Document:

exhibit10_35.htm

Exhibit 10.35

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (“Agreement”) is made by and between Steven R. Carlson (“Executive”) and Obagi Medical Products, Inc., a Delaware corporation (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”).

RECITALS

WHEREAS, Executive has been employed by the Company and served in various roles with the Company and its affiliates, including but not limited to OMP, Inc.;

WHEREAS, Executive signed an Employment Agreement with the Company entered into as of March 1, 2005, an Amendment to Employment Agreement dated as of August 6, 2007, a Second Amendment to Employment Agreement dated as of March 1, 2008, a Third Amendment to Employment Agreement dated as of December 31, 2008, and a Fourth Amendment to Employment Agreement dated as of March 11, 2010 (collectively the “Employment Agreements”);

WHEREAS, Executive wishes to resign his employment and all other positions and titles with the Company and its affiliates and the Company wishes to accept such resignations, effective October 8, 2010 (the “Separation Date”);

WHEREAS, the Parties have mutually agreed that Executive will receive the same separation benefits as he would have received pursuant to the Employment Agreements had his employment been terminated by the Company without Cause (as defined in the Employment Agreements);

WHEREAS, the Parties wish to terminate any and all agreements with each other, including but not limited to the Employment Agreements, except as otherwise specifically provided herein, effective as of the Separation Date; and

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that Executive may have against the Company and any of the Releasees as defined below, including but not limited to any and all claims arising out of or in any way related to Executive’s employment with or separation from the Company;

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Executive hereby agree as follows:

COVENANTS

1. Consideration.  In consideration of Executive’s execution of this Agreement and Executive’s fulfillment of all of its terms and conditions, and provided that Executive does not revoke the Agreement under Section 6 below, the Company agrees as follows:

a.           Payments.  On April 11, 2011, the Company shall pay Executive the gross sum of Seven Hundred Fifty Thousand Dollars ($750,000.00), in a lump sum, less applicable withholding.  Within the later of November 8, 2010 and ten (10) business days following the Effective Date (as defined below), the Company also shall provide a check payable to Executive’s attorney, William M. Crosby, in the lump sum of Two Thousand Five Hundred Dollars ($2,500.00),

 

 

  

  

  

for Executive’s legal fees related to this Agreement.  It is understood and agreed that Executive is fully responsible for any and all tax liability arising from this payment, that the Company will issue an IRS Form or Forms 1099 documenting this payment, and that Executive will defend and indemnify the Company for any and all tax liability, interest, penalties or other such obligations relating to or arising out of this payment.

b.           COBRA.  Provided Executive timely elects and remains eligible under the federal COBRA law, the Company will continue to pay Executive’s premium for the Company’s group health insurance covering Executive and his spouse and other eligible dependents through the last day of the month ending eighteen (18) months after the Separation Date; provided, however, should Executive secure employment with another entity and become eligible for comparable group health insurance coverage by such entity prior to the expiration of such eighteen (18) month period, Executive shall notify the Company within three (3) business days of becoming eligible for such alternate health insurance coverage and the Company’s obligations under this Section 1(b) shall cease immediately upon receipt of such notice.  At such time as the Company ceases to pay this premium, Executive may be eligible to continue his group health insurance benefits at his own expense, subject to the terms and conditions of the benefit plan, federal COBRA law, and, as applicable, state insurance laws.

c.           Bonus.  On April 11, 2011, the Company shall pay Executive the gross sum of Two Hundred Twenty Thousand Five Hundred Thirty-Three Dollars ($220,533.00) in bonus compensation, less applicable withholding, which it is agreed is the greater of the accrued Bonus or Bonus prorated through the Separation Date that has been earned but not paid as defined in the Employment Agreements.  Such bonus payment shall be in lieu of any bonus payment for which Executive may have otherwise been eligible.

