Document:

Exhibit

EXHIBIT 10.8

RETENTION AGREEMENT 

TOTAL PLASTICS, INC.
THIS AGREEMENT (“Agreement”), made and entered into this 15th day of February 2016 (the “Effective Date”), by and between Total Plastics, Inc. (the “Company”), and Thomas L. Garrett (the “Executive”);
WITNESSETH THAT:
WHEREAS, the Company and its parent company, A.M. Castle & Co. (“AMC”) are contemplating a sale of the Company, and the Executive is presently employed as the Vice President and President of the Company and has significant strategic and management responsibilities necessary to the continued successful operation of the Company;
WHEREAS, the Company wishes to assure itself of the continuity of the Executive’s service and has determined that it is appropriate that the Executive receive certain payments in the event of the successor sale of the Company; 
WHEREAS, the Company and the Executive accordingly desire to enter into this Agreement on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, IT IS HEREBY AGREED, by and between the parties as follows:
1.Agreement Term.  The “Term” of this Agreement shall begin on the Effective Date and shall continue through the first anniversary of the Effective Date (the “Expiration Date”); provided, however, that if the Company or AMC executes a binding agreement to enter into a transaction that, when consummated, would be a Sale of the Company (as defined below), the Expiration Date will be extended by sixty (60) calendar days, with respect to the transaction contemplated by that binding agreement only.

2.Certain Definitions.  In addition to terms otherwise defined herein, the following capitalized terms used in this Agreement shall have the meanings specified below:

(a)Cause.  The term “Cause” shall mean:

		
	(i)
	Conviction of, or entry of a plea of guilty or “nolo contendere” to, a felony (as defined by the laws of the United States of America or by the laws of the State or other jurisdiction in which the Executive was so convicted or entered such plea) by the Executive; 

		
	(ii)
	Engagement by the Executive in egregious misconduct involving serious moral turpitude to the extent that, in the reasonable judgment of the Company, the Executive’s credibility and reputation no longer conform to the standard of the Company’s executives;

		
	(iii)
	Willful misconduct by the Executive that, in the reasonable judgment of the Company, results in a demonstrateable and material injury to the Company or its affiliates, monetarily or otherwise;

EX-1-

		
	(iv)
	Willful and continued failure (other than any such failure resulting from the Executive’s incapacity due to mental or physical illness) by the Executive to perform his assigned duties, provided that such assigned duties are consistent with the job duties of the Executive and that the Executive does not cure such failure within 30 calendar days after notice of such failure from the Company; or

		
	(iv)
	Material breach of this Agreement by the Executive, provided that the Executive does not cure such breach within 30 calendar days after notice of such breach from the Company.

For purposes of determining whether “Cause” exists, no act, or failure to act, on the Executive’s part will be deemed “willful” unless done, or omitted to be done, in the reasonable judgment of the Company, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company or its affiliates.
		
	(b)
	Code.  The term “Code” means the Internal Revenue Code of 1986, as amended, and any regulations and other applicable authorities promulgated thereunder.

		
	(c)
	Good Reason.  The term “Good Reason” shall mean:

		
	(i)
	a reduction of 10% or more in the Executive’s base salary (either upon one reduction or during a series of reductions over a period of time), provided, that such reduction neither comprises a part of a general reduction for the Executive’s then-current peers as a group (determined as of the date immediately before the date on which the Executive becomes subject to any such reduction) nor results from a deferral of the Executive’s base salary;

		
	(ii)
	a material diminution in the Executive’s authority (including, but not limited to, the budget over which the Executive retains authority), duties, or responsibilities within the Company;

		
	(iii)
	a material change in the geographic location at which the Executive must perform services for the Company more than fifty (50) miles; or

		
	(iv)
	any other action or inaction that constitutes a material breach by the Company of this Agreement.

For purposes of this Agreement, in order for a termination of employment by the Executive to be considered to be on account of Good Reason, the following conditions must be met by the Executive:
		
	(i)
	the Executive provides written notice to the Company of the existence of the condition(s) described in this subparagraph (c) potentially constituting Good Reason within 90 calendar days of the initial existence of such condition(s), and 

		
	(ii)
	the Company fails to remedy the conditions which the Executive outlines in his written notice within 30 calendar days of such notice, and 

EX-2-

		
	(iii)
	the Executive actually terminates employment with the Company within six months of providing the notice described in this subparagraph (c).

