Document:

ex10-5.htm

Exhibit 10.5

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into on December 15, 2015 by and between Exactus BioSolutions Corporation, a Delaware corporation, having an address of 4870 Sadler Rd Suite 300 Glen Allen VA 23238 (the “Company”), and Mr. Timothy J. Ryan (the “Executive”).

 

WHEREAS the Company is engaged in the business of developing, manufacturing, and distributing point-of-care diagnostic products to customers throughout the United States and Europe (the “Business”) and

 

WHEREAS the Company desires to employ the Executive as its Executive Vice-President.  Executive will oversee corporate development activities focused in the areas of funding, investor relations and corporate communications and report to the President and Chief Executive Officer;

 

AND THEREFORE in consideration of the mutual promises, terms, provisions and conditions set forth in this Agreement, the parties hereby agree as follows:

 

1.           Employment.  Subject to the terms and conditions set forth in this Agreement, the Company hereby offers and the Executive hereby accepts employment with the Company.

 

2.           Term.  The Executive’s employment hereunder shall commence effective as of December 15, 2015 (the “Effective Date”) and shall continue until terminated on the terms and conditions set forth herein.  The Term of this Agreement is hereafter referred to as “the term of this Agreement” or “the term hereof.”

 

3.           Capacity and Performance; Location.

 

(a)           During the term hereof, the Executive shall serve as the Executive-President of the Company.  In addition, and without further compensation, the Executive shall be appointed to serve on the Board of Directors of the Company (the “Board”).  So long as Executive remains an Executive Officer of the Company the Company will recommend to its members or stockholders, as applicable, that Executive be elected to the Board of Directors at each meeting of stockholders or in connection with each action by written consent pursuant to which Executive may be elected.

 

(b)           During the term hereof, the Executive shall be employed by the Company on a full-time basis, shall have all powers and duties consistent with his position, subject to the direction and control of the President and Chief Executive Officer and shall perform such other duties and responsibilities on behalf of the Company as may reasonably be designated from time to time.  The Executive shall require the approval of the President and Chief Executive Officer to pursue or enter into any transaction or group of related transactions that are not in the ordinary course of business and would be material to the Company.

 

(c)           During the term hereof, the Executive shall devote sufficient time and his best efforts, business judgment, skill and knowledge to the advancement of the business and interests of the Company and to the discharge of his duties and responsibilities hereunder.  The Executive shall comply with all written policies of the Company in effect from time to time and shall observe and implement those resolutions and directives of the Board as made or issued from time to time.  Without the prior knowledge of the President and Chief Exectutive Officer, The Executive shall not engage in any other business activity or serve in any industry, trade, professional, governmental or academic position during the term of this Agreement; provided, that the Executive shall be entitled to serve on the Board of Directors of no more than two other companies, and advise HedgePath Pharmaceuticals, Inc, provided that such service does not interfere with his performance of his duties hereunder.

  

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(d)           The Company’s principal executive office shall be located in the area of Richmond, Virginia, however the Executive shall be based in and work primarily in and from New York, NY. If it is determined that the principal office location of the Executive shall be relocated, the Company shall provide the Executive with six months’ prior written notice and upon delivery of such notice, the Company and the Executive shall reasonably and in good faith negotiate a fair and equitable relocation package.    It is the expectation of the Company that the Company’s principal executive office will remain in the Richmond, Virginia area and the Executive’s principal office will remain in the New York, NY area in the absence of a compelling business reason to locate it elsewhere.

 

(e)           Upon reasonable notice, the Executive shall be available to participate in all meetings of the Board.  The Company will reimburse the Executive for all reasonable and customary travel and living expenses (e.g., hotel and meals), if any, incurred in connection with such meetings and the Executive shall provide the Company with reasonable documentation of such expenses.

 

4.           Compensation and Benefits.  As compensation for all services performed by the Executive hereunder during the term hereof, and subject to performance of the Executive’s duties and obligations pursuant to this Agreement:

 

(a)           Base Salary. Except for the following Limited Salary Period and during the term hereof, the Company shall pay the Executive a base salary at an initial rate of Two Hundred Forty Thousand Dollars ($240,000) per annum (the “Base Salary”). For an initial period from the Effective Date until such time as the Company has raised at least $5,000,000 through the sale of equity securities or otherwise (the “Limited Salary Period”), the Executive shall be paid a base salary at the rate of $120,000 per annum (the “Initial Salary”).  The Initial Salary or Base Salary, as applicable, will be payable in accordance with the payroll practices of the Company for its executives, but no less then once per each month.  The Base Salary will be paid subject to all applicable deductions and withholding permitted by law.  The Initial Salary shall start on the earlier of Febuary 1, 2016 or the completion of an initial financing of at least $500,000.

 

(b)           Bonus Compensation.

 

(i)           Within thirty (30) days following the end of the Limited Salary Period, the Company shall pay executive a lump sum bonus equal to the difference between the amount that Executive would have been paid during the Limited Salary Period had Executive’s salary been the Base Salary, and the amount that Executive was paid during the Limited Salary Period at the Initial Salary. At its discretion, the company may issue stock in lieu of a cash payout and assume liability for gross up payment of taxes incurred by the stock payment.  If paid in cash the bonus shall be subject to applicable withholding.

 

(ii)           During the term hereof, the Executive shall have the opportunity to earn an annual performance bonus equal to up to 50% of the Executive’s Base Salary based upon performance criteria set by the the President and Chief Executive Officer in his sole discretion on an annual basis.  The President and Chief Executive Officer shall conduct a performance review of the Executive at least once a year on or prior to February 1 of each year, commencing in 2017.  The Company may, from time to time, pay such other bonus or bonuses to the Executive as the Board or a compensation committee of the Board, in its sole discretion, deems appropriate.  In order to receive the annual performance bonus, the Executive must continue to be employed by the Company through the end of the period with respect to which the annual performance bonus has been earned.  The annual performance bonus will be paid to the Executive at such time as bonuses for the applicable period are regularly paid to senior executives of the Company; provided, however, in no event will the annual performance bonus be paid later than February 28 of the following calendar year.  Except as otherwise provided herein, bonuses shall be paid at such time as bonuses for the applicable period are regularly paid to senior executives of the Company.

