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PRODUCTION AGREEMENT

THIS PRODUCTION AGREEMENT (this “Agreement”) is effective this 23 day of January, 2018 (the “Effective Date”), by and between Pure Health Products, LLC, with an address at 5507-10 Nesconset Highway, Suite 125, Mount Sinai, New York 11766 (“Manufacturer”), and Canbiola, Inc., a Florida corporation (“Canbiola”).

BACKGROUND

A.

Manufacturer is in the business of manufacturing products containing Cannabinol (“CBD”).

B.

Canbiola is in the business of developing, producing and selling products containing CBD. 

C.

Canbiola has provided Manufacturer with financing to build out a manufacturing facility located at 5815 Lacey Blvd SE, Lacey, WA 98503 (“Facility”) including all fixtures and equipment necessary for Manufacturer’s business.

D.

Canbiola has developed proprietary formulas for its CBD infused products (the “Products”).

E.

The parties have agreed that Manufacturer shall produce Products for Canbiola on an exclusive basis, subject to the terms and conditions of this Agreement.

AGREEMENT

Manufacturer and Canbiola agree as follows:

1.

Purchase and Sale Obligations.

1.1

Products. During the term of this Agreement, and in accordance with the terms and conditions set forth herein, Manufacturer agrees to manufacture, package and sell to Canbiola the Products specified in Schedule A hereto, which schedule may be amended by Canbiola from time-to-time in writing acknowledged by Manufacturer, on an exclusive basis. Manufacturer shall not produce or manufacture any product containing any cannabis or hemp derivative for any person or entity other than Canbiola. All Products shall be brewed and packaged according to Canbiola’s written specifications, including the maintenance of standards and quality control programs. All specifications shall be provided to Manufacturer in writing and Manufacturer shall not be responsible for manufacturing or packaging the Canbiola’s Products according to any specifications not provided in writing. Canbiola may modify its specifications only with at least thirty (30) days’ advance notice to Manufacturer. Canbiola shall have the right, at any time, to monitor and review the practices and procedures of Manufacturer in the production and packaging of Products and to inspect the Facility. Manufacturer and Canbiola will, in any and all public statements or comments, recognize that Canbiola controls the ingredients, recipe, brewing processes and procedures and quality and taste parameters for all Products produced at the Facility and that Canbiola is the manufacturer of all such Products. Neither party will make any public statements inconsistent with the foregoing.

1.2

Minimum Order Requirement. There are no minimum order requirements.  

2.

Orders, Payment and Delivery.

2.1

Orders. Canbiola shall order Products from Manufacturer under this Agreement by submitting to 

Manufacturer a written purchase order specifying the Products, quantities and requested delivery dates required to enable Manufacturer to fill the order. Manufacturer will be obligated to fulfill any orders for Products which do not require any modifications or additions, other than the modifications specified in Section 3.1 (Customization). The purpose of the purchase order to be issued under this Agreement is for specifying the Products, quantities and requested delivery dates only; no terms and conditions of Canbiola's purchase orders, Manufacturer's order acknowledgment or any other document or instrument of Canbiola or Manufacturer shall be binding upon the other party or amend or modify this Agreement in any manner.

2.2

Prices. Canbiola shall be responsible for all costs associated with manufacture of the Products, at Manufacturer’s cost, with no mark-up or margin due Manufacturer. Manufacturer agrees to provide Canbiola prior to beginning any order with a written estimate of all costs of producing the requested Products. All sales and risk of loss are F.O.B. destination; however, Canbiola agrees to separately pay all expenses incurred by Manufacturer in the shipment and delivery of ordered Products, including without limitation freight charges, import duties and insurance premiums, and any federal and state excise taxes, which Manufacturer may pass along to Canbiola if Manufacturer pays such taxes in compliance with Federal laws. Canbiola shall determine, in its sole discretion, the price at which Canbiola resells Products to Canbiola's customers.

