CONSULTING AGREEMENT
This Agreement, dated as of December 3, 1998, by and between
Reliability Incorporated, a Texas corporation (the "Company"), and Basic
Engineering Services and Technology Labs, Inc., a California corporation
("BEST").
W I T N E S S E T H:
The Company wishes to obtain the services of Isam Qubain, President of
BEST ("Qubain"), to act as consultant to the Company, and BEST is willing
to make the services of Qubain available to Company, all upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as
follows:
1. Engagement. During the term of this Agreement, BEST will provide
the services of Qubain to act as a consultant to the management of the
Company in matters relating to transition of the testing service business
formerly conducted by BEST in Austin and Singapore, sales of the Company's
testing services, marketing of the Company's testing services and customer
relations related to the Company's testing services business. All services
performed by Qubain will be under the direction of the President of the
Company, and will be provided when and as called for by the President of
the Company, but will not exceed 45 hours per month, on average. BEST
agrees that services hereunder shall be provided by Qubain only.
BEST agrees that Qubain shall faithfully render his best efforts with
respect to such services and to the promotion and advancement of the
Company's business. It is understood, subject to the provisions of Section
5 hereof, that Qubain may have other occupations or employments during the
term hereof.
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Neither BEST or Qubain shall have any authority to bind or obligate
the Company. Neither BEST or Qubain is an agent of the Company and neither
is authorized to act for or on behalf of the Company with respect to
employees of the Company, customers or any third party.
2. Compensation. During the term hereof, the Company shall pay to
BEST a fee of $150,000 per year, payable at the rate of $12,500.00 per
month and paid on the last day of each month commencing on December 31,
1998, and thereafter until this Agreement is terminated under Section 3 or
4 hereof.
3. Term. Subject to the provisions for early termination
hereinafter set forth, the term of this Agreement shall begin on the date
hereof and shall expire on November 30, 2000. The provisions of Sections 5
and 6 survive termination of this Agreement under Section 3 or 4.
4. Early Termination. BEST may terminate this Agreement at any time
on thirty days written notice to the President of the Company. The
provisions of Sections 5 and 6 survive early termination of this Agreement.
5. Noncompetition Covenant. BEST acknowledges that it and Qubain
are parties to that certain Asset Purchase Agreement dated November 19,
1998, among Qubain, Company and BEST, which agreement contains
noncompetition covenants which (i) will not be violated by Qubain providing
the services required hereunder, and (ii) shall survive termination of this
Agreement.
6. Confidentiality.
(a) Neither BEST nor Qubain will during or at any time after the
termination of this Agreement use for itself or himself or others or
divulge or convey to others any secret or confidential information,
knowledge or data of the Company obtained
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by Qubain or BEST during the term hereof, and such information, knowledge
or data includes but is not limited to secret or confidential matters,
(i) of a technical nature, such as, but not limited to,
methods, know-how, compositions, processes, machines, inventions,
computer programs and similar items or projects,
(ii) of a business nature, such as, but not limited to,
information about cost, purchasing, profits, market, sales or lists of
customers, and
(iii) pertaining to future developments, such as, but not
limited to, research and development or future marketing or
merchandising.
(b) Upon termination of this Agreement, or at any other time at
the Company's request, BEST agrees to deliver promptly to the Company all
drawings, manuals, letters, notes, notebooks, reports, sketches, formulae,
computer programs and similar items, memoranda, customer's lists and all
other materials and all copies thereof relating in any way to the Company's
business and in any way obtained by BEST or Qubain during the term hereof
and which are in either BEST's or Qubain's possession or under their
control. BEST further agrees that neither it or Qubain will not make or
retain any copies of any of the foregoing and will so represent to the
Company upon termination of this Agreement.
7. Relationship of Parties. This Agreement is not intended to and
does not create an employment relationship between the Company and BEST or
the Company and Qubain, and BEST is an independent contractor and not an
employee of the Company. BEST is solely responsible for the payment of all
income and other taxes attributable to the fees paid by the Company
hereunder. BEST agrees to indemnify and hold the Company harmless against
any loss, costs or expenses (including attorneys' fees) for any
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failure by BEST to timely pay any requisite taxes. The Company's sole
obligation hereunder is to provide to the BEST a Form 1099 or its
equivalent as of the end of each year.
8. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any organization that succeeds to substantially all of the
assets and business of the Company, and the term "Company" however used
herein shall mean and include any such organization after such succession.
This Agreement and all rights and obligations hereunder are personal to
BEST and may not be assigned, transferred, alienated or hypothecated by it,
provided however, that BEST can assign all obligations hereunder to Qubain,
so long as Qubain confirms his assumption of all obligations hereunder.
9. Miscellaneous.
(a) This Agreement shall not be amended except by a written
agreement signed and delivered by the parties hereto.
(b) The interpretation and construction of this Agreement shall
be governed by the laws of the State of Texas.
(c) All notices and communications given pursuant hereto shall
be in writing and shall be deemed to have been duly given if mailed, by
certified mail, return receipt requested, or delivered in person as
follows:
(i) If to the Company, directed to Larry Edwards, President
at, 16400 Park Row, Houston, Texas 77084.
(ii) If to BEST, directed to it at 3600 Peterson Way, Santa
Clara, California 95040, Attn: President.
Either party may change the address to which such notices and
communications shall be sent by written notice to the other party.
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(d) No course of dealing between the Company and BEST nor any
delay in exercising any rights hereunder shall operate as a waiver of any
rights of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Reliability Incorporated
By: /s/ Larry Edwards
------------------------
Larry Edwards
President
Basic Engineering Services and Technology Labs, Inc.
By: /s/ Isam Qubain
------------------------
Isam Qubain
President
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