EXHIBIT 10.14
AMENDED AND RESTATED CONSULTING AGREEMENT
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This Amended and Restated Consulting Agreement (this "Agreement") is
entered into by and between ▇▇▇▇▇ WORTH ("consultant") and EXCALIBUR AEROSPACE,
INC., an Oklahoma corporation (the "Company") on this the November 21, 2002 (the
"Effective Date"). Consultant and the Company are sometimes hereinafter referred
to as the "Parties."
WHEREAS, the Parties entered into that certain Consulting Agreement,
dated effective as of the November 21, 2001 (the "Prior Agreement"), pursuant to
which the Company and Consultant made certain mutual covenants and
understandings regarding Consultant's services to the Company in connection with
the Company's business of: (i) the design and manufacture of civil and military
training devices and aerospace related equipment; (ii) close-tolerance
machining, welding, fabrication, assembly, and design for all industries, (iii)
custom turn-key engineering projects for a variety of industrial applications,
and (iv) other related services (collectively, the "Business");
WHEREAS, the Company and Consultant desire to amend and restate the
Prior Agreement, as more particularly set forth below in this Agreement;
WHEREAS, all initially capitalized, undefined terms used in this
Agreement shall have the meanings ascribed to such terms in that certain Asset
Purchase Agreement, dated effective as of November 20,2001, between the Company
and Aero Weld, Inc., an Oklahoma corporation (as the same may have been amended,
the "Asset Purchase Agreement");
NOW, THEREFORE, for and in consideration of the sum of TEN AND
NO/100THS DOLLARS ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
Parties hereby agree as follows.
1. PRIOR AGREEMENT TERMINATED. The Parties agree that the Prior
Agreement is hereby agreed to be terminated and canceled in its entirety, is no
longer of any force or legal effect, and shall be superseded and replaced by
this Agreement.
2. EFFECTIVE DATE. Company agrees to retain the services of Consultant
commencing on the Effective Date.
3. TERM. The term (the "Term") of this Agreement commence on the
Effective Date and shall automatically terminate March 31, 2012. This Agreement
can only be terminated by Company prior to the expiration of the Term for breach
by Consultant of the obligations contained in this Agreement.
4. DUTIES AND COMPENSATION. Consultant's shall have only the following
duties under this Agreement: attendance, upon Company's request, at the
Company's Thanksgiving and Christmas functions, Including cooking of turkeys for
Thanksgiving during the Term. But Consultant may accomplish such cooking through
an agent. In consideration for such services, Consultant will be paid a monthly
fee (the "Consultant Fee"). The Consultant Fee shall be based upon the gross
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revenues of the Company and its Affiliates from operations each calendar month
arising out of or related to the Business, as determined by the Company's
accountants, and after deducting all applicable sales and use taxes, in the
manner more particularly set forth below (the same being referred to as the
"Gross Revenue"). The first month's Gross Revenue that shall be counted for the
purposes of determining the Consultant Fee shall be Apri1, 2002. The Consultant
Fee for each month shall be payable as follows: within fifteen (15) days after
the end of the relevant calendar month, the Company shall determine the Gross
Revenue for such calendar month, and shall deliver written notice of such
determination to Consultant (itemized with reasonable particularity), together
with the payment of the Consultant Fee (if any) (as such, the first monthly
payment of the Consultant Fee (if any) will be payable on May 15, 2002 based
upon the Gross Revenue for the month of April, 2002). Consultant acknowledges
that he is an independent contractor, and agrees that he shall not be eligible
for any benefits provided by Company to its employees for services provided
under this Agreement (subject, however, to any obligation of the Company
pursuant to the Asset Purchase Agreement). Company shall reimburse Consultant
for his reasonable out-of-pocket travel and lodging expenses associated with the
performance of Company's requested services. Such reimbursement shall be made
within fifteen (15) days of presentation to Company of original receipts and a
properly completed expense form. Upon written notice to Company, Consultant
shall have the right to require payment of any or payments due under this
Agreement to any third party; provided however that Consultant shall not be able
to assign his obligations hereunder and shall personally perform the services.
