CBC CONSULTING AGREEMENT
THIS AGREEMENT IS ENTERED INTO AS OF FEBRUARY __, 2006 BETWEEN BARNABUS
ENERGY, INC., A NEVADA CORPORATION (BARNABUS) AND CONNECT BY COMPUTER, LLC, A
SINGLE MEMBER CALIFORNIA LIMITED LIABILITY COMPANY (CONTRACTOR).
WHEREAS, PURSUANT TO AN AGREEMENT AND PLAN OF MERGER OF EVEN DATE
HEREWITH, BY AND AMONG BARNABUS, CONNECT RENEWABLE ENERGY, INC., A NEVADA
CORPORATION ("CRE"), XXXXXX X. XXXXXXX ("XXXXXXX") AND OTHER PARTIES (THE
"MERGER AGREEMENT"), BARNABUS WILL ACQUIRE ALL OF THE OUTSTANDING COMMON STOCK
OF CRE IN EXCHANGE FOR A TOTAL OF 5,000,000 SHARES OF COMMON STOCK OF BARNABUS;
AND
WHEREAS, CONTRACTOR IS WHOLLY-OWNED BY XXXXXXX AND XXXXXXX OWNS GREATER
THAN 85% OF THE ISSUED AND OUTSTANDING COMMON STOCK OF CRE; AND
WHEREAS, CONTRACTOR AND CRE ARE PARTIES TO AN INDEPENDENT CONTRACTOR
MANAGEMENT SERVICES AGREEMENT DATED APRIL 15, 2005 (THE "CRE CONTRACT"),
PROVIDING FOR INCENTIVE COMPENSATION BASED ON A PERCENTAGE OF PRODUCT REVENUES
WHICH SURVIVES ANY TERMINATION OF THE CRE CONTRACT EXCEPT FOR CAUSE; AND
WHEREAS, BARNABUS DESIRES TO TERMINATE THE CRE CONTRACT WITHOUT
CONTINUING THE INCENTIVE COMPENSATION REFERRED TO IN THE PREVIOUS RECITAL AND
CONTRACTOR IS WILLING TO TERMINATE THE CRE CONTRACT AND THE INCENTIVE
COMPENSATION ON THE TERMS OF THIS AGREEMENT; AND
WHEREAS, IT IS A CONDITION TO THE MERGER AGREEMENT THAT CONTRACTOR
ENTER INTO THIS AGREEMENT, AND BARNABUS HAS RELIED ON CONTRACTOR'S AGREEMENTS
AND COMMITMENT UNDER THE TERMS AND CONDITIONS SET FORTH HEREIN, AND SUCH
AGREEMENTS AND CONTRACTOR'S COMMITMENT ARE ESSENTIAL TO THE RELATIONSHIP OF THE
PARTIES;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES HEREINAFTER SET
FORTH AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE PARTIES HERETO HEREBY
AGREE AS FOLLOWS:
1 Contractor's Services
1.1 Contractor agrees to act as a consultant for Barnabus and perform the
services described in Exhibit 1.1 (Services) attached to this Agreement. Except
as allowed by this Agreement, the Services will be performed by Xxxxxx X.
Xxxxxxx, who shall devote at least thirty (30) hours per week in the performance
of such Services.
1.2 During the term of this Agreement, and for a period of three (3) years
following any termination hereof, Contractor shall not be employed by, consult
with or engage, directly or indirectly, in any business in the alternative
energy field, which shall include, without limitation, wave or tidal power,
small hydro power, wind power, geothermal power, bio-fuels, cogeneration power,
solar power, and hydrogen fuel cells. 1.1
1.3 Contractor will determine the method, details, and means of performing
the Services subject to the supervision and direction of the Chief Executive
Officer of Barnabus.
