EXHIBIT 10(d)
AGREEMENT
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AGREEMENT made as of the 31/st/ day of December, 1999 by and among:
Refac International Ltd., a Nevada corporation having executive offices at
The Hudson River Pier, 115 River Road, Edgewater, New Jersey 07020-
1099 (hereinafter referred to as "RIL");
Refac, a Delaware corporation having executive offices at The Hudson River
Pier, 115 River Road, Edgewater, New Jersey 07020-1099 (formerly known
as Refac Technology Development Corporation and referred to herein as
"Refac"); and
Douglas M. Spranger, an individual residing at 142 East 37th Street, New
York, New York 10016 (hereinafter referred to as "Spranger").
W I T N E S S E T H:
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WHEREAS, Spranger has been employed by RIL and Refac pursuant to the
Employment Agreement (as hereinafter defined); and
WHEREAS, Spranger has a 30% interest in certain contingent payments
provided for in Section 6.12 of a Merger Agreement (as hereinafter defined); and
WHEREAS, in connection with the Employment Agreement and the Merger
Agreement, Refac has granted to Spranger options to acquire 45,000 shares of its
common stock pursuant to a Stock Option Agreement (as hereinafter defined); and
WHEREAS, the parties want to provide for (i) the termination of the
Employment Agreement, (ii) the termination of the Stock Option Agreement, (iii)
the sale, transfer and assignment by Spranger to Refac of his interest in such
contingent payments, (iv) a release of restrictions on Spranger engaging in
professional consulting services relating to control rooms and (v) sales
representation services that Spranger may provide to Refac HumanFactors-ID:
NOW, THEREFORE, in consideration of the premises and the respective
agreements of the parties herein contained, the parties hereto, intending to be
legally bound, agree as follows:
1. Definition of Terms.
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As used herein, the following terms shall have the following meanings:
1.1 "Agreement" means this agreement.
1.2 "Contingent Payment" means the 30% interest that Spranger holds in the
contingent payments provided for in Section 6.12 of the Merger Agreement.
1.3 "Employment Agreement" means the Employment Agreement between HFID
(as defined below) and Spranger, dated November 25, 1997, as amended by
Agreement, dated as of January 1, 1999.
1.4 "HFID" means the product development business previously conducted by
Human Factors Industrial Design, Inc. (which corporation was merged into RIL as
of December 31, 1998) and which is currently being conducted by RIL under the
name Refac HumanFactors-ID.
1.5 "Merger Agreement" means the Agreement and Plan of Merger by and among
Refac, HFID Acquisition Corporation, Human Factors Industrial Design, Inc., and
the principal stockholders of Human Factors Industrial Design, Inc., dated as of
November 25, 1997.
1.6 "Stock Option Agreement" means the Stock Option Agreement, dated
November 25, 1997, and amended on March 18, 1998, between Refac and Spranger
providing for the grant to Spranger of an option to acquire 45,000 shares of
Refac's common stock.
2. Termination of the Employment Agreement.
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The parties hereby agree that the Employment Agreement shall be deemed
terminated as of December 31, 1999.
3. Resignation from the Board of Directors of Refac and RIL.
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Simultaneously with the execution of this Agreement, Spranger resigns as an
officer and director of RIL and Refac and as the Chairman of HFID.
4. Termination of the Stock Option Agreement.
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Simultaneously with the execution of this Agreement, the Stock Option
Agreement shall terminate and be of no further force and effect whatsoever and
Spranger shall deliver to Refac any original executed copies of the Stock Option
Agreement (including the amendment thereto) in his possession to Refac.
5. Purchase of the Contingent Interest.
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5.1 Spranger hereby represents and warrants to Refac that he has not
sold, transferred or assigned all or any part of his interest in the Contingent
Payment and has not granted any security interest or encumbered same in any
manner whatsoever.
5.2 Spranger hereby sells, transfers and assigns all of his right, title
and interest in and to the Contingent Payment to Refac in consideration of the
sum of One Hundred Twenty-Five Thousand Dollars ($125,000.00), the receipt of
which Spranger hereby acknowledges.
6. Control Room Consulting Services
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6.1 Refac and RIL hereby agree to release Spranger from any and all
restrictions in the Merger Agreement and Employment Agreement that prohibit
Spranger from soliciting or performing professional consulting services relating
to the design of control rooms including, but not limited to, the Bapco project.
6.2 During the period commencing January 1, 2000 and ending December 31,
2001, HFID agrees to support any project that Spranger undertakes to design
control rooms by providing staffing, if available and requested by Spranger, to
work on the project. In such event, HFID shall bill Spranger for its staff time
at HFID's regular hourly rates in effect at the time the services are rendered.
