EXHIBIT 10.3
CONSULTING AGREEMENT
WHEREAS, The Chromaline Corporation, 0000 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxx, a Minnesota corporation ("Chromaline"), is desirous of
retaining the services of Xxxxxx X. Xxxxxxxx, 00 X. 00xx Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxxx 00000 ("Consultant"), as a Consultant; and
WHEREAS, the parties have agreed as to the terms and
conditions of a consulting arrangement between Chromaline and Consultant; and
WHEREAS, the terms and conditions of such consulting
arrangement are to be set forth herein;
NOW, THEREFORE, BE IT AGREED AS FOLLOWS:
1. Chromaline retains Consultant to consult with Chromaline,
on an unrestricted basis, with respect to assisting Chromaline in any area
Chromaline desires and is agreeable to by Consultant. Consultant will be
compensated as set forth herein, and is an independent contractor, not an
employee, of Chromaline. Consultant agrees to be personally responsible for any
FICA or income taxes imposed upon the monies paid him hereunder.
2. Chromaline will compensate and reimburse the Consultant for
expenses as follows:
a. Consulting fees will be paid in the following way: $10,000
in third quarter 1998, $10,000 in fourth quarter 1998, and $60,000 in
fourth quarter 1998 as prepayment for calendar 1999.
b. Reasonable expenses, including travel and accommodations,
appropriately documented, will be reimbursed to Consultant within 14
days of submission of these expenses. Travel and accommodations
expenditures are to be authorized by Chromaline prior to being
expended, and Chromaline will confirm each period of Consultant's
activities hereunder prior to it being commenced.
3. The term of this contract is from July 13, 1998 through
December 31, 1999.
4. Consultant, to induce Chromaline to enter into this
Agreement, further represents and agrees with Chromaline as follows:
a. Consultant's expertise has been acquired by him in a legal
fashion, and h is under no specific written restriction or other legal
restriction as a result of any prior or current employment or other
activity which prohibits, limits or bars his availability to Chromaline
as a Consultant within the terms of this Agreement.
b. Consultant does not have access to or possession of any
trade secrets of any competitor of Chromaline, and is free to divulge
information to Chromaline without restriction and will be fully
forthcoming with all information requested.
c. Consultant will hold his relationship with Chromaline
confidential for a period of no less than 4 years following the last
date of Consultant's activity for Chromaline under this Agreement, any
extension hereof, or any other agreement between him and Chromaline.
d. Any and all information acquired by Consultant from
Chromaline, if a trade secret, will be held confidential and not
disclosed forever, and any other information will be held confidential
for a period of at least 4 years following the conclusions of
Consultant's activities hereunder, any extension hereof, or any other
agreement between Consultant and Chromaline.
e. Without written prior approval by Chromaline, Consultant
will not, in a consulting capacity or otherwise, reveal or use any
information provided by him to Chromaline or obtained by him from
Chromaline for any other purpose other than communication to
Chromaline.
f. All inventions which Consultant may conceive or first
reduce to practice in the performance of services for Chromaline, or
which are based in whole or in part upon confidential information
obtained from Chromaline shall be assigned to Chromaline without cost
or charge of any kind. All such inventions shall be promptly and fully
disclosed in writing to Chromaline. Also, Consultant agrees to
cooperate with Chromaline and to execute such documents or do such
other acts as he or they may lawfully do which may be necessary or
desirable in the opinion of Chromaline to obtain and maintain Letters
of Patent or other rights, and to vest the entire right, title and
interest thereto in Chromaline (all without charge to Chromaline). The
costs for filing any patent resulting from any such invention shall be
paid for by Chromaline provided Chromaline has approved in writing such
patent filing.
5. Consultant agrees to promptly disclose to Chromaline in
writing any invention which is crated by him as a result of his activities
hereunder and all such inventions shall be the exclusive property of Chromaline
and are hereby assigned to Chromaline, except that if the invention does not
relate to the existing or reasonably foreseeable business interests of
Chromaline, Chromaline may in its sole discretion, release or license that
information to the Consultant upon written request. No additional compensation,
in any form, will be due Consultant as a result of such invention or inventions.
