Document:

EX-10.11

Exhibit 10.11

SETTLEMENT AGREEMENT

     This Agreement is made and entered into as of July 17, 2002 and effective as of the Effective
Date (defined below), by and between CHANGING WORLD TECHNOLOGIES, INC. (“CWT”), a corporation
organized under the laws of Delaware with corporate offices at 460 Hempstead Avenue, West
Hempstead, New York 11552, RESOURCE RECOVERY CORP. (“RRC”), a closely-held corporation organized
under the laws of Delaware with corporate offices at 460 Hempstead Avenue, West Hempstead, New York
11552, (collectively, “Plaintiffs”); ABC-WT LLC (“ABCWT”), a limited liability company organized
under the laws of Delaware with offices at 460 Hempstead Avenue, West Hempstead, New York 11552;
and Paul T. Baskis (“Baskis” or “Defendant”), a resident and domiciliary of the State of Illinois;
each referred to individually and collectively in this Agreement as “Party” and “Parties,”
respectively.

WITNESSETH

     WHEREAS, CWT, RRC, and Baskis are parties in Civil Action No. 02-CV-2672 (TCP) before the
United States District Court for the Eastern District of New York, entitled Changing World
Technologies, Inc. et ano. v. Paul Baskis (the “Action”);

     WHEREAS, Baskis has filed a third-party complaint against ABCWT in the Action; and

     WHEREAS, CWT, RRC, ABCWT and Baskis wish to settle amicably the disputes involved in the
Action;

     NOW, THEREFORE, for and in consideration of the promises and covenants hereinafter set forth,
the Parties agree as follows:

 

 

     1. DEFINITIONS

          The following capitalized terms in this Agreement shall have the meaning ascribed to them in
this Section:

          1.1 An “Affiliate” of a Party shall mean any company directly or indirectly (a) controlling,
(b) controlled by, or (c) under common control of the Party, but only so long as such control
exists, and all officers, directors, and members of any of the foregoing. For purposes of this
definition, “control” means the direct or indirect possession of the power to direct or cause the
direction of the management policies of a company, whether through the ownership of voting
securities, by contract, or otherwise.

          1.2 “CWT” shall mean Changing World Technologies, Inc..

          1.3 “RRC” shall mean Resource Recovery Corp.

          1.4 “ABCWT” shall mean AB-CWT LLC.

          1.5 “TDP LLC” shall mean Thermo-Depolymerization L.L.C.

          1.6 “SSD” shall mean the law firm of Schlam Stone & Dolan, LLP, its partners, counsel,
associates, and employees, including Richard H. Dolan and Bennette D. Kramer.

          1.7 “Baskis Trust” shall mean the Paul T. Baskis TDP Living Trust.

          1.8 “ConAgra” shall mean ConAgra Foods, Inc.

          1.9 “RES” shall mean Renewable Environmental Solutions, LLC.

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          1.10 “Main License” shall mean the Exclusive License Agreement made and entered into by and
between Baskis, Trustee of Baskis Trust, and RRC as of January 3, 1997.

          1.11 “Non-Competition Agreement” shall mean the Non-Competition and Confidentiality Agreement
executed by CWT and Baskis on October 6, 1998.

          1.12 “Assignment Agreement” shall mean the Assignment Agreement executed by Baskis Trust and
ABCWT as of July 27, 1999.

          1.13 “ABCWT Operating Agreement” shall mean the Amended and Restated Operating Agreement of
AB-CWT LLC, as of November 1, 1999.

          1.14 “Amendment No. 1” shall mean Amendment No. 1 to the Amended and Restated Operating
Agreement of AB-CWT LLC, dated as of December 12, 2001.

          1.15 “ConAgra License” shall mean the License Agreement made and entered into by and between
RRC, ABCWT, Baskis, Baskis Trust, and ConAgra as of December 4, 2000.

          1.16 “RES License” shall mean the Sublicense Agreement made and entered into by and between
RRC, ABCWT, Baskis, Baskis Trust, and RES as of September 28, 2001.

          1.17 “TDP Licenses” shall mean the Main License, ConAgra License, and RES License,
collectively.

          1.18 “Project Specific Sublicense” shall mean the Project Specific Sub-License Agreement made
and entered into by and between RRC and TDP LLC as of August 1, 1998.

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          1.19 “TDP” shall mean the thermal depolymerization process and devices, including the
apparatus and processes, as described in the Licensed Patent Application (as that term is defined
in the Main License), and any improvements thereon.

          1.20 “DCAD” shall mean a multiple environment biological process which uses the natural model
of microbial succession to degrade organic material.

          1.21 “Effective Date” shall mean the date the Stipulated Order of Dismissal, pursuant to Rule
41, is signed by the Parties and the Court.

          1.22 “Confidential Information” shall mean all non-public information and material, whether or
not in tangible form, of CWT, RRC, and/or ABCWT, and any Affiliates, customers, joint venture
partners, licensees, and consultants of or to any of the foregoing. The term “Confidential
Information” may include, but is not limited to, trade secrets, discoveries, know-how, techniques,
designs, specifications, drawings, diagrams, data, computer programs, results of operations,
business plans, business models, marketing, sales and financial data and projections, customer
lists, prospective customer lists, strategic partnership plans, inventions, unpublished patent
applications, proposed trademarks, proposed service marks, proposed patent applications, proposed
slogans, proposed advertising campaigns, reports and studies, personnel information and other
proprietary technical and business information, whether in written, oral, graphic, magnetic,
electronic or other form. Notwithstanding the foregoing, “Confidential Information” shall not
include information:

	 	a.	 	that is or becomes publicly available other
than as a result of a breach of this Agreement;
	 
	 	b.	 	that is independently developed without the use
of any Confidential Information; or

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	 	c.	 	that is lawfully obtained from a third-party
who has the right to transfer or disclose such information.

