EXHIBIT 10.1
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CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is entered into August 13,
2008 by and between Xxxxxx Pharmaceuticals, Ltd. a New Jersey corporation, with
an address of 000 Xxxxxxx 00, Xxxxxxx, XX 00000 (the "Company"), and Xxxxxx
Xxxxxxx, with offices at 000 Xxxxxxx 00, Xxxxxxx, XX 00000 ("Consultant").
R E C I T A L S
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A. WHEREAS, Consultant has training, expertise, and prior experience in
areas related to the business or needs of the Company,
B. WHEREAS, the Company desires to retain the services of Consultant.
C. WHEREAS, Consultant desires to furnish his services to the Company
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Consulting Services.
1.1 Commencing on May 15, 2008 (the "Effective Date") and continuing
(unless terminated earlier pursuant to Section 4 hereof) until five (5) years
from the Effective Date, Consultant shall consult with the Company regarding the
tasks set forth in Exhibit A attached hereto and such tasks and assignments as
directed by the Chief Executive Officer, the President or the Board of Directors
(the "Executive Officer"). This Agreement shall renew automatically for
additional one (1)-year terms unless either party shall deliver written notice
of termination to the other no later than 90 days prior to the end of the
then-current term.
1.2 Consultant shall have exclusive control over the means and manner
by which the services called for by this Agreement are performed.
1.3 Consultant shall devote so much of his productive time, ability and
attention as is necessary to perform consulting services as requested or
assigned by the Executive Officer. Consultant may render services of a business
or commercial nature to other persons or entities during the term of this
Agreement.
2. Compensation.
2.1 In consideration of the services to be rendered by Consultant
hereunder, the Company agrees to compensate Consultant as follows. During the
term hereof, the Company will pay Consultant annual compensation of Eighty
Thousand Dollars ($80,000) shall increase on each anniversary annual anniversary
at the rate of ten percent (10%).The foregoing fees shall be Consultant's sole
compensation for all services rendered by Consultant hereunder. The Consultant
hereby agrees to: (i) defer, at his option, payment of his compensation pursuant
to this Agreement and (ii) accept compensation pursuant to this Consulting
Agreement in the form of Class B Common Stock, no par value, in lieu of cash,
for as long as the Board of Directors decides in its sole discretion that the
Company does not have the financial resources to pay the Consultant in cash. The
number of Class B Common Stock shares to be issued to the Consultant pursuant to
this Paragraph 2 shall be equal to one share of Class B common stock for every
dollar of compensation due and owing the Consultant.
2.2 At such time that the Company completes an acquisition, merger,
reverse merger, or spin-off transaction (a "Transaction"), the Company shall
pay, and Consultant agrees to accept, cash compensation in the amount of two
hundred fifty thousand dollars ($250,000.00). Such amount shall be paid in a
lump sum on the date of closing of a Transaction, or alternatively, at the
discretion of the Company and with the agreement of the Consultant, in shares of
the Company's Class B Common Stock.
2.3 Upon execution of this Agreement, the Company will pay, and the
Consultant agrees to accept, a signing bonus equal to thirty five thousand
dollars ($35,000). Since the Company is presently unable to make such payment in
cash, the Company agrees to issue a five (5) year promissory note to Consultant
in such amount, such note carrying an interest charge of three percent (3%) per
annum. Such note shall be convertible, at the will of the Consultant, into
thirty five thousand (35,000) shares of Class B Common Stock, plus shares which
may be issued on a dollar for dollar basis in an amount equal to any interest
due and owing.. Consultant may choose, at his discretion, to partially convert
this obligation into shares of Class B Common Stock at any time.
2.4 Notwithstanding anything to the contrary, the Consultant may not
convert compensation payable to the Consultant pursuant to this Agreement to the
extent his aggregate beneficial ownership of the Company's Class A Common Stock
would exceed 9.99%.
3. Expenses. The Company shall reimburse Consultant for expenses incurred by
him during the term of this Agreement in the performance of his duties as a
consultant for the Company; provided, however, that the Company shall not be
obligated to reimburse Consultant for any expenses which have not been approved
in advance by the Company.
