CONSULTING AGREEMENT
Exhibit
10.1
THIS CONSULTING AGREEMENT ("Agreement")
is made this 8th day
of April, 2009, by and between Xxxxx Xxxx, whose address
is 27-139 CHS, 00000 Xx Xxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000-0000,
hereinafter referred to as "CONSULTANT", and Bio-Matrix Scientific Group, Inc. ,
whose principal place of business is 0000 Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, hereinafter referred to as "Company".
WHEREAS,
the Company desires to engage CONSULTANT, as an independent contractor and not
as an employee, to provide services to the Company in accordance with the terms
and conditions of this Agreement
WHEREAS,
CONSULTANT desires to provide services to the Company in accordance with the
terms and conditions of this Agreement
THEREFORE,
it is agreed as follows:
1.
Term. The term of this Agreement shall be for a period of five years
commencing on the date hereof (“Contract Period”) and thereafter shall be
renewable only by mutual written agreement of the parties.
2.
Liability. The CONSULTANT shall not be liable to the Company, or to anyone who
may claim any right due to any relationship with the Company, for any acts or
omissions in the performance of services on the part of the CONSULTANT except
when said acts or omissions of the CONSULTANT are due to willful misconduct or
gross negligence. The Company shall indemnify, defend and hold the
CONSULTANT free and harmless from and against any and all liabilities, costs and
expenses (including reasonable attorneys’ fees) arising out of or in connection
with the services rendered to the Company by CONSULTANT (whether pursuant to the
terms of this Agreement or otherwise) or in any way relating to the Company's
operation of its business, except to the extent that the same shall result from
the willful misconduct or gross negligence of the CONSULTANT as determined by a
court or arbitrator of competent jurisdiction. The CONSULTANT shall promptly
notify the Company in writing of any such third party claim or suit and the
Company shall have the right to fully control the defense and settlement thereof
provided that any settlement shall include a general release of the CONSULTANT
and shall not include any admission of liability by the
CONSULTANT. The Company agrees that during the Contract Period and
for a period of five years thereafter, it will maintain clinical trials
insurance (if the Company directly or indirectly conducts clinical trials
involving the Technology, as defined below) and other liability insurance in
amounts consistent with best practices in the industry and will list the
CONSULTANT as an additional insured on all such insurance
policies. The Company shall furnish the CONSULTANT with certificates
of insurance evidencing such coverage upon the CONSULTANT'S
request.
IN NO
EVENT WILL CONSULTANT BE LIABLE TO COMPANY FOR ANY SPECIAL, INCIDENTAL,
INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION
WITH THIS AGREEMENT, EVEN IF CONSULTANT HAS BEEN INFORMED IN ADVANCE OF THE
POSSIBILITY OF SUCH DAMAGES. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, IN NO EVENT SHALL CONSULTANT’S LIABILITY TO COMPANY WITH RESPECT TO
ANY SERVICES PERFORMED UNDER THIS AGREEMENT EXCEED THE AMOUNT OF ALL CONSULTING
FEES OR OTHER COMPENSATION PAID TO CONSULTANT BY COMPANY IN CONNECTION WITH SUCH
SERVICES, AND CONSULTANT SHALL HAVE THE RIGHT, IN HIS SOLE DISCRETION, TO OFFSET
ANY SUCH LIABILITY BY RETURNING ANY STOCK COMPENSATION ISSUED HEREUNDER, AT ITS
FAIR MARKET VALUE MEASURED AS OF THE DATE OF GRANT.
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3. Representations and Warranties
(a)
Company hereby represents and warrants to CONSULTANT as follows:
(i)
Corporate Existence of Company. Company (a) is a corporation duly formed,
validly existing and in good standing under the laws of the State of
Delaware and (b) has all requisite power and authority, and has all
governmental licenses, authorizations, consents and approvals necessary to
execute and deliver this Agreement and to consummate the transactions
contemplated by this Agreement.
