Exhibit 10.5
CONSULTING AGREEMENT
This Consulting Agreement (this "AGREEMENT") is entered into this 1st day
of April, 2002 by and between GER Consulting, Inc., a Florida corporation
("CONSULTANT") and Young Innovations, Inc., a Missouri corporation (the
"COMPANY").
WHEREAS, Consultant desires to provide consulting services to the Company
and the Company desires Consultant to provide such services; and
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements contained herein, the parties hereto agree as follows:
1. CONSULTING ARRANGEMENT.
(a) CONSULTING SERVICES. Consultant agrees to perform consulting
and advisory services and related duties as may be requested by the Company or
any of its affiliates from time to time in connection with the Company's
business (collectively, the "SERVICES"), including the following:
(i) advising the Company with respect to potential
acquisitions; and
(ii) providing strategic advice.
(b) COMMITMENT. During the Consulting Term and in accordance with
the Company's request for Services, Consultant shall devote approximately seven
(7) days per month to providing Services.
(c) CONSULTING FEE. During the Consulting Term, the Company shall
pay to Consultant a monthly fee of EIGHT THOUSAND THREE HUNDRED THIRTY-THREE
DOLLARS ($8,333.00), payable on the last business day of each month.
(d) EXPENSES. Consultant is authorized to incur reasonable expenses
in connection with the performance of the Services; provided, however, that any
expenses which are not in the ordinary course shall be subject to the prior
written approval of the Company's Chief Financial Officer. The Company will
reimburse Consultant in a timely manner at least monthly for all such expenses
upon presentation of an itemized written accounting therefor (together with such
vouchers and other verifications as the Company may require). The Company shall
not reimburse Consultant for expenses which have not been approved in advance by
the Company's Chief Financial Officer.
(e) TERM.
(i) The term of this Section 1 shall commence on the date
hereof, and shall continue through December 31, 2002 (the "INITIAL CONSULTING
TERM") unless otherwise
terminated pursuant to this Section 1(e). Consultant and the Company may agree
to extend employment hereunder for successive twelve (12) month terms
("SUCCESSIVE TERMS") by agreeing to such extensions(s) in writing thirty (30)
days prior to the expiration of the Initial Term or any Successive Terms. The
terms of this Agreement shall be binding during all Successive Terms, except as
may be modified in writing by agreement of Consultant and the Company.
(ii) Either party may terminate this Section 1 upon 90 days
written notice to the other party.
(iii) Upon the termination of this Section 1, the Company shall
pay to Consultant the consulting fees and expenses due to Consultant as accrued
to the date of such termination. The obligation of the Company for the payment
of any further consulting fees or expenses shall automatically cease upon such
termination, and Consultant or Consultant's personal representative shall have
no claim against the Company for compensation for loss of engagement or
otherwise in respect thereof.
(iv) All obligations of the Company and rights of Consultant
under this Section 1 shall cease upon any termination of this Section 1, except
as otherwise provided herein. Notwithstanding anything to the contrary contained
in this Agreement, the provisions of Sections 2, 4 and 10 shall survive any
termination of this Agreement and shall remain in full force and effect.
2. NONDISCLOSURE AND NONCOMPETITION.
(a) CONSIDERATION AND ACKNOWLEDGEMENTS. Consultant acknowledges and
agrees that the covenants described in this Section 2 are essential terms of
this Agreement and that this Agreement would not be entered into by the Company
in the absence of the covenants described herein. Consultant acknowledges and
agrees that the covenants set forth in this Section are necessary for the
protection of the business interests of the Company. Consultant further
acknowledges that these covenants are supported by adequate consideration as set
forth elsewhere in this Agreement and that these covenants do not place undue
restraint on Consultant and are not in conflict with any public interest.
Consultant acknowledges and agrees that the covenants set forth in this Section
2 are reasonable and enforceable in every respect under applicable law.
