Document:

EX10-9

Exhibit 10.9

__________

 

 

 

 

 

 

CEO EXECUTIVE SERVICES AGREEMENT

 

 

 

 

 

 

Between:

NATURALLY ADVANCED TECHNOLOGIES INC.

And :

KENNETH BARKER 

 

Dated for reference August 24, 2009 as fully executed on this 26th day of October, 2009

 

 

Naturally Advanced Technologies Inc.

Suite 402 - 1008 Homer Street, Vancouver, British Columbia, Canada, V6B 2X1

__________

CEO EXECUTIVE SERVICES AGREEMENT

 

                       THIS CEO EXECUTIVE SERVICES AGREEMENT is made and dated for reference effective as at August 24, 2009 (the "Effective Date") as fully executed on this 26th day of October, 2009.

 

BETWEEN:

NATURALLY ADVANCED TECHNOLOGIES INC., a 

company incorporated under the laws of the Province of British 

Columbia, Canada, and having an executive office and an address 

for notice and delivery located at Suite 402 - 1008 Homer Street, 

Vancouver, British Columbia, Canada, V6B 2X1

(the "Company");

        OF THE FIRST PART

AND :

KENNETH BARKER, businessman, of Oregon, U.S.A.

(the "Executive");

   OF THE SECOND PART

(the Executive and the Company being hereinafter singularly also 

referred to as a "Party" and collectively referred to as the "Parties" 

as the context so requires).

 

WHEREAS:

A.                     The Company is a reporting company incorporated under the laws of the Province of British Columbia, Canada, whose common shares are presently listed for trading on both the United States Over-the-Counter Bulletin Board market and the TSX Venture Exchange;

B.                     The Executive, the present Chief Executive Officer and a Director of the Company has experience in and specializes in providing reporting and non-reporting companies with valuable corporate management services;

C.                     The Company and its various subsidiaries are involved in the product-focused business of specializing in the development of proprietary technology for the production of bast fibers and fabrics (collectively, the "Business"); and, as a consequence thereof, the Company is hereby desirous of continuing to retain the Executive as the Chief Executive Officer of the Company and the Executive is hereby desirous of accepting such position in order to provide such corporate management related services to the Company and its various subsidiaries as may be necessary for the ongoing maintenance and development of the Company's and its various subsidiaries' respective Business interests during the continuance of this agreement (collectively, the "General Services");

D.                     Previously, the Company and the Executive's company, Meriwether Accelerators, LLC, entered into a CEO Executive Services Agreement effective August 24, 2008 (the "2008 CEO Agreement") and the initial term of the 2008 CEO Agreement expired on August 24, 2009;

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E.                     As the majority of the Executive's work is now dedicated to the Company, both the Executive and the Company now wish to enter into an agreement directly with each other setting out the terms of the agreement between the Parties in writing;

F.                     The Parties hereby acknowledge and agree that there have been various discussions, negotiations, understandings and agreements between them relating to the terms and conditions of the General Services and, correspondingly, that it is their intention by the terms and conditions of this agreement (the "Agreement") to hereby replace, in their entirety, all such prior discussions, negotiations, understandings and agreements with respect to the General Services; and

G.                     The Parties hereto have agreed to enter into this Agreement which replaces, in its entirety, all such prior discussions, negotiations, understandings and agreements, and, furthermore, which necessarily clarifies their respective duties and obligations with respect to the within General Services to be provided hereunder, all in accordance with the terms and conditions of this Agreement;

 

                       NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the mutual covenants and provisos herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:

 

Article 1

DEFINITIONS AND INTERPRETATION

1.1                  Definitions.   For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following words and phrases shall have the following meanings:

(a)     "Agreement" means this CEO Executive Services Agreement as from time to time supplemented or amended by one or more agreements entered into pursuant to the applicable provisions hereof, together with any Schedules attached hereto;

(b)     "Board of Directors" means the Board of Directors of the Company as duly constituted from time to time;

(c)     "Business" has the meaning ascribed to it in recital "C." hereinabove.

(d)     "business day" means any day during which Canadian Chartered Banks are open for business in the City of Vancouver, Province of British Columbia, Canada;

(e)     "Companies" means the Company and each of its subsidiaries;

(f)     "Company" means Naturally Advanced Technologies Inc., a company incorporated under the laws of the Province of British Columbia, Canada, or any successor company, however formed, whether as a result of merger, amalgamation or other action;

(g)     "Company's Non-Renewal Notice" has the meaning ascribed to it in section "3.2" hereinbelow;

(h)     "Date of Grant" has the meaning ascribed to it in section "4.3" hereinbelow;

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(i)     "Deliverables" has the meaning ascribed to it in section "4.3" hereinbelow;

(j)     "Effective Date" has the meaning ascribed to on the face page of this Agreement;

(k)     "Effective Termination Date" has the meaning ascribed to it in each of sections "3.3", "3.4", "3.5", "3.6" and "5.6" hereinbelow;

(l)     "Exchange Act" has the meaning ascribed to it in section "4.3" hereinbelow;

(m)     "Executive" means Kenneth Barker;

(o)     "Executive Materials" has the meaning ascribed to it in section "5.7" hereinbelow;

(q)     "Exercise Term" has the meaning ascribed to it in section "4.3" hereinbelow;

(r)     "Expenses" has the meaning ascribed to it in section "4.2" hereinbelow;

(s)     "Fee" has the meaning ascribed to it in section "4.1" hereinbelow;

(t)     "Form S-8 Registration Statement" has the meaning ascribed to it in section "4.3" hereinbelow;

(u)     "General Services" has the meaning ascribed to it in section "2.1" hereinbelow;

(v)     "Indemnified Party" has the meaning ascribed to it in section "6.1" hereinbelow;

(w)     "Initial Vesting Date" has the meaning ascribed to it in section "4.3" hereinbelow;

