Exhibit 10.1

SETTLEMENT AGREEMENT

 

This Settlement Agreement (this “ Agreement ”) is entered into by and among Bond Laboratories, Inc., a Nevada corporation (“ Buyer ”), NDS Nutrition Products, Inc., a Florida corporation (“ Buyer Sub ”), NDS Nutritional Products, Inc., a Nebraska corporation (“ Seller ”), Cory Wiedel, an individual (“ Wiedel ”), Ryan Zink, an individual (“ Zink ” and together with Wiedel, the “ Shareholders ”), effective as of September 30, 2009 (the “ Effective Date ”).  The Buyer Parties (as defined below) and the Seller Parties (as defined below), are referred to collectively hereafter as the “ Settling Parties ”.

 

A.            The “ Buyer Parties ” shall mean Buyer and its subsidiaries (including Buyer Sub) and other “affiliates” (for purposes of this Agreement, “affiliate” shall have the meaning ascribed to it in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended),  and their respective predecessors, successors, assigns, officers, directors, employees, affiliates, shareholders, partners, agents and representatives.

 

B.            The “ Seller Parties ” shall mean Seller, the Shareholders, and their respective heirs, predecessors, successors, assigns, officers, directors, employees, affiliates, shareholders, partners, agents and representatives.

 

WHEREAS , Buyer, Seller and Shareholders are party to that certain Asset Purchase Agreement, dated as of October 1, 2008, as amended by that certain First Amendment to Asset Purchase Agreement, dated March 2, 2009 (the “ Purchase Agreement ”), pursuant to which Buyer purchased from Seller the Acquired Assets and assumed the Assumed Liabilities, as more particularly provided in the Purchase Agreement (the “ Acquisition ”);

 

WHEREAS , (i) Buyer transferred to Buyer Sub its (A) rights, title and interest in and to the Acquired Assets, and (B) liabilities and obligations under the Assumed Liabilities, and (ii) Buyer Sub acquired and assumed, as appropriate, the Acquired Assets and the Assumed Liabilities;

 

WHEREAS , a dispute exists among the Settling Parties concerning Buyer’s and Seller’s respective performances under the Purchase Agreement and related agreements, including payment of earn-out amounts pursuant to the terms of the Purchase Agreement; and

 

WHEREAS , the Settling Parties all have agreed to resolve all of their differences by settlement, as contemplated by the provisions of this Agreement.

 

NOW, THEREFORE , for valuable consideration, including the obligations, promises and rights created herein, the Settling Parties agree to the foregoing and as follows:

 

1.   Secured Promissory Note .   Buyer and Buyer Sub shall enter into a secured promissory note in favor of Seller, dated as of the Effective Date, in substantially the form as attached Exhibit A (the “ Note ”), which shall provide as follows: (i) the Note shall be in the aggregate principal amount of $621,775,01; (ii) the Note shall supersede and replace in its entirety each of the following secured promissory notes: (A) that certain Secured Promissory Note (Component Inventory), dated as of October 1, 2008, made by Buyer in favor of Seller (the “ Component Inventory Note ”); (B) that certain Secured Promissory Note (Fixed Assets), issued as of October 1, 2008 (the “ Fixed Assets Note ”), made by Buyer in favor of Seller; and (C) that certain Secured Promissory Note (Installment) dated as of October 1, 2008, made by Buyer in favor of Seller (the “ Installment Note ” and together with the Component Inventory Note and the Fixed Assets Note, the “ Prior Notes ”); and (iii) Buyer’s and Buyer Sub’s payment obligation under the Note shall be secured by  Seller’s security interest in the “Collateral”, as defined and described in that certain Security Agreement, dated as of October 1, 2008, as amended pursuant to that certain Amendment No. 1 to Security Agreement, dated as of the Effective Date, in substantially the form as attached Exhibit B (such Security Agreement, as amended, the “ Amended Security Agreement ”).  The Settling Parties expressly agree that upon execution and issuance of the Note, the Prior Notes shall be null and void and shall cease to be of further force or effect.

 