     2. RESOLUTION OF THE LAWSUIT

          2.1 The Parties agree to terminate the Action in accordance with the accompanying Stipulated
Order of Dismissal (attached hereto as Appendix A) as a condition of settlement, and shall execute
the Stipulated Order of Dismissal simultaneously with this Agreement. The Parties shall instruct
their attorneys to ensure that the Stipulated Order of Dismissal is promptly filed in the United
States District Court for the Eastern District of New York upon execution. Entry of the Stipulated
Order of Dismissal is a condition precedent to this Settlement Agreement, and in the event that the
Order is not entered for any reason, this Agreement shall be null and void and have no effect.

          2.2 The Parties agree to a dismissal with prejudice of all claims, counterclaims, and
third-party claims; provided, however, that such dismissal shall not be construed or deemed as a
waiver, release from liability for, or dismissal of any claims arising out of facts not known as of
the Effective Date. The Parties reserve all rights with respect to all claims and defenses based
on facts newly discovered after the Effective Date. Further, CWT, RRC and ABCWT each separately
covenant that it has no intention of bringing any new claims against Baskis based on facts known by
it prior to the Effective Date, and Baskis covenants that he has no intention of bringing any new
claims against CWT, RRC, ABCWT, or any of the their Affiliates, licensees, or joint venture
partners, based on facts known by him prior to the Effective Date.

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     3. PAYMENT TERMS

          3.1 CWT, ABCWT and Baskis affirm Sections 7(A) and 7(B) of Amendment No. 1 and expressly agree
that CWT and ABCWT shall be jointly and severally responsible for the payment of $10,000.00 per
month to Baskis as provided for therein (including amounts due in arrears for the period April 2002
through June 2002), which obligations shall cease for both CWT and ABCWT in accordance with the
provisions of the foregoing sections that define the duration of ABCWT’s obligation to make the
$10,000.00 monthly payments. The $10,000.00 monthly payments shall be paid to Baskis and
Associates on a 1099 basis on the last business day of the month.

          3.2 CWT, ABCWT, and Baskis affirm Section 7(C) of Amendment No. 1 and expressly agree that CWT
and ABCWT shall be jointly and severally responsible for payment to Baskis of $15,092, which
represents the balance of the Expenses (as that term is defined in Section 7(C) of Amendment No. 1)
due Baskis.

          3.3 ABCWT affirms Section 7(D) of Amendment No. 1 and expressly agrees to make a payment of
$50,000.00 to Baskis, which is due pursuant to Section 7(D) in exchange for which Baskis agrees to,
and upon the receipt whereof does release and forever discharge Brian Appel (“Appel”) from any and
all claims and causes of action, known or unknown of any kind or nature whatsoever, with respect to
shares of CWT common stock owned directly by Appel in his name.

          3.4 CWT and/or RRC agree to reimburse Baskis for Baskis’s actual expenses and attorneys’ fees
incurred in connection with the Action in an amount not to exceed $80,000.00, and payable to
“Schlam Stone & Dolan as Attorneys for Paul Baskis” (the

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“Litigation Expenses”). SSD has provided to counsel for CWT and RRC a detailed statement of
the Litigation Expenses, which SSD represents and warrants to be a true and correct statement of
sums that Baskis is obligated to pay SSD pursuant to his retainer agreement with SSD.

          3.5 CWT and/or RRC agree to reimburse Baskis for Baskis’s expenses incurred in connection with
the Parties’ settlement meeting of May 30, 2002 in the amount of $1705.20.

          3.6 The amount due in arrears to Baskis pursuant to Section 3.1, and the amounts due pursuant
to Sections 3.2 through 3.5 shall be paid to Baskis and delivered to counsel within 5 business days
of the Effective Date.

     4. ADDITIONAL TERMS OF SETTLEMENT

          4.1 Non-Competition and Confidentiality.

               (a) For a period ending on the expiration of the Main License, Baskis shall not provide
services of any kind to anyone relating to TDP, including without limitation services relating to
(i) systems, apparatus or methods described and/or claimed in any of U.S. Patent Nos. 5,269,947,
5,360,533, and 5,543,061, any related patents and patent applications, or any other patents and
patent applications relating to TDP for which Baskis is an inventor or arise from work performed by
or on behalf of CWT or its Affiliates; (ii) systems, apparatus or methods relating to TDP and
designed, developed or tested by or for CWT or its Affiliates; and (iii) modifications and
improvements to any system, apparatus or method relating to TDP, including without limitation
modifications to systems and methods covered by (i) and (ii) above.

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For purposes of this provision, the term “relating to TDP” shall not be deemed to include
services by Baskis pertaining to processes that are materially different from TDP.

               (b) In addition, for a period of twenty-seven (27) months from the date hereof, Baskis shall
not provide services to any person or entity relating to the processing of any organic waste
product or by-product that is generated or used to create useful products in any of the following
industries and product types: food, agriculture, forest products, municipal waste, plastics, and
rubber products (including tires); provided, however, that nothing herein shall restrict Baskis
from performing services for any person or entity relating to the processing of cellulose derived
from forest products or from hemp sources.