Consultant will, at Chromaline's expense, give Chromaline all assistance it
reasonably requires to perfect, protect and use its rights to inventions. In
particular, but without limitation, Consultant will sign all documents, do all
things, and supply all information that Chromaline may deem necessary or
desirable to transfer or record the transfer of Consultant's entire right, title
and
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interest in the inventions to Chromaline and to enable Chromaline to obtain
patent, copyright and/or trademark protection for inventions anywhere in the
world. The obligations of this paragraph shall survive the conclusion of this
Agreement with respect to inventions conceiving or made by Consultant as a
result of or relating to his consultancy and shall be binding upon the heirs,
executors, legal representatives or assigns of Consultant.
6. Confidential Information, as stated herein, includes all
items set forth in Exhibit 1 hereto.
7. This Agreement may be modified only in writing. It will be
governed by the laws of the State of Minnesota and is binding on the heirs,
successors and assigns of the parties hereto.
IN WITNESS WHEREOF, Chromaline and Consultant have executed
this Agreement this 22nd day of July, 1998.
THE CHROMALINE CORPORATION
By /s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx, Chairman of the Board
CONSULTANT
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, Consultant
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It is our policy that the subjects enumerated below be
identified as containing "Confidential Information" of types contemplated in the
Consulting Agreement between Chromaline and Consultant executed by July 13,
1998.
Customer lists
Budgets and forecasts
Business plans and schedules
Unpublished financial data
All documents marked "Confidential" or similarly marked for
limited access and all verbal disclosures identified as
confidential or similarly described for limited access
Confidential price lists
Identities of raw and semi-finished materials and their
sources
Product formulations and compositions
Our equipment and how it is laid out
Manufacturing processes
Employee lists
Laboratory notebooks
New product development plans and schedules
Information gained about our customers which is not commonly
known and would be reasonably thought to be helpful to our
competitors if it were to become known to them
Our compilations and interpretations of information about
the marketplace
Product costs
Our marketing techniques, methods and operations
It is the policy of Chromaline to define Confidential
Information as:
1. information which is not generally known or readily
ascertainable by proper means by others; and
2. accrues independent economic value from its secrecy
In order to protect Confidential Information, Consultant
agrees to observe these rules and practice these procedures:
1. Entry into manufacturing areas is prohibited except prior
authorization of, and escort by, a reasonable authority.
2. Entry into laboratory areas is permitted only by prior
authorization of a reasonable authority.
3. Discarded Confidential Information will be destroyed rather
than merely thrown away.
4. Confidential Information will be kept in a central and/or
locked location.
5. Publications will be screened for Confidential Information.
6. Documents will be clearly marked "Confidential" where
appropriate.
7. When, with the prior agreement of Chromaline, trade secret
disclosures are made, all such disclosures will be clearly marked
"secret."
8. Employee access to documents and computer access codes will
be restricted.
9. A policy statement will be issued to employees outlining
what is considered to be Confidential Information.
10. Warn visitors of restricted areas and Confidential
Information.
Chromaline and Consultant's obligation of confidentiality
shall not apply to Confidential Information that:
1. Was published or was part of the public knowledge prior to
its receipt from Chromaline or Consultant; or
2. Became published or part of the public knowledge through no
act or failure to act by either Chromaline or Consultant, or is
disclosed without restriction to a third party by either party
subsequent to the approval of the other party; or
3. Was known to Chromaline prior to its receipt from
Consultant or was known to Consultant prior to its receipt from
Chromaline.
Exhibit 1-2
4. Notwithstanding the stipulations of this Section,
Consultant shall not be permitted to justify any disregard of the
obligations of confidentiality imposed by this Agreement by using
information received from Chromaline or representatives to guide a
search of publications and other publicly available sources of
information, including persons, selecting a series of items of
knowledge from unconnected sources and fitting them together by use of
the integrated disclosure received from Chromaline.
5. If Consultant should be lawfully required by any court or
government agency to disclose Confidential Information, Consultant will
be permitted to disclose, provided Consultant provides Chromaline with
appropriate notice and such disclosure includes written notice to the
receiving party that the information disclosed is confidential to
Chromaline and is not to be disclosed to others.
6. Nothing herein shall be construed to limit the rights of
Chromaline to seek civil or criminal judgments in the event of
disclosure of Confidential Information.
Exhibit 1-3
