EXHIBIT 99.1
LETTER AGREEMENT
This Letter ("Letter"), dated as of June 1, 2005, is executed and
delivered by Nutra Pharma Corp. (the "Company"), Xxxxxxx & Company, LLC
("Xxxxxxx"), a Delaware limited liability company, and Xxxxxxx Xxxxxxx
("Executive").
R E C I T A L S
WHEREAS, the Company desires Executive to become the Chairman of the
Company, an executive position supervising management of the Company.
WHEREAS, it is anticipated that Executive will expend considerable
personal time and effort as Chairman of the Company and his services to the
Company, including strategic guidance and management supervision, are a critical
component for the Company's future success.
WHEREAS, Executive is an employee of Xxxxxxx and expends considerable
time on behalf of Xxxxxxx and other investments and engagements, which will be
diminished to provide services to the Company.
WHEREAS, Xxxxxxx and the Company wish to confirm the terms set forth in
this Letter whereby Xxxxxxx will permit Executive to, and Executive shall,
become Chairman of the Company.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the provisions
set forth below, and subject to the terms and conditions set forth herein, the
parties agree as follows:
1. Services as Chairman. The Company, Executive and Xxxxxxx hereby agree
that Executive will serve as executive Chairman of the Company through
Xxxxxxx. Executive shall not be required to devote more than 20 hours
per week to the Company for his services as Chairman. In exchange for
Xxxxxxx providing Executive's services to the Company, the Company
grants to Xxxxxxx an option to acquire from the Company up to an
aggregate of Thirteen Million Six Hundred Thousand (13,600,000) whole
shares of Company's common stock ("Common Stock"), par value $0.001 per
share as of the date of this Letter in the form of Exhibit A hereto
("Option"). In addition, Xxxxxxx shall be entitled to receive cash
compensation commensurate with its position and duties and comparable
to Company's other executives at such time as the Company's other
executives receive cash compensation. The term of this arrangement
shall be for two years, unless earlier terminated by Xxxxxxx or by the
Company in accordance with Section 4 of this Letter.
2. Terms of Option. The Option will vest 50% on the first anniversary of
the date hereof and the balance shall become exercisable in twelve
equal monthly installments thereafter. The option shall be immediately
exercisable in the event of a change of control or otherwise as
provided in the Option. A change of control shall include the sale,
lease or
exchange of a majority of the Company's assets, the acquisition (by
stock, purchase, merger or otherwise) of a majority of the voting or
economic power of the Company by any person or group of affiliated
persons, or the liquidation or dissolution of the Company. The option
will be exercisable, in whole or in part from time to time, to the
extent vested until its expiration on May 31, 2010. The option shall be
exercisable at a price of $0.27 per share, which is the fair market
value as of the date hereof, subject to adjustment upon any stock
split, dividend or reverse split of the Common Stock as further
provided in the Option.
3. Duties as Chairman. As Chairman, Executive shall set strategic goals
and business planning; consult with and direct the chief executive
officer and other executive officers on matters determined by the Board
of Directors; help with strategic decisions or business combinations;
and otherwise perform duties consistent with the position of Chairman
or as agreed to by Executive and the Company. Executive shall also have
the authority to select the Company's primary outside corporate and
securities counsel, which may be a firm with which Executive or Xxxxxxx
has a prior relationship. The Company shall waive any conflicts of
interest with such firm representing the Company on an ongoing basis,
other than with respect to agreements entered into after the date
hereof.
4. Termination. The Company may only terminate this arrangement prior to
the second anniversary of this Letter for cause. As used in this
Letter, "cause" shall mean Executive (i) has breached his fiduciary
duties to the Company in a material way; (ii) is guilty of material
gross neglect with respect to his duties as Chairman; or (iii) is
convicted of violating the federal securities laws.
5. Binding Nature. This Letter shall be binding on the undersigned and
his, her or its respective successors, heirs, personal representatives
and assigns and is subject to the approval of the Board of Directors of
the Company.
6. Amendment. No amendment to this Letter shall be valid unless such
amendment is in writing and is signed by authorized representatives of
all the parties to this Letter.
7. Waiver. Any of the terms and conditions of this Letter may be waived at
any time and from time to time in writing by the party entitled to the
benefit thereof, but a waiver in one instance shall not be deemed to
constitute a waiver in any other instance. A failure to enforce any
provision of this Letter shall not operate as a waiver of the provision
or of any other provision hereof.
8. Severability. In the event that any provision of this Letter shall be
held to be invalid, illegal or unenforceable in any circumstances, the
remaining provisions shall nevertheless remain in full force and effect
and shall be construed as if the unenforceable portion or portions were
deleted.
9. Governing Law. This Letter shall be governed by and construed and
enforced in accordance with the laws of the State of California.
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10. Execution in Counterparts. This Letter may be executed by the parties
in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the parties has executed this Letter as of the date
first above written.
NUTRA PHARMA CORP.
/s/ Xxx X Xxxxxxx
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By: Xxx X Xxxxxxx
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Its: President
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XXXXXXX & COMPANY, LLC
/s/ Xxxxxxx Xxxxxxx
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By: Xxxxxxx Xxxxxxx
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Its: President
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/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
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