Document:

ex10_3.htm

 

PRODUCTION PURCHASE AGREEMENT

This Production Purchase Agreement (the “Agreement”) is entered into this 27 day of January 2010 by and between NaturalShrimp Corporation, a Delaware corporation whose address for notice purposes is 2068 N. Valley Mills Dr., Waco, Texas 76710 (hereafter “Seller”) and Nature’s Prime Organic Farms LLC, a Minnesota corporation, whose address for notice purposes is 2420 Chaska Blvd., Chaska, Minnesota 55318 (hereafter, “Purchaser”).  Each of the parties is herein referred to singularly as a “Party” and collectively as the “Parties.”

Recitals

a.           Seller is a producer and is engaged in the business of growing shrimp in a regulated closed and secure environment on a wholesale and retail basis and desires to sell or have distributed Seller’s shrimp production in a timely manner; and

b.           Purchaser is a purchaser of natural organic foods, which are appropriately certified by applicable governmental agencies as “organic” and desires to acquire Seller’s shrimp production under terms and conditions hereafter set forth.

Agreements

NOW THEREFORE, for and in consideration of the mutual promises and obligations hereafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

1.           Minimum Quantities.  Seller will produce, sell and make available to Purchaser and Purchaser will purchase Seller’s shrimp production grown at Seller’s La Coste, Texas facilities and other facilities that may be constructed from time to time (collectively, the “Facilities”).  It is anticipated that the initial shrimp production from the Facilities shall not be less than 500 pounds of shrimp per two-week period (the “Minimum Quantity”).  Upon commencement of the Initial Delivery Date (scheduled for the first week in February 2010), Seller will deliver to Purchaser shrimp production for each two-week period at the Facilities, FOB, La Coste, Texas.  Unless otherwise agreed in writing and annexed here to as an amendment, each pound of shrimp shall consist of approximately 18-25 heads-on shrimp per pound delivered to Purchaser.  In the event that Seller produces shrimp in amounts in excess of the Minimum Quantities, Seller shall sell and deliver the excess production to Purchaser and Purchaser shall accept and pay for (as hereafter set forth) all shrimp production in excess of the Minimum Quantity.

 

2.           Price/Payment.  The price charged by Seller to Purchaser for each pound of shrimp will be $6.00 per pound.  Purchaser agrees to send a fifty percent deposit on each order maturing for delivery thirty days before scheduled shipment and pay the balance by electronic bank transfer seven days before shipment. If during the initial growing period, Seller has more shrimp available than the Minimum Quantity for the delivery period, Seller shall notify Purchaser of the amount of shrimp in excess of the Minimum Quantity ten (10) days prior to the projected shipment date and Purchaser shall purchase the excess quantity, less amounts received by Seller in advance, by electronic bank transfer.

3. Rolling Grow-Out.  Seller will continue to stock its tanks with new crops of post-larvae shrimp (PLs) so that as one crop matures, is sold and delivered, new crops of shrimp will be available for purchase on a weekly or bi-weekly basis.

 

4.           Territory.  As long as Purchaser purchases, accepts delivery of and pays for the  shrimp delivered or available for delivery as set forth herein and is not otherwise in default hereof, Purchaser shall have the exclusive right to market, sell and distribute Seller’s shrimp in the following States:  Minnesota, Iowa, Wisconsin, Illinois, North Dakota, South Dakota, Nebraska, Wyoming, Montana and Colorado (the “Territory”).

5.           Term.  Except as otherwise provided herein, this Agreement will commence on the date first set forth above and will continue for a period of twelve (12) months (the “Initial Term”).  The Agreement shall automatically renew for an additional twelve (12) months on the anniversary of this Agreement unless terminated by either Party on sixty (60) days prior written notice (the Subsequent Term”).  Notwithstanding the foregoing, this Agreement may further be terminated by the Parties as follows:

a.           By Seller in the event that Purchaser materially breaches this Agreement or is in default hereunder and such default continues, after written notice and opportunity to cure for a period of thirty (30) days.

b.           By Purchaser in the event that Seller materially breaches this Agreement or is in default hereunder and such default continues, after written notice and opportunity to cure for a period of thirty (30) days.

In the event that the default if of such a nature that same cannot be cured within such thirty (30) day period, the Party receiving the written notice shall not be in default hereunder if such Party commences a cure within such thirty (30) day period and proceeds with due diligence to cure same.

6.           Marketing/Packaging.  Seller’s shrimp production will be private labeled by Purchaser, using Purchaser’s name and logo.  Purchaser is responsible for the content of its labels and packaging and will provide all of such packaging to Seller at no cost or expense to Seller for use by Seller in packaging the shrimp production for delivery to Purchaser.  Purchaser will ensure that all packaging, labels and disclaimers satisfy all state and federal requirements and will defend, save and hold Seller harmless and indemnify Seller of and from any claims or causes action that may arise as a result of mis-labeling any packaging.

