Exhibit
10.3
SUPPLY OF
SERVICES AGREEMENT
THIS SUPPLY OF
SERVICES AGREEMENT (the “ Agreement
”) is entered into with effect from February 2, 2009 the
“ Effective Date ”, between Four Rivers
BioEnergy, Inc., a Nevada corporation (the “ Company
”), and The ARM Partnership (“ARM”), of 3
rd Floor, 14 South Molton Street, London W1K, a UK
Partnership of which Robert Galvin and Martin Thorp are
Contractors, whereby ARM agrees to provide certain services
(“the Services”) to be provided by Martin Thorp
(“the Contractor”) to the Company. The Parties to this
Agreement are the Company, ARM and the Contractor.
The Contractor agrees
to provide such services and to be bound by this Agreement as if he
had entered into it in his own right as a self employed contractor
in the event that ARM is no longer able to procure or does not
procure the Services for whatever reason and, likewise, the Company
agrees that the Agreement shall continue in full force as if it
were a contract between the Contractor and the Company in the event
of the dissolution of ARM. In such circumstances references to ARM
herein shall be construed as references to the Contractor as a self
employed contractor.
NOW,
THEREFORE ,
in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions and Interpretations
1.1
Definitions
For purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires, the following terms shall have the
following respective meanings:
“ Base Fee
” shall have the meaning specified in Section 3.1.
“ Board of
Directors ” shall mean the Board of Directors of the
Company.
“ Cause
” shall have the meaning specified in Section 4.3.
“ Company
” will also include its subsidiaries, parents and affiliates
where it is reasonably logical the use of the word would include
such other entities, and include any successor to its business
and/or substantially all its assets which executes and delivers the
Agreement as provided for in Section 7.4 or which otherwise becomes
bound by all terms and provisions of this Agreement by operation of
law.
“ Confidential
Information ” shall have the meaning specified in Section
5.1(a).
“
Disability ” shall mean a physical or mental condition
of one of the Contractors that, in the good faith judgment of not
less than a majority of the Board of Directors, prevents that
individual from being able to perform the services required under
this Agreement. If any dispute arises as to whether a Disability
has occurred, or whether a Disability has ceased and the Contractor
is able to resume duties, then such dispute shall be referred to a
licensed physician mutually agreed upon by the Contractor and the
Company, which physician will not be any of the Contractor’s
regular physicians. The Contractor shall submit to such
examinations and provide information as such physician may request
and the determination of such physician as to the Contractor's
physical or mental condition shall be binding and conclusive on the
parties. The Company shall pay the cost of any such physician
and examination.
“ Dispute
” shall have the meaning specified in Article VI.
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“
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended.
“ Expiration
Date ” shall have the meaning specified in Section
2.2.
“ Notice of
Termination ” shall mean a notice purporting to terminate
this Agreement in accordance with Section 4.1, 4.2 or
4.3.
“ Person
” shall mean and include an individual, a Partnership, a
joint venture, a corporation, a trust and an unincorporated
organization.
“ Incentive
Fee ” shall have the meaning specified in Section
3.2.
“ Term
” shall have the meaning specified in Section 2.2.
“ Termination
Date ” shall mean the termination date specified in a
Notice of Termination delivered in accordance with this
Agreement.
1.2
Interpretations
(a)
In this Agreement,
unless a clear contrary intention appears, (i) 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, (ii) reference to any Article or
Section, means such Article or Section hereof, (iii) the words
“including” (and with correlative meaning
“include”) means including, without limiting the
generality of any description preceding such term, and (iv) where
any provision of this Agreement refers to action to be taken by
either party, or which such party is prohibited from taking, such
provision shall be applicable whether such action is taken directly
or indirectly by such party.
(b)
For the avoidance of
doubt this Agreement refers to the provision of certain services to
be provided by the Contractor in his capacity as a Contractor of
ARM. Martin Thorp, as managing Contractor of ARM, shall be
responsible to the Board of Directors, through the Chief Executive
Officer of the Company, for the overall service delivery standard
of ARM under this Agreement.
