EXHIBIT 2.3
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into
as of October 10, 1997, to be effective October 1,1997, by and between
Transafe Corporation, a Delaware Corporation ("Transafe"), and E. Xxxxx
Xxxxxx, an individual now residing in Southold, New York ("Consultant").
RECITALS
A. Pursuant to an Asset Purchase Agreement, dated as of October 10,
1997 , effective October 1, 1997, (the "Acquisition Agreement"; capitalized
terms used and not otherwise defined in this Consulting Agreement being used
herein as defined in the Acquisition Agreement) Transafe acquired certain
assets of Roadway Safety Services, Inc., Momentem Management, Inc. and Fitch
Barrier Corporation (together, "Roadway").
B. Consultant is a shareholder, director and officer of Roadway and
is experienced in matters related to the Business that would be beneficial to
Transafe.
C. Transafe desires to engage Consultant as a consultant in order to
achieve certain objectives of the Business, and Consultant desires to accept
the engagement, as provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and the mutual benefits provided, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Certain Definitions. For the purposes of this Consulting
Agreement:
(a) "Authorized Representative" shall mean Xxxxxx X. Xxxxxx or
any other person designated from time to time by Xx. Xxxxxx.
(b) "Product Information" shall mean all information,
inventions (whether or not patented or patentable), writings (whether or not
copyrighted or copyrightable) and discoveries, including improvements
relating to Transafe Products or the technology or know-how of Transafe,
Roadway or their Affiliates.
(c) "Proprietary Material" shall mean information deemed by and
treated by Transafe, Roadway or their Affiliates, in the ordinary course of
business operations, as confidential to Transafe, Roadway or their
Affiliates, such as but not limited to product pricing, cost information,
profit margins, customer lists, market research, sales and market plans,
design characteristics, manufacturing costs, strategic plans or financial
plans or arrangements or any research, technical, manufacturing or commercial
activities, strategic plans, or other information or discoveries of Roadway,
Transafe or their Affiliates, which are known to or ascertainable by
Consultant.
(d) "Transafe Products" shall mean or refer to any current or
planned products, services, apparatus or processes or uses thereof or
therefor or products or services which any of Transafe, or Roadway or their
Affiliates has developed or is actively engaged in developing, has acquired
or will acquire, both prior to the date hereof and during the Consultation
Period, and shall expressly include all products developed or designed by
Roadway, whether or not commercially marketed, but shall expressly not
include any Transafe Product designed for motorized racetrack and racecourse
use.
2. Consulting Term. Transafe hereby retains Consultant as a
consultant, and Consultant hereby accepts such engagement, in accordance with
the terms and conditions of this Consulting Agreement for a term commencing
on the date hereof and ending on September 30, 2007 (unless sooner terminated
as provided in Section 9 below (the "Consultation Period").
3. Consulting Services.
(a) During the Consultation Period, Transafe shall employ
Consultant as a consultant, within the range of his experience and expertise,
to advise and assist Transafe with regard to highway safety products,
inventions and improvements, transportation safety issues and other related
projects, including but not limited to serving as a witness or an expert in a
contested matter or in preparation therefor (the "Consulting Services").
Consultant agrees to be reasonably available for Transafe on an exclusive
basis during normal business hours to perform the Consulting Services as
assigned to him by the Authorized Representative from time to time.
Consultant will perform the Consulting Services at such times and places as
the Authorized Representative shall reasonably request. All Consulting
Services will be performed by Consultant in accordance with Transafe's
reasonable requests and in a manner consistent with appropriate ethical and
professional standards. Consultant will at all times use his best efforts
and in good faith act to promote the success of Transafe's business and will
cooperate fully with the Authorized Representative.
(b) During the Consultation Period, Consultant will report to
Transafe from time to time regarding technological developments and marketing
opportunities and strategies that may be of interest to Transafe with respect
to its business.
(c) Without limitation, Consultant shall (i) assist Transafe in
the transition of the Roadway suppliers and customers to Transafe; (ii)
supervise the conduct of the Business and its transition to Transafe if and
to the extent requested by the Authorized Representative; (iii) utilize his
contacts in the industry to assist Transafe's obtaining additional suppliers
and customers; (iv) provide training to any Transafe employees responsible
for aspects of the Business including the operations, marketing and
administration of the Business; (v) make sales calls and participate in
Transafe Product presentations; and (vi) develop marketing surveys and
advertising programs.