  

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(c)           Stock Options.  As soon as practicable following Executive’s commencement of employment as described in  4(a) the Executive shall receive stock options to purchase shares of common stock of the Company at an exercise price per share equal to the fair market value of such shares on the date of grant as reasonably determined by the Board in good faith (the “Initial Stock Option”).  The Initial Stock Option will vest and become exercisable with respect to half (50%) of the total number of shares on December 31, 2016. The other half (50%) (the “Remaining Shares”) shall vest monthly on the first day of each subsequent month, commencing on January 1, 2017, at a rate of 1/36 of the total number of Remaining Shares per month.  Vesting will be subject to acceleration as set forth in Sections 5 and 6 below.

 

 (d)           Vacations.  During the term hereof, the Executive shall be entitled to four (4) weeks of vacation per annum, to be taken at such times and intervals as shall be determined by the Executive, subject to the reasonable business needs of the Company.  Vacation time shall not cumulate from year to year.  Accrued and unused vacation time may be carried over to subsequent years, provided that vacation time will be capped at 15 weeks of accrued but unused vacation time. Any accrued but unused vacation will be payable to Executive at time of termination, regardless of the reason for termination.

 

(e)           Insurance Coverage.  During the term hereof, the Company shall provide Executive with medical, dental, vision, life and disability insurance as follows:  the Company shall (i) pay premiums in accordance with the Company’s usual practices, for all medical insurance, including health, dental and vision coverage for Executive and his immediate family, (ii) provide, at its cost, disability insurance with an annual benefit equal to 100% of the Executive’s Base Salary, and (iii) provide, at its cost, life insurance on the life of the Executive with a death benefit equal to an aggregate of $1,000,000, payable to such beneficiaries as may be designated by the Executive in writing from time to time.  The Executive’s benefits contemplated by this Section 4(e) shall be subject to the terms and conditions of each applicable policy, as may be in effect from time to time at the discretion of the Board.  Notwithstanding the foregoing, (i) in lieu of the foregoing, if Executive elects to retain existing insurance policies consistent with the foregoing, the Company shall reimburse Executive for the cost of such policies and (ii) Executive shall be solely responsible for the premiums related to his existing life insurance and disability policies until April 1, 2016.

 

(f)           Other Benefits.  During the term hereof and subject to any contribution therefor generally required of employees of the Company, the Executive shall be entitled to participate in any and all other employee benefit plans from time to time in effect for employees of the Company generally, except to the extent such plans are in a category of benefit (including, without limitation, bonus compensation) otherwise provided to the Executive.  Such participation shall be subject to (i) the terms of the applicable plan documents, (ii) generally applicable Company policies and (iii) the discretion of the Board or any administrative or other committee provided for in or contemplated by such plan.  The Company may alter, modify, add to or delete such “other employee benefit plans” at any time as it, in its sole judgment, determines to be appropriate.

 

(g)           Automobile Allowance.  The Company will provide Executive with an automobile allowance for his automobile expenses in the gross amount of $1,250.00 per month. In the event the Executive’s employment terminates, the Executive may retain possession of the automobile and will assume the monthly payments, and all other obligations related to the automobile, effective on the effective date of the termination.

  

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(h)           Business Expenses.  The Company shall pay or reimburse the Executive for all reasonable and necessary business expenses incurred or paid by the Executive in the performance of his duties and responsibilities hereunder, subject to any maximum annual limit and other restrictions on such expenses set by the Board for senior executives of the Company, and to such reasonable substantiation and documentation as may be specified by the Company from time to time.  The Executive shall use reasonable efforts to purchase transportation tickets in advance or otherwise take advantage of low-cost fares.

 

5.           Termination of Employment.  Executive’s employment hereunder may terminate as set forth below.

 

(a)           Death.  In the event of the Executive’s death during the term hereof, the Executive’s employment hereunder shall immediately and automatically terminate.  In that event, the Company shall pay to the Executive’s designated beneficiary or, if no beneficiary has been designated by the Executive, to his estate, any earned and unpaid Base Salary and Bonus.  In no event shall the Company pay the estate or designated beneficiary less then 6 months salary and bonus.  The Company shall have no further obligation or liability to the Executive or his estate.  Upon the Executive’s death all vested stock options will remain property of the estate or designated beneficiary.

 

(b)           Disability.

 

(i)               The Company may terminate the Executive’s employment hereunder, upon thirty (30) days’ notice to the Executive, in the event that the Executive becomes disabled during his employment hereunder through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform the essential functions of his position hereunder, with or without reasonable accommodation, for eighty (80) days during any period of one-hundred eighty (180) consecutive calendar days.

 

(ii)               The Board may designate another employee to act in the Executive’s place during any period in which the Executive is unable to perform the essential functions of his position as a result of any illness, injury, accident or condition of either a physical or psychological nature.  Notwithstanding any such designation, the Executive shall continue to receive the Base Salary in accordance with Section 4(a) and his other benefits pursuant to Sections 4(e), 4(f) and 4(g) hereof, to the extent permitted by the then-current terms of the applicable benefit plans, until the Executive becomes eligible for disability income benefits under any disability income plan provided by the Company or until the termination of his employment, whichever shall first occur.

 

(iii)              If any question shall arise as to whether during any period the Executive is disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform the essential functions of his position hereunder, the Executive may, and at the request of the Company shall, submit to a medical examination by a physician selected by the Company to whom the Executive or his duly appointed guardian, if any, has no reasonable objection, to determine whether the Executive is so disabled, and such determination shall for the purposes of this Agreement be conclusive of the issue.  If such question shall arise and the Executive shall fail to submit to such medical examination, the Company’s determination of the issue shall be binding on the Executive.