		
	(d)
	Sale of the Company.  The term “Sale of the Company” means the closing of a transaction or series of transactions in which all or substantially of the assets or common stock of the Company are sold, transferred, or otherwise disposed of.  Notwithstanding the foregoing, with respect to any severance benefits that are not exempt from Code Section 409A, “Sale of the Company” shall mean a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company under Code Section 409A(a)(2)(A)(v) and regulations thereunder.

		
	(e)
	Termination Date.  The term “Termination Date” means the date on which the Executive’s employment with the Company and all affiliates of the Company terminates for any reason, including voluntary resignation.  If the Executive becomes employed by (i) an entity into which the Company has merged, or (ii) by the purchaser of substantially all of the stock or assets of the Company, or (iii) by a successor to such entity or purchaser (any of which [i, ii or iii] shall be referred to for the sole purposes of this Agreement as a “Successor”), a Termination Date shall not be treated as having occurred for purposes of this Agreement until such time as the Executive terminates employment with the Successor and its affiliates (including, without limitation, the merged entity or purchaser).  Subject to the provisions of subparagraph 2(c) above, if the Executive is transferred to employment with an affiliate of the Company (including a Successor to the Company), such transfer shall not constitute a Termination Date for purposes of this Agreement.  Upon any Sale of the Company, the word “affiliate” as used in this paragraph will only be interpreted in relationship to the Successor.  

3.2015 Annual Bonus.  In lieu of and not in addition to any bonus or amount payable under the Company’s 2015 Short-Term Incentive Plan, the Company will pay the Executive a lump sum cash amount equal to one hundred thousand dollars ($100,000) on the earlier of April 1, 2016 or the Sale of the Company provided that the Executive has remained continuously employed by the Company or an affiliate of the Company until the earlier of such dates.  Notwithstanding the foregoing, the Executive will be entitled to payment under this paragraph if the Executive’s employment with the Company is terminated without Cause or by the Executive for Good Reason, before the earlier of the two dates set forth in the preceding sentence.
 
4.Retention Bonus.  Within thirty (30) calendar days following the Sale of the Company, the Company will pay the Executive a lump sum cash amount equal to seventy-five percent (75%) of his annualized base salary with AMC on the Effective Date or on the date of the Sale of the Company, whichever is greater, provided that the Executive has remained continuously employed by the Company or an affiliate of the Company until the Sale of the Company.  Notwithstanding the foregoing, the Executive will be entitled to payment under this paragraph if the Executive’s employment with the Company is terminated without Cause or by the Executive for Good Reason, during the Term hereof and before a Sale of the Company. 

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5.Enterprise Value Escalator.  In addition to the amount specified in paragraphs 3 and 4, if the gross sale price at closing of the Sale of the Company exceeds the target amount established by the Human Resources Committee of AMC’s board of directors (the “Target Price”), the Company will pay the Executive a lump sum cash amount equal to one dollar and twenty-five cents ($1.25) for every one-hundred dollars ($100.00) in excess of the Target Price, realized on the Sale of the Company, provided that the Executive has remained continuous employed by the Company and the Successor to the Company (or an affiliate of either of them), for at least one-hundred eighty (180) calendar days following the Sale of the Company.  Notwithstanding the foregoing, the Executive will be entitled to payment under this paragraph if the Executive’s employment with the Company or the Successor to the Company is terminated without Cause or by the Executive for Good Reason, after the Sale of the Company, but before one-hundred eighty (180) calendar days following the Sale of the Company. 

6.Severance Benefits Upon Termination Following a Sale of the Company.  This Agreement is not intended to and does not amend or supersede the Severance Agreement between the Executive and AMC dated December 22, 2010, as it may be amended (the “Severance Agreement”), or the Change in Control Agreement between the Executive and the Company dated September 15, 2010, as it may be amended (the “Change in Control Agreement”).  Subject to paragraphs 7 and 8 below, if the Executive’s employment is terminated within twenty-four (24) months following the Sale of the Company (A) by the Company or a Successor for a reason other than for Cause or (B) by the Executive for Good Reason, the Executive shall be entitled to a lump sum cash payment (the “Severance Benefit”), which shall be in addition to any salary earned and vacation accrued up to and including the Executive’s Termination Date (as defined below), equal to the following amounts, payable within thirty (30) calendar days following Executive’s Termination Date:

		
	(a)
	one and one-half (1.5) times the Executive’s annualized base salary with AMC on the Effective Date or on the date of the Sale of the Company, whichever is greater, reduced by the annual base salary amount paid under paragraph 4(a) of the Severance Agreement or paragraph 4(a) of the Change in Control Agreement, whichever is applicable; and

		
	(b)
	the grossed-up cost of eighteen (18) months of COBRA health insurance continuation coverage at the level of coverage the Executive had elected prior to his Termination Date, reduced by the value of the continued health benefit coverage provided under paragraph 4(e) of the Severance Agreement or paragraph 4(f) of the Change in Control Agreement, whichever is applicable. 