d.           Stock Options.  Although there is no provision for repurchase in the options granted to Executive, the Company has chosen to pay Executive, in a lump sum, within the later of November 8, 2010 and ten (10) business days following the Effective Date, the gross sum of Eight Hundred Seventy-four Thousand Eight Hundred Fifty-Eight Dollars ($874,858.00), less applicable withholding, to extinguish all of Executive's rights in all options to purchase shares of the Company’s common stock granted by the Company to Executive and which were outstanding as of the Separation Date, without regard to whether such options are presently exercisable, would have become exercisable or would have expired subsequent to the Separation Date in accordance with their terms or otherwise, and to be completed in conformity with all Securities and Exchange Commission and any other applicable rules and regulations.  It is agreed that the calculation of such lump sum amount is based upon the difference between the average closing price of the Company's shares for the past ninety (90) trading days as of the Separation Date and the exercise prices of those in-the-money options vested and exercisable as of the Separation Date.  Upon the Company’s payment of such lump sum amount to Executive, all options held by Executive (including without limitation all vested and exercisable out-of-the-money options) shall be cancelled and terminated and of no further force and effect.

e.           Product.  Beginning April 11, 2011 through November 7, 2020, the Company shall provide without charge to Executive and his spouse, and only for their personal use, reasonable quantities of the Company’s products, subject to any legal requirements, e.g., physician dispense or prescription, where applicable.

 

 

  

  

  

 

 

f.           Expenses.  The Company shall also reimburse Executive for any outstanding, reasonable business expenses that he has incurred on the Company’s behalf through the Separation Date, after the Company’s timely receipt of appropriate documentation pursuant to the Company’s business expense reimbursement policy.

g.           Resignation.  Executive hereby confirms his resignation from his positions as an employee of the Company and as the Company’s President and Chief Executive Officer, as an employee and President and Chief Executive Officer of OMP, Inc., from his position on the Boards of Directors of the Company and OMP, Inc., and Executive hereby resigns from any additional positions or offices Executive holds with the Company, OMP, Inc. or any subsidiaries or affiliates of either of them, effective as of the Separation Date.

2. Tax Treatment.  The Company shall undertake to make deductions, withholdings and tax reports with respect to payments and benefits under this Agreement to the extent that it reasonably and in good faith determines that it is required to make such deductions, withholdings and tax reports.  Payments under this Agreement shall be in amounts net of any such deductions or withholdings.  Executive acknowledges that the Company has advised him that it considers him to be a "specified employee" for purposes of Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A") and that Executive has consulted with his own tax counsel regarding the implications thereof.  The Company makes no representation or warranty and shall have no liability to Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A that does not comply with Section 409A.  Nothing in this Agreement shall be construed to require the Company to make any payments to compensate Executive for any adverse tax effect (including, but not limited to, any effects under Section 409A of the Internal Revenue Code of 1986, as amended) associated with any payments or benefits or for any deduction or withholding from any payment or benefit.

3. Benefits.  Except as provided in this Agreement, Executive’s participation in all benefits and incidents of employment, including, but not limited to, vesting in stock options, and the accrual of bonuses, vacation, and paid time off, will cease as of the Separation Date.

4. Payment of Salary and Receipt of All Benefits.  Regardless of whether Executive signs this Agreement, Executive shall be or has been paid no later than the Separation Date for all salary earned and all accrued and unused vacation earned through the Separation Date.  Executive acknowledges and represents that, other than the consideration set forth in this Agreement or as otherwise provided in this Section 4, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Executive.

5. Release of Claims by Executive.  Executive agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Executive by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Releasees”).  Executive, on his own behalf and on behalf of his respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently known

 

  

  

  

 

or unknown, suspected or unsuspected, that Executive may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement, including, without limitation:

a.           any and all claims relating to or arising from Executive’s employment relationship with the Company and the termination of that relationship;

b.           any and all claims relating to, or arising from, Executive’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

c.           any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

d.           any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the California Family Rights Act; the California Labor Code; the California Workers’ Compensation Act; and the California Fair Employment and Housing Act;

e.           any and all claims for violation of the federal or any state constitution;

f.           any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

g.           any claim for any loss, cost, damage, or expense arising out of any dispute over the nonwithholding or other tax treatment of any of the proceeds received by Executive as a result of this Agreement; and

h.           any and all claims for attorneys’ fees and costs.

Executive agrees that the release set forth in this Section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not extend to any obligations incurred under this Agreement.  This release does not release claims that cannot be released as a matter of law, including, but not limited to, Executive’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with the understanding that any such filing or participation does not give Executive the right to recover any monetary damages against the

 

  

  

  

 

Company; Executive’s release of claims herein bars Executive from recovering such monetary relief from the Company).  Nothing contained herein releases any of Executive’s rights to indemnification or defense or other rights that arise pursuant to the Company’s bylaws, under any insurance policies maintained by the Company that cover current or former officers or directors, under applicable law, or under the Indemnification Agreement executed September 12, 2006 between Executive and the Company (the “Indemnification Agreement”).