  

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(c)           By the Company for Cause.  The Company may terminate the Executive’s employment hereunder for Cause (as defined below) at any time upon notice to the Executive setting forth in reasonable detail the nature of such Cause.  The following, as determined by the Board in its reasonable and good faith judgment, shall constitute Cause for termination:  (i) conviction or plea of nolo contendere in a court of law of (x) any felony or (y) any misdemeanor involving dishonesty, breach of trust, misappropriation or illegal narcotics, (ii) commission of any act involving theft, embezzlement, fraud, intentional dishonesty or moral turpitude or that otherwise impairs the reputation, goodwill or business of the Company, (iii) material breach of any of the material provisions of this Agreement or of any other material agreement between the Executive and the Company or any of its Affiliates, which breach is not cured within thirty (30) days of notice to Executive; or (iv) demonstration of gross negligence, willful misconduct or dereliction of duty in the execution of his duties under this Agreement or breach of his duty of loyalty to the Company or any of its Affiliates that is materially injurious to the Company.  Upon the giving of notice of termination of the Executive’s employment hereunder for Cause, the Company shall not have any further obligation or liability to the Executive, other than for Base Salary earned and unpaid through the date of termination.  Any unvested Stock Options shall be forfeited and vested Stock Options not exercised prior to termination shall expire and no longer be exercisable.

 

(d)           By the Company without Cause.  The Company may terminate the Executive’s employment hereunder without Cause at any time upon six (6) months months’ advance written notice.

 

(e)           By the Executive.  The Executive may terminate his employment, with or without cause, at any time upon at least fourteen (14) days’ advance written notice to the Company.

 

(f)           By the Executive for Changed Circumstances.  The Executive may terminate his employment hereunder upon the occurrence of Changed Circumstances (as defined below) upon written notice to the Company.  “Changed Circumstances” shall mean (i) breach hereof by the Company of its obligations under this Agreement not remedied within thirty (30) days’ written notice by the Executive to the Company; (ii) subject to the Company’s right to terminate the Executive’s employment pursuant to subsections (c) and (d) above, a material diminution in the Executive’s authority or title within the Company by reason of actions taken by or under the authority of the Board, (iii) a “Change in Control” as defined in Section 6 hereof or (iv) relocation of Executive’s principal place of employment by more than forty (40) miles following the establishment of the Executive’s principal executive office as set forth in Section 3(d)’.

  

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(g)           Severance Benefits.

 

(i)             In the event that the Company terminates the Executive’s employment without Cause (as defined above) or the Executive terminates his employment for Changed Circumstances (as defined above), subject to the terms and conditions of this Section 5(g), (A) the Company will pay severance on a monthly basis to the Executive and will provide the continuation of the benefits set forth in Section 4(e) and 4(f) for a period of months (the “Severance Period”) following Executive’s termination equal to the greater of (x) six (6) months or (y) the number of full months between the Effective Date and Executive’s termination, provided that the Severance Period shall not exceed twelve (12) months; (B) any options or other equity awards that are subject to vesting shall have vesting accelerated with respect to the number of shares that would have vested during the Severance Period if Executive had remained employed by the Company during such period (and any shares of capital stock of the Company that are subject to a right of repurchase shall have such right of repurchase lapse with respect to the number of shares that would have lapsed during the Severance Period if Executive had remained employed by the Company during such period); and (C) a pro rate portion of any eligible bonus compensation as of the termination date.

 

(ii)           The severance amount and benefits continuation set forth above are referred to herein as the “Severance Benefits.”  The continuation of any group health plan benefits shall be to the extent authorized by and consistent with 29 U.S.C. § 1161 et seq. (commonly known as “COBRA”), with the cost of the regular employer portion of the premium for such benefits paid by the Company.  The Executive’s right to receive Severance Benefits under Subsection 5(g)(i) is conditioned on the Executive’s continued performance of those obligations hereunder that continue by their express terms after the termination of his employment, including without limitation those set forth in Sections 8, 9 and 10.

 

(iii) In order to receive the Severance Benefits under Subsection 5(g)(i), the Executive must execute and deliver to the Company a general release of any and all claims and causes of action of the Executive against the Company and its officers and directors, excepting only the right to any compensation, benefits and/or reimbursable expenses due and unpaid under Sections 4 and/or 5(g)(i) of this Agreement (“Severance Release”), in a form that is the same as or substantially similar to the form attached hereto as Exhibit A, which will be signed by Executive no later than the forty-fifth (45th) day after the date of such termination, and such release must become effective no later than fifty-ninth (59th) day after such termination.  Any Severance Benefits to be paid hereunder shall be payable in accordance with the payroll practices of the Company for its executives generally as in effect from time to time, and subject to all required withholding of taxes, with payments commencing on the 8th day following Executive’s execution of the Severance Release.

  

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6.           Change in Control.  If the Executive’s employment is terminated by the Company, with or without Cause, or by the Executive for Changed Circumstances in connection with or following a Change in Control, the Executive shall receive those Severance Benefits provided in Section 5(g)(i) as if his employment were terminated more than twelve months after the Effective Date plus the pro rata portion of any eligible bonus compensation the date of termination, which Severance Benefits shall be subject to the terms set forth in Section 5(g)(ii) and shall be in lieu of any benefits to which the Executive is otherwise entitled pursuant to Section 5(g).  “Change in Control” means an event or occurrence set forth in any one or more of subsections (a) through (c) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection):

 

(a)           the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (an “Acquiring Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Acquiring Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (i) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or

(b)           such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; or

(c)           the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively.

7.           Effect of Termination.  Upon termination of this Agreement, all obligations and provisions of this Agreement shall terminate except with respect to any accrued and unpaid monetary obligations, post-termination benefits described in Section 5 and Section 6, and vesting acceleration provisions and except for the provisions of Section 8 through (and inclusive of) 23 hereof.

  

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8.           Confidential Information; Assignment of Inventions.

 

(a)           The Executive acknowledges that the Company and its Affiliates will continually develop Confidential Information and Proprietary Information (as defined below), that the Executive may develop Confidential Information and Proprietary Information for the Company or its Affiliates, and that the Executive may learn of Confidential Information and Proprietary Information during the course of his employment with the Company.  The Executive agrees that, except as required for the proper performance of his duties for the Company, during his employment and for a period of ten (10) years following the cessation of his employment or for however long the information constitutes a trade secret under the Virginia Trade Secrets Act, whichever period is longer, he will not, directly or indirectly, use or disclose any Confidential Information or Proprietary Information to any third party without the express written permission of the Company.

