Exhibit 10.1
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is dated as of July 18, 2002,
by and between DOMINICK PAGANO ("Consultant") and EDAC TECHNOLOGIES CORPORATION,
a Wisconsin corporation (the "Company").
RECITALS
A. Consultant has significant experience and knowledge of the
operations and manufacturing processes of the Company's businesses.
B. Company desires to retain Consultant in a consulting and advisory
capacity and Consultant desires to be so retained pursuant to the terms and
conditions of this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, the Company and Consultant agree as follows:
1. Consulting Services. During the term of this Agreement, Consultant
shall be available at reasonable times to provide the review and advisory
services set forth on Exhibit A, attached hereto, (collectively, the
"Services"). Notwithstanding anything in this Agreement to the contrary, Company
shall retain the exclusive and absolute control over the general operation of
the business of the Company, including, but not limited to, management of
payables and receivables, purchasing and selling of assets, pricing, personnel
decisions and inventory control.
2. Term and Termination of Agreement.
(a) Initial Term. The term of Consultant's engagement under this
Agreement shall commence on the date hereof and shall continue until December
17, 2002; provided, however, that this Agreement may be extended by mutual
agreement in writing of the parties.
(b) Termination. This Agreement may be terminated as follows:
(i) At any time by mutual agreement of the parties.
(ii) Immediately, upon the death or disability of Consultant.
(iii) In the event of a material breach of this Agreement,
the nonbreaching party may provide written notice of the breach and terminate
this Agreement at any time after a reasonable opportunity to cure such breach.
If the breaching party, prior to expiration of the cure period, has cured the
breach, this Agreement shall remain in effect, provided the breaching party
promptly reimburses the nonbreaching party for any reasonable damages the
nonbreaching party may have incurred.
(iv) At any time by either party with seven days' prior
written notice to the other party.
(c) Effect of Termination. Upon termination of this Agreement, for
any reason, the parties hereto shall have no further obligation hereunder except
for obligations accruing prior to the effective date of termination or as
otherwise provided in section 9.
3. Consideration for Consultant's Services. As consideration for
Consultant's agreement to render the Services, the Company shall pay to
Consultant a consulting fee in the amount of $6,000 per month, payable in equal
weekly installments during the term of this Agreement.
4. Confidentiality. Consultant covenants and agrees that he will not at
any time during or after the term of this Agreement reveal, divulge or make
known to any person, firm or corporation any information, knowledge or data of a
confidential or proprietary nature relating to the business of the Company or
any of its affiliates, and Consultant shall hold, for the benefit of the
Company, all such information, knowledge or data which is or was obtained by the
Consultant during the term of this Agreement. Consultant's agreement under this
Section 4 shall not apply to any information, knowledge or data which (a) is or
has become generally known or public or otherwise in the public domain other
than as a result of a breach of this Section 4 by Consultant or (b) was
disclosed to Consultant by a third party who was not under any obligation of
confidence or secrecy to the Company at the time of such disclosure.
5. Indemnification.
(a) The Company shall indemnify Consultant, during and after the
term of this Agreement, to the fullest extent permitted under the laws of the
state of Wisconsin, against any and all costs, claims, judgments, fines,
settlements, liabilities, and fees or expenses (including, without limitation,
reasonable attorneys' fees) incurred in connection with any proceedings
(including, without limitation, threatened actions, suits or investigations)
brought by any party or parties, other than Consultant or Consultant's heirs,
successors or assignees arising out of, or relating to, Consultant's actions or
inactions related to this Agreement or the Services or any counterclaims brought
in
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defense of an otherwise indemnifiable action at any time. The indemnification
contemplated under this section 5(a) shall be provided to Consultant unless, at
the time indemnification is sought, such indemnification would be prohibited
under the laws of the state of Wisconsin; the Company may rely on the advice of
its counsel in determining whether indemnification is so prohibited. Amounts
payable as indemnification under this section 5 shall be reduced by the amount
of any other sums received by Consultant for the same purpose pursuant to any of
other sources or provisions.
