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CONSULTING AGREEMENT
THIS AGREEMENT is made as of September 26, 1996, between IGG
International, Inc., a Nevada corporation (the "Company") and Xxxxx X.
Xxxxx ("Consultant").
RECITALS:
A. The Company is engaged in the business of research, development,
testing and possible production and/or other distribution of chemical or
drug compounds for human therapeutics and plant and agricultural
applications.
B. The Company has retained Consultant in the past and wishes to
continue to retain Consultant to provide consulting services on various
aspects of the business.
C. This Agreement is to replace and supersede all prior agreements
between Consultant and the Company.
D. In light of the consulting services Consultant has rendered and
will be rendering to the Company, the parties have agreed to protect the
Company against competition from Consultant for a limited period of time.
NOW, THEREFORE, the parties hereby agree as follows:
1. Consulting Services.
(a) This Agreement shall be in effect, and Consultant will
continue to be retained by the Company to provide the consultation
services described below, until October 24, 1996 (the "Termination
Date"), unless earlier terminated for cause as hereinafter provided.
This Agreement may be renewed for successive one year terms by the
written election of the Company (i) by October 24, 1996 for the first
term hereafter, and (ii) thereafter, not less than 5 days prior to the
end of a term. Notwithstanding the termination of this Agreement, the
parties shall be required to carry out any provisions hereof which
expressly contemplate performance by them subsequent to such
termination including, without limitation, compliance by Consultant
with the covenants set forth in Section 3 below; nor shall termination
affect any liability or other obligation which shall have accrued
prior to such termination, including but not limited to any liability
for loss or damage on account of default.
(b) While this Agreement shall remain in effect, Consultant
shall advise the Company as to appropriate financing structures and
alternatives, locate sources of supply and customers for the Company's
products, and otherwise consult with the Company with respect to
various aspects of the Company's business. Consultant shall devote a
minimum of 20 hours per week (with allowance for 2 weeks of vacation
time per calendar year) to the performance of his duties under this
agreement.
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(c) For the services heretofore provided and to be provided by
Consultant to the Company hereunder, and for other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged (which services and other consideration are acknowledged
by the Company and Consultant to have an aggregate value at least
equal to the bid price for the Common Stock on the date of this
Agreement multiplied by the S-8 Shares, as hereinafter defined, which
Consultant is to be issued hereunder), the Company shall compensate
Consultant as follows:
(i) Within ten (10) days following the date of this
Agreement, the Company will issue 45,500 shares (the "S-8
Shares") of the Company's Common Stock to Consultant, such shares
to be issued pursuant to the Company's effective registration
statement on Form S-8 filed with the United States Securities and
Exchange Commission on May 14, 1996 (the "Registration
Statement") and pursuant to an option (the "S-8 Shares Option")
granted under the Company's 1996 Nonqualifying Stock Option Plan
attached to the Registration Statement as Exhibit 10.1 (the "1996
Plan"); provided, however, that Consultant shall first complete,
execute and return to the Company a Non-Qualifying Stock Option
Agreement and a written notice of election to exercise, each in
the form attached as Exhibits to the 1996 Plan. The Company will
exercise all possible efforts to maintain in effect a
registration statement on Form S-8 in respect of the S-8 Shares
permitting the issuance to Consultant hereunder of such shares
under the Securities Act and the securities laws of the state of
Consultant's residence (Idaho).
(ii) Within ten (10) days following the date of this
Agreement, the Company will grant Consultant, pursuant to the
Agreement between International Gene Group, Inc., Alvarada, Inc.
and Consultant dated March 30, 1995, a warrant (the "Warrant"),
in form mutually acceptable to Consultant and the Company, to
purchase 200,000 shares (the "Restricted Shares") of the
Company's Common Stock at a purchase price of $0.10 per share.