		
	(c)
	The Executive, the Company, and TPI each acknowledge and agree that a sale of substantially all of the assets of the Company by AMC and the transfer of the Executive’s employment to the Successor in connection with that sale, will not be a “Termination Date” that would trigger payments and benefits under the terms of the Severance Agreement or the Change in Control Agreement.  Instead, the Successor will assume the Severance Agreement and the Change in Control Agreement.

The Executive shall not be entitled to any benefits under this Agreement if his termination of employment occurs on account of his death, disability, or voluntary resignation (other than for Good Reason). 

EX-4-

7.Code Section 409A Compliance.  Notwithstanding any provision of this Agreement to the contrary:

		
	(a)
	If and to the extent any payment or benefits under this Agreement are otherwise subject to the requirements of Code Section 409A, the intent of the parties is that such payment and benefits shall comply with Code Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted, and such payment and benefits shall be paid or provided under such other conditions determined by the Company that cause such payment and benefits, to be in compliance therewith.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the parties hereto of the applicable provision without violating the provisions of Code Section 409A.  The Company makes no representation that any or all of the payments or benefits provided under this Agreement will be exempt from or comply with Code Section 409A and makes no undertaking to preclude Code Section 409A from applying to any such payments or benefits.  In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Executive by Code Section 409A or damages for failing to comply with Code Section 409A.

		
	(b)
	A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following the Executive’s Termination Date unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment,” “Termination Date,” or like terms shall mean “separation from service.”  

		
	(c)
	Each payment payable to the Executive under this Agreement on or after the Executive’s Termination Date shall be treated as a separate and distinct “payment” for purposes of Code Section 409A and, further, is intended to be exempt from Code Section 409A, including but not limited to the short-term deferral exemption thereunder.  If and to the extent any such payment is determined to be subject to Code Section 409A and is otherwise payable upon the Executive’s termination of employment, in the event the Executive is a “specified employee” (as defined in Code Section 409A), any such payment that would otherwise have been payable in the first six (6) months following the Executive’s Termination Date will not be paid to the Executive until the date that is six (6) months and one (1) day following the Executive’s Termination Date (or, if earlier, the Executive’s date of death).  Any such deferred payments will be paid in a lump sum; provided that no such actions shall reduce the amount of any payments otherwise payable to the Executive under this Agreement.  Thereafter, the remainder of any such payments shall be payable in accordance with this Agreement.

EX-5-

		
	(d)
	Whenever a payment under this Agreement specifies a period within which such payment may be made, the actual date of payment within the specified period shall be within the sole discretion of the Company.

		
	(e)
	In no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Code Section 409A be offset by any other payment pursuant to this Agreement or otherwise.

		
	(f)
	To the extent required under Code Section 409A, (i) any reference herein to the term “Agreement” shall mean this Agreement and any other plan, agreement, method, program, or other arrangement, with which this Agreement is required to be aggregated under Code Section 409A, and (ii) any reference herein to the term “Company” shall mean the Company and all persons with whom the Company would be considered a single employer under Code Section 414(b) or 414(c).

8.Waiver and Release.  Except for the payments provided in paragraphs 3, 4, and 5, the Executive shall not be entitled to any payments or benefits under this Agreement unless and until the Executive executes and delivers to the Company, within thirty (30) calendar days following the Executive’s Termination Date (or fifty (50) calendar days in the event that 29 CFR 1625.22 requires the Company to provide the Executive forty-five (45) calendar days to consider the release), a valid release of any and all claims against the Company and its affiliates in a form provided by the Company and the revocation period for such release has expired without revocation.

9.Mitigation.  The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise.  None of the Company or any of its affiliates shall be entitled to set off against the amounts payable to the Executive under this Agreement any amounts owed to the Company or any of its affiliates by the Executive, any amounts earned by the Executive in other employment after the Termination Date, or any amounts which might have been earned by the Executive in other employment had he sought such other employment.

10.Withholding.  All payments to the Executive under this Agreement will be subject to all applicable withholding of applicable taxes.

11.Confidential Information.  The Company and the Executive covenant and agree that:

		
	(a)
	The Company will provide the Executive Confidential Information (as defined below) to permit the Executive to perform the Executive’s duties on behalf of the Company and its affiliates, which will include, among other things, generating additional Confidential Information on behalf of the Company and its affiliates.

