EXHIBIT 10
AGREEMENT
---------
AGREEMENT made as of the 30th day of June, 2001 by and among:
Refac International Ltd., a Nevada corporation having executive offices
at The Xxxxxx River Pier, 000 Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx
00000-0000 (hereinafter referred to as "RIL");
Refac, a Delaware corporation having executive offices at The Xxxxxx
River Pier, 000 Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000-0000
(formerly known as Refac Technology Development Corporation and
referred to herein as "Refac"); and
Xxxx X. Xxxxxxxxxx, an individual residing at 00 Xxxxxxxx Xxxx,
Xxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as
"Xxxxxxxxxx").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Xxxxxxxxxx has been employed by RIL and Refac pursuant to the
Employment Agreement (as hereinafter defined); and
WHEREAS, Xxxxxxxxxx has a 20% interest in certain contingent payments
provided for in Section 6.12 of a Merger Agreement (as hereinafter defined); and
WHEREAS, in connection with the Employment Agreement, the Merger
Agreement and Xxxxxxxxxx'x employment, Refac has granted him the Stock Options
(as hereinafter defined); and
WHEREAS, the parties want to provide for (i) the termination of the
Employment Agreement, (ii) the termination of the Stock Options, (iii) the sale,
transfer and assignment by Xxxxxxxxxx to Refac of his interest in such
contingent payments and (iv) consulting services during the period ending on
December 31, 2001:
NOW, THEREFORE, in consideration of the premises and the respective
agreements of the parties herein contained, the parties hereto, intending to be
legally bound, agree as follows:
1. Definition of Terms.
--------------------
As used herein, the following terms shall have the following meanings:
1.1 "Agreement" means this agreement.
1.2 "Contingent Payment" means the 20% interest that Xxxxxxxxxx holds
in the contingent payments provided for in Section 6.12 of the Merger Agreement.
1.3 "Employment Agreement" means the Employment Agreement between HFID
(as
Page 1
defined below) and Xxxxxxxxxx, dated November 25, 1997.
1.4 "HFID" means the product development business previously conducted
by Human Factors Industrial Design, Inc. (which corporation was merged into RIL
as of December 31, 1998) and which is currently being conducted by RIL under the
name RefacDesign and Refac HumanFactors_ID.
1.5 "Merger Agreement" means the Agreement and Plan of Merger by and
among Refac, HFID Acquisition Corporation, Human Factors Industrial Design,
Inc., and the principal stockholders of Human Factors Industrial Design, Inc.,
dated as of November 25, 1997.
1.6 "Stock Options" means the 55,000 stock options granted to
Xxxxxxxxxx pursuant to the Merger Agreement, the Employment Agreement and
Xxxxxxxxxx'x employment.
2. Termination of the Employment Agreement.
----------------------------------------
The parties hereby agree that the Employment Agreement shall be deemed
terminated as of June 30, 2001 and that, except for outstanding reimbursable
expenses in the amount of $1,740.89 and Xxxxxxxxxx'x salary through June 30,
2001, there are no other sums due and owing him under or by reason of the
Employment Agreement.
3. Resignation as an Officer and Director of Refac and its Affiliated
------------------------------------------------------------------
Corporations
------------
Simultaneously with the execution of this Agreement, Xxxxxxxxxx
resigns as an officer and director of Refac, RIL, Refac Financial Corporation,
Refac Consumer Products, Inc. and Refac (H.K.) Limited.
4. Termination of the Stock Options.
---------------------------------
Simultaneously with the execution of this Agreement, the Stock
Options shall terminate and be of no further force and effect whatsoever and
Xxxxxxxxxx shall deliver to Refac any original executed copies of the related
Stock Option Agreements (including the amendment thereto) in his possession to
Refac.
5. Purchase of the Contingent Interest.
------------------------------------
5.1 Xxxxxxxxxx hereby represents and warrants to Refac that he has not
sold, transferred or assigned all or any part of his interest in the Contingent
Payment and has not granted any security interest or encumbered same in any
manner whatsoever.
5.2 Xxxxxxxxxx hereby sells, transfers and assigns all of his right,
title and interest in and to the Contingent Payment to Refac in consideration of
the sum of One Hundred Thousand Dollars ($100,000.00), payable by Refac
simultaneously with the execution of this Agreement, the receipt of which
Xxxxxxxxxx hereby acknowledges.
Page 2
6. Consulting Services.
--------------------
6.1 RIL hereby retains Xxxxxxxxxx as an independent consultant on the
following terms and conditions:
6.1.1 Period. Xxxxxxxxxx shall provide the consulting services
------
provided for in Paragraph 6.1.2 during the period
commencing on July 1, 2001 and terminating on December 31,
2001.
