EXHIBIT "A"
CONSULTING AGREEMENT
THIS AGREEMENT is entered into as of the 3rd day of December, 2004, by and
between DERMISONICS, INC., a Nevada corporation ("DERMISONICS" or the
"Company"), Four Tower Bridge, 000 Xxx Xxxxxx Xxxxx, Xxxx Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000, and XXXX XXXXX, an individual whose address is
Xxxxxxxxxxxxxxx 0, 00000 Xxxxxx, Xxxxxxx ("XXXXX"), in accordance with the
following terms and conditions:
RECITALS:
WHEREAS, DERMISONICS desires to engage XXXXX as an independent contractor
and to retain his professional consulting services with respect to organization
and structure, business strategy, product development, and product distribution,
at the request and under the direction of the Chief Executive Officer of
DERMISONICS, upon the terms and conditions hereinafter set forth; and
WHEREAS, DERMISONICS desires to appoint XXXXX as the Chairman of
DERMISONICS' Business Advisory Council; and
WHEREAS, XXXXX desires to provide consulting services to DERMISONICS as are
outlined in the foregoing recitals, as agreed to from time to time, and to serve
as the Chairman of DERMISONICS' Business Advisory Council;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. TERM.
1.1 The term of this Agreement shall be 36 months, terminable by either
party on 30 days' written notice. This Agreement shall terminate automatically
upon the death of XXXXX.
1.2 If DERMISONICS terminates this Agreement prior to June 30, 2005, all of
the common stock purchase warrants referred to in Section 2 below shall
immediately become exercisable.
2. COMPENSATION; COMMITMENT OF TIME AND EFFORT; INDEPENDENT CONTRACTOR.
2.1 In return for the consulting services to be provided hereunder,
DERMISONICS shall issue to XXXXX a total of 2,300,000 common stock purchase
warrants (the "Warrants") to purchase shares of the Company's common stock at a
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price of $2.00 per share, expiring on December 31, 2007. The Warrants shall vest
and be exercisable in accordance with the following schedule: 575,000 Warrants
shall be vested immediately, an additional 575,000 Warrants shall vest on
December 31, 2004, an additional 575,000 Warrants shall vest on March 31, 2005,
and the remaining 575,000 Warrants shall vest on June 30, 2005. If DERMISONICS
terminates this Agreement prior to June 30, 2005, all of the unvested Warrants
shall immediately become vested. If XXXXX terminates this Agreement prior June
30, 2005, any unvested Warrants shall be forfeit by him and be canceled. The
Warrants, when vested, shall be transferable to third parties; however, in the
event of XXXXX'x death prior to the vesting of all of the Warrants, all unvested
Warrants shall be exercisable by his estate.
2.2 Further, in return for the consulting services to be provided
hereunder, DERMISONICS shall pay to XXXXX a non-refundable retainer fee of
$60,000.00 due and payable $30,000.00 at such time as DERMISONICS has raised
$750,000 in new capital after the date hereof and $30,000.00 at such time as
DERMISONICS raised a total of $1,000,000 in new capital after the date hererof.
If DERMISONICS terminates this Agreement prior to June 30, 2005, all of the
unpaid balance of the retainer fee referred to herein shall be immediately due
and payable to XXXXX.
2.3 XXXXX shall devote such productive business time to perform the tasks
relating to the Business Advisory Council, organization and structure, business
strategy, product development, and product distribution of DERMISONICS as are
agreed to from time to time by the parties. XXXXX shall be responsible for
giving his best efforts in the performance of the services, but shall determine
the timing, method, detail, and means for the performance of such services.
XXXXX may represent, perform services for, and be employed by such other clients
as XXXXX sees fit so long as XXXXX performs such services as agreed to and so
long as such other clients are not engaged in businesses in competition with
DERMISONICS.
2.4 XXXXX shall be responsible for the payment of all taxes as are required
with respect to consulting fees for services paid by DERMISONICS to XXXXX as an
independent contractor.
2.5 XXXXX agrees to prepare a budget for his estimated expenses to be
submitted to DERMISONICS from time to time for written approval by DERMISONICS
of such expenses prior to XXXXX incurring them. XXXXX shall be reimbursed for
all reasonable expenses incurred by XXXXX in connection with XXXXX'x duties
hereunder upon presentation by XXXXX to DERMISONICS of an expense report and
adequate records or other documentation substantiating the expenditures, not
less frequently than monthly. Any such amounts incurred but not approved shall
be XXXXX'x responsibility. The fact that DERMISONICS may not reimburse XXXXX for
an expense is not an indication that the expense was not incurred on its behalf
or in connection with DERMISONICS' business.
3. COVENANT NOT TO COMPETE.
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During this Agreement, XXXXX shall not, without the express written consent
of DERMISONICS, engage in any activity competitive with and/or adverse to
DERMISONICS's (whether alone, as a partner, or as an officer, director, employee
or shareholder of any other corporation, or a trustee or fiduciary or any other
representative of any other entity). However, XXXXX may make passive investments
in companies which might be in a competitive business or have competitive
business practices with that of DERMISONICS.
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4. NON-TRANSFERABILITY.
The performance of services under this Agreement shall not be transferable
or assignable by XXXXX without the prior written consent of DERMISONICS, at its
sole discretion.
5. NOTICES.
All notices, requests, demands and other communications provided for by
this Agreement shall be in writing and (unless otherwise specifically provided
herein) shall be deemed to have been given at the time when mailed by commercial
express mail service (e.g. FedEx, UPS, or DHL), addressed as stated above or to
such changed address as such party may have fixed by notice.
6. PARTIAL INVALIDITY.
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable the remaining provisions
shall nevertheless continue in full force and effect without being impaired or
invalidated in any way.
7. ENTIRE AGREEMENT.
This Agreement supersedes any and all Agreements, whether oral or written,
between the parties hereto, with respect to the engagement of XXXXX by
DERMISONICS as a consultant and contains all of the covenants and Agreements
between the parties with respect to the rendering of such services in any manner
whatsoever. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement or promise with respect to such
engagement not contained in this Agreement shall be valid or binding. Any
modification of this Agreement will be effective only if it is in writing and
signed by all the parties hereto.
8. ATTORNEYS' FEES.
If any action in law or equity, including an action for declaratory relief,
is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' and technical
consultants' fees and costs, which may be set by the court in the same action or
in a separate action brought for that purpose, in addition to any other relief
to which that party may be entitled.
9. GOVERNING LAW.
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This Agreement will be governed by and construed in accordance with the
laws of the State of Nevada, and venue for resolving any dispute concerning this
Agreement will be exclusively in the County of Orange, State of California.
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10. BINDING NATURE.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective representatives, heirs, successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date above written.
DERMISONICS, INC.
By:
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Xxxxx X. Xxxxxxx, Chairman XXXX X. XXXXX
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