2.   Amendment/Termination of Acquisition Agreements .  The Settling Parties herby acknowledge and agree that upon execution of this Agreement: (i) the terms and provisions of the Purchase Agreement, as amended by that certain Amendment No. 2 to Asset Purchase Agreement, dated as of the date hereof (the “ Purchase Agreement Amendment ” and together with the Purchase Agreement, the “ Amended Purchase Agreement ”), shall continue in full force and effect; (ii) the terms and provisions of the Amended Security Agreement shall continue in full force and effect; (iii) the Prior Notes shall be null and void and shall cease to be of further force or effect; (iv) that certain Stock Rights and Restriction Agreement, dated as of October 1, 2008 (the “ Original Restriction Agreement ”), as amended by that certain Amendment No. 1 to Stock Rights and Restriction Agreement, dated effective as of September 3, 2009, (the “Restriction Agreement Amendment” , and together with the Original Restriction Agreement, the “ Amended Restriction Agreement ”), shall continue in full force and effect; and (v) that certain Supply, License and Transition Services Agreement, dated as of October 1, 2008 (the “ Original Supply Agreement ”), by and between Buyer and Complete Nutrition Holdings, Inc., a Nebraska corporation (f/k/a “Complete Nutrition, Inc.”) (“ CNH ”), as amended by that certain Amendment No. 1 to Supply, License and Transition Services Agreement, dated as of the date hereof, by and among Buyer, Buyer Sub and CNH in substantially the form as attached Exhibit C (the “ Supply Agreement Amendment ”, and together with the Original Supply Agreement, the “ Supply Agreement ”), shall continue in full force and effect.  For purposes of clarity, each agreement not specifically referenced above, including, without limitation, those certain Proprietary Information, Non-Competition and Non-Solicitation Agreements between Buyer, on one hand, and each of Seller, Wiedel and Zink, on the other hand, each dated as of October 1, 2008, shall remain in full force and effect; provided , however , all agreements between the Settling Parties shall in all respects be subject to the terms of that certain Agreement, dated effective as of September 1, 2009, by and among Buyer, Buyer’s Sub, Seller, Wiedel and Zink (the “ Zink Agreement ”) which sets forth the Settling Parties’ agreements with respect to the matters specified therein, including Zink’s ability to provide consulting or employment services on behalf of CNH.

 

 

3.   Purchase of Seller Product Inventory; Prior Note Payment .  Prior to the execution of this Agreement, Buyer shall make or cause to be made a cash payment to Seller (via wire transfer of immediately available funds) in the amounts of (a) $43,551.41, which amount represents all sums owed by Buyer to Seller as of immediately prior to the execution of this Agreement for Product Inventory (as defined in Section 1.6 of the Purchase Agreement) acquired from Seller pursuant to Section 1.6 of the Purchase Agreement but not yet paid for by Buyer; and (b) $44,007.51, which represents a partial payment of the $55,009.39 amount (the “ September 2009 Notes Payment ”) owed by Buyer to Seller on September 1, 2009 pursuant to the Prior Notes.  The Buyer Parties and Seller Parties acknowledge and agree that the remaining $11,001.88 of the September 2009 Notes Payment shall be included as part of the principal amount of Note.

 

4.   License of Rights to NDS Name .

 

(a)            License Grant .  Seller hereby acknowledges and agrees that Buyer has been using derivations of the name “NDS Nutritional Products” in the conduct of its business since October 1, 2008 as permitted pursuant to the terms of the Amended Purchase Agreement.  Subject to the following sentence, as of the date hereof, Seller hereby confirms and grants to Buyer (to the extent that Seller has any applicable right, title and interest) a perpetual, exclusive, royalty-free, worldwide, transferable, sublicensable license to use and otherwise exploit the Marks and associated trade dress, logos and related intellectual property (collectively, the “ Intellectual Property ”) in connection with the business of Buyer and/or Buyer’s designee.  Seller may revoke the foregoing license upon the occurrence, and during the continuance, of an  Event of Default (as defined in the Note) under Section 4.1(a)(i), (ii), (v) and (vii) of the Note; provided, however, that Seller shall allow Buyer and Buyer Sub to continue to use the Marks for a period of up to thirty (30) days after delivery of the notice of revocation solely to the extent necessary to allow Buyer Sub to continue operation of its business while it phases out its use of the Marks.  For purposes of this Agreement, “ Marks ” means the name “NDS Nutritional Products” and all derivations thereof in which Seller might have any rights, title and interest.

 

(b)            Assignment .  Immediately upon discharge in full of Buyer’s and Buyer Sub’s obligations under the Note (or any replacement thereof or substitution therefore) Seller and Buyer (or Buyer’s designee, as deemed appropriate by Buyer), shall enter into an assignment, effective as of the Effective Date, in substantially the form as attached Exhibit D (the “ Assignment ”), pursuant to which Seller shall, among other things, transfer, assign, deliver and convey to Buyer or Buyer’s designee, at no cost to Buyer or Buyer’s designee, all of Seller’s rights, title and interest in and to the Intellectual Property.  Seller covenants and agrees that it will use reasonable best efforts to cooperate with Buyer or Buyer’s designee to accomplish this transfer, assignment, delivery and conveyance (including effecting any required name change filings with the Nebraska Secretary of State).

 

