EXHIBIT 10.19
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this "Agreement"), dated as of October 1, 2002,
is entered into by and among HELIX BIOMEDIX, INC., a Delaware corporation
("Helix"), and Xxxxx Xxxx ("Consultant").
PRELIMINARY RECITALS
WHEREAS, Helix is a publicly owned biotechnology company which is engaged
in (i) developing, testing, patenting, and manufacturing synthetic bioactive
peptides (small proteins) having applications in the pharmaceutical and health
care fields and (ii) licensing its proprietary technology and in seeking
strategic corporate alliances for further development and commercialization of
its technology (collectively, the "Business"); and
WHEREAS, Helix desires outside professional assistance in various areas of
strategic and financial planning and believes that Consultant has experience and
expertise that will be valuable to Helix; and
WHEREAS, Helix desires to engage Consultant as a consultant, and Consultant
desires to perform consulting services for Helix, under the terms and conditions
set forth herein; and
NOW, THEREFORE, in consideration of the premises, the mutual covenants of
the parties hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Consulting.
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1.1 Consulting Services.
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Helix hereby engages Consultant, and Consultant hereby accepts such
engagement and agrees to serve as consultant to Helix concerning the
Business for a period of one year, beginning on the date hereof (the
"Consulting Period").
1.2 Duties.
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Consultant shall faithfully and to the best of its ability perform the
duties assigned by the Board of Directors of Helix and shall serve under
the direction of the President and Chief Executive Officer of Helix. These
duties shall include, without limitation, the following duties:
(a) strategic planning,
(b) assisting Helix in developing and monitoring business and science
plans,
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(c) assisting Helix in seeking additional financing,
(d) assisting Helix with efforts to enhance shareholder value, and
(e) reporting on a quarterly basis Consultant's progress in respect
of duties assigned by Board, in a format reasonably requested by
the Chief Executive Officer of Helix.
1.3 Relationship of Parties.
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Consultant shall be deemed an independent contractor and not an
employee of Helix. All letterhead, business cards and promotional materials
used or distributed by Consultant shall present Consultant as a business
consultant to, and not an employee or principal of, Helix. Consultant shall
be responsible for all taxes associated with payment hereunder, including
but not limited to income taxes and social security taxes.
1.4 Expenses.
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All ordinary and reasonable out-of-pocket expenses incurred by
Consultant solely as a result of the performance of Consultant's services
as assigned pursuant to Section 2.2 above, including reasonable travel
expenses, shall be reimbursed to Consultant by Helix, provided that
Consultant shall have submitted an invoice together with other
documentation of such expenses as Helix may reasonably require.
1.5 Compensation.
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(a) As consideration for the services to be rendered by
Consultant hereunder, its agreement not to compete with Helix and its
agreement to promote services for and through Helix during the
Consulting Period, Helix hereby grants to Consultant warrants
("Warrants") to purchase an aggregate of one hundred thousand
(100,000) shares of the Helix's common stock at an exercise price per
share of $1.00. Warrants shall have a ten-year term, commencing on
October 1, 2002 and ending on October 1, 2012, when any and all
unexercised Warrants granted herein shall expire and terminate.
(b) In the event of any change in the outstanding shares of
common stock by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of
shares or other similar corporate change, the maximum aggregate number
and class of shares of common stock which may be purchased by
Consultant pursuant to the Warrants will be equitably adjusted for
such event.
1.6 Restricted Stock
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(a) Consultant recognizes and understands that neither the
Warrants nor the shares of Common Stock of Helix to be purchased by
Consultant pursuant to the Warrants (collectively, the "Securities")
will be registered under the Securities Act of 1933 ("Securities
Act"), or under the securities laws of any state (the "securities
laws").
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(b) Consultant represents and warrants that (i) the Consultant
has knowledge and experience in business, finance, securities and
investments, such experience being based on actual participation
therein, (ii) the Consultant is capable of evaluating the merits and
risks of an investment in the Securities and the suitability thereof
as an investment therefor, (iii) the Consultant is an experienced and
sophisticated investor in investments, including investments similar
to that of the Securities, (iv) Securities to be acquired by it will
be acquired solely for investment and not with a view toward resale or
redistribution in violation of the securities laws, and no assurances
have been made concerning the future results of Helix or as to the
value of the Securities, and (v) Consultant is an "accredited
investor" within the meaning of Regulation D promulgated by the United
States Securities and Exchange Commission (the "Commission") pursuant
to the Securities Act.
