CONSULTING AGREEMENT
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THIS AGREEMENT entered into as of October 13, 1995 (the "Agreement") by and
between Viragen, Inc. (the "Company") and Girmon Investment Co., Limited, a
company incorporated in Ireland, Company No. 233671 ("Girmon"), acting solely by
and through its Chairman of the Board and Chief Executive Officer, Xx. Xxxx
Xxxxxx ("Xxxxxx") (collectively the "Consultant"), hereby agree to the
following:
1. APPOINTMENT OF CONSULTANT. The Company hereby engages Consultant, on a
non-exclusive basis, and Consultant hereby agrees to render services to the
Company through Hermon as an international financial and business development
consultant on a worldwide basis.
2. DUTIES. During the term of this Agreement, Consultant, solely by and
through Hermon, shall provide advice to, undertake for and consult with the
Company concerning international, financial and business development matters,
including but not limited to, financial and investor relations, international
marketing, strategic planning, and corporate organization and structure. Hermon
shall devote and spend a minimum of 50% of his business time and effort,
representing not less than eighty (80) hours per calendar month, exclusively to
perform services for the Company in accordance with this Agreement, subject to
an appropriate and proportional reduction for U.S. legal holidays and equivalent
of three (3) vacation weeks per twelve (12) month period. Consultant shall use
its best efforts to at all times promote the best interests of the Company.
3. TERM. Subject to the provisions of paragraph 8 herein, the term of
this Agreement shall be for a two (2) year period commencing on the date hereof.
4. COMPENSATION. For the services described herein, Consultant shall
receive as sole and aggregate compensation from the Company, including its
subsidiaries and affiliates, for all services rendered to and on behalf of the
Company, a Warrant, attached hereto as Exhibit A and made a part hereof, for the
purchase of up to 250,000 shares of the Company's Common Stock, irrevocably
exercisable for a period of five (5) years following the dates of vesting as
described herein. The purchase price of the shares underlying the Warrant shall
be $1.00 per share. The Warrant shall VEST and become exercisable by Consultant
(a) as to 83,334 shares on the date hereof, (b) as to 83,333 shares on April 13,
1996, and (c) as to 83,333 shares on October 13, 1996. The Company acknowledges
that this compensation shall be in addition to any compensation, including
warrants, previously received by Hermon for prior services performed for the
Company.
5. EXPENSES. Consultant shall be promptly reimbursed by the Company for
reasonable, documented, out-of-pocket expenses it shall incur in performing its
services under this Agreement up to an aggregate of $20,000 per 12-month period
of this Agreement. Travel and related expenses shall be limited to those
incurred by Hermon. Receipts for reimbursable expenses shall be provided by
Consultant in accordance with Company policy.
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6. REGISTRATION. The Company agrees to provide Consultant with certain
registration rights as defined in Exhibit A attached hereto.
7. CONFIDENTIALITY. Consultant agrees to execute the Company's
Confidentiality Agreement attached hereto as Exhibit B and made a part hereof.
In view of the Confidential Information to be obtained by or disclosed to
Consultant, because of the know-how acquired and to be acquired by Consultant,
and as a material inducement to the Company to enter into this Agreement and
continue to engage Consultant, Consultant covenants and agrees that, so long as
Consultant is engaged by the Company and for a period of two (2) years after
Consultant ceases for any reason to be engaged by the Company, Consultant shall
not, directly or indirectly (i) divert business from, (ii) solicit or transact
any business competitive with the Company or its affiliates with, or (iii) sell
any products or services sold or offered by the Company or its affiliates to,
any customer or former customer of the Company or its affiliates. In addition,
Consultant covenants and agrees that, so long as Consultant is engaged by the
Company and for a period of two (2) years after Consultant ceases for any reason
to be engaged by the Company, Consultant hereby agrees to refrain from, anywhere
in the world (the "Geographical Area"), directly or indirectly owning, managing,
operating, controlling or financing, or participating in the ownership,
management, control or financing, or participating in the ownership, management,
control or financing of, or being connected with or having an interest in, or
otherwise taking any part as a stockholder, director, officer, employee, agent,
consultant, partner or otherwise in, any business competitive with that engaged
in or being developed by the Company or its affiliates during Consultant's term
of engagement. The Company's business is acknowledged to include, but not be
limited to, the development, manufacture and distribution of human
leukocyte-derived interferon therapy products and other derivative natural or
recombinant technologies aimed at enhancing the human immune system, including
cosmetic applications. Consultant acknowledges that the Company's business is
international in scope, that a similar business could effectively compete with
the Company and its affiliates' businesses from any location in the world, and
that, therefore, the restricted Geographical Area is reasonable in scope to
protect the Company and its affiliates' trade secrets and legitimate business
interests. Any advice rendered by Consultant pursuant to this Agreement may not
be disclosed publicly in any manner without the prior written approval of the
Company. The provisions of this paragraph 7 shall survive the termination and
expiration of this Consulting Agreement.