(x)     "Notice of Termination" has the meaning ascribed to it in each of sections "3.3", "3.4", "3.5" and "5.6" hereinbelow;

(y)     "Option" has the meaning ascribed to it in section "4.3" hereinbelow;

(z)     "Option Plan" has the meaning ascribed to it in section "4.3" hereinbelow;

(aa)   "Option Shares" has the meaning ascribed to it in section "4.3" hereinbelow;

(ab)   "Parties" or "Party" means, individually and collectively, the Company, and/or the Executive, as the context so requires, together with each of their respective successors and permitted assigns as the context so requires;

(ac)   "Property" has the meaning ascribed to it in section "5.7" hereinbelow;

(ad)   "Registration Statement" has the meaning ascribed to it in section "4.3" hereinbelow;

(ae)   "Regulatory Approval" means the acceptance for filing, if required, of the transactions contemplated by this Agreement by the Regulatory Authorities;

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(af)   "Regulatory Authorities" and "Regulatory Authority" means, either singularly or collectively as the context so requires, such regulatory agencies who have jurisdiction over the affairs of either of the Companies and/or the Executive and including, without limitation, all regulatory authorities from whom any such authorization, approval or other action is required to be obtained or to be made in connection with the transactions contemplated by this Agreement;

(ag)   "SEC" has the meaning ascribed to it in section "4.3" hereinbelow;

(ah)   "Securities Act" has the meaning ascribed to it in section "4.3" hereinbelow; and

(ai)   "subsidiary" means any company or companies of which more than 50% of the outstanding shares carrying votes at all times (provided that the ownership of such shares confers the right at all times to elect at least a majority of the directors of such company or companies) are for the time being owned by or held for that company and/or any other company in like relation to that company and includes any company in like relation to the subsidiary.

1.2                  Interpretation.   For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)     the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, section or other subdivision of this Agreement;

(b)     any reference to an entity shall include and shall be deemed to be a reference to any entity that is a permitted successor to such entity; and

(c)     words in the singular include the plural and words in the masculine gender include the feminine and neuter genders, and vice versa.

 

Article 2

GENERAL SERVICES AND DUTIES OF THE EXECUTIVE

2.1                  General Services.   During the continuance of this Agreement the Company hereby agrees to retain the Executive as the Chief Executive Officer of the Company and to any or all of the Company's subsidiaries, as the case may be, and as may be determined by the Board of Directors in its sole and absolute discretion from time to time, and the Executive hereby agrees to be subject to the direction and supervision of, and to have the authority as is delegated to the Executive by, the Board of Directors consistent with such positions, and the Executive also agrees to accept such positions in order to provide such corporate management related services as the Board of Directors shall, from time to time, reasonably assign to the Executive and as may be necessary for the ongoing maintenance and development of the Companies' various Business interests during the continuance of this Agreement (collectively, the "General Services"); it being expressly acknowledged and agreed by the Parties hereto that the Executive shall commit and provide to the Company the General Services for which the Company, as more particularly set forth hereinbelow, hereby agrees to pay and provide to the order and direction of the Executive each of the proposed compensation amounts as set forth in Article "4" hereinbelow.

                       In this regard it is hereby acknowledged and agreed that the Executive shall be entitled to communicate with and shall rely upon the immediate advice, direction and instructions of the Board of Directors, or upon the advice or instructions of such director or officer of the Company as the Board of Directors shall, from time to time, in order to initiate, coordinate and implement the General Services as contemplated herein subject, at all times, to the final direction and supervision of the Board of Directors.

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2.2                  Additional duties respecting the General Services.   Without in any manner limiting the generality of the General Services to be provided as set forth in section "2.1" hereinabove, it is hereby also acknowledged and agreed that the Executive will, during the continuance of this Agreement, provide for the performance of said General Services faithfully, diligently, to the best of the Executive's abilities and in the best interests of the Companies and, furthermore, that the Executive's time will be prioritized at all times for the Companies in that regard.

2.3                  Adherence to rules and policies of the Companies.   The Executive hereby acknowledges and agrees to abide by the reasonable rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the same as such rules, regulations, instructions, personnel practices and policies may be reasonably applied to the Executive as the Chief Executive Officer of the Company.

 

Article 3

EFFECTIVENESS, INITIAL TERM, RENEWAL AND TERMINATION

3.1                  Effectiveness and Initial Term of the Agreement.   This Agreement becomes effective on the Effective Date hereinabove, however, is subject, at all times, to the Company's prior receipt, if required, of Regulatory Approval from each of the Regulatory Authorities to the terms and conditions of and the transactions contemplated by this Agreement.  The initial term of this Agreement is for a period commencing on the Effective Date hereof and ending at the close of business (Vancouver, British Columbia, Canada, time) on the date which is one year from the Effective Date hereof (the "Initial Term").

3.2                  Renewal by the Company after the Initial Term.   Subject at all times to sections "3.3", "3.4", "3.5" and "5.6" hereinbelow, this Agreement shall renew automatically if not specifically terminated in accordance with the following provisions.  The Company agrees to notify the Executive in writing at least 30 calendar days prior to the end of the Initial Term of its intent not to renew this Agreement (the "Company's Non-Renewal Notice").  Should the Company fail to provide a Company's Non-Renewal Notice this Agreement shall automatically renew on a month-to-month term renewal basis after the Initial Term until otherwise specifically renewed in writing by each of the Parties hereto for the next one-month term of renewal or, otherwise, terminated upon delivery by the Company of a corresponding and follow-up 30 calendar day Company's Non-Renewal Notice in connection with and within 30 calendar days prior to the end of any such one-month term renewal period.  Any such renewal on a one-month basis shall be on the same terms and conditions contained herein unless modified and agreed to in writing by the Parties in advance.