The Consultant fee for each calendar month shall be as follows: Company shall
reimburse Consultant for his reasonable out-of-pocket travel and lodging
expenses associated with the performance of Company's requested services. Such
reimbursement shall be made within fifteen (15) days of presentation to Company
of original receipts and a properly completed expense form. Upon written notice
to Company, Consultant shall have the right to require payment of any or
payments due under this Agreement to any third party; provided however that
Consultant shall not be able to assign his obligations hereunder and shall
personally perform the services. The Consultant fee for each calendar month
shall be as follows:
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GROSS REVENUE/MONTH CONSULTANT FEE/MONTH
------------------- --------------------
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$0.00 - $450,000.00 0.00
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$450,000.01 - $514,999.99 $15,000.00
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$515,000.00 - $614,999.99 $20,000.00
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$615,000.00 - $714,999.99 $25,000.00
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$715,000.00 - $814,999.99 $30,000.00
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$815,000.00 - $914,999.99 $50,000.00
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$915,000.00 and above $65,000.00
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It is agreed, however, that in no event shall the aggregate Consultant Fee
(i.e., the aggregate of all Consultant Fee payments made from time to time
during the term of this Agreement) exceed $2,500,000.00 (said $2,500,000.00
aggregate amount being referred to as the "Ceiling"). Consultant (or his
representatives), upon reasonable prior notice, from time to time, but no more
than one (1) time in any twelve (12) month period, shall have the right to
inspect the books and records of the Company and its Affiliates, which
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inspection shall take place at the offices of the Company, in order to determine
the accuracy of the payments made to Consultant pursuant to this Agreement. The
cost of such inspection shall be borne by Consultant.
5. PRIOR PAYMENTS. The Company agrees that Consultant may retain all
payments made to Consultant under the Prior Agreement (which amount it is agreed
by the Parties to be $41,666.67). However, all such payments made to Consultant
under the Prior Agreement shall be included in determining the point at which
the Ceiling has been or is reached.
6. CONTINUATION OF PAYMENTS UPON DEATH, DISABILITY, ETC. The Company
agrees that its obligation to pay the Consultant Fee (under the circumstances
and calculated as set forth above in Section 4) shall survive the death,
disability or legal incapacity of Consultant, and such obligation shall continue
for the duration of the Term (or upon the achievement of the Ceiling, whichever
occurs earlier).
7. OTHER BUSINESS INTERESTS. Company acknowledges that Consultant has
the right to accept other full-time or part-time employment which does not
violate the restrictions contained in this Agreement.
8. BUSINESS. In consideration for the promises by Consultant below, the
Company agrees to disclose to Consultant confidential and trade secret
information concerning its Business and investment activities, customers or
client relationships, business plans, and business information, the disclosure
of which would cause financial loss, detriment, and damage to the Company. The
Company desires to be able to impart such confidential information and trade
secrets to Consultant with the secure knowledge that the confidential
information and trade secrets will be used solely and strictly for its sole
benefit and not in competition with or to the detriment of the Company, directly
or indirectly, by Consultant or any of his agents, servants, future employees,
or future employers. The covenants contained in this Section 8 shall be
enforceable even if Company or Consultant is in breach of the other covenants in
this Agreement.