2 Consideration for Termination of Product Royalty. As payment in full for
the termination of the incentive compensation based on a percentage of product
revenues provided in the CRE Contract, Barnabus shall deliver to Contractor at
the Closing of the CRE Merger 1,000,000 shares of Barnabus common stock, all of
which shares shall be registered under the Securities Act of 1933, as amended,
and subject only to a mutually agreeable lockup agreement for not more than 90
days, and to the restrictions of Rule 144.
3 Compensation.
3.1 Monthly Payments. Contractor shall be paid $16,000 for each full month
that Services are provided in accordance with the terms of this Agreement.
3.2 Incentive Compensation. As additional compensation to Contractor for
the performance of the Services, Barnabus agrees to pay Contractor sales based
incentive compensation in the form of unregistered shares of Barnabus common
stock as set forth in Exhibit 2.2, and the Contractor agrees that it will
acquire all such shares for investment purposes only and not with a view to the
distribution thereof. The Contractor also represents and warrants that either it
or Xxxxxx X. Xxxxxxx, the owner of 100% of the ownership interest of the
Contractor, is an accredited investor as such term is defined in Rule 501(a)
under the Securities Act of 1933, as amended.
4 Expenses. Barnabus shall reimburse Contractor for all reasonably
necessary travel, entertainment, communications and other expenses incurred on
behalf of Barnabus, subject to Barnabus' corporate policies on T&E expenses.
Except for those expenses and other expenses which may be authorized and
approved in writing by the CEO of Barnabus prior to expenditure, Contractor
shall assume and pay all the costs of providing the Services.
5 Term of Agreement The Initial Term of this Agreement will expire on
March 31, 2008. After the end of the Initial Term, the Agreement shall remain in
full force and effect until it is terminated as provided in Section 5.
6 Termination
6.1 Either party may terminate this Agreement effective at any time after
the end of the Initial Term by giving 90 days written notice of termination.
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6.2 If either party fails to perform or observe any term, covenant or
undertaking in this Agreement to be performed or observed by it and such default
continues for thirty calendar days after written notice of default given to the
defaulting party by the non-defaulting party, the non-defaulting party may
terminate this Agreement by giving written notification of termination to the
defaulting party. 1.1
6.3 This Agreement terminates automatically on the occurrence of any of
the following events:
6.3.1 Levy or execution against any material property of Barnabus,
which levy or execution is not released or discharged within sixty (60)
days; or
6.3.2 Appointment of a receiver for any material part of the
property of Barnabus, assignment for the benefit of creditors by Barnabus,
commencement of any proceeding under any bankruptcy or insolvency laws, or
any laws relating to the relief of debtors, readjustment of indebtedness,
reorganization, composition or extension, by or against Barnabus, which
appointment, assignment or proceeding is not released, discharged or
dismissed within sixty (60) days.
6.3.3 Upon the death or disability of Xxxxxxx, or in the event
Xxxxxxx shall cease to own directly at least 60% of the ownership
interests in or cease to be the Managing Member of Contractor.
7 Relationship of the Parties
7.1 Contractor enters into this Agreement as, and shall continue to be, an
independent contractor. Under no circumstances shall Contractor look to Barnabus
as a partner, an agent, a principal or an employer. Contractor shall not be
entitled to any benefits accorded to Barnabus's employees, including, but not
limited to, worker's compensation, medical or disability insurance, or vacation
or sick pay.
7.2 Contractor shall pay, when and as due, any and all taxes incurred as a
result of Contractor's compensation, including estimated taxes, and shall
provide Barnabus with proof of payment on demand. Contractor shall indemnify
Barnabus upon demand for any claims, losses, costs, fees, liabilities, damages
or injuries suffered by Barnabus arising out of Contractor's breach of this
section.
7.3 So long as Contractor is fulfilling its responsibilities under this
Agreement, Contractor or Xx. Xxxxxxx may represent, perform services for, or be
employed by any additional persons, or companies outside the alternative energy
field as they see fit.
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8 Contractor's Representations and Indemnities
8.1 Contractor represents that Contractor and Xx. Xxxxxxx have the
qualifications and ability to perform the Services in a professional manner.
