Document:

ex10-3.htm

EXHIBIT 10.3

CONSULTANT AGREEMENT

THIS CONSULTANT AGREEMENT ("Agreement") is by and between Pacific Health Care Organization, ("Company"),  a Utah corporation, on behalf of itself and each of its wholly owned subsidiaries, and specifically the operational subsidiary listed below and Balzano & Associates ("Consultant").

WITNESSETH:

WHEREAS, the Company  is in the business of providing  managed care services (including, but not limited to, provider networks, nurse case management, utilization review, bill review, lien adjudication, and legal expertise) to payers, administrators, and employers nationally. ("Business"); and

WHEREAS, the Company desires to employ the services of the Consultant as Consultant of the Company and the Consultant desire to accept that position with the Company;

NOW, THEREFORE, in consideration of the promises, mutual covenants, and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Consultant agree as follows:

 

1.           REPRESENTATIONS AND WARRANTIES.

A.   Representations and Warranties of the Consultant

The Consultant hereby represents and warrants to the Company as follows:

(a)   The Consultant is knowledgeable and experienced for the engagement position.

(b)   The Consultant has full power and authority to enter into and to fully perform thisAgreement.

(c)   This Agreement has been duly executed by the Consultant and constitutes bindingand valid obligations of the Consultant as of the effective date of this Agreement in accordance with its terms.

B.   Representations of the Company.

The Company hereby represents and warrants to the Consultant as follows:

(a)   The Company is a corporation duly organized and validly existing under the lawsof the State of Utah, and its wholly owned subsidiary, Industrial Resolutions Coalition, Inc., is duly organized and validly existing under the laws of the State of California.

 

(b)  The Company has all requisite power and authority, corporate or otherwise, to enter into and to fully perform this Agreement.

(c)   This Agreement has been duly executed and delivered by the Company andconstitutes a valid and binding obligation of the Company as of the effective date ofthis Agreement enforceable in accordance with its terms.

 

  

  

  

2.           ENGAGEMENT TERM.

The Company agrees to engage the Consultant, and the Consultant agrees to serve the Company, as provided in this Agreement.  The Consultant's engagement under this Agreement shall commence on the effective date of this Agreement and shall continue until terminated at any time by either party with or without cause. (“Term”)

3.           DUTIES OF THE CONSULTANT.

Consultant shall perform the duties of legal counsel and shall perform all duties and responsibilities normally associated with this position.

4.           COVENANTS OF THE CONSULTANT.

The Consultant agrees that he/she will obey all rules, regulations, and special instructions of the Company and all other rules, regulations, and special instructions applicable to Consultant in connection with his/her duties hereunder and will endeavor to improve Consultant’s expertise and knowledge, in an effort to increase the value of his/her services for the mutual benefit of the Company and the Consultant.

(a)   Qualifications of the Consultant

The Consultant shall seek in good faith to assist the Company to fully and timely comply with all applicable laws, rules, and regulations and to obtain all permits and qualifications and toqualify as required or helpful in the conduct of the Company's business in order to maximize its Business.

(b)   Expertise.

The Consultant agrees that he/she will make available to the Company any and all information of which he/she has knowledge that is   relevant to the Company’s Business and will make suggestions and recommendations which Consultant should reasonably believe will be of benefit to the Company.

(c)   Opportunities.

The Consultant shall make all business opportunities  of which Consultant becomes aware pertaining to the Business in which the Company engages available to the Company, and to no other person or entity or to other employees individually.

(d)   Compliance.

The Consultant shall attempt in good faith to cause the Company to comply with allof its contractual obligations and commitments, as well as all applicable laws andregulations.

5.           COMPENSATION AND BENEFITS.

	
A.  

	
Compensation. For and in consideration  of the performance by the Consultant of the services, terms, conditions, covenants, and promises herein recited, the Company agrees and promises to pay to the Consultant at the times and in the manner herein stated, a monthly retainer in the gross sum of $10,833.32 payable semi-monthly during the period of engagement.  Each year thereafter, this Agreement will be renewed upon the mutual consent of both parties to this Agreement.

	
a.  

	
It is understood that Balzano & Associates has a separate agreement with a specific Medex employer client  for consulting services unrelated to PHCO business, and, at the request of the Company, and in a separate agreement by and between Consultant and Company, Company shall pass through payment for such services to Consultant on a monthly basis.  Payment is 1/7 of the fees paid for MPN program services for such client  in California.  The original MPN fees to Medex are 18% of PPO savings, and Consultant receives 3% of savings.  Therefore, Medex bills such client  21% of savings.

	
i.  

	
These payments will continue as long as Medex continues such business with such client and shall remain at the same percentage in perpetuity, even if the method of payment is changed.  These pass-through fees will continue even if this underlying Agreement is terminated for any reason.

 

  

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B.  

	
Business Expenses and Reimbursements.