(ii) No
Conflicts. None of the execution, delivery and performance of this Agreement by
Company, nor the consummation of the transactions contemplated hereby (a)
constitutes or will constitute a violation of the organizational documents of
Company, (b) constitutes or will constitute a breach or violation of, or a
default (or an event which, with notice or lapse of time or both, would
constitute such a default) under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which Company is a party or
by which Company or any of its properties may be bound, (c) violates or will
violate any statute, law or regulation or any order, judgment, decree or
injunction of any court or governmental authority directed to Company or any of
its properties in a proceeding to which its property is or was a
party.
(b)
CONSULTANT hereby represents and warrant to Company as follows:
(i) No
Conflicts. Subject to Section 7 of this Agreement, none of the execution,
delivery and performance of this Agreement by CONSULTANT, or the consummation of
the transactions contemplated hereby and thereby (a) constitutes or will
constitute a breach or violation of, or a default (or an event which, with
notice or lapse of time or both, would constitute such a default) under, any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which CONSULTANT is a party or by
which CONSULTANT may be bound, or (b) violates or will violate any
statute, law or regulation or any order, judgment, decree or injunction of any
court or governmental authority directed to CONSULTANT
4. Scope
of Services. CONSULTANT shall perform the following tasks, as directed by the
Company’s Chief Executive Officer (“CEO”) and /or Board of Directors
(“Board”):
(i) Advise the
Company in determining specific studies and time-lines that are needed (a) to
establish the clinical usefulness of a Screening Test for Gestational Diabetes
(licensed by the Company from the Regents of the University of California
pursuant to that certain license agreement dated September 26, 2008 (the
"Screening Test") and (b) to create a new rapid analysis method for screening
large populations (collectively, the "Technology").
(ii) Serve on the
Company’s Medical Advisory Board ("MAB") in order to provide advice to the
Company regarding the Technology and other related technologies or approaches as
the Company may from time to time reasonably request. The
Company anticipates that the MAB shall meet at least four (4) times each
year, at times and locations to be determined by the Company in consultation
with MAB members.
(iii)
Advise the Company in:
(a) the
design and completion of the specific studies that demonstrate the clinical
usefulness of the Screening Test. The parties anticipate that this will require
the Company, with the CONSULTANT'S advice, to 1) determine the screening values
for normal pregnant women in the first 20 weeks of pregnancy and establish the
potential usefulness of the Technology to detect gestational diabetes in early
pregnancy, and 2) complete a large prospective study that determines the value
of the Technology in identifying gestational diabetes in subpopulations that
include race/ethnicity, age, and gestational age; and
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(b)
establishing and validating a new method for rapid screening of large
populations.
Notwithstanding
anything to the contrary set forth in this Agreement, the parties hereby
acknowledge and agree that (a) the CONSULTANT is subject to certain limitations
on the time he may devote to consulting pursuant to the relevant polices and
guidelines of the University of California, (b) the CONSULTANT shall not be
required to devote more than 100 hours per year to the rendering of services to
the Company under this Agreement or otherwise and (c) CONSULTANT is being
engaged on a non-exclusive basis and may render professional consulting services
to other clients, including, without limitation, clients who may compete with
the Company’s business.
5.
Consideration. As consideration for entering into this Agreement and performing
services hereunder, Company agrees that:
CONSULTANT
shall be compensated in accordance with the following schedule:
Upon
execution of this Agreement, CONSULTANT shall be granted Three Hundred
Twenty-Five Thousand (325,000) shares of the Company's common stock (the
"Shares"). CONSULTANT shall have full voting, dividend and other
rights with respect to all of the Shares from the date of grant, provided,
however, that CONSULTANT agrees to the following restrictions on
transfer on the following number of Shares (“Share Restrictions”):
(a) 50,000 of
the Shares (“50K Shares”) may not be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of by the CONSULTANT (“50K Transfer
Restriction”). In the event of completion of the tasks in Section 4(i) of this
Agreement on or before the fifth anniversary of this Agreement; the 50K Transfer
Restriction shall no longer apply to the 50K Shares as of the date of completion
of those tasks. In the event that the tasks in Section 4(i) of this
Agreement are not completed by the fifth anniversary of this Agreement, the 50K
Shares shall be forfeited by the CONSULTANT, and ownership of the 50K
Shares transferred back to the Company.