7.           Indemnification.  Seller will indemnify, defend and hold harmless Purchaser against any claims, demands, liabilities, damages, losses, actions, judgments, fines, costs, and fees related to or arising out of in any way:  (i) Seller’s negligence, (ii) claims for product liability, product defects, or other such similar claims, if such claims are related to Seller’s actions, statements or representations, (iii) Seller’s violation of any applicable federal, state or local laws, ordinances or regulations, or (iv) Seller’s breach of any of its representations, warranties, duties or obligations in this Agreement.  Purchaser will indemnify, defend and hold harmless Seller from or against any claims, demands, liabilities, damages, losses, actions, judgments, fines, costs, and fees related to or arising out of in any way:  (i) Purchaser’s negligence, (ii) claims for product liability, product defects, or other such similar claims if such claim is related to Purchaser’s labels, actions, statements, or representations, (iii) Purchaser’s violation of any applicable federal, state or local laws, ordinances or regulations including, without limitation claims arising out of labeling or packaging, or (iv) Purchaser’s breach of any of its representations, warranties, duties or obligations in this Agreement.

8.           Notices.  All notices under this Agreement will be written and delivered by the United States mail, postage prepaid, by fax or by FedEx, to the party to be notified.  Such notices will be deemed properly given and addressed if addressed at the addresses specified in this Agreement.

9.           Assignment.  Neither party may assign or transfer this Agreement without the parties’ written consent.  However, either party may assign this Agreement to any related division or a related or successor corporation.

10.           Modification and Waiver.  This Agreement may only be modified in writing, signed by the parties.  The waiver by either party of a default or a breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent default or breach.

11.           Compliance with Laws.  Purchaser and Seller will comply with all applicable laws, regulations and ordinances in performing its obligations under this Agreement.

12.           Applicable Law.  The laws of the State of Texas will govern this Agreement, and its validity, interpretation, construction or performance.

13.           Severability.  If any provision of this Agreement is declared to be illegal, invalid or unenforceable, such provision(s) will be severed from this Agreement.  Any illegal, invalid or unenforceable provision will not affect the validity or the enforceability of this Agreement or its remaining provisions. In lieu of such provision, a provision that is as similar in terms to such illegal, invalid or unenforceable provision as may be possible but that is legal, valid or enforceable will be automatically added to this Agreement.

14.           Entire Agreement.  This Agreement contains the entire understanding and agreement of the parties.  There are no other representations, covenants, promises or undertakings other than those in this Agreement.  Neither party is relying upon any representation, covenant, promise or undertaking other than those in this Agreement.  Neither party has been induced into entering into this Agreement by any promise, representation, warranty, covenant, warning or inducement of the other party, except for those in this Agreement.  Each party represents that it has read and understands this Agreement and its terms.  Each party agrees that this Agreement is enforceable against it in accordance with its terms.

Dated and effective as of the date first set forth above.

NATURES PRIME ORGANIC FARMS LLC

/s/ James R. Albrecht,

                                                                                                    By James R. Albrecht

Title Managing Director

NATURALSHRIMP CORPORATION

/s/ Bill G. Williams

By       Bill G. Williams

Title    Chief Executive Officerex10_6.htm

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this "Agreement") dated as of January 1, 2008 (the "Commencement Date") is by and between NaturalShrimp Corporation, a Texas corporation ("Employer"), and Douglas H. Ernst ("Employee" and, together with Employer, the "Parties" and each individually, a "Party").

 

RECITALS:

 

A.Employer and Employee wish to enter into this Agreement so as to establish their

understanding with respect to the employment of Employee by Employer as set forth herein.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants contained herein, each Party agrees as follows:

 

1. Employment Term. This Agreement will remain in effect from the Commencement Date until this Agreement is properly terminated in accordance with its express terms (the "Employment Term").

 

2. Responsibilities and Authority. Employer hereby employs Employee to serve as its Vice President of Science & Technology. In such capacity, Employee will have such duties and responsibilities as determined by Employer's Board of Directors consistent with the Employer's Bylaws.

 

3. Acceptance of Employment. Employee accepts employment by Employer on the terms and conditions herein provided and agrees, subject to the terms of this Agreement, to devote all of Employee's full business time to Employer's affairs.