Provided Consultant obtains prior approval for business expenses and provides proper documentation of such expenses, Consultant shall be entitled to reimbursement in accordance with the customary policy of the Company for any ordinary and reasonable business expenses incurred by Consultant  in the performance of his/her duties for and on behalf of the Company during the Term of this Agreement.

      C.  Independent Contractor Status.

Consultant is and throughout the term of this Agreement shall be an independent contractor and not an employee, partner or agent of Company. Consultant shall not be entitled to, nor receive, any benefits normally provided to Company's employees. Company shall not be responsible for withholding income or other taxes from the payments made to Consultant. Consultant shall be solely responsible for filing all returns and paying any income, social security or other tax levied upon or determined with respect to the payments made to Consultant pursuant to this Agreement. Consultant is solely responsible for the means, manner, and method of Consultant's work, subject only to the general objectives contained herein.

6.           CONFIDENTIALITY OF INFORMATION AND DUTY OF NON-DISCLOSURE; COVENANT NOT TO COMPETE; SOLICITATION OF EMPLOYEES.

The Consultant acknowledges and agrees that during the course of engagement and for the Consultant to conduct his/her duties as set forth in this Agreement, Consultant shall have access and disclosed to certain confidential information and trade secrets, both oral and written, pertaining to the Business of the Company (all such information is collectively referred to hereinafter as (“Confidential Information”), consisting but not necessarily limited to the following:

Its trade secrets, technical information, methods, processes, formulae, compositions, systems, techniques, discoveries, ideas, concepts, know how, designs, specifications, inventions, computer programs, and research projects;

Business information consisting of customer lists, pricing methodologies and data, provider networks, information technologies, work flows,  sources of  services, business plans, financial data, and marketing strategies, plans or systems.

(a)   Consultant and his/her present and future partners, employees, agents, representatives, brokers, attorneys, owners, shareholders, principals, officers, directors, subsidiaries, divisions, affiliates, associates, heirs, executors, assigns and administrators, and all persons acting by, through, under or in concert with them, or any of them shall not directly or indirectly engage in business activities at any time during or after the term of the Consultant’s engagement hereunder, utilizing the Confidential Information, that is considered competitive to those Business activities of the Company or its client or to disclose to third parties the Confidential Information (i) without the express prior written permission of the Company, (ii) as he/she may be required pursuant to any law or court order or similar process, or (iii) in connection with any valid claim by the Consultant against the Company directly or indirectly disclose or is not otherwise in the public domain.

 

  

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(b)   Upon discovery of any unauthorized possession, use, or knowledge of any of the Confidential Information, Consultant shall immediately notify the Company of the same, and shall cooperate with the Company to regain possession or prevent further unauthorized use of the Confidential Information. If such unauthorized possession or use of the Confidential Information is the result of the negligence of the Consultant or of any breach by the Consultant of the terms of this Agreement, the Consultant, at Consultant’s own expense, shall take all reasonable actions, including, if likely to be effective, court proceedings, to recover possession of, or (as the case may be) to prevent further unauthorized use or disclosure of the Confidential Information.

(c)   All Confidential Information is and shall remain the property of the Company. By disclosing such information to the Consultant, the Company does not grant to the Consultant any express or implied right to the Confidential Information.

(d)   Consultant shall have no obligation to preserve the confidential or proprietary nature of any Confidential Information which:

(i) was already known to the Consultant free of any obligation to keep itconfidential at the time of its disclosure by the Company as evidenced byits written records prepared prior to such disclosure; or

(ii) is or becomes, publicly known through no wrongful act of theConsultant to which the information was disclosed; or

(iii) is rightfully received from a third person or company having no director indirect secrecy or confidential obligation with respect to suchinformation; or

(iv) is approved for release by written authorization of the Company.

(e)   Non-Solicitation of Company employees.

Consultant also covenant and agree that during the term of engagement with theCompany and for twelve (12) months after the termination thereof, regardless ofthe reason for the engagement termination, will not, directly or indirectly, onhis (her) own behalf or on behalf of or in conjunction with any person or legal entity, recruit, solicit, or induce, or attempt to recruit, solicit, or induce, any employee of the Company with whom Consultant had personal contact or supervised while performing his or her Job Duties, to terminate their engagement relationship with the Company.

 

(f)   Notwithstanding anything else in this Agreement to the contrary, the obligationof the Consultant under this provision shall survive the termination of this Agreement. Further, Consultant agrees not to compete with the business of the Company for a (5) five year period after termination.

 

(g)   Consultant shall defend, hold harmless and indemnify the Company for any liability, loss, claims, or damage of any kind, including reasonable attorney’s fees, incurred by Consultant as a result of any disclosure or use of any Confidential Information in violation of the provisions of this Agreement.

 

  

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7.           CONFLICT OF INTEREST

 

It is the Company’s policy that employees and others acting on the Company’s behalf must be free from conflicts of interest that could adversely influence their judgment, objectivity or loyalty to the Company in conducting the Company’s business activities and assignments. The Company recognizes that employees may take part in legitimate financial, business, charitable, and other activities outside their Company’s jobs, but any potential conflict of interest raised by those activities must be disclosed promptly to management.

