EXHIBIT 10.56
WORKOUT CONSULTING SERVICES AGREEMENT
This Workout Consulting Services Agreement is entered into as of the
3rd day of March, 2006 by and between Advanced Refractive Technologies, Inc., a
Nevada corporation (the "Company") and Xxxxxxxxx Mate Xxxxxxxx (the
"Consultant").
RECITALS:
A. The Company is an early-stage medical device company focused on the
development of ophthalmic surgery products for use in the laser eye surgery and
cataract surgery markets;
B. The Company has borrowed over $7,000,000 in various convertible
debenture offerings over the past few years, and is in default of its payment or
other obligations under such instruments (the "Senior Debt"), which are secured
by the assets of the Company pursuant to Security Agreements, Pledge Agreements
and UCC Financing Statements (the "Security Instruments");
C. The holders of the Senior Debt (the "Lenders") may have the right to
foreclose on the Company's assets under the Security Agreements, and certain of
the Lenders have threatened foreclosure proceedings;
D. The Company desires to seek a restructuring of the Senior Debt to
avoid foreclosure and to improve its balance sheet and liquidity;
E. Consultant has certain expertise in the fields of structuring and
negotiation of loan workouts, financial restructurings and related fields; and
F. The Company desires to retain Consultant to advise it in the
proposed workout of its Senior Debt;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and conditions contained herein, the parties hereto agree as
follows:
1. DUTIES. The Company hereby retains Consultant to advise it in the
structuring and negotiation of the workout or other resolution of its Senior
Debt and other debt obligations, and Consultant hereby accepts such engagement.
Consultant shall initiate contacts with the holders of the Senior Debt and seek
to negotiate an agreement among them to restructure the Senior Debt and related
Security Instruments, on such terms as she may be directed from time to time by
the Company. During the term of this Agreement, Consultant shall devote only
such time and energy as may be reasonably necessary to perform hers duties under
this Agreement, it being acknowledged that Consultant has other consulting
engagements. Consultant's duties under this Agreement shall include, without
limitation, the following:
(a) General evaluation of the current Senior Debt, including
the Security Instruments, and the feasibility of restructuring alternatives;
(b) Formulating a plan for the renegotiation and/or
restructuring of the Senior Debt, along with management of the Company;
(c) Contacting the holders of the Senior Debt and making
formal presentations of the restructuring plans;
(d) Drafting appropriate restructuring documents, along with
the Company's counsel; and
(e) Implementing the restructuring plan.
2. COMPENSATION. As compensation for all services rendered under this
Agreement, the Company shall issue Consultant an aggregate of 178,571,428 shares
of newly-issued Common Stock of the Company, in accordance with the following
schedule of milestones:
MILESTONE NO. OF SHARES
--------- -------------
Fifth Day Following 89,285,710
Execution of this Agreement
Successful Execution of Loan 89,285,710
Workout Agreements by All
Major Holders of Senior Debt
3. EXPENSES. Consultant shall not be entitled to reimbursement for any
expenses incurred by her in the performance of her obligations under this
Agreement, and shall bear all such expenses herself.
4. REGISTRATION STATEMENT. Promptly following execution of this
Agreement, the Company shall cause to be prepared and filed with the Securities
and Exchange Commission a Registration Statement on Form S-8 covering the shares
of Common Stock of the Company to be issued under this Agreement.
5. LIMITATIONS ON SERVICES. Consultant shall not perform any services
in connection with the offer or sale of securities in a capital-raising
transaction, and shall not directly or indirectly promote or maintain a market
for the Company's securities.
6. CONFIDENTIALITY. Consultant acknowledges that the information to be
disclosed to her by the Company and to be developed by her on behalf of the
Company is commercially sensitive data, and improper disclosure could cause
substantial damage to the Company. Consultant agrees that she will not at any
time, whether during or subsequent to the term of this Agreement, either
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directly or indirectly use, divulge, disclose or communicate to any person,
firm, or corporation, any confidential information of any kind concerning the
business of the Company, including, without limitation, the information
developed by Consultant under the terms of this Agreement, unless specifically
consented to in writing by the Company. The parties hereto stipulate that, as
between them, all of such information constitutes important, material and
confidential trade secrets and affects the successful conduct of the Company's
business and its goodwill, and that any breach of any term of this section is a
material breach of this Agreement. Such prohibited use and disclosure shall be
limited to confidential information that the Company has taken all reasonable
and proper stops to protect. Consultant agrees that the breach by her of this
Agreement could not reasonably or adequately be compensated in damages, and that
the Company shall be entitled to injunctive relief to prevent any violation of
the terms of this Agreement.
7. INDEMNIFICATION. Subject to the other terms and conditions of this
Agreement, the Company agrees to indemnify and hold harmless Consultant, and
Consultant agrees to indemnify and hold harmless the Company (as the context
requires, the "Indemnifying Party" and the "Indemnified Party") of and from any
and all claims, demands, causes of action, liabilities, judgments, losses,
deficiencies and expenses, including court costs and reasonable attorneys' fees)
incurred by the Indemnified Party and arising out of or in any manner, directly
or indirectly, relating to the performance by the Indemnified Party of its
obligations hereunder (other than and excluding the respective indemnification
obligations under this Section) or relating to any act or omission of the
Indemnifying Party's employees or agents.
8. TERM AND TERMINATION. This Agreement shall be for a maximum term of
one year, commencing on the date hereof. This Agreement may be terminated by the
Company immediately upon notice to Consultant in the event that Consultant
commits any material breach of this Agreement or is convicted of a felony or a
misdemeanor involving moral turpitude.
9. GENERAL.
9.1 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
9.2 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
to its principles of conflicts of laws.
9.3 COUNTERPARTS. This Agreement may be executed and delivered
by facsimile signature and in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
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9.4 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:
(a) if to the Company, to:
0000 Xxxxx Xxxxxxx, Xxxxx X
Xxx Xxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxx
or to such other person at such other place as the Company shall designate to
the Consultant in writing; and
(b) if to the Consultant, to:
Xxxxxxxxx Mate Xxxxxxxx
0, Xxx Xxxxxxx Xxxxxxx, X-0000
Xxxxxxxxx
or to such other person at such other place as the Consultant shall designate to
the Company in writing,
9.5 ATTORNEY'S FEES. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
9.6 Severability. The invalidity of unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
9.7 ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with respect to the
subject matter hereof, and any other written or oral agreement relating to the
subject matter hereof existing between the parties are expressly canceled. This
Agreement supersedes all previous agreements between the parties with respect to
the subject matter hereof. There are no agreements, representations or
warranties between or among the parties other than those set forth in this
Agreement or in the documents or agreements referred to herein.
9.8 AMENDMENTS. No amendment, modification, or supplement to
this Agreement shall be binding on any of the parties unless it is in writing
and signed by the parties in interest at the time of the modification.
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In Witness Whereof, the parties have executed this Agreement as of the
date first above written.
Advanced Refractive Technologies, Inc.,
a Delaware corporation
By: /S/ XXXXXXXX X. XXXXXXXXX
-----------------------------------------
Xxxxxxxx X. Xxxxxxxxx, Vice President
(the "Company")
/S/ XXXXXXXXX MATE XXXXXXXX
-----------------------------------------
Xxxxxxxxx Mate Xxxxxxxx
Biotelgy Director
("Consultant")
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