Exhibit 10.6
Xxxxxxx X. Xxxxxx
0000 X.X. 0xx Xxxxxx, Xxx 0000
Xxxxxxxxxx, Xx. 00000
September 29, 2004
Xxxxxxxx X. Xxxxx, Esquire
00 Xxx Xxxxx Xxxx
Xxxxxxxx, Xx. 00000
Re: Service Agreement
Dear Xxxx,
This letter agreement ("Agreement ") outlines the terms and conditions under
which Xxxxxxx X. Xxxxxx ("Consultant"), will act as a corporate financial
advisor to Pathogenics, LLC. ("Company").
Accordingly, and in consideration for the mutual benefit derived here from and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, we agree as follows:
1. ENGAGEMENT. The Company hereby engages and retains the Consultant as a
financial advisor for and on the Company's behalf to perform services (as that
term is hereinafter defined) and the Consultant hereby accepts such appointment
on the terms and subject to the conditions hereinafter set forth. The Company's
engagement of the Consultant shall commence with the execution of this
Agreement. During the course of this engagement, Consultant shall report to
Xxxxxxxx X. Xxxxx, President and CEO of the Company.
2. SERVICES. During the twelve (12) month term of this Agreement ("Term"),
the Consultant shall aid and assist the Company in connection with a multi
faceted corporate finance project comprised of enhancing the Company's
shareholder value through (i) introductions to bridge finance lenders ("Bridge
Loan") (ii) introducing the Company to a suitable candidate for the purposes of
a reverse merger ("Reverse Merger") (iii) preparing and executing a plan with
management to gain exposure for the Company (iv) introducing the Company to both
domestic and international financing sources ("Reg. S Funding") (v) assisting
the Company in the development of a presentation to investors. The foregoing
is hereinafter collectively referred to as the "Services," which are further
described in the "Proposed Timetable" and "Proposed Capital Plan" attached as
exhibits hereto. THE SERVICES SHALL SPECIFICALLY EXCLUDE THE FURNISHING OF
LEGAL, ACCOUNTING, INVESTMENT OR TAX ADVISOR SERVICES.
3. COMPENSATION. In consideration for the Services, the Company hereby
agrees to pay to the Consultant and the Consultant hereby accepts as its sole
compensation for the Services the following:
A. Monthly Retainer. A retainer in the amount of $7500 for each of the
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first three months, which shall be accrued prior to execution the Bridge Loan of
$250,000 and shall be paid in arrears only after receipt thereof. Thereafter,
a retainer in the amount of $6000 per month for the balance of the Agreement,
which shall be accrued prior to execution the Reg. S Funding in excess of
$1,000,000 and shall be paid in arrears only after receipt thereof. Each
payment shall be due by the 10th of the current month.
B. Equity. Upon completion of the Reverse Merger, Consultant will be
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issued common stock shares of the Company. Since the capital structure of the
Company post Reverse Merger is not yet decided, the parties agree to leave the
determination of the exact amount of shares until the date of the Reverse Merger
transaction. Nonetheless, by way of example, the parties agree that a
reasonable amount would be to issue the Consultant common stock of 900,000
shares of the Company post Reverse Merger with 300,000 being free trading and
the balance to be restricted for one (1) year with piggyback registration rights
(based upon the Company's founders and insiders having 50 million shares with
options).
4. EXPENSES. It is expressly agreed and understood that the Consultant's
compensation as provided herein does not include the normal out-of-pocket
expenses, including but not limited to long distance communication, airfare,
hotel lodging and meals, transportation, express mail, etc. incurred by the
Consultant in performing the Services and carrying out the Consultant's duties
under this Agreement. The Consultant agrees to seek pre-approval from the
Company for any individual expenses in excess of $100.00, and any cumulative
monthly expenses in excess of $500. All expenses shall be accrued prior to
execution the Bridge Loan of $250,000 and shall be paid in arrears only after
receipt thereof. Thereafter, all invoiced expenses will be due upon submitted
receipt.
5. REPRESENTATIONS AND WARRANTIES. In order to implement the operation of
this Agreement, the Consultant and the Company hereby represent to each other as
follows:
A. The execution, delivery and performance of this Agreement, in the time
and manner herein specified, will not conflict with, result in a breach of, or
constitute a default under any existing agreement, or other instrument to which
either the Consultant or the Company is a party or by which either the
Consultant or the Company may be bound or affected;
B. The Consultant and the Company each have full legal authority to enter
into this Agreement and to perform the same in the time and manner contemplated;
and,
C. The Company has taken all corporate action necessary to ratify and
approve this Agreement.
6. CONFIDENTIAL DATA. Neither the Consultant nor the Company shall divulge to
others, any secret or confidential information, knowledge, or data concerning or
pertaining to the business and affairs of each other (which is identified as
being secret or confidential) obtained by either the Consultant or the Company
as a result of the Consultant's engagement hereunder, unless authorized, in
writing.
7. INDEPENDENT CONTRACTOR. The Consultant and the Company shall be deemed to
be independent contractors in the performance of their duties hereunder. Neither
shall, by reason of this Agreement or the performance of their respective duties
hereunder, be or be deemed to be an employee, partner, co-venturer or
controlling person of the other and, except as specifically authorized by this
Agreement. Neither party shall have the power to enter into any agreement on
behalf of or otherwise bind the other. Except with respect to confidential and
proprietary information as hereinabove enumerated, neither shall have, or be
deemed to have, any fiduciary obligation or duties to any other.
8. GOVERNING LAW, FORUM. The validity of this Agreement and the interpretation
and performance of all of its terms shall be governed by the substantive laws of
the State of New York. The parties hereto agree that any suit, action or
proceeding arising out of or relating to this Agreement, shall be submitted to
the New York Supreme Court, New York County for determination pursuant to the
New York Simplified Procedure for Court Determination of Disputes and each party
waives any objection to the laying of the venue of such suit and irrevocably
submits to the jurisdiction of such Court.
9. TERM AND TERMINATION. The term of the Agreement shall commence on the
execution hereof and shall continue for twelve (12) months. The Company shall
have the right, anytime after the 120th day of this Agreement, on 30 days
written notice to the Consultant, to terminate this Agreement for any reason.
No termination of this Agreement shall adversely affect the Consultant's rights
to receive or retain the compensation previously earned or paid.
10. MISCELLANEOUS. All notices that are required to be or may be sent pursuant
to the provision of this Agreement shall be sent by certified mail, return
receipt requested, or by overnight package delivery service, to the Consultant
and/ or the Company at the address appearing herein, and shall count from the
date of the mailing or the date after the date of the air xxxx. This Agreement
is binding upon and shall inure to the benefit of and shall be enforceable
against the Consultant and the Company, and their successors and assigns.
This Agreement shall not be amended or assigned without the prior written
consent of the Consultant and the Company. This Agreement is intended to and
does contain and embody herein all the parties' understandings and agreements,
both written or oral, with respect to the subject matter of this Agreement.
There are no representations, warranties or covenants other than those set forth
herein.
If the foregoing correctly sets forth the understanding and agreement of the
Consultant and the Company, please indicate your acceptance by signing the
enclosed copy of this Agreement in the indicated space and returning the same to
the undersigned at your earliest convenience.
Very Truly Yours,
Agreed To and Accepted:
Pathogenics,LLC.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx Xxxxxxxx X. Xxxxx