(d) During the first 90 days of the Consultation Period,
Consultant agrees to be available to Transafe on an "as needed" basis (which
shall not be limited to normal business days or working hours) at the
Ronkonkoma facility, at Transafe's Chicago headquarters, at the Transafe
office and facility and as otherwise requested by Transafe. Thereafter, for
the remainder of the Consultation Period, Consultant shall be available for a
minimum of 300 hours and a maximum of 400 hours of Consulting Services during
each twelve-month period.
(e) During the Consultation Period, Consultant will report to
Transafe from time to time regarding technological developments that may be
of interest to Transafe with respect to the Business. Consulting and
advising via telephone, facsimile transmission and correspondence, as well as
in person, shall constitute performance of Consultant's services hereunder if
appropriate.
4. Compensation.
(a) As compensation for the services rendered by Consultant
pursuant to Section 3 of this Consulting Agreement and for the covenants of
Consultant pursuant to Sections 5, 6 and 7, Transafe will pay Consultant the
sum of $500,000 per annum during the Consultation Period, payable quarterly
on or about the last day of each December, March, June and September during
which this Consulting Agreement remains in effect.
(b) Consultant shall be solely and fully responsible for paying
any and all taxes, FICA, or other amounts required to be withheld by any
governmental entity or authority having jurisdiction over the matter.
Consultant shall hold Transafe harmless from any liability for such amounts.
Consultant expressly agrees and understands that the benefits available to
certain employees of Transafe, such as health insurance, disability benefits,
pensions and annuities, death benefits, savings plans and others shall not be
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available to Consultant hereunder.
(c) Transafe shall reimburse Consultant for out-of-pocket
expenses which Consultant incurs in the course of providing the Consulting
Services in amounts which Transafe has approved in advance in writing and for
which Consultant invoices Transafe in such reasonable detail and form and
according to Transafe's policies and procedures.
5. Transafe Proprietary Rights.
(a) Consultant agrees that all Proprietary Material and
Product Information (collectively "Information") created by Consultant (alone
or with others and regardless of whether or not such information was created
during Transafe's customary business hours or at Transafe's place of
business) during the term of this Consulting Agreement shall be and remain
the sole property of Transafe and shall be considered "works made for hire"
free and clear of any rights or claims that may be made by Consultant or any
other entity. To the extent such Information created by Consultant may not be
deemed "work for hire" under applicable law, Consultant hereby assigns to
Transafe all right, title and interest in and to Consultant's copyrights for
such Information.
(b) Consultant shall not file any copyright or patent
applications covering or claiming Information except with the prior written
consent of Transafe (and any such filings made in violation hereof deemed
void). At the request of Transafe, and without additional consideration for
time spent in complying with this obligation, Consultant shall (i) promptly
execute such documents and perform such other acts as Xxxxxxxx xxxxx
necessary to vest in Transafe or its designate title to Information, or (ii)
obtain, with respect to Information, copyrights and/or patents in any
jurisdiction or jurisdictions, and assign to Transafe or its designees such
copyright or patent applications, whether or not active, and the copyrights
or patents relating thereto.
(c) During the Consultation Period, Consultant agrees to
disclose promptly in writing to the Authorized Representative all Information
in Consultant's possession as to possible applications thereof to industry
and other uses thereof or therefor and to keep a written record of
Consultant's activities under this Agreement, such records being the sole
property of Transafe.
(d) The provisions of Section 5 shall survive the
termination of this Consulting Agreement.
6. Confidentiality.
(a) With respect to Information, Consultant agrees, unless
(i) the Information to be disclosed has otherwise become public knowledge
through no fault of Consultant where the disclosing person was not under an
obligation not to disclose such information, or (ii) the Information to be
disclosed was available to Consultant prior to its disclosure to Consultant,
provided that Consultant informs Transafe of this fact in writing at the time
of receiving the Information from Transafe:
(i) To hold all Information in strict confidence
forever and not publicize or otherwise disclose any thereof except
to or with the prior written consent of the Authorized
Representative or as required by law;
(ii) Never to disclose or make any use of any
Information and never copy any such Information or remove it from
Transafe's premises, except such use as is required in the
performance of Consultant's duties to Transafe or as permitted under
licensing or other agreements with Transafe; and
(iii) Always to use all reasonable precautions to assure
that all the Information is properly protected and kept from
unauthorized persons.
