UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 1, 2004
N-VIRO INTERNATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-21802 34-1741211
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
3450 W. CENTRAL AVENUE, SUITE 328
TOLEDO, OHIO 43606
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (419) 535-6374
ITEM 5. OTHER EVENTS
N-Viro International Corporation announced yesterday in a press release that it
has reached agreements with two of its directors to provide services to the
Company, which is attached as Exhibit 99.1. The Consulting Agreement with Terry
J. Logan referred to in the press release is also attached as Exhibit 99.2.
This Agreement has been modified from the form included with his Employment
Agreement signed in 1999 that was disclosed in a Form 8-K filed on June 14,
1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
N-VIRO INTERNATIONAL CORPORATION
Dated: July 2, 2004 By: /s/ James K. McHugh
-------------- ----------------------
James K. McHugh
Chief Financial Officer
Exhibit 99.1
------------
NEWS RELEASE FOR IMMEDIATE RELEASE
For More Information Contact:
Mr. Phillip Levin
N-Viro International Corporation
info@nviro.com
--------------
(419) 535-6374
N-VIRO ANNOUNCES MANAGEMENT AGREEMENTS
Toledo, Ohio. July 1, 2004. N-Viro International Corp. (OTC BB/NVIC.OB)
announced today it has reached agreement on a two-year Consulting Agreement with
its outgoing Chief Executive Officer, Dr. Terry Logan, Ph.D. Dr. Logan served
as the Company's CEO since May of 2002, and his employment contract expired
yesterday. Beginning today, Dr. Logan will act as a key consultant to the
Company, furthering its technology development, maintaining relationships with
current customers and participating in Company business development and
strategic management. In addition, Dr. Logan will retain his seat on the Board
of Directors.
The Company's Chairman, Phillip Levin, CPA, has agreed to be the acting CEO.
Mr. Levin holds an MBA in both Accounting and Finance, and at one time was
partner-in-charge of PriceWaterhouseCoopers' consulting division in Michigan for
16 years. Mr. Levin is particularly well-suited to the CEO role at this time,
as the Company is currently focusing on fiscal improvements. Mr. Levin resides
in Troy, Michigan, within an hour of the Company's offices. The Board of
Directors has embraced this restructure as the right interim move, as Dr. Logan
has recently relocated to South Carolina and will have an instrumental role in
maintaining the Company's relationships with key southern and east coast
licensees and partners. The Company expects to realize savings exceeding
$50,000 per year based on these staff changes.
Phil Levin stated, "The Board and management are very pleased to retain Terry
for at least another couple of years. He has been with the Company since the
beginning, and his expertise and experience in our industry is tremendously
valuable and appreciated. As for myself, I look forward to continuing my work
with the Company and the challenge of bringing us to profitability."
N-Viro International Corporation develops and licenses its technology to
municipalities and private companies. N-Viro's patented processes use lime
and/or mineral-rich combustion by-products to treat, pasteurize, immobilize and
convert wastewater sludge and other bio-organic wastes into biomineral
agricultural and soil-enrichment products with real market value. More
information about N-Viro International can be obtained by contacting the office,
on the Internet at www.nviro.com or by e-mail inquiry to info@nviro.com.
------------- --------------
The Company cautions that words used in this document such as "hopes,"
"expects," "anticipates," "believes" and "may," as well as similar words and
expressions used herein, identify and refer to statements describing events that
may or may not occur in the future. These forward-looking statements and the
matters to which they refer are subject to considerable uncertainty that may
cause actual results to be materially different from those described herein.
- 30 -
Exhibit 99.2
------------
EXHIBIT 12 TO EMPLOYMENT AGREEMENT
----------------------------------
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Consulting Agreement") is made and
entered into as of the First day of July, 2004 (the "Execution Date"), by and
between N-Viro International Corporation, a Delaware corporation (the
"Company"), and Terry J. Logan, an individual ("Consultant").N-Viro
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Consulting Agreement is being entered into pursuant to
Section 12 of the Amended and Restated Employment Agreement made and entered
into as of the 14th day of June, 1999, by and between the Company and Consultant
(the "Employment Agreement");
WHEREAS, the Company desires to engage employee as a consultant to the
Company upon the terms and subject to the conditions set forth in this
Consulting Agreement; and,
WHEREAS, Consultant desires to be hired as a consultant to the Company
upon the terms and subject to the conditions set forth in this Consulting
Agreement.