6.1.2 Services. Xxxxxxxxxx has served as the President of HFID
--------
since December 1998 and its CEO since May 1999. During the
consulting period provided for in Paragraph 6.1.1 above,
the management of RIL may seek Xxxxxxxxxx'x advise and/or
his opinions regarding operations, projects, client
relations, client prospects, staffing and/or any other
matter relating to its business.
Xxxxxxxxxx agrees to make himself available by telephone
at times mutually convenient to Xxxxxxxxxx and RIL to
provide such consulting services. It is understood and
agreed that Xxxxxxxxxx shall be provided reasonable
advanced notification of RIL's need for consulting
services, need not prepare any written reports or
undertake any studies and is only obligated to give his
advice and opinions based upon his knowledge of HFID and
its business. Refac expressly agrees that Xxxxxxxxxx will
not have any liability to Refac for any action that Refac
or HFID may take based upon and in reliance upon any
advice that he gives in good faith hereunder.
6.1.3 Compensation. In consideration of the consulting services,
------------
RIL shall pay Xxxxxxxxxx the sum of $18,000 payable at the
rate of $3,000 per month on the first day of each month.
In the event that RIL fails to issue any payment due
hereunder within five (5) business days after receipt of
notice of default, RIL shall immediately pay Xxxxxxxxxx
the balance of any unpaid portion of the $18,000
compensation and he shall be released from performing any
further services hereunder. In addition, RIL shall pay for
the cost of Xxxxxxxxxx'x COBRA group insurance premium
during the eighteen (18) month period following the
termination of the Employment Agreement or such earlier
time as he obtains insurance under another employer's
group insurance policy.
6.1.4 Computer and Printer. Upon termination of the consulting
--------------------
services provided for herein, RIL shall transfer, convey
and turn over to Xxxxxxxxxx all of its rights to the
Toshiba Satellite Pro Laptop and port replicator, Dell
monitor and the Hewlett Packard LaserJet 6P printer that
he is currently using.
Page 3
7. Confidentiality, Non-Competition, etc.
--------------------------------------
7.1 As used in this Paragraph 7, "Refac Companies" means Refac and all
of its subsidiary companies and "Confidential Information" means any
confidential or proprietary information relating to the identity of customers of
any of the Refac Companies, the identity of representatives of customers with
whom any of the Refac Companies has dealt, the kinds of services provided by the
Refac Companies to customers, the manner in which such services are performed or
offered to be performed, the service needs of actual or prospective customers,
pricing information, information concerning the creation, acquisition or
disposition of products, licenses and services, customer maintenance listings,
computer software applications, research and development data, knowhow,
personnel information, corporate finance information, and other proprietary
information and trade secrets. Notwithstanding the above, Confidential
Information shall not include any information that:
(i) is generally available to the public without conducting a
substantial search of published literature;
(ii) is generally known to industrial designers and/or to
entities in Refac's product development business; or
(iii) is part of the professional skills and know-how developed
by Xxxxxxxxxx during the course of his career; or
(iv) is subject to disclosure pursuant to any order or
regulation of any governmental, regulatory or
administrative agency or authority or court of judicial
authority.
If a particular portion or aspect of Confidential Information becomes subject to
either of the foregoing exceptions, all other portions or aspects of such
information shall remain subject to this Paragraph 7.
7.2 Xxxxxxxxxx acknowledges that (i) during the course of his
employment he has had access to and knowledge of Confidential Information and
may have access to Confidential Information during the six month consulting
period provided for herein, (ii) the disclosure of any such Confidential
Information to existing or potential competitors of the Refac Companies would
place the Refac Companies at a competitive disadvantage and would do damage,
monetary or otherwise, to the Refac Companies' business, and (iii) the trade
secret status of the Confidential Information and that the Confidential
Information constitutes a protectable business interest of the Refac Companies.
Accordingly, Xxxxxxxxxx agrees as follows:
(i) During the five (5) year period commencing July 1, 2001,
he shall not, directly or indirectly, whether
individually, as a director, stockholder, owner, partner,
employee, principal or agent of any business, or in any
other capacity, make known, disclose, furnish, make
available or utilize any of the Confidential Information,
other
Page 4
than in the proper performance of the duties as a
consultant hereunder.
(ii) Within fifteen (15) business days after the execution of
this Agreement, Xxxxxxxxxx agrees to return to Refac all
Confidential Information, including all photocopies,
extracts and summaries thereof, and any such information
stored electronically on tapes, computer disks or in any
other manner that he does not deem necessary for the
rendition of the consulting services provided for herein.
