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EXHIBIT 10.12
CONSULTING AGREEMENT
The Agreement is between FOUNTAIN PHARMACEUTICALS, INC., a Delaware corporation
("Fountain") and XXXXX XXXXXXX, M.D. (`Consultant").
1. TERM. Fountain engages the Consultant as an independent contractor to
provide consulting services to Fountain during the term commencing June
1, 1999 and concluding May 31, 2000. This Agreement may be extended
beyond May 31, 2000 by mutual agreement of the parties in writing.
2. FOUNTAIN'S SUB-LICENSE AGREEMENT. Pursuant to a Sub-License Agreement
dated May 27, 1999, between Fountain and Y.S. Laboratories, Inc. the
terms of which are incorporated in this Consulting Agreement by this
reference, Fountain has been granted a sub-license to use certain
proprietary information, technology and patents ("the Technology") for
purposes of manufacturing, modifying and selling Products for use as
topical epidermal skin care products, including products for lips and
skin, that utilize the Technology (collectively the "Licensed Uses")
within the United States of America ("xxx Xxxxxxxxx").
3. SERVICES. The Consultant shall provide to Fountain advice and assistance
for the manufacturing and marketing of Products utilizing the Technology
for Licensed Uses within the Territory during the term of this Agreement.
The services that are provided by the Consultant shall include, but are
not limited to, assistance and advice regarding the preparation of
promotional materials such as print media and infomercials. Upon
reasonable advance notice and request, the Consultant is required to
provide such services up to a maximum of 96 hours during the term of this
Agreement.
The parties agree that the Consultant may engage in other occupations and
engagements during the term of this Agreement, including but not limited
to the manufacture and development of Products utilizing the Technology;
provided, however, the Consultant shall not engage in any activity that
is directly competitive or adverse to Fountain's business except with the
prior written consent of Fountain.
4. COMPENSATION. Fountain agrees to pay the Consultant on the basis of time
reasonably devoted to the Consultant's services to Fountain as follows:
$500 per hours; $2,000 for 1/2 day; and $4,000 for one full work day. If
the Consultant is required to travel outside the geographical area
comprised of San Francisco and Marin Counties, California, the Consultant
shall be compensated $4,000 for each day, or partial day, that the
Consultant is required to be outside of those Counties.
5. BUSINESS EXPENSES. Fountain will reimburse the Consultant for reasonable
business expenses directly incurred in the performance of Consultant's
duties arising from this Agreement, and approved in advance by Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx, or another executive designated by Fountain for
such purposes. Such reimbursement shall be made not later than the end of
the calendar month immediately following the Consultant's request
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for reimbursement. The parties acknowledge that in unusual cases, the
Consultant may request that Fountain pay for reasonable business expenses
directly.
6. EARLY TERMINATION. This Agreement automatically expires on May 31, 2000
unless extended by mutual agreement in writing by both parties.
The Consultant may terminate this Agreement prior to May 31, 2000, with
or without cause, by 30 days advance written notice to Fountain.
Fountain may terminate the Consultant's engagement with Fountain prior to
May 31, 2000 for ""good cause"" only. The term ""good cause"" is defined
as any of the following: (a) Consultant's death; (b) litigation is
commenced against the Consultant or any business entity in which the
Consultant is or has been associated regarding the Sub-License Agreement
described in Section 2 or the underlying License Agreement; (c)
Consultant's material negligence or fraudulent conduct in connection with
the performance of the Consultant's duties arising from this Agreement;
(d) the Consultant's conviction by, or entry of a plea of guilty or nolo
contendere in a Court of competent jurisdiction for a felony or a
misdemeanor involving moral turpitude; (e) Consultant" commission of an
act of fraud upon Fountain, or any personal dishonesty or malfeasance in
the course of performing the Consultant's duties arising from this
Agreement.
In the event that Fountain terminates the Consultant for good cause and
the Consultant disputes the presence of good cause as defined in this
Section, the Consultant will be suspended, without compensation, pending
resolution of the dispute by binding arbitration as provided in Section
15 of this Agreement.
