CONSULTING AGREEMENT dated as of June
4, 1997, between CONVERSION TECHNOLOGIES
INTERNATIONAL, INC., a Delaware corporation
(the "Company"), and XXXXXX XXXXXXX (the
"Consultant")
The Company is a specialty materials company engaged in the business
of developing and manufacturing advanced industrial abrasives, specialty glass
and glass-ceramic products utilizing, among other things, industrial waste
stream recycling and conversion technologies (the "Business"). The Company
desires to retain the Consultant to provide certain services to the Company and
the Consultant desires to provide such services to the Company in accordance
with the terms and conditions hereof.
The parties are entering into this Consulting Agreement in
connection with the consummation of the merger (the "Merger") of Octagon, Inc.
with and into the Company.
NOW THEREFORE, in consideration of and for the mutual promises and
covenants contained herein, the parties hereto agree as follows:
1. Termination of Employment Agreement; Releases.
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(a) Effective as of June 6, 1997, the Amended and Restated
Employment Agreement (the "Employment Agreement") dated as of June 9, 1994,
between the Company and the Consultant, as amended, is hereby terminated and
shall be of no further force or effect. The Consultant acknowledges that such
termination shall not constitute a "Termination" under Section 6 of the
Employment Agreement; provided, however, that, in the event of a default by the
Company in its obligation to provide the Consultant the consideration set forth
in Section 3 hereof (following notice and expiration of a 10-day cure period),
the Consultant shall retain any and all rights he may have had under the
Employment Agreement as of June 6, 1997, including, without limitation any
rights he may assert with respect to termination thereunder.
(b) Subject to performance of this Consulting Agreement by the
Company in accordance with its terms, the Consultant hereby releases and
discharges forever the Company and its subsidiaries and their respective
officers, directors, stockholders and successors and assigns from any and all
causes of action, suits, claims, rights, debts, covenants, contracts, damages,
liabilities or other obligations whatsoever which the Consultant had, has or
hereafter may have against any of such releases arising from, relating to or in
connection with any matter, occurrence or thing from the beginning of time to
the time immediately preceding the execution and delivery of this Consulting
Agreement.
(c) Subject to the Consultant's performance of this Agreement in
accordance with its terms, the Company hereby releases and discharges forever
the Consultant and his heirs, executors, administrators and attorneys from any
and all causes of action, suits, claims, rights, debts, covenants, contracts,
damages, liabilities or other obligations whatsoever which the Company had, has
or may have against any of such releases arising from, relating to or in
connection with any matter, occurrence or thing from the beginning of time to
the time immediately preceding the execution and delivery of this Consulting
Agreement.
2. Consulting Services.
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The Consultant hereby agrees to act as a Consultant to the Company
during the Term hereof. In connection therewith, the Consultant agrees to be
available to consult on a telephonic basis or, with reasonable advance notice,
in person; provided, however, that such services shall not be required to the
extent that the performance thereof would prohibit the consultant from
performing other full-time work. The nature of such services shall be in areas
related to information known by the Consultant by virtue of his past employment
by the Company or project development, strategic planning or other services
within the Consultant's areas of expertise.
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3. Consideration for Consulting Services.
-------------------------------------
In consideration of the Consultant's performance of the Consulting
Services during the Term of this Agreement, (i) the Company shall pay to the
Consultant a consulting fee of $10,000 per month, payable in arrears on a
monthly basis,(ii) until the earlier of the expiration of the Term of this
Consulting Agreement or such time as the Consultant shall accept another
full-time position or otherwise receive benefits provided by another employer,
the Company shall continue the existing medical and life insurance coverages
received by the Consultant (or other no less favorable coverages provided by
Octagon) and (iii) the vesting of the Consultant's 80,000 shares of restricted
stock granted under the Company's Long-Term Employee Incentive Plan shall
continue uninterrupted until the January 1, 1998 vesting date thereof as though
the Consultant had remained an employee of the Company through such date (and
the Restricted Stock Purchase Agreement relating thereto is hereby amended by
the parties to permit such vesting to continue). The parties acknowledge that
all stock options held by the Consultant shall terminate and be available for
reissuance to others effective upon consummation of the Merger.
4. Reimbursement of Expenses.
-------------------------
The Company shall reimburse the Consultant for his reasonable
out-of-pocket expenses incurred in connection with the Consulting Services and
approved in advance by the Chairman, President or Chief Financial Officer of the
Company. Reimbursement for any expenses as provided for herein shall be made to
the Consultant within thirty (30) days following receipt by the Company of
satisfactory evidence of the incurrence of such expenses and the Consultant's
written request for such reimbursement.
5. Term.
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(a) The term (the "Term") of the Consulting Services and related
compensation to be provided hereunder shall commence on the Commencement Date
(as defined below) and end on the nine-month anniversary of the date thereof.
"Commencement Date" shall mean the earlier of (i) the date of the consummation
of the Merger or any other merger, consolidation or reorganization involving the
Company or the sale of more than 50% of the voting capital stock of the
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Company or sale of substantially all of the assets of the Company or (ii) the
closing date of one or more financings of the Company in the aggregate amount of
$1 million or more. Notwithstanding the foregoing, that this Agreement may be
extended by the mutual written agreement of the parties hereto. Notwithstanding
the foregoing, (i) this Agreement may be terminated by either party in the event
of a material breach by the other party if such breach is not cured within 10
days following written notice thereof and (ii) Sections 6 and 7 hereof shall
survive the termination of this Agreement in accordance with their terms.
(b) The parties acknowledge that the Consultant may accept full-time
employment prior to the consummation of the Merger and that doing so will not
alter the terms or effect hereof.