EX-6-

		
	(b)
	Except as may be required by the lawful order of a court or agency of competent jurisdiction, except as necessary to carry out his duties to the Company and its affiliates, or except to the extent that the Executive has express authorization from the Company, the Executive agrees to keep secret and confidential, all Confidential Information (as defined below), and not to disclose the same, either directly or indirectly, to any other person, firm, or business entity, or to use it in any way during the Agreement Term and at all times thereafter, provided, however, if the jurisdiction in which the Company seeks to enforce the confidentiality obligation will not enforce a confidentiality obligation of indefinite duration, then the provisions in this Agreement restricting the disclosure and use of Confidential Information shall survive for a period of five (5) years following the Executive’s Termination Date; provided, however, that trade secrets shall remain confidential indefinitely.

		
	(c)
	To the extent that any court or agency seeks to have the Executive disclose Confidential Information, he shall promptly inform the Company, and he shall take such reasonable steps to prevent disclosure of Confidential Information until the Company has been informed of such requested disclosure, and the Company has an opportunity to respond to such court or agency.  To the extent that the Executive generates or obtains information on behalf of the Company or any of its affiliates that may be subject to attorney-client privilege as to the Company’s attorneys, the Executive shall take reasonable steps to maintain the confidentiality of such information and to preserve such privilege.

		
	(d)
	Nothing in the foregoing provisions of this paragraph 11 shall be construed so as to prevent the Executive from using, in connection with his employment for himself or an employer other than the Company or any of the affiliates, knowledge which was acquired by him during the course of his employment with the Company and its affiliates, and which is generally known to persons of his experience in other companies in the same industry.

		
	(e)
	For purposes of this Agreement, the term “Confidential Information” shall include all non-public information (including, without limitation, information regarding litigation and pending litigation, trade secrets, proprietary information, or confidential or proprietary methods) concerning the Company and its affiliates (and their customers) which was generated or acquired by or disclosed to the Executive during the course of his employment with the Company, or during the course of his consultation with the Company following the Termination Date.  The term “Confidential Information” does not include information that (i) is or becomes generally available to the public through no violation of this Agreement or (ii) is or becomes available to others on a non-confidential basis from a source other than the Executive. 

		
	(f)
	This paragraph 11 shall not be construed to restrict unreasonably the Executive’s ability to disclose Confidential Information in a court proceeding in connection with the assertion of, or defense against any claim of breach of this Agreement, or to his professional advisers who are under a duty of confidentiality.  If there is a dispute between the Company and the Executive as to whether information may be disclosed in accordance with this subparagraph (f), the matter shall be submitted to the court for decision.

EX-7-

12.Non-Competition and Non-Solicitation.  During the Term of the Agreement and for a period of 12 months after the Executive’s Termination Date, the Executive covenants and agrees that he shall not, without the express written consent of the Chief Executive Officer of the Company:

		
	(a)
	be employed by, serve as a consultant to, or otherwise assist or directly or indirectly provide services to a Competitor (defined below) if: (i) the employment, consulting, assistance or services that the Executive is to provide to the Competitor are the same as, or substantially similar to, any of the services that the Executive provided to the Company or its affiliates and are or will be within the Restricted Territory (as defined below); or (ii) the Confidential Information to which the Executive had access could reasonably be expected to benefit the Competitor if the Competitor were to obtain access to such Confidential Information.  For purposes of this subparagraph (a), services provided by others shall be deemed to have been provided by the Executive if the Executive had material supervisory responsibilities with respect to the provision of such services.

		
	(b)
	solicit or attempt to solicit any party who is then, or during the 12-month period prior to the Executive’s Termination Date was, a customer or supplier of the Company for or with whom the Executive (or the Executive’s subordinates) had Confidential Information or contact on behalf of the Company, provided that the restriction in this subparagraph (b) shall not apply to any activity on behalf of a business that is not a Competitor.

		
	(c)
	solicit, entice, persuade or induce any individual who is employed by the Company or its affiliates (or was so employed within 90 calendar days prior to the Executive’s action and not involuntarily terminated for any reason other than Cause) to terminate or refrain from renewing or extending such employment or to become employed by or enter into contractual relations with any other individual or entity other than the Company or its affiliates, and the Executive shall not approach any such employee, either in person or through electronic or social media, for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other individual or entity.

