EXHIBIT 10.1
CONSULTING AGREEMENT
THIS AGREEMENT made as of the 15th day of May, 2000.
BETWEEN:
RTICA Inc., a corporation incorporated under the laws of the Province of Ontario
and having its head office at 999 Barton Street, Stoney Creek, L8E 5H4
(hereinafter referred to as the "Corporation")
OF THE FIRST PART,
-- and --
Warren Arseneau, carrying on business as a Flat Rock Management, a sole
proprietorship in the city of Burlington, Ontario.
(hereinafter referred to as the "Consultant")
OF THE SECOND PART.
WHEREAS the Corporation carries on a business consisting principally of
the development, marketing, and promotion of high performance insulation
made from recycled plastics (the "Business");
AND WHEREAS the Corporation is desirous of retaining the Consultant to
provide consulting services in connection with the Business of the
Corporation;
AND WHEREAS the Consultant is desirous of providing such services to the
Corporation, on the terms and subject to the conditions herein set out;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
respective covenants and agreements of the parties contained herein and
other good and valuable consideration (the receipt and sufficiency of
which is hereby acknowledged by each of the parties hereto) it is agreed
as follows:
ARTICLE ONE -- CONSULTING SERVICES
1.1 RETAINER. The Corporation hereby agrees to retain the Consultant to
provide the Corporation with consulting services consisting of managerial
services and advising on research and development, engineering,
production, distribution, sales and promotion, labor negotiations,
contract negotiations, financial services, and such other consulting
services as the Corporation and the Consultant may from time to time agree
upon, (the "Services") and the Consultant hereby agrees to provide such
Services to the Corporation.
1.2 TERM OF AGREEMENT. This Agreement shall remain in full force and effect
from the date hereof, to
December 31, 2004 subject to earlier termination as hereinafter provided,
with the said term being capable of extension by mutual written agreement
of the parties hereto.
1.3 PROVISION OF SERVICES. The Services to be provided hereunder to the
Corporation by the Consultant shall be provided by the Consultant. The
Consultant shall devote the majority of his time to managing the affairs
of the Corporation. It is agreed and acknowledged that the Consultant may
from time to time provide services to other persons, firms and
corporations, provided that the Consultant shall at no time while this
agreement remains in force provide ongoing managerial services to any
competitor of the Corporation that is not an affiliate (for the purposes
of this Agreement "Affiliate" shall mean any person, firm or corporation
that is affiliated with the Corporation within the meaning of the BUSINESS
CORPORATIONS ACT (Ontario)).
1.4 BOARD POLICY AND INSTRUCTIONS. The Consultant covenants with the
Corporation that he will act in accordance with any policy of and carry
out all reasonable instructions of the board of directors of the
Corporation. The Consultant acknowledges that such policies and
instructions may limit, restrict or remove any power or discretion, which
might otherwise have been exercised by the Consultant.
1.5 FEES. In consideration for the services rendered by the Consultant
hereunder, the Corporation shall pay to the Consultant consulting fees as
follows for the term of the Consultant's retainer. These fees shall be
based on the Consultant providing 225 days of consulting annually until
December 31, 2003. In 2004, the Consultant shall provide services on a
daily basis as required by the Corporation for up to 100 days. The
Consulting fees shall be paid in advance in on the first day of each
month.
June 1, 2000 to December 31, 2000 $12,500 per month
January 1, 2001 to December 31, 2001 $13,000 per month
January 1, 2002 to December 30, 2003 $13,500 per month
January 1, 2003 to December 30, 2003 $14,000 per month
January 1, 2004 to December 30, 2004 $1,500 per day
1.6 BONUS. The Corporation will pay the Consultant bonuses as follows:
Enbridge Milestone $25,000
Private Placement over $2,500,000 $50,000
Stoney Creek manufacturing break even $50,000
Full scale commercial plant operating $50,000
Meaningful strategic partner $50,000
Meaningful license agreement $50,000
Second commercial plant $50,000
Sale of company 1% of proceeds
Other incentives at the recommendation of the compensation committee.
1.7 EXPENSES. The Consultant will be reimbursed from time to time for other
out of pocket expenses, including travel over 150 km from the
Corporation's head office, incurred by the Consultant in connection with
providing the Services hereunder and other direct expenses made on behalf
of the Corporation. The Consultant shall furnish statements and vouchers
to the Corporation for all such expenses.