(b) Notwithstanding any other provision herein, the Company shall
not be obligated pursuant to the terms of this section 5:
(i) to indemnify Consultant for expenses or liabilities with
respect to proceedings or claims (except counterclaims or cross claims)
initiated or brought voluntarily by Consultant and not by way of defense; or
(ii) to indemnify Consultant for any expenses or liabilities
incurred by him with respect to any claim, issue or matter, raised in connection
with a proceeding instituted by Consultant to enforce or interpret the
provisions of this section 5, if a court of competent jurisdiction renders a
final judgment ruling against the Consultant with respect to the material
assertions made by Consultant with respect to such claim, issue or matter; or
(iii) to indemnify Consultant for expenses or liabilities of
any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties, and amounts paid in settlement) which have been paid
directly to Consultant by an insurance carrier under a policy of directors' and
officers' liability insurance maintained by the Company; or
(iv) to indemnify Consultant for expenses or liabilities
arising from the purchase and sale by Consultant of securities of the Company in
violation of federal or state securities laws; or
(v) to indemnify Consultant for expenses or liabilities or
with respect to proceedings or claims unrelated to his rendition of Services to
the Company, including, without limitation, actions taken in his individual
capacity as a shareholder.
6. Independent Contractor. The parties acknowledge and agree that
Consultant is at all times acting and performing as an independent contractor.
The parties shall make no statements inconsistent with Consultant's status as an
independent contractor. As an independent contractor, Consultant shall assume
full responsibility for payment of all federal, state and local income taxes,
self-employment taxes, FICA taxes and any other taxes or withholding resulting
from compensation derived by Consultant under this Agreement. Company shall not
be responsible for any of the foregoing or any
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other amounts required to be withheld or paid by an employer with respect to its
employees under any applicable laws, rules or regulations. Consultant shall be
liable for his own debts, obligations, acts and omissions.
7. Relationship of the Parties. In no event shall this Agreement be
construed (a) as establishing a partnership or joint venture or similar
relationship between Company and Consultant or (b) to authorize either party to
act as agent for the other. Consultant agrees to take all appropriate
precautions against unauthorized disclosure of the Confidential Information by
any of its affiliates, employees, agents or other persons under its control.
8. Notices. Any notice or communication required to be given by either
party hereunder shall be in writing and shall be hand delivered or sent by
registered mail, return receipt requested or by confirmed facsimile transmission
to the party receiving such communication at the address specified by each party
as its principal office or such other address as either party may in the future
specify to the other party.
9. Survival. The expiration or termination of this Agreement shall not
affect Consultant's or the Company's specific agreements in sections 4 and 5 of
this Agreement. Such agreements shall survive the expiration or termination of
this Agreement.
10. Severability. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, (a) such invalidity or unenforceability
shall not affect any other provision of this Agreement, (b) the remaining
provisions of this Agreement shall remain in full force and effect and (c) any
court of competent jurisdiction may so modify the objectionable provision as to
make it valid and enforceable.
11. Miscellaneous. This Agreement may not be amended or modified except
in a writing executed by Consultant and Company. Consultant may not assign its
rights or obligations under this Agreement, in whole or in part, without
Company's prior, written consent, which consent may be withheld for any reason.
The failure of either party to insist, in any one or more instances, on prompt
performance of any term, covenant or condition of this Agreement shall not be
construed as a waiver or relinquishment of any rights granted hereunder or of
the future performance of any such term, covenant or condition. This Agreement
shall be governed by, subject to and construed in accordance with the internal
laws of the State of Wisconsin.
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IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the day and year first written above.
COMPANY:
EDAC TECHNOLOGIES CORPORATION
BY /s/ Ronald G.Popolizio
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Its: EVP & CFO
CONSULTANT:
/s/ Dominick A. Pagano
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Dominick Pagano
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EXHIBIT A
Consulting Services
Mr. Pagano will consult with the Board and the CEO on current negotiations with
Pratt & Whitney concerning the Long-term Agreement and the realization of
unshipped inventory relating to the ground-based turbine contract, including
participating in negotiations and meetings with Pratt. He will also familiarize
himself with the Company's current financial status and its relationships with
GECC and other lenders, including meeting with Dennis Rusconi to review the
results of his work.