4. Termination.
4.1 Termination for Cause. Consultant understands and agrees that this
Agreement may be terminated by the Company for "cause" upon written notice to
Consultant in the manner set forth in Section 7.3 below. "Cause" shall mean a
finding by the Board in good faith that such Consultant has (i) been engaged in
an act or acts of dishonesty that resulted directly or indirectly in more than
an aggregate of $5,000 in gain or personal enrichment to Consultant at the
expense of the Company; (ii) breached this Agreement in any material respect;
(iii) been convicted of any felony offense involving fraud, theft or dishonesty
at any time; (iv) been incarcerated for more than 10 days during the term of
this Agreement, or (v) failed to substantially perform duties persisting for a
reasonable period following written notice. Any other provision in this
paragraph to the contrary notwithstanding, the Consultant shall not be deemed to
have been terminated for Termination for Cause unless and until the Board duly
adopts a resolution by the affirmative vote of no less than three-quarters (3/4)
of the disinterested members of the Board, excluding the Consultant, at a
meeting of the Board called and held for such purpose (after reasonable notice
to the Consultant and an opportunity for the Consultant, together with the
Consultant's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, the Consultant was guilty of conduct described in
subparagraphs (i), (ii), (iv) or (v) of this paragraph and specifying the
particulars thereof in detail and a certified copy of such resolution is
delivered to the Consultant."
4.2 Death. In the event of the death of Consultant during the term of
this Agreement, the Company shall pay, or cause to be paid, to any one or more
beneficiaries designated by Consultant pursuant to notice to the Company or,
failing such designation, to Consultant's estate, the fees earned provided for
herein through the date on which Consultant's death occurs.
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4.3 Disability. In the event that Consultant shall become, by reason of
physical or mental disability, incapable of performing his duties and services
in accordance with the provisions of this Agreement, and such incapacity(ies)
shall continue for more than 60 days out of any consecutive 120-day period, the
Company shall have the right to terminate this Agreement by giving Consultant
written notice of such termination and, thereafter, this Agreement shall
immediately terminate. Upon such termination, all compensation shall cease
immediately, and the Company shall owe Consultant only the amount of
Consultant's fees earned as of the date of such termination.
4.4 Effect of Termination. Upon termination or expiration of this
Agreement, Consultant shall immediately surrender to the Company all lists,
books, records, materials and documents, together with all copies thereof, and
all other property in Consultant's possession or under Consultant's control,
relating to or used in connection with the past or present business of the
Company, or any affiliate or subsidiary of the Company, Consultant acknowledges
and agrees that all such lists, books, records, materials and documents,
including, but not limited to, compilations or collections of suppliers',
contractors', employees' and customers' names and addresses, are the sole and
exclusive property of the Company.
5. Nondisclosure; Ownership and Protection of Proprietary Rights.
5.1 Nondisclosure. Consultant understands and agrees that, in the
course of Consultant's relationship with the Company, Consultant may acquire
confidential information and trade secrets concerning the Company's operations,
future plans, methods of doing business, marketing, costs, and that it would be
extremely damaging to the Company if such information were disclosed or made
available to any other person or corporation. In view of the nature of the
consulting relationship with the Company contemplated herein, Consultant agrees
that, during the term of this Agreement and thereafter, any and all confidential
information, including, without limitation, any customer lists, customer
information or addresses, trade secrets, information relating to governmental
relations, discoveries, practices, processes, methods or products, whether
patentable or not, concerning the business of the Company or any confidential
information concerning or relating to any former or existing suppliers,
contractors, employees or customers of the Company or any corporation or
business entity that is controlling, controlled by, under common control with or
otherwise affiliated with the Company (collectively, the " Customers "), with
respect to the past, present or future business of the Company, or any affiliate
or subsidiary of the Company or any secret, proprietary or confidential
information concerning or relating to the past, present or future business of
the Company, or any affiliate or subsidiary of the Company (collectively, "
Confidential Information ") that Consultant has acquired or may acquire from any
such corporation or business entity or the Company, shall be maintained by
Consultant in confidence and shall not be disclosed or divulged to any third
party without the prior written consent of the Executive Officer. Consultant
further agrees that Consultant will not utilize such Confidential Information on
Consultant's own behalf or on behalf of others at any time during the term of
this Agreement or thereafter. Consultant agrees that he will not divert or
attempt to divert any of the customers or do any act to impair, prejudice or
destroy the goodwill of the Company with the Customers.
