EXHIBIT 10.17
CONSULTING SERVICES AGREEMENT
THIS CONSULTING SERVICES AGREEMENT ("Agreement") is made and entered into
as of the 24th day of April, 2002, by and between Suntron Corporation, a
Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxxx, Xx., an individual
("Consultant").
1. Appointment of Consultant. The Company appoints Consultant and
Consultant accepts appointment to serve as a consultant to the Company's
business on the terms and conditions provided in this Agreement.
2. Board of Directors Supervision. The activities of Consultant to be
performed under this Agreement shall be subject to the supervision of the Chief
Executive Officer of the Company (the "CEO") and subject to reasonable policies
not inconsistent with the terms of this Agreement adopted by the Company's Board
of Directors (the "Board") and in effect from time to time.
3. Responsibilities of Consultant. Subject to any limitations imposed by
applicable law or regulation, Consultant shall render consulting services to the
Company, which services shall include the services set forth on Schedule 1
hereto. In addition, Consultant will give the Company the benefit of his special
knowledge, skill and business expertise to promote the Company's interests.
4. Independent Contractor. Consultant shall be an independent contractor,
and nothing obtained in this Agreement shall be deemed or construed (i) to
create a partnership or joint venture between the Company and Consultant, or
(ii) to cause Consultant to be responsible in any way for the debts, liabilities
or obligations of the Company or any other party, or (iii) to constitute
Consultant an employee, officer or agent of the Company.
5. Consulting Fee. In consideration of Consultant's agreement to provide
the consulting services described in Section 3 of this Agreement, the Company
shall pay to Consultant a cash consulting fee equal to $1,500 per day for each
day Consultant provides consulting services from Denver, Colorado, and $2000 per
day for each day Consultant provides consulting services outside of Denver,
Colorado, payable in monthly installments in arrears.
6. Expense Reimbursement. During the term hereof, the Company shall,
consistent with the Company's policies and internal audit procedures and upon
the submission of supporting documentation by Consultant, reimburse Consultant
for all other reasonable expenses actually paid or incurred by Consultant in the
course of providing consulting services to the Company pursuant to the terms of
this Agreement, including expenses for travel and entertainment.
7. Other Activities of Consultant. Consultant shall be entitled to perform
consulting services for other entities provided that such services do not
violate the provisions of this Agreement or interfere with the provisions
hereof.
8. Restrictive Covenants.
8.1 Non-competition. During the term hereof and for a period of one
year following the termination of this Agreement, Consultant shall not, directly
or indirectly, (A) acquire or own in any manner any interest in any person,
firm, partnership, corporation, association or other entity that provides or
intends to provide depot/repair services to any existing Customer Program (as
defined below), or (B) be employed by or serve as an employee, agent, officer,
director of, or as a consultant to, any person, firm, partnership, corporation,
association or other entity that provides or intends to provide depot/repair
services to any existing Customer Program; provided, however, that nothing
herein shall be deemed to prevent the ownership, solely as an investment, of
less than one percent in the aggregate of the equity
securities of any class of any issuer whose shares are registered under Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and are
listed or admitted for trading on any United States national securities exchange
or are quoted on the National Association of Securities Dealers Automated
Quotations System, or any similar system of automated dissemination of
quotations of securities prices in common use, so long as Consultant is not
involved in the management or conduct of the business affairs of such issuer nor
a member of any "control group" (within the meaning of the rules and regulations
of the United States Securities and Exchange Commission) of any such issuer. For
purposes of this Section 8, "Customer Program" shall mean any product family
within an existing customer of that is served by the Company or any of its
subsidiaries. For purposes of clarity, Schedule 2 hereto lists the Company's
existing Customer Programs. The Company agrees to update Schedule 2 every three
months to bring the list of then existing Customer Programs current. Consultant
acknowledges and agrees that the covenants provided for in this Section 8.1 are
reasonable and necessary in terms of time, area and line of business to protect
the Company's "Trade Secrets" (as hereinafter defined). Consultant further
acknowledges and agrees that such covenants are reasonable and necessary in
terms of time, area and line of business to protect the Company's legitimate
business interests, which include its interests in protecting the Company's (i)
valuable confidential business information, (ii) substantial relationships with
customers throughout the United States, and (iii) customer goodwill associated
with the ongoing business of the Company. Consultant expressly authorizes the
enforcement of the covenants provided for in this Section 8.1 by (A) the Company
and its subsidiaries, (B) the Company's permitted assigns, and (C) any
successors to the Company's business. To the extent that the covenant provided
for in this Section 8.1 may later be deemed by a court to be too broad to be
enforced with respect to its duration or with respect to any particular activity
or geographic area, the court making such determination shall have the power to
reduce the duration or scope of the provision, and to add or delete specific
words or phrases to or from the provision. The provision as modified shall then
be enforced.