 

	 	
(b)

	
The Executive agrees that all Confidential Information and Proprietary Information, including, without limitation all work products, inventions methods, processes, designs, software, apparatuses, compositions of matter, procedures, improvements, property, data documentation, information or materials that the Executive, jointly or separately prepared, conceived, discovered, reduced to practice, developed or created during, in connection with, for the purpose of, related to, or as a result of his employment with the Company, and/or to which he has access as a result of his employment with the Company (collectively, the “Inventions”) is and shall remain the sole and exclusive property of the Company.

	 	
(c)

	
The Executive by his signature on this Agreement unconditionally and irrevocably transfers and assigns to the Company all rights, title and interest in the Inventions (as defined above, including all patent, copyright, trade secret and any other intellectual property rights therein) and will take any steps and execute any further documentation from time to time reasonably necessary to effect such assignment free of charge to the Company.  The Executive will further execute, upon request, whether during, or after the termination of, his employment with the Company, any and all applications for patents, assignments and other papers, which the Company may deem necessary or appropriate for securing such Inventions for the Company.

	 	
(d)

	
Except as required for the proper performance of his duties, the Executive will not copy any and all papers, documents, drawings, systems, data bases, memoranda, notes, plans, records, reports files, data (including original data), disks, electronic media etc. containing Confidential Information or Proprietary Information (“Documents”) or remove any Documents, or copies, from Company premises.  The Executive will return to the Company immediately after his employment terminates, and at such other times as may be specified by the Company, all Documents and copies and all other property of the Company and its Affiliates then in his possession or control.

9.           Non-Competition Covenants.  During the term hereof and for a period of one (1) year from the date the Executive’s employment with the Company terminates (the “Restricted Period”), the Executive shall not, whether as an owner, employee, or consultant, perform the same or substantially similar duties as he performed for the Company, for or on behalf of any business or enterprise that directly competes with the Business of the Company anywhere in the Restricted Territory, as defined below.  Nothing in this Section 9 is intended to prevent Executive from working in any capacity or for any company that is not competitive with the Business of the Company.  Further nothing herein prevents Executive from owning shares in a publicly-traded corporation or publicly-traded mutual fund or publicly-traded limited partnership in which the Executive does not materially participate and in which the Executive’s ownership interest is one percent (1%) or less.  The Executive acknowledges and agrees that the Business of the Company is conducted throughout the United States and therefore, the restrictions contained in this Section 9 cannot be limited to any particular geographic region and are applicable nationwide (the “Restricted Territory”).  In the event that the scope of any restriction contained in this Section 9 is determined by a court to be too broad to permit enforcement hereof to its full extent, then such restriction shall be enforced to the maximum extent permitted by law.

  

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10.           Non-Solicitation Covenants.  During the Restricted Period, the Executive shall not, directly or indirectly, whether on behalf of himself or anyone else: (a) solicit or accept orders from any entity that was a customer of the Company during the 12 months immediately preceding Executive’s termination of employment (“Customer”), for a product or service that is competitive with a product or service offered or sold by the Company; (b) induce or attempt to induce any Customer to cease doing business with the Company for the benefit of a competitor; (c) solicit any of the Company’s current employees to leave the employ of the Company and to accept employment with a competitor; or (e) induce or attempt to induce any employee of the Company supply Confidential Information or Proprietary Information to any other person.  During the Restricted Period, the Executive shall not directly or indirectly assist or encourage any other person, in carrying out, directly or indirectly, any activity that would be prohibited by this agreement were they carried out by the Executive himself.

 

11.           Enforcement of Covenants.  The Executive acknowledges that he has carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 8, 9 and 10 hereof.  The Executive acknowledges that the covenants contained in Sections 8, 9 and 10 are reasonably necessary to protect the goodwill of the Company that is its exclusive property.

 

12.           Conflicting Agreements.  The Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which the Executive is a party or is bound and that the Executive is not subject to any covenants against competition or similar covenants that would affect the performance of his obligations hereunder.  The Executive will not disclose to or use any confidential or proprietary information of a third party without such party’s consent.

 

13.           Definitions.  Words or phrases which are initially capitalized or are within quotation marks shall have the meanings provided in this Section 13 and as provided elsewhere herein.  For purposes of this Agreement, the following definitions apply:

 

(a)           “Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under common control with the Company, where control may be by either management authority or equity interest.

 

(b)           “Confidential Information” means any and all information, inventions, discoveries, ideas, writings, communications, research, engineering methods, developments in chemistry, manufacturing information, practices, processes, systems, technical and scientific information, formulae, designs, concepts, products, trade secrets, projects, improvements and developments that relate to the business of the Company or any Affiliate and are not generally known by others, including but not limited to (i) products and services, technical data, methods and processes, (ii) marketing activities and strategic plans, (iii) financial information, costs and sources of supply, (iv) the identity and special needs of customers and prospective customers and vendors and prospective vendors, and (v) the people and organizations with whom the Company or any Affiliate has or plans to have business relationships and those relationships.  Confidential Information also includes such information that the Company or any Affiliate may receive or has received belonging to customers or others who do business with the Company or any Affiliate and any publication or literary creation of the Executive, developed in whole or in part while the Executive is employed by the Company, in whatever form published the content of which, in whole or in part, relates to the business of the Company or any Affiliate.  Confidential Information shall not include any information or materials that Executive can prove by written evidence (i) is or becomes publicly known through lawful means and without breach of this Agreement by Executive; (ii) was rightfully in Executive’s possession or part of Executive’s general knowledge prior to the Effective Date; or (iii) is disclosed to Executive without confidential or proprietary restrictions by a third party who rightfully possesses the information or materials without confidential or proprietary restrictions.

  

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(c)           “Person” means an individual, a corporation, an association, a partnership, an estate, a trust and any other entity or organization.

 

(d)           “Proprietary Information” means any and all intellectual property subject to protection under applicable copyright, trademark, trade secret or patent laws if such property is similar in any material respect with the products and services offered by the Company or any Affiliate.

