EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the
25th day of August, 2005, by and between Barnabus Enterprises Ltd., a Nevada
corporation (hereinafter called “Corporation”), and David Saltman (hereinafter
called “Executive”).

 

WITNESSETH:

 

In consideration of the compensation payable to Executive by the Corporation
pursuant to this Agreement, and the mutual promises, covenants, representations
and warranties contained herein, and other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto
agree as follows:

 

1.          Employment and Position. The Corporation hereby employs the
Executive as President and Chief Executive Officer of the Corporation, and the
Executive hereby accepts said employment and agrees to render such services to
the Corporation on the terms and conditions set forth in this Agreement. During
the term of this Agreement, the Executive shall report directly and solely to
the board of directors and shall have such executive responsibilities to and
shall perform such executive services for the Corporation as may be consistent
with his titles. All other officers and employees of the Corporation shall
report, directly or indirectly, to the Executive. Without limiting the
generality of the foregoing, the Executive shall have the right to designate the
Corporation's legal counsel, outside auditing firm and any investor relations
firm.

 

2.          Term. Subject to the provisions for extension and termination set
forth in this Agreement, the initial term of this Agreement will begin on
September 15, 2005 and shall terminate on September 30, 2008 unless sooner
terminated (“Initial Term”), provided that the term of this Agreement and the
Executive’s employment hereunder shall be deemed to be extended for additional
terms of one-year each (each, an “Additional Term”) commencing on the day after
the expiration of the Initial Term or the previous Additional Term unless either
party elects to terminate this Agreement at the end of the Initial Term or any
Additional Term by giving the other party written notice of such election at
least sixty (60) days before the expiration thereof. The Initial Term and all
Additional Terms shall be referred to collectively as the “Term”.

 

3.          Compensation. As compensation for all services to be performed by
the Executive under this Agreement, the Corporation shall compensate Executive
as follows:

 

(a)        Base Compensation. The Corporation shall pay the Executive base
compensation (“Base Salary”) equal to Two Hundred Fifty Thousand Dollars
($250,000) per annum, which may be increased from time to time in such amounts
as are determined by the Board of Directors of the Corporation and shall not be
decreased without the Executive’s written consent. The term “Base Salary” shall
refer to the Base Salary as so increased. The Base Salary will be payable in
installments in accordance with the Corporation’s regular payroll practices from
time to time. The Base Salary and all other remuneration paid to the Executive
shall be subject to applicable employment and income tax withholding taxes.

 

 

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(b)        Bonus. In addition to the Base Salary, the Corporation shall pay the
Executive during the term of this Agreement on each anniversary of the
commencement of the Initial Term such bonus payments as may be determined by the
Board of Directors of the Corporation based upon the Corporation's achievement
of the goals set forth in the Corporation's business plan as in effect from time
to time.

 

(c)          Stock Grant. Upon execution and delivery of this Agreement by the
parties hereto, the Corporation shall issue to the Executive eight million two
hundred thirty-five thousand six hundred sixty-two (8,235,662) shares (the
“Stock Grant”) of the Corporation’s common stock (“Common Stock”). Such Stock
Grant shall vest in accordance with the provisions set forth on Exhibit A. Upon
vesting, the stock included in the Stock Grant shall be duly authorized, legally
issued, fully paid and nonassessable. The Corporation represents and warrants
that the Stock Grant is equal to fifteen percent (15%) of the Corporation's
outstanding Common Stock on the date of issuance on a fully diluted basis
including the Stock Grant.

(d)          Benefits. During the Term of this Agreement, the Executive shall be
eligible to participate in the standard fringe benefits package and incentive
compensation plans generally made available to the executive management
employees of the Corporation, as such benefits may be determined or changed from
time to time by the Board of Directors of the Corporation. The fringe benefit
programs will include at a minimum reasonable hospital and major medical
insurance coverage for Executive and the family of the Executive. Without
limiting the generality of the foregoing, the Corporation shall at a minimum
reimburse the Executive for the amount of Blue Cross insurance coverage costing
$1,112 per month at the time this Agreement is entered into and shall increase
such reimbursement as the cost of such coverage is increased by the provider
thereof from time to time.