8.2 Nondisclosure. Consultant agrees that he shall not divulge,
communicate, use to the detriment of the Company or for the benefit of any other
person or persons, or misuse in any way, any "Confidential Information"
pertaining to the Company or its affiliates. Any Confidential Information now
known or hereafter acquired by Consultant with respect to the Company or its
affiliates shall be deemed a valuable, special and unique asset of the Company
that is received by Consultant in confidence and as a fiduciary, and Consultant
shall remain a fiduciary to the Company with respect to all of such information.
For purposes of this Agreement, the following terms when used in this Agreement
have the meanings set forth below:
"Confidential Information" means confidential data and confidential
information marked or otherwise identified as confidential or proprietary
relating to the business of the Company or its affiliates (which does not rise
to the status of a Trade Secret under applicable law) which is or has been
disclosed to Consultant or of which Consultant became aware as a consequence of
or through the Company's engagement of Consultant and which has value to the
Company or its affiliates and is not generally known to the competitors of the
Company. Confidential Information shall not include any data or information that
(i) has been voluntarily disclosed to the general public by the Company or its
affiliates, (ii) has been independently developed and disclosed to the general
public by others, or (iii) otherwise enters the public domain through lawful
means.
"Trade Secrets" means information of the Company or its affiliates
including, but not limited to, technical or nontechnical data, formulae,
patterns, compilations, programs, financial data, financial plans, product or
service plans or lists of actual or potential customers or suppliers which (i)
derives economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
In addition, during the term hereof and during the periods described in
the last sentence of this Section 8.2, Consultant (a) will receive and hold all
Confidential Information and Trade Secrets (collectively "Company Information")
in trust and in strictest confidence, (b) will take reasonable steps to protect
the Company Information from disclosure and will in no event take any action
causing, or fail to take any action reasonably necessary to prevent, any Company
Information to lose its character as
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Company Information, and (c) except as required by Consultant's duties in the
course of the Company's engagement of Consultant, will not, directly or
indirectly, use, disseminate or otherwise disclose any Company Information to
any third party without the prior written consent of the Company, which may be
withheld in the Company's absolute discretion. The provisions of this Section
8.2 shall survive the termination of this Agreement (i) for a period of five
years with respect to Confidential Information, and (ii) with respect to Trade
Secrets, for so long as any such information qualifies as a Trade Secret under
applicable law.
8.3 Nonsolicitation of Employees and Customers. During the term
hereof and for a period of one year thereafter, Consultant shall not, directly
or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity, (i) attempt to employ or enter into
any contractual arrangement with any employee or former employee of the Company,
unless such employee or former employee has not been employed by the Company for
a period in excess of six months, and/or (ii) call on or solicit any of the
actual or targeted prospective customers or clients of the Company, nor shall
Consultant make known the names and addresses of such customers or any
information relating in any manner to the Company's trade or business
relationships with such customers.
8.4 Books and Records. All books, records, reports, writings, notes,
notebooks, computer programs, sketches, drawings, blueprints, prototypes,
formulae, photographs, negatives, models, equipment, chemicals, reproductions,
proposals, flow sheets, supply contracts, customer lists and other documents
and/or things relating in any manner to the business of the Company (including
but not limited to any of the same embodying or relating to any Confidential
Information or Trade Secrets), whether prepared by Consultant or otherwise
coming into Consultant's possession, shall be the exclusive property of the
Company and shall not be copied, duplicated, replicated, transformed, modified
or removed from the premises of the Company except pursuant to the business of
the Company and shall be returned immediately to the Company on termination of
this Agreement or on the Company's request at any time.
8.5 Non-disparagement and Future Conduct or Litigation. Consultant
expressly covenants and agrees that during the term hereof and for a period of
three (3) years following the termination hereof, he will not make any
statements about or relating to the Company, including its affiliates, officers,
directors, shareholders, agents, independent contractors, counsel, management or
business practices, that are disparaging or likely to cause embarrassment or
that could materially and adversely affect the Company's business or reputation.
In addition, Consultant agrees to assist the Company in the future (at
reasonable times and upon reasonable notice, with no expense to Consultant) in
connection with any litigation or other matters of which Consultant has any
knowledge.