 

14.           Withholding.  All payments made under this Agreement shall be reduced by any tax or other amounts required to be withheld under applicable law.

 

15.           Assignment.  Neither the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and shall assign its obligations under this Agreement without the consent of the Executive in the event that the Company shall hereafter effect a reorganization, or consolidate with or merge into any other Person, or transfer all or substantially all of its properties or assets to any other Person.  This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, and their respective successors, executors, administrators, heirs and permitted assigns.

 

16.           Severability.  If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

17.           Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

18.           Notices.  Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person or by overnight courier or delivery service, or 3 business days after being deposited in the Danish or United States mail, postage prepaid, registered or certified, and addressed to the Executive at his last known address on the books of the Company or, in the case of the Company, at the Company’s principal place of business, to the attention of the Chairman of the Board, or to such other address as either party may specify by notice to the other actually received.

 

19.           Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior communications, agreements and understandings, written or oral, with respect to the terms and conditions of the Executive’s employment.  This Agreement is not intended to modify or supersede any other agreement pertaining to the ownership of the company or the purchase or sale of shares in the Company.

 

20.           Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and an expressly authorized representative of the Company.

  

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21.           Headings.  The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement.

 

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

 

23.           Governing Law.  This Agreement shall be construed and enforced under and be governed in all respects by the laws of the Commonwealth of Virginia, without regard to the conflict of laws principles thereof.  The parties consent to the exclusive venue of the federal or state courts sitting in the Counties of Goochland or Henrico, Virginia.

 

24.           Tax Matters.

 

(a)           If any payment or benefit which the Executive would receive pursuant to a Change in Control from the Company or otherwise (collectively, the "Payments") would (i) constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code'), and (ii) but for this Section 24(a) of this Agreement, be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive will be entitled to receive either (A) the full amount of the Payments; or (B) a portion of the Payments having a value equal to one dollar ($1.00) less than three (3) times Executive's "base amount" (as such term is defined in Section 280G(b)(3)(A) of the Code) (the "Safe Harbor Amount"), whichever of clauses (A) and (B), after taking into account applicable federal, state, and local income taxes and the Excise Tax, results in the receipt by the Executive on an after-tax basis, of the greater portion of the Payments.  If a reduction in the Payments is necessary, such reduction shall occur in the following order: reduction in cash payments; cancellation of accelerated vesting of stock awards; reduction in employee benefits.  In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Executive's stock awards.  Any determination required under this provision shall be made in writing by the independent public accountant of the Company or another entity reasonably approved by the Company and the Executive (the "Accountants"), whose determination shall be conclusive and binding for all purposes upon the Company and Executive.  If a reduction of the Payments is necessary, then the Accountants have the authority to cut back any Payments by the minimum possible amount allowable under the law. All fees and expenses of the Accountants shall be borne solely by the Company.  For purposes of making any calculation required by this provision, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code.

 

(b)           The intent of the parties is that payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code ("Code Section 409A") and, accordingly, to the maximum extent permitted; this Agreement shall be interpreted to be exempt from or in compliance therewith. If the Executive notifies the Company (with specificity as to the reason therefor) that he believes that any provision of this Agreement (or of any award of any compensation or benefits) would cause him to incur any additional tax or interest under Code Section 409A and the Company concurs with such belief or the Company independently makes such determination, the Company shall, after consultation with the Executive, to the extent legally permitted and to the extent it is possible to timely reform the provision to avoid taxation under Code Section 409A, reform such provision to attempt to comply with Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to both the Executive and the Company of the applicable provision without violating the provisions of Code Section 409A.

  

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For purposes of the application of Treasury Regulation § 1.409A-1(b) (4) (or any successor provision), each payment in a series of payments will be deemed a separate payment.

 

If the termination of employment giving rise to the severance benefits described in Sections 5 or 6 is not a "separation from service" within the meaning of Treasury Regulation § 1.409A-1(h) (1), then to the extent necessary to avoid the imposition of any accelerated or additional tax under Code Section 409A, such benefits will be deferred without interest until the Executive' experiences a separation from service.

 

The Company shall delay the payment of any benefits payable under this Agreement as required to comply with Section 409A(a)(2)(B)(i) of the Code, relating to payments made to certain "specified employees" of certain publicly-traded companies, and in such event, any such amount to which Executive would otherwise be entitled during the six (6) month period immediately following his termination of employment shall instead be accumulated through and paid or provided, together with interest at the long-term applicable federal rate (annual compounding) under Section 1274(d) of the Code in effect on his termination of employment, on the first business day following the expiration of such six (6) month period, or if earlier, the date of his death.  If the Executive is not a "specified employee" within the meaning of Code Section 409A at the time of Executive's termination of employment, no salary continuation payment that Executive shall be entitled to receive under this Agreement that constitutes deferred compensation under Code Section 409A will be made to Executive prior to the sixtieth (60th) day after the date of such termination.  On the first business date that occurs on or after such sixtieth (60th) day, the Company will pay Executive the salary continuation payments that Executive would have received on or prior to such sixtieth (60th) day, in a lump sum, with the balance of the salary continuation payments being paid as originally scheduled.

 

To the extent an expense reimbursement or in-kind benefit provided pursuant to this Agreement constitutes deferred compensation within the meaning of Code Section 409A (1), the expenses will be reimbursed to Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (2) the amount of expenses eligible for reimbursement or in-kind benefits provided during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided in any other calendar year, (3) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

 

25.           The Company shall reimburse Executive for reasonable fees and expenses of counsel incurred in connection with the negotiation and execution of this Agreement, up to a maximum of $5,000.

IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Executive and the Company, by its duly authorized representative, as of the date first above written.

 

	 Executive: 	  Exactus BioSolutions Corporation
	 	 
	 /S/ Timothy J. Ryan	 By: /S/ Philip J Young
	 Name: Timothy J. Ryan 	 Name: Philip J. Young
	 Title: Executive Vice-President	 Title: President and Chief Executive Officer

 

                                       

  

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Exhibit A – Severance Release

This Release Agreement (“Release”) is dated this ____ day of   ,  , and is made by and between Exactus BioSolutions Corporation (the “Company”) and TIMOTHY J. RYAN (“Executive”).