(c)
The Article and Section
headings herein are for convenience only and shall not affect the
construction hereof.
(d)
For the avoidance of
doubt it is specifically agreed between the Parties that nothing in
this agreement shall be construed as inferring any employment
rights and obligations between the Company and/or any of its
subsidiaries and associates and the Contractor or ARM and, as a
result, the Company shall have no obligation or right to make any
withholding tax deductions, unless required to do so by law. ARM
warrants and represents to The Company that it shall be solely
responsible for any income, social security or other taxation
liabilities that are payable on the compensation referred to
herein. The Company agrees that it or any subsidiary that benefits
from the service provided by ARM will pay VAT, if any, that is
payable or is subsequently deemed to be payable on invoices raised
by ARM, even if such VAT is not initially included in invoices by
virtue of the Parties understanding that the service provided are
not subject to VAT because they are effectively exported and
therefore believes to be zero rated.
ARTICLE II
Services, Compensation etc.
2.1
Service
Arrangement
The Company agrees to
contract with ARM to provide the Services of the Contractor as
further described herein, ARM agrees to procure that the Contractor
provides such services and the
Contractor agrees to provide such services.
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2.2.
Term of
Agreement
Unless sooner
terminated pursuant to Article IV, the term of this Agreement (the
“ Term ”) shall end on the January 1, 2010 (the
“ Expiration Date ”), being two years after the
date that the contractor commenced the provision of services to the
company under predecessor agreements, subject to extension as
herein provided. The Term will be automatically extended by
an additional 12 months unless one party gives written notice to
the other at least 12 months before the then effective Expiration
Date indicating that the party does not extend Term of the
Agreement. If the Term is extended, then the Expiration Date
will be automatically extended by a corresponding 12 months.
The right not to extend the Term and corresponding Expiration
Date is separate from the right to give a Notice of Termination
herein.
2.3
Services
(a)
During the Term of the
Agreement, the Contractor shall provide such professional and
related services as are commensurate with the Office of Chief
Financial officer of the Company (ARM shall effectively outsource
the Officer of Chief Executive Officer and related functions as
part of its service), support with Capital Raisings and Mergers and
Acquisitions and/or such other equivalent services as shall be
agreed between ARM and the Contractor with the Board of Directors
from time to time. In addition ARM shall procure and the Contractor
shall agree that the Contractor shall accept appointment as a
director and/or officer of the Company and its subsidiaries, as
shall be agreed from time to time with the Company, and, as such,
the Contractor shall have the responsibilities and authorities
designated to him by the bylaws of the Company, if stated therein,
and the Board of Directors.
(b)
During the Term of the
Agreement, the Contractor shall (i) report to the Board of
Directors and (ii) observe and comply with all lawful policies,
directions and instructions of the Board of Directors and the
Company that are consistent with the provisions of this paragraph
2.3.
(c)
During the Term of the
Agreement, the Contractor shall (i) devote his business time,
attention, skill and efforts to the faithful and efficient
performance of the provision of the Services as is reasonably
required, subject always to a maximum average time commitment by
each Contractor of 4 days a week for 45 weeks in any one year (the
“Time Commitment”), to be extended if required, subject
to the Contractor’s availability, in accordance with the
provisions of sub-clause (d) below.
(d)
The Contractor shall
maintain outline records of time spent in accordance with this
Agreement for the purposes of compliance with (c) above, which
shall show those days when the Contractor sets aside time to be
available for discharging his responsibly under this Agreement and
his activity by broad type. These records may be requested and
reviewed by the Chief Executive Officer from time to time who on
occasion request that further information is included on a
prospective basis, subject to such requests being reasonable and
not onerous. In the event that the Contractor consistently spends
more time in discharging his responsibilities than the agreed Time
Commitment or believes that he will do so for a particular reason,
the Board of Directors may, at their sole discretion, make a
further time based payment to ARM for the additional time committed
by the Contractor, on either a permanent or temporary (for example
project based) basis. Such further payments may be applied for, in
writing to the Board of Directors, by and at the discretion of the
Contractor and the Chief Executive Officer of the Company at any
time.