In consideration for Company's disclosure of confidential and trade
secret information to Consultant, the retention of Consultant under this
Agreement, and the mutual covenants and restrictions contained in this
Agreement, the parties agree as follows:
(a) NON-COMPETITION. As an inducement for Company's agreement
to employ Consultant, to provide Consultant with trade secrets and other
Confidential Information, and to enter into this Agreement, Consultant hereby
agrees that until March 31, 2007, or for the maximum period of time permitted by
law, whichever is less, Consultant shall not, whether for profit or not, whether
on his own behalf or on behalf of any person or firm in any capacity whatsoever,
engage in the "Prohibited Activity" (as hereinafter defined) within the
"Relevant Geographical Area" (as hereinafter defined). Serving as a partner,
member, trustee, receiver, custodian, manager, stockholder, officer, director,
owner, joint venturer, associate, employee, consultant, adviser or in any other
capacity whatsoever with respect to any person or firm engaged in the Prohibited
Activity within the Relevant Geographical Area shall be conclusively deemed
engagement in the Prohibited Activity within the Relevant Geographical Area
regardless of whether such service is for profit or not or whether such person
or firm engages in the Prohibited Activity for profit or not. For purposes
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hereof, the phrase "Prohibited Activity" shall mean, directly or indirectly,
soliciting the Company's customers or working independently or for any person or
firm involved in the Business, as defined below, in the Relevant Geographic
Area. Business shall mean (x) the design and manufacture of civil and military
training devices and aerospace related equipment; (y) close-tolerance machining,
welding, fabrication, assembly, and design for all industries and (z) custom
turn-key engineering projects for a variety of industrial applications. For
purposes hereof; the phrase "Relevant Geographical Area" shall mean the area
within political boundaries of the State of Oklahoma, provided, however, if the
aforesaid geographic area exceeds the maximum geographic area permitted by law
or for any other reason does not state a geographic area within which the
provisions of this Section 8 are enforceable, then the provisions of this
Section 8 shall apply within the maximum geographic area permitted by law in
which such provisions are enforceable.
(b) SOLICITATION OF COMPANY EMPLOYEES. Consultant recognizes
the substantial investment of the Company in the training of its personnel and
employees and as an inducement for Company's agreement to employ Consultant, to
provide Consultant with trade secrets and other Confidential Information, and to
enter into this Agreement, Consultant agrees to the following restriction. As
such, until March 31, 2007, or for the maximum period of time permitted by law,
whichever is less, Consultant will not either directly or on behalf of others
induce, attempt to influence or persuade, solicit or recruit employees of the
Company or any affiliate or subsidiary of the Company, to leave the employment
of the Company or any affiliate or subsidiary of the Company, or to join a
competitor of the Company or any affiliate or subsidiary of the Company. Even if
Company is able to acquire an injunction pursuant to the terms of this
Agreement, Company may still suffer damages due to the Consultant's breach of
this covenant. Should Consultant breach this covenant, and as a result thereof,
one or more employees leave the employ of the Company, Consultant shall be
liable to the Company for liquidated damages equal to the total compensation
paid by Company to the former employee during the last twelve (12) months of
employment with Company. Such sum shall be due and payable twenty (20) days
after demand, and if such sum is not timely paid, and Company must attempt
collection, Company shall be entitled to reasonable attorneys' fees and costs.
(c) NON DISCLOSURE OF TRADE SECRETS. While performing services
under this Agreement, Consultant will have access to and become familiar with
various trade secrets (as hereinafter defined) of the Company. Consultant will
also have access to plans and policies for the Company. Consultant acknowledges
the obligation not to disclose to any third party, directly or indirectly, or
use the Company's trade secrets in any way, at any time prior to March 31, 2007,
except as required in the course of Consultant's provision of services under
this Agreement. All databases, software, computer programs, files, records,
documents, drawings, specifications, equipment, and similar items relating to
the business of the Company or any of its affiliates or subsidiaries, whether or
not prepared by the Consultant, shall remain the exclusive property of the
Company and shall not be removed under any circumstances from the premises where
the work of the Company is being carried on, unless prior written consent of the
Company is obtained. As used herein, trade secrets shall mean, but not limited
to, devices; secret inventions; processes and compilations of information;
records; specifications; customer lists; prices; customer proposals; business
plans, goals, or prospects; information on potential acquisitions; computer
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programs; financial data of the Company, advertising; or any confidential
knowledge or secrets with respect to the business of the Company.
(d) SEVERABILITY. Consultant's covenants set forth in this
Section 8 are independent and severable from every other provision of this
Agreement; and the breach of any other provision of this Agreement by the
Company or any other agreement between Consultant and the Company shall not
affect the validity of the provisions of this Section 8 or constitute a defense
of Consultant in any suit or action brought by the Company to enforce the
provisions of this Section 8 or to seek any relief from Consultant's breach
thereof.