In consideration of the promises and of the mutual covenants herein contained, the agreements contained in the Employment Agreement effective on December 15, 2015, which agreement is incorporated by reference herein, including its severance provisions contained in Section 5 of that agreement, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties do hereby covenant and agree as follows:

A.           Executive’s employment with the Company will be terminated effective (the “Separation Date”).

B.           Upon execution of this Release, Executive will be paid the Severance Benefits as set forth in Section 5(g) of the Employment Agreement.

C.           Release.  Executive hereby knowingly and voluntarily releases and forever discharges the Company, any related companies, and the former and current employees, officers, agents, directors, shareholders, investors, attorneys, affiliates, successors and assigns of any of them (the “Released Parties”) from all liabilities, claims, demands, rights of action or causes of action Employee had, has or may have against any of the Released Parties through the date of this Agreement, including but not limited to any claims or demands based upon or relating to Employee’s employment with the Company or the cessation of that employment.  This includes, but is not limited to, a release of any rights or claims Employee may have under Title VII of the Civil Rights Act of 1964, as amended; the Equal Pay Act; the Age Discrimination in Employment Act of 1967; the Employee Retirement Income Security Act, except as provided herein; the Americans with Disabilities Act; the Family and Medical Leave Act of 1993; or any other federal, state or local laws or regulations applicable to the employment relationship.  This also includes, but is not limited to, a release by Executive of any claims for wrongful discharge, breach of contract, or any other statutory, common law, tort, contract, or negligence claim that Employee had, has or may have against any of the Released Parties through the date of this Agreement.  This release covers both claims that Executive knows about and those claims Employee may not know about.

This release does not include, however, a release of Executive’s right, if any, to payment of vested qualified retirement benefits under the Company’s ERISA plans and the right, if any, to continuation in the Company’s medical plans as provided by COBRA.

Notwithstanding the foregoing, the parties acknowledge and agree that nothing in this Agreement shall be construed to release any claims or prohibit the exercise of any rights by either party that such party may not waive as a matter of law.

To the fullest extent allowed by law, Executive promises never to file a lawsuit or administrative charge asserting any claims that are released in this Paragraph C.  In the event Executive breaches this Paragraph C, Employee shall pay to the Company all of its expenses incurred as a result of such breach, including but not limited to, actual attorneys’ fees and expenses. Notwithstanding the foregoing, the parties acknowledge and agree that this Paragraph C shall not be construed to prohibit the exercise of any rights by Executive that Executive may not waive or forego as a matter of law.

This Agreement does not waive or release any rights or claims that Executive may have which arises after the date that Executive signs this Agreement.  The parties acknowledge and agree that the decision to terminate Executive’s employment has been made prior to the execution of this Agreement.

D.           Executive understands that he has been given a period of forty five (45) days to review and consider this Release before signing it.  Executive further understands that he may use as much or as little of this period as he wishes prior to signing. Executive is encouraged to consult with an attorney before signing this Agreement. Executive may revoke this Agreement within seven (7) days of Executive’s signing it.  Revocation can be made by delivering a written notice of revocation to WILLIAM J. RYAN, RYAN, ROACH & RYAN, LLP, 115 GREEN STREET, KINGSTON, NY 12401. For this revocation to be effective, written notice must be received by Mr. WILLIAM J. RYAN no later than the close of business on the seventh (7th) day after Executive signs this Release.  If Executive has not revoked the Agreement, the eighth (8th) day after Executive signs this Release shall be the Effective Date for purposes of this Release.

EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND IS VOLUNTARILY ENTERING INTO IT.  PLEASE READ THIS AGREEMENT CAREFULLY.  IT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates stated below.

 

	 	 	_______________________________________
	Date ________________________________	TIMOTHY J. RYAN
	 	 
	 	 
	 	EXACTUS BIOSOLUTIONS CORPORATION
	 	 
	 	 	 
	Date ________________________________	By: _____________________________________
	 	Its: _____________________________________
	 	 

 

                      

A-1ex10-6.htm

Exhibit 10.6

 

Financial Consulting Services Agreement

This letter (the “Agreement”), beginning on January 27, 2016 (the “Effective Date”) sets forth the terms and conditions by which Exactus BioSolutions (the “Company”) engage Kelley Wendt, CPA (the “Provider”), for consultancy services related but not limited to financial management.

1. Services.

 

(a) The Company hereby engages Provider to perform financial management services, including but not limited to: support in maintenance of current accounting systems, processes and policies and procedures necessary to maintain an effective accounting system, support in preparation of periodic reporting for accounts and financial statements, support in preparation of packages and schedules for audit team(s),  all in accordance with applicable government rules and regulations during the Term (as defined below) of the services set forth in this Agreement (the “Services”).

 

(b) All Services are to be provided in compliance with all laws, regulations and policies applicable to the Company, including those pertaining to any applicable regulatory laws(collectively, the “Laws”). Provider shall not act in any manner that would result in the Company breaching the Laws.

 

(c) The Company shall make available to Provider all information which Provider reasonably requests in connection with providing the Services, including, but not limited to, information with respect all financial information owned by the Company and any of its subsidiaries.

 

2. Fees and Expenses.

 

(a) The Company shall compensate Provider for its Services during the Term as follows:

 

(b) The Company shall pay Provider $125 per hour

 

(c) Company shall reimburse Provider for all reasonable out-of-pocket expenses incurred by Provider in performing Services under this Agreement (“Expenses”), including, without limitation, long distance telephone charges, overnight mailing and delivery charges, postage, printing, photocopying and travel. Provider shall travel coach class for all flights unless approved by Company in advance.  Any single expense over $500 will require approval of the Company in advance.

 

(d) All Payments will be made within 30 days of receipt of invoice from Provider.

 

3. Nature of Relationship.  Provider will act under this Agreement as an independent contractor. Nothing in this Agreement shall be deemed to create a fiduciary, agency, employment or joint venture relationship between Provider and the Company. Nothing in this Agreement shall be deemed to confer on any person or entity other than Provider and the Company or their respective successors and, to the extent expressly set forth herein, the Indemnified Parties (as defined in Section 6(a)), any relationship, rights or remedies under or by reason of this Agreement or of the Services to be rendered by Provider.