(c) Consultant has consulted with its own counsel in regard to
the securities laws and is fully aware (i) of the circumstances under
which it is required to hold the Securities, (ii) of the limitations
on the transfer or disposition of the Securities, and (iii) that the
securities must be held indefinitely unless the transfer thereof is
registered under the securities laws or an exemption from registration
is available.
(d) Consultant has been furnished with a copy of the Annual
Report on Form 10-KSB of Helix filed with the Commission under the
Securities Exchange Act of 1934, as amended, for the fiscal year ended
December 31, 2001. Helix has made available to Consultant the
opportunity to ask questions and receive answers concerning the terms
and conditions of the transactions contemplated by this Agreement and
to obtain any additional information which they possess or could
reasonably acquire the purpose of verifying the accuracy of the
information furnished to Consultant as set forth herein or for the
purpose of considering the transactions contemplated hereby. Helix has
offered to, and agrees during the term of this Agreement, make
available to Consultant upon request at any time all exhibits filed by
Helix with the Commission as part of any of the reports filed
therewith.
1.7 Company Information.
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In connection with Consultant's engagement, Helix will furnish
Consultant and/or the Consulting Principal with all information concerning
Helix which Consultant and/or the Consulting Principal shall reasonably
request. Helix represents and warrants that all such information concerning
Helix will be true and accurate in all material respects and will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make statements therein not misleading in light
of the circumstances under which such statements are made. Helix
acknowledges and agrees that Consultant and the Consulting Principal will
be using and relying upon such information supplied by Helix and its
officers, agents and others concerning Helix without independent
investigation or verification thereof or independent appraisal by
Consultant or the Consulting Principal.
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1.8 Restrictive Covenant.
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Except as otherwise consented to in writing by Helix, such consent
being not unreasonably withheld, during the term of this Agreement and for
a period of two years thereafter, the Consultant shall not as an individual
on his own account; as a partner, joint venturer, consultant, agent,
salesman for any person; as an officer, director or stockholder (other than
a beneficial holder of not more than 5% of the outstanding voting stock of
a company having at least 250 holders of voting stock) of a corporation; or
otherwise, directly or indirectly:
(a) enter into or engage in any business or consult with any
business or entity directly competitive with Helix anywhere in the
world;
(b) solicit or attempt to solicit any of Helix customers with
whom Consultant has had contact as a Consultant or employee of Helix
with the intent or purpose to perform for such customer the same or
similar services which Consultant performed for such customer during
the term of his service hereunder or employment by Helix;
(c) employ or solicit, or attempt to employ or solicit, for
himself or any third party, the employment of any of Helix's
employees; or
(d) induce or attempt to induce any employee, consultant or agent
of Helix to discontinue services to Helix.
The provisions of this Section 1.8 shall survive the termination
of this Agreement.
2. Assignment.
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No party hereto may assign or delegate any of its rights or obligations
hereunder without the prior written consent of the other party hereto. Except as
otherwise expressly provided herein, all covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto shall be binding and
inure to the benefit of the respective legal representatives, heirs, successors
affiliates and assigns of the parties hereto, whether so expressed or not.
3. Severability.
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If any provision of this Agreement is held to be unenforceable for any
reason, it shall be adjusted rather than voided, if possible, in order to
achieve the intent of the parties to the extent possible. In any event, all
other provisions of this Agreement shall be deemed valid and enforceable to the
full extent.
4. Counterparts.
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This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same Agreement.
5. Descriptive Headings: Interpretation.
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The descriptive headings in this Agreement are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
6. Notices.
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All notices, demands or other communications to be given or delivered under
or by reason of the provisions of this Agreement shall be in writing and shall
be deemed to have been duly given if (i) delivered personally to the recipient,
(ii) sent to the recipient by reputable express courier service (charges
prepaid) or mailed to the recipient by certified or registered mail,return
receipt and postage prepaid, or (iii) transmitted by telecopy to the recipient
with a confirmation copy to follow the next day to be delivered by overnight
carrier. Such notices, demands and other communication shall be sent to the
addresses indicated below:
(a) If to Consultant:
Xxxxx Xxxx
000 X. XxXxxxx Xxxxx Xxxxx 0000
Xxxxxxx, XX 00000
(b) If to Helix:
Helix Biomedix, Inc.
00000 00xx Xxx. XX
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party. The
effective date of such notice shall be (w) the date such notice is personally
delivered, (x) three days after the date of mailing if sent by certified or
registered mail, (y) one day after date of delivery to the overnight courier if
sent by overnight courier or (z) the next business day after the date of
transmission by telecopy or e-mail.