The Warrant will be exercisable in increments of 50,000 shares or
more. Consultant will have "piggy back" registration rights for
the Restricted Shares for a period of five (5) years after
issuance thereof, subject to customary underwriter's "cut-back"
or rationing rights.
(d) Consultant will bear all expenses he shall incur in the
performance of his duties hereunder, without reimbursement by the
Company (except as otherwise agreed to in writing by the Company in
advance of Consultant's incurring an expense).
(e) Consultant shall perform his services as an independent
contractor of the Company and not as an employee. Consultant hereby
acknowledges that he is performing services hereunder solely as an
independent contractor and not as an employee of the Company.
Consultant acknowledges that he shall have sole responsibility for any
and all Federal, state and local employment taxes or related matters.
Further, Consultant specifically confirms to the Company that (i)
prior to signing this Agreement he has had the opportunity to consult
with such legal, tax, financial and other advisors as he has deemed
desirable, and to the extent he has desired to do so he has so
consulted, (ii) he is aware of and familiar with the financial, legal
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tax and other ramifications to Consultant as a result of this
Agreement, (iii) prior to the signing of this Agreement he has had
access to and reviewed to his satisfaction the Company's Form 10-Q for
the fiscal quarter ended June 30, 1996 and Form 10, Amendment No. 3,
filed August 30, 1996, each as filed with the Securities and Exchange
Commission (the "SEC"), (iv) he has not received and is not relying on
any advice or interpretations provided by either the Company or its
counsel in connection with this Agreement, inasmuch as Consultant is
aware that the company, its representatives and its counsel are
representing the Company's and not Consultant's interests in
negotiating and entering into this Agreement, (v) stock acquired by
the Consultant hereunder that has not been registered with the SEC on
Form S-8 is being acquired for the Consultant's own account for
investment and not with a view to the resale of all or any part
thereof or any interest therein, and (vi) the terms and general
structure of this Agreement are as proposed by Consultant and not the
Company or its advisors.
2. Termination. The Company may terminate this Agreement at any
time for cause, as specified below. If Consultant voluntarily
terminates this Agreement, or if this Agreement is terminated by the
Company for cause as specified below, the Company shall not be
obligated to make any payment to Consultant upon or after the
termination of this Agreement except for compensation earned as of the
date of such termination. The Warrant to be granted by the Company
pursuant to Section 1(c)(ii) shall not be subject to the foregoing
sentence. The Company shall be deemed to have terminated this
Agreement for cause if such termination is the result of the
occurrence of one or more of the following:
(i) In the event that Consultant is guilty of fraud,
dishonesty, embezzlement or theft, or substantial failure to
perform his duties hereunder;
(ii) In the event that any act occurs which would
legally disqualify Consultant from acting hereunder;
(iii) In the event that Consultant materially
breaches any of the covenants set forth in Section 3 below; or
(iv) The death or incompetency of Consultant.
3. Covenant Not to Compete. Consultant covenants, warrants and
agrees that he will not either directly or indirectly:
(a) while this Agreement remains in effect and for a period of
one (1) year after the date of the termination of this Agreement,
engage in, or have any interest in or be associated with (whether as
an officer, director, shareholder, partner, associate, employee,
consultant, owner, lender, investor, financier, member of a limited
liability company or otherwise) any corporation, partnership, limited
liability company, trust, association, firm or enterprise which is
engaged in any business based on carbohydrate chemistry or pertaining
to cancer or plant therapeutics (hereinafter referred to collectively
as the "Business"), or any facet thereof, anywhere in the world;
except that Consultant may invest in any publicly-held corporation
engaged in any similar business, if his investment in such corporation
does not exceed one (1%) percent in value of the issued and
outstanding capital stock of such corporation;
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(b) at any time after the date hereof, divert, or by aid of
others, do anything which would tend to divert from the Business, any
trade or business with any supplier or customer with whom the Company
or Consultant had any contact or association connection with the
Business, as Consultant acknowledges that the customer and supplier
relationships are unique and valuable to the Company;
(c) at any time after the date hereof, solicit, induce or
attempt to induce any employee of the Company to enter into the employ
of: (a) Consultant, (b) any entity in which Consultant is an employee
or otherwise has a financial interest, or (c) and competitor of the
Company; or to solicit, induce, or attempt to induce any person
employed by the Company to leave the employment of the Company;
(d) at any time after the date hereof, use, publish,
disseminate, distribute or otherwise disclose any proprietary or
confidential information of the Company of whatever kind or nature,
including, without limitation, information relating to the Business,
trade secrets, licensing or know-how agreements, marketing strategies,
manufacturing, production or distribution processes, source of goods
and materials, goods and material purchasing, operating and other cost
data, inventory control and practices, supplier and/or customer lists
and supplier and/or customer contact personnel, terms and conditions
of agreements to which the Company is a party, and any other
information which is not generally known in the industry.