9. Injunction. It is recognized and hereby acknowledged by the parties
hereto that a breach by Consultant of any of the covenants contained in Section
8 of this Agreement will cause irreparable harm and damage to the Company, the
monetary amount of which may be virtually impossible to ascertain. As a result,
Consultant recognizes and hereby acknowledges that the Company shall be entitled
to an injunction from any court of competent jurisdiction (without posting a
bond or other security) enjoining and restraining any violation of any or all of
the covenants contained in Section 8 of this Agreement by Consultant or any of
his affiliates, associates, partners or agents, either directly or indirectly,
and that such right to injunction shall be cumulative and in addition to
whatever other remedies the Company may possess.
10. Inventions and Patents.
10.1 The services Consultant will perform in the course of the
Company's engagement of Consultant may include the invention of new programs,
methods, processes, apparatus and products and the development and improvement
of existing programs, methods, processes, apparatus, reports, drawings,
memoranda, specimens, models, letters, notebooks, software, firmware, program
listings and documentation which will or may be related to or used in the
business of the Company. Consultant will promptly and fully disclose to the
Company, or any of its designees, any and all improvements, designs, ideas,
works of authorship, copyrightable works, discoveries, trademarks,
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copyrights, trade secrets, formulae, processes, techniques, know-how, and data,
whether or not patentable, made or conceived or reduced to practice or learned
by Consultant, either alone or jointly with others, during the term hereof
(whether or not during normal working hours) that are related to or useful in
the business of the Company or result from tasks assigned by Consultant or the
Company, or result from use of premises or equipment owned, leased, or
contracted for by the Company (all said improvements, inventions, designs,
ideas, works of authorship, copyrightable works, discoveries, trademarks,
copyrights, trade secrets, formulae, processes, techniques, know-how, data,
patent applications continuation applications, continuation-in-part
applications, file wrapper continuation applications and divisional applications
shall be collectively hereinafter called "Inventions"). All such Inventions
shall be the sole property of the Company, its successors, assigns and nominees,
and Consultant hereby assigns to the Company, without further compensation, all
rights, title and interest in and to such Inventions and any and all related
patents, patent applications, copyrights, copyright applications, trademarks and
trade names in the United States and elsewhere.
10.2 Exceptions. Consultant shall not be obligated to assign any
Invention that may be wholly conceived by him after the termination of this
Agreement, except that Consultant is so obligated if such Invention shall
involve the utilization of Confidential Information or Trade Secrets obtained
while Consultant is engaged by the Company.
10.3 Records. Consultant will keep and maintain adequate and current
written records of all Inventions (in the form of notes, sketches, drawings and
as may be specified by the Company), which records shall be available to and
remain the sole property of the Company at all times.
10.4 Enforcement and Protection. Consultant will assist the Company
in obtaining and enforcing patents, copyrights and other forms of legal
protection of such Inventions in any country. Upon request, Consultant will
execute all applications, assignments, instruments and papers and perform all
acts necessary or desired by the Company to assign all such Inventions fully and
completely to the Company and to enable the Company, its successors, assigns and
nominees, to secure and enjoy the full and exclusive benefits and advantages
thereof. If the Company is unable, after reasonable effort, to secure
Consultant's signature on any patent, copyright or other analogous protection
relating to an Invention, whether because of Consultant's physical or mental
incapacity or for any other reason whatsoever, Consultant hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as his agent and attorney-in-fact, to act for and in his behalf and stead to
execute and file any such application or applications and to do all other
lawfully permitted acts to further the prosecution and issuance of letters
patent, copyright or other analogous protection thereon with the same legal
force and effect as if executed by Consultant.
10.5 Works Made for Hire. Consultant acknowledges that all original
works of authorship which are made by him (solely or jointly with others) within
the scope of the Company's engagement of Consultant and which are protectable by
copyright are being created at the instance of the Company and are "works made
for hire," as that term is defined in the United States Copyright Act (17 USCA,
Section 101). If such laws are inapplicable or in the event that such works, or
any part thereof, are determined by a court of competent jurisdiction not to be
a work made for hire under the United States copyright laws, this Agreement
shall operate as an irrevocable and unconditional assignment by Consultant to
the Company of all of his right, title and interest (including, without
limitation all rights in and to the copyrights throughout the world, including
the right to prepare derivative works and the right to all renewals and
extensions) in the works in perpetuity.
10.6 Post Termination Obligations. Consultant understands that
certain obligations under this Section 10 will continue after the termination of
the Company's engagement of Consultant and that during the term hereof
Consultant will perform his obligations under this Section 10 without further
payment of any kind, except for reimbursement of expenses incurred at the
request of the Company. Consultant further understands that if Consultant is not
engaged by the Company at the time he is requested to perform any obligations
under this Section 10, he shall receive for such performance a reasonable per
diem fee, as well as reimbursement of any expenses incurred at the request of
the Company.