3.3                  Termination without cause by the Executive.   Notwithstanding any other provision of this Agreement, this Agreement may be terminated by the Executive at any time after the Effective Date and during the Initial Term and during the continuance of this Agreement upon the Executive to the Company of prior written notice of his intention to do so (the "Notice of Termination" herein) at least 30 calendar days prior to the effective date of any such termination (the end of such 30-day period from such Notice of Termination being the "Effective Termination Date" herein).  In any such event the Executive's ongoing obligation to provide the General Services will continue only until the Effective Termination Date and, subject to the following, the Company's ongoing obligation to provide and to pay to the Executive all of the amounts otherwise payable to the Executive under Article "4" hereinbelow will continue only until the Effective Termination Date.

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3.4                  Termination without cause by the Company.   Notwithstanding any other provision of this Agreement, this Agreement may be terminated by the Company at any time after the Effective Date and during the Initial Term and during the continuance of this Agreement upon the Company's delivery to the Executive of prior written notice of its intention to do so (the "Notice of Termination" herein) at least 30 calendar days prior to the effective date of any such termination (the end of such 30-day period from such Notice of Termination being the "Effective Termination Date" herein).  In any such event the Executive's ongoing obligation to provide the General Services will immediately cease upon the date of the Notice of Termination, however, the Company shall continue to be obligated to provide and to pay to the Executive all of the amounts otherwise payable to the Executive under Article "4" hereinbelow until the Effective Termination Date and including, without limitation, the Executive's then right to exercise any vested portion of the Option (as hereinafter determined) outstanding until the end of the exercise term of the Option as set forth under Article "4" hereinbelow.

3.5                  Termination for cause by any Party.   Notwithstanding any other provision of this Agreement, this Agreement may be terminated by any of the Parties hereto at any time upon written notice to the other Party of such Party's intention to do so (the "Notice of Termination" herein) at least 10 calendar days prior to the effective date of any such termination (the end of such ten-day period from such Notice of Termination being the "Effective Termination Date" herein), and damages sought, if:

(a)     the other Party fails to cure a material breach of any provision of this Agreement within 10 calendar days from its receipt of written notice from said Party (unless such material breach cannot be reasonably cured within said 10 calendar days and the other Party is actively pursuing to cure said material breach);

(b)     the other Party is willfully non-compliant in the performance of its respective duties under this Agreement within ten calendar days from its receipt of written notice from said Party (unless such willful non-compliance cannot be reasonably corrected within said 10 calendar days and the other Party is actively pursuing to cure said willful non-compliance);

(c)     the other Party commits fraud or serious neglect or misconduct in the discharge of its respective duties hereunder or under the law; or

(d)     the other Party becomes adjudged bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy, and where any such involuntary petition is not dismissed within 10 calendar days.

                       In any such event the Executive's ongoing obligation to provide the General Services will continue only until the Effective Termination Date and, subject to the following, the Company's ongoing obligation to provide and to pay to the Executive all of the amounts otherwise payable to the Executive under Article "4" hereinbelow will continue only until the Effective Termination Date.

3.6                  Disability or death.    Notwithstanding any other provision of this Agreement, this Agreement may be terminated at any time by any Party within 10 calendar days after the death or disability of the Executive, as a without fault termination (the resulting effective date of any such termination being herein also the "Effective Termination Date").  For the purposes of this Agreement the term "disability" shall mean the Executive shall have been unable to provide the General Services contemplated under this Agreement for a period of 30 calendar days, whether or not consecutive, during any 365 calendar day period, due to a physical or mental disability.   A determination of disability shall be made by a physician satisfactory to both the Executive and the Company; provided that if the Executive and the Company do not agree on a physician, the Executive and the Company shall each select a physician and these two together shall select a third physician whose determination as to disability shall be binding on all Parties.  In the event that the Executive's position is terminated by death or because of disability pursuant to this Agreement, the Company shall pay to the estate of the Executive all amounts to which the Executive would otherwise be entitled under Article "4" hereinbelow until the Effective Termination Date.

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3.7                  Effect of Termination.   Terms of this Agreement relating to accounting, payments, confidentiality, accountability for damages or claims and all other matters reasonably extending beyond the terms of this Agreement and to the benefit of the Parties hereto or for the protection of the various Business interests of the Companies shall survive the termination of this Agreement, and any matter of interpretation thereto shall be given a wide latitude in this regard.  In addition, and without limiting the foregoing, each of sections "3.2", "3.3", "3.4", "3.5", "3.6" hereinabove and section "5.6" hereinbelow shall survive the termination of this Agreement.

 

Article 4

COMPENSATION OF THE EXECUTIVE

4.1                  Fee.   It is hereby acknowledged and agreed that the Executive shall render the General Services as defined hereinabove during the Initial Term and during the continuance of this Agreement and shall thus be compensated during the continuance of this Agreement to the termination of the same by way of the payment by the Company to the Executive, or to the further order or direction of the Executive as the Executive may determine, in the Executive's sole and absolute discretion, and advise the Company of prior to such payment, of the gross monthly fee of U.S. $15,000.00 (the "Fee"); with all such Fees being be due and payable by the Company to the Executive, or to the further order or direction of the Executive as the Executive may determine, in the Executive's sole and absolute discretion, and advise the Company of prior to any such Fee payment, bi-monthly and on or about the fifteenth and thirtieth day of each month of the then monthly period of General Services during the continuance of this Agreement.

4.2                  Reimbursement of Expenses.   It is hereby acknowledged and agreed that the Executive shall also be reimbursed for all direct, reasonable expenses actually and properly incurred by the Executive for the benefit of the Company (collectively, the "Expenses"); and which Expenses, it is hereby acknowledged and agreed, shall be payable by the Company to the order, direction and account of the Executive as the Executive may designate in writing, from time to time, in the Executive's sole and absolute discretion, as soon as conveniently possible after the prior delivery by the Executive to the Company of written substantiation on account of each such reimbursable Expense.