 

(e)        Expenses. During the Term of this Agreement, the Corporation shall
reimburse the Executive for any and all expenses reasonably incurred by the
Executive incident to the performance of the duties imposed upon Executive
hereunder and which are substantiated in accordance with reasonable policies and
procedures of the Corporation in effect from time to time.

 

(f)         Auto Allowance. During the Term of this Agreement, the Corporation
shall pay to the Executive an automobile allowance of Six Hundred Dollars ($600)
a month in addition to the Executive’s Base Salary.

 

4.          Office. The Corporation will maintain an appropriately appointed and
furnished executive office in a location selected by the Executive at his
discretion from time to time, with a computer and such additional equipment and
office furnishings as are necessary to carry out the responsibilities of the
office of the CEO. The Corporation shall provide the Executive with secretarial
and other administrative staff and support services suitable to the Executive’s
duties and responsibilities hereunder. Without limiting the generality of the
foregoing sentence, the Corporation shall at a minimum pay an administrative
assistant to the Executive a salary equal to Four Thousand Dollars ($4,000.00)
per month, which amount shall be increased at least annually by a reasonable
amount determined by the Executive (which increase shall at least equal the rise
in the consumer price index for the corresponding period) plus benefits equal to
twenty-five percent (25%) of such salary.

 

 

 

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5.

Termination.

 

 

(a)

Death or Disability.

This Agreement shall terminate automatically upon the Executive’s death.

The Corporation shall be entitled to terminate this Agreement because of the
Executive’s disability during the Term. Such termination shall only become
effective if (i) one hundred and eighty (180) days shall elapse after the date
on which the Corporation gives the Executive written notice of its intention to
effect such a termination, and (ii) during such 180-day period the Executive
shall not have returned to full-time performance of the Executive’s duties.

 

(b)

Termination by the Corporation.

The Corporation may terminate this Agreement for Cause at any time during the
Term, at which time the Term shall end. The Corporation shall give the Executive
written notice of such termination, setting forth in reasonable detail the
specific conditions that it considers to constitute Cause, and termination shall
be effective thirty (30) days after the delivery of such notice.

For purposes of this Agreement, the term “Cause” shall mean, when used with
respect to the termination of this Agreement by the Corporation, the conviction
of the Executive by a court of competent jurisdiction of a felony involving a
crime of fraud against the Corporation, such as embezzlement or other theft from
the Corporation.

 

(c)

Termination by Executive.

The Executive may terminate this Agreement for Good Reason at any time during
the Term, at which time the Term shall end. The Executive shall give the
Corporation written notice of such termination, setting forth in reasonable
detail the specific conditions that the Executive considers to constitute Good
Reason, and termination shall be effective thirty (30) days after the delivery
of such notice.

For purposes of this Agreement, the term “Good Reason” means (a) any failure by
the Corporation to comply with any provision of this Agreement, other than an
isolated, insubstantial and inadvertent failure that is not taken in bad faith
and is remedied by the Corporation promptly after receipt of notice thereof from
the Executive; (b) the assignment to the Executive of any duties or
responsibilities inconsistent in any material respect with those customarily
associated with the positions held by the Executive during the Term, (c) the
occurrence of a Change of Control or (d) the failure of the Corporation's
shareholders to elect all of the Executive's Designees or the failure of the
Corporation to appoint any Designee pursuant to Section 9 hereof to be directors
of the Corporation.

For purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred in any of the following events: (i) the acquisition by any individual,
entity or group of the beneficial ownership (as that term is defined in Rule
13d-3 under the Securities Exchange Act of 1934) of 25 percent of more of the
Common Stock (as defined below); provided, however, that any acquisition by
Corporation or its subsidiaries, or any employee benefit plan (or related trust)

 

 

 

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of the Corporation or its subsidiaries, of 25% or more of the Common Stock shall
not constitute a Change in Control; or (ii) the consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation (“Business Combination”), in
each case, with respect to which all or substantially all of the individuals and
entities who were the beneficial owners of the Common Stock immediately prior to
such Business Combination do not, following such Business Combination,
beneficially own, directly or indirectly, more than seventy-five percent (75%)
of the then outstanding shares of common stock of the corporation resulting from
such a Business Combination (including, without limitation, a corporation which
as a result of such transaction owns the Corporation or all or substantially all
of the Corporation’s assets either directly or through one or more
subsidiaries); or (iii) the approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation.