               (c) Except as set forth in Sections 4.1(a) and (b), above, Baskis is free to perform services
of any nature or description for himself or any other person or entity.

               (d) This provision shall not diminish the rights, if any, held by the Parties under the Main
License, and in the event of any conflict between the Main License and this Settlement Agreement,
the terms and provisions of the Main License govern. Nothing in this Settlement Agreement shall be
construed as granting any license rights under, or waiving any right to assert, any patent, trade
secret, or other intellectual property rights owned, controlled, and/or licensed by CWT, RRC,
ABCWT, and/or their Affiliates in connection with any future activities of Baskis, his employer(s)
and/or any other entity for which Baskis performs services.

               (e) Baskis shall not use or disclose any trade secrets or other Confidential Information of
CWT, RRC, ABCWT and/or their Affiliates, customers, joint venture partners, licensees, and
consultants of or to any of the foregoing, including without

8

 

limitation Confidential Information relating to TDP, without the express written authorization
of CWT, RRC, and/or ABCWT, respectively.

               (f) The provisions of this Section 4.1 of this Settlement Agreement supersede (i) the first,
third, and fourth paragraphs of the Non-Competition Agreement; and (ii) any prior oral
representations, understandings, agreements, and provisions concerning Baskis’s non-competition and
confidentiality obligations relating to TDP. All other TDP-related agreements, including without
limitation, the Main License, the ABCWT Operating Agreement, Amendment No. 1, the Assignment
Agreement, the ConAgra License, the RES License, and the Project Specific Sublicense by and/or
between CWT, RRC, Baskis, Baskis Trust, TDP LLC, and/or ABCWT shall remain in full force and effect
and without modification.

               (g) The Parties expressly acknowledge and agree that the provisions of this Section 4.1 are
reasonable in duration and scope in consideration of Baskis’s relationship with and continuing
interests in CWT and ABCWT, and his role in developing TDP for CWT. In any action for breach of
this Agreement or enforcement of the Stipulated Order of Dismissal, Baskis waives any defense based
on unenforceability of any portion of this Section 4.1, and covenants that he shall not challenge
the enforceability of any portion of this Section 4.1 under the law of any state or other
jurisdiction.

          4.2 Restriction on Communications. Baskis will not communicate with anyone in any
manner that questions or undermines the commercial value or potential of TDP. By way of example,
this restriction shall preclude communications by Baskis to existing or potential investors,
partners, licensees, and clients of CWT, RRC, ABCWT or their Affiliates to

9

 

the effect that Baskis has invented a technology that would replace TDP or render it obsolete,
or otherwise materially affect its usefulness.

          4.3 Right of First Offer for New Technology. In the event that Baskis invents or
develops any new technology that he believes to be a substitute or replacement for TDP
(hereinafter, a “New Invention”), and prior to disclosing or offering rights in such New Invention
to any third-party, Baskis shall first notify CWT and, if CWT desires, Baskis shall disclose the
New Invention to CWT (or its designee for this purpose), provided that CWT first executes the
Confidentiality Agreement attached hereto as Appendix B. CWT shall have a right of first offer to
license or otherwise acquire rights to the New Invention on fair and reasonable terms to be
negotiated in good faith. If Baskis and CWT (or its designated Affiliate) do not execute an
agreement conveying rights to such technology to CWT within ninety (90) days of disclosure of a
reasonably detailed description of the New Invention, including its benefits and advantages over
the prior art, then Baskis shall be free to disclose the New Invention to any other person or
entity on terms no more favorable than those offered to CWT. Notwithstanding any other provision
herein, if Baskis and CWT (or its designee) do not execute an agreement within six (6) months of
the first disclosure of the New Invention to CWT by Baskis, as described above, then CWT (or its
designee) shall have no further rights under this provision.

          4.4 DCAD. CWT and RRC hereby acknowledge and agree that (i) as between CWT and RRC on
the one hand and Baskis on the other hand, Baskis owns all right, title and interest in and to any
proprietary rights arising from work performed by Baskis relating to DCAD, if any; and (ii) to
their knowledge, CWT and RRC have not conveyed any right, title, or interest in any proprietary
rights relating to DCAD to any third-party, in either case subject to ConAgra’s and RES’s rights to
use DCAD as set forth below. However, CWT and RRC

10

 

expressly make no representation or warranty with respect to the ownership by any other entity
or entities of any interest in DCAD, or any portion thereof. The Parties further acknowledge that
Baskis is free to license and/or exploit DCAD as he sees fit, provided, however, that Baskis shall
not challenge ConAgra’s and RES’s right to use DCAD in the Field, as defined in the ConAgra License
and the RES License, nor seek payment or compensation from ConAgra, RES, CWT, ABCWT, or any
Affiliates thereof for any such use. This section 4.4 shall have no effect upon the rights of the
Parties as defined in the TDP Licenses, and in the event of any conflict between this section 4.4
and any of the terms and provisions of the TDP Licenses, the terms and provisions of the TDP
Licenses shall govern.