5.   Mutual Release .   In consideration of all of the terms and conditions of this Agreement (including without limitation the mutual releases provided herein), except as expressly provided below, the Buyer Parties hereby release the Seller Parties, and the Seller Parties hereby release the Buyer Parties, from any and all causes of action, actions, judgments, liens, damages, Losses (as defined in the Amended Purchase Agreement), costs, claims, liabilities, expenses, and demands whatsoever, whether known or unknown, suspected or unsuspected (collectively, “ Claims ”), which they ever had, now have, or hereafter can, shall or may have, for, upon or by reason of any act, omission, misrepresentation, breach, transaction, practice, conduct, matter, cause, operation of law, effect, or thing of any kind whatsoever, arising out of, or relating in any manner to the relationship between the Buyer Parties and Seller Parties, including, without limitation, any Claims arising out of or in any way related to the Amended Purchase Agreement (including payments of any amounts due thereunder and any Claims for indemnification thereunder); provided , however , it is expressly agreed and understood that this Agreement does not release (a) any obligations under this Agreement, (b) Buyer’s or Buyer Sub’s obligations under (i) the Note, (ii) the Amended Security Agreement, (iii) the Supply Agreement, (iv) the Amended Purchase Agreement to satisfy the Assumed Liabilities (as defined in the Amended Purchase Agreement), (v) Sections 9.3(b)(v), 10.5 and 10.7 of the Amended Purchase Agreement, (vi) the Amended Restriction Agreement, (vii) the Zink Employment Agreement (as defined in the Amended Purchase Agreement) as modified by the Zink Agreement, and (viii) that certain Assignment and Assumption of Business Property Lease, dated October 1, 2008, by and between Seller and Buyer, (c) Seller’s or the Shareholders’ obligations under (i) clause (v) of Section 9.2(b) of the Amended Purchase Agreement, or (ii) the Amended Restriction Agreement, (d) Seller’s obligations from and after the Effective Date under the Seller Non-Competition Agreement (as defined in the Amended Purchase Agreement, (e) Wiedel’s obligations from and after the Effective Date under the Wiedel Non-Competition Agreement (as defined in the Amended Purchase Agreement) as modified by the Zink Agreement, (f) Zink’s obligations from and after the Effective Date under (i) the Zink Non-Competition Agreement (as defined in the Amended Purchase Agreement) as modified by the Zink Agreement and (ii) the Zink Employment Agreement (as defined in the Amended Purchase Agreement) as modified by the Zink Agreement, and (g) CNH’s obligations under the Supply Agreement.

 

6.   Waiver of Rights Under Civil Code Section 1542 .   The Settling Parties acknowledge that they have read, considered and understand the provisions and significance of Section 1542 of the California Civil Code which reads as follows:  A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.  The Settling Parties hereto further acknowledge and agree that the foregoing waiver of the provisions of Section 1542 of the California Civil Code was bargained for separately, and they assume the risk of the subsequent discovery or understanding of any matter, fact or law which if now known or understood would in any respect have affected their execution of this Agreement.  The Settling Parties assume this risk, and notwithstanding this risk intend by this Agreement to release and discharge each other of and from all Claims.  The Settling Parties voluntarily, and with full knowledge of its significance, waive and relinquish any and all rights that they have under Section 1542 as well as under the provisions of all comparable, equivalent or similar statutes and principles of common law or other decisional law of any and all states of the United States and of the United States.

 

It is expressly understood and agreed that this waiver of Civil Code Section 1542 and the releases set forth above are material terms of this Agreement and were separately negotiated between the Parties hereto.  The Settling Parties represent and warrant that they have not assigned any Claims and covenant not to sue or otherwise assert or prosecute any Claims released herein.

 

7.   Nondisparagement .  The Settling Parties agree that they will not make any statements, written or verbal, or cause or encourage others to make any statements, written or verbal, that defame or disparage the personal or business reputation, practices or conduct of the Settling Parties including, if applicable, their shareholders, owners, employees, directors and officers.  The Settling Parties acknowledge and agree that this prohibition extends to statements, written or verbal, made or delivered to anyone, including but not limited to the news media, investors, potential investors, any board of directors or advisory board or directors, industry analysts, competitors, banks, investment banks, vendors, employees and customers.

 

8.   Indemnification by the Buyer Parties From Future Claims . The Buyer Parties shall fully protect, indemnify and hold harmless the Seller Parties from and against any future Claim made by any of the Buyer Parties to the extent that such Claims are released by this Agreement.

 

9.   Indemnification by the Seller Parties From Future Claims . The Seller Parties shall fully protect, indemnify and hold harmless the Buyer Parties from and against any future Claim made by any of the Seller Parties to the extent that such Claims are released by this Agreement.

 

10.   No Admission of Liability .   Neither this Agreement nor any action taken pursuant to this Agreement shall constitute an admission of any wrongdoing, fault, violation of law or liability of any kind on the part of any party to this Agreement, which claims and allegations are denied and contested.

 

11.   Representation by Counsel . The Settling Parties specifically acknowledge that they are, and have been, represented by legal counsel in connection with the negotiation, drafting, and signing of this Settlement Agreement, that they understand and fully agree to every provision of this Settlement Agreement, and that they have received a copy of this Agreement.  The Settling Parties hereto represent and declare that, in executing this Agreement, they rely solely upon their own judgment, belief and knowledge, and the advice and recommendations of their own legal counsel, concerning the nature, extent and duration of their rights and claims hereunder, and that they have not been influenced to any extent whatsoever in executing this Agreement by any representations, statements or omissions by any party hereto or by any persons representing any party hereto other than themselves pertaining to any of the matters contained herein.

 

12.   Joint Draftsmanship .   The Settling Parties shall be deemed to have participated equally in the drafting of this Agreement.  This Agreement has been jointly negotiated and drafted.  The language of this Agreement shall be construed as a whole according to its fair meaning, and not strictly for or against any of the Settling Parties.

 

13.   Successors and Assigns .  This Agreement shall be binding upon and for the benefit of the Settling Parties, together with their respective spouses, predecessors, successors, assigns, officers, directors, partners, subsidiaries, affiliates and employees (as applicable).