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(b) Upon termination of the Consultation Period, or upon
request of Transafe at any time, Consultant agrees to deliver to Transafe all
written and recorded materials and all substances, models, mechanisms and the
like, including customer lists, documents, research data, reports, equipment,
software, tapes, discs, illustrations, samples, and manuals containing or
relating to the Information, it being agreed that all such written materials
and other things shall be and remain the sole property of Transafe. For this
purpose, "written materials" shall be deemed to mean and include letters,
memoranda, reports, notes, notebooks, books of account, data, drawings,
prints, plans, specifications, formulae and all other documents or writings,
and all copies thereof.
(c) It is agreed that the provisions of Section 6 shall
survive the termination of this Agreement.
7. Non-Compete.
(a) Consultant expressly covenants that he and his
Affiliates, directly or indirectly: (i) will not offer or perform, nor will
he accept compensation for, any services with regard to highway safety
products, transportation safety issues or other related subjects, either on
his own behalf or on behalf of any other Person or entity who is or who may
become in direct or indirect competition with Transafe, in any aspect of the
highway safety products market anywhere in the world; (ii) will not own,
manage, operate, provide financing to, or join, control or participate in the
ownership, management, operation or control of, or provision of financing to,
any business wherever located (whether in corporate, proprietorship or
partnership form or otherwise), if such business is competitive with the
Business or with any other business operated by Transafe; (iii) will not do
or say anything which is harmful to the reputation of the Business or
Transafe, or which may lead any Person to cease to deal with Transafe on
substantially equivalent terms to those previously offered to Roadway or at
all; or (iv) will not seek to contract with or engage in such a way as to
adversely affect the Business any Person who or which is party to an
agreement with or has otherwise been engaged to manufacture, assemble, supply
or deliver products, goods, materials or services to the Business at any
time; provided, however, Consultant shall be entitled to conduct and
participate in a transportation safety systems business limited to motorized
vehicle racetracks and racecourses, if such participation is done through
Impact Dynamics, L.L.C. or another entity owned by Consultant and Transafe.
(b) Consultant shall refrain, in any manner (other than as
an agent of Transafe), directly or indirectly, from (i) soliciting or
attempting to solicit, any business from any current or former customer of
Transafe or Roadway for purposes of providing products or services that are
competitive with the Business, Transafe Products, or Transafe's activities,
or (ii) soliciting or attempting to solicit on his behalf or on behalf of any
other person, firm, corporation or entity, any employee of Transafe or its
Affiliates.
(c) The provisions of Section 7 shall survive the
termination of this Consulting Agreement.
8. Right to Injunctive Relief. Consultant acknowledges that
Sections 5, 6 and 7 of this Consulting Agreement are of a special, unique,
extraordinary and intellectual character, which gives them particular value,
the loss of which will render irreparable harm to Transafe that cannot be
adequately or reasonably compensated in damages in an action at law.
Accordingly, Consultant further acknowledges that Transafe shall therefore be
entitled to any and all equitable relief, including without limitation
injunctive relief and specific performance, and to any other remedy that may
be available under any applicable law or agreement between the parties, and
to recover from Consultant all costs of litigation, including without
limitation attorneys' fees and court costs. This provision shall not,
however, be construed as a waiver of the rights of Transafe to obtain other
remedies at law or in equity.
9. Termination
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(a) The Consultation Period, Transafe's obligation to pay
Consultant compensation as provided in Section 3, and any and all other
rights of Consultant under this Consulting Agreement will terminate (except
as otherwise provided in Sections 5, 6, and 7): (i) upon the death of
Consultant; (ii) upon the disability of Consultant, immediately upon notice
from either party to the other; or (iii) for cause, immediately upon notice
from Transafe to Consultant, or at such later time as such notice may
specify.
(b) For purposes of this Section 9, Consultant will be
deemed to have a "disability" if, for physical or mental reasons, Consultant
is unable to perform the essential functions of Consultant's duties under
this Consulting Agreement for 90 consecutive days, or 180 days during any
twelve month period, as determined in accordance with this Section 9. The
disability of Consultant may be determined by a medical doctor selected by
written agreement of Transafe and Consultant upon the request of either party
by notice to the other. If Transafe and Consultant cannot agree on the
selection of a medical doctor, each of them will select a medical doctor and
the two medical doctors will select a third medical doctor who will determine
whether Consultant has a disability.
