[LOGO OF THE EASTWIND GROUP, INC.]
PERSONAL AND CONFIDENTIAL
-------------------------
June 20, 1997
Xx. Xxxx X. Xxxxx
000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Dear Xxxx:
The purpose of this letter is to reach an agreement between you and Eastwind,
whereby you will be fairly compensated and Eastwind and you will release each
other from any implied or real obligations it or you may have under the terms of
your Employment Contract.
The terms of the agreement are as follows:
1) You do hereby agree to:
a) Resign, effective July 1, 1997, from any and all offices you now hold
as an officer of Eastwind, other than as a member of the Board of
Directors, and resign from the Executive Committee thereof; and to forgo
any claims you might have in the future to such offices.
b) Release The Eastwind Group, Inc. ("Eastwind"), with prejudice, from any
and all, implied or real, claims and/or obligations by/to you under the
terms of your employment contract, including, but not limited to any
obligations to increase or add to any compensation that you are now, or
have been, receiving, whether they be accrued salary (other than those
normal salary payments already being paid on a consistent basis and
having accrued until the date of the signature of this agreement),
accrued bonuses, or otherwise (unless listed below).
c) Release Eastwind, with prejudice, from any and all, implied or real,
claims and/or obligations that you might have in the future regarding
further compensation or employment (other than as a shareholder or Board
Xx. Xxxx X. Xxxxx
June 20, 1997
Page 2
Member or as listed below), including, but not limited to any bonuses
that you might feel Eastwind would be obligated to pay you subsequent to
or regarding the sale of any Eastwind subsidiaries, such as Xxxxxxx or
Polychem.
d) Indemnify and hold Eastwind harmless for any and all real or imagined
past or present damages that you may feel that you have sustained as a
result of your mistreatment as an officer, shareholder or employee of
Eastwind; to keep all information you may have regarding Eastwind or the
matters covered by this agreement strictly confidential, unless
otherwise notified in writing, by me; and not to make any defamatory
remarks or statements in the future to anyone regarding Eastwind or its
officers or directors.
e) Not compete directly with Eastwind, by acquiring more than a 20%
ownership position in, or indirectly by accepting employment from any
companies whose principal business is in the printing or municipal
wastewater treatment equipment manufacturing industries, within a one
hundred and fifty mile radius of Philadelphia, through January 1, 2000.
f) At my discretion, but with thirty (30) days written notice, vacate your
current office at Eastwind. You are to leave behind all business related
files that you have, other than those files and materials that are
purely personal, or which you brought with you to Eastwind, or which you
may find useful solely in the pursuit of acquiring your own businesses
in the future, other than those businesses described in paragraph 1(e).
You will be provided with all of the general and administrative support
that you have been and are currently being provided, at no cost to you,
until such time as you vacate the Eastwind premises.
2) In return for which, Eastwind (and/or its successors), does hereby agree
to:
a) Pay you, in full, the sum of $125,000, in cash at closing of the earlier
of either Eastwind's refinancing the majority of its secured debt or its
sale of Polychem.
b) Pay you the amount of $200,000 per annum, on a semi-
Xx. Xxxx X. Xxxxx
June 20, 1997
Page 3
monthly basis, effective immediately, beginning to accrue upon signature
of this agreement and continuing through January 1, 2000, in return for
your non-complete obligations set forth in this agreement and its
exhibits, with full confession of judgement in the event of Eastwind's
failure to make payments (The terms of the non-compete agreement are
outlined in Exhibit A). No further pro-active performance will be
required of or from you in order that you be able to collect the amounts
owed you under the terms therein, and no deductions, offsets or claw-
backs will be allowed therefrom, unless you violate the terms of
paragraph 1(e) of this agreement.
c) Immediately vest you fully in all options that you now have in Eastwind
or any of its subsidiaries, including options to acquire 100,000 shares
in Team Graphics, Inc., or its successor, at the same exercise price
granted or if a more favorable exercise price by reason of future
adjustment, that I will have the right to acquire and exercise options
granted to me on the same dates. Eastwind will register all shares
underlying these options, at Eastwind's expense, as part of the next
registration of option shares, or if at earlier time an amendment of a
current registration.
d) Provide you with the right to approve or disapprove any and all press
releases regarding you or the termination of your employment, that are
to be made by Eastwind, but the timing of any such press release or
public announcement shall rest within my sole discretion.
e) Release you, with prejudice, from all of the terms of your employment
contract with Eastwind.
f) Indemnify and hold you harmless for any and all real or imagined past or
present damages that Eastwind may believe that it has sustained as a
result of your performance as an officer, shareholder or employee of
Eastwind; and not allow any officers or employees of Eastwind to make
any defamatory remarks or statements in the future to anyone regarding
you or your performance.
g) Allow you to pursue and use any and all materials assembled or hitherto
used by you as an employee of
Xx. Xxxx X. Xxxxx
June 20, 1997
Page 4
Eastwind, to attempt to acquire for your own benefit additional
businesses in any industry not described in paragraph 1)e), without any
hindrance or interference by Eastwind.
h) Provide you, at no cost to yourself with:
i) Full health and medical benefit coverage, as is currently being
provided to you and your family by Eastwind or any of its
subsidiaries, until such time as you are able by virtue of your
having acquired Ivy/Tygart Acquisition Corp. or some other company,
to obtain similar health and medical coverage therefrom, but not
beyond January 1, 2000.
