SEPARATION AGREEMENT
EXHIBIT 10.8
THIS SEPARATION AGREEMENT (the “Agreement”) is dated as of this 28th day of
August 2015, by and between BreedIT Corp., a Delaware corporation with offices
located at 00 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 (the "BreedIT"), on
the one hand, and BreedIT Ltd.,
P.C. 514943471, a majority-owned subsidiary of BreedIT organized under the laws
of the State of Israel with offices located at Xxxxxxx Street, Rehovot, X.X.X
00, Xxxxxx 00000 ("BreedIT Israel"), Xx. Xxxx Xxxxx, a resident of the State of
Israel with an address located at 00 Xxxxx Xxx Xx., Xxxxxxxxxx, Xxxxxx ("Xx.
Xxxxx") and Star Biotech Ltd., an entity organized under the laws of the State
of Israel and controlled by Xx. Xxxxx, with offices located at ____________,
Israel ("SB"), on the other hand. BreedIT, BreedIT Israel, Xx. Xxxxx and SB are
sometimes referred to collectively, as the "Parties" and individually, as a
"Party."
WHEREAS, on August 15, 2013, BreedIT entered into a preliminary agreement with
BreedIT Israel and Xx. Xxxxx (the "Preliminary Agreement"), a copy of which was
filed as an exhibit to BreedIT's Form 8-K filed with the Securities and Exchange
Commission ("SEC") on August 19, 2013, which Preliminary Agreement contemplated
the investment by BreedIT of up to US$1 million into BreedIT Israel in
consideration for the acquisition of sixty-six and two-thirds (66 2/3%) percent
equity ownership interest in BreedIT Israel (the "Equity Interest"); and
WHEREAS, on October 20, 2013, BreedIT entered into a Share Purchase Agreement
with BreedIT Israel and Xx. Xxxxx (the "SPA"), a copy of which was filed as an
exhibit to BreedIT's Form 8-K filed with the SEC on October 21, 2013, pursuant
to which BreedIT completed its purchase of the Equity Interest; and
WHEREAS, the Parties, in executing both the Preliminary Agreement and SPA
expressly contemplated that BreedIT's financial obligation to BreedIT Israel
would not exceed US$1 million and further contemplated that BreedIT, BreedIT
Israel and Xx. Xxxxx could re-evaluate the nature of their respective ownership
interests after the amount of US$1 million had been invested into BreedIT
Israel; and
WHEREAS, the Parties, having negotiated in good faith to address the decision of
BreedIT not to make further investment into BreedIT Israel and the agreement by
Xx. Xxxxx and his entity, SB, to assume the existing liabilities of BreedIT
Israel as well as the obligation to fund BreedIT on-going business operations,
have agreed that BreedIT's Equity Interest be reduced from sixty-six and
two-thirds (66 2/3%) percent to nineteen (19%) percent.
NOW THEREFOR, for good and valuable consideration, the receipt of which is
hereby acknowledged, the Parties agree as follows:
Section 1. Star Biotech Ltd., an entity controlled by Xx. Xxxxx ("SB"), shall
assume upon itself all of the financial liabilities (approximately 450,000 NIS
or approximately US$115,000) of BreedIT Israel and will finance their on-going
operations.
Section 2. Based upon the agreement of SB in Section 1 above, BreedIT's Equity
Interest, evidenced by 200 Ordinary Shares of BreedIT Israel (the "Shares")
shall be diluted to nineteen (19%) percent) on fully diluted basis.
Notwithstanding the foregoing, in the event that BreedIT Israel shall secure one
or more new investors, BreedIT's Equity Interest shall not be diluted below
nineteen (19%) percent.
Section 3. BreedIT will deposit the Shares with a trustee to be agreed upon by
the Parties (the "Trustee") who shall vote the Shares according to the
recommendation of the board of directors of BreedIT Israel and BreedIT shall
simultaneously waive any minority rights with respect to the Shares and any
rights or claims against the Trustee in that respect.
Section 4. SB shall have an option to purchase the Shares from BreedIT (the
"Option") in consideration for the payment to BreedIT of the sum of US$50,000.
The Option shall be exercisable on the earlier of: (i) August 10, 2016; or (ii)
notice by BreedIT of its agreement to early exercise (“Exercise Date”), and for
a period of up to 12 months thereafter.
Section 5. SB, for a period of three (3) years as of the consummation of the
transactions referred to in Sections 1 through 4 above, pay or cause BreedIT
Israel to pay to BreedIT an amount equal to ten (10%) percent) of BreedIT's
annual gross profits according to the audited annual financial reports of
BreedIT Israel (the “Audited Financials”). BreedIT hereby waives any right or
claim to challenge the Audited Financials.
Section 6. In addition, the following shall occur:
6.1. Xx. Xxxx Xxxxx will promptly resign from the board of directors of BreedIT
Israel;
6.2. Xx. Xxxx Xxxxxx will promptly resign from his position as CFO of BreedIT
Israel and BreedIT shall assume all of the financial liabilities to Xx. Xxxxxx
in connection with his departure from BreedIT Israel;
6.3. Not later than the Exercise Date, and subject to the filing with the SEC of
an Information on Schedule 14C with respect to the name change of BreedIT to a
name not using "BreedIT" (the "Name Change") and receipt of approval by FINRA of
the Name Change; and
6.4. Not later than the Exercise Date, BreedIT shall transfer the domain name
xxx.xxxx.xx to BreedIT Israel.
Section 7. All of the undersigned rights in and to his holdings in Breedit Corp
shall be maintained and reserved.
Section 8. The Parties will bear the legal expenses in connection with this
Agreement and the consummation of the transactions contemplated hereunder.
Section 8. Miscellaneous:
8.1 Entire Agreement: This Agreement constitutes the entire agreement between
the Parties hereto and supersedes all prior agreements, understandings and/or
communications between the Parties with respect to the subject matter hereof;
8.2 Amendment: This Agreement may not be amended or modified in any respect,
except by the mutual written agreement of the Parties hereto;
8.3 Counterparts: This Agreement may be executed in any number of counterparts
and by the separate Parties hereto in separate counterparts, each of which shall
be deemed to be one and the same instrument;
8.4 Expenses: The Parties will bear the legal expenses in connection with this
Agreement and the consummation of the transactions contemplated hereunder.
8.5 Notices: All notices required or permitted to be given under this Agreement
shall be in writing, sent certified mail, return receipt requested, postage
prepaid, or by email, to the following addresses:
If to BreedIT Israel or Xx. Xxxxx, then to:
_____________________
_____________________
_____________________
If to SB, then to:
_____________________
_____________________
_____________________
If to BreedIT, then to:
BreedIT Corp.
Attn: Xxxx Xxxxx
_____________________
_____________________
With a copy to:
Office of Xxxxxxx Xxxxx
00 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
BREEDIT CORP.
By:______________________
Xxxx Xxxxx, Chief Executive Officer
BREEDIT LTD
By:______________________
XX. XXXX XXXXX
By:______________________
Xx. Xxxx Xxxxx
STAR BIOTECH LTD
By:______________________
Name (Title)