7. Confidential Information and Discoveries.
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Consultant agrees that all information of a technical or business nature
such as know-how, trade secrets, secret business information, plans, data,
processes, techniques, customer information, inventions, discoveries, formulae,
patterns, devices, etc., ("Confidential Information") pertaining to the business
of Helix, is a valuable business property right of Helix. Consultant agrees that
such Confidential Information, whether in written, verbal or model form, shall
not be disclosed to anyone outside the employment of Helix or otherwise used by
Consultant for any purpose other than fulfillment of their respective
obligations under this Agreement, without the express authorization of Helix.
Confidential Information does not include information which Consultant can
demonstrate (i) has become generally available to the public other than as a
result of a disclosure by Consultant, (ii) has become available to Consultant on
a non-confidential basis from a source other than Helix, provided such source is
not bound by a confidentiality agreement with Helix or otherwise prohibited from
transmitting the information to Consultant by a contractual, legal or fiduciary
obligation.
Any and all improvements, inventions, discoveries, formulae or processes in
any way related to Helix's business which Consultant may conceive or make during
his regular working hours or otherwise shall be the sole and exclusive property
of Helix and Consultant will disclose the same to Helix and will, whenever
requested by Helix to do so (either during the terms of this Agreement or
thereafter), execute and assign any and all applications, assignments and/or
other instruments and do all things which Helix may deem necessary or
appropriate in order to apply for, obtain, maintain, enforce and defend patents,
copyrights, trademarks or other forms of protection, or in order to assign and
convey or otherwise make available to Helix the sole and exclusive right, title
and interest in and to said improvements, inventions, discoveries, formulae,
processes, applications or patents.
No provision in this Agreement is intended to require assignment of any of
the rights of Consultant in an invention if no equipment, supplies, facilities,
or trade secret information of Helix was used, and the invention was developed
entirely on the Consultant's own time; and the invention does not relate to the
business of Helix or to Helix's actual or demonstrably anticipated research or
development; and does not result from any work performed by the Consultant for
Helix.
The provisions of this Section 7 shall survive the termination of this
Agreement.
8. Return of Documents.
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Upon the termination of this Agreement for any reason, Consultant shall
forthwith return and deliver to Helix and shall not retain any original or
copies of any books, papers, price lists or customer contracts, bids or customer
lists, files, books of account, notebooks and other documents and data (in
printed, audio, video, electronic or other form) relating to the performance of
services rendered by Consultant hereunder, all of which materials are hereby
agreed to be the property of Helix.
9. Preliminary Recitals.
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The Preliminary Recitals set forth in the preamble hereto are hereby
incorporated and made part of this Agreement.
10. Entire Agreement.
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Except as otherwise expressly set forth herein, this Agreement sets forth
the entire understanding of the parties, and supersedes and preempts all prior
oral or written understandings and agreements with respect to the subject matter
hereof.
11. Governing Law.
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This Agreement shall be construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance
of this Agreement shall be governed by, the laws of the State of Washington.
12. Representations and Warranties.
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12.1 Helix represents and warrants that: (i) Helix is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Delaware, has duly authorized the execution and performance of
this Agreement, and such execution and performance will not violate its
Articles of Incorporation, Bylaws, or any contract or agreement by which it
is bound; and (ii) this Agreement is valid and enforceable against Helix in
accordance with its terms, and each instrument to be executed by Helix
pursuant to this Agreement will, when executed and delivered, be
enforceable in accordance with its terms, subject to bankruptcy, insolvency
and similar laws affecting creditors' rights generally. 12.2 Consultant
represents and warrants that this Agreement is valid and enforceable
against Consultant in accordance with its terms, and each instrument to be
executed by Consultant pursuant to this Agreement will, when executed and
delivered, be enforceable in accordance with its terms, subject to
bankruptcy, insolvency and similar laws affecting creditors' rights
generally.
13. Compliance with Laws.
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Consultant shall comply with all federal, state, and local laws,
regulations, ordinances, orders, decrees, resolutions, and other acts of any
governmental entity, including, but not limited to, securities laws and
regulations that are applicable to this Agreement and the work and services
performed or provided hereunder.
14. Attorney's Fees.
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If a dispute arises relating to the performance of the obligations of
either Consultant or Helix pursuant to the terms of this Agreement and legal or
other costs are incurred, the prevailing party shall be entitled to recover all
reasonable costs incurred in the defense or prosecution of the claim, including
court costs, reasonable attorney's fees, and other claim-related expenses.