Contractor shall be solely responsible for the professional performance of the
Services which shall be performed subject to the supervision and direction of
the Chief Executive Officer of Barnabus.
8.2 Contractor shall and does hereby indemnify, defend and hold harmless
Barnabus, and the officers, directors, and owners of Barnabus from and against
any and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries, and deficiencies, including interest, penalties, and
reasonable attorney fees and costs, that Barnabus may incur or suffer and that
result from, or are related to any breach or failure of Contractor to perform
any of the representations, warranties and agreements contained in this
Agreement.
9 Ownership of Intellectual Property
9.1 Contractor agrees that all designs, plans, reports, specifications,
drawings, schematics, prototypes, models, inventions, and all other information
and items made during the course of this Agreement and arising from the Services
or arising from all prior services rendered to CRE by Contractor ("New
Developments") shall be and are assigned to Barnabus as its sole and exclusive
property. On Barnabus's request, Contractor agrees to assist Barnabus, at
Barnabus's expense, to obtain patents or copyrights for such New Developments,
including the disclosure of all pertinent information and data, the execution of
all applications, specifications, oaths, and assignments, and all other
instruments and papers which Barnabus shall deem necessary to apply for and to
assign or convey to Barnabus, its successors and assigns or nominees, the sole
and exclusive right, title and interest in such New Developments. Contractor
agrees to obtain or has obtained written assurances from its employees,
contractors and contract personnel of their agreement to these terms with regard
to Proprietary Information and New Developments.
9.2 Contractor warrants that Contractor has good title to any New
Developments, and the right to assign New Developments to Barnabus free of any
proprietary rights of any other party or any other encumbrance whatever.
10 Proprietary Information
10.1 The written, printed, graphic, or electronically recorded materials
furnished by Barnabus or CRE for use by Contractor and Xx. Xxxxxxx are
Proprietary Information and the property of Barnabus. Proprietary Information
also includes, but is not limited to, specific customer requirements, customer
and potential customer lists, including information concerning Barnabus's
contractors, agents or divisions, and pricing information.
10.2 Contractor and Xx. Xxxxxxx will maintain in confidence and will not,
directly or indirectly, disclose or use, either during or after the term of this
Agreement, any Proprietary Information or confidential information or know-how
belonging to Barnabus, whether or not it is in written or permanent form, except
to the extent necessary to perform the Services. On termination of Contractor's
services to the Barnabus, or at the request of Barnabus before termination,
Contractor and Xx. Xxxxxxx shall deliver to Barnabus all material in their
possession relating to Barnabus's business. The obligations concerning
Proprietary Information extend to information concerning and belonging to
customers and suppliers of Barnabus about whom Contractor may have gained
knowledge as a result of performing the Services.
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10.3 Contractor and Xx. Xxxxxxx shall not, during the term of this
Agreement and for a period of three (3) years immediately following the
termination of this Agreement, or any extension of it, for any reason, either
directly or indirectly: (a) call on, solicit, or take away any of Barnabus's
customers or potential customers about whom Contractor became aware as a result
of Contractor's Services to the Barnabus, either for Contractor or for any other
person or entity; or (b) solicit or take away or attempt to solicit or take away
any of Barnabus's employees or contractors either for Contractor or for any
other person or entity.
11 General Provisions.
11.1 Amendments. This Agreement may be supplemented, amended, or modified
only by the mutual agreement of the parties. No supplement, amendment, or
modification of this Agreement shall be binding unless it is in writing and
signed by both parties.
11.2 Severability. If a court or an arbitrator of competent jurisdiction
holds any provision of this Agreement to be illegal, unenforceable, or invalid
in whole or in part for any reason, the validity and enforce ability of the
remaining provisions, or portions of them, will not be affected.