 

4. Compensation and Benefits. As compensation for Employee's services hereunder, Employee will be entitled to the following:

 

4.1Base Salary. From and after the Commencement Date, Employee will receive a base salary at the rate of $75,000 per annum ("Base Salary"). The Base Salary will be paid in substantially equal installments in accordance with Employer's regular payroll practices, as in effect from time to time, and subject to all appropriate withholdings.

 

4.2Cost of Living. From the date of this agreement and upon each annual twelve months of employment, employee will receive an increase in base salary of at least 3% per annum.

 

4.3Bonus. One or more bonuses may be paid to Employee at such times and in such amounts as may be determined in the sole discretion of Employer's Board of Directors. If awarded, payment of any such bonus will be subject to all appropriate withholdings.

 

4.4Benefits. Employee will be entitled to receive the benefits specified on Exhibit A ("Benefits"). In addition, Employer will reimburse Employee for all authorized expenses reasonably incurred or paid by Employee in connection with the performance of Employee's services under this Agreement upon presentation of expense statements or vouchers and such other supporting information as Employer may from time to time reasonably require or request ("Reimbursable Expenses").

 

5.Termination; Payments upon Termination. This Agreement may be terminated upon the following terms:

 

5.1Termination Upon Death. If Employee should die during the Employment Term, this Agreement will terminate on the date of death. All Base Salary through such date and any amounts owed for Reimbursable Expenses that Employee incurs through such date, as well as any previously awarded but unpaid bonuses, will be paid to Employee's designated beneficiary as promptly as practicable following the date of death. All Benefits will, unless otherwise expressly set forth on Exhibit A, otherwise provided by Employer policy applicable to its employees generally, or otherwise required by applicable law, terminate on the date of death.

 

5.2Termination Upon Total Disability. Employer may terminate this Agreement because of Employee's Total Disability upon at least 30 days' prior notice to Employee, which notice will specify the effective date of termination. The Base Salary will continue to be paid to Employee through the date of termination, and any amounts owed for Reimbursable Expenses that Employee incurs through such date and any previously awarded but unpaid bonuses will be paid as promptly as practicable following termination. All Benefits will, unless otherwise expressly set forth on Exhibit A, otherwise provided by Employer policy applicable to its employees generally, or otherwise required by applicable law, terminate on the date of termination. "Total Disability" means an illness or other physical or mental disability of Employee that makes it impossible or impracticable for Employee to perform any of Employee's material duties and responsibilities hereunder (with whatever reasonable accommodation may be required by applicable law) for a period of at least six (6) months in the aggregate during any 12-month period during the Employment Term. If a disagreement arises between Employee and Employer as to whether Employee is suffering from Total Disability, such issue will be determined by a physician designated by a majority of Employer's Board of Directors. If Employee disagrees with the conclusion of such physician, then such physician and Employee's physician will choose a mutually acceptable physician to make such determination.

 

5.3Termination by Employer With Cause. Employer will be entitled to terminate Employee's employment at any time for Cause. The Base Salary will continue to be paid to Employee through the date of termination, and any amounts owed for Reimbursable Expenses that Employee incurs through such date and any previously awarded but unpaid bonuses will be paid to Employee following termination. All Benefits will, unless otherwise required by applicable law, terminate on the date of termination. "Cause" will constitute any one of the following:

 

(a) Employee's continued failure to perform substantially Employee's duties and responsibilities (other than a failure resulting from a Total Disability);

 

(b) Employee engaging in willful, reckless, or grossly negligent misconduct that is materially injurious to Employer or any of its affiliates, monetarily or otherwise;

 

(c) Employee is charged with a felony or a crime involving moral turpitude;

 

(d) Employee commits an act of fraud, misappropriation, or material personal dishonesty; that is materially injurious to Employer or any of its affiliates, monetarily or otherwise, and

(e) Employee commits a breach of this Agreement and fails to cure such breach within 30 days from the date that Employer gives notice thereof to Employee identifying the provision of this Agreement that Employer has determined has been breached.

 

5.4Termination by Employer Without Cause. Employer may at any time terminate Employee's employment without Cause. In such event, the Base Salary will continue to be paid through the date of termination, and any amounts owed for Reimbursable Expenses that Employee incurs through such date and any previously awarded but unpaid bonus will be paid to Employee promptly following termination. Employer will also continue pay Employee, as severance, the Base Salary for a period of sixty days following the date of termination. All Benefits will, unless otherwise expressly set forth on Exhibit A, otherwise provided by Employer policy applicable to its employees generally or otherwise required by applicable law, terminate on the date of termination.

