Consulting
Agreement
This consulting agreement (the
“ Agreement ”), entered into on March 13, 2009
and effective as of the Effective Date (as defined in Section
1(e)), is made by and between BioNeutral Group, Inc., a Nevada
corporation (together with any successor thereto, the “
Company ”), and James Crane, an independent provider
of services (the “ Contractor ”).
RECITALS
A. The
Company desires to assure itself of the services of the Contractor,
as an independent contractor, by engaging the Contractor to perform
services under the terms hereof.
B. The
Contractor desires to provide services to the Company, as an
independent contractor, on the terms herein provided.
AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing and of the respective covenants and agreements set
forth below the parties hereto agree as follows:
(a) “ Stock
Award ” shall have the meaning set forth in
Section 3(a).
(b) “
Board ” shall mean the Board of Directors of the
Company.
(c) “ Change
in Control Event ” shall mean any event subsequent to
February 6, 2009, which results in:
[1] A change in the majority ownership of the
Company such that the current majority shareholder(s) no longer
retain majority control over the Company’s daily business
operations and a shareholder vote called by the current majority
shareholders will not necessarily result in the wishes of the
majority shareholder being met
[2] An event whereby the Company is acquired by
another business and the acquiring business obtains majority
control through the acquisition or award by the Company's Board, of
the majority of the seats on the Board of Directors
[3] An event whereby the Company is acquired by
another business and the acquiring business obtains majority
control through majority share ownership
[4] An event whereby the Company is acquired by
another business and the acquiring business obtains majority
control through voting control rights specific to a designation of
shareholder rights or a stockholders’ agreement; or through a
reverse or other merger subsequent to the merger between BioNeutral
Laboratories Corporation USA and Moonshine Creations, Inc on
January 30, 2009.
(d) “
Company ” shall, except as otherwise provided in
Section 6(f), have the meaning set forth in the preamble
hereto.
(e) “
Contractor ” shall have the meaning set forth in the
preamble hereto.
(f) “ Date
of Termination ” shall mean the date indicated in the
Notice of Termination or the date specified by the Company pursuant
to Section 4(b), whichever is earlier.
(g) “
Effective Date ” shall mean January 29, 2009, the date
Contractor’s Consulting with the Company commences
hereunder.
(h) “
Notice of Termination ” shall have the meaning set
forth in Section 4(b).
(i) “
Term ” shall have the meaning set forth in
Section 2(b).
(j) “
SEC ” shall mean the United States Securities and
Exchange Commission.
(k) “ Super
8-K ” shall mean the Form 8-K as filed with the United
States Securities and Exchange Commission on or around January 30,
2009, which is inclusive of the Company’s audited financial
statements for the years ended December 31, 2007 and 2006, and its
reviewed financial statements for the period ended September 30,
2008.
(l) “
Registration Rights ” shall mean that the Contractor
shall have piggyback registration rights such that all shares of
common stock issued under the Stock Award are to be included in any
and all registration statement(s) filed by the Company until a
registration statement is deemed effective by the United States
Securities and Exchange Commission ("SEC") subsequent to the
Effective Date.
(a) In General
. The Company shall engage the Contractor and the
Contractor shall perform services on behalf of the Company upon the
other terms and conditions herein provided.
(b) Term of
Agreement . The initial term under this Agreement
(the “ Initial Term ”) shall be for the period
beginning on the Effective Date and ending on the first anniversary
thereof, unless earlier terminated as provided in Section
4. Upon expiration of the Initial Term, the Consulting
term hereunder shall automatically be extended for successive one
year periods (“ Extension Terms ” and, if so
extended, collectively with the Initial Term, the “
Term ”); provided that the parties agree on
appropriate compensation during such Extension Terms and neither
party has delivered notice of non-extension to the other; provided
further that any notice of non-extension shall be delivered no
later than 30 days prior to the expiration of the then-applicable
Term.
(c) Position and
Duties . During the Term, the Contractor shall
provide services to the Company as defined in Exhibit A to the
Agreement. The Contractor will be subject to direction
of the Board; shall report directly to the Board; and agrees to
observe and comply with the Company’s rules and policies as
adopted by the Company from time to time.
3.
Compensation and Related
Matters .
(a) Cash and
Shares of Common Stock in Lieu of Cash.
The Contractor will receive a monthly fee
of $5,000, payable by the 15 th of
each month until the Agreement or terms within the Agreement expire
or the Agreement is terminated. However, it is agreed
that for the months of March and April 2009, the Contractor will
accept as payment in lieu of cash, a total of 10,000 shares of
common stock. All shares of the Company's common stock
issued under this Section 3 (a) shall contain Registration Rights
as defined herein such that the Company will include all shares
issued under the Stock Award in any and all registration statements
filed subsequent to the Effective Date until a registration
statement is deemed effective by the SEC. Such shares are to be
issued to the Contractor immediately and are free of all vesting
provisions.