WHEREAS, the form of this Consulting Agreement has been modified from
the form that was initially prepared at the date of the Employment Agreement to
accommodate the needs and interests of both parties.
NOW, THEREFORE, in consideration of the premises, the mutual promises,
covenants and conditions herein contained and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto intending to be legally bound hereby agree as follows:
Section 1. Definitions. Unless otherwise defined in this
Consulting Agreement, the capitalized terms and words used in this Consulting
Agreement shall have the meanings ascribed thereto in the Employment Agreement.
Section 2. Engagement. The Company hereby engages Consultant, and
Consultant hereby accepts engagement with the Company, as a consultant, all upon
the terms and subject to the conditions set forth in this Consulting Agreement.
Section 3. Consulting Services. Consultant is and shall be
engaged as a consultant to the Board of Directors of the Company (the "Board")
on all matters relating to the general business and affairs of the Company
("Consulting Services"). Consultant shall report directly to the Chief
Executive Officer (CEO) of the Company, and the CEO shall direct the scope of
work to be conducted by the Consultant. Consultant shall devote such of his
business time, best efforts, and attention to promote and advance the business
of the Company and its subsidiaries as reasonably requested, from time to time,
by the Chief Executive Officer; provided, however, that such time, efforts and
attention shall, where and when possible, shall be conducted during regular
business hours and shall not unreasonably interfere with Consultant's other
business and/or personal activities. Consultant shall provide Consulting
Services to the Company a minimum of One-Hundred Four (104) business days during
each year of the Consulting Period. It is the intent of the Parties that the
Consultant shall provide Consulting Services to the Company two (2) days per
week on average; however, because the work load may fluctuate, the Company may
direct the Consultant to work more or less days in any given week
Notwithstanding such fluctuations, to the extent that Consultant has provided
more or less business days than the average of two (2) days per week during a
calendar quarter, then such imbalance shall be reconciled by Consultant and
Company within two (2) weeks of the end of such calendar quarter.
Exclusivity. Notwithstanding the Covenant Not To Compete, executed
herewith and made a part hereof, the Consultant agrees not to undertake
consulting work for competing businesses, or business which might become
competitors of the Company.
Section 4. Term of Engagement. The term of engagement of
Consultant by the Company pursuant to this Consulting Agreement shall be for the
period (the "Consulting Period") commencing on the Termination Date (the
"Consulting Commencement Date") and ending on June 30, 2006 or such earlier date
that Consultant's engagement is terminated in accordance with the provisions of
this Consulting Agreement or such later date that Consultant's engagement is
extended pursuant to this Consulting Agreement (the "Consulting Termination
Date").
This Agreement may be renewed by mutual consent. Such renewal, unless
otherwise expressly stated, shall be for a term of one year.
Section 5. Fee. During the Consulting Period, subject to all the
terms and conditions of this Consulting Agreement and as compensation for all
Consulting Services under this Consulting Agreement, the Company shall pay to or
provide Consultant with the following:
5.01 Base Fee. The Company shall pay to Consultant a base fee (the
"Base Fee") at the rate of Seven-Hundred Dollars ($700.00) for each business day
(eight hours) that Consultant provides Consulting Services to the Company,
payable at such intervals (at least monthly) as salaries are paid generally to
executive officers of the Company. The Consultant shall bill on an hourly basis
at the rate of Eighty-seven and One-half Dollars ($87.50).
5.02 Travel Fee. For travel necessitated for providing Consulting
Services to the Company, or as directed by the Company, the Consultant shall be
paid at the rate of one-half the Base Fee, earned on a door-to-door basis.
5.03 Other Benefits. The Company shall provide Consultant with a
monthly cell phone allowance in the amount of One Hundred Dollars ($100).
5.04 Stock Options. During the Consulting Period, in addition to the
Base Fee, the Consultant shall receive a stock option for 1,000 shares of the
Company's common stock for each month that the Consultant provides Consulting
Services ("Monthly Options"). Monthly Options shall be granted pursuant to the
N-Viro International Corporation 2004 Stock Option Plan and shall be granted
within two (2) weeks of the end of each month and may be exercised by Consultant
no sooner than six (6) months from the grant date and no later than five (5)
years from the grant date.