 

4. Term.

 

(a) This Agreement will terminate on June 30, 2014 (the “Expiration Date”), unless extended by the Company and Provider. The period during which this Agreement is in effect is referred to as the “Term”.

 

(b) If the Agreement is terminated by the Company prior to the Expiration Date other than for Cause (as defined below) and the effective date of termination is prior to end of a month, the Company shall pay Provider the Fee due for the full period which the effective date of termination falls.  In any event, upon the termination of this Agreement, the Company shall reimburse Provider for all expenses properly incurred by Provider which have not been previously reimbursed by the Company.

 

(c) (i) “Cause” means a material breach of the Agreement by Provider which has not been cured within 30 days after receipt by Provider of written notice of such material breach.

 

5. Confidentiality.

 

(a) Provider and any of its representatives, as defined below will not disclose to any other person or entity, or use for any purpose any information pertaining to the Company or any subsidiary of the Company which is either non-public, confidential or proprietary (“Information”) that Provider obtains or is given access to by the Company or one of its subsidiaries or any of their respective officers, directors, employees or agents (“Representatives”) during the Term of this Agreement. Information does not include information which (i) is now, or hereafter becomes, through no act or failure to act on the part of Provider, generally known or available to the public; (ii) was rightfully and legally acquired by Provider from a party having the right to disclose such information before receiving such information from the Company (or any of its subsidiaries or Representatives) and without restriction as to use or disclosure; (iii) is hereafter rightfully furnished to Provider by a third party, without restriction as to use or disclosure; (iv) is information which was independently developed by Provider without breach of any obligation of confidentiality; (v) is required to be disclosed pursuant to law, provided that Provider (A) gives the Company reasonable advance notice of such required disclosure so that the Company may seek an appropriate protective order or other remedy; (B) will not oppose, and will cooperate with, the Company at the Company’s expense in seeking such order or remedy and (C) will disclose only that portion of the Information which it is legally compelled to disclose; or (vi) is disclosed with the prior written consent of the Company. The provisions of this Section 5(a) shall survive the termination of this Agreement for a period of five years.

 

  

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6. Indemnification.

 

(a) The Company hereby agrees to defend, indemnify and hold harmless  Provider  and their respective heirs, successors, assigns and affiliates (each an “Indemnified Party” and together, the “Indemnified Parties”) from and against any and all losses, deficiencies, claims, actions, liabilities, damages, assessments, judgments, obligations, penalties, awards and other liabilities, costs and expenses, including but not limited to interest, penalties and reasonable fees, disbursements and expenses of attorneys, accountants, financial and other advisors, experts and witnesses, both those incurred in connection with the defense or prosecution of the identifiable claim and those incurred in connection with the enforcement of this provision (collectively, “Damages”) caused by, based upon, resulting from or arising out of this Agreement and/or the provision of any Services by Provider, to the extent such Damages do not result from a breach of this agreement by an Indemnifying Party or from the gross negligence or willful misconduct of any such Indemnified Party, as determined in a final, non-appealable adjudication by a court of competent jurisdiction.

 

(b) Promptly after receipt by an Indemnified Party of notice of the commencement of any claim, action or other proceeding against it (collectively, an “Indemnified Claim”), such Indemnified Party shall provide the  Company  with written notice of the commencement thereof; provided, that no failure or delay by the Indemnified Party in giving such notice will relieve the Company from any obligation or liability under this Agreement, except and to the extent that the  Company is materially prejudiced by such failure or delay. Such notice shall describe the Indemnified Claim in reasonable detail. The Company may elect to defend, at its own expense and with counsel of its selection, reasonably satisfactory to the Indemnified Party, any Indemnified Claim unless and to the extent that (i) the Indemnified Claim seeks an order, injunction or other equitable or declaratory relief against the Indemnified Party; (ii) the Indemnified Party shall have reasonably concluded that there is an actual or potential conflict of interest between it and the Company in the conduct of such defense; (iii) the Indemnified Party shall have one or more defenses available to it that are not available to the Company; (iv) the Company shall have failed to employ counsel reasonably satisfactory to the Indemnified Party; or (v) the Company is not timely or diligently defending such Indemnified Claim after reasonable notice is provided by the Indemnifying Party of its intention to seek alternative counsel. If the Company elects to defend such Indemnified Claim, it shall within ten days (or sooner, if the nature of the Indemnified Claim so requires) notify the Indemnified Party of its intent to do so, and the Indemnified Party shall cooperate, at the expense of the Company, in the defense of such Indemnified Claim.  If the Company elects not to defend the Indemnified Claim, is not permitted to defend the Indemnified Claim by reason of this Section 6(b), fails to notify the Indemnified Party of its election as herein provided or contests its obligation to indemnify under this Agreement with respect to such Indemnified Claim, the Indemnified Party may pay, compromise or defend such Indemnified Claim at the sole cost and expense of the Company. Notwithstanding the foregoing, neither the Indemnified Party nor the Company may settle or compromise any claim over the reasonable written objection of the other; provided that the Indemnified Party may settle or compromise any Indemnified Claim as to which: (i) the Company has failed to notify the Indemnified Party of its election under this Section 6(b); (ii) the Company is contesting its indemnification obligations hereunder; or (iii) such settlement includes as an unconditional term thereof the giving by the claimant or plaintiff of a release of the Company from all liability with respect to such Indemnified Claim. Should either party unreasonably withhold, delay or condition consent to any settlement or compromise of any Indemnified Claim, that party shall be liable for all further defense related costs, including reasonable outside attorneys’ fees and expenses.  In any event, a party may participate, at its own expense, in the defense of any Indemnified Claim. If the Company chooses to defend any Indemnified Claim, the Indemnified Party shall cooperate fully in such defense and make available to the Company any books, records or other documents within its control that are necessary or appropriate for such defense. If the Indemnified Party defends the Indemnified Claim, the Company shall cooperate in such defense and shall make available to the Indemnified Party any books, records or other documents within its control that are necessary or appropriate for such defense. Any Damages of the Indemnified Party for which the Company is liable for indemnification hereunder shall be paid upon written demand therefor and any costs recovered shall be paid first to the Company to cover costs incurred in the defense.