Upon the termination of the consulting services, the
Confidential Information then in his possession shall be
returned to the Refac Companies.
7.3 During the period that Xxxxxxxxxx provides consulting services
provided for herein and for a period of thirty (30) months thereafter,
Xxxxxxxxxx agrees that he will not, directly or indirectly, for his benefit or
for the benefit of any other person, firm or entity, solicit the employment or
services of, or hire, any person who was known to be employed by or was a known
consultant to any of the Refac Companies during the course of his employment by
Refac and the period in which he is rendering consulting services hereunder.
7.4 Notwithstanding anything contained herein, in the Employment
Agreement and/or in the Merger Agreement, Xxxxxxxxxx may retain copies of and
show non-confidential materials that represent his work product and/or projects
which he managed while employed by HFID and Refac to prospective partners,
employers or clients, provided however, that such use shall appropriately credit
HFID. Moreover, he may freely take credit for awards or patents issued in his
name for work perform while at HFID so long as he makes reference to his
employee status at such time by HFID. Notwithstanding the foregoing, with the
exception of his Curriculum Vitae, resume or biography, Xxxxxxxxxx agrees that
he shall not use or authorize the inclusion of visual or textual descriptions of
such work in a brochure, web site, advertising or other collateral materials, by
any firm.
If at any time or from time to time, Xxxxxxxxxx requests HFID or
Refac to provide him with copies of designated materials for the above purpose,
if available. Refac shall cause HFID to provide same to Xxxxxxxxxx.
7.5 The provisions of this Paragraph 7 are in addition to any other
obligations that Xxxxxxxxxx may have to Refac under or by reason of the
Employment Agreement and/or the Merger Agreement for confidentiality or
non-competition. However, in the event of a conflict in the terms of Paragraphs
7.3 or 7.4 above and the Employment Agreement and/or Merger Agreement, it is
understood and agreed that the provisions of said Paragraphs 7.3 and 7.4 shall
control.
8. Arbitration.
------------
Any dispute or controversy arising under or in connection with this
Agreement shall be
Page 5
settled exclusively by arbitration, conducted before a panel of three
arbitrators sitting in New York, New York, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The arbitrators, in their
discretion, may direct that the successful party in any such arbitration shall
be entitled to be reimbursed by the other party for reasonable attorneys' fees
and expenses incurred in connection with such dispute or controversy.
9. Miscellaneous.
--------------
9.1 Section headings. Section headings contained in this Agreement are
----------------
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.2 Governing Law and Jurisdiction. This Agreement shall be governed by
------------------------------
and interpreted in accordance with the internal laws of the State of New Jersey
applicable to agreements entered into and to be performed wholly in New Jersey,
irrespective of such State's rules pertaining to conflicts of laws.
9.3 Waiver. No failure or delay by either party in exercising any
------
right, power, or remedy under this Agreement shall operate as a waiver of any
such right, power, or remedy. No waiver of any provision of this Agreement shall
be effective unless in writing and signed by the party against whom such waiver
is sought to be enforced. Any waiver by either party of any provision of this
Agreement shall not be construed as a waiver of any other provision of this
Agreement, nor shall such waiver operate as or be construed as a waiver of such
provision respecting any future event or circumstance.
9.4 Modification. No modification of any provision hereof shall be
------------
effective unless in writing and signed by both of the parties to this Agreement.
9.5 Severability. In the event any provision of this Agreement (or
------------
portion thereof) is determined by a court of competent jurisdiction to be
invalid or otherwise unenforceable, such provision (or part thereof) shall be
enforced to the extent possibly consistent with the stated intention of the
parties, or, if incapable of such enforcement, shall be deemed to be deleted
from this Agreement, while the remainder of this Agreement shall continue in
full force and remain in effect according to its stated terms and conditions.
9.6 Further Action. The parties agree, upon the other party's request,
--------------
to execute any and all documents and do all acts necessary to carry out the
terms of this Agreement.
9.7 Entire Agreement. This Agreement, including the Exhibits hereto,
----------------
sets forth the entire agreement and understanding between the parties with
respect to the subject matter hereof. This Agreement supersedes all prior and
contemporaneous agreements, negotiations, and understandings between the
parties, both oral and written.
Page 6
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date written below.
Refac
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx, President
Date: July 12, 2001
Refac International, Ltd.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx, President
Date: July 12, 2001
By: /s/ Xxxx X. Xxxxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxxxx
Date: July 12, 2001
Page 7
