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EXHIBIT 10
CONSULTING AGREEMENT
This Consulting Agreement is made between Cross Technologies, Inc.
("CTI"), Xxxxxx X. Xxxxx ("Xx. Xxxxx"), and Nanophase Technologies Corporation
("NTC").
WHEREAS, during the period between January 14, 1993 and December 16,
1998, Xx. Xxxxx served as the President and Chief Executive Officer of NTC
pursuant to agreements including that certain Employment Agreement between NTC
and Xx. Xxxxx dated February 3, 1994 (the "Employment Agreement");
WHEREAS, effective December 17, 1998, Xx. Xxxxx ceased serving as an
officer of NTC;
WHEREAS, NTC wishes to have periodic future access to Xx. Xxxxx'
knowledge and business experience, and Xx. Xxxxx wishes to provide NTC with such
access;
WHEREAS, Xx. Xxxxx is the sole shareholder and officer of CTI; and
WHEREAS, NTC wishes to engage CTI as NTC's consultant and CTI wishes to
provide consulting services to NTC upon the terms and conditions stated in this
Consulting Agreement.
NOW, THEREFORE, in consideration of the parties' mutual promises set
forth below, CTI, Xx. Xxxxx and NTC agree as follows.
1. For a period of eighteen months starting on December 17, 1998 and
ending on June 17, 2000, CTI shall render reasonable consulting services to NTC,
as may be requested by NTC's President from time to time (the "Term"). Such
consulting services shall not preclude CTI or Xx. Xxxxx from conducting other
business consistent with the respective obligations of CTI and Xx. Xxxxx under
this Consulting Agreement.
2. NTC shall pay CTI consulting fees in the aggregate amount of
$307,500 (the "Consulting Fees"). CTI acknowledges that NTC previously has paid
CTI $8,447.85 of these Consulting Fees. NTC's remaining payments of Consulting
Fees, in the aggregate amount of $299,052.15, will be made (a) in an initial
installment of $34,177.30, paid within four business days following all parties'
execution of this Consulting Agreement, and (b) in thirty-one subsequent equal
installments of $8,544.35 each, with each such installment paid on or before the
first business day respectively following the first and seventeenth day of each
month thereafter. NTC shall tender payments of all Consulting Fees by
first-class or overnight mail, addressed to Cross Technologies, Inc., P. O. Xxx
000, Xxxxxxxx, XX 00000 or such other address as CTI subsequently may provide to
NTC.
3. On or before the first business day of the first month following all
parties' execution of this Consulting Agreement, NTC shall provide CTI with a
signing bonus consisting of: (a) NTC's payment of $375 to CTI, and (b) NTC's
payment of up to $5,375 to
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Xxxxx Fargo Auto Finance, Inc. ("Xxxxx Fargo") or its designee in connection
with the termination of that certain Vehicle Lease No. 000-000-00000000 between
Xx. Xxxxx and Xxxxx Fargo (the "Signing Bonus").
4. The parties to this Consulting Agreement understand and agree that
the foregoing Consulting Fees and Signing Bonus shall be paid by NTC solely in
exchange for CTI's consulting services to NTC. The Consulting Fees and Signing
Bonus are not intended and should not be construed as NTC's payment to CTI of
wages, salary or compensation for services of Xx. Xxxxx. Based on NTC's receipt
of CTI's Federal Employer Identification Number, and the appropriate regulations
of the U.S. Internal Revenue Service and the Illinois Department of Revenue in
effect from time to time during the Term, NTC will not forward any statements of
earnings or payments of monies (Form 1099 or W-2) to either the U.S. Internal
Revenue Service, the Illinois Department of Revenue or any other taxing
authority in connection with the Consulting Fees and Signing Bonus paid by NTC
under this Consulting Agreement.
5. CTI and Xx. Xxxxx acknowledge that NTC makes no representations or
warranties to them concerning the tax consequences, if any, of the Consulting
Fees and Signing Bonus paid by NTC under this Consulting Agreement. Each party
to this instrument shall bear its own such tax consequences, if any, and any
applicable related tax reporting or filing obligations.
6. NTC acknowledges and confirms that under its Amended and Restated
1992 Stock Option Plan, as amended to date (the "Stock Option Plan") and any
Stock Option Agreement between NTC and Xx. Xxxxx (the "Stock Option
Agreements"):
A. Any stock options previously granted to Xx. Xxxxx shall remain in
effect and operate solely according to the provisions of the respective
Stock Option Agreements and the Stock Option Plan throughout the Term
of this Consulting Agreement.
B. Throughout the Term of this Consulting Agreement, Xx. Xxxxx shall
have "Continuous Status as an Employee, Consultant or Outside Director"
within the meaning of Sections 2(e) and 2(f) of the Stock Option Plan,
subject to Xx. Xxxxx remaining the sole shareholder and officer of CTI,
and Xx. Xxxxx' interests under the Stock Option Agreements shall
continue to vest consistent with the provisions of each respective
Stock Option Agreement.
C. Pursuant to Section 8(b)(ii)(D) of the Stock Option Plan, Xx.
Xxxxx may exercise any stock options previously granted to him, subject
to the terms of the Stock Option Agreements and the Stock Option Plan,
by the delivery of cash to NTC by a broker-dealer to whom Xx. Xxxxx has
submitted an irrevocable notice of exercise.