          4.5 Return of Documents. Baskis shall provide all documents (in both paper and
electronic form) and other things removed from the premises of CWT, ABCWT and/or RRC for CWT’s and
ABCWT’s inspection to identify TDP-related materials, which shall be returned to CWT, and original
corporate records and other documents of ABCWT, which shall be returned to ABCWT. Baskis shall
further provide for inspection all documents relating to TDP maintained outside the premises of
CWT, including TDP-related materials in the possession of Baskis’s assistant, Mr. Mullinex. Baskis
will provide such documents for inspection within fifteen (15) calendar days of the Effective Date.
CWT shall return to Baskis all personal possessions belonging to Baskis that are still in the
possession of CWT, including all office furniture and lab equipment owned by Baskis, within fifteen
(15) calendar days of the Effective Date. In addition, within fifteen (15) calendar days of the
Effective Date, CWT shall provide for inspection Baskis’s lab notebooks still in the possession of
CWT for identification and return of materials not TDP-related.

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          4.6 Jurisdiction. Each Party agrees that any legal action or proceeding arising out
of this Agreement may be brought in the United States District Courts for the Eastern District of
New York or any other United States District Court of competent jurisdiction, or, in the absence of
federal court jurisdiction, in the Supreme Court of the State of New York, New York County, and
each Party agrees to submit to the jurisdiction of such courts and venue in such courts, and to
waive any claim that either such court is an inconvenient forum.

     5. TERM

          5.1 This Agreement has no set term and shall be in effect beginning on the Effective Date and
continue for as long as any obligations of any Party hereto continue.

     6. REPRESENTATIONS AND WARRANTIES

          6.1 Each of the Parties hereby represents and warrants to the others that:

               (a) It has the power and has taken all action necessary to enter into this Agreement, to
execute and deliver the documents contemplated by this Agreement, to undertake and perform its
obligations hereunder, and to enter into the covenants set forth herein;

               (b) This Agreement has been duly executed by it and constitutes a valid and binding obligation
of it; and

               (c) Each document to be executed and delivered under the terms of this Agreement will have
been validly executed when it is delivered to the other Parties.

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     7. INTERPRETATION AND APPLICABLE LAW

          7.1 This Agreement shall be construed, interpreted, and enforced in accordance with the laws
of the State of New York, without giving effect to any rule of conflict of laws that would apply a
different law.

     8. ENTIRE AGREEMENT; MODIFICATION

          8.1 This Agreement, together with its Appendices, embodies the entire understanding and
agreement between the Parties hereto with respect to (i) Baskis’s non-competition obligations as
they relate to TDP; and (ii) Baskis’s confidentiality obligations as they relate to TDP, and
supersedes prior agreements pertaining to the foregoing as set forth in Section 4.1(f). Except as
explicitly set forth herein, all prior agreements by or between any of the Parties remain in full
force and effect without modification. In entering this Agreement, neither Party is relying upon
any warranty or representation by the other Party or any other person other than as set forth
expressly herein; and each Party hereby disclaims that any such warranty or representation has been
made to it. This Agreement may be amended or modified only by a writing signed by duly authorized
officers of the Parties.

     9. WAIVER

          9.1 No waiver by either Party whether express or implied, of any provision of this Agreement,
or of any breach or default thereof, shall constitute a continuing waiver of such provision or of
any other provision of this Agreement.

     10. HEADINGS

          10.1 All section captions or titles in this Agreement are inserted for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.

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     11. DRAFTING

          11.1 This Agreement, together with its Appendices, was jointly drafted by the Parties and
neither the Agreement nor any of its provisions shall be construed for or against either of the
Parties on the basis of the identity of the drafter.

     12. NOTICE

          12.1 Any notices or other communications under this Agreement shall be in writing, and shall
be sent by facsimile, with a copy by hand-delivery or overnight courier service, as follows:

To Baskis:

Paul T. Baskis

339 South Century Boulevard

Rantoul, IL 61866

With copies to:

SCHLAM STONE & DOLAN

A Limited Liability Partnership

26 Broadway

New York, New York 10004

(212) 344-5400

Attn: Richard S. Dolan

To CWT:

Changing World Technologies, Inc.

460 Hempstead Avenue

West Hempstead, NY 11552

With copies to:

SAM P. ISRAEL, P.C.

594 Broadway, Suite 1010

New York, New York 10012

(212) 925-3883

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WEIL, GOTSHAL & MANGES LLP

767 Fifth Avenue

New York, New York 10153

(212) 310-8000

Attn: Steven J. Rizzi

To RRC:

Resource Recovery Corporation

460 Hempstead Avenue

West Hempstead, NY 11552

With a copy to:

SAM P. ISRAEL, P.C.

594 Broadway, Suite 1010

New York, New York 10012

(212) 925-3883

WEIL, GOTSHAL & MANGES LLP

767 Fifth Avenue

New York, New York 10153

(212) 310-8000

Attn: Steven J. Rizzi

To ABCWT:

AB-CWT LLC

460 Hempstead Avenue

West Hempstead, NY 11552

With a copy to:

SHEA & GARDNER

1800 Massachusetts Avenue, Suite 800

Washington, DC 20036

(202) 828-2000

Attn: Mark Raffman

     13. COUNTERPARTS

          13.1 This Agreement may be executed in up to four counterparts and all such counterparts shall
constitute one and the same instrument.

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          IN WITNESS WHEREOF, each of the Parties hereto execute this Agreement, through its duly
authorized representative.

Date: July 17, 2002

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	CHANGING WORLD TECHNOLOGIES, INC.	 	 	 	Paul T. Baskis	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	RESOURCE RECOVERY CORP.	 	 	 	AB-CWT LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

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[Appendix A to Settlement Agreement]

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

CHANGING WORLD TECHNOLOGIES, INC.

and RESOURCE RECOVERY CORP.,

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Plaintiffs,	 	 	 	 
	 
	 	 	 	 	 	 
	v.

