Consulting Agreement
Exhibit
10.3
This
consulting agreement (the “Agreement”), entered
into on March 13, 2009 and effective as of the Effective Date (as defined in
Section 1(e)), is made by and between BioNeutral Group, Inc., a Nevada
corporation (together with any successor thereto, the “Company”), and Xxxxx
Xxxxx, an independent provider of services (the “Contractor”).
RECITALS
A. The
Company desires to assure itself of the services of the Contractor, as an
independent contractor, by engaging the Contractor to perform services under the
terms hereof.
B. The
Contractor desires to provide services to the Company, as an independent
contractor, on the terms herein provided.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements set forth below the parties hereto agree as follows:
1. Certain
Definitions.
(a) “Stock Award” shall
have the meaning set forth in Section 3(a).
(b) “Board” shall mean the
Board of Directors of the Company.
(c) “Change in Control
Event” shall mean any event subsequent to February 6, 2009, which results
in:
[1] A
change in the majority ownership of the Company such that the current majority
shareholder(s) no longer retain majority control over the Company’s daily
business operations and a shareholder vote called by the current majority
shareholders will not necessarily result in the wishes of the majority
shareholder being met
[2] An
event whereby the Company is acquired by another business and the acquiring
business obtains majority control through the acquisition or award by the
Company's Board, of the majority of the seats on the Board of
Directors
[3] An
event whereby the Company is acquired by another business and the acquiring
business obtains majority control through majority share ownership
[4] An
event whereby the Company is acquired by another business and the acquiring
business obtains majority control through voting control rights specific to a
designation of shareholder rights or a stockholders’ agreement; or through a
reverse or other merger subsequent to the merger between BioNeutral Laboratories
Corporation USA and Moonshine Creations, Inc on January 30, 2009.
(d) “Company” shall,
except as otherwise provided in Section 6(f), have the meaning set forth in the
preamble hereto.
(e) “Contractor” shall
have the meaning set forth in the preamble hereto.
1
(f) “Date of Termination”
shall mean the date indicated in the Notice of Termination or the date specified
by the Company pursuant to Section 4(b), whichever is earlier.
(g) “Effective Date” shall
mean January 29, 2009, the date Contractor’s Consulting with the Company
commences hereunder.
(h) “Notice of
Termination” shall have the meaning set forth in
Section 4(b).
(i) “Term” shall have the
meaning set forth in Section 2(b).
(j) “SEC” shall mean the
United States Securities and Exchange Commission.
(k) “Super 8-K” shall mean
the Form 8-K as filed with the United States Securities and Exchange Commission
on or around January 30, 2009, which is inclusive of the Company’s audited
financial statements for the years ended December 31, 2007 and 2006, and its
reviewed financial statements for the period ended September 30,
2008.
(l) “Registration Rights”
shall mean that the Contractor shall have piggyback registration rights such
that all shares of common stock issued under the Stock Award are to be included
in any and all registration statement(s) filed by the Company until a
registration statement is deemed effective by the United States Securities and
Exchange Commission ("SEC") subsequent to the Effective Date.
2. Consulting.
(a) In
General. The Company shall engage the Contractor and the
Contractor shall perform services on behalf of the Company upon the other terms
and conditions herein provided.
(b) Term of
Agreement. The initial term under this Agreement (the “Initial Term”) shall
be for the period beginning on the Effective Date and ending on the first
anniversary thereof, unless earlier terminated as provided in Section
4. Upon expiration of the Initial Term, the Consulting term hereunder
shall automatically be extended for successive one year periods (“Extension Terms” and,
if so extended, collectively with the Initial Term, the “Term”); provided that
the parties agree on appropriate compensation during such Extension Terms and
neither party has delivered notice of non-extension to the other; provided
further that any notice of non-extension shall be delivered no later than 30
days prior to the expiration of the then-applicable Term.
(c) Position and
Duties. During the Term, the Contractor shall provide services
to the Company as defined in Exhibit A to the Agreement. The
Contractor will be subject to direction of the Board; shall report directly to
the Board; and agrees to observe and comply with the Company’s rules and
policies as adopted by the Company from time to time.
3. Compensation
and Related Matters.