Consultant acknowledges and agrees that during the course of engagement and for the Consultant to conduct his/her duties as set forth in this Agreement, Consultant shall

(a)   Request permission and management approval in writing from the Company of outside activities, financial interests, or relationships that may pose a real or potential conflict of interest.  Remember that management written approval is subject to ongoing review; therefore Consultant shall periodically update  management regarding such involvement.

(b)   Avoid personal relationships with other the Company employees whereby parties in the relationship may receive or give unfair advantage or preferential treatment because of the relationship.

(c)   Avoid actions or relationships that might conflict or appear to conflict with job responsibilities or the interests of the Company.  Even the appearance of a conflict of interest can damage an important Company interest.

(d)   Obtain necessary approvals in writing from the Company before accepting any position as an officer or director of an outside business concern.

 

(e)   Prior to serving on the board of directors of a bona fide charitable, educational or other nonprofit organization, you are encouraged to advise your management and or your human resources manager.

Consultant further acknowledges and agrees that during the course of engagement and for the Consultant to conduct his/her duties as set forth in this Agreement, Consultant shall avoid the following:

(f)   Working with a business outside your Company responsibilities that is in competition with any the Company business.

(g)   Accepting a gift that does not meet the standards in the Company Business Gifts and Entertainment Policy.

(h)   Having a direct or indirect financial interest in or a financial relationship with a Company competitor, supplier, or customer (except for insignificant stock interests in publicly-held companies).

(i)   Taking part in any the Company business decision involving a company that employs your spouse or family member.

(j)   Having a second job where your other employer is a direct or indirect competitor, distributor, suppler, or customer of the Company.

 

  

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(k)   Having a second job or consulting relationship that affects your ability to satisfactorily perform your Company assignments.

(l)   Using nonpublic Company information for your personal gain or advantage, or for the gain or advantage of another, including the purchase or sale of securities in a business the Company is interested in acquiring, selling, or otherwise establishingor terminating business relations with.

(m)   Investing in an outside business opportunity in which the Company has an interest, except for having an insignificant stock interest in publicly-held companies.

(n)   Receiving personal discounts or other benefits from suppliers, service providers, or customers that are not available to all the Company employees.

(o)   Receiving personal honoraria for services you perform that are closely related to your work at the Company. Your supervisor or management should approveoccasional honoraria,such as for a university presentation or symposium.

(p)   Having romantic relationships with certain other employees where:

(i) there is an immediate reporting relationship between the employees.

(ii) there is no direct reporting relationship between the employees but where a romantic relationship could cause others to lose confidence in the judgment orobjectivity of either employee, or the relationship could causeembarrassment to the company. Note: In some circumstances, romantic relationships between employees may raise compliance issues under the Company’s Harassment Policy.

8.         MISCELLANEOUS.

(a)   Time of Essence.

Time shall be of the essence in all things pertaining to the performance of this Agreement unless waived in writing by the undersigned parties.

(b)   Waivers.

No provision of this Agreement may be waived except by a written instrumentsigned by the party waiving such provision.  A waiver by either party of any of theterms and conditions of the Agreement in any instance shall not be deemed orconstrued to be a waiver of such tem1 or condition to, the future, or of any subsequent breach thereof, or of any other term and condition of the Agreement.

(c)   Entire Agreement.

This Agreement and the accompanying schedules constitute the entireAgreement between the parties respecting the services of the Consultant andcompensation by the Company and there are no representations, warranties,agreements or commitments  between the parties hereto except as set forth herein.

 

  

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(d)   Notices.

Any notice, request, demand or other communication  permitted or required tobe given hereunder shall be in writing and shall be deemed to be duly given whenpersonally delivered to the Board of Directors of the Company or to the Consultant,as the case may be, or when deposited in the United States mails, by certified or registered mail, return receipt requested, postage prepaid, at the respective addresses of the Company and the Consultant as shown on the signature page hereto. Either party may change by notice the address to which notices are to be sent.

(e)   Governing Law.

This Agreement shall be construed, interpreted and enforced in accordance withthe laws of the State of California.

(f)   Severance.

If any provision of this Agreement shall, for any reason, be held in violation ofany applicable law or regulation, such provision shall be deemed to beunenforceable.  The  invalidity of such specific provision, however, shall not beheld to invalidate any other provision herein, and the remainder of this Agreement shall remain in full force and effect.

(g)   Successors and Assigns.

The Consultant may not, under any circumstances, delegate any of his/her rightsor obligations hereunder without first obtaining the written consent of theCompany.  This Agreement and all of the Company's rights and obligationshereunder may be assigned or transferred by the Company, in whole or in part, to and shall be binding upon and inure to the benefit of any successor or the Company if the successor  shall expressly assume by an instrument  in writing all of the obligations of the Company hereunder. As used herein. the term "successor" shall mean any person, firm, corporation or other business entity which at any time by merger, consolidation or otherwise shall have acquired all or substantially all of the stock of the Company.  Any such successor shall be deemed to be substituted for all purposes as the "Company" hereunder.