4.3                  Vesting Option predicated on certain Deliverables.   Subject to the following pre-delivery and vesting provisions, and as soon as reasonably practicable after the prior and ongoing attainment by the Company, with the direct assistance of the Executive, of certain pre-determined corporate development milestones by the Company (collectively, the "Deliverables"); a complete listing of such Deliverables having been agreed upon by the Parties hereto in advance and in writing with the execution of this Agreement (in each case herein being a "Date of Grant"), it is hereby acknowledged and agreed that the Executive will be granted, subject to the rules and policies of the Regulatory Authorities and applicable securities legislation, the terms and conditions of the Company's 2008 fixed share option plan (the "Option Plan") and subject to the final determination of the Company's Compensation Committee, acting reasonably, the right and option (the "Option") to purchase an aggregate of up to 500,000 common shares of the Company (each an "Option Share") immediately upon the Date of Grant in each such instance; which is again to occur as soon as reasonably practicable after the attainment by the Company of the stated Deliverables; at an exercise price of US$1.17 (CDN$1.21) Option Share and for a period of up to five years from the Date of Grant in each such instance on the following vesting terms and conditions:

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(a)     300,000 Option Shares, or a portion thereof, to be granted at the sole discretion of the Company's Compensation Committee based on a subjective evaluation of the Executive's performance in relation to the broad objectives previously agreed to by the Parties and subject to the provisions and vesting schedule set out in the Option Plan; and

(b)     if the Company's stock price reaches a sustained level (which the Parties previously agreed to be three months) of US$3.00 per share, at the discretion of the Company's Compensation Committee, the above mentioned subjective evaluation set out in subsection 4.3(a) may be overridden and 300,000 options shall be granted automatically and another 200,000 options may be granted as a bonus for a total of 500,000 options, all such Options will still be subject to the provisions and vesting schedule set out in the Option Plan,

                       In this regard, and subject also to the following, it is hereby acknowledged and agreed that the exercise of any of the Option shall be subject, at all times, to such resale provisions as may then be contained in the Company's Option Plan and as may be finally determined by the Board of Directors, acting reasonably.  Notwithstanding the foregoing, in accordance with Section 3.10 of the Option Plan, it is hereby also acknowledged and agreed that, in the event that this Agreement is terminated in accordance with either of sections "3.2", "3.3", "3.4" or "5.6" herein, the Executive will have 30 days from the Effective Termination Date to exercise such vested portion of the within and remaining Option which shall have then not been exercised on the Effective Termination Date.

                       In this regard, and in accordance with the terms and conditions of each final form of Option agreement(s), the Parties hereby also acknowledge and agree that:

(A)     Filings in accordance with TSX Venture Exchange Policy 4.4:   upon the granting of the Options the Parties agree to complete all filings required by Policy 4.4 of the TSX Venture Exchange no later than the end of the month in which the options are granted;

(B)     Registration of Option Shares under the Options:   the Company expects to file with the United States Securities and Exchange Commission (the "SEC") a registration statement on Form S-8 (the "Form S-8 Registration Statement") within 120 calendar days of initial Date of Grant and covering the issuance of all Option Shares of the Company underlying the then vested and issued Option, and such Form S-8 Registration Statement shall comply with all requirements of the United States Securities Act of 1933, as amended (the "Securities Act").  In this regard the Company shall use its best efforts to ensure that the Form S-8 Registration Statement remains effective as long as such vested and issued Option is outstanding, and the Executive fully understands and acknowledges that these Option Shares will be issued in reliance upon the exemption afforded under the Form S-8 Registration Statement which is available only if the Executive acquires such Option Shares for investment and not with a view to distribution.  The Executive hereby acknowledges that he is familiar with the phrase "acquired for investment and not with a view to distribution" as it relates to the Securities Act and the special meaning given to such term in various releases of the SEC;

(C)     Section 16 compliance:   only if applicable, the Company shall ensure that all grants of the Option are made to ensure compliance with all applicable provisions of the exemption afforded under Rule 16b-3 promulgated under the United States Securities and Exchange Act of 1934, as amended (the "Exchange Act").  Without limiting the foregoing, the Company shall have an independent committee of the Board of Directors approve each grant of the Option to the Executive and, if required, by the applicable Regulatory Authorities and the shareholders of the Company.  The Company shall file, on behalf of the Executive, all reports required to filed with the SEC pursuant to the requirements of Section 16(a) under the Exchange Act and applicable rules and regulations;

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(D)     Disposition of any Option Shares:  the Executive further acknowledges and understands that, without in anyway limiting the acknowledgements and understandings as set forth hereinabove, the Executive agrees that the Executive shall in no event make any disposition of all or any portion of the Option Shares which the Executive may acquire hereunder unless and until:

(i)     there is then in effect a "Registration Statement" under the Securities Act covering such proposed disposition and such disposition is made in accordance with said Registration Statement; or

(ii)    (a) the Executive shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, (B) the Executive shall have furnished the Company with an opinion of the Executive's own counsel to the effect that such disposition will not require registration of any such Option Shares under the Securities Act and (C) such opinion of the Executive's counsel shall have been concurred in by counsel for the Company and the Company shall have advised the Executive of such concurrence; and

(E)     Payment for any Option Shares:   it is hereby further acknowledged and agreed that, during the continuance of this Agreement, the Executive shall be entitled to exercise any portion of the vested Option granted hereunder and pay for the same by way of the prior agreement of the Executive, in the Executive's sole and absolute discretion, and with the prior knowledge of the Company, to settle any indebtedness which may be due and owing by the Company under this Agreement in payment for the exercise price of any Option Shares acquired thereunder.  In this regard, and subject to further discussion as between the Company and the Executive, together with the prior approval of the Board of Directors and the establishment by the Company of an Option Plan predicated upon the same, it is envisioned that, when the Company is in a position to afford the same, the Company may adopt certain additional "cashless exercise" provisions respecting the granting and exercise of incentive stock options during the continuance of this Agreement.

