EXHIBIT
10.3
SUPPLY OF SERVICES
AGREEMENT
THIS SUPPLY OF SERVICES AGREEMENT
(the “ Agreement
”) is entered into with effect from 1 st July
2009 the “ Effective Date ”, between Flex Fuels
Energy Inc., a Nevada corporation (the “ Company
”), and The ARM Partnership (“ARM”), of 3
rd Floor, 14 South Molton Street, London W1K 5QP, 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 Robert Galvin
(“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
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.
“ 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.
(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. Robert Galvin, as 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.
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.
Unless sooner terminated pursuant to Article IV,
the term of this Agreement (the “ Term ”) shall
end on the 30 th
June, 2010 (the “
Expiration Date ”), being one year 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 6 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.
(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, 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 1.5 days a week for 46 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) to not accept any other
client that may create a conflict with services to be provided to
the Company and (ii) to take reasonable steps to resign its role in
relation to any client that may come into conflict with the Company
and (iii) 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
(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
(a) For services
rendered by ARM under this Agreement, the Company shall pay to ARM
a base monthly fee of GBP £4,200 to be paid at the end of
each month in pounds sterling 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) 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.
(c) The Contractor
shall be entitled to participate in any bonus scheme arrangements
that the Company deems as appropriate to incentivize and reward
exceptional efforts by the Contractor in carrying out his
services.
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.
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 Chief Executive Officer of the Company, which shall not be
unreasonably denied.
3.4 Expense
Reimbursement
The Company
shall reimburse ARM for all reasonable travel and other business
expenses incurred by i