(b) DEFINITIONS. As used in this Section 2, the following terms
have the following meanings:
(i) "COMPANY" shall mean Young Innovations, Inc., including
any parent, subsidiary or affiliate as of the date of this Agreement or at any
time during the Noncompete Period.
(ii) "COMPETING BUSINESS" means any product, system, service,
process or practice produced, provided, marketed or sold anywhere in the
geographic area where the Company is then conducting any business by any person
or entity other than the Company which competes directly or indirectly with any
product, system, service, process or practice
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produced, provided, marketed, sold or under development by the Company at any
time during Consultant's employment.
(iii) "COMPETING ORGANIZATION" means Consultant and any person
or entity which is engaged in, or is planning to become engaged in research,
development, production, manufacturing, marketing or selling of a Competing
Business within the area in which the Company is then conducting any business or
has affirmative plans to conduct business while these covenants are in effect.
(iv) "CONFIDENTIAL INFORMATION" shall include any and all
information not generally available to the public through legitimate means
regarding any past, current or anticipated future business, product, system,
service, process, or practice of the Company, as well as any and all information
relating to the Company's business, research, development, purchasing,
accounting, advertising, marketing, manufacturing, merchandising and selling.
Confidential Information includes but is not limited to information that may
constitute a "trade secret" under applicable law.
(c) NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Except as necessary
to perform the Services, Consultant agrees not to use any Confidential
Information, or disclose any Confidential Information to any person or entity,
either during or at any time after termination of Section 1, without the
Company's prior written consent, unless required to do so by a court of
competent jurisdiction, or by an administrative or legislative body (including a
committee thereof) with purported or apparent jurisdiction to order Consultant
to divulge, disclose or make accessible such information.
(d) NON-COMPETITION. Consultant agrees that during the term of this
Agreement and this years thereafter (the "NONCOMPETE PERIOD"), Consultant will
not render services to, give advice to, become employed by or otherwise
affiliate with, directly or indirectly, any Competing Organization, nor will it
(on behalf of itself or any other person or entity) engage directly or
indirectly in any Competing Business, unless otherwise agreed to in writing by
the Company.
(e) NON-INDUCEMENT. Consultant agrees that during the Noncompete
Period Consultant will not directly or indirectly assist or encourage any person
or entity in carrying out any activity that would be prohibited by the
provisions of this Section 2 if such activity were carried out by Consultant.
Consultant also specifically agrees that during the Noncompete Period Consultant
will not directly or indirectly induce any other employee of the Company to
leave the employ of the Company or to carry out, directly or indirectly, any
such activity that would be prohibited by the provisions of this Section 2 if
such activity were carried out by Consultant. Consultant shall cause each of its
employees, agents and representatives to agree to be subject to and bound by the
obligations of Section 2(c) and this Section 2(e).
(f) INVENTIONS AND PATENTS. Consultant agrees to promptly and fully
disclose in writing and does hereby assign to the Company every invention,
innovation, copyright, or improvement made or conceived by Consultant during the
period that Consultant provides Services that relates directly or indirectly to
its engagement with the Company pursuant to this Agreement. Consultant further
agrees that both during and after this Agreement terminates, without charge to
the Company but at the Company's expense, Consultant will execute,
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acknowledge and deliver any documents, including applications for Letters
Patent, as may be necessary, or in the opinion of the Company, advisable to (i)
obtain, enjoy and/or enforce Letters Patent for those inventions, innovations or
improvements in the United States and in any other country; (ii) obtain, enjoy
or enforce the right to claim the priority of the first filed patent application
anywhere in the world; or (iii) vest title in the Company and its successors,
assigns or nominees. Additionally, Consultant agrees that for a period of one
(1) year after termination of Section 1, any invention, development, innovation,
or improvement within the scope of this Section 2 shall be presumed to have been
made during its retention as a consultant pursuant to this Agreement by the
Company. Consultant shall have the burden of clearly and convincingly
establishing otherwise. This Agreement does not apply to any invention for which
no equipment, supplies, facility or trade secret information of the Company was
used and which was developed entirely on Consultant's own time, and (i) which
does not relate (A) directly to the business of the Company or (B) to the
Company's actual or demonstrably anticipated research or development, or (ii)
which does not result from any work performed by Consultant for the Company.