6. Acknowledgment of Waiver of Claims under ADEA.  Executive acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary.  Executive agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.  Executive acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Executive was already entitled.  Executive further acknowledges that he has been advised by this writing that: (a) he should consult with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within which to consider this Agreement; (c) he has seven (7) days following his execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.  In the event Executive signs this Agreement and returns it to the Company in less than the 21-day period identified above, Executive hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement.

7. Release of Claims by the Company.  In consideration for, among other terms, Executive’s release of claims in Section 5 above, the Company voluntarily releases and forever discharges Executive on his own behalf and on behalf of his respective heirs, family members, executors, agents or assigns generally from any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that the Company may possess against Executive on his own behalf and on behalf of his respective heirs, family members, executors, agents or assigns arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement; provided that the Company does not release Executive from any civil claims based on intentional actions or omissions by Executive resulting in material loss to the Company (“Excepted Claims”).  The Company has no knowledge of or reason to believe that it has any Excepted Claims against Executive.

8. California Civil Code Section 1542.  Executive and the Company acknowledge that they have been advised to consult with legal counsel and are familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

    A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

  

  

  

 

Executive and the Company, being aware of said code section, agree to expressly waive any rights they may have thereunder, as well as under any other statute or common law principles of similar effect.

9. No Pending or Future Lawsuits.  Executive represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any of the other Releasees.  Executive also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any of the other Releasees.

10. Application for Employment.  Executive understands and agrees that, as a condition of this Agreement, Executive shall not be entitled to any employment with the Company, and Executive hereby waives any right, or alleged right, of employment or re-employment with the Company.  Executive further agrees not to apply for employment with the Company and not otherwise pursue an independent contractor or vendor relationship with the Company.

11. Confidentiality.  Executive agrees to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Separation Information”).  Except as required by law, Executive may disclose Separation Information only to his immediate family members, the Court in any proceedings to enforce the terms of this Agreement, Executive’s attorney(s), and Executive’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on tax treatment or to prepare tax returns, and must prevent disclosure of any Separation Information to all other third parties.  Executive agrees that he will not publicize, directly or indirectly, any Separation Information.

12. Trade Secrets and Confidential Information/Company Property.  Executive reaffirms and agrees to observe and abide by the terms of any and all confidentiality, trade secrets, proprietary information and invention assignment agreements or undertakings he has signed with the Company, including but not limited to Sections 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6 of the Employment Agreement entered into as of March 1, 2005, which Sections shall remain in full force and effect notwithstanding any other provision of this Agreement, but only to the extent not inconsistent with this Agreement; provided, however, that said Section 4.3 is hereby amended to delete subpart (ii) and to revise subpart (i) to read:  “solicit for employment or recommend for employment any person employed by the Company or any affiliate of the Company.”

13. Return of Property.  Executive agrees to return to the Company no later than the Separation Date all Company property, including, without limitation, computer equipment, software, keys and access cards, credit cards, files and any documents (including computerized data and any copies made of any computerized data or software) containing information concerning the Company, its business or its business relationships (in the latter two cases, actual or prospective).  Executive also commits to deleting and finally purging any duplicates of files or documents that may contain Company information from any computer or other device that remains his property after the Separation Date.  In the event that Executive discovers that he continues to retain any such property, he shall return it to the Company immediately

14. No Cooperation.  Executive agrees that he will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against any of the Releasees, unless

 

  

  

  

 

under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement.  Executive agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order.  If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints against any of the Releasees, Executive shall state no more than that he cannot provide counsel or assistance.

15. Nondisparagement.  Executive agrees to refrain from any disparagement, defamation, libel, or slander of any of the Releasees, and agrees to refrain from any tortious interference with the contracts and relationships of any of the Releasees.  Executive shall direct any inquiries by potential future employers to the Company’s human resources department, which shall use its best efforts to provide only Executive’s last position and dates of employment.  The Company agrees to instruct current members of its Executive Management and Board of Directors to refrain from any public comments that will disparage, defame, libel or slander Executive.