	 	 	 	Case No. 02-CV-2672 (TCP)	 	 
	 
	 	 	 	 	 	 
	PAUL BASKIS,

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Defendant.	 	 	 	 

STIPULATED ORDER OF DISMISSAL

          On May 1, 2002, plaintiffs CHANGING WORLD TECHNOLOGIES, INC. (“CWT”) and RESOURCE RECOVERY
CORP. (“RRC”), filed their complaint (the “Complaint”) against defendant Paul T. Baskis (“Baskis”).
On May 24, 2002, defendant Baskis filed his Answer and Counterclaims and Third-party Complaint
(the “Countercomplaint”) containing counterclaims against CWT and RRC and third-party claims
against AB-CWT LLC (“ABCWT”). On July                     , 2002, CWT, RRC, ABCWT, and Baskis entered into a
Settlement Agreement (the “Settlement Agreement”), which provides, inter alia, for the entry of
this Stipulated Order of Dismissal.

          Now, therefore, upon consent of CWT, RRC, ABCWT, and Baskis, and upon all prior proceedings
herein, it is

          ORDERED, ADJUDGED AND DECREED that:

     1. Construction. This Order shall be construed with reference to and in conjunction with the
Settlement Agreement, attached as Exhibit 1. The Settlement Agreement referred to in this Order
shall be deemed incorporated herein by reference.

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     2. Definitions. All capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Settlement Agreement.

     3. Jurisdiction. This Court has jurisdiction over CWT, RRC, ABCWT, and Baskis to enforce this
Stipulated Order of Dismissal.

     4. Dismissal. All claims, counterclaims, and third-party claims are hereby dismissed with
prejudice in accordance with the terms of this Order and the Settlement Agreement; provided,
however, that such dismissal shall not be construed or deemed as a waiver, release from liability
for, or a dismissal of, any claims arising out of facts not known as of the date hereof. The
Parties reserve all rights with respect to all claims and defenses based on facts newly discovered
after the Effective Date.

     5. Non-Competition and Confidentiality Obligations of Baskis.

          5.1 For a period ending on the expiration of the Main License, Baskis shall not provide
services of any kind to anyone relating to TDP, as defined in the Settlement Agreement, including
without limitation services relating to (i) systems, apparatus or methods described and/or claimed
in any of U.S. Patent Nos. 5,269,947, 5,360,533, and 5,543,061, any related patents and patent
applications, or any other patents and patent applications relating to TDP for which Baskis is an
inventor or arise from work performed by or on behalf of CWT or its Affiliates; (ii) systems,
apparatus or methods relating to TDP and designed, developed or tested by or for CWT or its
Affiliates; and (iii) modifications and improvements to any system, apparatus or method relating to
TDP, including without limitation modifications to systems and methods covered by (i) and (ii)
above. For purposes of this provision, the term “related to TDP”

18

 

shall not be deemed to include services by Baskis pertaining to processes that are materially
different from TDP.

          5.2 In addition, for a period of twenty-seven (27) months from the date hereof, Baskis shall
not provide services to any person or entity relating to the processing of any organic waste
product or by-product that is generated or used to create useful products in any of the following
industries and product types: food, agriculture, forest products, municipal waste, plastics, and
rubber products (including tires); provided, however, that nothing herein shall restrict Baskis
from performing services for any person or entity relating to the processing of cellulose derived
from forest products or from hemp sources.

          5.3 Except as set forth in Sections 5.1 and 5.2 above, Baskis is free to perform services of
any nature or description for himself or any other person or entity.

          5.4 Baskis shall not use or disclose any trade secrets or other Confidential Information of
CWT, RRC, ABCWT and/or their Affiliates, customers, joint venture partners, licensees, and
consultants of or to any of the foregoing, including without limitation Confidential Information
relating to TDP, without the express written authorization of CWT, RRC, and/or ABCWT, respectively.

          5.5 The provisions of Section 5 of this Order shall be construed in accordance with Section
4.1 of the Settlement Agreement.

     6. Any remedies available to a Party for acts or failures to act by another Party in violation
of this Order shall be in addition to, and not in lieu of, all remedies otherwise available to the
party injured by any such violation, as the case may be, for such acts or failures to act,

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whether arising under tort, contract, or other law.

Dated: July                     , 2002

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	SAM P. ISRAEL, P.C.	 	SCHLAM STONE & DOLAN	 	 
	594 Broadway, Suite 1010	 	A Limited Liability Partnership	 	 
	New York, New York 10012	 	26 Broadway	 	 
	(212) 925-3883	 	New York, New York 10004	 	 
	 	 	 	 	(212) 344-5400	 	 
	WEIL, GOTSHAL & MANGES LLP	 	 	 	 	 	 
	767 Fifth Avenue	 	Attorneys for Defendant and	 	 
	New York, New York 10153	 	Third-party Plaintiff
PAUL T. BASKIS	 	 
	(212) 310-8000	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Attorneys for Plaintiffs CHANGING	 	 	 	 	 	 
	WORLD TECHNOLOGIES, INC. and	 	 	 	 	 	 
	RESOURCE RECOVERY CORP.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	By:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Steven J. Rizzi (SJR-9141)	 	 	 	Richard H. Dolan	 	 
	SHEA & GARDNER	 	 	 	 	 	 
	1800 Massachusetts Avenue, Suite 800	 	 	 	 	 	 
	Washington, DC 20036	 	 	 	 	 	 
	(202) 828-2000	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Attorneys for AB-CWT LLC	 	SO ORDERED:	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	Benjamin W. Boley