6. Nondisclosure of Confidential Information.
-----------------------------------------
(a) The Consultant acknowledges that the Company would be
irreparably harmed if confidential information relating to the business and
strategies of the Company and its subsidiaries were disclosed to competitors or
potential competitors of the Company and its subsidiaries. Accordingly, the
Consultant shall not (i) disclose to any person, firm, corporation, association
or other entity any Confidential Information (as defined below) for any reason
or purpose whatsoever or (ii) make use of any such Confidential Information for
his own purpose or for the benefit of any person, firm, corporation, association
or other entity except the Company or its subsidiaries. For purposes of this
Agreement, the term "Confidential Information" shall mean any information
relating to the Company or any of its subsidiaries that the Consultant may
acquire by reason of his association with the Company or any of its
subsidiaries, except for (i) information which is in the public domain at the
time of receipt thereof by the Consultant, (ii) information which, after receipt
thereof by the Consultant, becomes part of the public domain through no improper
act or omission of the Consultant, and (iii) information which was lawfully
within the Consultant's possession prior to the initial commencement of the
Consultant's association with the Company or any of its subsidiaries. The
foregoing provisions shall not preclude the use or disclosure by the Consultant
of Confidential
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Information (i) in the performance of his obligations hereunder or (ii) to the
extent required by law.
7. Restrictive Covenants.
---------------------
(a) The Consultant acknowledges the highly competitive nature of the
business conducted by the Company and its subsidiaries. Accordingly, as an
inducement to the Company to enter into this Agreement and in partial
consideration of the amounts to be received hereunder, the Consultant, shall
not, during the term hereof and for the two-year period thereafter, (i) directly
or indirectly engage in or represent in any way any business (such business
being referred to herein as a "Competing Business") competing with the business
of the Company or any of its subsidiaries of converting waste into glass and
ceramic products, whether such engagement shall be as an officer, director,
owner, employee, partner, or other participant in any Competing Business, (ii)
assist others in engaging in any Competing Business in the manner described in
clause (i) above, (iii) induce any employees of the Company or any of its
subsidiaries to terminate their employment with the Company or any such
subsidiaries or to engage in any Competing Business or (iv) induce any entity or
person with which the Company or any of subsidiaries has a business relationship
to terminate or alter such business relationship; provided, however, that
nothing contained in this Section 6(a) shall prevent, restrain or otherwise
restrict the Consultant from owning 5% or less of any class of securities of any
corporation so long as such securities are listed for trade by NASDAQ in the
over-the-counter market or are traded on a national securities exchange.
(b) The Consultant understands that the foregoing restrictions may
limit his ability to earn a livelihood in a business similar to the Business of
the Company and its subsidiaries, but he nevertheless believes that he has
received and will receive sufficient consideration and other benefits as a
Consultant of the Company as provided hereunder to justify such restrictions.
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8. Injunctive Relief.
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The Consultant acknowledges that damages may not be an adequate
remedy for a breach of Section 6 or 7 hereof and agrees that injunctive relief
in favor of the Company would be an appropriate remedy for such breach. Nothing
herein contained, however, shall be construed as prohibiting the Company from
pursuing any remedies which may be available to it for such breach or threatened
breach or any other breach of this consulting Agreement.
9. No Breach of Duty.
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The Consultant represents and warrants to the Company that the
performance by him of this Agreement will not breach any agreement or duty to
keep in confidence proprietary information acquired by it in confidence or in
trust prior to the Consultant's engagement hereunder or any duty not to compete
with any party. The Consultant further agrees that it shall not enter into any
agreement in conflict herewith during the Term.
10. Benefits; Assignment.
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The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns and, in the case of the Consultant, his heirs, executors and
administrators. Anything contained herein to the contrary notwithstanding, the
Consultant shall not have the right to assign his duties to any other party
without the written consent of the Company.
11. Severability.
------------
Every provision of this Agreement is intended to be severable. If
any term or provision hereof is deemed unlawful or invalid in any jurisdiction
for any reason whatsoever, such unlawfulness or invalidity shall not affect the
validity of the remainder of this Agreement or the enforceability of such term
or provision in any other jurisdiction. To the extent that any such term or
provision is held to be unlawful or invalid, the parties agree to reform such
term or provision in such a way which will be enforceable in the jurisdiction to
which such holding applies, and which will reflect, as nearly as permissible,
the intention of the parties.
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12. Notices.
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All notices and other communications required or permitted hereunder
shall be sufficient if delivered personally or sent by nationally recognized
overnight courier, by facsimile or by registered or certified mail, return
receipt requested and postage prepaid, addressed as follows:
if to the Consultant, to
Xxxxxx Xxxxxxx
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
if to the Company, to:
Conversion Technologies International, Inc.
00 Xxxxxxx Xxxx, Xxxxx 0
Xxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
or to such other address as the party to whom notice is to be given may have
furnished to the other party. Any such notice or communication shall be deemed
to have been received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of nationally-recognized overnight courier, on the
next business day following dispatch, (c) in the case of facsimile transmission,
when received, and (d) in the case of mailing, on the fifth business day
following the day on which the piece of mail containing such communication is
posted.
13. Entire Agreement.
----------------
This Agreement constitutes the entire agreement and understanding
between the Company and the Consultant regarding the subject matter hereof and
supersedes any and all negotiations, prior discussions and preliminary and prior
agreements and understandings related to the subject matter hereof.
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14. Governing Law.
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This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly therein.
15. Counterparts.
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This Agreement may be executed in one or more counterparts, each of
which, when so executed shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same instrument.
16. Modification.
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Neither this Agreement nor any term hereof may be amended, modified,
supplemented or waived unless in a written instrument executed by the Company
and the Consultant.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
CONVERSION TECHNOLOGIES
INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Vice President and
General Counsel
THE CONSULTANT:
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
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