 

5.5Termination by Employee With Good Reason. Employee will be entitled to terminate Employee's employment at any time for Good Reason. In such event, the Base Salary will continue to be paid through the date of termination, and any amounts owed for Reimbursable Expenses that Employee incurs through such date and any previously awarded but unpaid bonus will be paid to Employee promptly following termination. Employer will also continue pay Employee, as severance, the pro-rated amount of employee's Base Salary for a period of sixty days following the date of termination. All Benefits will, unless otherwise expressly set forth on Exhibit A, otherwise provided by Employer policy applicable to its employees generally or otherwise required by applicable law, terminate on the date of termination. For purposes of this Agreement, "Good Reason" shall exist upon the occurrence of any of the following events or matters, in each case without Employer first being in receipt of Employee's written consent thereto, and the period of time within which Employee shall be required to exercise a Good Reason termination of service shall be thirty days, measured from the date upon which he is notified by Employer of such occurrence, or, with respect to the matter identified in clause (b) below, from the date upon which Employee notifies Employer of his belief that a material breach has occurred:

 

(a) A material adverse change in, or a substantial elimination of the duties and responsibilities of Employee;

 

(b) A material breach by Employer of its obligations hereunder;

 

(c) a reduction in Employee's Base Salary; or

 

(d) any refusal by Employer to permit Employee to engage in activities which

 

do not violate Employee's obligations under Section 7 of this Agreement.

 

5.6 Termination by Employee Without Good Reason. Employee may at any time terminate Employee's employment without Good Reason. In such event, the Base Salary will continue to be paid to Employee through the date of termination, and any amounts owed for Reimbursable Expenses that Employee incurs through such date and any previously awarded but unpaid bonuses will be paid to Employee following termination. All Benefits will, unless otherwise expressly set forth on Exhibit A, otherwise provided by Employer policy applicable to its employees generally or otherwise required by applicable law, terminate on the date of termination. 

 

5.7 Effect of Termination. Except as expressly provided in this Section 5 and except for the obligations set forth in Sections 6, 7 and 8, all further obligations of theParties under this Agreement will terminate upon termination of Employee's employment with Employer. 

 

6. Restrictive Covenants. Employee hereby acknowledges that, as a result of Employee's employment by Employer hereunder, Employee will receive special training and education with respect to the operations of Employer's and/or Employer's affiliates' businesses and other related matters that is a trade secret of Employer or is otherwise held in confidence by employer, ("Confidential Information"), and business and professional contacts. In consideration of such special and unique opportunities afforded by Employer and its affiliates to Employee as a result of Employee's employment, the Employee hereby agrees that Employee will not: 

 

6.1 For sixty (60) days after Employer or any of its affiliates no longer employs Employee (the date on which such person no longer employs Employee is hereinafter referred to as the "Employment Termination Date"), directly or indirectly, alone or as a partner, joint venture, officer, director, member, employee, consultant, agent, independent contractor, or equity interest holder of, or lender to, any person or business, engage in any business that is in competition with any business in which Employer or any of its affiliates is engaged as of the Employment Termination Date (a "Competitive Business"), and that is within a 10-mile radius of any location at which Employer or any of its affiliates engages in such business at the time Employee commences to engage in such competitive activity. 

 

6.2 For one (1) year after the Employment Termination Date, directly or indirectly (i) induce any person that is a customer of Employer or any of its affiliates to enter into any Contract with or otherwise patronize any business directly or indirectly in competition with the Competitive Business conducted by Employer or any of its affiliates; (ii) canvass, solicit, or accept from any person who is a customer of Employer or any of its affiliates any such Competitive Business; or (iii) request or advise any person who is a customer, vendor, or lessor of Employer or any of its affiliates, to withdraw, curtail, or cancel any such customer's, vendor's, or lessor's business with Employer or any of its affiliates; provided, however, that a general solicitation or advertisement originating outside of, and not specifically targeted to or reasonably expected to target, the territory as to which Employee is restricted from engaging in such competitive business as provided above under this Agreement at such time, will not be deemed in and of itself to violate the prohibitions of (i) or (ii) of this Section 6.2. 

 

6.3 For the twelve (12) months after the Employment Termination Date, directly or indirectly employ, or knowingly permit any affiliate of Employee to employ, any person whom Employer or any of its affiliates employed within the prior six months. 

 

6.4 For one (1) year after the Employment Termination Date, directly or indirectly (i) solicit for employment or other similar relationship with Employee, any of Employee's affiliates or any other person, any employee of Employer or any of its affiliates, or any person who was an employee of Employer or any of its affiliates, within the six-month period immediately preceding such solicitation of employment, other than such person (A) whose employment was terminated by the applicable person, or (B) who independently responded to a general solicitation for employment by Employee or Employee's affiliate; or (ii) induce, or attempt to induce, any employee of Employer or any of its affiliates, to terminate such employee's employment relationship with such person. 