(b) 100,000
of the Shares (“100K Shares”) may not be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of by the CONSULTANT (“100K
Transfer Restriction”). In the event of completion of the tasks in Section
4(iii)(a) of this Agreement on or before the fifth anniversary of this
Agreement; the 100K Transfer Restriction shall no longer apply to the 100K
Shares as of the date of completion of those tasks. In the event that the
tasks in Section 4(iii)(a) of this Agreement are not completed by the fifth
anniversary of this Agreement, the 100K Shares shall be forfeited by the
CONSULTANT, and ownership of the 100K Shares transferred back to the
Company.
(c) Another
100,000 of the Shares (“Second 100K Shares”) may not be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of by the CONSULTANT
(“Second 100K Transfer Restriction”). In the event of completion of the tasks in
Section 4(iii)(b) of this Agreement on or before the fifth anniversary of this
Agreement; the Second 100K Transfer Restriction shall no longer apply to
the Second 100K Shares as of the date of completion of those tasks. In the
event that the tasks in Section 4(iii)(b) of this Agreement are not completed by
the fifth anniversary of this Agreement, the Second 100K Shares shall be
forfeited by the CONSULTANT, and ownership of the Second 100K Shares transferred
back to the Company.
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In the
event that, prior to the expiration of the Consulting Period, the Company
terminates this Agreement without cause, all of the Share Restrictions pursuant
to this Section 5 shall be null, void, and of no force and effect.
CONSULTANT
understands that under section 83 of the Internal Revenue Code of 1986, as
amended (the “Code”), the fair market value of any Shares at the first time the
rights of the CONSULTANT’s beneficial interest in such Shares are transferable
or are not subject to a substantial risk of forfeiture, whichever occurs
earlier, will be reportable as ordinary income at that time. CONSULTANT
understands that he may elect to be taxed at the time the Shares are acquired
hereunder to the extent of the fair market value of the Shares as of the date of
grant rather than when such Shares cease to be subject to the abovementioned
restrictions by filing an election under section 83(b) of the Code with the
I.R.S. within thirty (30) days after the date of the granting of the Shares.
CONSULTANT ACKNOWLEDGES THAT IT IS CONSULTANT’S SOLE RESPONSIBILITY, AND
NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b) OF THE
CODE. CONSULTANT
IS RELYING SOLELY ON HIS ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR
NOT TO FILE AN 83(b) ELECTION.
CONSULTANT
represents that he has been made aware that any and all Common Shares
of the Company to be issued pursuant to this Agreement shall
not be registered under the Securities Act of 1933, as amended, or
the Securities Laws of any State. Notwithstanding the foregoing, the parties
acknowledge that the capital stock of the Company is publicly traded and, for so
long as the Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company hereby agrees
to make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), at all times, and use reasonable, diligent efforts to file
with the U.S. Securities and Exchange Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act.
CONSULTANT
agrees that any securities to be issued pursuant to this Agreement shall contain
the following, or a substantially similar, restrictive legend:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD,
ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT OR
SUCH LAWS AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED
TRANSFER IS EXEMPT FROM THE ACT OR SUCH LAWS.
6.
Expenses. The Company shall reimburse CONSULTANT for all expenses necessarily
and reasonably incurred by CONSULTANT in connection with the services rendered
hereunder and the business of the Company against presentation of proper
receipts or other proof of expenditure, and subject to such written guidelines
or limitations as are provided to CONSULTANT in advance by the CEO or the
Board.
7. Notwithstanding
anything to the contrary in this Agreement, the Company hereby acknowledges and
agrees that (a) CONSULTANT is an employee of the University of California with
pre-existing obligations to disclose and to assign patent rights to the Regents
consistent with the Patent Agreement, dated July 25, 1988, by and between the
CONSULTANT and the University of California, and the guidelines and policies of
the University of California in effect from time to time (collectively, the
“UCLA Patent Agreement”); (b) the obligations of the CONSULTANT under this
Agreement are subject and subordinate to all rights of and obligations to the
University of California under the UCLA Patent Agreement; (c) in the event of
any conflict between this Agreement and the UCLA Patent Agreement, the UCLA
Patent Agreement shall control; and (d) the CONSULTANT'S compliance with his
obligations under the UCLA Patent Agreement shall not be deemed a breach of this
Agreement. Nothing in this Agreement shall apply to the University of
California, or impose any obligations or restrictions on the University of
California. A copy of the UCLA Patent Agreement is attached to this
Agreement as Exhibit A and made a part hereof.