6.3 In consideration for the release of the restrictive covenants
regarding the design of control rooms, Spranger agrees to pay HFID 25% of the
amount that he, directly or indirectly, charges clients for the time that he
personally devotes to this activity in year 2000 up to a maximum of $50,000. In
year 2001, Spranger agrees to pay HFID 15% of the amount that he charges clients
for the time that he personally devotes to this activity up to a maximum of
$50,000. Thereafter, Refac and RIL would not have any interest in any control
room design work performed by Spranger.
6.4 As used in this Paragraph 6, the term "Spranger" shall include any
entity in which Spranger owns a 25% or greater interest or which he controls, it
being understood and agreed that Spranger personally guarantees the performance
of any and all obligations such entity may have to HFID.
6.5 During the period commencing January 1, 2000 and ending December 31,
2001, HFID agrees that it will not undertake any projects to design control
rooms and agrees to refer any inquiries from prospective or past clients
regarding such services to Spranger.
6.6 During the period commencing January 1, 2000 and ending December 31,
2001, Spranger agrees that he will refer to HFID, without compensation, all non-
control room project inquiries from any company that was an HFID client during
the period commencing January 1, 1995 and ending December 31, 1999.
6.7 HFID agrees that Spranger shall take possession of the original
historical control room materials for his free and unencumbered use. Spranger
agrees to provide HFID with an itemized list of all of such original historical
control room materials. He further agrees that at any time and/or from time to
time to give access to such materials to HFID and to permit HFID to make copies
of all or part of such materials. This covenant shall continue during the five
(5) year period ending December 31, 2004.
6.8 During the period commencing January 1, 2000 and terminating December
31, 2000, Refac shall make available to Spranger, without charge, an office at
its corporate headquarters in Edgewater, New Jersey for his use in performing
the services contemplated by this Paragraph 6 and the sales representation
services provided for in Paragraph 7 hereof.
7. Sales Representative Services.
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7.1 RIL hereby retains Spranger as an independent sales representative for
HFID on the following terms and conditions:
7.1.1 Period. The agency shall commence on the date hereof and shall be
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terminable at any time and for any reason by RIL.
7.1.2 Compensation. Should Spranger introduce HFID to a prospective
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client that has not been an active HFID client during the period
commencing January 1, 1995 and ending December 31, 1999 and which
has not been specifically identified by HFID as a targeted
prospect, HFID will pay Spranger a 7 1/2% commission on the first
$100,000 of collected project fees and 5% of such collected project
fees in excess of $100,000. Such commission will be payable within
thirty (30) days after the end of the month in which the client
makes payment to HFID.
If any such client retains HFID for an additional project(s) within
two (2) years from the commencement of the initial project, HFID
shall also pay Spranger a 5% fee on such project(s). This right to
compensation on additional projects shall continue even if RIL
terminates this sales representation agency under Paragraph 7.1.1
above.
All clients solicited by Spranger shall be subject to the fees and
other terms and conditions established by HFID from time to time.
Spranger understands and agrees that HFID shall not be obligated to
accept any clients introduced by him and that HFID shall have the
sole and absolute discretion to set credit limits, make
adjustments, terms, allowances, and discounts, and to accept or
reject any projects, as it may determine. Spranger shall not have
any right or authority to create any obligation on behalf of HFID
or to bind HFID in any manner.
7.1.3 Expenses. Spranger shall have the entire responsibility for and
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shall pay all costs and
expenses of doing business in connection with his sales
representation activities hereunder.
7.1.4 Definition of Clients. As used in this Paragraph 7, the term
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"clients" shall mean the business entities for which HFID
performed services but shall not include any of the individuals
employed by such entities.
8. Confidentiality, Non-Competition, etc.
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8.1 As used in this Paragraph 8, "Refac Companies" means Refac and all
of its subsidiary companies and "Confidential Information" means any
confidential or proprietary information relating to the identity of customers
of any of the Refac Companies, the identity of representatives of customers with
whom any of the Refac Companies has dealt, the kinds of services provided by the
Refac Companies to customers, the manner in which such services are performed or
offered to be performed, the service needs of actual or prospective customers,
pricing information, information concerning the creation, acquisition or
disposition of products and services, customer maintenance listings, computer
software applications, research and development data, knowhow, personnel
information, corporate finance information, and other proprietary information
and trade secrets. Notwithstanding the above, Confidential Information shall not
include any information that:
(i) is generally available to the public without conducting a
substantial search of published literature; or
(ii) is subject to disclosure pursuant to any order or regulation
of any governmental, regulatory or administrative agency or
authority or court of judicial authority.