(h)   Jurisdiction.

The parties consent, stipulate and agree without power of revocation to thenon­exclusive jurisdiction of any competent Federal or State court sitting inCalifornia in connection with any suit, action or proceeding arising out of thisAgreement and that service of process upon the other party by means of any method reasonably calculated to notify such other party of any such suit, action or proceeding shall be valid and effective service of process and further waive any right to object to the laying of venue in any such court of any such suit, action or proceeding or that any such suit, action, or proceeding brought in any such court has been brought in any inconvenient forum.

(i)   Expenses of Enforcement.

If any action, suit or proceeding is brought by any party hereto against any otherparty hereto with respect to a matter or matters covered by this Agreement, allcosts and expenses of the prevailing party incident to such action, suit orproceeding, including reasonable attorney's fees, shall be paid by the non-prevailing party.

 

  

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(j)   Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemedan original, but all of which taken together shall constitute but one and the sameinstrument.

(k)   Effective Date.

The effective date of this Agreement shall be as of the date set forth at the end of thisAgreement.

(1)   Modifications and Amendments.

This Agreement may not be modified, changed or supplemented,  nor may anyobligations hereunder be waived or extensions of time for performance granted,except by written instrument signed by the party to be charged or by its agent dulyauthorized in writing or as otherwise expressly permitted herein.

(m)   Legal Counsel.

Consultant has had the opportunity to have his or her own  legal counsel  review  and advise  him or her regarding the legal effect of this Agreement.

(n)   Arbitration

In the event that a dispute arises relating to or concerning this Agreement orthe transactions contemplating herein, the parties agree to submit said dispute tobinding arbitration to JAMS, in Orange County, California.   The prevailing partyto said arbitration shall be entitled to recover costs and attorney's fees.

  

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IN WITNESS WHEREOF, this Agreement is signed by the Consultant and the Company as of this 1st day of February, 2013 and shall become enforceable as of the effective date of this Agreement.

 

	
COMPANY:   

 

Pacific Health Care Organization

1201 Dove Street, Suite 300   

Newport Beach, CA 92660

 

By: /s/ Fred U. Odaka                            

 

Its: CFO                                                   

	
CONSULTANT:

 

Balzano & Associates

522 Michelle Drive

Torrance, CA 90503

 

By: /s/ Donald P. Balzano                              

 

Its: Principal                                                  

	 	 
	Industrial Resolutions Coalition, Inc.   

(Operational Subsidiary)

 

1201 Dove Street, Suite 300

Newport Beach, CA 92660

By: /s/ Fred U. Odaka                                                                                           

Its:  CFO                                                 

	 

                                                                                  

                                                      

  

9EXO 10K 2012 Exhibit 10.25

Exhibit 10.25
AMENDED AND RESTATED SEPARATION BENEFIT AGREEMENT
THIS AMENDED AND RESTATED SEPARATION BENEFIT AGREEMENT (this “Agreement”), is entered into as of January 7, 2013, by and among Exopack, LLC, a Delaware corporation (the “Company”), CPG Finance, Inc., a Delaware corporation and ultimate parent of the Company (“Parent”), and Robert H. Arvanites (the “Employee”).
WHEREAS, the Company, Parent and the Employee entered into that certain Separation Benefit Agreement on September 10, 2012 (the “Original Agreement”); and
WHEREAS, the Company, Parent and the Employee desire to amend and restate the Original Agreement to change certain time periods contained in the Original Agreement from six (6) months to twelve (12) months; and
WHEREAS, in consideration of the Employee’s performance of the covenants and agreements of the Employee contained herein, the Company and Parent wish to provide the Employee with a continuing right to receive a separation benefit from Parent in the circumstances, upon the terms, and subject to the conditions set forth herein; 
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.Separation Benefits.  
(a)    In consideration of the Employee’s performance of the covenants and agreements set forth herein (including, without limitation, those contained in Section 2 hereof), Parent agrees to pay the Employee an amount equal to twelve (12) months of the Employee’s then-existing base salary (minus applicable withholdings and payroll taxes), payable in equal installments over a twelve-month period in accordance with Parent’s normal payroll practices, in the event that the Employee’s employment with Parent or any of its subsidiaries (including the Company) is terminated by Parent or any such subsidiary (including the Company) without Cause (as hereinafter defined).
(b)    If the Employee’s employment with Parent or any of its subsidiaries is terminated as contemplated by Section 1(a) of this Agreement, then in addition to the salary continuation benefit provided in Section 1(a), Parent agrees to pay the Employee an amount equal to the bonus that would have been earned by the Employee for the year in which the Employee’s employment with Parent or any of its subsidiaries is so terminated, prorated for the portion of such year during which the Employee remained employed with Parent or such subsidiary to and including the date of termination of the Employee’s employment with Parent or such subsidiary, and reduced by all amounts previously paid to the Employee prior to the date of termination in respect of any bonus for that year, such bonus payment to be made at substantially the same time and in substantially the same manner (and minus applicable withholdings and payroll taxes) as Parent’s normal payroll practices in respect of the payment of similar bonuses.  For purposes of this Section 1(b), (i) the prorated amount of any bonus shall be determined to be a fraction, the numerator of which is the number of days in the fiscal year ending on the date of termination, and the denominator of which is 365, and (ii) the Employee shall forfeit and have no right to receive any payment with respect to any amount of bonus that, in accordance with the terms of any bonus plan governing the payment of such amount, (A) would only be payable after the final year-end determination of the financial results of the entity to which such bonus plan relates and/or (B) would only be payable if the Employee was still employed on the date regularly provided for such final payment, it being acknowledged and agreed that any amount subject to this clause (ii) shall not have been earned.
(c)    In the event that, following the termination without Cause of the Employee’s employment with Parent or any of its subsidiaries and during the period (if any) in which the Employee is participating in the health insurance plan of Parent or any such subsidiary pursuant to continuation coverage provided under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”), (i) the Employee receives any subsidy from Parent or any such subsidiary for the payment of health insurance premiums and (ii) the Employee becomes eligible for any other health insurance coverage, then (A) the Employee agrees immediately to notify Parent of such eligibility 