		
	(d)
	directly or indirectly own an equity interest in any Competitor (other than ownership of 5% or less of the outstanding stock of any corporation listed on the New York Stock Exchange or the American Stock Exchange or included in the NASDAQ System, so long as such ownership is passive in nature).

EX-8-

The term “Competitor” means any enterprise (including a person, firm or business, whether or not incorporated) during any period in which it is materially competitive in any way with any business in which the Company or any of its affiliates was engaged during the 12-month period prior to the Executive’s Termination Date.  Upon the written request of the Executive, the Company’s Chief Executive Officer will determine whether a business or other entity constitutes a “Competitor” for purposes of this paragraph 12 and may require the Executive to provide such information as the Chief Executive Officer determines to be necessary to make such determination.  The current and continuing effectiveness of such determination may be conditioned on the continuing accuracy of such information, and on such other factors as the Chief Executive Officer may determine.  The term “Restricted Territory” means the continental United States.  The Restricted Territory also shall include any country in which the Company or an affiliate of the Company has operations during the 12-month period prior to the Termination Date, or with respect to any country in which the Company or an affiliate of the Company has devoted resources to establishing operations during the 12-month period prior to the Termination Date.
13.Non-Disparagement.  The Executive covenants and agrees that, while he is employed by the Company, and after his Termination Date, he shall not make any false, defamatory or disparaging statements about the Company, its affiliates, or the officers or directors of the Company or its affiliates that are reasonably likely to cause material damage to the Company, its affiliates, or the officers or directors of the Company or its affiliates.  While the Executive is employed by the Company, and after the Termination Date, the Company agrees, on behalf of itself and its affiliates, that neither the officers nor the directors of the Company or its affiliates in their external communications shall make any false, defamatory or disparaging statements about the Executive that are reasonably likely to cause material damage to the Executive.  Nothing in this paragraph 12 shall preclude the Executive or the Company from making truthful statements that are required by applicable law, regulation or legal process.

14.Reasonable Scope and Duration.  The Executive acknowledges that the restrictions in paragraphs 11, 12, and 13 are reasonable in scope, are necessary to protect the trade secrets and other confidential and proprietary information of the Company and its affiliates, that the benefits provided under this Agreement are full and fair compensation for these covenants and that these covenants do not impair the Executive’s ability to be employed in other areas of his expertise and experience.  Specifically, the Executive acknowledges the reasonableness of the international scope of these covenants by reason of the international customer base and prospective customer base and activities of the Company and its affiliates, the widespread domestic and international scope of the Executive’s contacts created during his employment with the Company, the domestic and international scope of the Executive’s responsibilities while employed by the Company and his access to marketing strategies of the Company and its affiliates.  Notwithstanding the foregoing, if any court determines that the terms of any of the restrictions herein are unreasonable or unenforceable, such court may interpret, alter, amend or modify any or all of such terms to include as much of the scope, time period and intent as will render such restrictions enforceable, and then in such reduced form, enforce such terms.  In the event of the Executive’s breach of any such covenant, the term of the covenant shall be extended for a period equal to the period that the breach continues.

15.Equitable Relief.  The Executive agrees that any violation by the Executive of any covenant in paragraph 11, 12, or 13 may cause such damage to the Company as will be serious and irreparable and the exact amount of which will be difficult to ascertain, and for that reason, the Executive agrees that the Company shall be entitled, as a matter of right, to a temporary, preliminary and/or permanent injunction and/or other injunctive relief, ex parte or otherwise, from any court of competent jurisdiction, restraining any further violations by the Executive.  Such injunctive relief shall be in addition to, and in no way in limitation of, any and all other remedies the Company shall have in law and equity for the enforcement of such covenants.

EX-9-

16.Nonalienation.  The interests of the Executive under this Agreement are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Executive or the Executive’s beneficiary. 

17.Amendment.  This Agreement may be amended or canceled only by mutual agreement of the parties in writing without the consent of any other person.  So long as the Executive lives, no person, other than the parties hereto, shall have any rights under or interest in this Agreement or the subject matter hereof.

18.Applicable Law.  The provisions of this Agreement shall be construed in accordance with and governed by applicable federal laws and, to the extent not pre-empted thereby or inconsistent therewith, the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. 

19.Severability.  The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, and this Agreement will be construed as if such invalid or unenforceable provision were omitted (but only to the extent that such provision cannot be appropriately reformed or modified). 