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11. Term. This Agreement shall remain in effect through December 31, 2002;
provided, however, that (i) either the Company or Consultant may unilaterally
terminate this Agreement in the event of the breach of any of the material terms
or provisions of this Agreement by the other party, which breach is not cured
within 10 business days after written notice of the same is given to the party
alleged to be in breach, and (ii) the Company and Consultant may terminate this
Agreement by mutual agreement at any time.
12. Standard of Care. Consultant shall not be liable for any mistakes of
fact, errors of judgment, for losses sustained by the Company or for any acts or
omissions of any kind (including acts or omissions of Consultant), unless and
except to the event that the Company's losses (including expenses, costs and
attorneys' fees) result from the gross negligence or willful misconduct of
Consultant.
13. No Assignment. Without the consent of Consultant, the Company shall
not assign, transfer or convey any of its rights, duties or interest under this
Agreement, nor shall it delegate any of the obligations or duties required to be
kept or performed by it hereunder. Without the prior written consent of the
Company, Consultant shall not assign, transfer or convey any of its rights,
duties or interests under this Agreement, nor shall it delegate any of the
obligations or duties required to be kept or performed by it under this
Agreement.
14. Notices. All notices, demands, consents, approvals and requests given
by either party to the other hereunder shall be in writing and shall be
personally delivered or sent by registered or certified mail, return receipt
requested, postage prepaid, to the parties at the following addresses:
If to the Company: Suntron Corporation
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, President and Chief
Executive Officer
with a copy to:
Xxxxxxx X. Xxxxxxxx
Xxxxxx Capital Partners
0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to Consultant: Xxxxx X. Xxxxxxxx, Xx.
00 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Any party may at any time change its respective address by sending written
notice to the other party of the change in the manner hereinabove prescribed.
15. Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or enforceable, shall not be affected thereby, and each term
and provision of this Agreement shall be valid and be enforced to the fullest
extent permitted by law.
16. No Waiver. The failure by any party to exercise any right, remedy or
elections herein contained or permitted by law shall not constitute or be
construed as a waiver or relinquishment for the future exercise of such right,
remedy or election, but the same shall continue and remain in full force and
effect. All rights and remedies that any party may have at law, in equity or
otherwise upon breach of any term or condition of this Agreement, shall be
distinct, separate and cumulative rights and remedies and
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no one of them, whether exercised or not, shall be deemed to be in exclusion of
any other right or remedy.
17. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the matters herein contained and any
agreement hereafter made shall be ineffective to effect any change or
modification, in whole or in part, unless such agreement is in writing and
signed by the party against whom enforcement of the change or modification is
sought.
18. Governing Laws. This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona without reference to the laws
of any other state.
19. Waiver of Jury Trial. The parties hereto hereby waive trial by jury in
any judicial proceeding involving, directly or indirectly, any matter (whether
in tort, contract or otherwise) in any way arising out of, related to, or
connected with this Agreement, the related documents or the relationship
established hereunder.
20. Attorneys' Fees. In the event any suit or other legal proceeding is
brought for the enforcement of any of the provisions of this Agreement, the
parties hereto agree that the prevailing party or parties shall be entitled to
recover from the other party or parties upon final judgment on the merits
reasonable attorneys' fees and costs incurred bringing or defending such suit or
proceedings.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly exercised by their authorized representatives as of the date first above
written.
SUNTRON CORPORATION
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
CONSULTANT
/s/ Xxxxx X. Xxxxxxxx, Xx.
------------------------------------
Xxxxx X. Xxxxxxxx, Xx., Individually
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SCHEDULE 1
CONSULTING SERVICES
Consultant shall provide the following services on behalf of the Company:
o Assist the Company to pursue agreements with its customer(s) to divest in
part or total a major service repair depot and to seek leverage into the
depot/repair service segment of the electronics market.
o Represent Suntron as the lead in setting strategy and tactical actions for
corporate services initiatives.
o Facilitate the Company's acquisition of one or more repair depot sites
from Honeywell AES.
o Assist the Company to work with other major customers to establish an
in-house depot/repair sites or acquire such depot/repair sites.
o Establish the process by which the Company acquires and integrates service
repair depots into the Company infrastructure.
o Lead and document the integration/transition process with respect to any
depot/repair service business acquired by the Company.
o Other projects/key initiatives with respect to establishing a depot/repair
services business within the Company as directed by the Company's CEO