(g) ENFORCEMENT OF THESE COVENANTS. Consultant acknowledges that
full compliance with all of the covenants set forth in this Section 2 is
necessary to enable the Company to do business with its customers and suppliers
and to prevent damage to the Company for which there will be no adequate remedy
at law. In the event of a breach of any of these covenants, Consultant therefore
acknowledges and agrees that the Company shall be entitled to injunctive relief
and the Company shall further be entitled to such other relief, including money
damages, as may be deemed appropriate by a court of competent jurisdiction. In
the event of a court action based upon an alleged breach of any of these
covenants, the prevailing party (as determined by a court ruling on the merits
of the dispute) will be reimbursed by the other party for reasonable attorneys'
fees and costs incurred as a result of the dispute. If any court should at any
time find any one of these covenants to be unenforceable or unreasonable as to
scope, territory or period of time, then the scope, territory or period of time
of the covenant shall be that determined by the court to be reasonable, and the
parties hereby agree that the court has the authority to so modify any of these
covenants as necessary to make the covenant enforceable.
(h) WAIVER. Consultant agrees that the Company's failure to enforce
any of the covenants of this Section 2 in any particular instance shall not be
deemed to be a waiver of the covenant in that or any subsequent instance, nor
shall it be deemed a waiver by the Company's of any other rights at law or under
this Agreement.
(i) BREACH. Consultant agrees that any breach of Section 2 above
will result in irreparable damage to the Company for which the Company will have
no adequate remedy at law, and, therefore if such a breach should occur,
Consultant consents to any temporary restraining order, a preliminary or
permanent injunction or any other form of equitable relief or decree of specific
performance by any court of competent jurisdiction in favor of the Company
enjoining any such breach, without prejudice to any other right or remedy to
which the Company shall be entitled. It is further agreed that the existence of
any claim or cause of action on the part of the Consultant against the Company,
whether arising from this Agreement or otherwise, shall in no way constitute a
defense to the enforcement provisions of Section 2 of this Agreement. In the
event that any portion of this Agreement shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its scope such
provisions shall be interpreted,
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modified or rewritten to include as much of the scope set forth in Section 2 as
will render such restrictions valid and enforceable. Each of the covenants
herein shall be deemed a separate and severable covenant. In the event
Consultant breaches any provision of this Agreement, the Company shall be
entitled to recover all costs of enforcement, including reasonable attorneys'
fees. It is the desire and intent of the parties that the provisions of Section
2 shall be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which such enforcement is sought.
Accordingly, a court of competent jurisdiction is directed to modify any
provision to the extent necessary to render such provision enforceable.
3. STATUS. The relationship of Consultant to the Company shall be that of
an independent contractor. Consultant shall not in any way obligate or create
liability on the part of the Company or any of its affiliates without the
Company's prior written consent. Nothing contained in this Agreement shall be
construed to constitute Consultant as the agent of the Company, nor shall
Consultant have any authority to bind, contract for, or act on behalf of the
Company or any of its affiliates.
4. COMPLETE AGREEMENT; RULES OF CONSTRUCTION. This Agreement contains the
full and complete understanding of the parties hereto with regard to the subject
matter contained herein. No other agreements or undertakings of the parties
shall in any manner limit or alter the nature and scope of the terms hereof
unless in writing duly executed by both parties and expressly providing that the
same shall be controlling over any conflicting terms contained herein. The word
"INCLUDING" shall mean including, without limitation. The Article, Section and
other headings contained herein are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
5. ASSIGNMENT. Consultant may not assign or transfer its rights, duties
or obligations under this Agreement, in whole or in part, without the prior
written consent of the Company. This Agreement shall be binding upon and will
inure to the benefit of the successors of the Company and may be assigned or
transferred by the Company, in whole or in part.