4. Severability of Covenants.
(a) The parties intend that the covenants of Consultant set
forth in Section 3 hereof be deemed a series of separate covenants
with respect to the Business, one for each and every political
subdivision of each nation or state of a nation to which such
covenants apply. Consultant acknowledges and agrees that the covenants
set forth above are reasonable and valid in geographical and temporal
scope and in all other respects.
(b) If any court determines that any of the covenants, or any
part of any covenant, is invalid or unenforceable, the remainder of
the covenants shall not be affected and shall be given full effect,
without regard to the invalid portion.
(c) If any court determines that any of the covenants, or any
part of any covenant, is unenforceable because of its duration or
geographic scope, such court shall have the power to reduce the
duration or scope, as the case may be, and, enforce such provision in
such reduced form.
(d) Subject to the provisions of Section 6(c) hereof, Consultant
and the Company hereby confer jurisdiction to enforce the covenants
upon the courts within the Commonwealth of Massachusetts. If the
courts of such jurisdiction holds the covenants, or any part of the
covenants, unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of Consultant and the Company that such
determination not bar or in any way affect the right of the Company to
the relief provided above in the courts of any other jurisdiction
within the geographical scope of such covenants as to breaches of such
covenants in such other respective jurisdictions. For this purpose,
such covenants as they relate to each jurisdiction shall be severable
into diverse and independent covenants.
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5. Specific Enforceability. Consultant covenants and agrees that in
the event of the violation or attempted violation of any of the covenants
set forth in Section 3 hereof, in addition to any and all legal and
equitable remedies immediately available, such covenants may be enforced by
a temporary and/or permanent injunction without the requirement that the
Company post a bond in an action in equity. Consultant acknowledges that
the remedy at law for a breach or threatened breach of any of such
covenants would be inadequate. Consultant further covenants and agrees that
in the event of a violation of any of the covenants set forth in Section 3,
in addition to injunctive relief specified in the preceding sentence, the
Company shall be entitled to discontinue the payments provided to
Consultant in Section 2 above.
6. Miscellaneous Enforceability.
(a) This Agreement shall not be assignable by Consultant. This
Agreement shall be assignable by the Company, if the Company shall
transfer substantially all of its assets, or the control thereof. This
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
(b) Consultant agrees to indemnify and hold the Company, its
shareholders, officers, directors, and agents, and their successors
and assigns, harmless from any and all liability, loss, costs or
expenses, including reasonable attorney fees, arising from any claim
with respect to any action that Consultant may take under this
Agreement, unless such claim results from the willful misconduct,
breach of contract or gross negligence on the part of the party
seeking indemnification.
(c) This Agreement shall be governed in all respects, whether as
to validity, construction, capacity, performance or otherwise, by the
laws of the Commonwealth of Massachusetts. The parties hereby agree
that if Consultant shall bring any legal action with respect to any
matter relating to this Agreement, such legal action shall be
commenced in a United States or state court located within the
Commonwealth of Massachusetts, and each of the parties hereto do
hereby consent to the jurisdiction of any such court.