(e)
The Company
acknowledges that ARM has several other clients and that the
Contractor has other commitments which he needs to attend to. ARM
and the Contractor agree as follows: (i) that its obligations to
provide service to the Company shall take priority to other
commitments, subject always to the constraints imposed by the Time
Commitment and (ii) to not accept any other client that may create
a conflict with services to be provided to the Company and (iii) to
take reasonable steps to resign its role in relation to any client
that may come into conflict with the Company and (iv) to accept the
decision of the Board of Directors of the Company as to whether a
conflict situation exists and to draw any client situation to the
attention of the Board of Directors if ARM believes that a conflict
does or may arise
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(f)
During the currency of
this Agreement, the Contractor and ARM shall not knowingly
prejudice, in any material respect, the reputation of the Company
in the fields of business in which it is engaged or with the
investment community or the public at large.
(g)
If elected or appointed
thereto, and only for the duration of such elected term or
appointment, the Contractor shall, as an integral part of and to
facilitate the provision of the Services referred to herein, serve
as a director and/or officer of the Company and any of its
subsidiaries and/or in one or more executive positions of any of
such subsidiaries, provided that the Contractor is indemnified for
serving in any and all such capacities on a basis consistent with
that provided by the Company to other directors and executive
officers of the Company or similarly situated executive officers of
any such subsidiaries.
(h)
ARM and the Contractor
represent that there are no restrictions imposed upon it or them by
any covenants or agreements arising out of any prior engagement
which materially affect its or their ability to provide the
services set forth in this Agreement. ARM agrees to indemnify and
hold the Company harmless for any judgment and related costs,
including attorney’s fees, which may be entered against the
Company as a result of a breach of any such covenants or violation
of any such restrictions, and agrees that any such breach or
violation shall qualify for “Cause” termination
pursuant to Section 4.3 below.
ARTICLE III
Fees and Expenses
3.1
Base
Fee
(a)
For services rendered
by ARM under this Agreement, the Company shall pay to ARM a base
monthly fee of $22,500 to be paid at the end of each month in US
dollars to a bank account nominated by ARM and maintained in its
name. The amount is exclusive of any VAT that is or may be
payable.
(b)
ARM is based in offices
at 14 South Molton Street London W1, which it leases. The Company
agrees to contribute towards the running cost of this office
because of the material commitment made by ARM to the Company and,
in return ARM agrees to allow the Company to use its office as a
mailing and meeting address for the Company to use in London
subject always to prior agreement with ARM, not to unreasonably
withheld. For this facility the Company agrees to pay ARM the sum
of £1,750 per month throughout the Term, which amount shall
be included within the base fee so long as ARM maintains the said
office. VAT shall be added to this amount if required by
legislation.
(c)
The Contractor shall be
granted such stock warrants as the Company shall for time to time
agree to grant as further consideration for the Services and to
provide incentive.
3.2
Incentive
Fee
During the Term, the
Parties may agree from time to time to modify this Agreement so as
to engage ARM to provide services over and above those set out in
this Agreement and/or to provide incentive to ARM to add
exceptional value by virtue of its corporate finance / M&A
know-how and expertise and / or network.
3.3
Period of
Absence
The Company accepts that
the Contractor may from time to time take vacation from his full
time client commitments at ARM, including to the Company (Period of
Absence). During such periods ARM shall ensure that adequate base
coverage is provided by ARM so as not to prejudice the quality of
the overall service. On no account shall the Contractor take a
Period of Absence other than in accordance with the following: (a)
it shall be within the overall average annual Time Commitment
calculation; (b) it shall only exceed 5 consecutive business days
with the prior agreement of the Chie