 

6.

Obligations of the Corporation upon Termination  

(a)          Termination for other than Good Reason, for Death or Disability, or
for Cause. If, during the Term, the Corporation terminates this Agreement due to
the death or disability of the Executive in accordance with Section 5(a) or for
Cause in accordance with Section 5(b), or the Executive terminates this
Agreement other than for Good Reason in accordance with Section 5(c), then the
Corporation shall pay to the Executive (or in the event of termination of
employment by reason of the Executive’s death, his legal representative or his
estate if no representative has been appointed) in a lump sum in cash, within 30
days after the date of Termination, an amount equal to the accrued but unpaid
salary pursuant to Section 3(a) and the bonuses as to which the goals set forth
on Exhibit B have been achieved but which have not been paid in accordance with
Section 3(b) (even if the deadline for such achievement has not yet occurred).

(b)          Termination for Good Reason or other than for Cause. If the
Executive terminates this Agreement for Good Reason pursuant to Section 5(c) or
the Corporation terminates this Agreement other than pursuant to Section 5(b)
for Cause, then the Corporation shall pay to the Executive, in a lump sum in
cash within 30 days after the date of Termination, an amount equal to two
hundred fifty percent (250%) of the salary that the Corporation would have been
obligated to pay the Executive pursuant to Section 3(a) during the Calculation
Period if the Agreement had remained unterminated until the end of the
Calculation Period plus the amount of all bonuses set forth on Exhibit B, except
for any bonus for which the deadline for achievement has passed that was not
earned on such deadline, and less any salary that has already been paid.

As used herein, "Calculation Period" shall mean the period (i) beginning on the
first day of the Initial Term and (ii) ending on (A) the last day of the Initial
Term if termination occurs more than sixty (60) days before the end of the
Initial Term, (B) the last day of the first Additional Term if termination
occurs sixty (60) days or fewer from the end of the Initial Term or during such
Additional Term before sixty (60) days from the end thereof, or (C) the last day
of the next succeeding Additional Term if termination occurs sixty (60) days or
less from the end of any Additional Term.

(c)          Obligation to reimburse expenses. The obligation of the Corporation
under Sections 3(d)-(f) shall survive the termination of this agreement.

 

 

 

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(d)          Effect of Termination on Stock Grant. If the Corporation terminates
this Agreement for Cause pursuant to Section 5(a) hereof, or if the Executive
terminates this Agreement other than for Good Reason pursuant to Section 5(c)
hereof, then the Executive shall be deemed to have forfeited all of the Stock
Grant that has not vested in accordance with Exhibit A at the time of such
termination, and the Executive shall deliver certificates representing such
forfeited shares to the Corporation promptly after such termination.

 

7.

Confidential Information.

(a)          Nondisclosure. The Executive shall not, during or after the period
during which he is employed by the Corporation, disclose any Confidential
Information (as such term is defined herein) to any Person for any reason or
purpose whatsoever, other than in connection with the performance of his duties
under this Agreement. The term “Confidential Information” shall mean all
confidential information of or relating to the Corporation and any of its
Affiliates, including without limitation, financial information and data,
business plans and information regarding prospects and opportunities (such as,
by way of example only, client and customer lists and acquisition, disposition,
expansion, product development and other strategic plans), but does not include
any information that is or becomes public knowledge by means other than the
Executive’s breach or nonobservance of his obligations described in this Section
7. Notwithstanding the foregoing, the Executive may disclose such Confidential
Information as he may be legally required to do so in connection with any legal
or regulatory proceeding; provided, however, that the Executive shall provide
the Corporation with prior notice of any such required or potentially required
disclosure and the Corporation may at its own expense seek appropriate
confidential treatment of any such Confidential Information that may be so
required to be disclosed in connection with any such legal or regulatory
proceeding. The Executive’s obligation to refrain from disclosing any
Confidential Information under this Section 7 shall continue in effect in
accordance with its terms following any termination of this Agreement. The
Executive acknowledges that he will not use any Confidential Information for any
reason after his employment with the Corporation is terminated other than as
permitted in this Section 7.