1.8 STOCK OPTIONS. The Corporation shall provide the Consultant with stock
options in the Corporation as follows with an exercise price of market
price at the date of issue.
December 1, 2000 100,000 options
January 15, 2001 100,000 options
January 15, 2002 100,000 options
January 15, 2003 100,000 options
January 15, 2004 25,000 options
ARTICLE TWO -- COVENANTS
2.1 NO DELEGATION OF SERVICES. The Consultant covenants and agrees with the
Corporation that it shall not delegate performance of the Services to
anyone other than Warren Arseneau without the prior written consent of the
Corporation.
2.2 PROVISION OF AMENITIES. The Corporation shall provide the Consultant with
access to the Corporation's facilities.
ARTICLE THREE -- CONFIDENTIALITY AND NON-COMPETITION
3.1 CONFIDENTIAL INFORMATION. The Consultant covenants and agrees that he
shall not disclose to anyone any confidential information with respect to
the business or affairs of the Corporation except as may be necessary or
desirable to further the business interests of the Corporation. This
obligation shall survive the expiry or termination of this Agreement.
3.2 RETURN OF PROPERTY. Upon expiry or termination of this Agreement the
Consultant shall return to the Corporation any property, documentation, or
confidential information which is the property of the Corporation.
3.3 PROMOTION OF CORPORATION'S INTERESTS. The Consultant shall and will
faithfully serve and use his best efforts to promote the interests of the
Corporation, shall not use any information he may acquire with respect to
the business and affairs of the Corporation or its affiliates for his own
purposes or for any purposes other than those of the Corporation or its
affiliates.
3.5 CORPORATION ENTITLED TO INJUNCTIVE RELIEF. The Consultant agrees that in
the event of a breach or threatened breach by the Consultant of any of the
provisions of this Agreement, the Corporation, in addition to and not in
limitation of any other rights, remedies or damages available to the
Corporation at law or in equity, shall be entitled to an injunction in
order to prevent or to restrain any breach by the Consultant, or by any or
all of the Consultant's partners, co-venturers, employers, employees,
servants, agents, representatives and any and all persons directly or
indirectly acting for, on behalf of, or with the Consultant.
ARTICLE FOUR -- TERMINATION
4.1 TERMINATION OF AGREEMENT. The Corporation may terminate this Agreement by
giving the Consultant six (6) months written notice or in lieu of such
written notice by paying the Consultant a consulting fee equivalent to six
(6) months of consulting as determined pursuant to Section 1.5 hereof. The
Consultant may terminate this Agreement at any time by giving the
Corporation six months (6) months' written notice. The obligations of the
Consultant under this Agreement, except for the continuing obligations
under Article, 3 and 4, shall terminate upon the earlier of the Consultant
ceasing to be retained by the Corporation or the termination of this
Agreement by the Corporation or the Consultant. Furthermore, should the
Corporation terminate this Agreement the Corporation shall pay incentives
in paragraph 1.6 for a period of three years following termination.
4.2 CHANGE OF CONTROL OF CORPORATION. The Corporation shall pay the Consultant
a one time fee of $750,000 if the Corporation terminates the Consultant's
contract is terminated within 24 months of a change in control of the
Corporation.
ARTICLE FIVE -- CAPACITY
5.1 CAPACITY OF CONSULTANT. It is acknowledged by the parties hereto that the
Consultant is being retained by the Corporation in the capacity of
independent contractor and not as an employee of the Corporation. The
Consultant and the Corporation acknowledge and agree that this Agreement
does not create a partnership or joint venture between them.
5.2 DISCLOSURE OF RECORDS. It is a condition of this agreement that Consultant
maintain at all times a good and current status in remitting of all Goods
and Services Taxes and Income Taxes as and when due. The Company shall
have the right to reasonable written verification of same from Consultant
from time to time, failure of which shall entitle Company to terminate
this agreement upon notice to the Consultant.
ARTICLE SIX -- GENERAL CONTRACT PROVISIONS
6.1 NOTICES. All notices, requests, demands or other communications
(collectively, "Notices") by the terms hereof required or permitted to be
given by one party to any other party, or to any other person shall be
given in writing by personal delivery or by registered mail, postage
prepaid, or by facsimile transmission to such other party as follows:
(a) To the Corporation at: 999 Barton Street, Stoney Creek, ON L8E 5H4
Fax (905) 643-1442
(b) To the Consultant at: 639 Montego Cr., Burlington, ON L7N 2Y9
Fax (905) 333-0560
or at such other address as may be given by such person to the other
parties hereto in writing from time to time.