16. Breach.  In addition to the rights provided in the “Attorneys’ Fees” Section below, Executive acknowledges and agrees that any material breach of this Agreement, unless such breach constitutes a legal action by Executive challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, shall entitle the Company immediately to recover and/or cease providing any and all consideration provided to Executive under this Agreement and to obtain damages, except as provided by law.

17. No Admission of Liability.  Executive understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed claims by Executive.  No action taken by the Company hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to Executive or to any third party.

18. Costs.  The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement.

19. Future Cooperation.  Executive agrees to cooperate reasonably with the Company and all of its affiliates (including its and their outside counsel) in connection with the contemplation, prosecution and defense of all phases of existing, past and future litigation about which the Company believes Executive may have knowledge or information.  Executive further agrees to make himself available at mutually convenient times during and outside of regular business hours as reasonably deemed necessary by the Company’s counsel.  Executive agrees to appear without the necessity of a subpoena to testify truthfully in any legal proceedings in which the Company calls Executive as a witness or designates or has designated Executive as an agent of the Company.  The Company shall also reimburse Executive for any pre-approved reasonable business travel expenses that Executive incurs on the Company’s behalf as a result of his litigation cooperation services, after receipt of appropriate documentation consistent with the Company’s business expense reimbursement policy.  In addition, for all time that Executive reasonably expends in cooperating with the Company or any of its affiliates pursuant to this Section 19, the Company shall compensate Executive at the rate of $250 per hour; provided that Executive’s right to such compensation shall not apply to time spent in activities that could have been compelled pursuant to a subpoena, including testimony and related attendance at depositions, hearings or trials.  The

 

 

  

  

  

 

 

executive agrees to testify truthfully in all proceedings in which he may be called as a witness by any party.

20. Authority.  The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement.  Executive represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him/her to bind them to the terms and conditions of this Agreement.  Executive warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

21. No Representations.  Executive represents that he has had an opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement.  Executive has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

22. Severability.  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

23. Attorneys’ Fees.  Except with regard to a legal action challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action.

24. Entire Agreement.  This Agreement represents the entire agreement and understanding between the Company and Executive concerning the subject matter of this Agreement and Executive’s employment with and separation from the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Executive’s relationship with the Company, with the exception of the Indemnification Agreement and any and all confidentiality, trade secrets, proprietary information and invention assignment agreements or undertakings he has signed with the Company, including but not limited to those sections of the Employment Agreement entered into as of March 1, 2005 referenced in Section 12 of this Agreement, all of which remain in full force and effect to the extent not inconsistent with this Agreement.

25. No Oral Modification.  This Agreement may only be amended in a writing signed by Executive and the Company’s Chief Executive Officer.

26. Governing Law.  This Agreement shall be governed by the laws of the State of California, without regard for choice-of-law provisions.  Executive consents to personal and exclusive jurisdiction and venue in the State of California.

27. Effective Date.  Each Party has seven (7) days after that Party signs this Agreement to revoke it.  This Agreement will become effective on the eighth (8th) day after Executive signed

 

 

  

  

  

 

this Agreement, so long as it has been signed by the Parties and has not been revoked by either Party before that date (the “Effective Date”).

28. Counterparts.  This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

29. Voluntary Execution of Agreement.  Executive understands and agrees that he executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of his claims against the Company and any of the other Releasees.  Executive acknowledges that:

(a)             he has read this Agreement;

	  	
 (b)

	
he has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of his own choice or has elected not to retain legal counsel;

	  	
 (c)

	
he understands the terms and consequences of this Agreement and of the releases it contains; and

(d)             he is fully aware of the legal and binding effect of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

	  	  	  
	  	  	  	  
	
October 15, 2010

	
By:

	
/s/ Steven R. Carlson

	  
	  	  	
Steven R. Carlson

	  
	  	  	  	  
	  	  	  	  

	  	
Obagi Medical Products, Inc.

	  
	  	  	  	  
	
October 15, 2010

	
By:

	
/s/ Albert F. Hummel

	  
	  	  	
Albert F. Hummel

	  
	  	  	
Chief Executive Officer

	  
	  	  	  	  

 

	  	
Obagi Medical Products, Inc.