4.4                  Payment of compensation as a non-taxable consultant.   It is hereby acknowledged and agreed that the Executive will be classified as a non-taxable consultant of the Company for all purposes.  In this regard, and for all matters relating to this Agreement therefore, the Executive will be a consultant of the Company under the meaning or application of any and all applicable federal and state unemployment, insurance and workers' compensation laws, and otherwise.

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Article 5

ADDITIONAL OBLIGATIONS OF THE EXECUTIVE

5.1                  Reporting.   At such time or times as may be required by the Board of Directors, acting reasonably, the Executive will provide the Board of Directors with such information concerning the results of the Executive's General Services and activities hereunder for the previous month as the Board of Directors reasonably require.

5.2                  Non-competition.   During the continuance of this Agreement, and for a period of twelve months following the termination of this Agreement in accordance with either of sections "3.2", "3.3", "3.4", "3.5", "3.6" or "5.6" hereunder, the Executive shall not enter into any agreement with any third party whose primary business is the manufacture and distribution of natural or organic fibers to provide services similar to those provided by the Executive to the Company under this Agreement.

5.3                  Confidentiality.   The Executive will not, except as authorized or required by the Executive's duties hereunder, reveal or divulge to any person or entity any information concerning the organization, business, finances, transactions or other affairs of the Companies which may come to the Executive's knowledge during the continuance of this Agreement, and the Executive will keep in complete secrecy all confidential information entrusted to the Executive and will not use or attempt to use any such information in any manner which may injure or cause loss either directly or indirectly to the Business interests.  This restriction will continue to apply after the termination of this Agreement without limit in point of time but will cease to apply to information or knowledge which may come into the public domain.

5.4                  Compliance with applicable laws.   The Executive will comply with all Canadian, U.S. and foreign laws, whether federal, provincial or state, applicable to the Executive's duties hereunder and, in addition, hereby represents and warrants that any information which the Executive may provide to any person or company hereunder will, to the best of the Executive's knowledge, information and belief, be accurate and complete in all material respects and not misleading, and will not omit to state any fact or information which would be material to such person or company.

5.5                  Opinions, reports and advice of the Executive.   The Executive acknowledges and agrees that all written and oral opinions, reports, advice and materials provided by the Executive to the Companies in connection with the Executive's engagement hereunder are intended solely for the Company's benefit and for the Company's uses only, and that any such written and oral opinions, reports, advice and information are, except as specifically provided in section "5.7" hereinbelow, the exclusive property of the Company.  In this regard the Executive covenants and agrees that the Companies may utilize any such opinion, report, advice and materials for any other purpose whatsoever and, furthermore, may reproduce, disseminate, quote from and refer to, in whole or in part, at any time and in any manner, any such opinion, report, advice and materials in the Company's sole and absolute discretion.  The Executive further covenants and agrees that no public references to the Executive or disclosure of the Executive's role in respect of the Companies may be made by the Executive without the prior written consent of the Board of Directors in each specific instance and, furthermore, that any such written opinions, reports, advice or materials shall, unless otherwise required by the Board of Directors, be provided by the Executive to the Companies in a form and with such substance as would be acceptable for filing with and approval by any Regulatory Authority having jurisdiction over the affairs of the Companies from time to time.

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5.6                  Executive's business conduct.   The Executive warrants that the Executive shall conduct the business and other activities in a manner which is lawful and reputable and which brings good repute to the Companies, the Business interests and the Executive.  In particular, and in this regard, the Executive specifically warrants to provide the General Services in a sound and professional manner such that the same meets superior standards of performance quality within the standards of the industry or as set by the specifications of the Company.   In the event that the Company has a reasonable concern that the business as conducted by the Executive is being conducted in a way contrary to law or is reasonably likely to bring disrepute to the Business interests or to the Companies' or the Executive's reputation, the Company may require that the Executive make such alterations in the Executive's business conduct or structure, whether of management or Board representation or employee or sub-licensee representation, as the Board of Directors may reasonably require, in its sole and absolute discretion, failing which the Company, in its sole and absolute discretion, may terminate this Agreement upon prior written notice to the Executive to do so (the "Notice of Termination" herein) at least 10 calendar days prior to the effective date of any such termination (the end of such 10-day period from such Notice of Termination being the "Effective Termination Date" herein).  In any such event the Executive's ongoing obligation to provide the General Services will continue only until the Effective Termination Date and, subject to the following, the Company's ongoing obligation to provide and to pay to the Executive all of the amounts otherwise payable to the Executive under Article "4" hereinabove will continue until the Effective Termination Date.  In the event of any debate or dispute as to the reasonableness of the Board of Directors' request or requirements, the judgment of the Board of Directors shall be deemed correct until such time as the matter has been determined by arbitration in accordance with Article "8" hereinbelow.

5.7                  Right of ownership to the Business and related Property.   The Executive hereby acknowledges and agrees that any and all Business interests, together with any products or improvements derived therefrom and any trade marks or trade names used in connection with the same (collectively, the "Property"), are wholly owned and controlled by the Company.  Correspondingly, neither this Agreement, nor the General Services or the operation of the Business contemplated by this Agreement, confers or shall be deemed to confer upon the Executive any interest whatsoever in and to any of the Property.  In this regard the Executive hereby further covenants and agrees not to, during or after the Initial Term and the continuance of this Agreement, contest the title to any of the Property interests, in any way dispute or impugn the validity of the Property interests or take any action to the detriment of the Company's interests therein.  The Executive acknowledges that, by reason of the unique nature of the Property interests, and by reason of the Executive's knowledge of and association with the Property interests during the Initial Term and during the continuance of this Agreement, the aforesaid covenant, both during the Initial Term of this Agreement and thereafter, is reasonable and commensurate for the protection of the legitimate Business interests of the Companies.  As a final note, the Executive hereby further covenants and agrees to immediately notify the Company of any infringement of or challenge to the any of the Property interests as soon as the Executive becomes aware of the infringement or challenge.  Notwithstanding the Company's ownership of the Property, the Parties acknowledge and agree that the Property may contain certain proprietary Executive materials or elements which shall remain the property of the Executive (collectively, the "Executive Materials").  Executive Materials are generally used or provided to the clients of the Executive in the normal course of delivering his consulting services and include, but are not limited to, processes, techniques and know how, and all intellectual property rights contained herein.  The Executive grants to the Company a non-exclusive, non-transferable license to use the Executive Materials embodied within the Property.