(b) Stock
Award . As of January 29, 2009, the Contractor
received an award of 150,000 shares of the Company's common stock
(the “S tock Award ”) to be delivered in
accordance with Section 23, which shall be in partial payment of
the Contractor's fees that the Contractor expects to earn in
performance of the Contractor's services over the Term and as
defined in Exhibit A. All shares of the Company's common
stock issued under this Stock Award shall contain Registration
Rights as defined herein such that the Company will include all
shares issued under the Stock Award in any and all registration
statements filed subsequent to the Effective Date until a
registration statement is deemed effective by the
SEC. At all times, it is intended that the Contractor is
compensated as a contractor under the applicable rules and
regulations of the Internal Revenue Service and the State of New
Jersey in effect during the Term.
(c) Vesting .
The Stock Award will vest according to the following
timeline:
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75,000 shares of the Company's common stock
vested on January 30, 2009, as a result of the filing of Form 8-K
announcing the closing of the reverse merger between BioNeutral
Laboratories Corporation USA and Moonshine Creations,
Inc.
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An additional 75,000 shares of the
Company's common stock shall vest on the twelve month anniversary
of the Effective Date.
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In the event of a Change in Control Event as
defined in Section 1(c), all shares of the Company's common stock
under the Stock Award, as detailed in Section 3(a), shall be
considered to be fully earned and all vesting terms outlined above
shall be accelerated as such.
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(d) Expenses
. The Company shall reimburse the Contractor for all
reasonable travel and other business expenses incurred by him in
the performance of his duties to the Company in accordance with the
Company’s applicable expense reimbursement policies and
procedures. The travel needs to be approved by the
Company in advance.
4.
Termination
.
(a) The
Contractor’s Consulting hereunder may be terminated by the
Company or the Contractor, as applicable, for any reason with or
without cause, without any breach of this Agreement.
(b) Notice of
Termination . Any termination of the
Contractor’s Consulting by the Company or by the Contractor
under this Section 4 shall be at least 30 days following the date
of such notice (a “ Notice of Termination
”).
(c) Termination
due to Death or Disability . If the Agreement is
terminated by reason of the Contractor's death or Disability, then
the Contractor or, as applicable, his estate or other legal
representative, shall be entitled to receive the amounts described
in Section 4(c), if the Contractor, or his legal representative,
executes and does not thereafter revoke, a General Release in a
form acceptable to the Company.
5.
Contractor Obligations Upon
Termination of Consulting
(a)
Contractor will deliver to the
Company any compositions, articles, devices, computer software,
computer diskettes and other storage media including all copies or
specimens thereof in their possession (whether at the place of
work, at home or elsewhere), that have been prepared or made by the
Contractor or others, and any other items which disclose or embody
Confidential Information, or reproductions of any aforementioned
items developed by the Contractor pursuant to services
provided by the Contractor or otherwise belonging to the Company,
its successors or assignees, including, but not limited to, those
records maintained pursuant to Section 2(c).
6.
Restrictive
Covenants .
(a)
Confidentiality . The Contractor agrees that he
will not during the Term or thereafter divulge to anyone (other
than the Company or any persons designated by the Company) any
knowledge or information of any type whatsoever of a confidential
nature relating to the business of the Company, including, without
limitation, all types of trade secrets, business strategies,
marketing, sales and distribution plans. The Contractor
further agrees that he will not disclose, publish or make use of
any such knowledge or information of a confidential nature (other
than in the performance of the Contractor’s duties hereunder)
without the prior written consent of the Company. This
provision does not apply to information which becomes available
publicly without the fault of the Contractor or information which
the Contractor is required to disclose in legal proceedings,
provided the Contractor gives advance notice to the Board and an
opportunity to for the Company to resist such
disclosure.
(b) Competitive
Business Restrictions . During the Term, the
Contractor shall not engage directly or indirectly, whether as an
Contractor, independent contractor, consultant, partner,
shareholder or otherwise, in a business or other endeavor which
would or might interfere with any of his duties or obligations
hereunder or which is competitive with or similar to the business
of the Company or any of its subsidiaries or
affiliates. Notwithstanding the foregoing, the
Contractor shall have the right to own up to one percent (1%) of
the shares of any publicly traded company in a business which is
competitive with or similar to the business of the Company or any
of its subsidiaries or affiliates.
(c)
Non-Solicitation . The Contractor further agrees
that during the Term and during the period beginning on the
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