2.3

Shipment and Delivery. Shipments will be made to the warehouse facilities identified by Canbiola in advance of each shipment. Shipments will be made as requested by Canbiola’s carrier. In the event Canbiola requests express delivery or shipment by air instead of by truck or by courier service, Canbiola agrees to pay all additional expenses required by such request. Manufacturer will use commercially reasonable efforts to meet Canbiola's requested delivery schedules for Products. For Manufacturer's first purchase order, the latest shipment date shall be 90 days after receipt of purchase order, unless delayed by governmental registration restrictions. Canbiola shall make any claims for shortage or damage of Products with the common carrier promptly upon receipt of the order and provide Manufacturer with written notice of such a claim. As between Manufacturer and Canbiola, Products shall be deemed accepted by Canbiola unless, within three (3) business days of delivery of the Products, Canbiola affirmatively rejects the Products, by written notice detailing the reasons for rejections. If no such notice of rejection is received, Canbiola shall be deemed to have accepted delivery provided; however, the acceptance of delivery shall in no way diminish or affect the product warranty given by Manufacturer in Section 6 (Warranty and Repairs).

2.4

Payment. Canbiola shall pay 10% of the estimated cost of any Product order subject to a written purchase order prior to production and the balance upon completion of production. 

2.5

Forecasts. Canbiola shall submit a rolling one (1) month sales forecast to Manufacturer every one (1) months. Such sales forecast shall include expected sales quantities per month, order dates, shipping dates and Product requirements. If the most recent forecast becomes materially inaccurate at any time, Canbiola shall promptly provide Manufacturer with updated information. 

3.

Modifications; Discontinued Products; Quality Assurance.

3.1

Customization. Manufacturer agrees to white label / rebrand or relabel the Products pursuant to “white label agreements” entered into between Canbiola and third party customers.  Manufacturer and Canbiola shall collaborate to make sure the labeling is satisfactory to the parties and in accordance with Canbiola's requirements for such Products set forth in its agreements with its . Canbiola shall indicate its its approval of any specific label by causing an authorized representative to sign and print his or her name on a copy of the final label, which executed label shall be delivered to Canbiola’s third party customer on behalf of 

Canbiola in accordance with its white label agreement with each customer. Canbiola shall provide Manufacturer with camera-ready artwork necessary for the labeling of the customized/ white label Products, which shall include, without limitation: trademarks, Product serial numbers, UPC codes, and such additional information as may be specified by Canbiola. Canbiola shall be responsible for the costs of such labeling. Canbiola shall be responsible for the costs of registration.

3.2

Quality Assurance. The Products shall be manufactured in accordance with industry standards and in compliance with all local, state and federal laws.

4.

Confidentiality. 

Manufacturer and Canbiola agree that certain information supplied by Canbiola to Manufacturer during the term of this Agreement, including, without limitation, the Products, the documentation and the intellectual property and technology underlying the Products, the information for customization pursuant to Section 3.1 (Customization) and information contained on purchase orders or regarding Canbiola's ordering or delivery patterns is proprietary, secret, confidential or non-public. All such information shall be held in confidence by Manufacturer, shall be used only for the purposes of this Agreement and shall not be disclosed to any person other than an employee with a need to know the information in order to fulfill the obligations of the receiving party hereunder.

4.1

Return or Destroy Confidential Information. Upon termination of this Agreement, Manufacturer shall return or, upon request, destroy all confidential, proprietary or secret information of Canbiola in its possession. Manufacturer’s obligations pursuant to this Section 4 (Confidentiality) shall survive the expiration or earlier termination of this Agreement.

5.

Canbiola Trademarks. Canbiola hereby grants to Manufacturer a non-exclusive, non-transferable, revocable right to use the “Canbiola” trademark (“Canbiola Mark”) solely on the Products ordered by Canbiola hereunder and associated packaging. Manufacturer agrees to the following:

(a)

to comply with Canbiola's guidelines and instructions regarding use of the Canbiola Marks as communicated to Manufacturer from time to time;

(b)

in the event Canbiola notifies Manufacturer that such use is not in conformance with Canbiola's guidelines and instructions, to promptly bring such use into conformance;

(c)

to ensure that all use of the Canbiola Marks will not reflect adversely upon the good name or good will of Canbiola and that all Products in connection with which the Canbiola Marks are used are of high standard and workmanship and of such nature, style, appearance and quality as shall be adequate and suited to the protection of the Canbiola Marks and the goodwill associated therewith;

(d)

not to use the Canbiola Marks (or any part thereof) as part of, or in combination with, any other names or trademarks without Canbiola's prior written approval;

(e)

not to register (or aid any third party in registering) the Canbiola Marks (or confusingly similar mark) or take any action inconsistent with Canbiola's ownership of the Canbiola Marks in any jurisdiction; and

(f)

that all usage of the Canbiola Marks will be on behalf of, and inure to the benefit of, Canbiola.