5.2 Ownership of Intellectual Property. Consultant acknowledges and
agrees that all intellectual property (including without limitation all ideas,
concepts, inventions, plans, developments, software, data, configurations,
materials (whether written or machine-readable), designs, drawings,
illustrations and photographs, which may be protectable, in whole or in part,
under any patent, copyright, trademark, trade secret or other intellectual
property law), developed, created, conceived, made or reduced to practice during
the term of this Agreement which (a) relate to the current, future or potential
business of the Company, (b) result from the duties or work performed by
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Consultant hereunder, or (c) are developed during working time or using the
Company's equipment, supplies, facilities, resources, materials or information,
shall be the sole and exclusive property of the Company and Consultant shall and
hereby does assign all right, title and interest in and to such intellectual
property to the Company.
5.3 Non-solicitation. Because Consultant's solicitation of the
Customers of the Company, or any affiliate of the Company, under certain
circumstances would necessarily involve the use or disclosure of Confidential
Information, Consultant shall not, either directly or indirectly, at any time
during the term of this Agreement and for a period of two (2) years from the
date of termination or expiration of this Agreement (a) call on, solicit or take
away, or attempt to call on, solicit or take away, any past or present Customers
of the Company, or any affiliate of the Company, (b) employ, hire or solicit the
employment of any person employed by the Company, or any affiliate of the
Company, (c) do any act to impair, prejudice or destroy the goodwill of the
Company, or any affiliate of the Company, or to prejudice or impair the
relationship or dealing between the Company, or any affiliate of the Company,
and the Customers or (d) assist any other person, firm or corporation in any
such acts.
5.4 Survival. Subject to the following provisions, the provisions of
this Section 5 shall survive the termination of this Agreement, irrespective of
the reason therefor.
6. Relief. Consultant acknowledges that (a) the services to be rendered
by him are of a special, unique and extraordinary character and it would be very
difficult or impossible to replace such services, (b) the provisions of Section
5 are reasonable and necessary to protect the legitimate interests of the
Company, (c) the restrictions contained in Section 5 will not prevent Consultant
from earning or seeking a livelihood, (d) the restrictions contained in Section
5 shall apply in all areas where such application is permitted by law and (e)
any violation of this Agreement by Consultant would result in irreparable harm
to the Company, Accordingly, Consultant consents and agrees that, if Consultant
violates any of the provisions of this Agreement, the Company shall be entitled
to, in addition to other remedies available to it, an injunction to be issued by
any court of competent jurisdiction restraining him from committing or
continuing any violation of this Agreement, without the need to post any bond or
for any other undertaking, including, without limitation, proving the inadequacy
of money damages.
In the event that the whole or any part of the provisions of Section 5
hereof shall be determined to be invalid by reason of the extent, duration,
scope or other provision set forth therein, the extent, duration, scope or other
provision of that section shall be reduced so as to cure such invalidity and in
its reduced form the provisions of Section 5 shall be enforceable in the manner
contemplated hereby. The provisions of this Section 6 shall survive the
termination of this Agreement, irrespective of the reason therefor.
7. Miscellaneous.
7.1 Waiver of Breach. Neither party's failure to enforce any provision
or provisions of this Agreement shall be deemed or in any way construed as a
waiver of any such provision or provisions, nor prevent that party thereafter
from enforcing each and every provision of this Agreement. The rights granted
the parties herein are cumulative and shall not constitute a waiver of any
party's right to assert all other legal remedies available to it under the
circumstances.