Mark S. Raffman	 	 	 	Hon. Thomas C. Platt

United States District Judge	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	
Dated:     Central Islip, New York

July                     , 2002

20

 

[Appendix B to Settlement Agreement]

CONFIDENTIALITY AGREEMENT FOR DISCLOSURE OF NEW INVENTION

TITLE OF NEW INVENTION:                                                             

     This Agreement is made and entered into and effective as of the ___day of ___, 200_, by and
between CHANGING WORLD TECHNOLOGIES, INC., a corporation organized under the laws of Delaware with
corporate offices at 460 Hempstead Avenue, West Hempstead, New York 11552, and Paul T. Baskis
(“Baskis”), a resident and domiciliary of the State of Illinois, on the other side; each referred
to individually and collectively in this Agreement as “Party” and “Parties,” respectively.

W I T N E S S E T H:

     WHEREAS, Baskis has developed a New Invention, as defined in the Settlement Agreement entered
into by the Parties on July ___, 2002 (“Settlement Agreement”), and possesses Confidential
Information, as defined herein, concerning such New Invention; and

     WHEREAS, CWT desires to evaluate or have evaluated, as the case may be, the Confidential
Information for the purpose of determining whether to exercise its Right of First Offer to obtain
rights to such New Invention as provided for and defined in the Settlement Agreement, and

     WHEREAS, Baskis is required to disclose the New Invention to CWT to permit CWT to evaluate or
have evaluated the New Invention;

     NOW, THEREFORE, pursuant to the Parties’ Settlement Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:

     2. DISCLOSURE OF CONFIDENTIAL INFORMATION. Baskis shall disclose the Confidential
Information to CWT, and CWT will use the Confidential Information for the sole purpose of
evaluating its interest in the New Invention in connection with determining whether to exercise its
Right of First Offer for the Confidential Information. Neither CWT nor its employees, officers,
affiliates, directors or agents will, without prior written consent of Baskis, disclose or
distribute the Confidential Information or cause the Confidential Information to be disclosed or
distributed to any third party, except that CWT may disclose the Confidential Information to a
third party, or designate a third party to be the original recipient of such Confidential
Information; provided that any such third party recipient of the Confidential Information uses the
Confidential Information for the sole purpose of assisting CWT in evaluating the New Invention, or
advising CWT in connection therewith, and such third party agrees in writing (with a copy of its
signed agreement being promptly provided to Baskis) to be bound by the terms of this Agreement
restricting use and disclosure of the Confidential Information.

21

 

     3. CONFIDENTIAL INFORMATION: The term “Confidential Information” shall mean all
non-public information and material, whether or not in tangible form, provided by Baskis with
respect to the New Invention. The term “Confidential Information” may include, but is not limited
to, trade secrets, discoveries, know-how, techniques, designs, specifications, drawings, diagrams,
data, computer programs, results of operations, business plans, business models, marketing, sales
and financial data and projections, customer lists, prospective customer lists, strategic
partnership plans, patent applications, proposed trademarks, proposed service marks, proposed
patent applications, proposed slogans, proposed advertising campaigns, reports and studies,
personnel information and other proprietary technical and business information, whether in written,
oral, graphic, magnetic, electronic or other form. Notwithstanding the foregoing, “Confidential
Information” shall not include information:

	 	a.	 	of which CWT already has knowledge at the time
of disclosure, free of any obligation to Baskis to maintain the
confidentiality of such information;
	 
	 	b.	 	that is or becomes publicly available other
than as a result of a breach of this Agreement by CWT;
	 
	 	c.	 	that CWT independently develops without the use
of any Confidential Information of Baskis; or
	 
	 	d.	 	that CWT lawfully obtains from a third-party
who has the right to transfer or disclose such information to CWT.

     4. NONASSIGNABILITY. This Agreement shall be binding upon and inure to the benefit of
the parties, their legal representatives, successors and assigns. Neither this Agreement, nor any
rights granted hereunder may be assigned, transferred, conveyed or encumbered by either party
without the prior written consent of the other, which shall not be unreasonably withheld.

     5. ACKNOWLEDGEMENT: No representation or acknowledgement is made by CWT through the
execution of this agreement or through the receipt of materials purporting to be Confidential
Information from Baskis that such information is in fact Confidential Information, as defined
herein, or otherwise proprietary to Baskis.

     6. COMPELLED DISCLOSURE: If CWT faces legal action or is subject to legal process
that would require it to disclose Confidential Information, then CWT shall promptly notify Baskis
of such process. CWT shall not be liable for damages incurred by Baskis as a result of or in
connection with any disclosure by CWT of Confidential Information of the Baskis pursuant to such
legal action or process.

     7. RETURN/DESTRUCTION OF CONFIDENTIAL INFORMATION. In the event that CWT declines to
exercise its Right of First Offer in the New Invention, it shall destroy or caused to be destroyed
all Confidential Information received from Baskis concerning such New Invention, and shall provide
written notification to Baskis of such destruction.

22

 

     8. MISCELLANEOUS.

	 	(a)	 	The rights and obligations provided by this Agreement regarding the disclosure
and use of Confidential Information shall continue until the third anniversary of the
date of its disclosure by Baskis to CWT.
	 
	 	(b)	 	The rights and obligations provided by this Agreement shall take precedence
over any specific legends or statements associated with the Confidential Information
when received.
	 