 

14.   Authority to Sign .  Each person executing this Agreement personally represents and warrants to the Settling Parties that he/she has the authority necessary to execute this Agreement on behalf of, and to fully bind, all those on whose behalf such person is executing the Agreement, including those persons and entities releasing the releasees; and that no other consents or approvals of anyone are required or necessary for this Agreement to be fully binding on all parties hereto in accordance with its terms.  The Settling Parties further represent and warrant that they have exclusive authority to execute this Agreement, that there is no restriction to their doing so, and that each has not heretofore assigned or transferred, or purported to assign or transfer, or suffered any assignment, disposition, voluntary or involuntary, of any claim or demand relating to any matter covered by this Agreement.

 

15.   Attorneys’ Fees .

 

(a)           The Settling Parties to this Agreement agree to bear their own costs and attorneys’ fees expended in connection with the this Agreement and the transactions contemplated herein and hereby.

 

(b)           In the event that any suit or action is instituted to enforce any provision in this Agreement, to the extent permitted by law the prevailing party (or parties) in such dispute shall be entitled to recover from the losing party (or parties) all fees, costs and expenses of enforcing any right of such prevailing party (or parties) under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

16.   Survival of Covenants . All representations, warranties, covenants and stipulations set forth in this Agreement shall be deemed continuing and shall survive and continue after the Agreement is signed by the Settling Parties.

 

17.   Waiver .   No breach of any provision hereon can be waived unless in writing.  Waiver of any one breach of any provision hereof shall not be deemed to be a waiver of any other breach of the same or any other provision hereof.

 

18.   Governing Law .   This Agreement shall be governed by and construed in accordance with the laws of the State of Nebraska applicable to contracts made and to be performed in that State by residents of that State.  Each party hereto submits to the jurisdiction of any state or federal court sitting in Douglas County, Nebraska in any action or proceeding arising out of or relating to this Agreement or any of the agreements or transactions contemplated hereby and agrees that all claims in respect of the action or proceeding may be heard and determined there.  Each party also agrees not to bring any action or proceeding arising out of or relating to this Agreement or any of the or any of the agreements or transactions contemplated hereby in any other court.  Each party waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other party.  Each party agrees that a final judgment in any action or proceeding so brought will be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or in equity.

 

19.   Severability .   Wherever possible, each provision, word and phrase of this Agreement shall be interpreted in such a manner as to be valid under applicable law, but, if any provision, word or phrase of this Agreement shall be invalid or prohibited thereunder, such provision shall be ineffective to the extent of such prohibition without invalidating the remaining provisions, words, and phrases, respectively, of this Agreement.

 

20.   Entire Agreement .   This Agreement, including the exhibits attached hereto, contains the entire agreement between the Settling Parties hereto and supersedes all prior agreements and discussions regarding such settlement.  The terms are deemed contractual and not a mere recital and only may be modified or amended by a written instrument executed by the Settling Parties hereto.  There are no warranties, representations, agreements, promises or terms other than as set forth herein.  This Agreement may be waived, canceled, novated, modified or amended only by a writing signed by the party against who said waiver, cancellation, novation, modification or amendment is asserted.

 

21.   Execution and Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement shall be effective for all purposes upon its execution. Signatures faxed or sent via electronic mail to an opposing party shall constitute original and binding signatures for the purposes of executing and rendering binding this Agreement.

 

22.   Assignment . This Agreement is not assignable by the Settling Parties unless otherwise agreed to in writing by the Settling Parties.

 

23.   Section Headings .   The section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

24.   Further Steps .   The Settling Parties agree and covenant to take all such further action and execute all such further documents as may be necessary and appropriate in order to carry out the intent of this Settlement Agreement.

 

25.   Notices .   Any and all notices or other communications to be given hereunder shall be in writing and shall be validly given, if served personally, or if deposited in United States mail, certified or registered, postage prepaid, return receipt requested.  If such notice or communication is served personally, service shall be conclusively deemed made at the time of such personal service.  If given by mail, such notice or communication shall be conclusively deemed given upon the deposit thereof in United States mail, addressed to the party to whom such notice or communication is to be given at the addresses set forth below the party signature or to such other address as a party may designate in writing to the other party as provided herein.

 

(a)  If to the Buyer or Buyer Sub, addressed to:

Bond Laboratories, Inc.

777 South Highway 101, Suite 215

San Diego, CA  92075

Attention: Chief Executive Officer

Fax: (858) 847-9090

Email: jwilson@bond-labs.com

And to:

Micha Danzig, Esq.

Mintz Levin Cohn Ferris Glovsky and Popeo, P.C.

3580 Carmel Mountain Road, Ste 300

San Diego, CA 92130

Fax: (858) 314-1501

Email: mdanzig@mintz.com

(b)  If to Seller, addressed to:

NDS Nutritional Products, Inc.

6610 S. 118 th Street

Omaha, Nebraska 68137

Attention: Cory J. Wiedel

Fax: 402-614-0882

Email: cjwiedel@completenutrition.com

And to:

Koley Jessen P.C., L.L.O.

