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Exhibit 10.11
TEKNI-PLEX, INC.
Somerville, New Jersey
April 4, 1997
MST/TP Holding Inc.
00000 Xxxxxxxx Xxxx. Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Gentlemen:
This letter when accepted by you, will confirm the understanding of
TEKNI-PLEX, INC., a Delaware corporation (formerly known as TP Acquisition
Company, Inc.) (the "Company"), on the terms and conditions set forth below, to
continue to retain you to perform management consulting services to the
Company. This letter shall constitute the entire agreement between the parties
with respect to the subject matter contained herein and shall supersede all
other prior agreements between the parties with respect to the subject matter
hereof, including (i) the letter agreement dated March 18, 1994 among the
Company, you and MST Management Company, Inc. ("MST Management"), (ii) the
letter and acknowledgement of instructions dated as of March 18, 1994 executed
by certain officers of the Company, and (iii) the letter agreement dated
December 22, 1995 between the Company and MST/TP Holding Inc. The terms and
conditions of our agreement are as follows:
1. You shall continue to provide the Company with such regular and
customary management consulting services as are reasonably requested by the
Company for a period of ten (10) years from March 18, 1994 (the "Term"; to be
extended for an additional ten (10) years unless you provide notice to the
Company of your intention not to renew this Agreement at least one (1) year
prior to the expiration of this Agreement); such consulting services to
include, but not be limited to, advising the Company in the areas of financial
management, marketing and general management (the "Services").
2. In full consideration for the Services to be rendered by you to the
Company hereunder, the Company shall pay to you a management consulting service
fee for each period as indicated below (each a "Contract Year") during the Term
(the "Management Fee"), as follows:
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MST/TP HOLDING, INC.
CONTRACT YEAR MANAGEMENT FEE
------------- --------------------
3/18/97 - 3/17/98 $115,763
3/18/98 - 3/17/99 $115,763
3/18/99 - 3/17/00 $115,763
3/18/00 - 3/17/01 $115,763
3/18/01 - 3/17/02 $115,763
3/18/02 - 3/17/03 $115,763
3/18/03 - 3/17/04 $115,763
Should this Agreement be renewed in accordance with paragraph 1 hereof, the
Management Fee for each Contract Year shall be $115,763 per Contract Year;
provided, that, each such Contract Year shall cover the period from March 18th
of the year to March 17th of the following year. The Company further confirms
and acknowledges that the payments previously made to you for the periods
March 18, 1994 through March 17, 1997 were properly paid to you under the terms
hereof.
3. The Management Fee payable hereunder shall be payable on a monthly
basis, in advance, for the Services to be rendered during said month; provided,
however, that, unless and until otherwise directed by MST Management by notice
to the Company, on behalf of you $416.67 of each monthly payment (a total of
$5,000.00 per Contract Year) shall be paid directly to Xxxxxxx Xxxxxxx & Xxxxx,
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, Attention: Xxxxxxx X. Xxxxx.
4. In the event that MST Management's rights and obligations to provide
Services to the Company are terminated in connection with the sale by the
Company of substantially all of its assets or a sale (whether by merger or
otherwise) by all of the shareholders of their shares of the Company, in one
transaction (a "Sale"), this Agreement will terminate and you agree to waive
any Management Fees otherwise provided for hereunder, arising after the date of
such Sale.
5. In the event that MST Management's rights and obligations to provide
Services to the Company are terminated in connection with an initial public
offering (an "Initial Public Offering") of securities of the Company, this
Agreement will terminate and you agree to waive any Management Fees otherwise
provided for hereunder, arising after the date of such Initial Public Offering.
6. In the event that MST Management (or the shareholders of MST
Management, as successors to MST Management pursuant to MST Management's
management fee agreement with the Company (the "MST Fee Agreement")) terminates
the MST Fee Agreement, this Agreement will terminate and you agree to waive any
Management Fees otherwise provided for hereunder. The foregoing
notwithstanding, in no event shall the liquidation or dissolution of MST
Management, in the absence of a termination of the fees payable to MST
Management (or its shareholder successors) pursuant to the MST Fee Agreement,
constitute a basis for the termination of the payment of fees to you under this
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Agreement. In addition, in the event MST Management (or one or more
shareholders of MST Management, or one or more assigns, as successors to MST
Management) terminates the MST Fee Agreement with the Company, or the MST Fee
Agreement with the Company is otherwise terminated pursuant to paragraphs 4 or
5 hereof, but then enters into a substantially similar agreement or arrangement
with the Company, the fees payable to you hereunder shall continue as though
the MST Fee Agreement with the Company was not terminated.
7. In the event that during the Term of this Agreement MST
Management's management fee is increased for any reason, other than in
connection with a new acquisition consummated after the date hereof, then
proportionate increase shall be made in the Management Fee payable under this
Agreement.
8. This Agreement shall inure to the benefit of and be binding upon you
and the Company and the Company's successors and assigns. In the event Xxxxxxx
X. Xxxxx, in his individual capacity, shall succeed to your rights and
obligations under this Agreement, then this Agreement shall, in lieu of you,
inure to the benefit of and be binding upon Xx. Xxxxx.
Please confirm that the foregoing constitutes our entire
understanding with respect to the matters set forth herein signing this letter
in the space provided below and returning this originally signed letter to the
Company.
Very truly yours,
TEKNI-PLEX, INC.
By: /s/ F. Xxxxxxx Xxxxx
--------------------
Name: F. Xxxxxxx Xxxxx
Title: Chief Executive Officer
AGREED TO AND ACCEPTED:
MST/TP HOLDING INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
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