July 30, 1996
Xx. Xxxxx Maison
0000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Dear Xxxxx:
Reference is hereby made to the letter agreement dated July 30, 1996
between Environmental Purification Industries, Inc., a Delaware corporation
("EPI, Inc.") and you (the "Employment Agreement"). For purposes of this
Agreement, you are referred to as "Maison."
Meridian National Corporation ("Meridian") hereby agrees as follows:
1. GUARANTEE. Meridian hereby guaranties performance of the obligations
of EPI, Inc. under the Employment Agreement. This guaranty is a continuing and
irrevocable guaranty, binding upon Meridian and its successors and assigns, and
the rights and obligations of Maison under this Agreement will inure to the
benefit of, and will be binding upon, Maison and his heirs, personal
representatives and estate. In the event that EPI, Inc. breaches any of its
obligations under the Employment Agreement, Meridian will, upon written demand
by Maison, promptly perform the obligation of EPI, Inc.
2. VOTING OF SHARES. During the term of the Employment Agreement, if
Maison is nominated for election as a director of EPI, Inc., Meridian agrees to
vote all of its shares of voting capital stock of EPI, Inc. in favor of election
of Maison as a director of EPI, Inc.
3. BONUS. Upon the payment of $1,300,000 to Meridian in connection with
the closing of the public offering of shares of common stock of EPI, Inc.
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), in connection with the proposed
"spin-off" by Meridian of the companies that comprise its paint recycling
business (the "Spin-Off"), Meridian will pay Maison a bonus of $65,000.
4. SALE OF CAPITAL STOCK OF EPI, INC. BY MERIDIAN. Meridian agrees to
pay to Maison a percentage of the aggregate amount of net proceeds realized by
Meridian, in one or more transactions, upon the sale of the 1,200,000 shares of
common stock of EPI, Inc., par value $.01 per share, Meridian will own as of the
closing of the public offering in connection with the Spin-Off (the "Common
Stock"), as follows:
(a) 1.0% of the aggregate amount of net proceeds, if the average
price per share of Common Stock (calculated by dividing the aggregate
amount of gross proceeds by the number of shares sold) is equal to or
exceeds $1.00 per share of Common Stock but less than or equal to $1.99 per
share of Common Stock;
(b) 2.0% of the aggregate amount of net proceeds, if the average
price per share of Common Stock (calculated by dividing the aggregate
amount of gross proceeds
Xx. Xxxxx Maison
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by the number of shares sold) is equal to or exceeds $2.00 per share of
Common Stock but less than or equal to $2.99 per share of Common Stock;
(c) 3.0% of the aggregate amount of net proceeds, if the average
price per share of Common Stock (calculated by dividing the aggregate
amount of gross proceeds by the number of shares sold) is equal to or
exceeds $3.00 per share of Common Stock but less than or equal to $3.99 per
share of Common Stock;
(d) 4.0% of the aggregate amount of net proceeds, if the average
price per share of Common Stock (calculated by dividing the aggregate
amount of gross proceeds by the number of shares sold) is equal to or
exceeds $4.00 per share of Common Stock but less than or equal to $4.99 per
share of Common Stock;
(e) 4.5% of the aggregate amount of net proceeds, if the average
price per share of Common Stock (calculated by dividing the aggregate
amount of gross proceeds by the number of shares sold) is equal to or
exceeds $5.00 per share of Common Stock but less than or equal to $5.49 per
share of Common Stock; and
(f) 5.0% of the aggregate amount of net proceeds, if the average
price per share of Common Stock (calculated by dividing the aggregate
amount of gross proceeds by the number of shares sold) is equal to or
exceeds $5.50 per share of Common Stock.
Such payments will be made within thirty (30) days following the date
Meridian receives such net proceeds and will be subject to federal, state or
local income tax withholding laws applicable to Meridian or EPI, Inc. For
purposes of this paragraph 4, "net proceeds" will be deemed be the gross
proceeds received by Meridian on the sale of the Common Stock less Meridian's
costs of sale including, without limitation, commissions, attorneys' fees and
other out of pocket expenses associated with the transaction.
5. BINDING AGREEMENT. The rights and obligations of Meridian under this
Agreement will inure to the benefit of, and will be binding upon, Meridian and
its successors and assigns, and the rights and obligations of Maison under this
Agreement will inure to the benefit of, and will be binding upon, Maison and his
heirs, personal representatives and estate.
6. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or the breach of this Agreement, will be settled by arbitration
in accordance with the Rules of the American Arbitration Association then
pertaining in the City of Toledo, Ohio, and judgment upon the award rendered by
the Arbitrator or Arbitrators may be entered in any Court having jurisdiction
thereof. The Arbitrator or Arbitrators will possess the power to issue
mandatory orders and restraining orders in connection with such arbitration.
7. NOTICES. Any notice to be given under this Agreement must be
personally delivered in writing or will be deemed duly given after it is posted
in the United States mail,
Xx. Xxxxx Maison
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postage prepaid, registered or certified, return receipt requested, and if
mailed to Meridian, must be addressed to Meridian at its principal place of
business, attention: Chairman, and if mailed to Maison, must be addressed to
him at his home address last shown on the records of Meridian, or at such other
address or addresses as either Meridian or Maison may in the future designate in
writing to the other.
8. WAIVER. The failure of either party to enforce any provision or
provisions of this Agreement will not in any way be construed as a waiver of any
such provision or provisions as to any future violations thereof, nor prevent
that party thereafter from enforcing each and every other provision of this
Agreement. The rights granted the parties herein are cumulative and the waiver
of any single remedy will not constitute a waiver of such party's right to
assert all other legal remedies available to it under the circumstances.
9. EFFECTIVE DATE. This Agreement will become effective on the date of
the closing of the public offering of shares of common stock of EPI, Inc.
pursuant to an effective registration statement under the Securities Act in
connection with the Spin-Off.
10. MISCELLANEOUS. No modification, termination or attempted waiver of
this Agreement will be valid unless in writing and signed by the party against
whom the same is sought to be enforced. This Agreement will be governed by and
construed according to the laws of the State of Ohio.
If the foregoing understanding respecting the Agreement between you and
Meridian is acceptable to you, please indicate your approval by signing a copy
of this letter in the space provided below and return it to me.
Sincerely,
MERIDIAN NATIONAL CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, Chairman
The terms and provisions of this Agreement are hereby approved and accepted
this 30th day of July, 1996.
/s/ Xxxxx Maison
--------------------------
Xxxxx Maison