If a particular portion or aspect of Confidential Information becomes subject to
either of the foregoing exceptions, all other portions or aspects of such
information shall remain subject to this Paragraph 8.
8.2 Spranger acknowledges that (i) during the course of his
employment he has had, and will continue to have, access to and knowledge of
Confidential Information, (ii) the disclosure of any such Confidential
Information to existing or potential competitors of HFID would place HFID at a
competitive disadvantage and would do damage, monetary or otherwise, to HFID's
business, and (iii) the trade secret status of the Confidential Information and
that the Confidential Information constitutes a protectable business interest of
HFID. Accordingly, Spranger agrees as follows:
(i) During the five (5) year period commencing January 1, 2000,
he shall not, directly or indirectly, whether individually,
as a director, stockholder, owner, partner, employee,
principal or agent of any business, or in any other
capacity, make known, disclose, furnish,
make available or utilize any of the Confidential
Information, other than in the proper performance of the
duties as a sales representation and/or consultant
hereunder.
(ii) Within thirty (30) days after the execution of this
Agreement, Spranger agrees to return to Refac all
Confidential Information, including all photocopies,
extracts and summaries thereof, and any such information
stored electronically on tapes, computer disks or in any
other manner that he does not deem necessary for the
rendition of the sales representation services provided for
herein. Upon the termination of the sales representation
services, the Confidential Information then in his
possession shall be returned to the Refac Companies.
8.3 During the period that Spranger provides the sales representation
services provided for herein and for a period of twenty-four (24) months
thereafter, Spranger agrees that he will not, directly or indirectly, for his
benefit or for the benefit of any other person, firm or entity, solicit the
employment or services of, or hire, any person who was known to be employed by
or was a known consultant to any of the Refac Companies during the course of his
employment by HFID and sales representation services hereunder.
8.4 The provisions of this Paragraph 8 are in addition to any other
obligations that Spranger may have to Refac under or by reason of the Employment
Agreement and/or the Merger Agreement for confidentiality or non-competition.
9. Arbitration.
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Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in New York, New York, in accordance with the rules
of the American Arbitration Association then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction. The arbitrators, in
their discretion, may direct that the successful party in any such arbitration
shall be entitled to be reimbursed by the other party for reasonable attorneys'
fees and expenses incurred in connection with such dispute or controversy.
10. Miscellaneous.
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10.1 Section headings. Section headings contained in this Agreement
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are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.2 Governing Law and Jurisdiction. This Agreement shall be governed by
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and interpreted in accordance with the internal laws of the State of New York
applicable to agreements entered into and to be performed wholly in New York,
irrespective of such State's rules pertaining
to conflicts of laws.
10.3 Waiver. No failure or delay by either party in exercising any
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right, power, or remedy under this Agreement shall operate as a waiver of any
such right, power, or remedy. No waiver of any provision of this Agreement shall
be effective unless in writing and signed by the party against whom such waiver
is sought to be enforced. Any waiver by either party of any provision of this
Agreement shall not be construed as a waiver of any other provision of this
Agreement, nor shall such waiver operate as or be construed as a waiver of such
provision respecting any future event or circumstance.
10.4 Modification. No modification of any provision hereof shall be
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effective unless in writing and signed by both of the parties to this Agreement.
10.5 Severability. In the event any provision of this Agreement (or
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portion thereof) is determined by a court of competent jurisdiction to be
invalid or otherwise unenforceable, such provision (or part thereof) shall be
enforced to the extent possibly consistent with the stated intention of the
parties, or, if incapable of such enforcement, shall be deemed to be deleted
from this Agreement, while the remainder of this Agreement shall continue in
full force and remain in effect according to its stated terms and conditions.
10.6 Further Action. The parties agree, upon the other party's request,
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to execute any and all documents and do all acts necessary to carry out the
terms of this Agreement.
10.7 Entire Agreement. This Agreement, including the Exhibits hereto,
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sets forth the entire agreement and understanding between the parties with
respect to the subject matter hereof. This Agreement supersedes all prior and
contemporaneous agreements, negotiations, and understandings between the
parties, both oral and written.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
written below.
Refac
By: /s/ Robert L. Tuchman
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Robert L. Tuchman
Title: President & CEO
Date: January 11, 2000
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Refac International, Ltd.
By: /s/ Robert L. Tuchman
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Robert L. Tuchman
Title: President & CEO
Date: January 11, 2000
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/s/ Douglas M. Spranger
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Douglas M. Spranger
Date: January 11, 2000
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