Section 6. Expenses. The Company shall reimburse Consultant for
all reasonable, ordinary and necessary expenses (including, but not limited to,
automobile and other business travel and customer entertainment expenses)
incurred by him in connection with providing Consulting Services Consultant
shall render to the Company a complete and accurate accounting of all such
expenses in accordance with the substantiation requirements of Section 274 of
the Internal Revenue Code of 1986, as amended (the "Code"), as a condition
precedent to such reimbursement. The Company shall not be obligated to
reimburse expenses which have not been previously and expressly approved by the
Company.
Section 7. Notices. For the purposes of this Consulting
Agreement, notices and all other communications provided for in the Consulting
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or sent by certified mail, return receipt requested,
postage prepaid, or by expedited (overnight) courier with established national
reputation, shipping prepaid or billed to sender, in either case addressed to
the respective addresses last given by each party to the other (provided that
all notices to the Company shall be directed to the attention of the Board with
a copy to the Secretary of the Company) or to such other address as either party
may have furnished to the other in writing in accordance herewith. All notices
and communication shall be deemed to have been received on the date of delivery
thereof, on the third business day after the mailing thereof, or on the second
day after deposit thereof with an expedited courier service, except that notice
of change of address shall be effective only upon receipt.
Section 8. Life Insurance. REMOVED.
Section 9. Proprietary Information and Inventions. Consultant
understands and acknowledges that:
9.01 Trust. Consultant's engagement creates a relationship of
confidence and trust between Consultant and the Company with respect to certain
information applicable to the business of the Company and its subsidiaries and
affiliates (collectively, the "Group") or applicable to the business of any
licensee, vendor or customer of any of the Group, which may be made known to
Consultant by the Group or by any licensee, vendor or customer of any of the
Group or learned by Consultant during the Consulting Period and/or the
Employment Period.
9.02 Proprietary Information. The Group possesses and will
continue to possess information that has been created, discovered, or developed
by, or otherwise become known to, the Group (including, without limitation,
information created, discovered, developed or made known to by Consultant during
the period of or arising out of his employment by the Company) or in which
property rights have been or may be assigned or otherwise conveyed to the Group,
which information has commercial value in the business in which the Group is
engaged and is treated by the Group as confidential. Except as otherwise herein
provided, all such information is hereinafter called "Proprietary Information",
which term, as used herein, shall also include, but shall not be limited to,
data, functional specifications, computer programs, know-how, research, patents,
inventions, discoveries, processes, procedures, formulae, technology,
improvements, developments, designs, marketing plans, strategies, forecasts, new
products, unpublished financial statements, budgets, projections, licenses,
prices, costs, and customer, supplier and potential acquisition candidates
lists. Notwithstanding anything contained in this Consulting Agreement to the
contrary, the term "Proprietary Information" shall not include (i) information
which is in the public domain, (ii) information which is published or otherwise
becomes part of the public domain through no fault of Consultant, (iii)
information which Consultant can demonstrate was in Consultant's possession at
the time of disclosure and was not acquired by Consultant directly or indirectly
from any of the Group on a confidential basis, (iv) information which becomes
available to Consultant on a non-confidential basis from a source other than any
of the Group and which source, to the best of Consultant's knowledge, did not
acquire the information on a confidential basis or (v) information required to
be disclosed by any federal or state law, rule or regulation or by any
applicable judgment, order or decree or any court or governmental body or agency
having jurisdiction in the premises.
All Proprietary Information shall be the sole property of the Group and their
respective assigns. Consultant assigns to the Company any rights Consultant may
have or acquire in such Proprietary Information. At all times, both during
Consultant's engagement by the Company and after its termination, Consultant
shall keep in strictest confidence and trust all Proprietary Information, and
Consultant shall not use or disclose any Proprietary Information without the
written consent of the Group, except as may be necessary in the ordinary course
of performing Consultant's duties as a consultant to the Company.