 

6.5 Employee will not use for Employee's personal benefit, disclose, communicate, divulge to, or use for the direct or indirect benefit of any person other than Employer or any of its affiliates any of such persons' Confidential Information. This Section 6.5 will apply during and after the period when Employee is an employee of Employer or any of its affiliates and will be in addition to (and not a limitation of) any legally applicable protections of Employer's interest in Confidential Information, trade secrets and the like. Employer acknowledges that "Confidential Information" does not include information which (a) was known to Employee before receipt from Employer; (b) is or becomes publicly available through no fault of Employee; (c) is rightfully received by Employee from a third party without a duty of confidentiality; (d) is disclosed by Employer to third party without a duty of confidentiality on the third party; (e) is independently developed by Employee without a breach of this Agreement; or (f) is disclosed by Employee with the Employer's prior written approval. Further, subject to Section 6.6 below, the Parties agree that "Confidential Information" does include general knowledge, skills and experience (including ideas, concepts, know-how and techniques) related to Employer's business ("General Knowledge") and that the subsequent use Employee of such General Knowledge as retained in his unaided memories, without reference to Confidential Information in written, electronic, or other fixed form, shall not constitute a breach of this Agreement. 

 

6.6 Except for Employee's pre-existing unrelated intellectual property, as defined in the attached "Amendments to the Employment Agreement" (Exhibit B) and other copyrighted works, any and all writings, inventions, improvements, processes, procedures advances, discoveries, works of authorship, and/or techniques ("Developments") that Employee may make, conceive, discover, or develop, whether or not patentable, copyrightable, or protectable under mask works legislation or trademark laws, either solely or jointly with any other person, at any time during the Employment Term, whether or not during working hours and whether or not at the request or upon the suggestion of Employer or any of its affiliates, that relate to or are useful in connection with any business now or hereafter carried on or contemplated by Employer or such affiliate, including developments or expansions of its present fields of operations, will be Employer's sole and exclusive property. Employee hereby assigns to Employer and/or Employer's nominees all of Employee's right, title, and interest in any Developments, and hereby irrevocably designates and appoints Employer and each of Employer's duly authorized officers and agents as Employee's agent and attorney-in-fact to act for and in Employee's behalf and stead to execute and file any document and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of Developments. Employee will make full disclosure to Employer of all such Developments and will do everything necessary or desirable to vest the absolute title thereto in Employer. Employee will write and prepare all specifications and procedures regarding such Developments and otherwise aid and assist Employer or any of its affiliates so that Employer or such affiliate, as the case may be, can prepare and present applications for copyright, letters patent therefor and can secure such copyright, letters patent, mask works, or trademark registrations, wherever possible, as well as reissues, renewals, and extensions thereof, and can obtain the record title to such copyright, letters patent, mask works, or trademark registrations so that Employer and/or its nominees will be the sole and absolute owner(s) thereof in all countries in which it may desire to have copyright, patent, mask work, or trademark protection. Employee will not be entitled to any additional or special compensation or reimbursement regarding any and all such Developments. These obligations will continue beyond the termination of employment for Developments that Employee conceives of or makes, in full or in part, during the Employment Term. Employer will pay Employee a reasonable hourly rate for work as well as Employee's out of pocket expenses incurred in connection with such work. These obligations will continue beyond the termination of employment for Developments that Employee conceives of or makes, in full or in part, during the Employment Term.  

 

6.7 Notwithstanding the foregoing, the beneficial ownership of less than five percent (5%) of the equity interests of any person having a class of equity interests actively traded on a national securities exchange or over-the-counter market will not be deemed, in and of itself, to breach the prohibitions of this Section 6. Employee agrees and acknowledges that the restrictions in this Section 6 are reasonable in scope and duration and are necessary to protect Employer and its affiliates. If any provision of this Section 6, as applied to either Party or to any circumstance, is adjudged by a governmental body, arbitrator, or mediator not to be enforceable in accordance with its terms, the same will in no way affect any other circumstance or the enforceability of the remainder of this Agreement. If any such provision, or any part thereof, is held not to be enforceable in accordance with its terms because of the duration of such provision, the area covered thereby, or the scope of the activities covered, the Parties agree that the governmental body, arbitrator, or mediator making such determination will have the power to reduce the duration, area, and/or scope of activities of such provision, and/or to delete specific words or phrases, and in its reduced form such provision will then be enforceable in accordance with its terms and will be enforced. The Parties agree and acknowledge that the breach of any provision of this Section 6 will cause irreparable Damage to Employer and its 'affiliates and upon breach of any provision of this Section 6, Employer and its affiliates will be entitled to injunctive relief, specific performance, or other equitable relief without bond or other security; provided, however, that the foregoing remedies will in no way limit any other remedies that Employer or its affiliates may have. Employer may, without notifying Employee, notify any subsequent employer of Employee of Employee's rights and obligations under this Section 6. 