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for such other health insurance coverage, and (B) such subsidy (if any) shall cease to be provided immediately upon the Employee becoming eligible for such other health insurance coverage and such continuation coverage shall only be provided upon payment by the Employee of the full rate applicable under COBRA.
(d)    For the purposes of this Agreement, “Cause” means (A) conviction of the Employee of any felony, or the conviction of the Employee of a misdemeanor which involves moral turpitude, or the entry by the Employee of a plea of guilty or nolo contendere with respect to any of the foregoing, (B) the commission of any act or failure to act by the Employee that involves moral turpitude, dishonesty, theft, destruction of property, fraud, embezzlement or unethical business conduct, or that is otherwise injurious to Parent, the Company or any of their respective subsidiaries or affiliates, whether financially or otherwise, (C) any violation by the Employee of any rule or policy of Parent, the Company or any of their respective subsidiaries or affiliates, (D) any violation by the Employee of the requirements of any other contract or agreement between Parent, the Company or any of their respective subsidiaries or affiliates, on the one hand, and the Employee, on the other hand, and the failure of the Employee to cure such violation under this subsection (D) within ten (10) days after receipt of written notice from Parent, the Company, or any of such subsidiaries or affiliates, or (E) any failure by the Employee to abide by any directive of the Board of Directors of Parent or the Company or an officer of Parent or the Company to whom the Employee reports; in each case, with respect to subsections (A) through (E), as determined in good faith by the Board of Directors of Parent or the Company in the exercise of its reasonable business judgment.
2.    Covenants.  
(a)    The Employee acknowledges the time and expense incurred by Parent and its subsidiaries (including the Company) in connection with developing proprietary and confidential information in connection with Parent’s and such subsidiaries’ business and operations.  The Employee agrees that the Employee will not, whether during the Employee’s service as an employee of Parent or any of its subsidiaries (including the Company) or at any time thereafter, divulge, communicate, or use to the detriment of Parent or any of its subsidiaries (including the Company) or Sun Capital Partners, Inc. (“Sun”) or any of its affiliates or any other person, firm or entity, confidential information or trade secrets relating to Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates, including, without limitation, business strategies, operating plans, acquisition strategies (including the identities of (and any other information concerning) possible acquisition candidates), financial information, market analyses, acquisition terms and conditions, personnel information, know-how, customer lists and relationships, supplier lists and relationships, or other non-public proprietary and confidential information relating to Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates.  The foregoing confidentiality agreement shall not apply if the Employee can show that the communication (i) is required in the course of performing the Employee’s duties as an employee of Parent or any of its subsidiaries, (ii) is made with the written consent of the Board of Directors of Parent, (iii) relates to information that is or becomes generally known by the public other than as a result of a breach hereof, or (iv) is required by law or judicial or administrative process to be disclosed. 
(b)    During the Employee’s service as an employee of Parent or any of its subsidiaries and for the period ending on the later of (i) twelve months thereafter, and (ii) the date of payment of the final installment of separation benefit pursuant to Section 1 of this Agreement, the Employee shall not, to the detriment of Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates, directly or indirectly, for the Employee or on behalf of any other person, firm or entity, employ, engage, retain, solicit, recruit or enter into a business affiliation with any person who is an employee of Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates, or attempt to persuade any such person to terminate such person’s employment with Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates, whether or not such person is a full-time employee or whether or not such employment is pursuant to a written agreement or at-will.
(c)    During the Employee’s service as an employee of Parent or any of its subsidiaries and for the period ending on the later of (i) twelve months thereafter, and (ii) the date of payment of the final installment of separation benefit pursuant to Section 1 of this Agreement, the Employee shall not, to the detriment of Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates, directly or indirectly, for the Employee or on behalf of any other person, firm or entity, solicit or otherwise attempt to take away any supplier, vendor, or customer of Sun, 