One Pacific Place, Suite 800

1125 South 103 Street

Omaha, NE 68124-1079

Attention: Michael Hupp

Fax: (402) 390-9005

Email: mike.hupp@koleyjessen.com

(c)  If to Shareholders, addressed to:

Ryan Zink

500 Fort Street

Papillion, NE  68046

Fax: (402) 884-1816

Email: rzink@ndsnutrition.com

And

Cory Wiedel

4629 S. 187 th Street

Omaha, NE  68135

Fax: 402-614-0882

Email: cjwiedel@completenutrition.com

All notices, if mailed, shall be deemed effective three (3) days after deposit in the U.S. mail as provided herein above in this paragraph;  provided, however, any notice deposited with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, shall be deemed effective one (1) day after such deposit.

 

Exhibit 10.2

SECURED PROMISSORY NOTE

$621,775.01                                                                             September 30, 2009 (the “ Issuance Date ”)

 Omaha, Nebraska

FOR VALUE RECEIVED, the undersigned, Bond Laboratories, Inc., a Nevada corporation (“ Parent ”) and NDS Nutrition Products, Inc., a Florida corporation (hereinafter called the “ Company ”), promise, jointly and severally, to pay to the order of NDS Nutritional Products, Inc., a Nebraska corporation (hereinafter referred to as the “ Holder ”), the principal sum hereunder of Six Hundred Twenty-One Thousand Seven Hundred Seventy-Five Dollars and One Cent ($621,775.01).  This Note is being made by Parent and the Company pursuant to that certain Settlement Agreement, dated as of even date herewith (the “ Settlement Agreement ”), by and among the Company, Parent, the Holder, Cory Wiedel (“ Wiedel ”) and Ryan Zink (“ Zink ”).  Parent and the Company are each referred to herein as a “ Co-Maker ” and collectively as the “ Co-Makers ”.

1.            Basic Note Terms .

(a)           The Co-Makers and Holder acknowledge and agree that this Secured Promissory Note (this “ Note ”) supersedes and replaces in its entirety each of the following secured promissory notes originally executed by Parent in favor of Holder pursuant to the terms of that certain Asset Purchase Agreement, dated as of October 1, 2008, by and among Parent, Holder, Wiedel and Zink, as amended by that Amendment No. 1 to Asset Purchase Agreement, dated as of March 2, 2009, and that Amendment No. 2 to Asset Purchase Agreement, dated as of the date hereof (such Asset Purchase Agreement, as amended, the “ Purchase Agreement ”): (i) that certain Secured Promissory Note (Component Inventory), dated as of October 1, 2008 (the “ Component Inventory Note ”); (ii) that certain Secured Promissory Note (Fixed Assets), dated as of October 1, 2008 (the “ Fixed Assets Note ”); and (iii) that certain Secured Promissory Note (Installment), dated as of October 1, 2008 (the “ Installment Note ” and together with the Component Inventory Note and the Fixed Assets Note, the “ Prior Notes ”).

(b)           The outstanding principal amount of this Note shall bear simple interest at the rate of eight percent (8%) simple interest per annum from the Issuance Date; provided , however , that any principal amount not paid when due and, to the extent permitted by applicable law, any interest not paid when due, in each case whether at stated maturity or otherwise, shall bear interest at a rate that is 18% simple interest per annum until paid.  Subject to the Co-Makers’ pre-payment right, the Co-Makers shall commence payments under this Note on March 1, 2010, with each subsequent payment to be made on the same day of each successive month thereafter until this Note is paid in full.  Each monthly payment under this Note shall be in the aggregate amount of $25,000; provided , however , that (i) the Co-Makers shall make a payment of $50,000 on each of April 1, 2010 and May 1, 2010; (ii) the then-outstanding principal balance of this Note will be automatically reduced by either (A) $25,000 if the Co-Makers make one or more pre-payments (i.e., payments in addition to the regularly scheduled monthly payment) in the aggregate amount of $250,000 after December 31, 2009 but on or before June 30, 2010, or (B) $50,000 if the Co-Makers make one or more pre-payments (i.e., payments in addition to the regularly scheduled monthly payment) in the aggregate amount of $225,000 on or before December 31, 2009, in either case which reduction of the principal amount shall be deemed automatically effective as of the date of receipt of the applicable aggregate amount; and (iii) the entire then-outstanding principal balance of this Note and accrued and unpaid interest thereon (the “ Outstanding Balance ”) will be due and payable on December 31, 2010 (the “ Maturity Date ”) unless the Holder consents in writing to extension of the repayment period hereunder.  Both principal and interest due hereunder shall be payable in lawful money of the United States to such address that the Holder shall designate.  Payments on this Note shall be applied first to accrued, unpaid interest and thereafter to reduce the outstanding principal amount.  The Co-Makers shall have the right at any time to prepay the indebtedness evidenced by this Note in whole or in part without penalty or premium.

