FORM OF CONSULTING AGREEMENT Arbios Systems, Inc.
Exhibit
10.1
FORM
OF
CONSULTING AGREEMENT
Xxxxxx
Systems, Inc.
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxxxxxxx 00000
[__________],
2006
[NAME]
[TITLE]
[ADDRESS]
Dear
[NAME]:
I
am
pleased that you are willing to continue your relationship with Xxxxxx Systems,
Inc. (the “Company”) in the role of consultant. As authorized by the Board of
Directors of the Company, this letter is to confirm our understanding with
respect to (i) your rendering services as a consultant to the Company, (ii)
your agreement not to compete with the Company in its direct area of business,
and (iii) your agreement to protect and preserve information and property
which is confidential and proprietary to the Company or other parties with
whom
the Company does business (the terms and conditions agreed to in this letter
shall hereinafter be referred to as the “Agreement”). Hereinafter, reference to
“you” includes your company, [_______________], of which you are an employee,
and all other employees or subcontractors which you may employ on behalf of
the
Company, whom you shall ensure are bound by the terms of this Agreement. In
consideration of the mutual promises and covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency
of
which are hereby mutually acknowledged, we have agreed as follows:
1.
Services
of Consultant.
You
agree to render services to the Company as an independent contractor to, and
not
as an employee of, the Company. Your principal service will be to
[_______________], and to perform related services in the Company’s business,
each occasionally and from time to time as directed by Xxxxxx Xxxxx or his
designate. You shall devote your best efforts in the performance of the
foregoing services. You acknowledge and agree that you will be an independent
contractor for all purposes including, but not limited to, payroll and tax
purposes, and that you shall not represent yourself to be an employee or officer
of the Company unless so designated by a written agreement signed by the
Company.
2.
Term
of Consulting Arrangement.
Your
services as a consultant to the Company shall commence upon the day following
the 2006 Annual Meeting of the Company, scheduled for July 31, 2006, and shall
terminate on July 31, 2007, unless mutually agreed to be extended by you and
the
Company. However, you agree that the Company has the right terminate your
consulting arrangement hereunder at any time, with or without cause, which
right
shall be exercisable by written notice sent to you by the Company and shall
be
effective immediately as of the date of such notice or a later date as the
Company may specify. As you are aware, the Board of Directors of the Company
has
resolved that management and the Board shall review your services in December
with the possible consequence that the Company, in its sole discretion, shall
determine that insufficient services have been provided to continue the
consulting relationship. Similarly, you have the right to terminate your
services to the Company at any time, which right shall be exercisable by written
notice sent to the Company by you and shall be effective immediately as of
the
date of such notice or a later date as you may specify. In the event such notice
is given, you shall use best efforts to reduce cost to the Company as a result
of such termination. The Company’s obligation will be to reimburse you for cost
incurred, as evidenced by invoice, as of final date of termination, including
any uncancellable legal obligations to third parties relating to this Agreement,
such as purchase orders, which were entered into prior to effective termination
notice.
3.
Compensation
for Services.
The
Company shall pay you as your exclusive compensation for your services and
agreements hereunder a fee of $[_____] per month (the “Retainer”). At the sole
discretion of the Company, the Company may determine to pay you, in lieu of
the
Retainer, a fee of $[_____] per day, or a pro-rata amount for any substantial
portion of a day, for work which you perform on behalf of the Company and which
has been agreed in advance by the Chief Executive Officer of the Company. You
shall also be reimbursed for reasonable and customary expenses (costs) incurred
by you on behalf of the Company. Such expenses include, but are not limited
to,
costs incurred for transportation, travel, lodging, meals, delivery,
communications, literature search and retrieval, and exceptional
telecommunications costs which may be incurred in the performance of a
particular (e.g. overseas) project. To receive payment, you shall provide the
Company with an invoice each month in which work is performed, which reflects
professional services and expenses rendered through the end of the prior month.