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                       The Executive hereby assigns to the Company, exclusive of the Executive Materials, his right, title and interest throughout the world in and to all work performed, writings, formulas, designs, models, drawings, photographs, design inventions, and other inventions, made, conceived, or reduced to practice or authored by the Executive or by the Executive's employees, either solely or jointly with others, during the performance of this Agreement, or which are made, conceived, or reduced to practice, or authored with the use of information or materials of the Companies either received or used by the Executive during the performance of this Agreement or any extension or renewal thereof.  The Executive shall promptly disclose to the Company all works, writings, formulas, designs, models, photographs, drawings, design inventions and other inventions made, conceived or reduced to practice, or authored by the Executive or the Executive's employees as set forth above.  The Executive shall sign, execute and acknowledge, or cause to be signed, executed and acknowledged, at the Company's cost and expense, applicable patent, trademark or copyright protection throughout the world upon all such works, writings, formulas, designs, models, drawings, photographs, design inventions and other inventions; title to which the Company acquires in accordance with the provisions of this section, subject to the Executive's sole and exclusive rights in the Executive Materials.  The Executive has acquired or shall acquire from each of the Executive's employees, if any, the necessary rights to all such works, writings, formulas, designs, models, drawings, photographs, design inventions and other inventions made by such employees within the scope of their employment by the Executive in performing the General Services under this Agreement.  The Executive shall seek to obtain the reasonable cooperation of each such employee to secure to the Company's or its nominee's the rights to such works, writings, formulas, designs, models, drawings, photographs, design inventions and other inventions as the Company may acquire in accordance with the provisions of this section.

 

Article 6

INDEMNIFICATION AND LEGAL PROCEEDINGS

6.1                  Indemnification.   The Parties hereto hereby each agree to indemnify and save harmless the other Party hereto and including, where applicable, their respective subsidiaries and affiliates and each of their respective directors, officers, employees, consultants, associates, counsel and agents (each such party being an "Indemnified Party") harmless from and against any and all losses, claims, actions, suits, proceedings, damages, liabilities or expenses of whatever nature or kind and including, without limitation, any investigation expenses incurred by any Indemnified Party, to which an Indemnified Party may become subject by reason of the terms and conditions of this Agreement.

6.2                  No indemnification.   This indemnity will not apply in respect of an Indemnified Party in the event and to the extent that a Court of competent jurisdiction in a final judgment shall determine that the Indemnified Party was grossly negligent or guilty of willful misconduct.

6.3                  Claim of indemnification.   The Parties hereto agree to waive any right they might have of first requiring the Indemnified Party to proceed against or enforce any other right, power, remedy, security or claim payment from any other person before claiming this indemnity.

6.4                  Notice of claim.   In case any action is brought against an Indemnified Party in respect of which indemnity may be sought against either of the Parties hereto, the Indemnified Party will give both Parties hereto prompt written notice of any such action of which the Indemnified Party has knowledge and the relevant Party will undertake the investigation and defense thereof on behalf of the Indemnified Party, including the prompt employment of counsel acceptable to the Indemnified Party affected and the relevant Party and the payment of all expenses.  Failure by the Indemnified Party to so notify shall not relieve the relevant Party of such relevant Party's obligation of indemnification hereunder unless (and only to the extent that) such failure results in a forfeiture by the relevant Party of substantive rights or defenses.

6.5                  Settlement.   No admission of liability and no settlement of any action shall be made without the consent of each of the Parties hereto and the consent of the Indemnified Party affected, such consent not to be unreasonable withheld.

6.6                  Legal proceedings.   Notwithstanding that the relevant Party will undertake the investigation and defense of any action, an Indemnified Party will have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel will be at the expense of the Indemnified Party unless:

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(a)     such counsel has been authorized by the relevant Party;

(b)     the relevant Party has not assumed the defense of the action within a reasonable period of time after receiving notice of the action;

(c)     the named parties to any such action include that any Party hereto and the Indemnified Party shall have been advised by counsel that there may be a conflict of interest between any Party hereto and the Indemnified Party; or

(d)     there are one or more legal defenses available to the Indemnified Party which are different from or in addition to those available to any Party hereto.

6.7                  Contribution.   If for any reason other than the gross negligence or bad faith of the Indemnified Party being the primary cause of the loss claim, damage, liability, cost or expense, the foregoing indemnification is unavailable to the Indemnified Party or insufficient to hold them harmless, the relevant Party shall contribute to the amount paid or payable by the Indemnified Party as a result of any and all such losses, claim, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the relevant Party on the one hand and the Indemnified Party on the other, but also the relative fault of relevant Party and the Indemnified Party and other equitable considerations which may be relevant.  Notwithstanding the foregoing, the relevant Party shall in any event contribute to the amount paid or payable by the Indemnified Party, as a result of the loss, claim, damage, liability, cost or expense (other than a loss, claim, damage, liability, cost or expenses, the primary cause of which is the gross negligence or bad faith of the Indemnified Party), any excess of such amount over the amount of the fees actually received by the Indemnified Party hereunder.

 

Article 7

FORCE MAJEURE

7.1                  Events.   If either Party hereto is at any time either during this Agreement or thereafter prevented or delayed in complying with any provisions of this Agreement by reason of strikes, walk-outs, labour shortages, power shortages, fires, wars, acts of God, earthquakes, storms, floods, explosions, accidents, protests or demonstrations by environmental lobbyists or native rights groups, delays in transportation, breakdown of machinery, inability to obtain necessary materials in the open market, unavailability of equipment, governmental regulations restricting normal operations, shipping delays or any other reason or reasons beyond the control of that Party, then the time limited for the performance by that Party of its respective obligations hereunder shall be extended by a period of time equal in length to the period of each such prevention or delay.