6. SEVERABILITY. Subject to Section 2(i), in the event that any portion,
provision, paragraph, sentence, or word of this Agreement shall be found to be
invalid or unenforceable by a court of competent jurisdiction, the Agreement
shall be deemed amended to delete therefrom such portion, provision, paragraph,
sentence or word adjudicated to be invalid or unenforceable; such amendment
shall have no effect upon the validity or enforceability of the balance of this
Agreement and such amendment is to apply only with respect to the operation of
this Agreement in the particular jurisdiction in which such adjudication is
made.
7. WAIVER. The failure of the Company to insist, in any one or more
instances, upon performance of any of the terms or conditions of this Agreement,
shall not be construed as a waiver or relinquishment of any rights granted
hereunder or the future performance of any such term, covenant or condition. No
amendment or waiver of any provision of this Agreement shall in any event be
effective unless the same shall be in writing and signed by the parties hereto,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
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8. JURISDICTION; SERVICE OF PROCESS. Each of the parties hereto agrees
that any action or proceeding initiated or otherwise brought to judicial
proceedings by either Consultant or the Company concerning the subject matter of
this Agreement shall be litigated in the United States District Court for the
Eastern District of Missouri or, in the event such court cannot or will not
exercise jurisdiction, in the state courts of the State of Missouri (the
"COURTS"). Each of the parties hereto expressly submits to the jurisdiction and
venue of the Courts and consents to process being served in any suit, action or
proceeding of the nature referred to above either (a) by the mailing of a copy
thereof by registered or certified mail, postage prepaid, return receipt
requested, to his or its address as set forth herein or (b) by serving a copy
thereof upon such party's authorized agent for service of process (to the extent
permitted by applicable law, regardless of whether the appointment of such agent
for service of process for any reason shall prove to be ineffective or such
agent for service of process shall accept or acknowledge such service); provided
that, to the extent lawful and practicable, written notice of said service upon
said agent shall be mailed by registered or certified mail, postage prepaid,
return receipt requested, to the party at his or its address as set forth
herein. Each party hereto agrees that such service, to the fullest extent
permitted by law, (i) shall be deemed in every respect effective service of
process upon him or it in any such suit, action or proceeding and (ii) shall be
taken and held to be valid personal service upon and personal delivery to him or
it. Each party hereto waives any claim that the Courts are an inconvenient forum
or an improper forum based on lack of venue or jurisdiction. Except as
specifically provided in this Agreement, each party shall bear its own costs and
attorneys' fees incurred in connection with any such actions or proceedings.
9. GOVERNING LAW. This Agreement shall be governed as to its validity and
effect by the internal laws of the State of Missouri, without regard to its
rules regarding conflicts of law.
10. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be personally delivered, sent by
overnight carrier (such as Express Mail, Federal Express, etc.) or sent by
facsimile transmission with confirming copy sent by overnight courier and a
delivery receipt obtained and addressed to the intended recipient as follows:
If to the Company:
Young Innovations, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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Attn: Xxxx X. Xxxxxxxx
If to Consultant:
GER Consulting, Inc.
00000 Xxxxxxx Xxx
Xxxxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
With a copy to:
Xxxxx Xxxxx
Xxxx Xxxxxx and Xxxxxxxxx
0 X. XxXxxxx Xx.
Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Any party may change its address or add or change parties for receiving notice
by giving the other party notice in the manner set forth above.
11. AUTHORSHIP. The parties agree that the terms and language of this
Agreement were the result of negotiations between the parties and, as a result,
there shall be no presumption that any ambiguities in this Agreement shall be
resolved against any party. Any controversy over construction of this Agreement
shall be decided without regard to events of authorship or negotiation.
* * *
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date and year first above written.
YOUNG INNOVATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------
Its: Chief Financial Officer
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GER Consulting, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Its: President
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