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Parent or any of their respective affiliates who the Employee solicited or did business with on behalf of Parent or any of its subsidiaries (including the Company).
(d)    During the Employee’s service as an employee of Parent or its subsidiaries and for the period ending on the later of (i) twelve months thereafter, and (ii) the date of payment of the final installment of separation benefit pursuant to Section 1 of this Agreement, the Employee shall not, directly or indirectly, engage in, or serve as a principal, partner, joint venturer, member, manager, trustee, agent, stockholder, director, officer or employee of, or advisor to, or in any other capacity, or in any manner, own, control, manage, operate, or otherwise participate, invest, or have any interest in, or be connected with, any person, firm or entity that engages in any activity which competes directly or indirectly with any business of Parent or its subsidiary or parent companies (collectively, the “Company Business”) anywhere in the United States of America or any other country in which the Company Business was conducted or related sales were effected during the preceding two years.  THIS PARAGRAPH WILL NOT APPLY AND WILL NOT BE ENFORCED BY PARENT WITH RESPECT TO POST-TERMINATION ACTIVITY BY THE EMPLOYEE THAT OCCURS IN CALIFORNIA OR IN ANY OTHER STATE IN WHICH THIS PROHIBITION IS NOT ENFORCEABLE UNDER APPLICABLE LAW.
(e)    Whether during or after the term of the Employee’s employment or service with Parent or any of its subsidiaries, the Employee shall not disparage, defame or discredit Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates or engage in any activity which would have the effect of disparaging, defaming or discrediting Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates, nor shall the Employee interfere with or disrupt the business activities of Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates, or engage in any activity which would have the effect of interfering with or disrupting the business activities of Parent or any of its subsidiaries (including the Company) or Sun or any of its affiliates; provided, however, that nothing in this subsection (e) or elsewhere in this Section 2 shall prevent the Employee from engaging in “whistle-blowing” or other activities expressly protected by applicable law, to the extent so protected.
(f)    In the event that during the Employee’s service as an employee of Parent or any of its subsidiaries the Employee generates, authors, conceives, develops, acquires, makes, reduces to practice or contributes to any discovery, formula, trade secret, invention, innovation, improvement, development, method of doing business, process, program, design, analysis, drawing, report, data, software, firmware, logo, device, method, product or any similar or related information, any copyrightable work or any proprietary information (collectively, “Intellectual Property”), the Employee acknowledges that such Intellectual Property is and shall be the exclusive property of Parent and/or its subsidiaries.  Any copyrightable work prepared in whole or in part by the Employee shall be deemed “a work made for hire” to the maximum extent permitted under Section 201(b) of the 1976 Copyright Act as amended, and Parent and/or its subsidiaries, as appropriate, shall own all of the rights comprised by the copyright therein.  Without limiting the foregoing, the Employee hereby assigns the Employee’s entire right, title and interest in and to all Intellectual Property to Parent.  During the Employee’s service as an employee of Parent or its subsidiaries and thereafter, the Employee shall promptly and fully disclose all Intellectual Property to Parent and shall cooperate with Parent and its subsidiaries to protect Parent’s and its subsidiaries’ interests in and rights to such Intellectual Property (including, without limitation, providing reasonable assistance in securing patent protection and copyright registrations and executing all documents as reasonably requested by Parent, whether such requests occur during or after the period of the Employee’s employment by Parent or its subsidiaries).  The Employee acknowledges that the Employee does not now nor has the Employee ever owned, nor has the Employee ever made, any materials prior to the commencement of the Employee’s service as an employee of Parent or its subsidiaries that relate to Parent’s and/or its subsidiaries’ actual or anticipated business, research and development or existing or planned future products or services.  The Employee hereby agrees to perform all actions reasonably requested by Parent (whether during or after the Employee’s service as an employee of Parent or its subsidiaries) to establish and confirm Parent’s or its subsidiaries’ ownership of any Intellectual Property (including, without limitation, by executing assignments, consents, powers of attorney, and other instruments).  Should Parent or any of its subsidiaries be unable to secure the Employee’s signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to any Intellectual Property, whether due to the Employee’s mental or physical incapacity or any other cause, the Employee hereby irrevocably designates and appoints Parent and its subsidiaries and each of their duly authorized officers and agents as the Employee’s agent and attorney-in-fact, to act for and in the Employee’s behalf and stead, to execute and 