	 	(c)	 	This Agreement shall be governed by and construed in accordance with the law of
the state of New York other than those provisions governing conflicts of law.
	 
	 	(d)	 	Any modifications or amendments to this Agreement shall only become effective
if in writing and signed by a duly authorized representative of each party.
	 
	 	(e)	 	If any provision or clause of this Agreement, or portion thereof, shall be held
by any court or other tribunal of competent jurisdiction to be illegal, void or
unenforceable in such jurisdiction, the remainder of such provisions shall not thereby
be affected and shall be given full effect, without regard to the invalid portion. It
is the intention of the parties that, if any court construes any provision or clause of
this Agreement, or any portion thereof, to be illegal, void or unenforceable because of
the duration of such provision or the area or matter covered thereby, such court shall
reduce the duration, area, or matter of such provision and in its reduced form, such
provision shall then be enforceable and shall be enforced.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dated:	 	New York, New York	 	PAUL T. BASKIS:	 	 
	 

	 	                    , 200_	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	CHANGING WORLD TECHNOLOGIES, INC.:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 

23EX-10.12

Exhibit 10.12

August 13, 2008

Mr. Joseph P. Synnott

15 Lesley Lane

Old Bethpage, NY 11804

Re: Employment Contract; Non-circumvention and Non-Compete Riders

Dear Joe:

This is to reflect the terms on which we are prepared to offer you employment as Vice President of
Project Development of Changing World Technologies Inc. (“CWT”). Needless to say we feel that your
unique skills and experience make you a perfect candidate for this position at CWT and therefore
sincerely hope that you will accept our offer of employment by executing this letter where
indicated as well as each of the appended riders.

REMUNERATION

Your initial compensation while you are employed by us shall be as follows:

Gross Salary Per Year and Benefits: $10,000 per month for first three months and then
12,000 per month; incentive bonuses payable subject to and in accordance with the schedule attached
hereto; 4 (four) weeks paid vacation per year; Medical and Dental Insurance as per Company Benefit
Plans including 401K matching retirement plan.

Stock Options: On the date of an initial public offering of our common stock but no later than the
270th day following the date hereof you will be awarded an option to purchase 3,000
shares of our common stock at a purchase price equal to fair market value on the date of grant, as
determined by our board of directors. These options will vest 25% on the one-year anniversary of
the date hereof and 25% on each of the following three anniversaries provided that you have
remained employed by us. Upon purchasing shares of our common stock pursuant to your options, you
will be required to execute and deliver to us a joinder agreement to our shareholders agreement.

At the conclusion of your first year of employment, and annually thereafter, your performance will
be reviewed for the purpose of determining your eligibility for a raise in salary. Such
determination is within the sole discretion of CWT, however. Additionally, from time to time, CWT
reviews its benefits programs, policies and practices and may amend or change them at its
discretion and without advance notice.

 

 

ORIENTATION

As a new employee, you will attend a new employment orientation on your first day of employment as
an introduction to the company and the various benefits, programs policies and procedures you can
expect while employed at CWT (and as are further set forth above). A further purpose of the
orientation shall be to ensure that you understand the company’s strict rules concerning the
non-dissemination of trade secrets, the trade secrets of and password protection policy employed by
CWT and its affiliated companies, Resource Recovery Corporation (“RRC”), Renewable Environmental
Solution, LLC (“RES”) Thermo Depolymerization Process, LLC (“TDP- LLC”) and any future subsidiary
or affiliate of CWT (collectively, “Subsidiaries and Affiliates”) in order to protect their
intellectual property rights, the maintenance of client and third party confidences and our
strictly enforced non-circumvention policy.

ADDITIONAL CONDITIONS

By executing this document and the accompanying riders you agree that if, in CWT’s sole discretion,
you have been granted stock options, your purchase of stock in CWT (in the event that you decide to
exercise such option) shall be subject to all applicable corporate by-laws, state and Federal
securities laws, resolutions by CWT’s Board of Directors, CWT’s shareholders’ agreement as it may
exist at the time of your purchase, the agreement granting you options as well as any option plan
which may be in effect from time to time. You will provide services to CWT, its Subsidiaries and
Affiliates, and any of its third party client entities or individuals promptly and in accordance
with all applicable work rules pertaining to working hours, holiday and other schedules, security
requirements and other policies of CWT, its Subsidiaries and Affiliates, and/or any of its clients
for whom you may be asked to render services. By execution of this Contract, you agree to provide
your services to CWT, or any of its Subsidiaries and Affiliates, as directed from time to time by
the management of CWT. Likewise, you understand that you may receive your remuneration from one of
CWT’s Subsidiaries or Affiliates and not CWT itself.

During the term of the Contract, you shall not engage in any activity to the detriment of CWT, its
Subsidiaries and Affiliates, and, by way of illustration and not as a limitation, you shall not
discuss with any client or potential client of Company or any provider of services or equipment to
CWT, its Subsidiaries and Affiliates, any plans by you or any other employee, agent, independent
contractor, supplier or partner of CWT, its Subsidiaries and Affiliates to end his/her business
relationship with CWT, its Subsidiaries and Affiliates. Further, you will (a) devote your best
energies to the business of CWT, its Subsidiaries and Affiliates and diligently perform all duties
incident to your business relationship with CWT, its Subsidiaries and Affiliates, (b) use your best
efforts to promote the interests and goodwill of CWT, its Subsidiaries and Affiliates and (c)
perform such other duties commensurate with your office as CWT may from time to time assign you.