(a) Cash and Shares of Common
Stock in Lieu of Cash. The Contractor will receive
a monthly fee of $5,000, payable by the 15th of each
month until the Agreement or terms within the Agreement expire or the Agreement
is terminated. However, it is agreed that for the months of March and
April 2009, the Contractor will accept as payment in lieu of cash, a total of
10,000 shares of common stock. All shares of the Company's common
stock issued under this Section 3 (a) shall contain Registration Rights as
defined herein such that the Company will include all shares issued under the
Stock Award in any and all registration statements filed subsequent to the
Effective Date until a registration statement is deemed effective by the SEC.
Such shares are to be issued to the Contractor immediately and are free of all
vesting provisions.
2
(b) Stock
Award. As of January 29, 2009, the Contractor received an
award of 150,000 shares of the Company's common stock (the “Stock Award”) to be
delivered in accordance with Section 23, which shall be in partial payment of
the Contractor's fees that the Contractor expects to earn in performance of the
Contractor's services over the Term and as defined in Exhibit A. All
shares of the Company's common stock issued under this Stock Award shall contain
Registration Rights as defined herein such that the Company will include all
shares issued under the Stock Award in any and all registration statements filed
subsequent to the Effective Date until a registration statement is deemed
effective by the SEC. At all times, it is intended that the
Contractor is compensated as a contractor under the applicable rules and
regulations of the Internal Revenue Service and the State of New Jersey in
effect during the Term.
(c) Vesting. The Stock
Award will vest according to the following timeline:
|
1.)
|
75,000
shares of the Company's common stock vested on January 30, 2009, as a
result of the filing of Form 8-K announcing the closing of the reverse
merger between BioNeutral Laboratories Corporation USA and Moonshine
Creations, Inc.
|
|
2.)
|
An
additional 75,000 shares of the Company's common stock shall vest on the
twelve month anniversary of the Effective
Date.
|
|
3.)
|
In
the event of a Change in Control Event as defined in Section 1(c), all
shares of the Company's common stock under the Stock Award, as detailed in
Section 3(a), shall be considered to be fully earned and all vesting terms
outlined above shall be accelerated as
such.
|
(d) Expenses. The
Company shall reimburse the Contractor for all reasonable travel and other
business expenses incurred by him in the performance of his duties to the
Company in accordance with the Company’s applicable expense reimbursement
policies and procedures. The travel needs to be approved by the
Company in advance.
4. Termination.
(a) The
Contractor’s Consulting hereunder may be terminated by the Company or the
Contractor, as applicable, for any reason with or without cause, without any
breach of this Agreement.
(b) Notice of
Termination. Any termination of the Contractor’s Consulting by
the Company or by the Contractor under this Section 4 shall be at least 30 days
following the date of such notice (a “Notice of
Termination”).
(c) Termination due to Death or
Disability. If the Agreement is terminated by reason of the
Contractor's death or Disability, then the Contractor or, as applicable, his
estate or other legal representative, shall be entitled to receive the amounts
described in Section 4(c), if the Contractor, or his legal representative,
executes and does not thereafter revoke, a General Release in a form acceptable
to the Company.
3
5. Contractor Obligations Upon
Termination of Consulting
(a) Contractor
will deliver to the Company any compositions, articles, devices, computer
software, computer diskettes and other storage media including all copies or
specimens thereof in their possession (whether at the place of work, at home or
elsewhere), that have been prepared or made by the Contractor or others, and any
other items which disclose or embody Confidential Information, or reproductions
of any aforementioned items developed by the Contractor pursuant to
services provided by the Contractor or otherwise belonging to the Company, its
successors or assignees, including, but not limited to, those records maintained
pursuant to Section 2(c).
6. Restrictive
Covenants.
(a) Confidentiality. The
Contractor agrees that he will not during the Term or thereafter divulge to
anyone (other than the Company or any persons designated by the Company) any
knowledge or information of any type whatsoever of a confidential nature
relating to the business of the Company, including, without limitation, all
types of trade secrets, business strategies, marketing, sales and distribution
plans. The Contractor further agrees that he will not disclose,
publish or make use of any such knowledge or information of a confidential
nature (other than in the performance of the Contractor’s duties hereunder)
without the prior written consent of the Company. This provision does
not apply to information which becomes available publicly without the fault of
the Contractor or information which the Contractor is required to disclose in
legal proceedings, provided the Contractor gives advance notice to the Board and
an opportunity to for the Company to resist such disclosure.
