EXHIBIT 10.1
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PARAGON TECHNOLOGIES, INC.
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is dated as of
September 1, 2005, by and between PARAGON TECHNOLOGIES, INC., a Delaware
corporation (the "Company"), and THE QTX GROUP, a Pennsylvania sole
proprietorship ("QTX").
W I T N E S S E T H
WHEREAS, Mr. Joel L. Hoffner (the "Consultant") is Managing
Director of QTX; and
WHEREAS, the Consultant served as Vice President of Product
Management, Vice President of Engineering and Director of Engineering of SI
Handling Systems, Inc., a predecessor of the Company; and
WHEREAS, the Company desires that the Consultant provide
consulting services to the Company and provide periodic advice to the Company;
and
WHEREAS, the parties hereto desire to enter into this
Agreement whereby QTX will allow the Consultant to act from time to time as an
independent contractor for the Company in providing to the Company consulting
services relating to the Company's corporate development (the "Business")
pursuant to the terms hereof; and
NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties, intending to be legally bound, agree as follows:
1. Term. The Company hereby retains the Consultant and the
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Consultant hereby accepts such retention by the Company commencing on September
1, 2005 until August 31, 2007 (the "Term"). Thereafter, this Agreement shall be
automatically renewed for successive one month terms (each, a "Renewal Term").
This Agreement may be terminated during (i) the Term upon mutual written
agreement of the parties or (ii) any Renewal Term upon five (5) days written
notice by either party.
2. Services Rendered. Consultant shall perform strategic
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consulting for the Company (the "Consulting Services"). During the Term, the
Consultant shall provide at least one hundred fifty-six (156) days of consulting
services per year. During each Renewal Term, the Consultant shall provide
consulting services at the request and as directed by the Board of Directors of
the Company.
3. Compensation. The Company shall pay the Consultant, and the
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Consultant hereby agrees to accept, as compensation for all services to be
rendered to the Company, the compensation set forth in this Section 3.
a. Term. During the Term, the Company shall pay the
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Consultant a consulting fee in the amount of Ninety Thousand Dollars ($90,000)
per year, payable in equal monthly installments of Seven Thousand Five Hundred
Dollars ($7,500) on the first day of each calendar month during the Term (the
"Consulting Fee").
b. Renewal Term. During each Renewal Term, the Company
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shall pay the Consultant a consulting fee of Seven Thousand Five Hundred Dollars
($7,500) payable on the first day of each Renewal Term (the "Renewal Term Fee");
provided that, if a Renewal Term is terminated in accordance with the terms of
Section 1 of this Agreement, the Renewal Term Fee shall be prorated consistent
with the number of days the Consultant provided consulting services to the
Company during such Renewal Term.
c. No Entitlement to Employee Benefits. Consultant
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acknowledges that he will not be eligible to participate in any retirement,
welfare, bonus, incentive or other benefit plan, including, without limitation,
health insurance and other health care benefits, sick leave, vacation or holiday
leave, maintained by the Company during the Term or otherwise by virtue of his
retention by the Company and agrees that he will not make any claim for such
benefits.
d. Expenses. The Company will reimburse Consultant for all
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reasonable and necessary out-of-pocket expenses directly incurred by Consultant
in the course of his engagement by the Company. Subject to then current Company
policies, expenses will be reimbursed at actual cost. Payment for such expenses
will be due within thirty (30) days of the submission by Consultant of a receipt
setting forth in reasonable detail the expenses to be reimbursed.
4. Relationship of the Parties. The Consultant's engagement
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by the Company under this Agreement is strictly for the purposes and to the
extent set forth in this Agreement. The Consultant's relationship to the Company
is solely that of an independent contractor. The Consultant shall not be
considered an employee or agent of the Company under this Agreement or
otherwise. The Consultant acknowledges that as an independent contractor, the
Consultant will not be provided any benefits which the Company provides to its
employees, including but not limited to health insurance or other health care
benefits, sick leave, vacation or holiday leave. Without limiting the foregoing,
the Consultant shall be responsible for the timely payment of his own
self-employment and income taxes and the Company shall not deduct or withhold
from any amount payable to the Consultant under this Agreement any tax or
employee benefit payments.
5. Confidentiality.
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a. Definition. "Confidential Information" means any
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Company proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products, services,
customers, customer lists, markets, developments, marketing, finances or other
business information disclosed by the Company either directly or indirectly in
writing, orally or by drawings or inspection of parts or equipment.
b. Non-Use and Non-Disclosure. Consultant will not, during
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or subsequent to the Term or any Renewal Term of this Agreement, use the
Company's
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Confidential Information for any purpose whatsoever other than the performance
of the Consulting Services on behalf of the Company or disclose the Company's
Confidential Information to any third party. It is understood that said
Confidential Information shall remain the sole property of the Company.
