1
EXHIBIT 10.5
THIS EMPLOYMENT AGREEMENT (the "Agreement") made as of the 15th day of March,
2000, is made, by and between ADVANCED PLANT PHARMACEUTICALS, INC., with an
address at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("APPI" or the "Company") and
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, with an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ( "Bielory" or the "Scientific Director").
W I T N E S S E T H
WHEREAS, APPI is a nutriceutical company engaged in the development and
distribution of all natural, plant-derived dietary supplements; and
WHEREAS, the Company is desirous of retaining the services of Bielory in
the position of Scientific Director for purposes of providing scientific
overview and oversight all of the Company's products; and
WHEREAS, the Company is desirous of electing Bielory to serve as its
Chairman of the Board of Directors, subject to the approval of its current
Board; and
WHEREAS, this Agreement shall supersede all previous consulting or
employment agreements between the Company and Bielory, except that the amount of
$126,000 accrued to January 31, 2000 from previous consulting agreements with
▇▇. ▇▇▇▇▇▇▇ shall not be canceled by this Agreement and shall still be owed to
▇▇. ▇▇▇▇▇▇▇ by the Company. The sum of $20,000 will be paid to ▇▇. ▇▇▇▇▇▇▇ upon
execution of this Agreement. The balance of $106,000 will be paid to ▇▇. ▇▇▇▇▇▇▇
in monthly installments of $800, to be paid on the first day of each calendar
month beginning April 1, 2000.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
further good and valuable consideration, the undersigned parties hereby agree as
follows:
1. Employment With APPI
APPI hereby retains the services of Bielory to serve as the Company's
Scientific Director (duties and responsibilities to be defined hereafter)
and Bielory hereby agrees to serve the Company in such capacity.
2. Duties and Responsibilities
Bielory, in his position as Scientific Director shall perform the
following services for the Company including, but not limited to:
2.1 Bielory will assist APPI in developing and creating a market for
the Company's existing products such as ACA and Lo-Chol and such
other plant based nutriceutical product or other herbal or
therapeutic supplements as may hereinafter be developed or
purchased by the Company during the term of this Agreement.
2.2 Bielory will assist the Company in developing and creating a
market for the assets purchased from ▇▇. ▇▇▇▇▇▇▇ by the Company
(the "Assets") on February 28, 2000. Bielory will use his best
efforts to introduce the Company to distributors and purchasers of
such Assets.
2.3 Bielory will assist the Company in assembling a credible
scientific advisory board for the purpose of maximizing the
Company's business mission and financial earning potential. The
Company acknowledges and agrees that Bielory is employed and
engaged in other medical, academic and related activities and that
the performance of his duties hereunder
1
2
will be significantly less than full time and that the rendering
of Scientific Director's services will be periodic and upon such
occasions and dates as Scientific Director may choose in his
discretion to accomplish the duties outline herein.
2.4 The Company shall provide Bielory with coverage under the
Company's product liability insurance with minimum coverage of
$1,000,000. The Company shall provide Bielory with proof of
insurance coverage in form satisfactory to Bielory, and such
coverage shall provide that the policy of insurance shall not be
canceled without thirty (30) days, prior written notice to
Bielory.
2.5 The Company shall provide Bielory, with regard to his capacity as
Chairman of the Board of Directors, with Officer's and Director's
insurance in amounts satisfactory to him and his counsel. APPI
shall provide Bielory with proof of Officer's and Director's
insurance coverage in form satisfactory to him and such coverage
shall provide that the policy of insurance shall not be canceled
without thirty (30) days prior written notice to Bielory.
3. Term
The term of this Agreement shall be for two (2) years beginning on the
date hereof, March 15, 2000 and ending on March 15, 2002.
4. Compensation
4.1 For the services described in Section 2 of this Agreement, the
Company will pay to Bielory Five Hundred Dollars ($500) per month
commencing March 15, 2000, and shall pay such amount monthly
continuing thereafter for a period of twelve (12) months from the
date hereof.
4.2 If and when the Company earns net profits equal to or in excess of
$50,000 per month, then Bielory's monthly compensation shall be
increased to an aggregate of $1,000 per month for the then
remaining Term of this Agreement. The amount of the Company's "net
profits" shall be determined by the Company's then independent
public accountants regularly retained using generally accepted
accounting principles.
4.3 If and when the Company earns net profits equal to or in excess of
$100,000 per month, then Bielory's monthly compensation shall be
increased to an aggregate of $2,500 per month for the then
remaining Term of this Agreement.
4.4 If and when the Company earns net profits equal to or in excess of
$150,000 per month, then Bielory's monthly compensation shall be
reevaluated and subsequently determined by the board of directors
of the Company.