7.2 Successors, Assigns. The Company shall not assign its rights and
obligations hereunder without the prior written consent of Consultant; provided,
however, that the Company shall be entitled to assign its rights hereunder to
any acquirer, affiliate or successor to the Company without the prior written
consent of Consultant. Consultant shall not assign any of his rights or
obligations hereunder without the prior
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written consent of the Executive Officer. Subject to the foregoing, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the heirs, legal representatives, executors, successors and assigns of
Consultant and the Company.
7.3 Notices. All notices and other communications which are required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to be sufficiently given (a) if delivered personally, upon delivery and
(b) if delivered by registered or certified mail (return receipt requested),
postage prepaid, upon the earlier of actual delivery or upon three (3) days
after being mailed, in each case to Consultant or the Company at the address set
forth at the beginning of this Agreement. Either party may, by notice given
hereunder, designate any further or different address to which subsequent
notices or other communications shall be sent.
7.4 Severability. If any term or provision of this Agreement is held to
be void or unenforceable by any court of competent jurisdiction, only that
objectionable term or provision shall be deleted herefrom while the remainder of
the term, provision and agreement shall be enforceable.
7.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without regard to conflicts
of laws principles.
7.6 Agreement to Arbitrate.
7.6.1 Except for the remedies available to the Company
pursuant to Section 6 hereof, any controversy, dispute or claim under, arising
out of, in connection with or in relation to this Agreement, including but not
limited to the negotiation, execution, interpretation, construction, coverage,
scope, performance, nonperformance, breach, termination, validity or
enforceability of this Agreement or any alleged fraud in connection therewith or
this Section 7.6, shall be settled, at the request of either party, by
arbitration conducted in accordance with the Commercial Arbitration Rules or
then existing rules for commercial arbitration of the American Arbitration
Association before a single arbitrator. The arbitration of such issues,
including the determination of any amount of damages suffered by any party
hereto by reason of the acts or omissions of any party, shall be binding upon
the parties after confirmation of the award by a court of competent
jurisdiction; provided, however, that the parties may attack or appeal any
arbitration award in accordance with applicable law. The parties intend that
this Section 7.6 shall be valid, binding, enforceable and irrevocable and shall
survive the termination of this Agreement.
7.6.2 Any arbitration proceedings hereunder shall be held in
Newark, New Jersey.
7.6.3 Judgment upon any award rendered by the arbitrator may
be entered by any court having jurisdiction thereof.
7.6.4 The prevailing party shall be entitled to an award of
its costs, attorneys' and other fees and other expenses as part of the
arbitrator's award in connection with each arbitration, and the non-prevailing
party shall bear the costs, fees and expenses incurred by and payable to the
arbitrator, and court reporter.
7.7 Counterparts. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one (1) and the same instrument.
Facsimiles of signatures may be taken as the actual signatures, and each party
agrees to furnish the other with documents bearing the original signatures
within ten (10) days of the facsimile transmission.
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7.8 Complete Agreement Amendments. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes any prior agreements and understandings relating thereto,
This Agreement may not be waived, changed, modified, extended or discharged
orally, but only by a written instrument signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
7.9 Termination of Employment Agreement. The parties hereto agree to
terminate the Employment Agreement dated March 1, 2007 and each shall have no
further rights and obligations to the other, except for all earned and unpaid
compensation owed the Consultant through April 16, 2008 shall be paid the
Consultant as set forth in the Employment Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
day and year first above written,
XXXXXX PHARMACEUTICALS, LTD CONSULTANT
By:__________________________ By:__________________________
Xxxx Xxxxxx Xxxxxx Xxxxxxx
President and Chief Executive Officer
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EXHIBIT A
CONSULTANT TASKS
1. Consultation regarding strategic business plans, long range plans,
goals and objectives
2. Consultation regarding policies and procedures of the Company
3. Consultation regarding major operations decisions
4. Consultation regarding corporate finance transactions
5. Consultation regarding acquisitions
6. Consultation regarding vendor and customer relationships
7. Consultation regarding personnel matters
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