 

(c) The provisions of this Section 6 shall survive the termination of this Agreement.

 

7. Freedom to Provide Other Services.  During the Term of this Agreement, Provider may provide the same or similar Services to or for any person or entity other than the Company, including, but not limited to, competitors or potential competitors of the Company.  If the Company identifies direct competitors of the Company who are or will become Provider’s clients and the Company is concerned with Provider’s representation of such direct competitor, the Company will contact Provider about it and Provider and the Company will decide whether representing both the Company and the direct competitor is advisable.  If the parties do not reach agreement and Provider desires to represent the direct competitor, the Company shall have the right to terminate this Agreement on at least five days’ written notice.

 

8. Communications. Provider makes every effort and exercises diligence to ensure that its communication systems are secure.  Nevertheless, the Company acknowledges that certain communications systems and networks which Provider may use or rely on in performing the Services may not necessarily represent a secure environment in which to conduct communications. These systems include certain telephone systems, computer networks and the Internet. The Company authorizes Provider, subject to the confidentiality provisions of Section 5, to use such systems (including sending and receiving electronic mail) for communication of sensitive information about the Company; provided reasonable precautions are taken by Provider to avoid inadvertent disclosure of the Company’s confidential information.

 

9. Publicity.  Provider (i)may not place advertisements in regulatory  and other trade newspapers and journals (including electronic versions thereof) describing its services to the Company and (ii) may not use the Company’s name and corporate logo in such advertising or in other promotional materials (including electronic versions thereof) describing Provider’s services.

 

10. Governing Law; Jurisdiction.

 

(a) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia with respect to contracts made and to be performed entirely therein and without regard to choice of law principles thereof.  Any controversy arising out of or relating to this Agreement shall be settled by arbitration before an arbitrator in the Commonwealth of Virginia in accordance with the then effective American Arbitration Association’s rules for resolution of commercial disputes as modified by the provisions of this Agreement.

 

(b) If a dispute arises with respect to this Agreement, the parties shall in good faith attempt to resolve such dispute. A demand for arbitration may be filed only if the parties in good faith fail to agree on a mutually satisfactory resolution of the dispute after 30 days.  The parties shall attempt for two weeks to agree on a single arbitrator.  If they are unable to agree, the parties shall request that the American Arbitration Association in the Commonwealth of Virginia choose an arbitrator for them.  The decision of the arbitrator shall be final, binding and non-appealable.

 

  

-2-

  

 

(c) The parties (A) consent to the exclusive jurisdiction of the state and federal courts located in the Commonwealth of Virginia for all purposes in connection with arbitration, including the entry of judgment on any award; (B) waive any objection to laying venue in any such court; (C) waive any objection that any such court is an inconvenient forum or does not have jurisdiction over any party; and (D) consent that any process, notice of motion or other application to such courts, and any papers in connection with arbitration, may be served by registered or certified mail, return receipt requested, by personal service, or in such other manner as may be permissible under the rules of the applicable court or arbitration tribunal, provided a reasonable time for appearance is allowed.

 

(d) The arbitrator shall have no power to alter or modify any express provision of this Agreement or to render an award, which has the effect of altering or modifying any express provision of this Agreement. The arbitrator shall be prohibited from issuing any award providing for multiple or punitive damages. The parties shall pay their own costs and attorneys’ fees associated with the arbitration.

 

(e) Nothing in this Agreement shall preclude either party from seeking injunctive or other equitable relief from any state or federal court of competent jurisdiction located in the Commonwealth of Virginia in order to avoid irreparable harm pending arbitration and/or to avoid rendering any arbitration award on the merits from becoming ineffectual or unenforceable.

 

11. Miscellaneous.

 

(a) If any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable provision, which, being valid, legal and enforceable, comes closest to the intention of the parties underlying the invalid, illegal or unenforceable provision.

 

(b) This Agreement contains the entire understanding of the parties relating to the subject matter of this Agreement and supersedes all prior agreements and understandings with respect to such subject matter, whether oral or written. No modification to any provision of this Agreement shall be binding unless in writing and signed by both the Company and Provider. No waiver of any rights under this Agreement will be effective unless in writing, signed by the party against whom enforcement of such waiver is sought. The waiver of a default shall not constitute a waiver of any other default, and the failure of either party to enforce any right or remedy for any one default shall not be deemed a waiver of such right or remedy if the offending party persists in such default or commits another default, nor shall such failure in any way affect the validity of the Agreement or any provision of this Agreement.

 

(c) All notices under this Agreement shall be sufficient if delivered by registered or certified mail, overnight mail or personal service. Any notice shall be deemed to be given only upon actual receipt or refusal of receipt to the address of the Company or Provider, as the case may be, set forth above or such other address as such party shall have specified in writing to the other party in accordance with this Section 11(c).

 

(d) This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original as against any party whose signature appears on such counterpart, but all of which together shall constitute but one and the same instrument.

 

(e) This Agreement, and any right or obligation under this Agreement, may not be assigned, transferred or delegated by either party without the express prior written consent of the other party; provided, however, that either party may, without the consent of the other party, assign or transfer this Agreement to any direct or indirect parent or subsidiary company of such party or in connection with a merger or sale of all or substantially all of the assets or stock of such party. Subject to the foregoing, this Agreement and the obligations hereunder shall be binding on the representatives, assigns, and successors of the party in question and shall inure to the benefit of the assigns and successors of such party.

 

Acknowledged and Agreed to:

 

Kelley Wendt, CPA

By:                 /S/ Kelley Wendt

 

Name:            Kelley Wendt, CPA

 

Dated:           January 29, 2016

 

AmpliPhi Biosciences Corporation

By:                 /S/ Philip J. Young

 

Name:            Philip J. Young

 

Title:              Chief Executive Officer & President                 Dated: January 29, 2016

 

 

-3-

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