EXHIBIT 10.1
CONSULTING AGREEMENT
THIS AGREEMENT made and entered into this 7th day of
February, 1996 by and between XXXXXX MANUFACTURING AND
TECHNOLOGY, INC., a Delaware corporation with an office at
0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000 (hereinafter
called the "Company"), and XxXXXXXX CONSULTANTS INC., a Delaware
corporation with an office at 000 Xxxxx Xxxxx, Xxxxxxxx, Xxx
Xxxxxx 00000 (hereinafter called "Consultant").
RECITALS
A. The Company is the owner of XXXX X. XXXXXXXX
ASSOCIATES, INC. ("JJMA") a corporation engaged in the business
of naval architecture and marine engineering with a significant
amount of U.S. Navy business, and is seeking to control the costs
and enhance the revenues of such business and of certain other
enterprises owned by the Company which do a significant amount of
business with various agencies and bureaus within the U.S.
Department of Defense, and the Company is desirous of finding
opportunities to expand its business operations into other
defense-oriented activities.
B. Consultant and personnel associated with Consultant
possess a high degree of entrepreneurial and financial experience
which the Company wishes to have available to it for its business
improvement and expansion.
C. In consideration of the mutual benefits and agreements
set out herein, the Company and Consultant have made the
agreement set forth herein.
1. Engagement. The Company hereby engages the services of
Consultant to provide the services hereinafter specified (the
"Services") for the compensation and on the terms and conditions
set forth in this Agreement. Consultant accepts such engagement
and agrees to provide such Services for said compensation and on
such terms and conditions.
2. Effective Date and Term. This Agreement shall be
effective as of the first day of February, 1996 and shall
continue in force and effect for five (5) years until January 31,
2001 unless sooner terminated under the provisions hereof.
3. Services of Consultant.
(a) Consultant, acting as an independent contractor
and consultant, shall on request of the Company or JJMA provide
the following services to the Company or JJMA by means of members
of the Consultant's staff designated by the Consultant for the
particular task: assist the Company in seeking and finding
business opportunities for the Company to exploit including
analyzing the investment required and the potential return of
each such business opportunity; as and when requested by the
Company assist the Company from time to time in making
presentations to potential clients of JJMA and other enterprises
owned by the Company which do business with agencies of the U.S.
Government, and provide such other consulting services as the
Company and the Consultant may mutually agree are within the
general scope of the foregoing listed specific service
description.
(b) During the term of this Agreement, and for so long
as he is willing and able to do so, the Company and the
Consultant agree that Xx. Xxxx X. XxXxxxxx shall serve as
Chairman of JJMA with such duties as may be delegated to him from
time to time by the Board of Directors of JJMA, and shall be
otherwise available at reasonable times by telephone for
consultation with officers and employees of the Company and/or
its subsidiaries.
4. Compensation and Expense Reimbursement.
(a) As a consulting fee, the Company shall pay, or
shall cause one or more of its subsidiaries to pay, to Consultant
a fee of $400,000 per year for each year of the term of this
Agreement, payable in equal installments on the fifteenth (15th)
day and last day of each month during the term of this Agreement.
(b) Consultant shall also be reimbursed for reasonable
out-of-pocket expenses incurred in carrying out its duties
pursuant to this Agreement. All such reimbursements will be made
within 30 days of receipt by the Company of Consultant's
itemization of such expenses.
5. Secretarial Services. The Company shall supply to
Consultant the exclusive services of two secretaries employed by
JJMA and carried on its payroll, but seconded to Consultant. All
costs related to such secretaries incurred by JJMA or the
Company, including but not limited to salary, benefits,
extraordinary medical claims and severance pay, shall be
reimbursed to the Company by Consultant.
6. Early Termination. This Agreement may be terminated by
either party prior to January 31, 2001 by written notice given to
the other in the event any of the following should occur: (a) a
material default by either party in performing its material
obligations under this Agreement, such default continuing for a
period of thirty (30) days following notice of default by the
non-defaulting party to the defaulting party, and the non-
defaulting party then giving a notice of election to terminate;
(b) the other party shall become unable or fail to pay its debts
generally as they become due, or admit in writing its inability
to pay its debts, or make a general assignment for the benefit of
creditors; (c) any proceeding shall be instituted by or against
the other party seeking (i) to adjudicate it a bankrupt or
insolvent, or (ii) reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or
(iii) appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property, and
such proceeding shall not have been dismissed within forty-five
(45) days after the date such proceeding was commenced; or
(iv) the other party shall take any action to authorize or
consent to any action described in clause (c) above.
7. Covenant Not to Compete; Confidentiality. During the
term of this Agreement and for a period of three (3) years after
the termination of this Agreement, neither Consultant nor
XxXxxxxx shall engage in any activity that competes with any line
of business engaged in by JJMA, including, but not limited to the
business of commercial ship and detail design, naval ship and
combat systems and marine technical and management services
(collectively, "Line of Business"), whether acting as an officer,
director, employee, consultant, shareholder, owner, partner,
fiduciary or in any other individual or representative capacity
whatsoever, and shall not otherwise use to its or his own
advantage, or to the advantage of any other person, corporation,
or other entity, or disclose to any other person, corporation, or
other entity, any non-public information as to the clients,
customers, prospects, properties, prices, sales practices, manner
of operation, plans, trade secrets, patents, processes,
relationships with clients and customers or any other non-public
information concerning the Company or JJMA and/or their
respective businesses or solicit or induce (or seek to induce)
any employee of JJMA to leave such employment. Notwithstanding
the foregoing, Consultant and Xx. Xxxx X. XxXxxxxx may invest its
or his assets in such form or manner as deemed appropriate;
provided, however, that such investments shall not require any
substantial services on the part of Consultant or Xx. XxXxxxxx in
the operation of the affairs of the company or entity in which
such investments are made if such company or entity competes with
a Line of Business. The parties acknowledge the foregoing
covenants are reasonable in scope and necessary for the Company
to receive the full benefit of the consulting services to be
provides hereunder. The Company shall have the option in its
sole discretion to reduce the scope and extent of the foregoing
covenants, by written notice to Consultant, either before or
after adjudication of the legality or enforceability of said
covenants, whereupon said covenants shall be valid and
enforceable against Consultant and XxXxxxxx.