 

7.CONFLICTS OF INTEREST.

 

7.1Employee represents to Employer as follows: (a) there are no restrictions, agreements, or understandings, oral or written, to which Employee is a party or by which Employee is bound that prevent or make unlawful Employee's execution or performance of this Agreement, and (b) Employee does not have any business or other relationship that creates a conflict between the interests of Employee and Employer. 

 

7.2Employee recognizes and agrees that Employee owes Employer and its affiliates a fiduciary duty of loyalty, fidelity, and allegiance to act at all times in the best interests of Employer and its affiliates and to do no act which might injure the business, interests, or reputation of Employer or any of its affiliates. Employee's duty of loyalty will extend throughout the Employment Term and will continue following termination of this Agreement to the extent set forth in this Agreement and as recognized by applicable law. In keeping with Employee's fiduciary duty to Employer and its affiliates, Employee agrees that, during the Employment Term, Employee will not knowingly become involved in a conflict between his personal interests and those of Employer or any of its affiliates, and, upon discovery thereof, will not willfully allow such conflict of interest to continue. Employee agrees to disclose in writing to Employer any facts that could reasonably be expected to involve a material conflict of interest upon Employee's conscious awareness that such a material conflict could exist. Employee recognizes that it is impossible to provide an exhaustive list of actions or activities that constitute or might constitute a conflict of interest, but recognizes that these actions or activities may include the following: 

 

(a) ownership of more than a 5% interest in any supplier, contractor, customer, or other person that does business with Employer or any of its affiliates; 

 

(b) acting in any capacity, including as a director, officer, employee, partner, consultant, or agent, for any supplier, contractor, customer, or other person that does business with Employer or any of its affiliates; 

 

(c) acceptance, directly or indirectly, of payments, services, or loans (other than entertainment, gifts, or other sales incentives that may be furnished in the Ordinary Course of Business) from a supplier, contractor, customer, or other person that does business with Employer or any of its affiliates; 

 

(d) misuse or disclosure of information of any kind obtained through Employee's relationship with Employer; and  

 

(e) appropriation by Employee or diversion to any other person, directly or indirectly, of any business opportunity in which it is known or could reasonably be anticipated that Employer or its affiliates would be interested. 

 

In further recognition of the fiduciary duties Employee owes to Employer and its affiliates, Employee agrees that all documentation that Employee provides to Employer will be accurate in all material respects, when taken as a whole and in light of the circumstances in which it was made. 

 

8.Payments In Certain Circumstances Following a "Change in Control" of Employer. 

 

8.1"Change in Control" means (a) the acquisition, other than from Employer, by any individual, entity, or group of beneficial ownership of 50% or more of either the then outstanding shares of common stock of Employer or the combined voting power of the then outstanding voting securities of Employer entitled to vote generally in the election of directors; or (b) approval by the stockholders of Employer of (i) a reorganization, merger, consolidation, share exchange, or similar form of reorganization of Employer with respect to which the individuals and persons who were the respective beneficial owners of the common stock and voting securities of Employer immediately prior to such reorganization, merger, or consolidation do not, following such reorganization, merger, or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding equity interests and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the person resulting from such reorganization, merger or consolidation, (ii) a complete liquidation or dissolution of Employer, or (iii) sale or other disposition of all or substantially all of Employer's assets. 

 

8.2 Subject to Section 8.3, upon the occurrence of a Change in Control, Employee may elect, within 30 days of such Change in Control, to terminate this Agreement by written notice to Employer and, in such event, will receive from Employer, within 30 days following the Employment Termination Date, a lump sum payment equal to a pro-rated amount of employee's Base Salary for a period of sixty days. All payments made pursuant to this Section 8.2 will be in lieu of, and not in addition to, payments would otherwise be made as a result of a termination without Cause pursuant to Section 5.4. 