(b) Competitive Business
Restrictions. During the Term, the Contractor shall not engage
directly or indirectly, whether as an Contractor, independent contractor,
consultant, partner, shareholder or otherwise, in a business or other endeavor
which would or might interfere with any of his duties or obligations hereunder
or which is competitive with or similar to the business of the Company or any of
its subsidiaries or affiliates. Notwithstanding the foregoing, the
Contractor shall have the right to own up to one percent (1%) of the shares of
any publicly traded company in a business which is competitive with or similar
to the business of the Company or any of its subsidiaries or
affiliates.
(c) Non-Solicitation. The
Contractor further agrees that during the Term and during the period beginning
on the Date of Termination and ending on the first anniversary of the Date of
Termination, the Contractor will not engage or attempt to engage or assist
anyone else to engage any person who is a Restricted Employee. As
used herein, “Restricted Employee” means any person engaged by the Company or
any of its subsidiaries or affiliates as of the Date of Termination or at any
time during the 120 day period prior to the Date of Termination.
(d) Non-Compete. In
consideration of the Company’s agreements herein, the Contractor agrees, in
addition to any other obligation imposed by this Section 6, that he will not,
during the Restricted Period, engage directly or indirectly (other than as a
holder of not in excess of one percent (1%) of the shares of any publicly traded
company), whether as an Contractor, independent contractor, consultant, partner,
shareholder or otherwise, in a business or other endeavor which is competitive
with or similar to any business of the Company or any potential business which
as of the Date of Termination has been submitted to the Board for consideration
and is under active consideration by the Board (any such business or endeavor, a
“Competitive
Business”), anywhere in the United States. The Contractor
specifically acknowledges that he is not a founder, creator or builder of the
business of the Company but is a key Contractor of the Company, he has access to
confidential information, trade secrets, and the like, of the Company; that he
has independent means of supporting himself and his family; and that in view of
the foregoing, the restrictions imposed by this Section 6(d) are reasonably
necessary to protect the Company against unfair competition by the Contractor
and are not unduly burdensome to the Contractor. As used in this Agreement, the
term “Restricted
Period” means the period beginning on the Date of Termination and ending
on the third anniversary of the Date of Termination.
4
(e) Non-Disparagement. The
Company agrees not to disparage the Contractor and the Contractor agrees not to
disparage the Company, any of its products or practices, or any of its
directors, Contractors, agents, representatives, stockholders or affiliates,
either orally or in writing, at any time during or subsequent to the Term of
this Agreement.
(f) Interpretation. In
the event the terms of this Section 6 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
great a period of time or over too great a geographical area or by reason of its
being too extensive in any other respect, it will be interpreted to extend only
over the maximum period of time for which it may be enforceable, over the
maximum geographical area as to which it may be enforceable, or to the maximum
extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. As used in this Section 6,
the term “Company” shall
include the Company, its parent, related entities, and any of its direct or
indirect subsidiaries or affiliates.
(g) The Restrictive Covenants of
Confidentiality, Competitive Business Restrictions, Non-Competition , Non
Solicitation and Non Disparagement shall survive termination for a period of
five (5) years.
7. Representations
and Warranties of Contractor. The Contractor represents and
warrants that the Contractor is not a party to any other Consulting agreement,
noncompetition agreement or other agreement which restriction could interfere
with the Contractor’s Consulting with the Company or the Company’s rights and
the Contractor’s obligations hereunder and that the Contractor’s acceptance of
Consulting with the Company and the performance of the Contractor’s duties
hereunder will not breach the provisions of any contract, agreement or
understanding to which the Contractor is party or any duty owed by the
Contractor to any other person or entity.
8. Information
of Others. The Contractor agrees that Contractor will not,
during his Consulting or service with the Company, use or disclose any
confidential or proprietary information or trade secrets of any former or
concurrent engager or other person or entity and that Contractor will not bring
onto the premises of the Company any unpublished document or other confidential
or proprietary information belonging to any such engager, person or entity
unless consented to in writing by such engager, person or entity.
9. Injunctive
Relief. The Contractor recognizes and acknowledges that a
breach of the covenants contained in Section 6 will cause irreparable damage to
Company and its goodwill, the exact amount of which will be difficult or
impossible to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, the Contractor agrees that in the event
of a breach of any of the covenants contained in Section 6, in addition to any
other remedy which may be available at law or in equity, the Company will be
entitled to specific performance and injunctive relief.