7.2                  Notice.   A Party shall within three calendar days give notice to the other Parties of each event of force majeure under section "7.1" hereinabove, and upon cessation of such event shall furnish the other Parties with notice of that event together with particulars of the number of days by which the obligations of that Party hereunder have been extended by virtue of such event of force majeure and all preceding events of force majeure.

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Article 8

ARBITRATION

8.1                  Matters for arbitration.   Except for matters of indemnity or in the case of urgency to prevent material harm to a substantive right or asset, the Parties agree that all questions or matters in dispute with respect to this Agreement shall be submitted to arbitration pursuant to the terms hereof.  This provision shall not prejudice a Party from seeking a Court order or assistance to garnish or secure sums or to seek summary remedy for such matters as counsel may consider amenable to summary proceedings.

8.2                  Notice.   It shall be a condition precedent to the right of any Party to submit any matter to arbitration pursuant to the provisions hereof that any Party intending to refer any matter to arbitration shall have given not less than five business days' prior written notice of its intention to do so to the other Parties together with particulars of the matter in dispute.  On the expiration of such five business days the Party who gave such notice may proceed to refer the dispute to arbitration as provided for in section "8.3" hereinbelow.

8.3                  Appointments.   The Party desiring arbitration shall appoint one arbitrator, and shall notify the other Parties of such appointment, and the other Parties shall, within five business days after receiving such notice, appoint an arbitrator, and the two arbitrators so named, before proceeding to act, shall, within five business days of the appointment of the last appointed arbitrator, unanimously agree on the appointment of a third arbitrator, to act with them and be chairperson of the arbitration herein provided for.  If the other Parties shall fail to appoint an arbitrator within five business days after receiving notice of the appointment of the first arbitrator, and if the two arbitrators appointed by the Parties shall be unable to agree on the appointment of the chairperson, the chairperson shall be appointed in accordance with the scope of the rules of the Arbitration Service of Portland; whose rules and regulations shall govern the applicable arbitration.  The chairperson, or in the case where only one arbitrator is appointed, the single arbitrator, shall fix a time and place in Portland, Oregon, U.S.A., for the purpose of hearing the evidence and representations of the Parties, and the chairperson shall preside over the arbitration and determine all questions of procedure not provided for by the Arbitration Act or this section.  After hearing any evidence and representations that the Parties may submit, the single arbitrator, or the arbitrators, as the case may be, shall make an award and reduce the same to writing, and deliver one copy thereof to each of the Parties.  The expense of the arbitration shall be paid as specified in the award.

8.4                  Award.   The Parties agree that the award of a majority of the arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be final and binding upon each of them.

 

Article 9

GENERAL PROVISIONS

9.1                  Entire agreement.   This Agreement constitutes the entire agreement to date between the Parties hereto and supersedes every previous agreement, expectation, negotiation, representation or understanding, whether oral or written, express or implied, statutory or otherwise, between the Parties with respect to the subject matter of this Agreement.

9.2                  No assignment.   This Agreement may not be assigned by any Party hereto except with the prior written consent of the other Parties.

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9.3                  Notice.   Each notice, demand or other communication required or permitted to be given under this Agreement shall be in writing and shall be sent by prepaid registered mail deposited in a recognized post office and addressed to the Party entitled to receive the same, or delivered to such Party, at the address for such Party specified on the front page of this Agreement.  The date of receipt of such notice, demand or other communication shall be the date of delivery thereof if delivered, or, if given by registered mail as aforesaid, shall be deemed conclusively to be the third business day after the same shall have been so mailed, except in the case of interruption of postal services for any reason whatsoever, in which case the date of receipt shall be the date on which the notice, demand or other communication is actually received by the addressee.  Any Party may at any time and from time to time notify the other Parties in writing of a change of address and the new address to which notice shall be given to it thereafter until further change.

9.4                  Time of the essence.   Time will be of the essence of this Agreement.

9.5                  Enurement.   This Agreement will enure to the benefit of and will be binding upon the Parties hereto and their respective heirs, executors, administrators and assigns.

9.6                  Currency.   Unless otherwise stipulated, all payments required to be made pursuant to the provisions of this Agreement and all money amount references contained herein are in lawful currency of the United States of America.

9.7                  Further assurances.   The Parties will from time to time after the execution of this Agreement make, do, execute or cause or permit to be made, done or executed, all such further and other acts, deeds, things, devices and assurances in law whatsoever as may be required to carry out the true intention and to give full force and effect to this Agreement.

9.8                  Representation and costs.   It is hereby acknowledged by each of the Parties hereto that they are individually responsible for obtaining independent legal advice with respect to the review and execution of this Agreement.   It is also hereby acknowledge that each Party to this Agreement will bear and pay its own costs, legal and otherwise, in connection with its respective review and execution of this Agreement. 

9.9                  Applicable law.   This Agreement shall be governed by the laws of the State of Oregon, U.S.A., and applicable United States federal law.

9.10                Severability and construction.   Each Article, section, paragraph, term and provision of this Agreement, and any portion thereof, shall be considered severable, and if, for any reason, any portion of this Agreement is determined to be invalid, contrary to or in conflict with any applicable present or future law, rule or regulation in a final unappealable ruling issued by any court, agency or tribunal with valid jurisdiction in a proceeding to which any Party hereto is a party, that ruling shall not impair the operation of, or have any other effect upon, such other portions of this Agreement as may remain otherwise intelligible (all of which shall remain binding on the Parties and continue to be given full force and effect as of the date upon which the ruling becomes final).

9.11                Captions.   The captions, section numbers and Article numbers appearing in this Agreement are inserted for convenience of reference only and shall in no way define, limit, construe or describe the scope or intent of this Agreement nor in any way affect this Agreement.