6.

Warranty.

6.1

Warranty. Manufacturer warrants that the Products manufactured and sold by it will be free from defects in material and workmanship, and will substantially conform to the technical specifications provided by Canbiola in writing. Canbiola shall have three (3) business days to notify Manufacturer of any defects relating to the Products and shall return the subject Products to Manufacturer. Upon receipt, Manufacturer will replace the defective product free of charge. Manufacturer reserves the right to inspect the defective Products on its return in order to determine the origin of the fault, and if the defect is found not to be covered by the warranty,

6.2

Disclaimer. Canbiola shall be responsible for any warranty it extends, either directly or indirectly, expressly or by operation of law, beyond the warranty expressly granted in this Section 6 (Warranty). Manufacturer  is  not  responsible  for  (i)  damages  caused  by  Canbiola's  failure  to  perform  Canbiola's responsibilities or (ii) damages due to deterioration during periods of storage by Canbiola longer than those periods set forth in the Product documentation.

7.

Insurance. Manufacture shall purchase and maintain throughout the term of this Agreement insurance or indemnity protection sufficient to cover all potential liabilities of Manufacturer. This shall include, but not necessarily be limited to (1) broad form commercial general liability insurance, (2) personal/commercial automobile liability insurance (including, as appropriate, owned, hired, and borrowed auto coverages), and (3) workman’s compensation insurance. The limit of liability for such coverage shall be no less than $1 million per claim/occurrence, and Canbiola shall be named as “additional insureds” under such policies. 

8.

Product Recalls. Manufacturer shall be responsible for all Product recalls. Manufacturer agrees to take any and all actions, at its sole cost and expense, which are reasonably necessary and appropriate to effectuate a Product corrective action, including, without limitation, a Product recall, provided, however that Canbiola agrees to cooperate with Manufacturer in such action, including, without limitation contacting customers and assisting in the transfer of Products, as directed by Manufacturer, if necessary.

9.

Representations and Warranties of Manufacturer. Manufacturer hereby represents and warrants to Canbiola as of the Effective Date as follows:

9.1

Authorization. Manufacturer (i) has the corporate power and authority and the legal right to enter into the Agreement and perform its obligations hereunder, and (ii) has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder. The Agreement has been duly executed and delivered on behalf of Manufacturer, and constitutes a legal, valid, binding obligation of Manufacturer and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity whether enforceability is considered a proceeding at law or equity.

10.

Representations and Warranties of Canbiola. Canbiola hereby represents and warrants to Manufacturer as of the Effective Date as follows:

10.1

Authorization. Canbiola (i) has the corporate power and authority and the legal right to enter into the Agreement and perform its obligations hereunder, and (ii) has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder. The Agreement has been duly executed and delivered on behalf of Canbiola, and 

constitutes a legal, valid, binding obligation of Canbiola and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity whether enforceability is considered a proceeding at law or equity.

11.

Indemnity

11.1

Canbiola shall indemnify, defend and hold Manufacturer harmless from and against any damages, claims, suits, actions, causes of action, demands, liabilities, losses, costs and expenses (including without limitation reasonable attorneys' fees and disbursements and court costs) as a result of or arising from any representations or warranties made by Canbiola to customers or end users which (a) exceed the scope of the representations or warranties made by Manufacturer to Canbiola pursuant to Sections 6 (Warranty and Repairs) and 9 (Representations and Warranties) of this Agreement; or (b) contradict the documentation and/or information made available to Canbiola by Manufacturer regarding specifications, performance and intended use of the Products, provided that (i) Manufacturer shall have promptly provided Canbiola written notice thereof and reasonable cooperation, information and assistance in connection therewith, and (ii) Canbiola shall have sole control and authority with respect to the defense, settlement or compromise thereof. Canbiola acknowledges and agrees that Manufacturer may perform its services hereunder through subsidiaries and the above indemnification shall apply to all Manufactuer subsidiaries, affiliates and agents providing services to Canbiola pursuant to this Agreement.