(b)          Injunctive Relief. The Executive acknowledges and agrees that the
Corporation will have no adequate remedy at law, and would be irreparably
harmed, if the Executive breaches or threatens to breach any of the provisions
of this Section 7. The Executive agrees that the Corporation shall be entitled
to equitable and/or injunctive relief to prevent any breach or threatened breach
of this Section 7, and to specific performance of each of the terms of this
Section 7 in addition to any other legal or equitable remedies that the
Corporation may have. The Executive further agrees that he shall not, in any
equity proceeding relating to the enforcement of the terms of this Section 7,
raise the defense that the Corporation has an adequate remedy at law.

(c)          Special Severability; Survivability. The terms and provisions of
this Section 7 are intended to be separate and divisible provisions and if, for
any reason, any one or more of them is held to be invalid or unenforceable,
neither the validity nor the enforceability of any other provision of this
Agreement shall thereby be affected. This Section 7 shall survive the expiration
or termination of this Agreement.

8.            Full Settlement; Mitigation. The Corporation’s obligation to make
the payments provided for in, and otherwise to perform its obligations under,
this Agreement shall not be

 

 

 

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affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action that the Corporation may have against the Executive or others other
than a claim, right or action for fraud. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced, regardless of whether the
Executive obtains other employment.

9.            Directors. The Executive shall have the right to identify, in its
sole discretion, a number of candidates (the "Designees") for the Corporation's
board of directors that shall at all times constitute a majority of such
directors. The Corporation shall use its best efforts to cause the Designees to
be elected to its board of directors. Without limiting the generality of the
foregoing, the Corporation shall include the Designees in its proxy materials,
shall recommend that the Corporation's stockholders vote in favor of the
Designees and shall solicit proxies of its stockholders to vote in favor of the
Designees, and if a Designee is identified to fill a seat between stockholder
meetings that results from an expansion of the board or becomes vacant due to
the death or resignation or inability or unwillingness of another Designee to
serve on the Corporation's board of directors or otherwise, then the Corporation
shall appoint such Designee to the board of directors.

10.          Indemnification. The Corporation shall pay or indemnify the
Executive to the full extent permitted by law for all expenses, costs,
liabilities and legal fees which the Executive may incur in the discharge of his
duties hereunder.

11.        Notices. All demands, notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be personally delivered or sent by facsimile machine (with a
confirmation copy sent by one of the other methods authorized in this Section
11), commercial (including FedEx) or U.S. Postal Service overnight delivery
service, or, deposited with the U.S. Postal Service mailed first class,
registered or certified mail, postage prepaid, as set forth below:

 

 

If to Corporation, addressed to:

 

Barnabus Enterprises Ltd.

Suite 2410

West Georgia Street

Vancouver, British Columbia

Canada V6E 2N7

 

Attention: Chief Executive Officer

Fax (604) 682-5564

 

 

If to the Executive:

 

David Saltman

1758 Kennington Road

Encinitas CA 92027

Fax (760) 930-2691

 

 

 

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Notices shall be deemed given upon the earliest to occur of (i) receipt by the
party to whom such notice is directed; (ii) if sent by facsimile machine, on the
day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which
such notice is directed) such notice is sent if sent (as evidenced by the
facsimile confirmed receipt) prior to 5:00 p.m. Pacific Time and, if sent after
5:00 p.m. Pacific Time, on the day (other than a Saturday, Sunday or legal
holiday in the jurisdiction to which such notice is directed) after which such
notice is sent; (iii) on the first business day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
the day the same is deposited with the commercial carrier if sent by commercial
overnight delivery service; or (iv) the fifth day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
deposit thereof with the U.S. Postal Service as aforesaid. Each party, by notice
duly given in accordance therewith may specify a different address for the
giving of any notice hereunder.

 

12.        Binding Effect; Benefits. This Agreement will be binding upon and
will inure to the benefit of the parties hereto and their respective heirs,
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators or assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement. There are no
third party beneficiaries to this Agreement.

 

13.        Entire Agreement. This Agreement constitutes the final written
expression of all of the agreements between the Parties with respect to the
subject matter hereof and supersedes all understandings and negotiations
concerning the matters specified herein. No addition to or modification of any
provision of this Agreement will be binding upon any party unless made in
writing and signed by the party to be bound.