(e) DUTY OF LOYALTY. Consultant agrees not to render any
services of a business nature during the Term for any business or pursuit which
is in competition with the Company or its Affiliates in the states or
municipalities of Texas and Oklahoma.
(f) DAMAGES. In addition to all other remedies at law and in
equity which the Company might have for Consultant's breach of the covenants set
forth in the preceding Subsections 8(a), 8(b), 8(c), or 8(e), will cause the
Company immediate and irreparable harm. The parties agree that in the event of
any breach or attempted or threatened breach of any such covenant, the Company
shall also have the right to obtain a temporary restraining order, temporary
injunction and permanent injunction against Consultant prohibiting such breach
or attempted or threatened breach, merely by proving the existence of such
breach, or attempted or threatened breach (by a preponderance of the evidence)
and without the necessity of proving either inadequacy of legal remedy or
irreparable harm. Notwithstanding the availability of such relief, the Company
may seek damages for the breach of these covenants.
(g) REASONABLENESS AND SURVIVAL. Each of the parties agree and
stipulate that: (i) the agreements and covenants not to compete contained in
this Section 8 are fair and reasonable in light of all of the facts and
circumstances of the relationship between Consultant and the Company; (ii) the
consideration provided by the Company is not illusory; and (iii) the
consideration given by the Company under this Agreement gives rise to the
Company's interest in restraining and prohibiting Consultant from engaging in
the Prohibited Activity within the Relevant Geographical Area as provided under
this Section 8 and the covenants not to engage in the Prohibited Activity within
the Relevant Geographical Area pursuant to this Section 8 are designed to
enforce such consideration. The Parties are aware, however, that in certain
circumstances, courts have refused to enforce certain agreements not to compete.
Therefore, in furtherance of and not in derogation of the provisions of the
preceding sentence, the Parties agree that if a court should decline to enforce
the any of the provisions of this Section 8, such affected provisions shall be
deemed to be modified to restrict competition with the Company to the maximum
extent, in both time and geography, which the court shall find enforceable. The
provisions of this Section 8 shall survive any termination or expiration of this
Agreement, and the termination of Consultant's employment with the Company (for
whatever cause or reason).
9. COMPANY PROPERTY. Consultant agrees that on termination of this
Agreement to return to the Company any and all material, equipment and other
property of the Company in Consultant's possession. Company property shall
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include all documents, lists, compilations, data, tapes, or discs, including
copies of same, either created by the Consultant or coming into Consultant's
possession as a result of the services provided under this Agreement.
10. NOTICE OF DEFAULT AND OPPORTUNITY TO CURE. No payment is late
unless it has not been received by Consultant thirty (30) days after the date it
was due. If the payment has not been received after thirty (30) days from its
due date, Consultant is required to provide written notice to Company of the
non-receipt of payment, and Company shall have fourteen (14) days following
receipt of the notice of non-receipt of payment to make the payment at issue.
11. STATUS. This Agreement operates for the benefit of Company and any
of its divisions, subsidiaries, and affiliated companies for which Consultant
performs services, including but not limited to Excalibur Aerospace, Inc.,
Excalibur Services, Inc., Excalibur Holdings, Inc., Excalibur Steel, Inc., and
its successors in interest. If Company is not the actual employer of Consultant,
then "Company" as used herein shall refer to Excalibur Aerospace, Inc., the
subsidiary or affiliated entity or entities for which Consultant is employed. In
the event that another legal entity becomes the employer of Consultant, this
Agreement shall remain in full force and effect unless the successor employer
notified the Consultant in writing of its intent to cancel this Agreement.
12. MODIFICATION. This Agreement may be modified or amended only by an
instrument in writing executed by the parties hereto.
13. LAW GOVERNING CONTRACT. This Agreement is to be construed in
accordance with the laws of the State of Oklahoma.
14. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the Term, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by is severance therefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically by the Company, as part hereof, a provision as
similar in terms to such illegal, invalid, or unenforceable provision as may be
possible and be legal, valid and enforceable. Notwithstanding the foregoing, if
it should ever be held that any provision contained herein does not contain
reasonable limitations as to time, geographical area, or scope of activity to be
restrained, then the court so holding shall, at the request of Company, reform
such provisions to the extent necessary to cause them to contain reasonable
limitations as to time, geographical area and scope of activity to be restrained
and to give the maximum permissible effect to the intentions of the parties as
set forth herein, and the court shall enforce such provisions as reformed.
15. ARBITRATION OF DISPUTES. Any legal or equitable dispute or
controversy arising under, out of, or in connection with or in relation to this
Agreement; or arising out of, or related to the services provided by Consultant,
or the termination of Consultant by the Company, shall be resolved exclusively
by binding arbitration. This agreement applies to all claims. This provision
shall apply to any such disputes or controversies involving Consultant and the
Company and/or its shareholders, directors, officers, managers, supervisors and
other employees.
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The arbitration proceedings shall be conducted in the City of Tulsa,
Oklahoma (unless Consultant and the Company agree to another location) in
accordance with the Commercial Dispute Resolution Rules ("CDR Rules") of the
American Arbitration Association ("AAA") in effect at the time a demand for
arbitration is made.
One arbitrator shall be used and shall be chosen by mutual agreement of
the parties. If, within thirty (30) days after either party notifies the other
party of an arbitrable dispute, no arbitrator has been chosen, an arbitrator
shall be chosen by AAA pursuant to its EDR Rules. The arbitrator must be an
attorney licensed to practice law in the jurisdiction in which the arbitration
is to be conducted. The arbitrator shall be required to determine the rights of
the parties in accordance with federal law and the state law of the forum with
the most substantial relationship to the conduct at issue. The arbitrator shall
have the authority to consider and grant a motion to dismiss and motion for
summary judgment applying the standards governing such motions under the Federal
Rules of Civil Procedure. The arbitrator shall coordinate, and limit as
appropriate, all pre-trial arbitral discovery, which shall include document
production, information requests, and depositions. The arbitrator shall issue a
written decision and award, which shall explain the basis of the decision. The
decision and award shall be exclusive, final, and binding on both Consultant and
the Company, aid all heirs, executors administrators, successors, and assigns.
The costs and expenses of the arbitration shall be borne by the Company, except
that if Consultant initiates the arbitration, Consultant will pay up to $150
towards the administrative fees charged by AAA, except that this requirement
will be waived upon a showing of financial hardship under the same standards
used in federal district court. Consultant is entitled to representation by an
attorney throughout the proceedings at Consultant's own expense.
Both Consultant and the Company understand that by agreeing to
arbitration, they are agreeing to substitute one legitimate dispute resolution
forum (arbitration) for another (litigation), and thereby are waiving the right
to have disputes resolved in court. However, Company and Consultant have the
right to pursue injunctive relief for breach of Section 5 of this Agreement
through the judicial process without waiving the right to arbitration. This
substitution involves no surrender, by Consultant or the Company, of any
statutory or common law benefit, protection, or defense.
13. NOTICE. Any notice, request, instruction, or other document to be
given hereunder by any party hereto to any other party shall be sufficiently
given if delivered in person or sent by confirmed facsimile transmission or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if the Company, to:
Excalibur Aerospace, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attentiom: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile:(_____)_____________
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with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ and ▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Consultant, to:
▇▇▇▇▇ Worth
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Doerner, Saunders, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: H. ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address for a party as shall be specified by like notice, and
such notice or communication shall be deemed to have been duly given as of the
date so delivered, mailed or sent by telecopier.
16. NO DEFAULT UNDER PRIOR AGREEMENT. To the knowledge of the Company,
Consultant is not in default of his obligations under the Prior Agreement as of
the Effective Date.
17. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the Parties with respect to the subject matter hereof: Any
previous agreements or understandings (whether oral or written) between the
Parties regarding the subject matter hereof are merged into and superseded by
this Agreement, including, without limitation, the Prior Agreement.
This Agreement is effective as of the Effective Date.
COMPANY:
EXCALIBUR AEROSPACE, INC, an Oklahoma
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ Chief Executive
Officer