Section 10. Inventions. Any and all inventions, conceptions,
processes, discoveries, improvements, patent rights, letter patents, programs,
copyrights, trademarks, trade names and applications therefore, in the United
States and other countries, whether patentable or not, and any and all rights
and interest in, to and under the same, that are conceived, made, acquired, or
possessed by Consultant, alone or with employees of the Company, during the term
of this Consulting Agreement, or within two (2) years thereafter shall become
the exclusive property of the Company and shall at all times and for all
purposes be regarded as acquired and held by Consultant in a fiduciary capacity
for the sole benefit of the Company, and the Consultant hereby assigns and
agrees to assign the same to the Company without further compensation.
Consultant agrees that, upon request, he will promptly make all disclosures,
execute all applications, assignments or other instruments and perform all acts
whatsoever necessary or desired by the Company to vest and confirm in it, its
successors, assigns and nominees, fully and completely, all rights and interests
created or contemplated by this Section.
Section 11. Surrender of Documents. Consultant shall, at the
request of the Company, promptly surrender to the Company or its nominee any
Proprietary Information or document, memorandum, record, letter or other paper
in his possession or under his control relating to the operation, business or
affairs of the Group.
Section 12. Prior Employment Agreements. Consultant represents
and warrants that Consultant's performance of all the terms of this Consulting
Agreement and as a consultant to the Company does not, and will not, breach any
agreement to keep in confidence proprietary information acquired by Consultant
in confidence or in trust prior to Consultant's employment by the Company.
Consultant has not entered into, and shall not enter into, any agreement, either
written or oral, which is in conflict with this Consulting Agreement or which
would be violated by Consultant entering into, or carrying out his obligations
under, this Consulting Agreement. It is expressly agreed and acknowledged that
this Consulting Agreement shall control the relationship between the Consultant
and the Company. All prior or contemporaneous agreements between the Parties
are hereby merged hereinto and or of no present or future effect. The Parties
warrant and acknowledge that the terms of the all prior agreements between them
have been satisfied in full.
Section 13. Remedies. Consultant acknowledges and agrees that the
Company's remedy at law for a breach or a threatened breach of the provisions
herein would be inadequate, and in recognition of this fact, in the event of a
breach or threatened breach by Consultant of any of the provisions of this
Consulting Agreement, it is agreed that the Company shall be entitled to,
equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available, without posting bond or other security. Consultant
acknowledges that the granting of a temporary injunction, a temporary
restraining order or other permanent injunction merely prohibiting Consultant
from engaging in any Business Activities would not be an adequate remedy upon
breach or threatened breach of this Consulting Agreement, and consequently
agrees upon any such breach or threatened breach to the granting of injunctive
relief prohibiting Consultant from engaging in any activities prohibited by this
Consulting Agreement. No remedy herein conferred is intended to be exclusive of
any other remedy, and each and every such remedy shall be cumulative and shall
be in addition to any other remedy given hereunder now or hereinafter existing
at law or in equity or by statute or otherwise.
Section 14. Successive Employment Notice. Within five (5)
business days after the Termination Date, Consultant shall provide notice to the
Company of Consultant's next intended employment. If such employment is not
known by Consultant at such date, Consultant shall notify the Company
immediately upon determination of such information. Consultant shall continue
to provide the Company with notice of Consultant's place and nature of
employment and any change in place or nature of employment during the period
ending two (2) years after the Consulting Termination Date. Failure of
Consultant to provide the Company with such information in an accurate and
timely fashion shall be deemed to be a breach of this Consulting Agreement and
shall entitle the Company to all remedies provided for in this Consulting
Agreement as a result of such breach.
Section 15. Successors. This Consulting Agreement shall be
binding on the Company and any successor to any of its businesses or assets.
Without limiting the effect of the prior sentence, the Company shall use its
best efforts to require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Consulting Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place. As used in this Consulting Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which assumes and agrees to perform this Consulting
Agreement or which is otherwise obligated under this Agreement by the first
sentence of this Section 15, by operation of law or otherwise.
Section 16. Termination. This Consulting Agreement may be
terminated by (i) the Company with Cause (as said term is defined in the
Employment Agreement by substituting the words "Consulting Agreement" for
"Employment Agreement"), (ii) the Company by reason of the death or Disability
(as defined in the Employment Agreement) of Consultant or (iii) consultant by
giving sixty (60) days prior written notice to the Company before such
termination.