 

 

EMPLOYMENT AT WILL

While you shall be treated as an employee for income tax purposes, nothing contained in this
Agreement (nor in the accompanying riders) is intended to create any relationship between you and
CWT other than that of an AT- WILL employee. CWT expressly reserves the right to terminate the
employment relationship at any time with or without cause. Likewise, you are free to terminate your
employment at any time on two (2) weeks prior written notice. Moreover by executing this agreement
you acknowledge that any compensation that you receive from CWT shall constitute salary and not
wages, within the meaning of any applicable wage-related laws, statutes or regulations.

Notwithstanding the at-will nature of your employment relationship with CWT, this document and the
accompanying riders impose certain restrictions on you, in terms of the maintenance of proprietary
and competitive information to which you may be exposed, as well as restricting your ability to
otherwise gain an unfair advantage through your relationship with CWT, its Subsidiaries and
Affiliates and/or any of its clients. Accordingly, it is recommended that you have a lawyer review
with you your obligations under this document and the accompanying riders prior to executing them.

CHOICE OF LAW AND JURISDICTION

This agreement and each at the accompanying riders (collectively, the “Contract”) contain the
entire terms of the parties’ agreement concerning employment and shall be governed by, and in
accordance with, the laws of the state of New York and the employee expressly consents to the
jurisdiction of the Courts of New York for the determination of any controversy arising hereunder
and/or under the accompanying riders.

We sincerely believe that this offer will provide you a challenging opportunity, one that will be
professionally and personally satisfying for you.

Please sign both copies of this letter agreement, as well as the two copies of each of the
accompanying riders and return one fully executed copy of each of the two documents in the envelope
provided.

This offer is subject to approval of the Board of Directors of CWT.

WELCOME TO CHANGING WORLD TECHNOLOGIES, INC

Signature page follows

 

 

Sincerely,

	 	 	 	 	 	 	 
	Changing World Technologies, Inc.	 	 
	 
	 	 	 	 	 	 
	BY:
	 	/s/ Brian S. Appel	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Brian S. Appel	 	 
	 

	 	Title:	 	CEO	 	 
	 
	 	 	 	 	 	 
	Accepted By:	 	/s/ Joseph P. Synnott	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Joseph P. Synnott	 	 
	 
	 	 	 	 	 	 
	Date:

	 	8/13/2008	 	 
	 	 	 	 	 

 

 

 

    Changing World
    Technologies, Inc.: Performance Bonus Criteria for Joseph P.
    Synnott

    
    

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
 
	
    Goal

    
	
 
	
 
	
    Bonus

    
	
 
	
 
	
 
	
 
	
 
	
    Time

    
	
 
	
 
	
 

	
    Goal #
	
 
	
 
	
    Weight
	
 
	
 
	
    Weight
	
 
	
 
	
    Description
	
 
	
 
	
    Period i

	
 
	
 
	
    Comments

	

    1

	
 
	
 
	
    25%
	
 
	
 
	
    12.5%
	
 
	
 
	
    Execution of financeable definitive
    documentation ii

    for the construction of one additional TCP plant.
	
 
	
 
	
    Annual
	
 
	
 
	

• Legally and commercially complete executed documents.

• Will support financing of project on either standalone basis or as part of corporate facility.

• Documents support commencement of construction in a timely manner.

	

    2

	
 
	
 
	
    25%
	
 
	
 
	
    12.5%
	
 
	
 
	
    Supervision of grant and similar facilities.
	
 
	
 
	
    Annual
	
 
	
 
	

• Compliance with all material obligations for existing grants.

• on time and complete delivery of all reporting requirements to outside reviewers.

• Identification of additional/new funding sources and timely submission of applications as appropriate.

	

    3

	
 
	
 
	
    25%
	
 
	
 
	
    12.5%
	
 
	
 
	
    Joint Ventures/Licensing
	
 
	
 
	
    Annual
	
 
	
 
	

• Maintenance of existing relationships with partners including performance and monitoring revenue receipt.

• Identification and harvesting of additional potential partners.

• Development of JV/licensing Implementation Plan.

	

    4

	
 
	
 
	
    25%
	
 
	
 
	
    12.5%
	
 
	
 
	
    Management and Development Function
	
 
	
 
	
    Annual
	
 
	
 
	

• Performance within Budget.

• On-time delivery of functional commitments.

• Compliance with organizational procedures and policies.

• Maintenance of appropriate relationship with other functional areas.

	

    Total

	
 
	
 
	
    100%
	
 
	
 
	
    50%
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    5

	
 
	
 
	
    25%
	
 
	
 
	
    12.5%
	
 
	
 
	
    Execution of financeable definitive documentation for the
    construction of a second additional TCP plant within the
    applicable year.
	
 
	
 
	
    Annual
	
 
	
 
	
    See goal #1 for criteria.

	
    Maximum

    Total
	
 
	
 
	
    125%
	
 
	
 
	
    62.5%
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

 

			
	
    i		
    Assumption: goals cover a period of
    one year from the start of employment. If company’s bonus
    program is on a calendar year basis, objectives will need to be
    reviewed and possibly revised.
    

 

			
	
    ii		
    Need to determine the scope of
    “documents”. Is the scope as customary documents
    related to site control, community hosting (including tax and
    other incentives), access, input procurement and output sales,
    etc. or does it include permits, construction, major equipment
    procurement, operations, etc.

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