 

8.3 To the extent that any payment or distribution of any type to or for the benefit of Employee by Employer, any affiliate of Employer, any person who acquires ownership or effective control of Employer or ownership of a substantial portion of Employer's assets (within the meaning of Section 280G of the Code and the regulations thereunder), or any affiliate of such person, whether paid or payable or distributed or distributable under this Agreement or otherwise ("Payments"), is or will be subject to the excise tax imposed under Section 4999 of the Code (the "Excise Tax"), then Employee will be entitled to receive an additional payment (a "Gross-Up Payment") from Employer in an amount such that after payment by Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax, or Excise Tax, imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. The determination of whether the Payments are subject to the Excise Tax and, if so, the amount of the Gross-Up Payment, will be made by an accounting firm selected by Employer (the "Accounting Firm"). The Accounting Firm will provide its determination (the "Determination"), together with detailed supporting calculations and documentation, to the Parties within 20 days of the Employment Termination Date. If the Accounting Firm determines that no Excise Tax is payable by Employee with respect to the Payments, it will furnish the Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payments and, absent manifest error, such Determination will be binding, final and conclusive upon the Parties. To avoid misunderstanding, the intent of this Section 8.3 is for Employee to retain, after payment of all taxes associated with the Payments and the Gross-Up Payment, an aggregate amount that will equal the amount that Employee would have retained if Section 4999 had not applied to the Payments. 

 

9. Miscellaneous.

 

9.1 Entire Agreement. This Agreement, the attached "Amendments to the Employment Agreement" (Exhibit B) and the certificates, documents, instruments and writings that are delivered pursuant hereto constitutes the entire agreement and understanding of the Parties in respect of its subject matters and supersedes all prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof or the Transactions. Except as expressly contemplated hereby and except for Employer's affiliates, each of which will be deemed a third party beneficiary of all obligations of Employee under this Agreement, there are no third party beneficiaries having rights under or with respect to this Agreement. 

 

9.2 Successors. All of the terms, agreements, covenants, representations, warranties, and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the Parties and their respective successors. 

 

9.3 Assignment. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of Employer and Employee; provided, however, that Employer may (a) assign any or all of its rights and interests hereunder to one or more of its affiliates and (b) designate one or more of its affiliates to perform its obligations hereunder (in any or all of which cases Employer nonetheless will remain responsible for the performance of all of its obligations hereunder). 

 

9.4 Notices. All notices, requests, demands, claims and other communications hereunder will be in writing. Any notice, request, demand, claim or other communication hereunder will be deemed duly given if (and then three business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

 

If to Employer:

 

Natural Shrimp Corporation

 

Attn: President

 

P.O. Box 400

La Coste, Texas 78039

Tel:            (830) 762-3200

Fax: (830) 762-3302

 

If to Employee:

 

Attn: Douglas H. Ernst P.O. Box 400

LaCoste, Texas 78039 Tel: (830) 762-3200 Fax: (830) 762-3302

 

Either Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Either Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

 

    9.5 Specific Performance. Each Party acknowledges and agrees that the other Parties would be damaged irreparably if any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached. Accordingly, each Party agrees that the other Party will be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and its terms and provisions in any Action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter, in addition to any other remedy to which they may be entitled at law or in equity. 

 

    9.6 Arbitration. Any controversy or claim by either Party arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration in accordance with the Commercial Rules of the American Arbitration Association by a single arbitrator to be located in Austin, Travis County, Texas, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof, and shall not be appealable by either Party. Each Party shall be responsible for paying its respective costs relating to any arbitration pursuant to this Agreement, including any related attorneys fees. 

 

    9.7 Time. Time is of the essence in the performance of this Agreement 

 

    9.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.

 

    9.9 Headings. The article and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.

 

    9.10 Governing Law. This Agreement and the performance of the Parties' obligations hereunder will be governed by and construed in accordance with the laws of the State of Texas, without giving effect to any choice of law principles.

 

    9.11 Amendments and Waivers. No amendment, modification, replacement, termination, or cancellation of any provision of this Agreement will be valid, unless the same will be in writing and signed by the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising because of any prior or subsequent such occurrence.

 

    9.12 Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof; provided that if any provision of this Agreement, as applied to any Party or to any circumstance, is adjudged by a governmental body, arbitrator, or mediator not to be enforceable in accordance with its terms, the Parties agree that the governmental body, arbitrator, or mediator making such determination will have the power to modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced.

 

    9.13 Expenses. Except as otherwise expressly provided in this Agreement, each Party will bear its own costs and expenses incurred in connection with the preparation, execution and performance of this Agreement and the Transactions including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.

 

    9.14 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party because of the authorship of any provision of this Agreement. Any reference to any federal, state, local, or foreign law will be deemed also to refer to law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. The words "include," "includes," and "including" will be deemed to be followed by "without limitation." Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words "this Agreement," "herein," "hereof," "hereby," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The Parties intend that each representation, warranty, and covenant contained herein will have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached will not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, or covenant.

 

    9.15 Incorporation of Exhibits, Annexes, and Schedules. The Exhibits, Annexes, Schedules and other attachments identified in this Agreement are incorporated herein by reference and made a part hereof.