20.Obligation of Company.  Except as otherwise specifically provided in this Agreement, nothing in this Agreement shall be construed to affect the Company’s right to modify the Executive’s position or duties, compensation, or other terms of employment, or to terminate the Executive’s employment.  Nothing in this Agreement shall be construed to provide to the Executive any rights upon termination of the Executive’s employment with the Company other than as specifically described in paragraphs 3 through 6.  If the Executive’s employment is terminated before a Sale of the Company for any reason, the Executive’s benefits shall be determined in accordance with the Severance Agreement, Change in Control Agreement, and any applicable retirement, insurance and other programs of the Company or AMC as may then be in effect.

21.Waiver of Breach.  No waiver by any party hereto of a breach of any provision of this Agreement by any other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party of any similar or dissimilar provisions and conditions at the same or any prior or subsequent time.  The failure of any party hereto to take any action by reason of such breach will not deprive such party of the right to take action at any time while such breach continues.

22.Successors, Assumption of Contract.  This Agreement is personal to the Executive and may not be assigned by the Executive without the written consent of the Company.  However, to the extent that rights or benefits under this Agreement otherwise survive the Executive’s death, the Executive’s heirs and estate shall succeed to such rights and benefits pursuant to the Executive’s will or the laws of descent and distribution.  This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company and the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

23.Notices.  Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid (provided that international mail shall be sent via overnight or two-day delivery), or sent by facsimile or prepaid overnight courier to the parties at the addresses set forth below.  Such notices, demands, claims and other communications shall be deemed given:

EX-10-

		
	(a)
	in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery;

		
	(b)
	in the case of certified or registered U.S. mail, five business days after deposit in the U.S. mail; or

		
	(c)
	in the case of facsimile, the date upon which the transmitting party received confirmation of receipt by facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to be given later than the date they are actually received.  Communications that are to be delivered by the U.S. mail or by overnight service or two-day delivery service are to be delivered to the addresses set forth below:
to the Company:
Total Plastics, Inc.
1420 Kensington Road
Suite 220
Oak Brook, IL 60523
Attn:  Corporate Secretary
or to the Executive at the Executive’s most recent address on file with the Company.  Each party, by written notice furnished to the other party, may modify the applicable delivery address, except that notice of change of address shall be effective only upon receipt.
24.Exclusive Jurisdiction and Venue.  Any suit, claim or other legal proceeding arising out of or related to this Agreement in any way must be brought in a federal or state court located in Cook County, Illinois, and the Company and the Executive hereby consent to the exclusive jurisdiction of such court for such purpose.  The Company and the Executive irrevocably consent and submit itself and himself to the jurisdiction of such court(s) for the purposes of any such suit, claim or other legal proceeding.

25.Gender, Singular and Plural.  All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require.  As the context may require, the singular may be read as the plural and the plural as the singular.

26.Survival of Agreement.  Except as otherwise expressly provided in this Agreement, the rights and obligations of the parties to this Agreement shall survive the termination of the Executive’s employment with the Company.

27.Counterparts.  This Agreement may be executed in two or more counterparts, any one of which shall be deemed the original without reference to the others.

[remainder of page intentionally left blank]

EX-11-

IN WITNESS THEREOF, the Executive has hereunto set his hand, and the Company has caused these presents to be executed in its name and on its behalf, all as of the Effective Date.

	
		
	 
	/s/ Thomas L. Garrett

	 
	Thomas L. Garrett

	 
	 

	 
	 

	 
	/s/ Marec E. Edgar

	 
	Total Plastics, Inc. 

	 
	By: Marec E. Edgar

	 
	Its: Secretary

EX-12-ex10-01.htm

Exhibit 10.1

EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT (the “Agreement”), dated as of February 16, 2016, is made by and between Spiral Energy Tech., Inc., a Nevada corporation (“Company”), and the holder of shares of common stock of the Company signatory hereto  (“Holder”).

WHEREAS, the Holder holds such number of shares of common stock of the Company as set forth on Schedule A hereto (such shares, the “Exchange Securities”); and

WHEREAS, prior to the date hereof, Holder purchased from various sellers an additional 600,000 shares of common stock of the Company as reflected in purchase and sale agreements (the “Private Purchases”), which as of the date of such purchases were fully paid and owned by the Holder; and

WHEREAS, prior to the date hereof, Holder subscribed and Company accepted subscription for $100,000 of common stock of the Company (the “2015 Subscription”), which funds were to be held in escrow (the “Escrow”) pending further instructions from Holder as of the date of payment therefore and owned by the Holder as of such date; and

