EXHIBIT 10.1
CONSULTING SERVICES AGREEMENT
between
MEDICAL SCIENCE SYSTEMS, INC.
and
XXXXXX X. XXXXXX
THIS CONSULTING SERVICES AGREEMENT (this "AGREEMENT") is made and entered
into as of the 1 day of June, 1999 (the "EFFECTIVE DATE") by and between Medical
Science Systems, Inc., a Texas corporation (the "COMPANY"), and Xxxxxx X.
Xxxxxx, an individual residing in Concord, Massachusetts ("CONSULTANT").
IN CONSIDERATION of the mutual agreements herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows:
1. ENGAGEMENT. The Company hereby engages Consultant to serve as a
consultant to the Company, and Consultant hereby accepts such engagement, upon
and subject to the terms and conditions set forth herein. Consultant currently
is employed as the Executive Director of the Xxxxxxx Center for Mental
Retardation, Inc, and, in addition, provides consulting services to several
companies as set forth in Schedule 2.
2. AFFILIATIONS. From and following the Effective Date of this Agreement,
Consultant shall not act as a consultant for any person or entity other than the
Company without first obtaining the written consent of the Company's Board of
Directors. Notwithstanding the foregoing, consultant may (a) be employed as the
Executive Director of the Xxxxxxx Center, (b) terminate his employment with the
Xxxxxxx Center and seek employment elsewhere, and (c) be engaged as a consultant
by any company or organization, provided that such consulting activity does not
directly conflict with his duties and responsibilities as a consultant to
Medical Science Systems, Inc. Consultant warrants to the Company that Consultant
currently has no other consulting affiliations than those set forth in Schedule
2.
3. DUTIES. Consultant agrees to provide the services set forth on EXHIBIT
A which is attached hereto and incorporated herein for all purposes. Consultant
will devote approximately 10 to 15 hours per week, determined by averaging over
the course of each year, to provide the services set forth in EXHIBIT A. The
parties understand and acknowledge that potential conflicts or duality of
interest, or the appearance of such conflict or duality of interest, may arise
during Consultant's performance of those duties and services as a result of
Consultant's other affiliations. Both parties recognize the importance of
avoiding both actual conflicts and the appearance of conflicts of interest. The
parties will therefore mutually develop procedures for identifying and
evaluating actual, potential and apparent conflicts of duality of interests. In
discharging his duties and responsibilities hereunder, Consultant will
advise the Company when and if an actual or potential conflict arises. The
parties will then mutually work at attempting to resolve the conflict.
4. COMPENSATION. Compensation for Consultant's services shall be in
accordance with EXHIBIT B which is attached hereto and incorporated herein for
all purposes.
5. INDEPENDENT CONTRACTOR. The parties understand and acknowledge that
Consultant is an independent contractor and is not an employee of the Company
for the purposes of this Agreement, the Social Security Act, the income
withholding provisions of the Internal Revenue Code of 1986, as amended, or
other federal or state laws relating to compensation, insurance, unemployment,
or xxxxxxx'x compensation. Consultant acknowledges and agrees that it shall be
his obligation to report as self-employment income all compensation received or
accrued as a result of this Agreement. Consultant acknowledges that he will not
be entitled to any insurance, pension, profit sharing, retirement or other
employee benefits which the Company may provide to its employees during the term
of this Agreement. This Agreement shall not be construed as creating a
partnership, joint venture, agency or employment relationship, or as granting a
franchise under either federal or state law.
6. INVENTIONS. Consultant warrants and represents to the Company that
Consultant has no affiliation with any other persons or entities which require,
to any degree or under any conditions, that Consultant assign his rights to any
discoveries, inventions or developments to such persons or entities. In the
performance of his duties and responsibilities hereunder, Consultant may
conceive, make or develop products, processes or other intellectual property. It
is the intent of the parties that intellectual property conceived, made or
developed by Consultant during the performance of his duties and
responsibilities hereunder or that is conceived, made or developed using the
Company's funds, facilities, materials or information, shall be owned by the
Company. Consultant will ensure that his obligations under affiliations with any
other persons or entities, including, without limitation, those persons or
entities listed in SCHEDULE 2, do not extend to intellectual property rightfully
owned by the Company. Consultant will assist the Company in obtaining legal
protection for such intellectual property as part of his duties and
responsibilities hereunder, and will execute such documents as are reasonably
necessary to secure such protection and confirm ownership in the Company.