15. Indemnification.
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Helix shall (A) indemnify Consultant (jointly and/or severally, the
"Indemnified Party"), and hold him harmless to the fullest extent permitted by
law against any losses, claims, damages or liabilities to which the Indemnified
Party may become subject in connection with (i) his use of information that is
inaccurate in any respect (as a result of misrepresentation, omission, failure
to update, or otherwise) that is provided to Indemnified Party by Helix, its
representatives, agents or advisers, regardless of whether the Indemnified Party
knew or should have known of such inaccuracy, or (ii) any other aspect of
rendering such services, in the case of each of clauses (i) and (ii) above
unless it is finally judicially determined that such losses, claims, damages or
liabilities relating thereto arise only out of the gross negligence or willful
misconduct of any of the Indemnified Party, and (B) reimburse Indemnified Party
for any legal or other expenses reasonably incurred by him in connection with
investigating, preparing to defend or defending any lawsuits, claims, or other
proceedings arising in any manner out of or in connection with his performance
of duties pursuant to the engagement contemplated herein, unless it is finally
judicially determined that the losses, claims, damages or liabilities relating
thereto arise only out of the gross negligence or willful misconduct of the
Indemnified Party. If, for any reason, the foregoing indemnity is unavailable to
the Indemnified Party or is insufficient to hold the Indemnified Party harmless
(other than in the event that the losses, claims, damages or liabilities
relating thereto arise only out of the gross negligence or willful misconduct of
the Indemnified Party), then Helix shall contribute to the amount paid or
payable by Indemnified Party as a result of such claims, liabilities, losses,
damages, or expenses in such proportion as is appropriate to reflect not only
the relative benefits received by Helix on the one hand and the Indemnified
Party on the other, but also the relative fault of Helix and the Indemnified
Party, as well as any equitable considerations. Notwithstanding the provisions
of this Agreement, the aggregate contribution of the Indemnified Party to all
claims, liabilities, losses, damages and expenses shall not exceed the amount of
the fees actually received by Consultant pursuant to its engagement by Helix. It
is hereby further agreed that the relative benefits to Helix on the one hand and
the Indemnified Party on the other hand with respect to the transactions
contemplated in the engagement referenced above shall be deemed to be in the
same proportion as (i) the total value of the transaction bears to (ii) the fees
paid to Consultant with respect to such transactions. Helix agrees that the
indemnification and reimbursement commitments set forth in this Agreement shall
apply whether or not the Indemnified Party is a formal party to any such
lawsuits or other proceedings, that the Indemnified Party is entitled to retain
separate counsel of hid choice in connection with any of the matters to which
such commitments relate, that such commitments shall be in addition to any
liability that Helix may have to the Indemnified Party at common law or
otherwise, and that such commitments shall extend upon the terms set forth in
this Agreement to any controlling person, director, officer, employee, agent or
affiliate of Indemnified Party and shall survive any termination of this
Agreement; provided that any such claim arising other than as a result of this
indemnification procedure shall serve as a set-off against any claim hereunder.
Notwithstanding the provisions of Section 1 above, the indemnification
provisions of the Prior Agreement shall survive this novation and the provisions
of this Section 15 shall serve to supplement the provisions therein.
16. Termination.
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This Agreement may be terminated by either party upon 30 days' advanced
written notice to the other party. Any securities which have not been earned
pursuant to this Agreement shall automatically be terminated and canceled and
Helix shall have no further obligation to Consultant in respect of such
securities. Subsection 1.8 and Sections 7 and 15 of this Agreement shall survive
the expiration or termination of this Agreement.
17. Activities of Consultant.
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In connection with this engagement, it is understood that Consultant may
identify and facilitate contact between Helix and corporations or individuals
that may potentially become the Helix's joint venture partners, licensees,
commercial collaborators, agents, directors, or investors. To the extent that
Consultant contacts corporations or individuals as potential joint venture
partners, licensees, commercial collaborators, agents, directors, or investors,
Helix acknowledges that Consultant's sole role is to initially contact such
potential joint venture partners, licensees, commercial collaborators, agents,
directors, or investors and refer any resulting contact to Helix or its
designated agent(s). Accordingly, Consultant shall have no liability to Helix or
any other person or party resulting from his so acting in connection with
initiating such contacts referenced herein. It is explicitly agreed that
Consultant's role under this engagement will not include, without limitation:
performing due diligence; verifying information provided to Consultant or,
directly or indirectly, to other persons or parties pursuant to contacts made by
Consultant as contemplated by this paragraph; preparing any offering memoranda;
or, negotiating or structuring any agreements, licenses, commercial
collaborations, or investments by or with third parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HELIX BIOMEDIX, INC.
By: /s/ R. Xxxxxxx Xxxxxx
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R. Xxxxxxx Xxxxxx, President and Chief
Executive Officer
CONSULTANT
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