(d) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together
shall be considered one in the same agreement.
(e) The captions to the paragraphs of this Agreement are for
convenience of reference only and shall not be considered in
construing this agreement.
7. Prior Agreements. The parties agree that this Agreement replaces
and supersedes in all respects any and all agreements, understandings or
other arrangements which may exist between Consultant and any other person
or entity affiliated with Consultant, on the one hand, and the Company and
any other person or entity affiliated with the Company, on the other hand,
prior to the execution hereof, including but not limited to (a) the
Agreement dated March 30, 1995 between Consultant and International Gene
Group, Inc. and Alvarada, Inc., (b) the Agreement executed on March 29,
1995 between Consultant and International Gene Group, Inc., (c) the
Agreement dated March 30, 1995 between Consultant and Xxxxx Xxxxx and
Xxxxxxx X. Xxxxxx, (d) the fax letter dated October 2, 1995 from Consultant
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to Messrs. Xxxxxx and Xxxxx, (e) the unexecuted draft of a Consulting
Agreement dated as of October 1, 1995 between the Company and Consultant,
and (f) the unexecuted draft of a Royalty Agreement dated as of October 1,
1995 between the Company and Consultant, all of which are hereby expressly
declared terminated and null and void. Any and all consideration to which
either party may be entitled prior to the date of this Agreement is hereby
waived and deemed no longer due or payable. It is the express intention of
the parties hereto that this Agreement be and is the total expression of
their understandings, agreements and arrangements as to all matters.
Without limiting the scope of the foregoing, the parties hereby release
each other of and from any claims or liabilities they may have against each
other, known or unknown, as of the date of this Agreement. Notwithstanding
the foregoing, if the Company fails to issue the S-8 Shares to Consultant
within sixty (60) days after the execution of this Agreement and the
satisfaction by Consultant of the requirements of Section 1(c)(i), or fails
to issue the Restricted Shares to Consultant within sixty (60) days after
the exercise by Consultant of the Restricted Shares Option and the
satisfaction of any conditions set forth in the 1996 Plan for the issuance
thereof, the agreements described in clauses (a),
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(b) and (c) of this paragraph 7 shall be reinstated and continued in full
force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
IGG INTERNATIONAL, INC.
By: _____________________________ _____________________________________
Xxxxx Xxxxx, CEO Xxxxx X. Xxxxx
Chief Executive Officer
By: _____________________________
Xxxxxxx X. Xxxxxx
President
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COMMONWEALTH OF MASSACHUSETTS
COUNTY OF MIDDLESEX, ss.
On the ___ day of _____________, 1996, before me came Xxxxx Xxxxx, to
me known, who being duly sworn, did depose and say that he is the Chief
Executive Officer of IGG International, Inc., the corporation described in
and which executed the foregoing instrument; that he is duly authorized by
all necessary corporate action to execute the foregoing instrument and that
he executed the foregoing instrument on behalf of said corporation as his
free act and deed.
_______________________________________
Notary Public
My Commission Expires:
COMMONWEALTH OF MASSACHUSETTS
COUNTY OF MIDDLESEX, ss.
On the ___ day of _____________, 1996, before me came Xxxxxxx X.
Xxxxxx, to me known, who being duly sworn, did depose and say that he is
the President of IGG International, Inc., the corporation described in and
which executed the foregoing instrument; that he is duly authorized by all
necessary corporate action to execute the foregoing instrument and that he
executed the foregoing instrument on behalf of said corporation as his free
act and deed.
__________________________
Notary Public
My Commission Expires:
STATE OF IDAHO
COUNTY OF _____________, ss.
On the ___ day of ______________, 1996, before me personally appeared
Xxxxx X. Xxxxx, to me known to be the person described in and who executed
the foregoing instrument, and acknowledged that he executed the same as his
free act and deed.
_______________________________________
Notary Public
My Commission Expires:
