McManus & Company, Inc. 23811 Inverness Place Laguna Niguel, California 92677
Exhibit
10.2
XxXxxxx
& Company, Inc.
00000
Xxxxxxxxx Xxxxx
Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
(000)
000-0000 Fax: (000)
000-0000
July
10,
2006
Xxxxx
X.
Xxxxxxxx
Chairman
of the Board
00000
Xxxxxxxxx Xxxxx
Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Dear
Xxxxx:
This
will
confirm the terms of our mutual understanding and agreement ("Agreement") in
connection with the efforts of XxXxxxx & Company, Inc. ("M&C") to
provide consulting services to Aeolus Pharmaceuticals, Inc. or its affiliates,
sister companies or principals (collectively the "Company" or “Aeolus”) as
follows:
1.
Appointment.
The
Company hereby authorizes M&C to provide the Company services in connection
with the outsourcing of the accounting, finance and administration functions.
These services shall include but are not limited to:
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Accounts
payable/accounts receivable
supervision
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Cash
management
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Purchasing
management
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Budgeting
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Audit
coordination, facilitation and
administration
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Human
resources administration
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Insurance
administration
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Contract
administration
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Shareholder
services
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Accounting
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Financial
statement preparation
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Lease
administration
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Legal
coordination
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Board
of directors facilitation/minutes, and
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Other
corporate activities
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In
addition, XxXxxxx & Company, Inc. will be responsible for hosting the
Company’s corporate headquarters, corporate servers and administration files and
records.
Furthermore,
it is agreed that M&C will become an agent of the Company. Xxxxxxx X.
XxXxxxx is appointed Chief Financial Officer, Treasurer and Secretary and will
perform all duties typically associated with such position as well as be given
all of the responsibilities.
It
is
understood that M&C is acting as a consultant only and is not a licensed
securities or real estate broker or dealer.
M&C
may, at M&C’s own expense, use employees or consultants to perform the
Services under this Agreement.
Xxxxxxx
X. XxXxxxx, as an officer of Aeolus will be covered under the Company’s
insurance plans including its directors and officers policy.
2.
Compensation.
Outsourcing
Compensation
The
Company will pay M&C a monthly payment of $25,000 in cash for the duration
of this agreement beginning on July 1, 2006.
Incentive
Compensation.
On
July
10th of each year the contract is in effect begging on July 10, 2006, Xxxxxxx
X.
XxXxxxx will be granted a stock option to purchase 90,000 shares of the Aeolus
Pharmaceuticals, Inc. Common Stock, par value $0.01 per share, with an exercise
price equal to the closing stock price on the date of grant. The stock option
will vest on a monthly basis at a rate of 7,500 shares per month following
the
date of grant as long as Consultant continues to be a consultant to or employee
of the Company, except in the case of a Sale of the Company, in which case,
the
options shall fully vest and be immediately exercisable. The foregoing grants
shall be subject to the Company’s standard form of stock option grant agreement
and the Company’s then existing stock plan.
During
the term of this Agreement, M&C will be entitled to:
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A
cash payment in the amount of $20,000 upon the declaration of the
effectiveness of a Registration Statement on Form X-0, X-0, X-0 or
S-4
with the United States Securities and Exchange
Commission;
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A
cash payment in the amount of $15,000 upon the filing of a Preliminary
Proxy Statement with the United States Securities and Exchange Commission
except for the Proxy Statement related to the Company’s Annual Shareholder
meeting.
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A
cash payment in the amount of $50,000 upon a Change of Control such
that
another entity acquires and/or merges with
Aeolus.
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A
“Change
in Control” means a merger, business combination, reorganization,
recapitalization or other transaction, which results in the stockholders of
the
Company who on at least fifty percent (50%) of the Company’s voting control
immediately prior to such transaction owning less than fifty percent (50%)
of
the surviving entity’s voting control immediately after such transaction, and/or
sale, transfer, lease or other disposition in any transaction or series of
transactions of all or substantially all of the assets of the
Company.
Other
Compensation
Xxxxxxx
X. XxXxxxx shall also be entitled to receive any other compensation given to
other executive officers of the Company at a level commensurate with his level
of responsibilities and at a value determined by the board of directors. Other
compensation would include but not be limited to stock option grants, long-term
incentive plans and cash bonuses.
Out-of-Pocket
Expenses
Aeolus
will reimburse M&C for actual and reasonable out-of-pocket expenses on a
monthly basis.
3.
Fees.
The
fees
due M&C as set forth in Section 2 above shall be paid by bank or cashier's
check.
4.
Term
The
initial term of this Agreement shall begin as of July 1, 2006 and shall expire
June 30, 2008. Thereafter, this Agreement will automatically renew for one
(1)
year periods, unless either party gives to the other written notice at least
ninety (90) days prior to the commencement of the next year, of such party’s
intent not to renew this Agreement.
5.
Termination.
This
Agreement may be terminated at the option of Aeolus at any time for cause.
For
purposes of this Agreement, “cause" shall be defined as any of the following,
provided however, that the board of directors of the Corporation by a duly
adopted resolution has determined the presence of such cause in good faith:
(i)
M&C’s material breach of any of its duties and responsibilities under this
Agreement; or, (ii) M&C's commission of an act of fraud or willful
misconduct or gross negligence in the performance of its duties.
Aeolus
shall have the right to terminate this Agreement without cause at any time
immediately upon written notice to M&C, but any such termination shall be
without prejudice to M&C’s rights to receive all payments under this
agreement. Such payment will be due and payable upon termination of this
agreement.
M&C,
Inc. shall have the right to terminate this Agreement with or without cause
at
any time.
6.
Indemnification
The
Company agrees to indemnify and hold M&C and each of its
respective
affiliates
and their respective directors, officers, employees, agents and controlling
persons harmless from and against any loss, damage, expense (including legal
and
other related fees and expenses), liability or claim arising out of negligent
or
other wrongful actions or inactions by the Company, its affiliates or its
officers or employees. M&C shall advise the Company in writing of any such
claim of liability within a reasonable time after first receipt of any notice
or
other information which would suggest the likelihood of such claim or
action.
While
representing itself as an agent of the Company, M&C agrees to indemnify and
hold the Company harmless from and against any loss, damage, expense (including
legal and other related fees and expenses), liability or claim arising out
of
negligent or other wrongful actions by M&C or its officers or employees
under this Agreement. The Company shall advise M&C in writing of any such
claim of liability within a reasonable time after first receipt of any notice
or
other information which would suggest the likelihood of such claim or
action.
7.
Accurate
Information.
The
Company hereby represents and warrants that all information provided M&C
pertaining to the Company shall be true and correct; and the Company shall
hold
M&C harmless from any and all liability, expenses or claims arising from the
disclosure or use of such information.
8.
Applicable
Law.
This
Agreement is governed by and construed under the laws of the State of
California, and any action brought by either party against the other party
to
enforce or interpret this Agreement shall be brought in an appropriate court
of
such State. In the event of any such action, the prevailing party shall recover
all costs and expenses thereof, including reasonable attorney's fees from the
losing party.
9.
Notices.
Any
notice, request, instruction or other document to be given under this Agreement
by either party to the other party shall be in writing and (a) delivered
personally; (b) sent by telecopy; (c) delivered by overnight express (charges
prepaid); or (d) sent by registered or certified mail, postage
prepaid:
| If to Company to: |
Aeolus
Pharmaceuticals, Inc., 00000 Xxxxxxxxx Xxxxx,
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| Xxxxxx Xxxxxx, XX 00000 |
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If to M&C to:
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XxXxxxx
& Company, Inc., 00000 Xxxxxxxxx Xxxxx,
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| Xxxxxx Xxxxxx, XX 00000 |
or
at
such other address for a party as shall be specified by like notice. Any notice
which is delivered personally, telecopied or sent by overnight express in the
manner provided in this section 8 shall be deemed to have been duly given to
the
party to whom it is addressed upon actual receipt by such party. Any notice
which is addressed and mailed in the manner herein provided shall be
conclusively presumed to have been given to the party to whom it is addressed
at
the close of business, local time of the recipient, on the third business day
after it is so placed in the mail.
10.
Complete
Understanding.
This
Agreement shall constitute the entire agreement and understanding between the
parties and supersedes all prior agreements and understanding, both written
and
oral, between the parties hereto with respect to the subject
matter.
11.
Headings
and Capitalized Terms.
The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of its
provisions.
12.
Successors
and Assigns.
The
terms
and conditions of this Agreement shall insure to the benefit of and be binding
upon the parties and their respective successors and permitted assigns. Neither
M&C nor Company may assign their rights or delegate their obligations under
this Agreement without the prior written consent of the other.
13.
Modification
and Waiver.
None
of
the terms or conditions of this Agreement may be waived except in writing by
the
party that is entitled to the benefits thereof. No supplement, modification
or
amendment of this Agreement shall be binding unless executed in writing by
M&C and Company. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision (whether or not
similar) nor shall such waiver constitute a continuing waiver.
14.
Invalid
Provisions.
If
any
provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws by any court of competent jurisdiction, such
illegality, invalidity or unenforceability shall not affect the legality,
enforceability or validity of any other provisions or of the same provision
as
applied to any other fact or circumstance and such illegal, unenforceable or
invalid provision shall be modified to the minimum extent necessary to make
such
provision legal, valid or enforceable, as the case may be.
If
the
foregoing correctly sets forth our Agreement, please sign and return the
enclosed copy of this letter.
| Sincerely, | ||
| /s/ Xxxxxxx X. XxXxxxx | ||
| Xxxxxxx X. XxXxxxx | ||
| Executive Vice President | ||
| XxXxxxx & Co., Inc |
AGREED
TO
AND ACCEPTED AS OF THE DATE HEREOF
| By: /s/ Xxxxx X. Xxxxxxxx | ||
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Xxxxx
X. Xxxxxxxx
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Chairman
of the Board
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