12.

Term and Termination.

12.1

Term. Unless earlier terminated pursuant to this Section 12 (Term and Termination) or renewed for an additional term to be determined by the parties hereto, by written agreement, this Agreement shall terminate ten (10) years from the Effective Date. 

12.2

Termination. This Agreement may be terminated by the mutual agreement of the parties evidenced in writing. Either party may terminate this Agreement upon the material breach of the Agreement by the other party and failure to cure after thirty (30) days following written notice from the non-breaching party. 

12.3

Duties Upon Termination. Upon the termination of this Agreement for any reason whatsoever, Manufacturer shall promptly return to Canbiola any and all Canbiola-owned equipment, materials, documentation or data in the possession of Manufacturer for whatever reason or purpose, such equipment, materials, documentation and data to be in the same condition as when delivered to Manufacturer, reasonable use, wear and tear excepted.

13.

Miscellaneous.

13.1

Force Majeure. Manufacturer shall not be liable in any respect for failure to ship or for delay in shipment of Products pursuant to accepted orders where such failure or delay shall have been due wholly or in part to the elements, acts of God, acts of Canbiola, acts or civil or military authority, fires, floods, epidemics, quarantine restrictions, war, armed hostilities, riots, strikes, lockouts, breakdown, differences with workers, accidents to machinery, delays in transportation, delays in delivery by Manufacturer, Manufacturer or any other cause beyond the reasonable control of Manufacturer.

13.2

Equitable Relief. Nothing in this Agreement will prevent a party from bringing an action for equitable or injunctive relief in any court of competent jurisdiction to compel the other party to comply with its obligations under the Agreement.

13.3

Applicable Law, Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without reference to the conflict of laws provisions thereof.

13.4

Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute either party as the agent or representative of the other party, or both parties as joint ventures or partners for any purpose. Neither party shall be responsible for the acts or omissions of the other party, and neither party will have authority to speak for, represent or obligate the other party in any way without prior written authority from the other party.

13.5

Entire Agreement. This Agreement (including its Schedules) constitutes the entire agreement between Manufacturer and Canbiola and shall not be amended, altered or changed except by a written agreement signed by the parties hereto. Any terms and conditions in any purchase order or other instrument issued by Canbiola or Manufacturer or any of Canbiola's customers in connection with this Agreement which are in addition to or inconsistent with the terms and conditions of this Agreement shall not be binding on either party and shall not be deemed to amend or modify this Agreement. Each party acknowledges that it is not entering into this Agreement on the basis of any representations not expressly contained herein.

13.6

Rights and Remedies. All rights and remedies of either party hereunder shall be cumulative and may be exercised singularly or concurrently. The failure of either party, in any one or more instances, to enforce any of the terms of this Agreement shall not be construed as a waiver of future enforcement of that or any other term.

13.7

Modifications, Amendments. Modifications and amendments to this Agreement must be in writing, executed by the party against which enforcement thereof is sought.

13.8

No Rights by Implication. No rights or licenses with respect to the Products are granted or deemed granted hereunder or in connection herewith, other than those rights expressly granted in this Agreement.

13.9

Non-Disparagement. Each Party agrees to take all commercially reasonable steps to prevent any of its personnel from making disparaging or otherwise adverse remarks about the products of the other party. Manufacturer shall not, in regard to, Canbiola or its affiliates, or any of their employees, officers, shareholders, or members (the “Protected Parties”), make any statement in writing, orally or on the internet via, among other things, blogs, message boards and social networks) about the Protected Parties that could reasonably be construed as disparaging or defamatory, or to cast such Protected Parties in a negative light, or harm the Protected Parties current or prospective business plans or advantage. 

13.10

Delivery of Notices. Whenever, by the terms of this Agreement, notice, demand or other communication shall or may be given to either party, the communication will be deemed to have been properly given (i) upon delivery, if delivered in person or by facsimile transmission with receipt of an electronic confirmation thereof, (ii) one business day after having been deposited for overnight delivery with any reputable overnight courier service, or (iii) three business days after having been deposited in any post office or mail depository regularly maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested and shall be addressed to the other party at its address first set forth above, or to such other address or addresses as shall from time to time be designated by written notice by either party to the other. 