ii) Full and prompt payment of any and all automotive payments,
privileges or benefits that you are currently being provided or
reimbursed for, by Eastwind or its subsidiaries (including but not
limited to all lease, gasoline, repair and insurance payments),
through the later of December 31, 1997 or your acquisition of
Ivy/Tygart Acquisition Corp or some other company, but not beyond
January 1, 2000.
iii) The same office you now occupy, or a similar office acceptable to
you at Centennial Printing as well as all general and
administrative assistance you now receive (including but not
limited to phone, fax, copy, postal expense, etc.) or, at
Eastwind's discretion, the sum of $1,000 per month in cash to cover
the costs thereof, for a period of twelve (12) months subsequent to
the date of signature of this letter.
i) Pay all reasonable costs related to moving you into your new offices,
unless said office is outside of a thirty mile radius of Philadelphia.
The bill for moving services will be submitted directly to and paid
directly by Eastwind.
j) Provide you with first and last right of review and refusal regarding
any real and acceptable offer made by any person(s) or entity, who is
capable of consummating such a transaction, to acquire the business,
assets or stock of Xxx-Xxxxxx Acquisition Corp, and provide you
Xx. Xxxx X. Xxxx
June 20, 1997
Page 5
with adequate time to respond adequately.
3) To whatever extent that there may be any ambiguities in this agreement of
its exhibits, such ambiguities shall be construed or interpreted to your
benefit. Eastwind will reimburse you for any and all reasonable expenses
(legal and otherwise) that you might incur in attempting to collect
payments due under the terms of this agreement.
4) Any failure to pursue remedies for any violation of the terms of this
agreement, by either party, shall not be interpreted or construed as a
waiver of any rights either party has under the terms of this agreement.
5) This document is a fully enforceable and binding agreement to be governed
and interpreted by the law of the Commonwealth of Pennsylvania.
6) This letter agreement and Exhibit A set forth the entire understanding of
the parties hereto, and supersede all prior agreements, arrangements,
discussions and communications, verbal or written, between the parties with
respect to the matters covered in this agreement, unless otherwise stated
herein.
If the foregoing is acceptable to you, please confirm by signing this agreement
and returning the original copy to me. The terms of this offer supersede the
terms of any offer made prior to the date of this letter.
Sincerely,
/s/ Xxxx X. XxXxxxxx
Xxxx X. XxXxxxxx
Chairman and CEO
Xxxxxx and accepted this 20th day of June, 1997, on behalf of himself, by:
---- -----
/s/ Xxxx X. Xxxxx
------------------
Xxxx X. Xxxxx
EXHIBIT A
---------
The terms of the Non-Compete Agreement whereby Xxxx X. Xxxxx ("Xxxxx") agrees
not to compete with The Eastwind Group, Inc. ("Eastwind") under the terms of the
non-compete portion of his termination agreement dated June 20, 1997 and found
in paragraph 1)e) thereof; and in return Eastwind agrees to make certain
semimonthly cash payments to Xxxxx, are as follows:
Agreement: Xxxxx will not compete directly with Eastwind, by acquiring more
than a 20% ownership position in, or indirectly by accepting
employment from any companies whose principal business is in the
printing or municipal wastewater treatment equipment
manufacturing industries, within a one hundred and fifty mile
radius of Philadelphia, through January 1, 2000.
Payments: Xxxxx will be paid $200,000 per annum, in equal semi-monthly
payments to be made on the 1st and 15th of each month through
January 1, 2000, accruing from the date of signature of the
termination agreement, to which this is an Exhibit. In the event
of Xxxxx'x death, said payments will continue to be paid to the
benefit of his wife, heirs or personal representatives.
Duration: Up to and including January 1, 2000.
Prepayment: Eastwind shall have the right to prepay the remaining
unsatisfied amount owed under the terms of this non-compete
agreement in full, at any time without fear of loosing any
rights thereunder.
Security: By the full faith and credit of Eastwind. However, in the event
that the Eastwind is, or becomes, unable to make such payments
by virtue of declaring Chapter 11 or otherwise, Xxxxx shall be
released from any and all non-compete obligations in the
agreement.
Withholding of
Payments: Eastwind shall not for any reason, whether real or
imagined, have any right to forgo, reduce or withhold any
payment to Xxxxx, other than for Xxxxx'x having gone into
competition with Eastwind, as defined by the terms of this
Agreement. Furthermore, Eastwind shall be considered to have
signed a full confession of
Exhibit A (continued)
June 20, 1997
judgement to its detriment, in the event of failure to make said
payments.
Failure: Payments are due, by mail or courier, within three (3) working
days of the 15th and end of each month. The failure to do so
will constitute a "Failure" under the terms of this agreement.
Remedy: Either the Chief Executive Officer, Chief Financial Officer or
Chief Operating Officer of Eastwind must receive either oral or
written notice from Xxxxx of such Failure to make said payments,
after which Eastwind has 4 business days to correct such
Failure. However, in the event of ten (10) or more events of
Failure as defined above under the terms of this agreement or
one event of failure with a duration of more than ten (10) days
post-notification, Eastwind shall be required to immediately pay
the full amount of all payments to be made, in cash to Xxxxx.
Eastwind will reimburse Xxxxx for any and all reasonable
expenses (legal and otherwise) that Xxxxx incurs in attempting
to collect said amounts.