11.3 Entire Agreement. This Agreement embodies the entire agreement and
understanding among the parties relating to the employment and compensation of
Xxxxxx X. Xxxxxxx and Connect by Computer, LLC, and supersedes all prior
agreements and understandings relating to such matters (including, without
limitation, the Management Services Agreement dated April 4, 2005, the January
12, 2006 letter from Xxxxx Xxxxxxx to Xx. Xxxxxxx, and any other agreements
between Connect Renewal Energy, Inc. or Barnabus Energy, Inc. and said parties).
11.4 Other Agreements. The provisions of Sections 8 and 9 of this
Agreement shall be by addition to and not in limitation of any and all other
agreements relating to the subject matter thereof, now existing or hereafter
arising and between Xxxxxxx and CRE and/or Barnabus and its affiliates.
References in this Agreement to Barnabus shall include its subsidiaries and
affiliates, including CRE, unless the context shall otherwise require.
11.5 Headings. The headings in this Agreement are included for convenience
only and shall neither affect the construction or interpretation of any
provision in this Agreement nor affect any of the rights or obligations of the
parties to this Agreement.
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11.6 Governing Law; Consent to Jurisdiction; waiver of Trial by Jury. (a)
This Agreement and the transactions contemplated hereby, and all disputes
between the parties under or related to the Agreement or the facts and
circumstances leading to its execution, whether in contract, tort or otherwise,
shall be governed by and construed in accordance with the laws of the State of
Nevada, without regard to the application of Nevada principles of conflicts of
laws.
(B) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION
OF ANY CALIFORNIA STATE COURT, OR FEDERAL COURT SITTING IN THE
COUNTY OF SAN DIEGO, CALIFORNIA, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE AGREEMENTS
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT RELATING THERETO, AND EACH OF THE
PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY (I) AGREES NOT
TO COMMENCE ANY SUCH ACTION OR PROCEEDING EXCEPT IN SUCH
COURTS, (II) AGREES THAT ANY CLAIM IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
CALIFORNIA STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT, (III) WAIVES, TO THE FULLEST EXTENT IT MAY
LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH CALIFORNIA STATE OR FEDERAL COURT, AND
(IV) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH CALIFORNIA STATE OR FEDERAL
COURT.
(C) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER
OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS
VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.6.
11.7 Notice. All notices, requests or demands required or permitted to be
given hereunder shall be in writing, and shall be deemed effective (a) upon hand
delivery, if hand delivered; (b) one (1) Business Day after such are deposited
for delivery via Federal Express or other nationally recognized overnight
courier service; or (c) three (3) Business Days after such are deposited in the
United States mails, certified or registered mail, all with delivery charges
and/or postage prepaid, and addressed as shown below, or to such other address
as either party may, from time to time, designate in writing. Written notice may
be given by telecopy to the telecopier number shown below, or as either party
may designate, from time to time, in writing, provided that such notice shall
not be deemed effective unless it is confirmed within 24 hours by hand delivery,
courier delivery or mailing of a copy of such notice in accordance with the
requirements set forth above.
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If to Barnabus: Barnabus Energy, Inc.
000 Xxx xx xx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
lf to Contractor: Connect by Computer LLC
0000 Xxxxxxxxxx Xxxxx Xxxx, Xxx. X
Xxxxx Xxxxxx, XX 00000
or to any other addresses as such party shall designate in a written notice to
the other parties hereto.
11.8 Counterpart and Facsimile Signatures. This agreement may be executed
in several counterparts, either originally or by way of facsimile signature, all
of which, collectively, shall constitute one agreement, binding on all of the
parties hereto even if any party is not a signatory to the original or the same
counterpart.
IN WITNESS WHEREOF, the undersigned have executed this CBC Consulting
Agreement to be effective as of the date first appearing above.