13.11

Section Headings. Section headings are for descriptive purposes only and shall not control or alter 

the meaning of this Agreement.

13.12

Publicity. Manufacturer shall not make any public announcement or release regarding this Agreement or Canbiola without Canbiola’s prior written permission. 

13.13

Severability. If any provision of this Agreement shall for any reason be held illegal or unenforceable, such provision shall be deemed separable from the remaining provisions of this Agreement and shall in no way affect or impair the validity or enforceability of the remaining provisions of this Agreement, unless removal of the invalidated provision renders another provision impossible to perform or inconsistent with the intent of the parties.

13.14

Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.  This Agreement may be signed and delivered by electronic means, including e-mail.

IN WITNESS WHEREOF, Manufacturer and Canbiola hereby have duly executed this Agreement under seal as of the day and year first above written.

		
	MANUFACTURER

Printed: 

Title:

	CANBIOLA

  Printed: Marco Alfonsi

  Title: CEO

SCHEDULE A 

Products 

SCHEDULE B

Technical Specification of ProductsBOARD OF DIRECTORS  - RETAINER AGREEMENT

EXECUTIVE SERVICES AGREEMENT

This Executive Services Agreement (“Agreement”) is entered into as of February 7, 2017, by and between Canbiola, Inc., a Florida corporation (the “Company”), and David Posel, a resident of Washington (“Executive”). The parties agree as follows:

I.      Services Provided

Company hereby appoints Executive to serve as its Executive “COO,” Chief Operating Officer, and Executive hereby accepts such appointment. Executive shall provide those services required of an officer of like title of a company of similar size and industry. Without limiting the generality of the foregoing, Executive’s duties will include creation of formulas for the Company’s CBD infused products. Any and all services relating to creation of such formulas or development the Company’s products or methodologies provided by Executive under this Agreement will hereafter be referred to as “Work.” 

II.      Nature of Relationship

The Executive is an independent contractor and will not be deemed an employee of Company or any of its project companies for purposes of employee benefits, income tax withholding, F.I.C.A. taxes, unemployment benefits or otherwise. 

III.      Work for Hire; Intellectual Property Ownership

This Agreement is made with the intent that the Work is work made for hire. The Work (including, without limitation, any works of authorship, documents, records, notes, inventions (whether or not reduced to practice), methods, materials, ideas, designs, models, concepts, techniques, discoveries, and improvements created, conceived or reduced to practice by Executive in connection with Work or by use of or exposure to the Company’s confidential information) has been specially ordered and commissioned by the Company, may be incorporated in existing the Company works as a compilation or collective work, and constitutes work made for hire for the Company under applicable copyright law to the extent it qualifies as such. Executive agrees that the Company will own all copyrights, trademarks, trade secrets, formulas and patents in the Work and that the Work is a “work made for hire” for all intellectual property purposes. 

All rights, titles and interests in and to any formulas, programs, systems data, and materials furnished to Executive by the Company are and shall remain the property of the Company. All rights,  titles and interests in and to the  formulas, programs, systems, data, reports, audio and video materials, databases, or other materials used or produced by Executive in the performance of the Work, including any modifications, enhancements, or derivative works thereof, shall remain or become the property of the Company.

All rights, titles and interests in and to any and all materials provided pursuant to this Agreement, including all rights in copyrights, trade secrets, trademarks, patents, including but not limited to any research, databases created specifically for the Company, formulas and manufacturing methods for the Company’s products, or other intellectual property rights pertaining thereto (the “Work Products”) shall be held by the Company, and all Work Products shall, to the extent possible, be considered works made by Executive for the benefit of the Company.  Executive shall mark all Work Products with the Company's copyright or other proprietary notices as directed by the Company and shall take all actions deemed necessary by the Company to protect the Company's rights therein.

The Company may use any ideas, concepts, know-how, methods or techniques not fixed in a tangible medium during the term of this Agreement (“Residual Subject Matter”) relating to the Work that it, individually or jointly, develops or discloses under this Agreement. Notwithstanding the above, neither party shall be prevented from making use of know-how and principles learned nor experience gained of a non-proprietary and non-confidential nature.