9.12                Counterparts.   This Agreement may be signed by the Parties hereto in as many counterparts as may be necessary, and via facsimile if necessary, each of which so signed being deemed to be an original and such counterparts together constituting one and the same instrument and, notwithstanding the date of execution, being deemed to bear the Effective Date as set forth on the front page of this Agreement.

9.13                No partnership or agency.   The Parties have not created a partnership and nothing contained in this Agreement shall in any manner whatsoever constitute any Party the partner, agent or legal representative of the other Parties, nor create any fiduciary relationship between them for any purpose whatsoever.

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9.14                Consents and waivers.   No consent or waiver expressed or implied by either Party in respect of any breach or default by the other in the performance by such other of its obligations hereunder shall:

(a)     be valid unless it is in writing and stated to be a consent or waiver pursuant to this section;

(b)     be relied upon as a consent to or waiver of any other breach or default of the same or any other obligation;

(c)     constitute a general waiver under this Agreement; or

(d)     eliminate or modify the need for a specific consent or waiver pursuant to this section in any other or subsequent instance.

 

                       IN WITNESS WHEREOF each of the Company and the Executive's Company has duly executed this Agreement as of the Effective Date first provided hereinabove.

 

	
The Common Seal of NATURALLY ADVANCED TECHNOLOGIES INC., the Company herein, was hereunto affixed in the presence of:

"Guy Prevost"         

Authorized Signatory

	
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(C/S)

 

 

	
SIGNED, SEALED and DELIVERED by KENNETH BARKER, the Executive:

"Kenneth Barker"         

KENNETH BARKER
	
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__ex10-1.htm

Exhibit 10.1

 

EXTENSION AGREEMENT

This Extension Agreement, made effective as of April 7, 2010 (the “Agreement”), is between Innovative Food Holdings, Inc., a Florida corporation (the “Company”) and the signatories hereto who are subscribers (“Subscribers”) under certain subscription agreements with the Company dated February 24, 2005, August 25, 2005 and December 31, 2008 (Alpha Capital Anstalt - $200,000) (collectively, “Subscription Agreement”) as amended to include certain Promissory Notes dated February 7, 2006 (Alpha Capital Anstalt - $120,000, Whalehaven Capital Fund Limited - $30,000), May 16, 2006 (Alpha Capital Anstalt - $10,000), respectively, as amended, certain Class A, B and C Warrants (issued in March 2008) as amended, and certain Notes representing liquidated damages (issued on January 1, 2009) as amended, and related documents (“Transaction Documents”).

WHEREAS, the Company has issued notes as further described on Schedule A hereto, as amended (the “Notes”); and

WHEREAS, the Company has issued warrants as further described on Schedule A hereto (the “Warrants”); and

WHEREAS, some of the Notes have reached their Maturity Date but have not been repaid; and

WHEREAS, the Company and Subscribers have agreed to make certain changes to the terms of the Notes and Warrants.

           NOW THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby consent and agree as follows:

	
1.  

	
Except for the Notes identified on Schedule B, the Maturity Date of each Note is hereby amended to April 15, 2011, unless the Maturity Date of a Note is already stated to be a specific date which is later than such date, in which case the existing Maturity Date shall remain in effect.  The Maturity Date of Notes identified on Schedule B is hereby amended to June 15, 2010.

	
2.  

	
The Expiration Date of each Warrant is hereby extended to April 16, 2012, unless the Expiration Date is already stated to be a specific date which is later than such date, in which case the existing Expiration Date shall remain in effect.

	
3.  

	
Sections 1.2, entitled Minimum Monthly Principal Payments, and 2.1(a), entitled Payment of Monthly Amount in Cash or Common Stock, of the Notes are hereby deleted in their entirety except for the Note issued to Alpha Capital Anstalt on 12/31/08 for $200,000 for which sections 1.2 and 2.1 remain unchanged.

	
4.  

	
A Default Interest rate of 20% will be applied to the Notes dated December 21, 2006 issued to Whalehaven Capital Fund Limited.

	
5.  

	
The Subscribers hereto acknowledge and agree that as of the date hereof, to their best knowledge, none of the Notes are in default, nor are there any existing breaches pursuant to the terms of any Subscription Agreement that would cause a default under any of the Notes.  In addition, any existing or past defaults, if any, under any of the Notes are hereby waived, and going forward, a Note will only be deemed in default if written notice of a new default, occurring after the date hereof, is given to the Company.

	
6.  

	
Unless otherwise changed in accordance with the terms of the Notes as amended herein, as of January 1, 2010 interest on all the Notes shall accrue at the non-default rate.  Default Interest shall not accrue on any Notes solely for an Event of Default which is a result of the Notes on Schedule B being past due.  Upon written notice from the Subscribers, an Event of Default as a result of the Notes on Schedule B being past due shall be a cross default on the rest of the Notes on Schedule A.

	
7.  

	
The total interest owed to Whalehaven on all its Notes as of January 1, 2010 is as set forth on Schedule C.

	
8.  

	
All other terms of the Transaction Documents remain in full force and effect (including the terms of any amendments not specifically superseded by this Agreement) as if this Agreement had not been executed.

	
9.  

	
This Agreement may be executed in counterparts, all of which when taken together shall be considered one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that all parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were an original thereof.  A copy of this Agreement annexed to the Note or the Warrant, as appropriate, shall be sufficient to reflect the amendment thereto.

[THIS SPACE INTENTIONALLY LEFT BLANK]

 

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the date first written above.

INNOVATIVE FOOD HOLDINGS, INC.

By: _______________________________________

ALPHA CAPITAL ANSTALT

By: _______________________________________

WHALEHAVEN CAPITAL FUND LIMITED

By: _______________________________________

LANE VENTURES

By: _______________________________________

MOMONA CAPITAL

By: _______________________________________

__________________________________________

ASHER BRAND

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