Exhibit 10.1
AGREEMENT
THIS AGREEMENT
(“Agreement”) is made and entered into effective as of
the 1st day of June 2009 (the “Effective Date”)
among NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION, a Delaware
corporation (“NTIC”), and DAK ENGINEERING, LLC, a North
Dakota limited liability company (“DAK”), for
consulting with respect to the expansion of NTIC’s
business.
RECITALS:
A.
NTIC is engaged in the business of
owning, developing and distributing certain technologies and
products throughout the world, including, but not limited to,
corrosion-inhibiting technologies and products. NTIC
commercially exploits its technologies and products through, among
other things, entering into joint ventures throughout the world and
licensing such technologies and products to these joint ventures
for ultimate sale.
B.
DAK provides consulting services in
the area of chemistry, technology development, supplier technical
issues, production issues, product performance characterization,
and other forms of commercializing intellectual property
rights.
C.
Donald A. Kubik, as of the date of
this Agreement, has retired from being an Executive Officer and
employee of NTIC, and is a Principal Officer and sole owner of
DAK.
D.
NTIC desires to engage DAK to render
certain consulting services and DAK desires to accept such
engagement, all upon the terms and conditions set forth
herein. In performing its services hereunder, DAK will have
access to NTIC’s confidential business and technical
information that is being developed by NTIC at substantial expense,
and that NTIC wants reasonable protection of its confidential
business and technical information.
NOW, THEREFORE, in consideration of
the mutual covenants and promises contained herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as
follows:
1.
CONSULTING
ARRANGEMENT WITH DAK . Commencing as of the
Effective Date and continuing until this Agreement is terminated in
accordance with the terms hereof, NTIC hereby engages DAK to
provide consulting services to NTIC and DAK hereby agrees to
provide such services in accordance with and subject to all of the
terms and conditions of this Agreement. In providing such
services, DAK shall not utilize the services of any other person or
entity in providing unless pre-approved in writing by NTIC.
NTIC hereby approves Donald A Kubik as pre-approved to perform such
services.
2.
SERVICES
. DAK shall
provide the expertise of its Principal Officer, Donald A Kubik, to
work with NTIC employees with respect to specific projects
designated and approved by NTIC’s Executive Management and
Audit Committee. DAK shall maintain close contact with
NTIC’s Executive Management and shall provide, at a minimum,
quarterly reports of his activities on behalf of NTIC to
NTIC’s Management and Audit Committee. The initial set of DAK
projects and objectives is set forth in Appendix 1. Until further
notice, DAK shall coordinate with and receive instructions from
NTIC’s Zerust® Marketing Manager or such other
representative as may be designated by NTIC with respect to the
services to be provided by DAK to NTIC hereunder.
3.
CONSULTING
FEES AND COMMISSIONS TO DAK . Commencing on the
Effective Date of this Agreement and during the term of this
Agreement until it is terminated pursuant to Section 6 hereof,
NTIC shall pay to DAK a monthly fee (“Monthly Fee”) of
seven thousand two-hundred and fifty and 00/100 Dollars ($7,250.00)
in consideration for all consulting services rendered by DAK
hereunder. This Monthly Fee is payable in advance on the first day
of each month in a manner as reasonably designated by DAK. In the
event NTIC requests DAK representatives to travel in furtherance of
the purposes of this Agreement, NTIC shall reimburse DAK for all
reasonable out-of-pocket travel expenses incurred in connection
therewith, which expenses shall be determined and approved in
advance by NTIC on a case-by-case basis. Any such
reimbursements by NTIC shall be made to DAK upon submission by DAK
to NTIC of an expense report with appropriate receipts, in
accordance with customary NTIC policies.
In the event that DAK develops new
products and/or technologies which result in commercial
technologies and/or products that are considered “Work for
Hire” work product, with all resulting intellectual property
rights (if any) being transferred to the ownership of NTIC pursuant
to Section 8 of this Agreement and otherwise complies with
Section 8, 9 and 10 of this Agreement, then, NTIC will pay DAK
2% of any “Net Operating Profit” (as defined below)
generated by NTIC from the sale of any such product and/or
technology as a commission for seven (7) years from the date
of first sale of any such product and/or technology; provided,
however, that no commissions shall be due and payable hereunder
unless and until the Net Sales of any such product and/or
technology for any fiscal year exceed $500,000; and provided,
further that no amounts shall be due and payable by NTIC to DAK
hereunder after seven (7) years after the termination of this
Agreement.