 

14.        Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of California, without reference
to principles of conflict of laws.

 

15           Withholding. The Corporation may withhold from any amounts payable
under this Agreement such taxes as shall be required to be withheld pursuant to
any applicable law or regulation.

16.        Headings. Headings of the Sections of this Agreement are for the
convenience of the parties only, and will be given no substantive or
interpretive effect whatsoever.

 

17.        No Conflict. The Executive represents and warrants that performance
of the terms of this Agreement will not breach or conflict with any agreement
entered into by the Executive, and that the Executive will not enter into any
agreement in conflict herewith.

 

18.        Assignability. Neither party hereto may assign any of its or his
rights or obligations hereunder without the prior written consent of the other
party hereto, which consent may be withheld in the sole discretion of such other
party.

 

19.        Waivers. The failure or delay of the Corporation at any time to
require performance by the Executive of any provision of this Agreement, even if
known, will not affect

 

 

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the right of the Corporation to require performance of that provision or to
exercise any right, power or remedy hereunder, and any waiver by the Corporation
of any breach of any provision of this Agreement should not be construed as a
waiver of any continuing or succeeding breach of such provision, a waiver of the
provision itself, or a waiver of any right, power or remedy under this
Agreement. No notice to or demand on the Executive in any case will, of itself,
entitle the Executive to any other or further notice or demand in similar or
other circumstances.

 

20.        Construction. Unless the context of this Agreement otherwise clearly
requires, (i) references in this Agreement to the plural include the singular,
the singular the plural, the masculine the feminine, the feminine the masculine
and the part the whole and (ii) the word “or” will not be construed as exclusive
and the word “including” will not be construed as limiting.

 

21.        No Strict Construction. This Agreement has been prepared jointly and
will not be strictly construed against either party.

 

22.        Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which shall together constitute one and the same agreement.

 

IN WITNESS WHEREOF, the Corporation and the Executive have executed this
Agreement on the day and year first above written.

 

 

BARNABUS ENTERPRISES LTD.

 

 

 

By:

/s/ Kerry Nagy

Kerry Nagy, Chief Executive Officer

 

 

 

 

/s/ David Saltman

David Saltman

 

 

 

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EXHIBIT A

STOCK GRANT VESTING PROVISIONS

 

Provided that the Agreement has not earlier been terminated, on each December
31, March 31, June 30 and September 30 commencing December 31, 2005 and ending
on June 30, 2008, 8,235,660 shares shall vest, and on September 30, 2008, all
the shares in the Stock Grant that remain unvested shall vest as set forth in
the following table:

 

Date of
Vesting

Shares Vesting on Date

Aggregate Shares Vested Through Date

Shares Remaining Unvested

 

 

 

 

 

 

 

8,235,662

December 31, 2005

686,305

686,305

7,549,357

March 31, 2006

686,305

1,372,610

6,863,052

June 30, 2006

686,305

2,058,915

6,176,747

September 30, 2006

686,305

2,745,220

5,490,442

December 31, 2006

686,305

3,431,525

4,804,137

March 31, 2007

686,305

4,117,830

4,117,832

June 30, 2007

686,305

4,804,135

3,431,527

September 30, 2007

686,305

5,490,440

2,745,222

December 31, 2007

686,305

6,176,745

2,058,917

March 31, 2008

686,305

6,863,050

1,372,612

June 30, 2008

686,305

7,549,355

686,307

September 30, 2008

686,307

8,235,662

0

 

In addition to the foregoing vesting milestones, all options vest immediately
upon (i) a termination of this Agreement due to the death or disability of the
Executive in accordance with Section 5(a) of the Agreement, or (ii) a
termination of this Agreement by the Corporation other than for Cause pursuant
to Section 5(b), or (iii) a termination by the Executive for Good Reason
pursuant to Section 5(c) or (iv) upon a Change of Control as that term is
defined in Section 5(c).

 

All share amounts in this Exhibit A shall be adjusted for stock splits,
consolidations, reorganizations and similar transactions. All section references
herein are to sections of the Agreement of which this Exhibit is a part.

 

 

 

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