8. TERMINATION.
A. EVENTS. Notwithstanding any provisions of this Agreement (and its
Exhibits) to the contrary, Consultant's engagement may be terminated by the
Company with Cause (as hereinafter defined), effective upon the delivery of
written notice to Consultant. In addition, Consultant's engagement shall
automatically terminate (i) upon Consultant filing for protection of any kind
under bankruptcy law in any jurisdiction (ii) upon Hermon leaving the post of
Chairman or CEO of Girmon, leaving the employ of Girmon or directly or
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indirectly disassociating himself in any way with Girmon (iii) upon a change of
control of Girmon from Hermon to any other person or entity (iv) upon Hermon's
death or (v) upon Hermon becoming Disabled (as hereinafter defined).
B. DEFINITION OF CAUSE. For purposes of this Agreement, "Cause"
shall include, but not be limited to: (a) conviction for fraud or criminal
conduct (other than conviction of, or a plea of guilty to, a non-DUI related
traffic violation) (b) habitual drunkenness or drug addiction; (c) embezzlement;
(d) sanctions against Consultant in its capacity as a advisor to the Company by
regulatory agencies governing the Company or against Consultant because of
wrongful acts or misconduct of Consultant (e) breach or default by Consultant of
any of the terms or conditions of Section 7 of this Agreement, (f) material
breach or default by Consultant of any of the terms or conditions of the
Confidentiality Agreement attached as Exhibit B hereto or (g) resignation by
Consultant prior to the end of the term of this Agreement (in this last event,
Consultant's engagement is deemed terminated with Cause on the date that it
resigns).
C. DEFINITION OF DISABLED. For purposes of this Agreement, Hermon
shall be deemed to be "Disabled" when, by reason of physical or mental illness
or of injury, he is unable to perform substantially all of the duties and
responsibilities required of him in connection with his employment hereunder. No
disability shall be deemed to exist until after Hermon shall be unable to
perform his duties hereunder for ninety (90) consecutive days (the "Disability
Period"). If Hermon shall have been under a disability but shall have returned
to work prior to the end of the Disability Period, any new disability commencing
within thirty (30) days of the termination of the prior disability shall be a
continuation of the prior disability, and the period of all such disabilities
shall be added together to determine whether, or how much of, the Disability
Period has elapsed.
9. IRREVOCABILITY OF WARRANTS FOLLOWING VESTING. Consultant and the
Company agree that, subject to termination pursuant to Section 8 of the Warrant
attached as Exhibit A hereto, upon the vesting of the Warrant pursuant to its
terms, such Warrant shall be irrevocable for a period of five (5) years.
10. INDEPENDENT CONTRACTOR. Consultant and the Company hereby acknowledge
that Consultant is an independent contractor. Unless directed by the Company in
writing, Consultant shall not hold itself out as, nor shall it take any action
from which others might infer, that it is an agent of or a joint venture of the
Company. Consultant and the Company hereby acknowledge that Consultant is acting
solely as an independent contractor and as an independent advisor.
11. MISCELLANEOUS. This Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and supersedes and cancels
any prior communications, understandings and agreements between the parties,
except for any warrant agreements existing prior to the date hereof between
Hermon and the Company. This Agreement cannot be modified or changed, nor can
any of its provisions be waived, except by written agreement signed by all
parties. This Agreement shall be governed by the laws of the State of Florida.
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In the event of any dispute as to the terms of this Agreement, the prevailing
party in any litigation shall be entitled to reasonable attorney's fees.
12. NOTICES. Any notices or communications with respect to this
Agreement shall be delivered to the following addresses:
As to the Company: Viragen, Inc.
Attn: Xxxxxx Xxxxx, President
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
As to Consultant: Girmon Investment Co., Limited
Attn: Xxxx Xxxxxx, Chairman of the Board
and Chief Executive Officer
c/o Xx. Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxx & Co.
Chartered Accountants
0 Xxxxx Xxxxxx, Xxxxxxx Xxxxxx
Xxxxxx XX, Xxxxxx Xxxxxxx
IN WITNESS WHEREOF, the parties and their duly authorized representatives have
executed this Agreement as of the day and year first above written.
VIRAGEN, INC.
By: /S/ XXXXXX XXXXX
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Xxxxxx Xxxxx, President
GIRMON INVESTMENT CO., LIMITED,
a company incorporated in Ireland
By: /S/ XXXX XXXXXX
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Xxxx Xxxxxx, Individually and as
Chairman of the Board and Chief
Executive Officer
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