 

2.            Representations and Warranties of the Co-Makers.   The Co-Makers represent and warrant to the Holder, jointly and severally, as follows:

(a)            Organization and Authority of Company .  The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Florida and has all requisite corporate power and authority to enter into and deliver this Note and to perform its obligations hereunder and to consummate the transactions set forth herein.  All necessary corporate proceedings of the Company have been duly taken to authorize the execution, delivery, and performance of this Note by the Company.  This Note is the legal, valid, and binding obligation of the Company, and is enforceable as to the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(b)            Organization and Authority of Parent .  Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to enter into and deliver this Note and to perform its obligations hereunder and to consummate the transactions set forth herein.  All necessary corporate proceedings of Parent have been duly taken to authorize the execution, delivery, and performance of this Note by Parent.  This Note is the legal, valid, and binding obligation of Parent, and is enforceable as to Parent in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(c)            No Default .  Neither the Company nor Parent shall, as a result of entering into and delivering the Note, be in default under material contract, agreement or understanding (including any instrument constituting any indebtedness or under any guarantee of any indebtedness).

3.            Waivers

(a)            Co-Makers’ Waivers .  The Co-Makers and all other makers, sureties, guarantors and endorsers hereof hereby waive presentment, protest, demand, notice or dishonor, and all other notices, and all defenses and pleas on the grounds of any extension or extensions of the time of payments or the due dates of this Note, in whole or in part, before or after maturity, with or without notice.  No renewal or extension of this Note, no release or surrender of any collateral given as security for this Note, and no delay in enforcement of this Note or in exercising any right or power hereunder, shall affect the liability of the Co-Makers.

(b)            No Waiver by Note Holder .  No single or partial exercise by the Holder of any right hereunder, shall preclude any other or further exercise thereof or the exercise of any other rights.  No delay or omission on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note.

4.            Default

(a)            Events of Default .  The occurrence and continuance of any one or more of the following events (whether or not in the control of either Co-Maker) shall constitute an “ Event of Default ”:

(i)            Nonpayment .  The Co-Makers shall fail to make, on or before the due date, in the manner required, any payment of principal, interest or any other sums due under this Note and such failure continues unremedied for a period of five (5) business days;

(ii)            Bankruptcy .  The institution by or against either Co-Maker under any state insolvency laws, federal bankruptcy law, or similar debtor relief laws then in effect.

(iii)            Other Defaults; Cure Period .  The Co-Makers shall fail to: (A) observe or perform any of their material covenants contained in this Note (other than failure to make payments under this Note), which failure is not remedied within fifteen (15) business days of the Co-Maker’s receipt of notice of such failure; or (B) observe or perform any of their material covenants under that certain Security Agreement, dated as of October 1, 2008, as amended by that certain Amendment No. 1 to Security Agreement, dated as of even date herewith (the “ Amended Security Agreement ”), which failure is not remedied within the applicable cure period(s) set forth in the Amended Security Agreement.

(iv)            Representation or Warranty .  Any representation or warranty made by the Co-Makers herein or in the Amended Security Agreement shall prove to have been untrue in any material respect as of the time made; or

(v)            Insolvency .  Either Co-Maker shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or (i) either Co-Maker shall commence any voluntary bankruptcy proceeding, or (ii) their shall be commenced against either Co-Maker by another party any such case, proceeding or other action in bankruptcy which remains unstayed, undismissed or undischarged for a period of ninety (90) days.

(vi)            Delivery of Original Note .  Either Co-Maker shall fail to deliver a fully executed original signature page to this Note to the Holder’s legal counsel, Koley Jessen P.C., L.L.O., at the address set forth immediately below within three (3) business days of the Issuance Date.

Koley Jessen P.C., L.L.O.

One Pacific Place, Suite 800

1125 S. 103 Street

Omaha, NE  68124

Attention:  Joseph R. Hefflinger

(vii)            Indebtedness in Excess of $1,250,000 .  The Co-Makers collectively having outstanding indebtedness at any time either (A) with U.S. Bank, N.A. (“ Lender ”) or any successor commercial lender, in the aggregate, in excess of $1,250,000 or (B) with more than one commercial lender.

(b)            Acceleration .  Upon an Event of Default of the type described in Sections 4(a)(i), (iii), (iv), (vi) or (vii), the Holder may declare the amount of the Note outstanding, plus accrued interest and all other amounts owed by the Co-Makers pursuant to this Agreement to be immediately due and payable to the Holder, and upon an Event of Default of the type described in Sections 4(a)(ii) or (v) there shall immediately be due and payable to the Holder the amount of the Note outstanding, plus accrued interest and all other amounts owed by the Co-Makers pursuant to this Agreement.  All amounts under this Section 4 are due and payable without presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Co-Makers.

(c)            Remedies Upon Event of Default .

(i)            General .  The Holder may proceed to protect and enforce its rights as holder of this Note, and may proceed to enforce the payment of all amounts due upon this Note, and such further amounts as shall be sufficient to cover the costs and expenses of collection (including, without limitation, reasonable counsel fees and disbursements and court costs), or to enforce any other legal or equitable right as holder of this Note.  In addition, the Holder shall have all rights under the Amended Security Agreement.

(ii)            Discounted Purchase of Inventory .  Subject to the terms and conditions of this Section 4(c)(ii), upon the occurrence and during the continuance of an Event of Default described in Sections 4(a)(i) (ii), (v) or (vii) above, Holder will be entitled to purchase inventory from the Company at 50% of the Company’s original cost basis.  Notwithstanding the foregoing, this right to purchase inventory at a discounted price shall become effective and remain in force only if and at such time that (and while) either (i) the Company’s and its affiliates’ obligations under debt facilities with its commercial lender (whether Lender or any successor commercial lender) are discharged in full (and provided that the exercise of this right to purchase discounted inventory will not cause the Company to be in default or breach of any agreements with its commercial lender, whether Lender or any successor commercial lender), or (ii) Lender consents in writing to such discounted purchase right (which consent Company shall be obligated to request upon an Event of Default described in Sections 4(a)(i) (ii), (v) or (vii) above and which consent Holder may request on behalf of Company if Company has not made such request within two (2) business day following an Event of Default).

(iii)            Remedies Cumulative .  No remedy conferred in this Note or the Amended Security Agreement upon the Holder is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.

(iv)            Remedies Not Waived .  No course of dealing between the Co-Makers and the Holder, and no delay or failure in exercising any rights hereunder or under the Amended Security Agreement, shall operate as a waiver of any of the rights of the Holder.

(d)            Default Termination .  Upon an Event of Default and except as set forth below in this Section 4(d), the following restrictions on the Holder, Wiedel and Zink under the Seller Non-Competition Agreement (as defined in the Purchase Agreement), the Wiedel Non-Competition Agreement (as defined in the Purchase Agreement), the Zink Non-Competition Agreement (as defined in the Purchase Agreement) and the Zink Employment Agreement (as defined in the Purchase Agreement), each as modified by the Zink Agreement (as defined in the Purchase Agreement), shall immediately terminate forever and be of no further force and effect, (said termination referred to herein as the “ Default Termination ”):

(i) The restrictions on the Holder set forth in Sections 2 of the Seller Non-Competition Agreement  (to the extent restricting the Holder’s use of the confidential information and trade secrets of the Holder that were transferred to the Parent pursuant to the Purchase Agreement), and the restrictions on the Holder set forth in Sections 1(a), 1(b) and 1(c) of the Seller Non-Competition Agreement;

(ii) The restrictions on Wiedel set forth in Sections 2 of the Wiedel Non-Competition Agreement  (to the extent restricting Wiedel’s use of the confidential information and trade secrets of the Holder that were transferred to the Parent pursuant to the Purchase Agreement), and the restrictions on Wiedel set forth in Sections 1(a), 1(b) and 1(c) of the Wiedel Non-Competition Agreement;

(iii)  The restrictions on Zink set forth in Sections 2 of the Zink Non-Competition Agreement  (to the extent restricting Zink’s use of the confidential information and trade secrets of the Holder that were transferred to the Parent pursuant to the Purchase Agreement), and the restrictions on Zink set forth in Sections 1(a), 1(b) and 1(c) of the Zink Non-Competition Agreement; and

(iv)  The restrictions on Zink set forth in Sections 5.1 (solely to the extent restricting Zink’s use of the confidential information and trade secrets of Holder that were transferred to the Parent pursuant to the Purchase Agreement) 5.2 and 6 of the Zink Employment Agreement.  For purposes of Sections 2.1 and 2.2 of the Zink Employment Agreement, Parent and Company each acknowledge and agree that any payments made to Holder pursuant to this Note shall not constitute “compensation or any other consideration” to Zink.

Notwithstanding the foregoing, no Default Termination shall occur after the later of (i) the date upon which twenty percent (20%) or less of the total aggregate principal amount owed to Holder pursuant to this Note remains outstanding (the “ Substantial Payment Date ”), or (ii) such date after the Substantial Payment Date that one hundred percent (100%) of the Remaining Earn-Out Amount (as defined in the Purchase Agreement) has been paid by Co-Makers to Holder.

5.            Offset . Notwithstanding anything to the contrary contained herein, the Holder acknowledges and agrees that the Co-Makers shall be entitled to offset any amounts payable to the Holder hereunder in accordance with the terms and provisions of Section 9.5(d) of the Purchase Agreement.

6.            Security .  This Note is secured by the Amended Security Agreement.

7.            Transferability .  This Note and all rights hereunder are transferable by the Holder, in whole or in part without charge to the Holder with a properly executed assignment at the principal office of the Company.

8.            Miscellaneous

(a)            Unenforceable Provision .  If any provision of this Note shall be deemed unenforceable under applicable law, such provision shall be ineffective, but only to the extent of such unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Note.

(b)            Successors and Assigns .  This Note shall be binding upon the successors and assigns of the Co-Makers and shall inure to the benefit of the Holder and its successors and assigns.  Neither Co-Maker may assign its obligations under this Note without the prior written consent of the Holder.

(c)            Amendment .  This Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of the Co-Makers, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

(d)            Replacement Note .  Upon receipt by the Co-Makers of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, and (in case of loss, theft or destruction) of indemnity reasonably satisfactory to it, and upon reimbursement to the Co-Makers of all reasonable expenses incidental thereto, and upon surrender and cancellation of any Note, if mutilated, the Co-Makers will make and deliver a new Note of like tenor in the principal amount of this Note then outstanding in lieu of such Note.  Any Note so made and delivered shall be dated as of the date to which interest shall have been paid on the Note lost, stolen, destroyed or mutilated.

(e)            Notices .   Any notice required or desired to be served, given or delivered hereunder shall be in writing and shall be deemed to have been validly served, given or delivered upon the earlier of:  (a) personal delivery, (b) in the case of facsimile or other electronic telecommunications transmission, upon receipt (receipt of transmission confirmed), or (c) in the case of notice by FedEx or other reputable overnight courier service, upon receipt, addressed in each case to a party to at such address as such party may designate by written notice to the other party.

(f)            Governing Law; Jurisdiction; Attorney’s Fees .  This Note shall be governed by and construed in accordance with the laws of the State of Nebraska   without reference to choice of law provisions which would require the application of the laws of another jurisdiction.  The Holder and the Co-Makers agree that the sole venue for any action, suit, arbitration or other proceeding arising out of or related to this Note shall be the state or federal courts located in Douglas County, Nebraska.  Each party hereby irrevocably consents and submits to the personal jurisdiction of and venue in the state and federal courts sitting in Douglas County, Nebraska   in any legal action, equitable suit or other proceeding arising out of or related to this Note or any document referenced in this Note.  In the event of any action or proceeding arising out of or related to this Note, the prevailing party in such action or proceeding shall be entitled to receive an award of all costs and expenses of such action or proceeding, including attorneys fees and costs, and all other expenses in connection therewith, in addition to any other award or remedy provided in such action or proceeding.

 

(g)            WAIVER OF JURY TRIAL .  THE HOLDER AND THE CO-MAKERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION THEREWITH.

 

IN WITNESS WHEREOF, each Co-Maker has executed and delivered this Secured Promissory Note as of the date and year first written above.

BOND LABORATORIES, INC. , a Nevada corporation, Co-Maker

By:  _________________                                                     

Name: John S. Wilson

Title: CEO

 

NDS NUTRITION PRODUCTS, INC. , a Florida corporation, Co-Maker

By:  _________________

Name: John S. Wilson

Title: CEO

 

Acknowledged and Agreed:

NDS NUTRITIONAL PRODUCTS, INC.,

a Nebraska corporation, Holder

By: _______________________________

       Cory J. Wiedel, CEO

 

 

Exhibit 10.3

 

Exhibit 10.4

 

Exhibit 10.5
 

Exhibit 10.6

ASSIGNMENT OF NAME

This Assignment of Name (“ Assignment ”) is made by NDS Nutritional Products, Inc., a Nebraska corporation (“ Assignor ”), to NDS Nutrition Products, Inc., a Florida corporation (“ Assignee ”), effective as of  September 30, 2009 (the “Effective Date”).

WHEREAS, Assignor, Assignee, Bond Laboratories, Inc, a Nevada corporation (“ Parent ”), Cory Wiedel, an individual, and Ryan Zink, an individual, are parties to an Asset Purchase Agreement, dated as of October 1, 2008, as amended pursuant to that certain Amendment No.1 to Asset Purchase Agreement, dated as of March 2, 2009, and that certain Amendment No. 2 to Asset Purchase Agreement, dated as of the Effective Date (as amended, the “ Purchase Agreement ”), pursuant to which Parent originally purchased and assumed, as applicable, from Assignor (and subsequently assigned to Assignee), its rights, title and interest in and to the Acquired Assets (as defined in the Purchase Agreement) and its duties and obligations under the Assumed Liabilities (as defined in the Purchase Agreement), as more particularly provided in the Purchase Agreement;

 

WHEREAS, the Marks (as defined below) did not originally constitute part of the Acquired Assets; and

 

WHEREAS, the Assignee wishes to acquire and the Assignor wishes to assign all rights, title and interest of Assignor in and to the Marks as set forth below.

 

NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, the Assignor and Assignee each hereby agree as follows:

 

1.   Assignment .  Assignor does hereby transfer, assign, deliver and convey to Assignee or Assignee’s designee all of Assignor’s rights, title and interest in and to the following marks of Assignor” "NDS", "NDS Nutritional Products", "NDS Nutrition Products, Inc.", “"NDS Nutritional Products, Inc."” as well as any and all derivations thereof (collectively, the “ Marks ”), together with the good will of the business symbolized by such Marks.

 

2.   Further Assurances .  The Assignor agrees to execute and deliver such other documents and to take all such other actions which the Assignee, its successors and/or assigns may request to effect the terms of this Assignment and to execute and deliver any and all affidavits, testimonies, declarations, oaths, exhibits, and other documentation as may be required to effect the terms of this Assignment (including any filings required to be made with the Nebraska Secretary of State.

 

IN WITNESS WHEREOF, the undersigned have duly executed this Assignment effective as of the date first above written.

 

ASSIGNOR:

NDS NUTRITIONAL PRODUCTS, INC.,

a Nebraska corporation

By: _______________________________

      Name: __________________

      Title: ___________________

 

ASSIGNEE:

NDS NUTRITION PRODUCTS, INC.,

a Florida corporation

By: _______________________________

      Name: __________________

      Title: ___________________