Section 17. Binding Effect. This Consulting Agreement shall inure
to the benefit of and be enforceable by Consultant's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Consultant should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Consulting Agreement to Consultant's estate.
Section 18. Modification and Waiver. No provision of this
Consulting Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by Consultant and
such officer as may be specifically designated by the Board. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Consulting Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
Section 19. Headings. Headings used in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.
Section 20. Waiver of Breach. The waiver of either the Company or
Consultant of a breach of any provision of this Consulting Agreement shall not
operate or be construed as a waiver of any subsequent breach by either the
Company or Consultant.
Section 21. Amendments. No amendments or variations of the terms
and conditions of this Consulting Agreement shall be valid unless the same is in
writing and signed by all of the parties hereto.
Section 22. Severability. The invalidity or unenforceability of
any provision of this Consulting Agreement, whether in whole or in part, shall
not in any way affect the validity and/or enforceability of any other provision
herein contained. Any invalid or unenforceable provision shall be deemed
severable to the extent of any such invalidity or unenforceability. It is
expressly understood and agreed that while the Company and Consultant consider
the restrictions contained in this Consulting Agreement reasonable for the
purpose of preserving for the Company the good will, other proprietary rights
and intangible business value of the Company if a final judicial determination
is made by a court having jurisdiction that the time or territory or any other
restriction contained in this Consulting Agreement is an unreasonable or
otherwise unenforceable restriction against Consultant, the provisions of such
clause shall not be rendered void but shall be deemed amended to apply as to
maximum time and territory and to such other extent as such court may judicially
determine or indicate to be reasonable.
Section 23. Governing Law/Forum. This Consulting Agreement shall
be construed and enforced pursuant to the laws of the State of Ohio, and Ohio
shall be the sole venue for dispute resolution relative hereto.
Section 24. Arbitration. Any controversy or claim arising out of
or relating to this Consulting Agreement or any transactions provided for
herein, or the breach thereof, other than a claim for injunctive relief shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "Rules") in effect at the time demand
for arbitration is made by any party. The evidentiary and procedural rules in
such proceedings shall be kept to the minimum level of formality that is
consistent with the Rules. One arbitrator shall be named by the Company, a
second shall be named by Consultant and the third arbitrator shall be named by
the two arbitrators so chosen. In the event that the third arbitrator is not
agreed upon, he or she shall be named by the American Arbitration Association.
Arbitration shall occur in Toledo, Ohio or such other location agreed to by the
Company and Consultant. The award made by all or a majority of the panel of
arbitrators shall be final and binding, and judgment may be entered in any court
of law having competent jurisdiction. The award is subject to confirmation,
modification, correction, or vacation only as explicitly provided in Title 9 of
the United States Code. The prevailing party shall be entitled to an award of
pre- and post-award interest as well as reasonable attorneys' fees incurred in
connection with the arbitration and any judicial proceedings related thereto.
Section 25. Counterparts. This Consulting Agreement may be
executed in more than one (1) counterpart and each counterpart shall be
considered an original.
Section 26. Exhibits. The Exhibits attached hereto are
incorporated herein by reference and are an integral part of this Consulting
Agreement.
Section 27. Sections. Unless the context requires a different
meaning, all references to "Sections" in this Agreement shall mean the Section
of this Agreement.
Section 28. Publicity. Press releases and other publicity
materials relating to the transactions contemplated by this Consulting Agreement
shall be released by the parties hereto only after review and with the consent
of the other party; provided, however, that if legal counsel for the Company
advises the Company that disclosure of this Consulting Agreement is required
under applicable federal or state securities laws, then the Company shall be
permitted to make such disclosure in the form recommended by such legal counsel
without the prior consent of Consultant.
Section 29. Independent Contractor. Consultant shall be deemed to
be an independent contractor with respect to the Company and not an employee and
Consultant shall be responsible for all federal, state and local taxes as a
result of the receipt of the Base Fee paid to Consultant by the Company,
including, but not limited to, unemployment and withholding taxes.