IV.

Executive’s Warranties

Throughout the term of this Agreement and for a period of one (1) year thereafter, the Executive agrees he will not, without obtaining Company’s prior written consent, directly or indirectly engage or prepare to engage in any activity in competition with any Company business or product, including products in the development stage, accept employment or provide services to (including service as a member of a board of directors), or establish a business in competition with Company in the territories in which the Company operates. All intellectual properties and formulas created by Executive shall be property of the Company, and stored in a secure data room provided by the Company.

Executive shall perform his obligations under this Agreement in a manner that does not infringe, or constitute an infringement or misappropriation of, any patent, copyright, trademark, trade secret or other proprietary rights of the Company or any third party.

V.      Compensation

·

Compensation.  As compensation for Executive’s services, Executive shall receive a salary of $5,000.00 per month.  The salary shall be paid on the 1st and 15th of each month unless modified by the Company.

·

Salary milestones:

·

Corporate Annual Sales in a calendar year exceeds $1.5M the employee's income shall increase by 20%

·

Corporate Annual Sales in a calendar year exceeds $3M the employee's income shall increase by 10% 

·

Corporate Annual Sales in a calendar year exceeds $5M the employee's income shall increase by 20%

·

Note: Any increase is from the last salary example: If employees salary is $5K/month and Company surpasses $1.5M annual Revenue then the salary will increase by 20% or $1,000 to $6,000/month, if the company then follows with a year where annual sales surpass $3M the salary shall increase to $6,600/month (10% above prior salary) and so forth. If the company surpasses a step in this model such as going directly to $3M+ in sales for the calendar year then the employee shall see a salary increase immediately of $1,600/month in the sample above

·

Executive shall also receive 5% of net revenues from the sale of the Company’s products by U.S.A. Wholesale Exchange, LLC, payable in conjunction with Executive’s salary. For purposes of this Agreement, “net revenues” means all revenues derived from the sale of the Company’s products by U.S.A. Wholesale Exchange, LLC, less the cost of goods sold, pro rata overhead expenses, shipping costs and returns. 

·

Preferred Share Issuance. As additional compensation, Executive shall be issued one (1) share of the Company’s Series A Preferred Stock upon execution of this Agreement, which shall vest and be considered fully earned only upon expiration of the initial four-year term of this Agreement.

·

Vacation and Sick Pay.  Executive shall be entitled to two weeks paid vacation time and 5 paid days for illness each year. Unused vacation and sick days will roll-over and may be used in the following year. Further, Executive may take the following paid holidays: New Year's Day, Martin Luther King, Jr., Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving (plus one additional), and Christmas (plus one additional).

VI.      Indemnification and Insurance

The Company hereby agrees to hold harmless and indemnify Executive to the fullest extent authorized or permitted by law and the Company’s governing documents, as the same may be amended from time to time, except for acts constituting negligence or willful misconduct by Executive, pursuant to the terms of the attached Indemnity Agreement.

VII.      Term of Agreement

This Agreement shall be in effect from the date hereof and continue for an initial term of four years. This Agreement shall be renewed for consecutive four-year terms unless either party gives notice of its intent to terminate the Agreement at least 30 days prior to the expiration of the applicable term. 

VIII.      Termination

This Agreement shall automatically terminate upon the death of the Executive or upon his resignation. Executive may resign with 30 days’ prior written notice to the Company. This Agreement may be terminated by the Company prior to the expiration of its term without or “with cause.” For purposes of this Agreement, “with cause” means: (i) the failure or neglect by the Executive to perform his duties, or (2) misconduct in connection with the performance of any of Executive’s duties, including, without limitation, misappropriation of funds or property of the company, securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of the Company, or any material violation of law or regulations to which the Company is subject. If the Company terminates the Agreement prior to the expiration of its term, but not with cause, it shall pay to Executive within five (5) days of such termination, $5,000.00 (“Severance Pay”). In the event of a merger or acquisition involving the Company where this Agreement is terminated, the Company shall arrange to pay Executive the Severance Pay as a term of the merger or acquisition agreement. 