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8. Termination. Either party may terminate this Agreement at any time without cause by giving the other party thirty (30) days prior written notice. In the event of any material breach of this Agreement that is not cured within ten (10) days after receipt of written notice from the non-breaching party, the non-breaching party may terminate this Agreement by giving written notice to the breaching party. Any liabilities accrued through the date of termination shall survive termination.
9. Independent Contractor. CONSULTANT
is an independent contractor and is not an agent or employee of, and has no
authority to bind, the Company by contract or otherwise. CONSULTANT
will perform services hereunder under the general direction of Company, but
CONSULTANT will determine, in CONSULTANT'S sole discretion, the manner and means
by which such services are accomplished, subject to the requirement that
CONSULTANT shall at all times comply with applicable law.
10. Binding
Effect and Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
(a) This
Agreement shall not be assignable by Company, in whole or in part, without
CONSULTANT's prior consent in his sole discretion except as
follows:
The
Company may assign its rights to the services of the CONSULTANT pursuant to this
Agreement to Entest Biomedical, Inc., a California corporation which is
currently a wholly owned subsidiary of the Company, in its sole discretion
(“Entest Assignment”). In the event of an Entest Assignment, Share Restrictions
(as defined in Section 5) shall expire upon completion of the applicable tasks
specified in Section 5 of this Agreement completed on behalf of Entest
BioMedical, Inc. as if they were completed on behalf of the Company. In the
event that CONSULTANT is paid a dividend in kind of the securities of Entest
BioMedical, Inc. by the Company on Shares ( “Entest Dividend Shares” ), then the
CONSULTANT agrees that the Entest Dividend Shares will be subject to transfer
and forfeiture restrictions identical to and in the same proportion as the Share
Restrictions on the Shares described in Section 5 of this
Agreement.
(b) This
Agreement shall not be assignable by CONSULTANT, in whole or in part, without
Company's consent in its sole discretion.
11. Entire
Agreement. This Agreement represents the full and complete agreement between the
parties with respect to the subject matter hereof and supersedes all previous
agreements between the parties with respect to the subject matter hereof. Any
supplemental amendments to this Agreement shall not be binding upon either party
unless executed in writing by the parties hereto.
12. Governing
Law. This Agreement will be governed by and construed in accordance
with the laws of the State of California excluding that body of law pertaining
to conflict of laws.
13.
Invalid by Operation of Law. If any section or part of this Agreement
is held to be invalid by operation of law or by any tribunal of competent
jurisdiction, or if compliance with or enforcement of any section or part should
be restrained by such tribunal, the remainder of the Agreement shall not be
affected thereby and the parties shall enter into immediate negotiations for the
purpose of arriving at a mutually satisfactory replacement for such section or
part.
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14.
Arbitration. Any controversy or claim arising out of or relating to
this contract, or the breach thereof, shall be settled by arbitration in
accordance of the rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrator(s) shall be entered in any court
having jurisdiction thereof. For that purpose, the parties hereto
consent to the non-exclusive jurisdiction and venue of an appropriate court
located in San Diego County, State of California. In the event
that litigation results from or arises out of this Agreement or the performance
thereof, the parties agree to reimburse the prevailing party's reasonable
attorney's fees, court costs, and all other expenses, whether or not taxable by
the court as costs, in addition to any other relief to which the prevailing
party may be entitled.
IN WITNESS
WHEREOF, the parties have hereunto executed this Agreement as of the date first
set forth above.
Bio-Matrix
Scientific Group Inc.
By:
/s/Xxxxx X.
Xxxx /s/Xxxxx
Xxxx
____________________ __________________
____________________ __________________
Xxxxx X.
Xxxx Xxxxx
Xxxx, M.D.
Chairman &
CEO Consultant
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