EXHIBIT 10.11
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "AGREEMENT") is made and entered into as
of September 10, 2002 (the "COMMENCEMENT DATE"), by and between Hemoxymed, Inc.,
a Delaware corporation (the "COMPANY") and Prism Ventures LLC (the
"CONSULTANT").
RECITALS
A. The Company desires to avail itself of the experience, sources of
information, advice, and assistance of Consultant.
B. Consultant is willing to make available to the Company Consultant's
experience, sources of information, advice, and assistance.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and the Consultant agree as follows:
1. SERVICES. Consultant hereby agrees to render services to the Company
concerning general consulting relative to financings and other transactions of
the Company or its affiliates (collectively, the "SERVICES").
2. TERM OF AGREEMENT; TERMINATION. This Agreement shall commence on the
Commencement Date and shall continue until the second anniversary of the
Commencement date, unless extended otherwise by written consent of the parties
(the "TERM").
3. COMPENSATION. In consideration of Consultant entering into this
Agreement and in exchange for the Services to be performed pursuant to this
Agreement, the Company shall issue a warrant to purchase 800,000 shares of the
Company's common stock to Consultant upon execution of this Agreement. The
warrant shall have a ten-year life, shall have a cashless exercise feature, and
shall have an exercise price equal to the market price of the Company's common
stock on the date of this Agreement. The Company shall also pay health insurance
costs for Xxxxxx Xxxxxx and Xxxxxx X. Xxxxxx on the Oxford Health Plan-Freedom
Plan Select (or an equivalent plan selected by Xxxxxx and Schein) to begin on a
date specified by Consultant and continuing for a period of two years up to a
maximum of $20,000 per year per person.
In addition, in the event the Company or an affiliate of the Company enters into
a strategic transaction (e.g. license agreement) with a party that was
introduced to the Company by Consultant, the Company agrees to pay Consultant a
success fee equal to 4% (four percent) of all consideration received or paid by
the Company or its affiliates in the transaction. The fee shall be paid in the
same form of consideration and over the same period as the consideration
received or paid by the Company or its affiliates. In the event of a direct
investment by a party introduced to the Company by Consultant, the success fee
will equal 8% (eight percent) of the cash received by the Company and a warrant
to purchase a number of shares in the Company equal to 10% of the shares issued
in the transaction. The warrant exercise price shall be the same as the exercise
of warrants issued to investors. If no warrants are issued to investors, the
exercise price shall be at a 20% premium to the market price with the market
price determined by the average closing price over the previous ten trading
days. In the event of a financing transaction managed by a broker-dealer
introduced to the Company by Consultant, the success fee will equal 2% (two
percent) of the cash received by the Company and a warrant to purchase a number
of shares in the Company equal to 2% (two percent) of the shares issued in the
transaction with an exercise price as determined above. Any warrants issued to
Consultant shall have a cashless exercise feature and shall be ten-year
warrants. The Company's obligation to pay Consultant a success fee for a
Transaction shall continue for a period of two years beyond the term of this
Agreement.
4. OFFICE SPACE AND EQUIPMENT: The Company agrees to grant Consultant
exclusive use of the Company's New York office, located at 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, including the exclusive use of all office equipment, through
the end of the Company's lease which expires on September 30, 2002. In addition
to the monthly lease obligations, the Company shall bear all reasonable office
expenses, including telephone expenses, through the end of the lease, up to a
maximum of $3,500 per month including lease payments. At the expiration of the
lease, Consultant will retain all office equipment, consisting of three desktop
computer systems and two printers.
5. REGISTRATION RIGHTS: The Company agrees to maintain in effect the
current registration statement for all shares, including shares underlying any
warrants or options currently held by Consultant, Xxxxxx Xxxxxx or Xxxxxx X.
Xxxxxx, until such shares are sold. The Company agrees that, during the term of
this Agreement, it will not afford any member of management any "piggyback" or
"demand" registration rights with respect to any shares issuable to them upon
the exercise of options or warrants unless it offers equivalent rights to Prism
with respect to any shares or warrants it may obtain pursuant to this Agreement.