If a court should conclude that the foregoing covenants are
unenforceable according to their terms either because of their
duration, the geographic area covered thereby or the scope of the
subject matter covered, the parties hereby agree that the court
shall reduce such duration, geographic area or scope so that the
resulting duration, geographic area and scope shall be the
maximum that such court shall conclude is enforceable, which
reduction shall be performed as follows: in the case of
duration, the duration hereof shall be reduced by one month at a
time until it shall be the maximum enforceable duration; in the
case of geographic area, such area shall be reduced by
eliminating individual states one at a time therefrom until such
area shall be of maximum enforceable geographical coverage,
commencing with the state in which the least volume of JJMA
revenues is generated during a fiscal year immediately preceding
such determination and eliminating additional states one at a
time in inverse order of the volume of JJMA revenues generated by
business activity of JJMA in each such state during such fiscal
year; in the case of the scope of subject matter, the parties
agree that the scope of such covenants shall be reduced to the
minimum extent necessary in order for such covenants to be
enforced. The parties acknowledge that damages may not be an
adequate remedy for breaches of the foregoing covenants. In
addition to such other remedies as may be available under
applicable law, the parties acknowledge that the remedies of
specific performance and/or injunctive relief shall be available
and proper in the event of Consultant's or Xxxxxxxx'x actual or
imminent refusal or failure to perform its or his obligations
hereunder.
8. Relationship of Parties. This instrument does not
create and shall not be construed as creating joint venture,
partnership, or association between the Company and Consultant.
Consultant is and shall be during the entire term of this
Agreement an independent contractor.
9. Not Personal Services. In addition to other provisions
herein contained, this Agreement shall not be terminated in the
event of the death or disability of Xx. Xxxx X. XxXxxxxx.
10. No Assignments. This Agreement is personal to each of
the parties hereto, and neither party may assign or delegate any
of its rights or obligations hereunder without first obtaining
the written consent of the other; provided, however, that the
Company may in connection with a merger, consolidation, sale or
other disposition of all or substantially all of its assets
assign its respective rights and delegate its obligations
hereunder, but in such case shall remain obligated as surety for
the performance of the assignee.
11. Binding Effect. This Agreement shall bind and benefit
Consultant and the Company and their respective successors and
assigns.
12. Notice. Any notice required or permitted to be given
under this Agreement shall be sufficient if in writing and if
sent by registered mail to the attention of the President at the
office of Consultant, in the case of the Consultant; or to the
attention of its Chairman of the Board at its principal office in
the case of the Company.
13. Integration Clause; Oral Modification. This Agreement
represents the entire agreement of the parties with respect to
the subject matter hereof, and all agreements entered into prior
hereto are revoked and superseded by this Agreement, and no
representations, warranties, inducements or oral agreements halve
been made by any of the parties except as expressly set forth
herein, or in other contemporaneous written agreements. This
Agreement may not be changed, modified or rescinded except in
writing, signed by all parties hereto, and any attempt at oral
modification of this Agreement shall be void and of no effect.
14. Governing Law. This Agreement shall be deemed to be
made under, and shall be construed in accordance with and shall
be governed by, the laws of the State of Arizona, and suit to
enforce any provision of this Agreement or to obtain any remedy
with respect hereto may be brought in Superior Court, Maricopa
County, Arizona, and for this purpose each party hereby expressly
and irrevocably consents to the jurisdiction of said court.
15. Attorneys' Fees. In the event suit is brought (or
arbitration instituted) or an attorney is retained by any party
to this Agreement to enforce the terms of this Agreement or to
collect any moneys due hereunder, or to collect money damages for
breach hereof, the prevailing party shall be entitled to recover,
in addition to any other remedy, reimbursement for reasonable
attorneys' fees, court costs, costs of investigation and other
related expenses incurred in connection therewith.
16. Waiver. Failure of any party to exercise any right or
option arising out of a breach of this Agreement shall not be
deemed a waiver of any right or option with respect to any
subsequent or different breach, or the continuance of any
existing breach.
17. Counterparts. This Agreement may be executed in any
number of counterparts, all such counterparts shall be deemed to
constitute one and the same instrument, and each of said
counterparts shall be deemed an original hereof.
18. Captions. Captions and section headings used herein
are for convenience only and are not a part of this Agreement and
shall not be deemed to limit or alter any provisions hereof and
shall not be deemed relevant in construing this Agreement.
IN WITNESS WHEREOF, the parties have signed this Agreement
as of the day, month and year first written above.
XXXXXX MANUFACTURING AND
TECHNOLOGY, INC., a Delaware
corporation
By Xxxx X. Xxxxxxxxx
Its: Vice President and
Secretary
XxXXXXXX CONSULTANTS INC.
By Xxxx X. XxXxxxxx
President