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file any such document, and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, trademarks or other rights or protections with the same force and effect as if executed and delivered by the Employee.
(g)    In accordance with certain state laws, the Employee is hereby advised that the foregoing subsection (f) regarding ownership of work product does not apply to any invention for which no equipment, supplies, facilities or trade secret information of Parent or its subsidiaries was used and that was developed entirely on the Employee’s own time, unless (i) the invention relates to the business or actual or demonstrably anticipated research or development of Parent or any of its subsidiaries, or (ii) the invention results from any work performed by the Employee for Parent or any of its subsidiaries.
(h)    The Employee understands that Parent and its subsidiaries will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on Parent’s and/or its subsidiaries’ part to maintain the confidentiality of such information and to use it only for certain limited purposes.  During the Employee’s service as an employee of Parent or its subsidiaries and thereafter, and without in any way limiting the provisions of subsection (a) above, the Employee has held and will hold all Third Party Information in the strictest confidence and has not disclosed and will not disclose to anyone (other than personnel and consultants of Parent and its subsidiaries who need to know such information in connection with their work for Parent or any of its subsidiaries) or use, except in connection with the Employee’s work for Parent or any of its subsidiaries, any Third Party Information unless expressly authorized by a member of the Board of Directors of Parent in writing.
(i)    During the Employee’s service as an employee of Parent or its subsidiaries, the Employee has not improperly used or disclosed and will not improperly use or disclose any trade secrets or other confidential information, if any, of any former employers or any other person to whom the Employee has an obligation of confidentiality, and will not bring onto the premises of Parent or any of its subsidiaries any unpublished documents or any property belonging to any former employer or any other person to whom the Employee has an obligation of confidentiality unless consented to in writing by the former employer or person.  The Employee will use in the performance of the Employee’s duties only information which is (i) generally known and used by persons with training and experience comparable to the Employee’s and which is (x) common knowledge in the industry or (y) is otherwise legally in the public domain, (ii) is otherwise provided or developed by Parent or any of its subsidiaries or (iii) in the case of materials, property or information belonging to any former employer or other person to whom the Employee has an obligation of confidentiality, approved for such use in writing by such former employer or person.
(j)    The Employee acknowledges that in the course of the Employee’s service as an employee of Parent or its subsidiaries that the Employee may become familiar with Parent’s or a subsidiary’s or Sun’s or an affiliate’s trade secrets and that the Employee has and will become familiar with the confidential information concerning Parent, its subsidiaries, Sun and its affiliates and that the Employee’s services are and will be of special, unique and extraordinary value to Parent and/or its subsidiaries. Without limiting any other obligations of the Employee pursuant to this Section 2, the Employee accordingly covenants and agrees with Parent that during the Employee’s service as an employee of the Company or its Subsidiaries and for the period ending on the later of (i) twelve months thereafter, and (ii) the date of payment of the final installment of separation benefit pursuant to Section 1 of this Agreement, the Employee has not and shall not, directly or indirectly, engage in, or serve as a principal, partner, joint venturer, member, manager, trustee, agent, stockholder, director, officer or employee of, or advisor to, or in any other capacity, or in any manner, own, control, manage, operate, or otherwise participate, invest, or have any interest in, or be connected with, any person, firm or entity that engages in any activity which competes directly or indirectly with any business of Parent or any of its subsidiaries (including the Company) anywhere within the United States, or in any other country in which Parent or any of its subsidiaries (including the Company) conducts or actively proposes to conduct business at any time within the one-year period immediately preceding the termination of the Employee’s service as an employee of Parent or its subsidiaries, in which the Employee has been or would be required to employ, reveal, or otherwise utilize trade secrets used hereafter by Parent or its subsidiaries or Sun or its affiliates but prior to the Employee’s termination.
(k)    Notwithstanding anything to the contrary in this Agreement, any and all payments provided in Section 1 hereof or otherwise are expressly conditioned upon the Employee’s execution and delivery to Parent of a release in 

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form and substance reasonably satisfactory to the Company, pursuant to which the Employee must agree to waive, release, remise and forever discharge any and all claims against Parent and its subsidiaries (including the Company) and their respective parents, subsidiaries, partners, principals, directors, officers, managers, employees, agents and all persons acting through or by any of them from all claims and liabilities of any kind or nature whatsoever in any way arising out of or related to the Employee’s employment or the termination thereof, or any other matter which shall have arisen at any time before the date of such release, or which might be asserted under local, state or federal law or by any governmental authority acting pursuant thereto, including but not limited to any claim for additional wages, compensation, benefits, reinstatement, reemployment, injunctive relief, reasonable accommodation, damages of any nature, penalties or attorneys’ fees, such release to be executed and delivered in a manner consistent with the requirements of the Age Discrimination in Employment Act and any other applicable law.  No payment provided in Section 1 hereof or otherwise shall be made unless and until the release referred to in this subsection (k) shall have become irrevocable.
(l)    The Employee acknowledges that the agreements of the Employee herein are reasonable and necessary for the protection of Parent and its subsidiaries and Sun and its affiliates, and that those agreements and the Employee’s service as an employee of Parent or its subsidiaries, as the case may be, are essential inducements to Parent’s and the Company’s entry into this Agreement.  Accordingly, the Employee shall be bound by the provisions hereof to the maximum extent permitted by law, it being the intent and spirit of the parties that the foregoing shall be fully enforceable.  However, the parties further agree that, if any of the provisions hereof shall for any reason be held to be excessively broad as to duration, geographical scope, property or subject matter, such provision shall be construed by limiting and reducing it so as to be enforceable to the extent compatible with the applicable law as it shall herein pertain.
(m)    The Employee acknowledges that the services to be rendered by the Employee to Parent or its subsidiaries are of a unique nature and that it would be difficult or impossible to replace such services and that by reason thereof the Employee agrees and consents that if the Employee violates the provisions of this Section 2, then Parent and its subsidiaries, in addition to any other rights and remedies available under this Agreement or otherwise, shall be entitled to an injunction to be issued or specific performance to be required restricting the Employee from committing or continuing any such violation.
3.    Notices.  For the purpose of this Agreement, any notice or demand hereunder to or upon any party hereto required or permitted to be given or made shall be deemed to have been duly given or made for all purposes if (a) in writing and sent by (i) messenger or an overnight courier service against receipt, or (ii) certified or registered mail, postage paid, return receipt requested, or (b) sent by telefax, telex or similar electronic means, provided, that a written copy thereof is sent on the same day by postage paid first-class, certified or registered mail, to such party at the following address:
In the case of the Employee, to the Employee at:
Robert H. Arvanites
337 Hidden Creek Cr.
Spartanburg, SC 29306
Telecopy:    ___.___.____
or at the last known address of the Employee contained in the personnel records of Parent or the Company.