Section 30. Financial Hardship. Should the business of the
Company falter in such manner that it shall have difficulty paying the
Consultant's compensation, or should the business segment for which the
Consultant is utilized fall off significantly, then, the Company may elect to
reduce utilization of the Consultant down to one day per week, payable at the
Base Rate. Should the Company elect to reduce it utilization of the Consultant,
then the Consultant or his appointee shall have the right to examine the books
and records of the Company, as only reasonably necessary, in order to confirm
the Company's representation as to its vitality.
IN WITNESS WHEREOF, this Consulting Agreement has been duly executed
by the Company and Consultant in four (4) counterparts as of the date first
above written.
N-VIRO INTERNATIONAL CORPORATION
By_/s/ Phillip Levin
Its:_Chairman of the Board
/s/ Terry J. Logan
Terry J. Logan
EXHIBIT 13 TO CONSULTING AGREEMENT
----------------------------------
COVENANT NOT TO COMPETE
-----------------------
This Covenant Not to Compete (the "Covenant Not to Compete") is made
and entered into as of the First day of July, 2004, by and between N-Viro
International Corporation, a Delaware corporation (the "Company"), and Terry J.
Logan, an individual ("Consultant").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and Employee entered into a Consulting Agreement
on July 1, 2004 (the "Consulting Agreement");
WHEREAS, the form of this Covenant Not To Compete has been modified
from the form that was initially prepared at the date of the Employment
Agreement to accommodate the needs and interests of both parties.
WHEREAS, the Company desires to enter into this Covenant Not to
Compete with Employee; and,
WHEREAS, Employee desires to enter into this Covenant Not to Compete
with the Company.
NOW, THEREFORE, in consideration of, and as an inducement to, the
Company entering into the Consulting Agreement, of the covenants, agreements,
representations and warranties contained herein, in a prior Employment Agreement
and in the Consulting Agreement and for other good and valuable considerations,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Certain Definitions. Unless otherwise defined herein, the
capitalized words and terms used herein shall have the meanings given to them by
the definitions and descriptions in the Employment Agreement. Unless the
context otherwise requires or indicates a different meaning, words of masculine
gender shall be deemed and construed to include correlative words of the
feminine and neuter genders, words importing the singular number shall include
the plural number and vice versa, and the terms "hereof," "hereby," "hereto,"
"hereunder," "herein" and similar terms mean this Covenant Not to Compete.
Additionally, the capitalized words and terms set forth below and used herein
shall be defined as follows:
"Business Activities" means collectively, (a) any activities
related either directly or indirectly to any and all patents whether issued and
owned by the Company or filed and pending by the Company during the Restriction
Period (as hereinafter defined); and (b) any activities engaged in or proposed
to be engaged in by the Company at any time during the Restriction Period.
"Equitable Relief" means a preliminary restraining order, an
injunction, or any other available equitable remedy.
"Person" means any individual, corporation, limited liability
company, partnership, limited partnership, limited liability partnership,
partnership with limited liability, unincorporated association, or other
business, entity, organization or firm.
"Prohibited Activities" means any business or activities operated
by the Company and/or any of the Company's subsidiaries or affiliates including,
but not limited to, those related, directly or indirectly, to the Business
Activities.
"Territory" means the United States of America and all other
countries in which the Company is or reasonably contemplates engaging in
Business Activities.
2. Restrictions. During the period beginning on the Commencement Date
and ending on the later of three (3) years after the expiration of the
Consulting Agreement or any renewal thereof or five (5) years after the
expiration of the Employment Agreement (the "Restriction Period"), except as
required in carrying out his duties and responsibilities under the Employment
Agreement or Consulting Agreement, and within the Territory, Employee shall not
individually or through any person who is an affiliate of Employee:
(a) directly or indirectly canvass, solicit or accept any business
from or for any Person engaged in any Prohibited Activities;
(b) directly or indirectly induce or attempt to induce any Person
to canvass, solicit or accept any business for or from any Person engaged in any
Prohibited Activities;
(c) directly or indirectly request or advise any customer of the
Company to withdraw, curtail or cancel its business with the Company;
(d) directly or indirectly disclose to any Person the names of
past, present or future (if known) customers of the Company;
(e) directly or indirectly induce or attempt to influence any
employee or agent of any member of the Company and/or its subsidiaries or
affiliates to terminate his employment or agency, as the case may be, with such
member;
(f) directly or indirectly engage in any Prohibited Activities as
a director, officer, employee, consultant, agent, adviser, proprietor, partner,
member, Employee, lender or otherwise of any Person; provided, however, that
investments in public traded entities in an amount not to exceed 5% of the
outstanding capital stock thereof shall be permitted; or
(g) directly or indirectly disclose to any person any of the
Proprietary Information.