7. CONFIDENTIAL INFORMATION. Consultant agrees to maintain in confidence
all information and materials provided by, or obtained from or through, the
Company including, without limitation, (a) all information regarding trade
secrets, inventions, ideas, processes, formulas, data, other works of
authorship, know-how, improvements, discoveries, developments, designs and
techniques, (b) all information regarding plans for research, development, new
products, marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers,
computer software and documentation and (c) all other information relating to
the business of the Company, including, without limitation, information
regarding the skills and compensation of employees of the Company (collectively,
the "CONFIDENTIAL INFORMATION"). Consultant shall not publish, use or disclose
Confidential Information learned, developed or acquired as a result of services
offered under this Agreement without the Company's prior written consent.
Confidential
Information shall not include (i) information which was rightfully in
Consultant's possession without an obligation of confidentiality prior to
disclosure by or through the Company, (ii) information which lawfully becomes
part of the public knowledge, literature or generally available to the public
through no act of Consultant, or (iii) information obtained from any third
party, provided that any such third party did not obtain such information from
the Company or obtain such information in confidence. Consultant shall protect
the Confidential Information and shall take all reasonable steps to prevent the
unauthorized disclosure, dissemination, or publication of the Confidential
Information.
All data, records, analyses, reports and material prepared or compiled by
Consultant or furnished to Consultant, in connection with this Agreement during
the term hereof shall be the sole and exclusive property of the Company, and all
of such data, records, analyses, reports and materials, and all copies thereof,
shall be delivered to the Company at its request or on the termination of this
Agreement.
The parties acknowledge that the terms of Consultant's other affiliations
also contain or require certain obligations of confidentiality. In discharging
his duties relative to Confidential Information, Consultant shall advise the
Company when and if an actual or potential conflict with such other obligations
arise. The parties will then mutually work at attempting to resolve the
conflict. If such conflict cannot be resolved, Consultant is expressly excused
from performing any services hereunder that would result in a breach or
potential breach of his confidentiality obligations owed to another entity.
8. TERM AND TERMINATION.
(a) TERM. Subject to the rights of termination set forth in this SECTION
8, this Agreement shall remain in full force and effect from June 11, 1999 until
June 11, 2002, unless sooner terminated by Consultant's death or continuing
inability to discharge the duties hereunder for three (3) consecutive months.
(b) VOLUNTARY TERMINATION. During the term of this Agreement, either party
may terminate this Agreement without cause, by giving 120 days written notice of
termination to the other party.
(c) TERMINATION WITH CAUSE. In the event of breach of this Agreement by
either party, the non-breaching party may, at its option, cancel this Agreement
for such breach by giving written notice of cancellation to the breaching party,
which cancellation shall be effective thirty (30) days following the delivery of
such notice or such later time as may be specified in such notice, unless the
breaching party shall have cured such breach prior to the expiration of the
notice.
(d) LIMITED SURVIVAL UPON TERMINATION. SECTIONS 6 and 7 shall survive
termination of this Agreement and shall remain in full force and effect.
9. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands, and other communications
hereunder
shall be in writing and, unless otherwise provided herein, shall be deemed to
have been duly given upon hand delivery or upon deposit in the United States
Mail, postage prepaid, certified or registered mail, return receipt requested,
as follows:
If to the Company:
Medical Science Systems, Inc.
000 X.X. Xxxx 000, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: U. Xxxxxxx Xxxxx
If to Consultant:
Xx. Xxxxxx X. Xxxxxx
000 Xxxxxxxx Xx.
Xxxxxxx, Xxxxxxxxxxxxx 00000
or at such other address as shall have been furnished to the other party in
writing in accordance herewith, except that such notice of such change shall be
effective only upon receipt.
(b) AMENDMENTS AND WAIVER. This Agreement may be amended or modified by,
and only by, a written instrument executed by all the parties hereto. The terms
of this Agreement may be waived by, and only by, a written instrument executed
by the party against whom such waiver is sought to be enforced.
(c) SECTION AND OTHER HEADINGS. The section and other headings contained
in this Agreement are for convenience of reference only and shall not in any way
affect the meaning or interpretation of this Agreement.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
(e) ASSIGNMENTS AND PARTIES IN INTEREST. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. This Agreement calls for Consultant's personal services
and may not be assigned by Consultant without the prior written consent of the
Company.
