EXHIBIT 10.14
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made as of the 1st day
of June, 1999, between CECO Environment Corp. ("CECO"), a New York corporation,
and CECO Filters, Inc. a Delaware corporation.
WHEREAS, CECO Filters, Inc. and its subsidiaries (collectively, where
appropriate, "Company") are engaged in the manufacture and sale of industrial
air filters;
WHEREAS, CECO wants to provide management and financial consulting
services to the Company that will involve advising the Company on corporate
policies, marketing, strategic and financial planning, and mergers and
acquisitions and related matters.
WHEREAS, the Company believes that CECO's skills, expertise and
qualifications will be valuable to its business; and
WHEREAS, the Company desires to engage CECO and CECO desires to be
engaged by the Company to provide consulting services to the Company on the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt, adequacy and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
1. Engagement. The Company hereby engages CECO to render to it the
consulting services herein described and CECO hereby accepts such engagement.
2. Duties. The Company and CECO agree that CECO shall provide
consulting services regarding the Company's corporate policies, marketing,
strategic and financial planning, including long and short-term goals, mergers
and acquisitions and other business combinations, financing, growth plans and
other related matters.
3. Compensation. As compensation for the consulting services to be
rendered hereunder, the Company shall pay to CECO a consulting fee of $50,000
per month until the termination of this Agreement ("Monthly Fees") payable in
advance on or prior to the first business day of each month at CECO's offices in
Toronto, Ontario or such other address as CECO shall direct.
4. Term. This Agreement shall be terminable upon the occurrence of the
events described below:
(a) At the option of CECO, upon 10 days notice to the other,
upon the sale of substantially all of the assets of the Company or the
merger of the Company into or with another entity that results in a
change in control of the Company. For purposes of this Section 4(a) a
change in control of the Company shall mean: (i) a change in ownership
of the Company of 50% or more; or (ii) a decrease in CECO's ownership
of the outstanding voting securities of the Company to less than 51%.
(b) At the Company's or CECO's option, respectively, if the
CECO or the Company, respectively, pursuant to or within the meaning of
any Bankruptcy Law: (i) commences a voluntary case; (ii) consents to
the entry of an order for relief against it in an involuntary case;
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property; or (iv) makes a general assignment
for the benefit of its creditors; or
(c) At the Company's or CECO's option, respectively, if a
court of competent jurisdiction enters an order or decree under any
Bankruptcy Law (defined below) that: (i) is for relief against CECO or
the Company, respectively, in an involuntary case; (ii) appoints a
Custodian (defined below) for all or substantially all of the property
of CECO or the Company, respectively; or (iii) orders the liquidation
of CECO or the Company, and the order or decree remains unstayed and in
effect for 90 days.
For purposes of this Agreement, the term "Bankruptcy Law" shall mean
Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar federal or state law for the relief
of debtors.
For purposes of this Agreement, the term "Custodian" shall mean any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
5. Severance Fee. In the event this Agreement is terminated for any
reason other than the Company's termination of this Agreement for the reasons
set forth in Sections 4(b) or 4(c), the Company shall pay to CECO a severance
fee ("Severance Fee") equal to $600,000. The Severance Fee shall be paid by the
Company to CECO within 30 days of the termination of this Agreement.
6. No Quotas. CECO's consulting arrangement hereunder shall not be
subject to any quotas or other similar type of performance measurement.
7. CECO's Availability. CECO shall not be required to provide services
to the Company for a specified number of hours or at predetermined times, other
than as may be agreed upon between CECO and the Company, from time to time.
8. Expense Reimbursement. CECO shall pay all of the expenses incurred
in connection with the provision of consulting services hereunder, unless
otherwise specifically agreed to by the Company and CECO.
9. Independent Contractor Status. Nothing set forth herein shall be
deemed or construed to create a joint venture relationship or a partnership
relationship between CECO and the Company or any officers or directors of CECO,
it being the express intention of the parties hereto that CECO, in performing
services hereunder, is an independent contractor and has no authority to bind
the Company. CECO agrees that neither it nor any of its officers and directors,
acting in their capacity as officers or directors of CECO, will represent or
hold themselves out as joint venturers or partners of the Company, nor represent
that they have any authority to contract for or bind the Company in any manner.
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CECO's employees and independent contractors shall at all times remain
employees and independent contractors, respectively, of CECO. CECO shall be
solely responsible for the payment of each of its: (i) employee's benefits and
entire compensation, including employment taxes, worker's compensation and any
similar taxes associated with employment; and (ii) independent contractor's
compensation.
CECO and the Company acknowledge that Xxxxxxx XxXxxxxx ("DeZwirek") the
Chief Executive Officer, Chief Financial Officer, a director and a controlling
shareholder of CECO is an executive officer and a director of the Company and
that this Agreement and the performance by CECO of consulting services hereunder
shall not affect the Company's relationship with DeZwirek or the rights of
DeZwirek to receive compensation for such activities and the ability of DeZwirek
to bind the Company when acting in such capacities.