“Net Operating Profit”
is hereby defined as Net Sales less Cost of Goods Sold, in each
case as determined to the extent practicable in accordance with
U.S. generally accepted accounting principles and in each case as
attributed to the products and/or technologies developed by DAK and
assigned to NTIC hereunder.
4.
INDEPENDENT
CONTRACTOR STATUS OF DAK . Notwithstanding
anything contained herein to the contrary under this Agreement, DAK
is and shall act as, and for all purposes shall be deemed to be, an
independent contractor of NTIC. No contract of partnership,
joint venture or any other relationship except that of independent
contractor shall be deemed to exist between NTIC and DAK.
Neither DAK nor Donald A. Kubik shall be entitled or eligible to
participate in any benefits or privileges given or extended by NTIC
to its employees, or be deemed an employee of NTIC for purposes of
federal or state withholding taxes, F.I.C.A. taxes or unemployment
benefits, or otherwise, and DAK will make all required F.I.C.A. and
unemployment contributions due on behalf of itself or its
employees. DAK shall have sole and exclusive responsibility
for the payment of all federal, state and local income taxes and
all other taxes with respect to any compensation provided by NTIC
to DAK hereunder. DAK shall not bind NTIC or incur any obligation
or liability on behalf of NTIC, including but not limited to
financial obligations, promises of equity in NTIC technology
projects or joint ventures, or hiring of employees.
5.
RESOURCE
AVAILABILITY AND ALLOCATION . In order to facilitate DAK
in his consulting services to NTIC hereunder, NTIC shall grant DAK
the use of various NTIC resources, which shall be subject to change
by NTIC without notice to DAK, at NTIC’s Circle Pines office
location in connection with the rendering of services by DAK to
NTIC hereunder:
·
Phone and
computer access.
·
Qualified lab
personnel time (specifically Barbara Nygaard) to aid in the conduct
of experiments. Such personnel and time allocation shall be
assigned by NTIC’s Zerust® Industrial Division Technical
Director.
·
NTIC research
material, including confidential NTIC documents such as lab log
books, formulations, etc.
·
Any other
resource and expenditure shall be approved on a case by case basis
by NTIC.
6.
TERM AND
TERMINATION . This Agreement shall
commence on the date hereof and shall continue on a quarter to
quarter basis until either NTIC, on the one hand, or DAK, on the
other hand, gives a written termination notice to the other, which
notice shall be given at least thirty (30) days prior to the end of
a given fiscal quarter. NTIC also may terminate this
Agreement immediately on written notice to DAK for cause, including
(without limitation) (i) dishonesty, fraud, misrepresentation,
deliberate injury or attempted injury, by DAK or any employees or
agents of DAK and in each case related to NTIC or its business,
(ii) any unlawful or criminal activity by DAK or any employees
or agents of DAK, (iii) any willful breach of duty or habitual
neglect of duty or (iv) the breach by DAK of any provision of
this Agreement.
7.
EFFECTIVE ON
TERMINATION . Except as set forth
in this Agreement, upon termination, the parties shall have no
obligations to each other hereunder, other than NTIC’s
obligation to pay any earned but unpaid Monthly Fees as well as any
commissions as set forth in Section 3 above and DAK’s
covenants in Sections 8, 9 and 10 of this Agreement, which
provisions shall survive the termination of this
Agreement.
8.
INVENTIONS
.
(a)
Definition
. “Inventions”
as used in this Section 8, means any inventions, discoveries,
improvements, ideas, concepts, drawings, designs, patents, patent
applications, specifications, trade secrets,
prototypes, techniques, processes,
know-how and documentation (whether or not they are in writing or
reduced to practice) or works of authorship (whether or not they
can be patented or copyrighted) (i) that DAK makes, authors,
or conceives (either alone or with others), within the scope of the
services provided to NTIC hereunder and (ii) that concern or
are related to NTIC’s business or to NTIC’s actual or
demonstrably anticipated research and development.
(b)
NTIC’s
Rights . DAK agrees that all
Inventions (as defined in Section 8(a)), if any, made by DAK
during the term of this Agreement and for six (6) months
thereafter will be
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