In the event of any termination of this Agreement, the Executive agrees to return any materials and confidential information of the Company.

IX.      Sole Agreement

This Agreement supersedes all prior or contemporaneous written or oral understandings or agreements, and may not be added to, modified, or waived, in whole or in part, except by a writing signed by the party against whom such addition, modification or waiver is sought to be asserted.

X.      Assignment

This Agreement and all of the provisions hereof shall be binding upon and insure to the benefit of the parties hereto and their respective successors and permitted assigns and, except as otherwise expressly provided herein, neither this agreement, nor any of the rights, interests or obligations hereunder shall be assigned by either of the parties hereto without the prior written consent of the other party.

XI.      Notices

Any and all notices, requests and other communications required or permitted hereunder shall be in writing, registered mail or by facsimile, to each of the parties at the addresses set forth herein or as otherwise provided in writing by such party.

Any such notice shall be deemed given when received and notice given by certified mail shall be considered to have been given on the tenth (10th) day after having been sent in the manner provided for above.

XII.      Survival of Obligations

Notwithstanding the expiration of termination of this Agreement, neither party hereto shall be released hereunder from any liability or obligation to the other which has already accrued as of the time of such expiration or termination or which thereafter might accrue in respect of any act or omission of such party prior to such expiration or termination.

XIII.      Severability

Any provision of this Agreement which is determined to be invalid or unenforceable shall not affect the remainder of this Agreement, which shall remain in effect as though the invalid or unenforceable provision had not been included herein, unless the removal of the invalid or unenforceable provision would substantially defeat the intent, purpose or spirit of this agreement.

XIV.      Governing Laws

This Agreement will be construed in accordance with the laws of the state of New York, without resort to conflict of law principles. 

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by their duly authorized officers, as of the date first written above.

CANBIOLA, INC.

____________________________________

By:  

Title:

EXECUTIVE

____________

David Posel

1

EXHIBIT A

INDEMNITY AGREEMENT

This Indemnity Agreement (“Agreement”) is made and entered into this 6 day of February, 2018 by and between Canbiola, Inc., a Florida corporation (the “Company”), and David Posel (“Executive”).

RECITALS

WHEREAS, Executive performs a valuable service to the Company in his capacity as Chief Operations Officer;

WHEREAS, the Company has adopted Bylaws (the “Bylaws”) providing for the indemnification of the directors, officers, employees and other agents, including persons serving at the request of the Company in such capacities with other corporations or enterprises; and

WHEREAS, in order to induce Executive to continue to serve as COO of the Company, the Company has determined and agreed to enter into this Agreement with Executive.

NOW, THEREFORE, in consideration of Executive’s continued service after the date hereof, the parties hereto agree as follows:

AGREEMENT

1. Indemnity of Executive. The Company hereby agrees to hold harmless and indemnify Executive to the fullest extent authorized or permitted by the provisions of the Bylaws and applicable law against any and all expenses (including attorneys’ fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that Executive becomes legally obligated to pay because of any claim or claims made against or by him in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative (including an action by or in the right of the Company) to which Executive is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Executive is, was or at any time becomes a director, officer, employee or other agent of Company, or is or was serving or at any time serves at the request of the Company as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

2. Limitations on Indemnity. No indemnity shall be paid by the Company:

(a) on account of any claim against Executive solely for an accounting of profits made from the purchase or sale by Executive of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law;

(b) on account of Executive’s conduct that is established by a final judgment as knowingly fraudulent or deliberately dishonest or that constituted willful misconduct;

(c) on account of Executive’s conduct that is established by a final judgment as constituting a breach of Executive’s duty of loyalty to the Company or resulting in any personal profit or advantage to which Executive was not legally entitled;

(d) for which payment is actually made to Executive under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement;

(e) if indemnification is not lawful (and, in this respect, both the Company and Executive have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication); or

(f) in connection with any proceeding (or part thereof) initiated by Executive, or any proceeding by Executive against the Company or its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the board of directors of the Company, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the NYCRR, or (iv) the proceeding is initiated pursuant to Section 9 hereof.