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In the case of Parent, to it at:
CPG Finance, Inc.
c/o Exopack, LLC
8600 W. Bryn Mawr Avenue
Chicago, IL  60631
Attention:    ___________
Telecopy:    ___.___.____

with a copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA  19103
Attention:    David A. Gerson
Telecopy:    215.963.5001
In the case of the Company, to it at:
Exopack, LLC
8600 W. Bryn Mawr Avenue
Chicago, IL  60631
Attention:    ___________
Telecopy:    ___.___.____

with a copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA  19103
Attention:    David A. Gerson
Telecopy:    215.963.5001
4.    Severability; Assignment.  
(a)    If any portion of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, such portion shall be deemed deleted as though it had never been included herein, but the remainder of this Agreement shall remain in full force and effect.
(b)    This Agreement shall not be assignable by the Employee without the consent of both Parent and the Company; provided, however, that either Parent or the Company may assign its rights and obligations under this Agreement (including, without limitation, the right to enforce the covenants set forth in Section 2 of this Agreement) without consent of the Employee in the event that either Parent or the Company shall effect a reorganization or consolidate or merge with, sell all or substantially all of its equity or assets to, or enter into any other transaction with, any other entity.
5.    Waiver of Trial By Jury.  EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT, THE MATTERS CONTEMPLATED HEREBY, OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT.

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6.    No Waiver; Remedies.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.  Each party shall have all remedies available to it at law or in equity, and all such remedies shall be cumulative.
7.    Successors; Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon Parent and the Company and their respective successors and permitted assigns.  This Agreement shall also inure to the benefit of and be binding upon the Employee, his executors, administrators and heirs.
8.    Governing Law.  This Agreement shall be governed by and construed in accordance with, the laws of the State of Delaware, without regard to any of the conflicts of laws or choice of law provisions thereof that would compel the application of the substantive laws of another jurisdiction.
9.    No Third Party Beneficiaries.  Nothing contained in this Agreement, whether express or implied, is intended, or shall be deemed, to create or confer any right, interest or remedy for the benefit of any person (other than, in the case of  Parent and the Company, their respective subsidiaries and affiliates) or as otherwise provided in this Agreement. 
10.    Entire Agreement.  This Agreement supersedes all prior employment or other agreements, negotiations or understandings of any kind with respect to the subject matter hereof, including the Original Agreement, and contains the entire understanding between the parties hereto with respect to the subject matter hereof.
11.    Headings.  The headings contained in this Agreement are included for convenience and reference purposes only and shall be given no effect in the construction or interpretation of this Agreement.
12.    Compliance with Section 409A.  This Agreement is intended to comply with the provisions of Section 409A(a)(2) of the Internal Revenue Code of 1986, as amended (the “Code”).  Parent may make any changes to this Agreement it determines in its sole discretion are necessary to comply with the provisions of Code Section 409A and any final, proposed, or temporary regulations or any other guidance issued thereunder without the consent of Employee (including, without limitation, delaying the payment or commencement of payments contemplated herein to the extent required under Code Section 409A(a)(2)(B)(i)).
13.    Amendments.  No modification, termination or waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the party against whom the same is sought to be enforced.
14.    Counterparts.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
EMPLOYEE

/s/ Robert H. Arvanites                
Robert H. Arvanites

EXOPACK, LLC

By: /s/ Fred Fratto                             
Name:    Fred Fratto
Title:    Chief Human Resource Officer

CPG FINANCE, INC.

By: /s/ Duane Owens                
Name:    Duane Owens
Title:    Treasurer and Interim Chief Financial Officer

[Signature Page to Separation Benefit Agreement]

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