6. BOARD REPRESENTATION: Xxxxxx Xxxxxx and Xxxxxx X. Xxxxxx shall have the
right to board seats or board observation rights until Consultant, Xxxxxx Xxxxxx
and Xxxxxx X. Xxxxxx own less than two million shares in aggregate, adjusted for
stock splits.
7. INDEPENDENT CONTRACTOR. At all times during the term of this Agreement,
Consultant is and shall be an independent contractor in providing the Services
hereunder, with the sole right to supervise, manage, operate, control, and
direct the performance incident to the Services. Nothing contained in this
Agreement shall be deemed or construed to create a partnership or joint venture,
to create the relationships of employee/employer or principal/agent, or
otherwise create any liability whatsoever as partner, joint venturer, employer,
employee, principal, or agent for either the Company or Consultant with respect
to the indebtedness, liabilities, or obligations of each other or of any other
person or entity.
8. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be personally delivered, delivered by
facsimile or courier service, or mailed, certified with first class postage
prepaid, to the addresses set forth below:
If to the Company, to:
Hemoxymed, Inc.
00 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
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If to Consultant, to:
Prism Ventures LLC
000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Each such notice shall be deemed to have been given (whether actually received
or not) on the date of actual delivery thereof, if personally delivered or
delivered by facsimile transmission (if receipt is confirmed at the time of such
transmission by telephone or facsimile machine-generated confirmation), or on
the third day following the date of mailing, if mailed in accordance with this
Section, or on the day specified for delivery to the courier service (if such
day is one on which the courier service will give normal assurances that such
specified delivery will be made). Any notice, request, demand, or other
communication given otherwise than in accordance with this Section shall be
deemed to have been given on the date actually received. Any party may change
its address for purposes of this Section by giving written notice of such change
to all other parties in the manner hereinabove provided.
9. LIABILITY OF CONSULTANT. Consultant assumes no responsibility under this
Agreement other than to perform the Services in good faith, and Consultant will
not be responsible for any consequences whatsoever that result from any action
of the Company in following or declining to follow any advice or recommendation
of Consultant, it being acknowledged and agreed by the Company that Consultant's
services provided under this Agreement are consulting only and any and all
decision-making regarding the Company, including without limitation whether or
not to follow any advice by Consultant, is solely the responsibility of the
Company. Consultant will not be liable to the Company except by reason of acts
constituting bad faith of Consultant or willful misfeasance or reckless
disregard of its duties. The parties hereto recognize and agree that the
effectiveness of the Services and the success of any actions undertaken by
Consultant in connection therewith are not guaranteed or warranted by Consultant
in any respect whatsoever.
10. CONFIDENTIAL INFORMATION.
(a) Consultant acknowledges that certain information that may be
disclosed to Consultant by the Company may be confidential, proprietary, and
secret in character. Consultant agrees that such information will (i) be kept
confidential by Consultant, (ii) not be used by Consultant in any way
detrimental to the Company, and (iii) not be used other than in furtherance of
the Services to be provided under this Agreement.
(b) The term "CONFIDENTIAL INFORMATION" means any information or
knowledge that is not generally known to the public that is disclosed or made
known to the Consultant directly or indirectly during the term of this Agreement
(regardless of the form in which communicated and including all notes,
memoranda, records, analyses, test results, surveys, applications for
governmental approvals, and other documents and items that were prepared by the
Consultant, other employees of the Company, or other persons or entities acting
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at the behest of or in conjunction with the Company that incorporate, embody,
reflect, describe, or otherwise relate to, in whole or in part, the oral or
written information made known to the Consultant). Notwithstanding the
foregoing, no item of information otherwise included in the definition of
"CONFIDENTIAL INFORMATION" shall be deemed Confidential Information to the
extent that it (i) is or becomes publicly available through no fault or breach
of this Agreement, (ii) is disclosed in a non-confidential capacity by the party
which would have had the right to assert that such information was Confidential
Information, (iii) is lawfully obtained or could be lawfully obtained from third
parties without breaching any provision of any non-disclosure agreement, (iv) is
information which is previously known or is developed by the recipient
independently of the disclosing party or (v) must be disclosed pursuant to or as
required or directed by law or by a court or other tribunal of competent
jurisdiction. "CONFIDENTIAL INFORMATION" also does not include any business,
industry or other analysis previously made or subsequently developed by
Consultant that is not specific to the business activities of the Company.