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D. Pursuant to Section 7(d) of the Stock Option Plan and the terms
of the Stock Option Agreements, Xx. Xxxxx may exercise any stock
options previously granted to him in accord with the provisions of each
respective Stock Option Agreement and subject to the withholding and
tax payment requirements of the Stock Option Plan, the Stock Option
Agreements and applicable law. NTC will report any such exercise of
stock options by Xx. Xxxxx to the U.S. Internal Revenue Service on Form
W-2.
7. The parties to this instrument understand and agree that NTC's
obligations under Paragraphs 2 and 3 of this Consulting Agreement are expressly
subject to CTI and Xx. Xxxxx' complying with their respective following
obligations:
A. CTI shall render such consulting services to NTC as reasonably
requested pursuant to Paragraph 1 of this Consulting Agreement.
B. Xx. Xxxxx shall provide NTC with written notice of his voluntary
resignation from NTC's Board of Directors and as a director of NTC,
concurrently with Xx. Xxxxx' executing this Consulting Agreement.
C. Xx. Xxxxx hereby waives and releases any claim, action, suit,
debt, dues, account, controversy, damages or judgment which Xx. Xxxxx
had, has or hereafter may have, whether known or unknown, in any way
connected with or arising from (i) any claim for severance benefits or
payments from NTC, and (ii) any claim under Section 7 of the Employment
Agreement.
D. Xx. Xxxxx hereby confirms the continuing existence and
enforceability of, and his compliance with: (i) all terms of that
certain Confidential Information And Proprietary Rights Agreement
between Xx. Xxxxx and NTC dated January 14, 1993, and (ii) the
confidentiality and non-competition covenants in Section 8 of the
Employment Agreement.
E. Xx. Xxxxx and CTI shall maintain the confidentiality of all terms
of this Consulting Agreement, and they each warrant that they will not,
in any manner or means, by act or omission, disclose the terms of this
Consulting Agreement to any person or entity. Xx. Xxxxx and CTI
specifically warrant that they will not represent to any person or
entity that Xx. Xxxxx is a consultant to, or otherwise affiliated with,
NTC. The warranties in this Paragraph 7.E shall not apply to Xx. Xxxxx'
disclosures to his spouse, financial advisors or lawyers, to CTI's
disclosures to its financial advisors or lawyers, or to disclosures of
Xx. Xxxxx or CTI as required by applicable law.
8. The parties to this instrument do not intend that any provisions of
this Consulting Agreement shall release or waive any claim, action, suit, debt,
dues, account, controversy, damages or judgment that any party had, has or may
hereafter have against
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another party or any other person, except as expressly provided in Paragraph 7.C
of this instrument.
9. This Consulting Agreement, and all obligations of NTC under
Paragraphs 2 and 3 of this instrument, shall end immediately upon the earlier
of: (a) Xx. Xxxxx' death; (b) the dissolution, receivership or bankruptcy of
CTI, without CTI having previously notified NTC of the identity and address of
any successor entity to CTI; (c) the conclusion of the Term; or (d) Xx. Xxxxx or
CTI failing to comply with their respective obligations under Paragraph 7 of
this Consulting Agreement.
10. Neither CTI nor Xx. Xxxxx shall have any power to assign their
respective rights or obligations under this Consulting Agreement.
11. Any dispute or controversy based upon or arising in connection with
any party's respective rights or obligations under this Consulting Agreement
shall be submitted to arbitration before a single arbitrator in Chicago,
Illinois pursuant to the commercial arbitration rules of the American
Arbitration Association. An arbitration award rendered pursuant to this
Paragraph 11 shall be final, binding on the parties and may be submitted to any
court of competent jurisdiction for entry of a judgment thereon, in accord with
the Federal Arbitration Act or the Uniform Arbitration Act.
12. Except as otherwise provided in Paragraph 2 of this instrument, any
notice to be given under this Consulting Agreement shall be in writing and
delivered personally or by overnight courier, addressed to the party concerned
at the address stated below or to such other address as such party subsequently
may provide in writing:
If to CTI: Cross Technologies, Inc.
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxxxxx 00000
If to Xx. Xxxxx: Xxxxxx X. Xxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxxxxx 00000
If to NTC: Nanophase Technologies Corporation
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Attention: President
13. CTI and Xx. Xxxxx acknowledge that the only consideration for this
Consulting Agreement is described in this instrument; that no other promise or
agreement has been made to or with them by any person or entity whatsoever to
cause them to sign this Consulting Agreement; that each party to this instrument
is represented by counsel and that counsel has
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explained to the party all the terms of this Consulting Agreement and that each
party has voluntarily signed it; and that this instrument constitutes the entire
agreement between the parties on all the subjects described herein.
14. This Consulting Agreement shall be construed in accord with, and
governed by, the laws of the State of Illinois.
15. This Consulting Agreement may be signed by the parties in multiple
counterparts.
CROSS TECHNOLOGIES, INC.
By: /s/ XXXXXX X. XXXXX March 8, 1999
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Xxxxxx X. Xxxxx Date
Chief Executive Officer
/s/ XXXXXX X. XXXXX March 8, 1999
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XXXXXX X. XXXXX Date
NANOPHSE TECHNOLOGIES
CORPORATION
By: /s/ XXXXXX XXXXX March 9, 1999
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Xxxxxx Xxxxx Date
Chief Executive Officer
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