WHEREAS, the Company inadvertently failed to instruct its transfer agent to print and deliver the stock certificates therefor prior to the date hereof, which failure does not affect the beneficial ownership of such shares by Holder and Holder and Company desire to (A) exchange all shares owned by Holder and the Private Purchase shares for shares of Series A Preferred Stock of the Company in such amount as set forth on Schedule A annexed hereto; (B) amend the terms of the 2015 Subscription and release all funds held in Escrow by subscribing for and purchasing 400,000 shares of Series B Preferred Stock of the Company (after giving effect to the recapitalization transaction including the reverse split of the common stock previously described to Holder: (C) provide for the subscription of an additional $50,000 (200,000 shares) of Series B Preferred Stock pursuant to the terms of the Offering thereof made by the Company; and (D) provide for Holder to vote “for” the approval of the matters required in order for the Company to undertake the recapitalization and acquisition of Exactus BioSolutions, Inc., previously described to Holder; and (E) release Company and its affiliates from and against any and all liability, claims and disputes with respect to the foregoing (each of (A) – (E) above, the “Holder Undertakings”); and

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), the Company desires to exchange with the Holder, and the Holder desires to exchange with the Company, the Exchange Securities for shares of the Company’s Series A Preferred Stock,

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and Holder agree as follows:

1.             Terms of the Exchange. The Company and Holder agree that the Holder will exchange the Exchange Securities and will relinquish any and all other rights he may have under the Exchange Securities in exchange for such number of shares of Series A Preferred Stock (the “Shares”) as set forth on Schedule A, annexed hereto and further agrees to the Holder Undertakings.  Holder agrees to execute and deliver irrevocable subscription agreements for $150,000 of Series B Convertible Securities of the Company (600,000 shares on a post-recapitalization basis), and to instruct the escrow agent presently holding any funds in Escrow to immediately transfer to the Series B Convertible Securities Escrow Agent the balance of any funds from the 2015 Subscription.  Holder shall affix his name to the Shareholder Consent approving the recapitalization and vote “for” all matters related to the acquisition of Exactus BioSolutions, Inc.

  

  

  

2.            Closing. Upon satisfaction of the conditions set forth herein, a closing shall occur at the principal offices of the Company, or such other location as the parties shall mutually agree. At closing, Holder shall deliver certificates representing the Exchange Securities to the Company and the Company shall deliver to such Holder a certificate evidencing the Shares, in the name(s) and amount(s) as indicated on Schedule A annexed hereto.  Upon closing, any and all obligations of the Company to Holder under the Exchange Securities shall be fully satisfied, the certificates evidencing the Exchange Securities shall be cancelled and Holder will have no remaining rights, powers, privileges, remedies or interests under the Exchange Securities.

 

3.             Further Assurances

 

Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

4.             Representations and Warranties of the Holder. The Holder represents and warrants as of the date hereof and as of the closing to the Company as follows:

a.           Authorization; Enforcement. The Holder has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement by the Holder and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Holder and no further action is required by the Holder.  This Agreement has been (or upon delivery will have been) duly executed by the Holder and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Holder enforceable against the Holder in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

b.                      Tax Advisors. The Holder has reviewed with its own tax advisors the U.S. federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. With respect to such matters, the Holder relies solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Holder understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

c.            Information Regarding Holder.  Holder is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Holder to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment.  Holder has the authority and is duly and legally qualified to purchase and own the Shares.  Holder is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.

  

  

  

d.           Legend.   The Holder understands that the Shares will be issued pursuant to an exemption from registration or qualification under the Securities Act and applicable state securities laws, and except as set forth below, the Shares shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

e.           Removal of Legends.   Certificates evidencing the Shares shall not be required to contain the legend set forth in Section 4(d) above or any other legend (i) while a registration statement covering the resale of such Shares is effective under the Securities Act, (ii) following any sale of such Shares pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Shares are eligible to be sold, assigned or transferred under Rule 144 and the Subscriber is not an affiliate of the Company (provided that the Holder provides the Company with reasonable assurances that such Shares are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion of the Holder’s counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided that the Holder provides the Company with an opinion of counsel to the Holder, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Shares may be made without registration under the applicable requirements of the Securities Act or (v) if such legend is not required under applicable requirements of the Securities Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC).

f.           Restricted Securities.   The Holder understands that: (i) the Shares have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) the Holder shall have delivered to the Company (if requested by the Company) an opinion of counsel to the Holder, in a form reasonably acceptable to the Company, to the effect that such Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Holder provides the Company with reasonable assurance that such Shares can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Shares made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of the Shares under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Shares under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

  

  

  

5.            Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to the Holder:

a.           Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Exchange Documents”) and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors of the Company or the Company’s stockholders in connection therewith, including, without limitation, the issuance of the Shares, have been duly authorized by the Company's Board of Directors and no further filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders.  This Agreement and any Other Agreement (as defined herein) have been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

b.           Issuance of Securities.  The issuance of the Shares is duly authorized and upon issuance shall be validly issued, fully paid and non-assessable and free from all taxes, liens, charges and other encumbrances with respect to the issue thereof.  Upon conversion of the Shares in accordance with the Certificate of Designation, the common shares thereby issued to Holder shall, when issued, be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.