11. BINDING EFFECT. This Agreement shall be binding upon Consultant and the
Company and their respective successors, assigns, and representatives.
12. ASSIGNMENT. Neither this Agreement nor the rights and obligations
hereunder may be assigned by operation of law or otherwise without the express
consent of the other party (which consent may be granted or withheld in the sole
and absolute discretion of such other party).
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
14. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any law or public policy,
all other terms and provisions of this Agreement will nevertheless remain in
full force and effect. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner.
15. COUNTERPARTS. This Agreement may be executed in a number of identical
counterparts, each of which, for all purposes, is to be deemed an original, and
all of which constitute, collectively, one agreement; but in making proof of
this Agreement, it shall not be necessary to produce or account for more than
one such counterpart.
16. AMENDMENT. Neither this Agreement nor the rights and obligations
hereunder may be assigned by operation of law or otherwise without the express
written consent of the nonassigning party (which consent may be granted or
withheld in the sole and absolute discretion of such party).
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17. ENTIRE AGREEMENT. This Agreement (including any Exhibits hereto and the
documents delivered pursuant hereto) constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, among the parties
hereto with respect to the subject matter.
18. HEADINGS. The various titles of the paragraphs, captions, headings, and
arrangements herein are used solely for convenience, shall not be used for
interpreting or construing any word, clause, paragraph, or subparagraph of this
Agreement, and do not in any way affect, limit, amplify, or modify the terms
hereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
THE COMPANY:
HEMOXYMED, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxx
Name: -------------------------------
Title: Chairman, CEO
------------------------------
PRISM VENTURES LLC
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Member
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Amendment to the Consulting Agreement between Hemoxymed, Inc. and Prism
Ventures LLC dated September 10, 2002.
As of October 10, 2002, the Consulting Agreement between Hemoxymed, Inc. and
Prism Ventures LLC dated September 10, 2002 (the "Agreement") is hereby amended
as follows:
The following paragraph should be added to Section 3 of the Agreement:
"In addition, in the event the Company or an affiliate of the Company is
acquired by, acquires or merges with a party that was introduced to the Company
by Consultant, the Company agrees to pay Consultant a success fee, to be paid in
the same form of consideration and over the same period as the consideration
received or paid by the Company or its affiliates equal to the sum of; i) 10%
(ten percent) of the amount of consideration (e.g. common stock) received or
paid by the Company or its affiliates in the transaction up to the value of the
cash and marketable securities held by the party introduced by the Consultant at
the closing of the merger or acquisition, plus ii) 4% of the remainder of the
consideration (e.g. common stock) received or paid by the Company or its
affiliates in the transaction over the value of the cash and marketable
securities held by the party introduced by the Consultant at the closing of the
merger or acquisition. The Company also agrees to pay Consultant a cash success
fee equal to 8% (eight percent) of the cash and marketable securities held by
the party introduced by Consultant at the closing of the merger or acquisition.
In lieu of common stock, Consultant may elect to receive an equal number of
warrants with an exercise price equal to the price of the common stock issued to
or received by the Company on the date of the closing. Any warrants issued to
Consultant as a success fee shall have a cashless exercise feature and shall be
ten-year warrants. Any shares issued to Consultant as a success fee shall be
registered with the Company's next registration statement. The Company's
obligation to pay Consultant a success fee for a merger or acquisition
introduced by Consultant shall continue for a period of two years beyond the
term of this Agreement."
HEMOXYMED, INC.
/s/ Xxxxx Xxxxxx
By: _______________________
Name: Xxxxx Xxxxxx
Title: Chief Executive Officer
PRISM VENTURES LLC
/s/ Xxxxxx X. Xxxxxx
By: _______________________
Name: Xxxxxx X. Xxxxxx
Title: Member
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HEMOXYMED, INC.