	  
	  	  	  	  
	
October 15, 2010

	
By:

	
/s/ Preston S. Romm

	  
	  	  	
Preston S. Romm

	  
	  	  	
Chief Financial Officerex10-1.htm

CONSULTING SERVICES AGREEMENT

 

THIS CONSULTING SERVICES AGREEMENT (the "Agreement") is entered into on January 11, 2010 between Freshwater Technologies, Inc. ("Company"), having its principle address at 30 Denver Crescent, Suite #200, Toronto, Ontario, Canada M2J1G8 and Michael Borrelli, Consultant  having  a  principal address at 125 Coldwater Road W, Orillia, Ontario L3V 3L5.

 

WHEREAS, the Company desires to retain the services of Consultant as described herein and Consultant desires to provide such services for the consideration set forth below and for such other mutual promises and consideration received the Company and Consultant hereby enter into this Agreement as follows:

 

1. Services. The Company retains Consultant to render to the Company the following ser services (the "Services"):

   

a) The Consultant will assess the Company’s current supplier systems to determine present and future compatibility with corporate growth and expansion. This should include water activation products, ozone production of OzoCan and UV and related products of Viqua (formerly R-Can Environmental). The report should document order entry and production scheduling as well as payment procedures for equipment ordered from manufacturing suppliers.

 

b) The consultant will consult with all Company distributors and agents to determine a policy and procedures manual that will ensure that equipment orders are efficiently and accurately processed, customers financial arrangements for payment, sales and rental commission structures, banking arrangements in each locale and transfer to corporate bank account.

 

c) The Consultant will consult with the officers of the Company to determine the required management information system, data that can be reported on a monthly basis using digital information technology to ensure that senior management has on line access to information that is accurate and current.

 

d) The Consultant will meet regularly with officers and directors of the Company to discuss ongoing operational activities and recommend systems, procedures and policies to further the Company’s business plans and operational targets.

 

e) The Consultant will also be available to consult with Company supplier and manufacturing partners, distributors and agents to provide advice and managerial system solutions that can enhance the effective relationship between the Company and its key stakeholders.

 

f) It is expressly agreed herein that the Company shall be responsible for all reasonable costs and necessary expenses incurred by Consultant, including travel, mileage,  duplicating and communication expenses. The Company shall reimburse Consultant for all such expenses with thirty (30) days, subject to submission by Consultant of reasonably satisfactory documentation. Consultant shall be required to receive prior written approval from the Company's Chief Financial Officer for any reimbursed expenses.   

 

2. Compensation.  As consideration for Consultant's performance of the Services, the Company shall issue to Michael Borrelli , Six Million (6,000,000) shares of the Company's  common stock (the "Shares") upon the signing of this contract by both parties.

 

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3.  Term and Termination. Subject to earlier termination, the term of this agreement shall begin on the date set forth above and will continue in full force and effect for a period of twelve (12) months from the date hereof. Either party may terminate this Agreement on thirty (30) calendar days written notice, or if prior to such action, the other party materially breaches any of its representations, warranties or obligations under this Agreement. Except as may be otherwise provided in this Agreement, such breach by either party will result in that party being responsible to reimburse the non-defaulting party for all costs incurred directly as a result of the breach of this Agreement. Upon any termination or expiration of this Agreement, Company shall pay all unpaid and outstanding fees, through the effective date of termination or expiration of this Agreement. And upon such termination, Consultant shall provide and deliver to Company any and all outstanding Services due through the effective date of this Agreement. Termination by either party shall not result in the forfeiture by Consultant of the Shares.                   

 

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4. Independent Contractor Status. The parties agree and acknowledge that this Agreement shall not be construed so as to make either an employee of the other and neither party shall hold themselves out as such. Neither party shall i) have the authority to bind the other to any contract, agreement, nor indenture; ii) be liable to any third party for the acts of the other; nor iii) accept service of process for the other.

  

5. Confidential Information. It is agreed by the parties that Consultant shall have access to, have disclosed to it, or otherwise obtain Confidential Information about the Company. "Confidential Information" shall mean confidential, non-public or other proprietary information including, without limitation, letters addressed from the Securities and Exchange Commission to the Company, trade secrets, technical information, including algorithms, code, data, designs, documentation, drawings, formulae, hardware, know­how, ideas, inventions, whether patentable or not, photographs, plans, procedures, processes, reports, research, samples, sketches, software, specifications, business information, including customer and distributor names, marketing information, operations, plans, products, financial information, including pricing and other confidential information that is disclosed under the terms of this Agreement by the Company or the Consultant. Consultant shall not disclose to, or use for the benefit of, any third party, Confidential Information it receives without the prior written consent of the Company. Information shall not be considered Confidential Information if such information is i) already known to Consultant at the time it is obtained, ii) subsequently learned from an independent third party; or iii) available publicly.