Consultant further agrees to take all reasonable precautions to prevent any
unauthorized disclosure of such Confidential Information. Confidential
Information does not include information which has become publicly known and
made generally available through no wrongful act of Consultant.
c. Third Party Confidential Information. Consultant
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recognizes that the Company has received and in the future will receive from
third parties their confidential or proprietary information subject to a duty on
the Company's part to maintain the confidentiality of such information and to
use it only for certain limited purposes. Consultant agrees that Consultant owes
the Company and such third parties, during the Term and thereafter, a duty to
hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm or corporation or to use
it except as necessary in carrying out the Consulting Services for the Company
consistent with the Company's agreement with such third party.
d. Return of Materials. Upon the termination of this
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Agreement, or upon Company's earlier request, Consultant will deliver to the
Company all of the Company's property or Confidential Information that
Consultant may have in Consultant's possession or control.
6. Successors and Assigns. This Agreement shall inure to the
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benefit of and be binding upon the Company and QTX and their respective
successors, executors, administrators, heirs and/or assigns; provided that the
Consultant shall not make any assignment of this Agreement or any interest
herein, by operation of law or otherwise.
7. Notice. Any notice hereunder by either party shall be given
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by personal delivery or by sending such notice by certified mail, return-receipt
requested, or any national overnight delivery service, addressed to the other
party at its address set forth below or at such other address designated by
notice in the manner provided in this Section 7. Such notice shall be deemed to
have been received upon the date of actual delivery if personally delivered or,
in the case of mailing, two (2) days after deposit with the U.S. mail, or, in
the case of overnight delivery service, when deposited with the overnight
delivery service.
(i) if to the Company, to:
Leonard S. Yurkovic
Paragon Technologies, Inc.
600 Kuebler Road
Easton, Pennsylvania 18040
(ii) if to QTX, to:
Joel L. Hoffner
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1806 Easthill Drive
Bethlehem, Pennsylvania 18017
8. Entire Agreement; Amendments. This Agreement contains
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the entire agreement and understanding of the parties hereto relating to the
consulting arrangement hereunder, and merges and supersedes all prior and
contemporaneous discussions, agreements and understandings of every nature
between the parties hereto any consulting, employment, severance, deferred
compensation, retirement or similar type of agreement; and the Consultant
expressly agrees that all such prior agreements are hereby terminated and the
Company is released of all obligations with respect thereto. This Agreement may
not be changed or modified, except by an express agreement in writing signed by
each of the parties hereto.
9. Waiver. The waiver of the breach of any term or provision of
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this Agreement shall not operate as or be construed to be a waiver of any other
or subsequent breach of this Agreement.
10. Governing Law. This Agreement shall be construed and enforced
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in accordance with the laws of the Commonwealth of Pennsylvania without regard
to the principles of conflicts of laws of any jurisdiction.
11. Invalidity. If any provision of this Agreement shall be
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determined to be void, invalid, unenforceable or illegal for any reason, then
the validity and enforceability of all of the remaining provisions hereof shall
not be affected thereby. If any particular provision of this Agreement shall be
adjudicated to be invalid or unenforceable, then such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such amendment to apply only to the operation of such provision
in the particular jurisdiction in which such adjudication is made; provided
that, if any provision contained in this Agreement shall be adjudicated to be
invalid or unenforceable because such provision is held to be excessively broad
as to duration, geographic scope, activity or subject, then such provision shall
be deemed amended by limiting and reducing it so as to be valid and enforceable
to the maximum extent compatible with the applicable laws of such jurisdiction,
such amendment only to apply with respect to the operation of such provision in
the applicable jurisdiction in which the adjudication is made.
12. Section Headings. The section headings in this Agreement are
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for convenience only; they form no part of this Agreement and shall not affect
its interpretation.
13. Number of Days. In computing the number of days for purposes
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of this Agreement, all days shall be counted, including Saturdays, Sundays and
legal holidays; provided that, if the final day of any time period falls on a
Saturday, Sunday or day which is a legal holiday in the Commonwealth of
Pennsylvania, then such final day shall be deemed to be the next day that is not
a Saturday, Sunday or legal holiday.
14. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
PARAGON TECHNOLOGIES, INC.
By: /s/ Leonard S. Yurkovic
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Leonard S. Yurkovic
Chief Financial Officer
THE QTX GROUP
By: /s/ Joel L. Hoffner
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Joel L. Hoffner
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