7. EXCHANGE OF CONFIDENTIAL INFORMATION. Each of the parties acknowledges
that the other may receive access to information of a confidential and/or
trade secret nature that has great value to the disclosing party in the
course of the performance of the Consultant's duties pursuant to this
Agreement. Such information includes, but is not limited to, techniques,
processes, pricing, and the names and address of suppliers and customers.
The recipient of such information will keep all such Confidential
Information in confidence during the term of this Agreement and after the
expiration or termination of this Agreement. Upon termination or
expiration of this Agreement, each recipient of Confidential Information
will deliver to the disclosing party all documents, records, notebooks,
work papers, and similar material containing any Confidential Information
whether prepared by the disclosing party or anyone else.
8. INDEMNITY. To the fullest extent permitted by applicable law, and not in
conflict with any indemnity provisions of the Sub-License Agreement
described in Section 2, Fountain will indemnify the Consultant and hold
the Consultant harmless for any acts or decisions made in good faith by
the Consultant while performing services for Fountain. Fountain will pay
all expenses, including reasonable attorneys fees and costs of court
approved settlements, actually and necessarily incurred by the Consultant
in connection with the defense of any such action, suit or proceeding and
in connection with any appeal thereon, which as been brought against the
Consultant by reason of the Consultant's services as a consultant to
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Fountain. Provided, however, the indemnity provisions of this Section
shall not apply to any litigation brought against the Consultant in
connection with the terms or granting of the Sub-License Agreement or its
underlying License Agreement.
9. INDEPENDENT CONTRACTOR. Consultant's relationship with Fountain is that
of an independent contractor, and nothing in this Agreement shall be
construed to create an employer-employee relationship between Fountain
and the Consultant. Since the Consultant will not be an employee of
Fountain, Consultant acknowledges and agrees that Consultant will not be
entitled to any employee benefits Fountain offers to employees, nor will
any part of any compensation payable to the Consultant be subject to
withholding by Fountain for the payment of any Social Security, Federal,
State or other employee payroll taxes. The Consultant is solely
responsible for the payment of all income taxes, Federal or State, levied
upon Consultant's fees received pursuant to this Agreement.
10. NOTICES. All notices, requests, demands, or other communications under
this Agreement must be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom
notice is given, or within 72 hours after mailing, if mailed to the party
to whom notice is to be given, by First Class Mail, Registered or
Certified, postage prepaid, and properly addressed to the party at either
of the following addresses, or at any other address that any party may
designate by writing to the other.
To. Fountain Pharmaceuticals, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
To: Xxxxx Xxxxxxx, M.D.
X.X. Xxx 000
Xxxx, XX 00000
11. NON ASSIGNMENT AND SUCCESSORS. The Consultant may not delegate a
Consultant's obligation to provide services to Fountain. Subject to the
limitation against delegation of the Consultant's duties, this Agreement
inures to the benefit and is binding upon the successors and assigns of
each of the parties.
12. ENTIRE AGREEMENT. This Agreement is the entire agreement of the parties
relating to the subject matter of the Consultant's engagement as an
independently contracting consultant with Fountain, and supersedes any
prior agreements, undertakings, commitments and practices relating to
such services.
13. AMENDMENTS. No amendment or modification of the terms of this Agreement
will be valid unless made in writing and signed by both parties.
14. GOVERNING LAW. This Agreement and the legal relationship between the
parties is governed by the laws of the State of California.
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15. ARBITRATION. Any dispute, controversy, or claim arising out of or in
respect to this Agreement in the engagement of the Consultant by Fountain
must be submitted to and settled by binding arbitration conducted by a
single Arbitrator in accordance with the rules of the Judicial
Arbitration Mediation Services ("JAMS"). Any such dispute shall be heard
in San Francisco, California. The Arbitrator will have the discretion to
determine a prevailing party in the proceedings, and to award the
prevailing party reimbursement of reasonable attorneys fees and cost from
the other party.
Entered into effective June 1, 1999.
FOUNTAIN PHARMACEUTICALS, INC.
a Delaware Corporation, "Fountain"
By: /s/ Xxxxxx Xxxxxxx 6/4/99
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XXXXXX XXXXXXX, President/CEO
/s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX, M.D., "Consultant"
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