The Company agrees that all invoiced fees and expenses payable under this
contract will be paid to you within thirty (30) days of receipt of said invoice.
Any services to be provided by other employees of [________________] or
subcontractors shall be agreed in advance with the Company, including
compensation to be paid by the Company.
4.
Continuing
Obligations.
Your
obligations under this Agreement other than the provisions of Section 1 shall
not be affected by any termination of your consulting arrangement, including
termination upon the Company’s initiative.
5.
Prohibited
Competition.
(a)
We
have discussed, and you recognize and acknowledge the competitive and
proprietary nature of the Company’s business operations. You further acknowledge
and agree that a business will be deemed competitive with the Company if it
conducts planning or operations or otherwise engages in the Company’s Field of
Interest (as defined herein). You further acknowledge and agree that, during
the
course of your performing services for the Company as a consultant and earlier
as a member of the Board of Directors and as a consultant, the Company has
already and will furnish, disclose or make available to you confidential and
proprietary information related to the Company’s business. You also acknowledge
that such confidential information has been developed and will be developed
by
the Company through the expenditure by the Company of substantial time, effort
and money and that all such confidential information could be used by you to
compete with the Company.
2
(b)
You
acknowledge and agree that, although the Company has retained your consulting
services on a non-exclusive basis, you currently are not a party to, and during
the term of this Agreement, and for one year following termination of this
Agreement, you will not (i) enter into any agreement, arrangement, understanding
or other relationship pursuant to which you are obligated to render advice
and/or services to a commercial entity in the Company’s Field of Interest,
either as principal, agent, stockholder, employee, consultant, representative,
or in any other capacity or (ii) own, manage, operate or control, or be
concerned, connected or employed by, or otherwise associate in any manner with,
engage in or have a financial interest in any such entity, except that nothing
contained herein shall preclude you from purchasing or owning securities of
any
such business if such securities are publicly traded, and provided that your
holdings do not exceed three percent (3%) of the issued and outstanding
securities of any class of securities of such business. The term “Field of
Interest” with respect to the Company currently means the development or
commercialization of medical devices or cell therapies for the treatment of
liver disease, viral hepatitis or septic shock. The Company may modify the
definition of its Field of Interest by written notice to you based on the
activities in which the Company is then engaged or in which the Company then
proposes to be engaged.
(c)
Further, neither individually nor on behalf of or through any third party,
shall
you directly or indirectly, solicit, entice or persuade or attempt to solicit,
entice or persuade any other employees of or consultants to the Company or
any
present or future parent, subsidiary or affiliate of the Company to leave the
services of the Company or any such parent, subsidiary or affiliate for any
reason.
(d)
You
further recognize and acknowledge that (i) the types of employment which are
prohibited by this Section 5 are narrow and reasonable in relation to the skills
which represent your principal salable asset both to the Company and to
prospective employers and/or business partners, and (ii) the specific scope
of
the provisions of this Section 5 is reasonable, legitimate and fair to you
in
light of the Company’s need to protect its proprietary information and to make
the Company’s business profitable and in light of the limited restrictions on
the type of employment prohibited herein compared to the types of employment
for
which you are qualified to earn your livelihood.
(e)
Your
acknowledgements and agreements set forth in this Section 5 shall survive the
expiration or termination of this Agreement and the termination of your
employment with the Company for any reason.
6.
Protected
Information.