10. Assignment
and Successors. The Company may assign its rights and
obligations under this Agreement to any entity which is a successor to all or
substantially all the assets of the Company, by merger or
otherwise. This Agreement may not be assigned by the Contractor. This
Agreement shall be binding upon and inure to the benefit of the Company, the
Contractor and their respective successors, assigns, personnel and legal
representatives, executors, administrators, heirs, distributees, devisees, and
legatees, as applicable.
11. Governing
Law. This Agreement shall be governed, construed, interpreted
and enforced in accordance with the substantive laws of the State of Delaware,
without reference to the principles of conflicts of law of the State of Delaware
or any other jurisdiction, and where applicable, the laws of the United States.
Venue is established in Delaware and both parties hereto irrevocable submit
themselves to venue therein.
5
12. Dispute
Resolution. Any controversy or claim
arising out of or relating to this Agreement shall be resolved by arbitration
before a panel of one arbitrator in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (“AAA”) then pertaining, except
where those rules conflict with this provision, in which case this provision
controls. Any court with jurisdiction shall enforce this clause and
enter judgment on any award. The arbitrator shall be selected within
twenty business days from commencement of the arbitration from the AAA’s
National Roster of Arbitrators pursuant to agreement or through selection
procedures administered by the AAA. Within 45 days of initiation of
arbitration, the parties shall reach agreement upon and thereafter follow
procedures, including limits on discovery, assuring that the arbitration will be
concluded and the award rendered within no more than eight months from selection
of the arbitrator or, failing agreement, procedures meeting such time limits
will be designed by the AAA and adhered to by the Parties. The
arbitration shall be held in New Jersey and the arbitrators shall apply the
substantive law of New Jersey, except that the interpretation and enforcement of
this arbitration provision shall be governed by the Federal Arbitration
Act. Prior to commencement of arbitration, emergency relief is
available from any court to avoid irreparable harm. The arbitrator
shall not award either party punitive, exemplary, multiplied or consequential
damages, or attorneys’ fees or costs.
Notwithstanding the
foregoing, the parties acknowledge and agree that the other party would be
irreparably harmed if any of the provisions of this Agreement are not performed
in accordance with their specific terms and that any breach of this Agreement
could not be adequately compensated in all cases by monetary damages
alone. Accordingly, in addition to any other right or remedy to which
such parties may be entitled at law or in equity, they shall be entitled to
enforce any provision of this Agreement by a decree of specific performance and
to temporary preliminary and permanent injunctive relief in any court of
competent jurisdiction to prevent breaches or threatened breaches of any of the
provisions of this Agreement.
13. Notices. Any
notice, request, claim, demand, document and other communication hereunder to
any party shall be effective upon receipt (or refusal of receipt) and shall be
in writing and delivered personally or sent by telex, telecopy, or certified or
registered mail, postage prepaid, to the following address (or at any other
address as any party shall have specified by notice in writing to the other
party):
(a) If to the
Company:
000
Xxxxxx Xxxxxx
Xxxxxx,
Xxx Xxxxxx 00000
Xxxxxx
Xxxxxx of America
(b) If to the
Contractor:
Xxxxx
Xxxxx
c/o X.
Xxxxx & Company
00 Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxxxxxx 00000
Xxxxxx
Xxxxxx of America
6
14. Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original, but all of which together will constitute one and the same
Agreement.
15. Entire
Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
Consulting of the Contractor by the Company and may not be contradicted by
evidence of any prior or contemporaneous agreement. This Agreement
(together with any other agreements and instruments contemplated hereby or
referred to herein) shall supersede all undertakings or agreements, whether
written or oral, previously entered into by the Contractor and the Company or
any predecessor thereto or affiliate thereof with respect to the Consulting of
the Contractor by the Company. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this
Agreement.
16. Amendments;
Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by the Contractor and the
Company. By an instrument in writing similarly executed, the
Contractor or the Company may waive compliance by the other party or parties
with any provision of this Agreement that such other party was or is obligated
to comply with or perform; provided, however, that such waiver shall not operate
as a waiver of, or estoppel with respect to, any other or subsequent
failure. No failure to exercise and no delay in exercising any right,
remedy, or power hereunder preclude any other or further exercise of any other
right, remedy, or power provided herein or by law or in equity.