Barnabus Energy, Inc. Connect by Computer LLC
By:__________________________ By:___________________________
Xxxxx Xxxxxxx, President Xxxxxx X. Xxxxxxx
and Chief Executive Officer Managing Member
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EXHIBIT 1.1
DESCRIPTION OF SERVICES
1. CONTRACTOR SHALL CAUSE XXXXXX X. XXXXXXX TO SERVE AS CHIEF TECHNOLOGY OFFICER
AND A MEMBER OF THE BOARD OF DIRECTORS OF BARNABUS AND ITS AFFILIATES. XX.
XXXXXXX SHALL DEVOTE AT LEAST 30 HOURS PER WEEK OF NORMAL BUSINESS HOURS IN THE
PERFORMANCE OF THE SERVICES ON BEHALF OF BARNABUS OR AFFILIATES OF BARNABUS.
2. ADDITIONAL SERVICES TO BE PERFORMED BY THE CONTRACTOR SHALL INCLUDE THE
FOLLOWING:
A. ASSIST IN GENERAL MANAGEMENT OF WEST COAST OPERATIONS, INCLUDING
STAFFING, MANUFACTURING, MARKETING, SALES AND SERVICE OPERATIONS.
B. BUDGET RESPONSIBILITY FOR THE WEST COAST OPERATIONS OF BARNABUS.
C. CAUSE XX. XXXXXXX TO CHAIR THE TECHNICAL ADVISORY COMMITTEE OF
BARNABUS BOARD OF DIRECTORS.
D. RESPONSIBILITY FOR STRATEGIC ACQUISITIONS AND ALLIANCE
OPPORTUNITIES.
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EXHIBIT 2.2
INCENTIVE COMPENSATION PLAN
BARNABUS AGREES TO PAY CONTRACTOR INCENTIVE COMPENSATION, WITHIN TEN
DAYS FOLLOWING THE RECEIPT OF THE FINANCIAL RESULTS OF CRE FOR EACH TWELVE MONTH
PERIOD COMMENCING WITH THE TWELVE MONTHS ENDING MARCH 31, 2007, BASED ON THE
FOLLOWING DESCRIBED NET SALES TARGETS. NET SALES SHALL BE DETERMINED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED ON A CONSISTENT
BASIS.
IN ORDER TO EARN INCENTIVE COMPENSATION IN ANY TWELVE MONTH PERIOD, THE
CONTRACTOR, INCLUDING ITS OWNER, XXXXXX X. XXXXXXX, MUST HAVE BEEN PERFORMING
SERVIES DURING THE ENTIRE TWELVE MONTH PERIOD.
IN THE EVENT THE TARGET THRESHOLD AMOUNT IS EXCEEDED, NO ADDITIONAL
INCENTIVE COMPENSATION WILL BE PAID. IF LESS THAN THE TARGET THRESHOLD AMOUNT IS
ACHIEVED, THE AMOUNT OF INCENTIVE COMPENSATION WILL BE PROPORTIONATELY REDUCED
BASED ON THE PERCENTAGE OF THE TARGET AMOUNT WHICH IS ACHIEVED DURING SUCH
PERIOD. IN ADDITION, ALL PAYMENTS OF INCENTIVE COMPENSATION HEREUNDER SHALL BE
SUBJECT TO THE PROVISO THAT AT THE TIME OF SUCH PAYMENT, NEITHER THE CONTRACTOR
NOR XXXXXXX SHALL BE IN DEFAULT UNDER ANY OF THEIR AGREEMENTS WITH BARNABUS.
Target Threshold Amount Amount of Incentive Compensation
of Net Sales CRE
------------------------ --------------------------- ----------------------------------------------------------
Twelve months ending $15,000,000 1,000,000 shares of Common Stock of Barnabus
March 31, 2007
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Twelve months ending $50,000,000 1,000,000 shares of Common Stock of Barnabus
March 31, 2008
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In the event the target threshold amount is not met in any year, but is
made up on a cumulative basis in a subsequent year or years (through the twelve
months ending March 31, 2007), Barnabus shall pay the amount of incentive
compensation omitted in the prior year or years at the time it is made up.
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