COMMON STOCK WARRANT AGREEMENT
THIS AGREEMENT ("Agreement") is made this 10th day of September 2002, between
Hemoxymed, Inc., a Delaware corporation ("Hemoxymed" or the "Company"), and
Prism Ventures LLC (the "Holder").
1. GRANT OF COMMON STOCK WARRANTS This certifies that Holder is hereby granted
a warrant (the "Warrant") to purchase from the Company 800,000 shares of
the Company's Common Stock (the "Warrant Shares") at a price of $.20
(twenty cents) per share (the "Stock Purchase Price"). The Warrant may be
exercised until September 10, 2012 ("Last Exercise Date"). Any portion of
the Warranted Shares that have not been exercised shall accumulate and can
be exercised at any time prior to the Last Exercise Date.
2. EXERCISE OF WARRANT This Warrant may be exercised by delivering to the
Company (i) a written notice of intention to exercise specifying the number
of Warranted Shares to be purchased and (ii) payment in full of the Stock
Purchase Price for all such Warrant Shares in cash, certified check or
surrender of shares of Common Stock of the Company having a value equal to
the Stock Purchase Price of the Warrant Shares being purchased. The Company
shall use its best efforts to cause the Warrant Shares to be issued as
promptly as practicable after receipt of the notice of intention to
exercise.
3. CONVERSION RIGHT In lieu of payment of the Stock Purchase Price, at any
time the Stock Purchase Price is less than the market price of the
Company's Common Stock (such difference being the "Per Share Value of the
Warrant"), Holder shall have the right to require the Company to convert
this Warrant, in whole or part, into the Warrant Shares as follows (the
"Conversion Right"): Upon exercise of the Conversion Right, the Company
shall deliver to the Holder (without payment by the Holder of any of the
Stock Purchase Price) up to that number of the Warrant Shares equal to the
quotient obtained by dividing (x) the product of (i) the Per ShareValue of
the Warrant at the time the Conversion Right is exercised and (ii) the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to the exercise of the Conversion Right by (y) the market price of
one share of the Company's Common Stock immediately prior to the exercise
of the Conversion Right.
4. CHANGE IN CAPITALIZATION Subject to any required action by the shareholders
of the Company, the number of shares of common stock covered by each
outstanding Warrant and the number of shares of common stock which have
been authorized for issuance under this Agreement, as well as the price per
share of common stock covered by each such Warrant, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of common stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the common stock,
or any other increase or decrease in the number of issued shares of common
stock effected without receipt of consideration by the Company. The
conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration."
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5. MERGER OR ASSET SALE In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, the Warrant shall be assumed or an equivalent warrant or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation.
6. REGISTRATION RIGHTS The Company agrees to register the Warrant Shares with
the next registration statement filed by the Company that includes any
shares underlying options held by the Company's management.
7. SUCCESSORS AND ASSIGNS. All authority herein conferred or agreed to be
conferred shall survive the death or incapacity of any party hereto and any
obligations of a party shall be binding upon the heirs, personal
representatives, successors, and assigns of such party.
8. COUNTERPARTS. This Agreement may be executed in more than one counterpart,
each of which shall be deemed an original, but all of which shall
constitute the same instrument.
9. INTERPRETATION. Unless the context otherwise requires, as used herein,
words in the singular shall include words in the plural and vice versa and
words in one gender shall include words in the other gender. This Agreement
is deemed executed and delivered in the State of New York and shall be
construed and enforced in accordance with the laws of such state without
giving effect to the conflicts of law rules thereof.
10. VENUE. Each party hereof irrevocably consents to the sole and exclusive
jurisdiction and venue of the state and federal courts located in the
Southern District of New York in connection with any matter arising from or
related to any matter addressed in this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first set forth above.
PRISM VENTURE LLC
/s/ Xxxxxx X. Xxxxxx
By: _______________________________
Xxxxxx X. Xxxxxx
Member
HEMOXYMED, INC.
/s/ Xxxxx Xxxxxx
By: _______________________________
Xxxxx Xxxxxx
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