4.5 The provisions regarding compensation in this Section 4(a) are in
addition to those compensatory arrangements under the Asset
Purchase Agreement between ▇▇. ▇▇▇▇▇▇▇ and the Company dated
February 28, 2000.
4.6 Commencing March 1, 2000, and effective each January 1 thereafter,
for so long as this Agreement is in effect, Bielory will receive
an option to purchase 750,000 shares of the Company's common
stock, par value $.0007 (the "Options"). Such Options shall be
exercisable at any time by Bielory whether or not the parties are
in a contractual relationship with each other at the time of the
exercise of such Options. The exercise price for the 2000 option
shall be the listed closing bid price of the Common Stock as of
March 15, 2000 and the exercise price of subsequent annual option
grants shall be the listed closing price of the first market day
of January of each year as quoted on the
2
3
Over-The-Counter Bulletin Board or that exchange on which the
Company's Common Stock is then quoted.
4.7 Upon acceptance by the undersigned of the terms of this Agreement,
Bielory shall be granted 225,000 restricted shares of the
Company's Common Stock, par value $.0007. Such stock shall be
issued pursuant to Section 4(2) of the Securities Act of 1933, as
amended. Such stock given to Bielory shall be valued at the
closing bid price of the Company's common stock as quoted on the
Over-The-Counter market as of the date hereof. Bielory shall
acknowledge in writing to the Company that such restricted shares
are being acquired for investment purposes only and not with a
view towards public distribution or resale. Bielory further
acknowledges that such stock given to him shall be restricted and
bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TOWARD DISTRIBUTION OR
RESALE. THESE SHARES MAY NOT BE MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER
THE ACT, OR AN OPINION OF COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT
REQUIRED UNDER THIS ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
Bielory shall be given piggyback registration rights. if the
Company, at any time, proposes to register any of its securities for sale for
its own account or for the account of any other person (other than a
registration relating to the sale of securities to employees or consultants of
the Company pursuant to a stock option, stock purchase or similar plan) the
Company shall give written notice to Bielory thirty days prior to filing such
registration statement.
4.8 Bielory shall be compensated additional shares of restricted stock
for various publication, speaking engagements and presentations. Specifically,
Bielory shall receive not less than 25,000 shares of the Company's stock, such
number of shares and price to be determined by the Company's Board of Directors,
for each article that is written by Bielory and published in a medical journal
or publication that is academic in nature or for speaking engagement or
presentations that are for academic purposes. Additionally, Bielory shall
receive not less than 5,000 shares of the Company's stock, such number of shares
and price to be determined by the Company's Board of Directors, for each article
that is written by Bielory and published that is of a marketing nature to
promote the Company's products and/or for speaking engagements or presentations
that will help market the Company's products.
4.9 In the event payment for the above compensation is received by
Bielory after the tenth (10th) day of the month, or after ten (10) days from
receipt of an invoice from Bielory, whichever is applicable, or any check fails
of collection, APPI agrees to pay Bielory a service charge of five percent (5%)
for each payment that is paid late. In the event any payment is made more than
thirty days after its due date, Bielory shall be entitled to eighteen percent
(18%) interest on each past due payment until the date paid.
5. Termination
Bielory shall be permitted to terminate this Agreement at will, upon
giving the Company ninety (90) days prior written notice, provided,
however, that any compensation, options or shares given to Bielory by
that time shall be deemed to have been earned pro rata to the date of
termination of this Agreement. The Company shall be permitted to
terminate the Agreement upon ninety (90) days prior written notice to
Bielory.
3
4
6. Representation and Warranties by the Company
The Company warrants and represents that
6.1 It is a Corporation in existence and good standing under the laws
of the State of its incorporation, Delaware.
6.2 The Company will take such steps as are necessary, including but
not limited to, the payment of all premiums required to maintain
the insurance coverage for the benefit of Bielory referenced in
Section 2(c) and (d) above.
6.3 The Company has the authority to enter into this Agreement.
6.4 The Company has not filed any Petition in Bankruptcy, nor has a
Petition in Bankruptcy or insolvency been filed in connection with
the Company as of the date of execution of this Agreement nor is
same contemplated by the Company.
6.5 This Agreement has been approved by the Board of Directors of the
Company and a resolution to that effect has been cast by such
Board and executed by the President of the Company.
6.6 The Company has not entered into any agreements with any
physicians or other persons of similar qualifications to provide
services similar to those to be provided by Bielory under this
Agreement, and will not do so for the duration of this Agreement
except with the prior written consent of Bielory, which may be
withheld for any reason.