You
shall at all times, both during and after any termination of the consulting
arrangement by either the Company or you, maintain in confidence and shall
not,
without the prior written consent of the Company, use, except in the course
of
performance of your duties for the Company and specifically not for the benefit
of others outside the Company, disclose or give to others any fact or
information which was disclosed to or discerned or developed by you during
the
course of performing services for, or receiving training from, the Company,
and
is not generally available to the public including but not limited to
information and facts concerning business plans, customers, future customers,
suppliers, licensors, licensees, partners, investors, affiliates or others,
training methods and materials, financial information, sales prospects, client
lists, inventions (as defined in paragraph 7), or any other scientific,
technical, trade or business secret or confidential or proprietary information
of the Company or of any third party provided to you in the course of your
consultancy to the Company. You also agree not to file patents, copyrights
or
trademark applications based on the Company’s technology, property or
confidential information, nor seek to make improvements thereon, without the
Company’s approval. You agree not to make any copies of such confidential or
proprietary information of the Company (except when appropriate for the
furtherance of the business of the Company or duly and specifically authorized
to do so) and promptly upon request, whether during or after the period of
the
consulting arrangement, to return to the Company any and all documentary,
machine-readable or other elements or evidence of such confidential or
proprietary information, and any copies that may be in your possession or under
your control. In the event you are questioned by anyone not employed by the
Company or by an employee of or a consultant to the Company not authorized
to
receive such information, in regard to any such information or any other secret
or confidential work of the Company, or concerning any fact or circumstance
relating thereto, you will promptly notify the President of the
Company.
3
7.
Ownership
of Ideas, Copyrights and Patents.
(a)
Property
of the Company.
You
agree that all ideas, discoveries, creations, manuscripts and properties,
innovations, improvements, know-how, inventions, designs, developments,
apparatus, techniques, methods, biological processes, cell lines, laboratory
notebooks, and formulae (all of the foregoing being hereinafter referred to
as
“the inventions”) which may be used in the business of the Company, whether or
not reduced to practice and whether patentable, copyrightable or not, which
you
may conceive, reduce to practice or develop during the term of this Agreement,
alone or in conjunction with another, or others, and whether at the request
or
upon the suggestion of the Company, or otherwise, shall be the sole and
exclusive property of the Company if made or improved during any time during
which you are providing services to the Company or with the assistance of
financial or other support from the Company, and that you shall not publish
any
of the inventions without the prior written consent of the Company. You hereby
assign to the Company all of your right, title and interest in and to all of
the
foregoing. You agree to maintain and furnish to the Company complete and current
records of all such inventions and disclose to the Company in writing any such
inventions.
(b)
Right
of First Refusal of the Company.
In the
event that you, alone or with others, develop or improve any inventions in
the
Field of Interest at times during which you are not providing services to the
Company and without the financial or other support of the Company, you agree
to
provide the Company with a right of first refusal to purchase or license any
and
all such inventions.
(c)
Cooperation.
At any
time during or after the term of this Agreement, you agree that you will fully
cooperate with the Company, its attorneys and agents, in the preparation and
filing of all papers and other documents as may be required to perfect the
Company’s rights in and to any of such inventions, including, but not limited
to, joining in any proceeding to obtain letters patent, copyrights, trademarks
or other legal rights of the United States and of any and all other countries
on
such inventions, provided that the Company will bear the expense of such
proceedings, and that any patent or other legal right so issued to you,
personally, shall be assigned by you to the Company without charge by you.
You
hereby designate the Company as your agent, and grant to the Company a power
of
attorney with full power of substitution (which power of attorney shall be
deemed coupled with an interest), for the purpose of effecting the foregoing
assignments from you to the Company.
4
8.
Records.
Upon
termination of your relationship with the Company, you shall deliver to the
Company any property of the Company which may be in your possession including
products, materials, memoranda, notes, laboratory notebooks, records, reports,
or other documents or photocopies of the same.
9.
No
Conflicting Agreements.
You
hereby represent and warrant that you have no commitments or obligations
inconsistent with this Agreement. You hereby agree to indemnify and hold the
Company harmless against any loss, damage, liability or expense arising from
any
claim based upon circumstances alleged to be inconsistent with such
representation and warranty. During the term of this Agreement, you will not
enter into any agreement, either written or oral, which may be in conflict
with
this Agreement, and you will arrange to provide your services under this
Agreement in such a manner and at such times that your services will not
conflict with your responsibilities under any other agreement, arrangement
or
understanding or pursuant to any employment relationship that you may have
at
any time with any third party.
10.
No
Employment Relationship Created.