 

    9.16 Remedies.Except as expressly provided herein, the rights, obligations and remedies

created by this Agreement are cumulative and in addition to any other rights, obligations, or remedies otherwise available at law or in equity. Except as expressly provided herein, nothing herein will be considered an election of remedies.

 

9.17 Electronic Signatures.

 

(a) Notwithstanding the Electronic Signatures in Global and National Commerce Act (15 U.S.C. Sec. 7001 et.m.), the Uniform Electronic Transactions Act, or any other law relating to or enabling the creation, execution, delivery, or recordation of any Contract or signature by electronic means, and notwithstanding any course of conduct engaged in by the Parties, no Party will be deemed to have executed this Agreement or other document contemplated thereby (including any amendment or other change thereto) unless and until such Party shall have executed this Agreement or other document on paper by a handwritten original signature or any other symbol executed or adopted by a Party with current intention to authenticate this Agreement or such other document contemplated.

 

(b) Delivery of a copy of this Agreement or such other document bearing an original signature by facsimile transmission (whether directly from one facsimile device to another by means of a dial-up connection or whether mediated by the worldwide web), by electronic mail in "portable document format" (".pdf') form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature. "Originally signed" or "original signature" means or refers to a signature that has not been mechanically or electronically reproduced.

 

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

EMPLOYER: NaturalShrimp Corporation

 

By:                                          

Name: Gerald Easterling Title: President

 

EMPLOYEE:

 

 

Name: Douglas H. Ernst, individually

 

 

	
  

	
1. The Company will provide Douglas H. Ernst and his spouse with health insurance, on the terms generally made available to the officers of the Company.

 

 

Exhibit B

 

Amendment to Employment Agreement

 

The following statements constitute amendments (1-5) to the Employment Agreement between NaturalShrimp Corporation ("Employer") and Douglas H. Ernst ("Ernst"). The amendments apply to all sections of the Employment Agreement that pertain to rights of intellectual property, ownership, assignment, and licensing, including all language in sections 6 and 7 of the Employment Agreement.

 

	
1.  

	
Ernst will continue to have and maintain exclusive copyright, ownership, assignment, and licensing rights of AquaFarm software (C) Douglas H. Ernst, 2000 — 2008) for all software components, including mathematical and rule-based algorithms and models, graphical user interfaces, documentation, and database files, as described in;

 

· www.aquafarm.com and Aquafarm software (all version)

 

	
·  

	
Ernst, D.H., Bolte, J.P., Nath, S.S., 2000. AquaFarm: simulation and decision support for aquaculture facility design and management planning. Aquacultural Engineering (23)1-3, pp. 121-179.

 

	
·  

	
Ernst, D.H., 2000. AquaFarm: simulation and decision support aquaculture facility design and management planning. PhD Dissertation, Oregon State University, Corvallis, Oregon. 383pp.

 

	
2.  

	
During the course of Ernst's employment with Employer, it is anticipated that refinements and enhancements to AquaFarm software will be made to all software components previously listed. Ernst will maintain exclusive copyright, ownership, assignment, and licensing rights of all such refinements and enhancements.

 

	
3.  

	
Ernst will continue to have and maintain all rights for marketing, beta-testing, licensing, and distributing AquaFarm software to the aquaculture industry.

 

	
4.  

	
As to AquaFarm software and all refinements and enhancements thereof, Ernst agrees to and does hereby grant to Employer a non-exclusive perpetual license to use same as part of the business plan, research, and development of Employer.

 

	
5.  

	
All database files developed through the use of AquaFarm software for the specific business and technical purposes of Employer will be under the sole ownership of Employer. Under no circumstances will distributed AquaFarm software violate the intent and spirit of Ernst's employment with Employer.

 

EXECUTED this 1st Day of January, 2008

 

BY EMPLOYER: NaturalShrimp Corporation, Inc.

 

/s/ Gerald Easterling, President

 

 

By. Employee: /s/ Douglas Ernst, Individually

 

EXHIBIT C

 

Amendment to the Employment Agreement

 

The following statement constitutes amendment number 6 to the Employment Agreement between NaturalShrimp Corporation ("Employer") and Douglas H. Ernst ("Ernst"). The amendment applies to sections 5.4 & 5.5 of the Employment Agreement that pertain to the length of the severance package in case of termination by employer without cause or termination by employee with good cause. This amendment will override the language in the agreement and will allow for Employee to receive a severance package of twelve months as opposed to the stated length in the agreement of sixty days.

 

 

EXECUTED this 1st Day of January, 2008

 

BY EMPLOYER: NaturalShrimp Corporation, Inc.

 

/s/ Gerald Easterling, President

 

 

By. Employee: /s/ Douglas Ernst, Individually

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