 

6. Confidentiality of Agreement. The parties shall not disclose to any third person or entity, any portion of this Agreement except as necessary for the Consultant to provide the Services set forth in Section 1 herein and as otherwise required by applicable law. Except as permitted in the preceding sentence, neither party shall disclose the existence or terms of this Agreement without first obtaining prior written approval of the other party. Neither party shall use the other's name, logo, trademarks, or service marks in any advertising, publicity releases, or any other materials without that party's prior written approval, which shall not be unreasonably withheld by the Company if Consultant determines such use to be consistent with the performance of its Services described herein.

 

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7. Best Efforts. The parties agree that Consultant will utilize its best efforts to provide the Services set forth in Section 1 above. The Company acknowledges and accepts that Consultant does not and cannot promise or guarantee that any specific result can or will be achieved by the Consultant as a result of its performance of the Services set forth herein.

 

8. Assignment. This Agreement may be assigned to and inure to the benefit of, and be binding upon, any successor to substantially all of the assets and business of the Company as a going concern, whether by merger, consolidation, liquidation or sale of substantially all of the assets of the Company or otherwise. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform as if no such succession had taken place; and, as used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise; provided that for purposes of Section 8 hereof, the term "Company" shall mean the Company as hereinbefore defined and any such transaction in which this Agreement is assigned to a successor may not expand or enlarge the scope of restrictions applicable to Consultant pursuant to this Agreement. Consultant understands and agrees, however, that this Agreement is exclusive and personal to him only, and, as such, he will neither assign nor subcontract all or part of his undertaking(s) or obligation(s) under the terms of this Agreement.

 

9. Suit/Jurisdiction. The parties agree that any and all disputes arising out of or relating to this Agreement shall be submitted to the American Arbitration Association ("AAA") for binding and final resolution in accordance with the rules of the AAA. The parties further agree that such arbitration shall take place in Nevada. Notwithstanding the foregoing, the parties shall each retain the right to seek injunctive or equitable relief for any actual or threatened breach of Sections 5 and 6 of this Agreement. In the event either party exercises its right to seek injunctive or equitable relief, it shall do so in a court of competent jurisdiction in the State of Nevada. Without limitation of the foregoing, each party acknowledges that it hereby waives the right to have disputes arising out of or relating to this Agreement resolved by jury trial and the parties shall not be entitled to special, punitive, incidental and similar damages in any proceeding brought for enforcement of this Agreement.

 

Initial ______

 

10. Interpretation of Agreement. This Agreement shall be interpreted in accordance plain meaning of its terms and under the laws of the State of Nevada without reference to conflicts of law provisions.

 

11. Contents of Agreement and Amendments. This Agreement sets forth the entire agreement of the parties. No amendment or modification to this Agreement shall be binding unless in writing and signed by both parties. The parties agree the terms of the Addendum hereto are hereby incorporated into this Agreement.

 

12. Counterparts; Delivery by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of this Agreement may be effected by facsimile.

 

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

 

	
CONSULTANT:

	  	
COMPANY:

	
 

/s/ Michael Borrelli

	  	
/s/ Max Weissengruber

	
Print Name: Michael Borrelli

	  	
Print Name: Max Weissengruber

	  	  	  
	
Title:

	  	
Title: President, CEO and Director

	
Dated: January 11, 2010

	  	
Dated: January 11, 2010 

 

 

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Addendum

 

Consultant represents that it is not required to maintain any licenses or registrations under federal or any state regulations necessary to perform the services set forth herein that it does not possess. Consultant acknowledges that, the performance of the services set forth under this Agreement will not violate any rule or provision of any regulatory agency having jurisdiction over Consultant and Consultant will fully and accurately disclose its compensation provided hereunder and its ownership of securities of the Company in connection with any publications, reports or analysis. Consultant acknowledges that, to the best of its knowledge, Consultant and its officers and directors are not the subject of any investigation, claim, decree or judgment involving any violation of the SEC or securities laws. Consultant further acknowledges that it is not a securities Broker, Dealer or a registered investment advisor

	  	  
	  	  

Initial

 

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