This
Agreement does not constitute, and shall not be construed as constituting,
an
undertaking by the Company to hire you as an employee of the Company. You
acknowledge that you will be working as a consultant only, and not as an
employee. You will not be entitled to receive any of the benefits provided
by
the Company to its employees and you will be solely responsible for the payment
of all federal, state and local taxes and contributions imposed or required
on
income, unemployment insurance, social security and any other law or
regulation.
11.
Release.
You
hereby waive your right to assert any form of legal claim or any other form
of
action against the Company (including its affiliates and related entities,
and
its and their respective officers, directors, employees, agents,
representatives, successors and assigns) of any kind whatsoever relating in
any
way to your relationship with the Company from the beginning of time through
the
date you sign this Agreement.
12.
General.
(a)
Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, shall be addressed to the receiving party’s address set forth below or
to such other address as a party may designate by notice hereunder, and shall
be
either (i) delivered by hand, (ii) made by telex, telecopy or
facsimile transmission, (iii) sent by overnight courier, or (iv) sent
by registered mail, return receipt requested, postage prepaid
5
If
to
Xxxxxx Systems, Inc.:
Xxxxxx
X.
Xxxxx
President
and Chief Executive Officer
Xxxxxx
Systems, Inc.
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxxxxxxx 00000
FAX
0-000-000-0000
If
to
you, [NAME]:
[NAME]
[TITLE]
[ADDRESS]
FAX
[FAX
NUMBER]
All
notices, requests, consents and other communications hereunder shall be deemed
to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the
day such notice is delivered to the courier service, or (iv) if sent by
registered mail, on the fifth business day following the day such mailing is
made.
(b)
Entire
Agreement.
This
Agreement embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings relating to the subject matter hereof.
No statement, representation, warranty, covenant or agreement of any kind not
expressly set forth in this Agreement shall affect, or be used to interpret,
change or restrict, the express terms and provisions of this
Agreement.
(c)
Modifications
and Amendments.
The
terms and provisions of this Agreement may be modified or amended only by
written agreement executed by the parties hereto.
(d)
Waivers
and Consents.
The
terms and provisions of this Agreement may be waived, or consent for the
departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect
to
any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and
for
the purpose for which it was given, and shall not constitute a continuing waiver
or consent.
(e)
Assignment.
The
Company may assign its rights and obligations hereunder to any person or entity.
Your rights and obligations under this Agreement may not be assigned by you
without the prior written consent of the Company.
6
(f)
Benefit.
All
statements, representations, warranties, covenants and agreements in this
Agreement shall be binding on the parties hereto and, in your case, upon your
heirs, executors and administrators; and shall inure to the benefit of the
respective successors and permitted assigns of each party hereto. Nothing in
this Agreement shall be construed to create any rights or obligations except
among the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
(g)
Governing
Law.
This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and governed by the law of The Commonwealth of Massachusetts,
without giving effect to the conflict of law principles thereof.
(h)
Arbitration.
Except
with respect to the provisions of Sections 5, 6 and 7 hereof, any controversy,
dispute or claim arising out of or in connection with this Agreement, or the
breach, termination or validity hereof, shall be settled by final and binding
arbitration to be conducted by an arbitration tribunal in Boston, Massachusetts,
pursuant to the rules of the American Arbitration Association. The arbitration
tribunal shall consist of three arbitrators. The party initiating arbitration
shall nominate one arbitrator in the request for arbitration and the other
party
shall nominate a second in the answer thereto within thirty (30) days of receipt
of the request. The two arbitrators so named will then jointly appoint the
third
arbitrator. If the answering party fails to nominate its arbitrator within
the
thirty (30) day period, or if the arbitrators named by the parties fail to
agree
on the third arbitrator within sixty (60) days, the office of the American
Arbitration Association in Boston, Massachusetts shall make the necessary
appointments of such arbitrator(s). The decision or award of the arbitration
tribunal (by a majority determination, or if there is no majority, then by
the
determination of the third arbitrator, if any) shall be final, and judgment
upon
such decision or award may be entered in any competent court or application
may
be made to any competent court for judicial acceptance of such decision or
award
and an order of enforcement. In the event of any procedural matter not covered
by the aforesaid rules, the procedural law of the Commonwealth of Massachusetts
shall govern.