3. Continuation of Indemnity. All agreements and obligations of the Company contained herein shall continue during the period Executive is a director, officer, employee or other agent of the Company (or is or was serving at the request of the Company as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Executive shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative, by reason of the fact that Executive was serving in the capacity referred to herein.

4. Partial Indemnification. Executive shall be entitled under this Agreement to indemnification by the Company for a portion of the expenses (including attorneys’ fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that Executive becomes legally obligated to pay in connection with any action, suit or proceeding referred to in Section 1 hereof even if not entitled hereunder to indemnification for the total amount thereof, and the Company shall indemnify Executive for the portion thereof to which Executive is entitled.

5. Notification and Defense of Claim. Not later than thirty (30) days after receipt by Executive of notice of the commencement of any action, suit or proceeding, Executive will, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve it from any liability which it may have to Executive otherwise than under this Agreement. With respect to any such action, suit or proceeding as to which Executive notifies the Company of the commencement thereof:

(a)   the Company will be entitled to participate therein at its own expense;

(b)   except as otherwise provided below, the Company may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Executive. After notice from the Company to Executive of its election to assume the defense thereof, the Company will not be liable to Executive under this Agreement for any legal or other expenses subsequently incurred by Executive in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided below. Executive shall have the right to employ separate counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of Executive unless (i) the employment of counsel by Executive has been authorized by the Company, (ii) Executive shall have reasonably concluded, and so notified the Company, that there is an actual conflict of interest between the Company and Executive in the conduct of the defense of such action or (iii) the Company shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of Executive’s separate counsel shall be at the expense of the Company. The Company shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Company or as to which Executive shall have made the conclusion provided for in clause (ii) above; and

(c)   the Company shall not be liable to indemnify Executive under this Agreement for any amounts paid in settlement of any action or claim affected without its written consent, which shall not be unreasonably withheld. The Company shall be permitted to settle any action except that it shall not settle any action or claim in any manner which would impose any penalty or limitation on Executive without Executive’s written consent, which may be given or withheld in Executive’s sole discretion.

6. Expenses. The Company shall advance, prior to the final disposition of any proceeding, promptly following request therefore, all expenses incurred by Executive in connection with such proceeding upon receipt of an undertaking by or on behalf of Executive to repay said amounts if it shall be determined ultimately that Executive is not entitled to be indemnified under the provisions of this Agreement, the Bylaws, applicable law or otherwise.

7. Enforcement. Any right to indemnification or advances granted by this Agreement to Executive shall be enforceable by or on behalf of Executive in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefore. Executive, in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim. It shall be a defense to any action for which a claim for indemnification is made under Section 1 hereof (other than an action brought to enforce a claim for expenses pursuant to Section 6 hereof, provided that the required undertaking has been tendered to the Company) that Executive is not entitled to indemnification because of the limitations set forth in Section 2 hereof. Neither the failure of the Company (including its board of directors or its stockholders) to have made a determination prior to the commencement of such enforcement action that indemnification of Executive is proper in the circumstances, nor an actual determination by the Company (including its board of directors or its stockholders) that such indemnification is improper shall be a defense to the action or create a presumption that Executive is not entitled to indemnification under this Agreement or otherwise.

8. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Executive, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

9. Non-Exclusivity of Rights. The rights conferred on Executive by this Agreement shall not be exclusive of any other right which Executive may have or hereafter acquire under any statute, provision of the Company’s Articles of Incorporation or Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding office.

10. Survival of Rights.

(a)   The rights conferred on Executive by this Agreement shall continue after Executive has ceased to be a director, officer, employee or other agent of the Company or to serve at the request of the Company as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of Executive’s heirs, executors and administrators.

(b)   The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

11. Severability. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Company shall nevertheless indemnify Executive to the fullest extent provided by the Bylaws, the NYCRR or any other applicable law.

12. Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of New York.

13. Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto.

14. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement. Only one such counterpart need be produced to evidence the existence of this Agreement.

15. Headings. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

16. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand to the party to whom such communication was directed or (ii) upon the third business day after the date on which such communication was mailed if mailed by certified or registered mail with postage prepaid to the parties address of record, or to such other address as may have been furnished to Executive by the Company.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

CANBIOLA, INC.

___________________________________

By:  

Title:

EXECUTIVE

___________________________________

David Posel

2

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