17. No
Inconsistent Actions. The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement. Furthermore, it
is the intent of the parties hereto to act in a fair and reasonable manner with
respect to the interpretation and application of the provisions of this
Agreement.
18. Construction. This
Agreement shall be deemed drafted equally by both the parties. Its language
shall be construed as a whole and according to its fair meaning. Any
presumption or principle that the language is to be construed against any party
shall not apply. The headings in this Agreement are only for
convenience and are not intended to affect construction or
interpretation. Any references to paragraphs, subparagraphs, sections
or subsections are to those parts of this Agreement, unless the context clearly
indicates to the contrary. Also, unless the context clearly indicates
to the contrary, (a) the plural includes the singular and the singular includes
the plural; (b) “or” is used both conjunctively and disjunctively; (c) “any,”
“all,” “each,” or “every” means “any and all,” and “each and every”; (d)
“includes” and “including” are each “without limitation”; (e) “herein,”
“hereof,” “hereunder” and other similar compounds of the word “here” refer to
the entire Agreement and not to any particular paragraph, subparagraph, section
or subsection; and (f) all pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the identity
of the entities or persons referred to may require.
19. Enforcement. If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws effective during the term of this Agreement, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a portion of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
7
20. Withholding. The
Company shall be entitled to withhold from any amounts payable under this
Agreement any federal, state, local or foreign withholding or other taxes or
charges which the Company is required to withhold. The Company shall be entitled
to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise.
21. Contractor
Acknowledgement. The Contractor acknowledges that he has read
and understands this Agreement, is fully aware of its legal effect, has not
acted in reliance upon any representations or promises made by the Company other
than those contained in writing herein, and has entered into this Agreement
freely based on his own judgment.
22. Survival. The
expiration or termination of the Term shall not impair the rights or obligations
of any party hereto, which shall have accrued prior to such expiration or
termination and shall remain in force for a period of five years after
termination.
23. Stock
Certificates. The common stock certificates to be issued in
accordance with Section 3(a) shall be delivered as follows:
(a) A stock
certificate for 82,585 shares of the Company's common stock was previously
delivered in the following name and at the following address as
follows:
Xxxxx
Xxxxx
c/o X. Xxxxx &
Company
00 Xxxxx Xxxxxx, Xxxxx
000
Xxxxxxxxx, XX 00000
(b) A stock
certificate for 77,415 shares of the Company's common stock shall be delivered
in the following name and at the following address as follows:
Xxxxx
Xxxxx
c/o X. Xxxxx &
Company
00 Xxxxx Xxxxxx, Xxxxx
000
Xxxxxxxxx, XX 00000
[Signature
Page Follows]
8
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date and year
first above written.
|
By: Xxxxxxx
Xxxxxxx
Title: President
and Chief Executive Officer
By: Xxx
Xxxxxx
Title: Director
|
|
|
CONTRACTOR:
By: /s/ Xxxxx
Xxxxx
Xxxxx Xxxxx
|
|
9
Exhibit
A
1)
Position and Duties
The
Contractor shall in general have duties described below, including without
limitation, the responsibility to:
(a) Serve as
the Company's Chief Financial Officer and accept all customary duties of a Chief
Financial Officer of a public company who shares of common stock are traded on
the United States Over-the-Counter Bulletin Board.
(b) Keep a
complete and accurate accounting of receipts and disbursements in the corporate
accounting records;
(c) Render a
complete financial report at the annual meeting of the shareholders if so
requested;
(d) Be
responsible to act as the main depository of the Company's accounting, finance
and corporate records. Provide such records as requested in a timely
manner.
(e) Provide
consulting services with regard to fundraising, private placements, general
securities law matters (but with a full understanding that any actions on behalf
of the Company or communications with the Company do not constitute legal advice
or a suggestion that the Contractor can be relied upon for sound legal advice),
business plan development, filings with the SEC on Form 10-K and Form
10-Q.
(f) Attendance
with all shareholder or meetings of the Board as requested by the
Company
(g) All other
services or in particular other filings with the SEC such as registration
statements on Form S-1 or Form 10, or other filings, which are not outlined
within the Agreement shall be considered separate and distinct services for
which the Contractor and management of the Company will negotiate and agree upon
appropriate compensation prior to other services or other filings being
attempted or completed by the Contractor.