(c) For purposes of Section 9, the phrase "for cause" means:
(i) Consultant's breach of Sections 5, 6 and 7 of this Consulting Agreement
or any other agreement between Consultant and Transafe or its Affiliates; or
(ii) the appropriation (or attempted appropriation) of a material business
opportunity of Transafe or its Affiliates, including attempting to secure or
securing any personal profit in connection with any transaction entered into
on behalf of Transafe or its Affiliates.
(d) If this Consulting Agreement is terminated by either
party as a result of Consultant's disability, as determined pursuant to
Section 9, or death, Transafe will pay Consultant for Consulting Services
through the remainder of the calendar month during which such termination is
effective, and will then pay Consultant, his estate, heirs or designated
beneficiary (as the case may be) the balance of the compensation as provided
in Section 3 through September 30, 2007. If Transafe terminates this
Consulting Agreement for cause, Consultant will be entitled to receive
compensation only for Consulting Services through the effective date of such
termination.
10. Independent Contractor. Notwithstanding anything in this
Consulting Agreement, Consultant is an independent contractor with authority
to select the means and method of performing the Consulting Services except
as may otherwise be requested by Transafe. Consultant is not an employee or
agent of Transafe and any action taken by Consultant which is not authorized
by this Consulting Agreement or any other written agreement between Transafe
and Consultant will not bind Transafe or create any claim against Transafe.
Unless otherwise specifically authorized by this Agreement or any other
written agreement between Transafe and Consultant, Consultant has no
authority to transact any business or make any representations or promises in
the name of Transafe or on behalf of Transafe. Consultant shall not
represent to anyone that his relationship to Transafe under this Agreement is
other than that of an independent contractor for limited purposes.
11. Set Off. Consultant agrees that Transafe may, to the extent
Consultant and his Affiliates fail to pay any claim for indemnification to
Transafe or its Affiliates pursuant to the Acquisition Agreement within
thirty (30) days of notice by Transafe or its Affiliates requiring such
indemnification, set off said amounts claimed against any sums otherwise due
and owing Consultant pursuant to this Consulting Agreement, notwithstanding
the amounts claimed arise from amounts due and owing by Consultant and his
Affiliates in other capacities.
12. Warranties. Each party hereto represents and warrants that he
or it has the right to enter into and fully perform his or its obligations
under this Agreement and that this Agreement is his or its legal, valid and
binding agreement enforceable against him or it in accordance with its terms.
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13. Severability. If any covenant or provision contained herein
is determined to be void or unenforceable, in whole or in part, it shall not
be deemed to affect or impair the validity of any other covenant or
provision.
14. Assignment. This Consulting Agreement shall inure to the
benefit of and shall be binding upon the parties hereto and their heirs,
devisees, successors and assigns. Transafe may assign this Consulting
Agreement in whole or in part without the prior written consent of
Consultant. Consultant may not assign or delegate any rights or
responsibilities under this Consulting Agreement, in whole or in part.
15. Governing Law, Arbitration. This Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Illinois, without reference to the conflict of laws principles thereof. In
the event a dispute arises between the parties with regard to the terms and
conditions of this Consulting Agreement, the parties agree to submit such
dispute to binding arbitration in Chicago, Illinois under the then-current
rules of the American Arbitration Association.
16. Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by facsimile (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested,
or (c) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the
appropriate address and facsimile numbers set forth (or to such other
addresses and facsimile numbers as a party may designate by notice to the
other parties):
If to Transafe: Transafe Corporation
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a Copy To: XxXxxxx Xxxxx & Xxxxx
000 Xxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx Schiave
Facsimile: (000) 000-0000
If to Consultant: E. Xxxxx Xxxxxx
00 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No. 000-000-0000
With a Copy To: Xxxxxxxx, Xxxxxxx & Xxxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Facsimile No. 000-000-0000
17. Counterparts. This Consulting Agreement may be executed in
one or more counterparts, each of which will be deemed to be one original
copy of this Consulting Agreement, and all of which, when taken together,
will be deemed to constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first set forth above.
TRANSAFE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Its: President & CEO
/s/ E. Xxxxx Xxxxxx
------------------------
E. Xxxxx Xxxxxx
Consultant
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