(i)
Jurisdiction
and Service of Process.
Except
as governed by the above paragraph (h), any legal action or proceeding with
respect to this Agreement shall be brought in the courts of The Commonwealth
of
Massachusetts or of the United States of America for the First District of
Massachusetts. By execution and delivery of this Agreement, each of the parties
hereto accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
hereto irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the party at its address set
forth in Section 12(a) hereof.
(j)
Severability.
The
parties intend this Agreement to be enforced as written. However, (i) if any
portion or provision of this Agreement shall to any extent be declared illegal
or unenforceable by a duly authorized court having jurisdiction, then the
application of such portion or provision in circumstances other than those
as to
which it is so declared illegal or unenforceable, shall not be affected thereby
(provided that should any portion of Section 5, 6 or 7 be declared illegal
or
unenforceable, the Company shall have the right in its sole discretion to
terminate this Agreement); and (ii) if any provision, or part thereof, is held
to be unenforceable because of the duration of such provision or the geographic
area covered thereby, the Company and you agree that the court making such
determination shall have the power to reduce the duration and/or geographic
area
of such provision, and/or to delete specific words and phrases
(“blue-pencilling”), and in its reduced or blue-pencilled form such provision
shall then be enforceable and shall be enforced.
7
(k)
Headings
and Captions.
The
headings and captions of the various subdivisions of this Agreement are for
convenience of reference only and shall in no way modify, or affect the meaning
or construction of any of the terms or provisions hereof.
(l)
Injunctive
Relief.
You
hereby expressly acknowledge that any breach or threatened breach of any of
the
terms and/or conditions set forth in Section 5, 6 or 7 of this Agreement will
result in substantial, continuing and irreparable injury to the Company.
Therefore, you hereby agree that, in addition to any other remedy that may
be
available to the Company, the Company shall be entitled to injunctive or other
equitable relief by a court of appropriate jurisdiction in the event of any
breach or threatened breach of the terms of Section 5, 6 or 7 of this Agreement
and Section 12(h) of this Agreement shall not apply.
(m)
No
Waiver of Rights, Powers and Remedies.
No
failure or delay by a party hereto in exercising any right, power or remedy
under this Agreement, and no course of dealing between the parties hereto,
shall
operate as a waiver of any such right, power or remedy of the party. No single
or partial exercise of any right, power or remedy under this Agreement by a
party hereto, nor any abandonment or discontinuance of steps to enforce any
such
right, power or remedy, shall preclude such party from any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The election of any remedy by a party hereto shall not constitute a waiver
of
the right of such party to pursue other available remedies. No notice to or
demand on a party not expressly required under this Agreement shall entitle
the
party receiving such notice or demand to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
party giving such notice or demand to any other or further action in any
circumstances without such notice or demand.
(n)
Expenses.
Should
any party breach this Agreement, in addition to all other remedies available
at
law or in equity, such party shall pay all of any other party’s costs and
expenses resulting therefrom and/or incurred in enforcing this Agreement,
including legal fees and expenses.
(o)
Counterparts.
This
Agreement may be executed in one or more counterparts, and by different parties
hereto on separate counterparts, each of which shall be deemed an original,
but
all of which together shall constitute one and the same instrument.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
8
If
the
foregoing accurately sets forth our agreement, please so indicate by signing
and
returning to us the enclosed copy of this letter.
| Very truly yours, | ||
| Xxxxxx Systems, Inc. | ||
| By: ________________________________ | ||
|
Xxxxxx
X. Xxxxx
|
||
|
President
and Chief Executive Officer
|
||
| Accepted and Approved: | ||
| ________________________________ | ||
| [NAME] | ||
| Dated: _______________________ | ||
9