6.7 The Company will not utilize the name and/or likeness of Bielory
without his prior written consent, which may be withheld for any
reason in the discretion of Bielory; however, Bielory hereby
agrees to have his name, title, age and a brief description of his
background incorporated in reports and forms to be submitted to
the Securities and Exchange Commission ("SEC") so that the Company
may comply with federal securities regulations. Bielory also
agrees to allow his name to be incorporated in press releases by
the Company after approval of such releases by Bielory.
7. Representation and Warranties by Bielory
Bielory represents and warrants that:
7.1 He is free to serve as the Company's Scientific Director and that
such position will not in any way conflict with other medical or
academic duties which Bielory now has or may have during the Term
of this Agreement.
7.2 Bielory is a practicing physician and in addition, acts as
consultant and advisor to other firms in the medical and health
care industries, including but not limited to, pharmaceutical
firms, Medical services firms, UMDNJ - New Jersey Medical School,
Starx Asthma and Allergy Centers and others health care providers.
It is not Bielory's intention to provide services exclusively for
APPI in the field of Allergy and Immunology (AIDS) and related
disorders.
8. Confidential Information
All data and information supplied by the undersigned parties to each
other shall be treated by each party as confidential information unless
it falls within the exceptions enumerated below. Bielory shall not
disclose any confidential information supplied to Bielory by APPI to any
third party not affiliated with APPI by common ownership and then only to
affiliates under similar conditions
4
5
of confidentiality, nor shall the Company disclose any confidential
information supplied to the Company by Bielory, unless each party obtains
the other's prior written consent or unless such information falls within
the following exceptions:
8.1 Except to the extent it can be established by competent proof that
such confidential information was known by the disclosing party
prior to receiving confidential information from the other
undersigned party.
8.2 Except to the extent that such confidential information is or
becomes publicly known through no fault or omission attributable
to Bielory or the Company; or except to the extent that such
confidential information is rightfully given to the disclosing
party from proper independent sources.
8.3 Except to the extent that confidential information is derived
independently of any disclosure from the undersigned parties.
8.4 Obligations of confidentiality shall continue for a period of
three (3) years after the termination of this Agreement.
8.5 All documents, data, know-how, formulas and samples provided to
Bielory by APPI and end-products of the same are and will at all
times remain the property of APPI and shall be returned to APPI
when no longer needed for experimental purposes or evaluation or
upon termination of this Agreement, whichever occurs first.
9. PUBLICATIONS:
Bielory agrees that he will not publish or co-author any paper relating
to his work with APPI without the prior written approval of APPI, which
approval will not be unreasonably withheld or delayed. Bielory further
agrees that publications of material arising from this Agreement may be
made by APPI, but that use of Bielory's name in connection with such
publication will require Bielory's prior written approval, which approval
will not be unreasonably withheld or delayed.
10. NOTICES
Any notice, demand or communication required, permitted or desired to be
given hereunder, shall be deemed effectively given when personally
delivered or mailed by prepaid certified mail, return receipt requested,
or by overnight commercial carrier, addressed as follows:
To: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Advanced Plant Pharmaceuticals, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
With A Copy To:
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ Kaszovitz ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ & Bass LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
To: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Scientific Director
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇
▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a Copy To:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Bloom ▇▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address, and to the attention of such other person(s) or
officer(s) as either party may designate by written notice.
11. INDEMNIFICATION
Bielory hereby agrees to hold APPI harmless and indemnify it against any
and all costs, claims and damages for injuries or otherwise resulting
from the negligence of Bielory in fulfilling Bielory's obligations
pursuant to this agreement.
12. WAIVER OF BREACH
The waiver of any breach of any term or condition of this Agreement shall
not be deemed to constitute a waiver of any other term or condition of
this Agreement.
13. SEVERABILITY
If any term or provision of this Agreement or the application thereof to
any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the applicability of
such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby,
and each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
14. GOVERNING LAW
This Agreement shall be governed by and construed and enforced in,
accordance with the laws of the State of New Jersey. All actions
hereunder shall be brought in the state or federal courts of the State of
New Jersey.
15. ENTIRE AGREEMENT
This Agreement contains the entire Agreement of the parties with respect
to its subject matter and no waiver, modification or change of any of its
provisions shall be valid unless in writing and signed by the parties
against whom such claimed waiver, modification or change is sought to be
enforced (unless otherwise provided herein) .
ADVANCED PLANT PHARMACEUTICALS, INC.
Dated:March 15, 2000 By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------- -----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
6
7
SCIENTIFIC DIRECTOR
Dated:March 15, 2000 By:/s/ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------- --------------------------------
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
7