(f) NO IMPLIED RIGHTS OR REMEDIES. Except as otherwise expressly provided
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or to give any person, firm, or corporation, other than the parties
hereto and their respective successors and assigns, any rights or remedies under
or by reason of this Agreement.
(g) AGREEMENT OF FURTHER COOPERATION. Each of the parties agrees to
execute and deliver such further documents and to cooperate in such manner as
may be necessary to implement and give effect to the agreements contained
herein.
(h) ENTIRE AGREEMENT. This Agreement, together with all exhibits and
schedules hereto, embodies the entire agreement and understanding between the
parties hereto relating to the subject matter hereof and supersedes any prior
agreements and understandings relating to the subject matter hereof.
(i) SEVERABILITY. If any part or provision of this Agreement is or shall
be deemed violative of any applicable laws, rules or regulations, such legal
invalidity shall not void this Agreement or affect the remaining terms and
provisions of this Agreement, and this Agreement shall be construed and
interpreted to comport with all such laws, rules or regulations to the maximum
extent possible.
(j) APPLICABLE LAW. This Agreement has been accepted and made performable
in Bexar County, Texas. This Agreement and the rights and obligations of the
parties hereto shall be construed under and governed by the laws of the State of
Texas, without giving effect to principles of conflict of laws. The exclusive
venue for resolution of any dispute between the parties related to the subject
matter of this Agreement shall be in Bexar County, Texas.
EXECUTED as of the day and year first above written.
COMPANY:
MEDICAL SCIENCE SYSTEMS, INC.
By:
U. Xxxxxxx Xxxxx, Chief Financial Officer
CONSULTANT:
Xxxxxx X. Xxxxxx
EXHIBIT A
DUTIES AND SERVICES
Consultant shall perform the following services for the Company. In
performing these services, Consultant shall at all times exercise his
independent judgment, discretion and control to accomplish the stated objective.
1. STRATEGIC PLANS. Consultant shall, consistent with the terms of
this Agreement, advise and assist the senior management of the Company in
formulating plans for the strategic direction of the Company.
2. PRESENTATIONS; INTRODUCTIONS. Consultant shall, consistent with
the terms of this Agreement, make introductions and presentations for and on
behalf of the Company, including, without limitation, introductions and
presentations to financial investors and/or potential financial investors. Any
such presentation shall include an appropriate disclosure of Consultant's
financial relationship with the Company.
3. POSITIONS. Consultant shall, upon request by the Company and
subject to the approval of the shareholders of the Company, serve as Chairman of
the Board of Directors and a Director of the Company.
4. ADDITIONAL SERVICES. In addition to the other services specified
in this SECTION 1, Consultant shall, consistent with the terms of this
Agreement, perform such other services to the Company as necessary to build
shareholder value in the Company.
EXHIBIT B
COMPENSATION
1. The Company shall pay to Consultant for Consultant's services a fee
equal to One Hundred Twenty Thousand and No/100 Dollars ($120,000.00) for the
period from June 11, 1999 to June 10, 2000 and One Hundred Thousand and No/100
Dollars ($100,000.00) per year for the period from June 11, 2000 to June 10,
2002, which fees shall be paid in monthly installments commencing on July10,
1999 and continuing on the 10th day of each month thereafter through and
including June 10, 2002. The amount of the monthly installment shall be (a)
$10,000.00 for each monthly installment payable from July 10, 1999 through and
including June 10, 2000 and (b) $8,333.33 for each monthly installment payable
from July 10, 2000 through and including June 10, 2002. In addition to the fees
set forth herein above, the Company shall reimburse Consultant for all expenses
reasonably incurred by Consultant in connection with the performance of
Consultant's responsibilities set forth herein in accordance with the prevailing
practice and policy of the Company.
2. In addition to the fees provided for in Paragraph 1 above, on the date
hereof, the Company shall pay Consultant the sum of $5,000.00.
3. The Company shall grant to Consultant the option to purchase up to
240,000 shares of Common Stock, no par value, of the Company at an exercise
price equal to $.50 per share pursuant to the terms and provisions of that one
certain Non-Qualified Stock Option Agreement of even date herewith between the
Company and Consultant.
SCHEDULE 2
AFFILIATIONS OF CONSULTANT