 

6.           Additional Acknowledgments.  The Holder and the Company confirm that the Company has not received any consideration for the transactions contemplated by this Agreement.

7.          Miscellaneous.

a.           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

 

b.           Governing Law; Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by and construed under the laws of the State of Nevada without regard to the choice of law principles thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of New York located in The City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or therewith or with any transaction contemplated hereby or thereby, and hereby irrevocably waives any objection that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

c.           Severability.  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

  

  

  

 

d.           Counterparts/Execution.  This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains an electronic file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or electronic file signature page (as the case may be) were an original thereof.

 

e.           Notices.  Any notice or communication permitted or required hereunder shall be in writing and shall be deemed sufficiently given if hand-delivered or sent (i) postage prepaid by registered mail, return receipt requested, or (ii) by facsimile, to the respective parties as set forth below, or to such other address as either party may notify the other in writing.

 

	
  

	
  If to the Company, to:

	
Spiral Energy Tech, Inc.

550 Sylvan Avenue, Suite 101

Englewood Cliffs, NJ 07632

Attention: Chief Executive Officer

	 	 	 

 

 If to Holder, to the address set forth on the signature page of the Holder

 

f.           Expenses.  The parties hereto shall pay their own costs and expenses in connection herewith.

 

g.           Entire Agreement; Amendments.  This Agreement constitutes the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties.  This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by all parties, or, in the case of a waiver, by the party waiving compliance.  Except as expressly stated herein, no delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder preclude any other or future exercise of any other right, power or privilege hereunder.

 

h.           Headings.  The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

i.           Independent Counsel; Conflict of Interest of Counsel; Release.  Holder and Company acknowledge that the law firm of Sichenzia, Ross, Friedman Ference, LLP (the "Law Firm"), has prepared this Agreement and serves as Escrow Agent for the 2015 Subscription; the Law Firm has represented the Company, Escrow Agent, certain investors in the Company and their respective affiliates in the past and anticipates it may continue to so do;  The Law Firm has prepared this Agreement and related agreements and in such representation conflicts may arise between the interests of the Company, Escrow Agent, and Holder AND HOLDER AND COMPANY HAVE BEEN ADVISED TO RETAIN INDEPENDENT COUNSEL to advise them or it in connection with this Agreement and its investment and dealings with the Company.  The Holder and Company have also been informed and acknowledge that are aware that members of the Firm own and may acquire or possess membership interests for cash and/or for services in the Company and acknowledge and agree that they have been informed that such relationship may raise actual or implied conflicts of interest, that each of Holder and Company hereby waive and any all conflicts of interest, and each such persons have been encouraged to retain independent counsel to review this Agreement and the matters contemplated hereby and does not and will not object to such ownership or raise any such conflict of interest in any action, suit, proceeding or in any other manner whatsoever.

The Holder and Company hereby release and relinquish any claim against the Law Firm or any of its partners, members and/or employees for any claims of conflict of interest arising or purportedly arising from this Agreement, the 2015 Subscription or its amendment or the transactions contemplated herein.

(Signature Pages Follow)

  

  

  

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

SPIRAL ENERGY TECH, INC.

By:____________________________________

      Elliot Maza, CEO

HOLDER:  [_________]

 

 

By:____________________________________

	
  

	
Address for Notices:

	
  

	
__________________________________________

	
  

	
__________________________________________

	
  

	
__________________________________________

	
  

	
__________________________________________

	
  

	
Address for delivery of Shares:

	
  

	
__________________________________________

	
  

	
__________________________________________

	
  

	
__________________________________________

	
  

	
__________________________________________

  

  

  

SCHEDULE A

 

	 
Name and Address

of Holder

	 
Number of Shares of 

Common Stock Exchanged

	 
Number of Shares of 

Series A Preferred Stock 

to be Issued

	 	 	 
	 	 	 
	
R = S-1 Registered (no legend)

	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	
Sandor (incl 12/28/15 transfers)

	
1,342,100

	
1,100,000

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