10. Mutual Representations, Warranties and Covenants. Each party
represents and warrants to the other that it is not a party to any agreement,
contract or understanding which will in any way restrict or prohibit it from
entering into this Agreement and performing its obligations hereunder in
accordance with the terms and conditions of this Agreement. Each party
represents and warrants to the other that it has the requisite corporate
authority and other approvals necessary to enter into this Agreement and that
all approvals required for the execution, delivery and performance of the terms
and conditions of this Agreement have been received. Each party agrees that it
shall comply with all applicable federal and state or other laws, rules and
regulations in the performance of its responsibilities and the exercise of its
rights hereunder.
11. The Company's Approvals. The Company represents and warrants to
CECO that the consulting arrangement between CECO and the Company and this
Agreement have been approved by a majority of the disinterested members of the
Company's Board of Directors.
12. Other Activities of CECO. CECO and its principals have the right to
engage in such other business activities or businesses as they may choose,
except that during the term of this Agreement CECO may not engage in consulting
relationships with businesses that directly compete with the business activities
of the Company.
13. Indemnification. Each party shall indemnify and hold the other
(including its officers, directors, employees and agents) harmless from and
against any and all losses, liabilities, damages and expenses (including legal
fees and expenses to be paid as incurred), judgments, fines, settlements and all
other amounts arising out of any and all claims, costs, demands, actions, suits,
or other proceedings (whether civil, criminal, administrative or investigative)
in which the indemnified parties may be involved as parties or threatened to be
involved or otherwise incurred by any of such indemnified parties arising out of
or resulting from the failure by such indemnifying party or any person employed
by such party to comply with the terms of this Agreement, any applicable
federal, state or other law, rule or regulation relating to the provision of
services under this Agreement or any gross negligence or willful misconduct of
such indemnifying party occurring or alleged to have occurred in connection with
or as a result of the performance or failure to perform services under this
Agreement. The provisions of this section shall survive termination of this
Agreement for a period of three years.
Expenses incurred in investigating claims related to and defending a
civil, criminal, administrative or investigative action, suit or other
proceedings shall be paid by the indemnifying parties as incurred by the
indemnified parties if so requested by the indemnified parties.
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The indemnification provided hereby shall be in addition to any other
rights to which the indemnified parties may be entitled under any agreement, as
a matter of law or otherwise.
If the right to indemnification provided shall to any extent be
invalid, unenforceable or unavailable, a right of contribution shall exist for
the benefit of the indemnified parties, to the extent of 99% of any and all
losses, claims, damages, liabilities and expenses to which the indemnified
parties may become liable, or if such level of contribution is not enforceable
or otherwise invalid, in such amounts as are appropriate to reflect equitable
considerations and the relative faults of each party. Such contribution
provisions shall be in addition to any right to contribution otherwise available
to the indemnified parties.
14. Severability. Each of the terms and provisions of this Agreement is
and is to be deemed severable in whole or in part and, if any term or provision
or the application thereof in any circumstance should be invalid, illegal or
unenforceable, the remaining terms and provisions or the application thereof to
circumstances other than those as to which it is held invalid, illegal or
unenforceable, shall not be affected thereby and shall remain in full force and
effect.
15. No Exclusive Rights. During the term of this Agreement, the Company
shall not grant any rights to any third parties or enter into any exclusive
agreements or arrangements with any third parties that would prevent CECO from
performing services hereunder.
16. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, to the other parties
hereto at his or its address as set forth on the signature page of this
Agreement and shall be deemed received when delivered, or three days after
mailing, respectively. Any party may change the address to which notices,
requests, demands, and other communications hereunder shall be sent by sending
written notice of such change of address to the other parties in the manner
above provided.
17. No Assignment. Neither CECO nor the Company may assign, transfer,
pledge, encumber, hypothecate or otherwise dispose of its rights or obligations
under this Agreement, and any such attempted delegation, assignment or
disposition by any such party shall be null, void and without effect, unless the
other party consents thereto; except, that CECO may assign or transfer its
rights hereunder to a successor corporation controlled by DeZwirek.
18. Waiver. Waiver by any party hereto of any breach or default by
another party in respect of any of the terms and conditions of this Agreement
shall not operate as a waiver of any other breach or default, whether similar to
or different from the breach or default waived.
19. Entire Agreement; Modification. This writing sets forth the entire
agreement and supersedes all prior agreements among the parties respecting the
subject matter hereof. No modification or amendment of this Agreement or waiver
or cancellation of any provision hereof shall be valid except by a written
document signed by all parties hereto.
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Pennsylvania.
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21. Dispute Resolution - Arbitration. All disputes arising out of or in
connection with this Agreement, or for the breach thereof, shall be referred to
and finally settled by arbitration (without being submitted to any court in the
United States or elsewhere). Such arbitration shall take place in Philadelphia,
Pennsylvania, U.S.A. in accordance with the Commercial Rules of Procedure of the
American Arbitration Association ("AAA") by three arbitrators approved by the
AAA, and shall be limited in duration to two days. The award rendered shall be
final and binding upon both parties hereto, and judgment upon the award rendered
may be entered in any court of competent jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CECO ENVIRONMENTAL CORP.
By: /s/ Xxxxxxx XxXxxxxx
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Title: President
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Address: 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
CECO FILTERS, INC.
By: /s/ Xxxxxxx XxXxxxxx
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Title: Assistant Secretary
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Address: 0000-00 Xxxxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
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