3. Remedies. The parties hereto acknowledge that a breach of any of
the covenants in Section 2 by Employee will result in substantial injury and
damage to the Company and its subsidiaries and affiliates for which there is no
adequate remedy at law. Therefore, in addition to any other remedies available
to the Company and its subsidiaries and affiliates at law or in equity, in the
event of an actual or threatened breach of the covenants or any one of them by
Employee, each and every member of the Company and its subsidiaries and
affiliates shall be entitled to Equitable Relief to prohibit and restrain the
violation or attempted violation of this Covenant Not to Compete by Employee or
by any other Person acting for or on behalf of Employee as employee, agent,
representative or otherwise. Such Equitable Relief shall be provided to the
Company and its subsidiaries and affiliates without being required to post any
bond or other security whatsoever.
4. Enforcement. In the event there is any action to enforce the terms
of Section 2, the prevailing party, in addition to any other remedy, shall be
entitled to recover reasonable attorneys' fees and paralegal fees and all other
costs associated with any such action both at the trial and appellate levels.
Employee agrees and acknowledges that the restrictions contained in Section 2
were reasonable in scope and duration, and are necessary to protect the Business
Activities of the Company and its subsidiaries and affiliates.
5. Unenforceability. Should any of the provisions contained in this
Covenant Not to Compete be held invalid or unenforceable, such portion shall be
severed and the remaining portions of this Covenant Not to Compete shall remain
valid and enforceable.
6. Modification. In the event that a court of competent jurisdiction
determines by final non-appealable judgment that the scope, time period, or
Territory covered by the covenants contained in Section 2 are too broad to be
capable of enforcement, said court is authorized, and all parties hereto agree
and stipulate, to modify said covenants and enforce such provisions as to scope,
time, and Territory as such court deems appropriate considering the intent of
the parties hereto and the substantial injury that will result to the Company
and its subsidiaries and affiliates in the event of a modification of the terms
of Section 2 and the substantial sums of money received by Employee pursuant to
the Employment Agreement and Consulting Agreement.
7. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if sent in such manner and to such
addresses for the Company and Employee as are set forth in the Employment
Agreement unless otherwise changed in accordance with the Employment Agreement.
8. Waiver. The waiver by the Company of a breach of any provision of
this Covenant Not to Compete by Employee shall not operate or be construed to be
a waiver of any subsequent breach by Employee. Any such waiver must be in
writing and signed by an authorized representative of the Company.
9. Choice of Law/Forum. This Covenant Not to Compete shall be
interpreted, construed and governed by and in accordance with the internal laws
of the State of Ohio, and its courts shall be proper the exclusive and venue for
any dispute relative hereto.
10. Amendments. This Covenant Not to Compete may not be altered,
amended or changed except by written instrument signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
11. Construction. The normal rules of construction which require the
terms of an agreement to be construed most strictly against the drafter of such
agreement are hereby waived since each party has been represented by counsel in
the preparation, negotiation and execution of this Covenant Not to Compete.
12. Binding Effect. This Covenant Not to Compete shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and permitted assigns.
13. Counterparts. This Covenant Not to Compete may be executed in two
or more counterparts, each of which shall be deemed an original but which
together shall constitute one and the same instrument.
14. Liquidation in Bankruptcy. Should the Company be constrained to be
liquidated in bankruptcy, then, upon acceptance of Company's liquidation plan by
a court of competent jurisdiction, the Consultant shall be released from the
terms and prohibitions of this Covenant Not to Compete.
IN WITNESS WHEREOF the parties have set their hands as of the date
first above written.
N-VIRO INTERNATIONAL CORPORATION
By_/s/ Phillip Levin
Its:_Chairman of the Board
/s/ Terry J. Logan
Terry J. Logan