All such Notices shall be deemed to have been received when delivered or
transmitted, or, if mailed, 48 hours after 12:01 a.m. on the day following
the day of the mailing thereof. If any Notice shall
have been mailed and if regular mail service shall be interrupted by
strikes or other irregularities, such Notice shall be deemed to have been
received 48 hours after 12:01 a.m. on the day following the resumption of
normal mail service, provided that during the period that regular mail
service shall be interrupted all Notices shall be given by personal
delivery or by facsimile transmission.
6.2 ADDITIONAL CONDITIONS. The parties shall sign such further and other
documents, cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perform and cause to be
done and performed such further and other acts and things as may be
necessary or desirable in order to give full effect to this Agreement and
every part thereof.
6.3 COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which so executed shall be deemed to be an original and such
counterparts together shall be but one and the same instrument.
6.4 TIME OF THE ESSENCE. Time shall be of the essence of this Agreement and of
every part hereof and no extension or variation of this Agreement shall
operate as a waiver of this provision.
6.5 ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement between
the parties with respect to all of the matters herein and its execution
has not been induced by, nor do any of the parties rely upon or regard as
material, any representations or writings whatever not incorporated herein
and made a part hereof and may not be amended or modified in any respect
except by written instrument signed by the parties hereto. Any schedules
referred to herein are incorporated herein by reference and form part of
the Agreement.
6.6 ENUREMENT. This Agreement shall enure to the benefit of and be binding
upon the parties and their respective legal personal representatives,
heirs, executors, administrators or successors.
6.7 ASSIGNMENT. This Agreement is personal to the Consultant and may not be
assigned by the Consultant without the consent of the Corporation.
6.8 CURRENCY. Unless otherwise provided for herein, all monetary amounts
referred to herein shall refer to the lawful money of Canada.
6.9 HEADINGS FOR CONVENIENCE ONLY. The division of this Agreement into
articles and sections is for convenience of reference only and shall not
affect the interpretation or construction of this Agreement.
6.10 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws
of Canada applicable therein and each of the parties hereto agrees
irrevocably to conform to the non-exclusive jurisdiction of the Courts of
such Province.
6.11 GENDER. In this Agreement, words importing the singular number shall
include the plural and vice versa, and words importing the use of any
gender shall include the masculine, feminine and neuter genders and the
word "person" shall include an individual, a trust, a partnership, a body
corporate, an association or other incorporated or unincorporated
organization or entity.
6.12 CALCULATION OF TIME. When calculating the period of time within which or
following which any act is to be done or step taken pursuant to this
Agreement, the date which is the reference date in
calculating such period shall be excluded. If the last day of such period
is not a Business Day, then the time period in question shall end on the
first business day following such non-business day.
6.13 LEGISLATION REFERENCES. Any references in this Agreement to any law,
by-law, rule, regulation, order or act of any government, governmental
body or other regulatory body shall be construed as a reference thereto as
amended or re-enacted from time to time or as a reference to any successor
thereto.
6.14 SEVERABILITY. If any Article, Section or any portion of any Section of
this Agreement is determined to be unenforceable or invalid for any reason
whatsoever that unenforceability or invalidity shall not affect the
enforceability or validity of the remaining portions of this Agreement and
such unenforceable or invalid Article, Section or portion thereof shall be
severed from the remainder of this Agreement.
6.15 TRANSMISSION BY FACSIMILE. The parties hereto agree that this Agreement
may be transmitted by facsimile or such similar device and that the
reproduction of signatures by facsimile or such similar device will be
treated as binding as if originals and each party hereto undertakes to
provide each and every other party hereto with a copy of the Agreement
bearing original signatures forthwith upon demand.
IN WITNESS WHEREOF the parties have duly executed this Consulting
Agreement as of the 15th day of May, 2000.
/s/ WARREN ARSENEAU
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Flat Rock Management
Warren Arseneau, President
/s/ ROBERT STIKEMAN
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RTICA Inc.
Robert Stikeman, Director
/s/ MICHAEL BOYD
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Inzeco Holdings Inc.
Michael Boyd, Director