EXHIBIT 10.24
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (the "Agreement") is effective as of the
18th day of May, 2001, by and between CELSION CORPORATION, a Delaware
corporation (the "Company"), and XX. XXXX XXXXXX ("Xxxxxx"), and SUNDARI
ENTERPRISES, a New Jersey corporation (the "Advisor").
In consideration of the mutual covenants and agreements
contained in this Agreement, the parties hereby agree as follows:
1. APPOINTMENT TO BOARD OF DIRECTORS; DIRECTOR'S FEES.
Xxxxxx has been appointed to the Board of Directors of the Company effective May
18, 2001, and agrees to serve as a director of the Company. Venkat's service as
a director shall terminate at the option of the Company in its sole discretion.
Compensation as a director of the Company will be comprised of:
(a) Payment of an annual director's fee in the
amount of Twenty Thousand Dollars ($20,000) payable in common stock calculated
at the closing price of the stock on the last day of the Company's fiscal year
(September 30). For fiscal year 2001, the director's fee will be prorated for
the period of service from May 18, 2001 through September 30, 2001.
(b) A grant of non-qualified stock options under the
Celsion Corporation 2001 Stock Option Plan (the "Plan") entitling Xxxxxx to
receive One Hundred Thousand (100,000) shares of common stock of the Company
with an exercise price of $0.92/share. These stock options will vest and become
exercisable in accordance with the terms of the Plan, and upon the following
schedule: options to acquire 50,000 shares shall vest on May 18, 2001 and
options to acquire 50,000 shares shall vest on May 18, 2002.
2. RETENTION OF ADVISOR; SCOPE OF SERVICES. The Company
hereby retains the Advisor and Advisor hereby agrees to provide the following
advisory services to the Company: (1) provide strategic and tactical advise to
the Company including development plans, Company positioning, contacts,
recruitment of key personnel; (2) assist the Company in developing its Heat
Activated Liposome business, including streamlining university/licensor
relationships, product development and manufacturing agreements, and the
identification and recruitment of a management team and negotiation of
appropriate strategic alliances, and development of a business plan for the Heat
Activated Liposome business to be used in attracting potential investment
partners, (3) assist the Company in developing a financial strategy and securing
equity capital and/or debt financing to fund on-going business of the Company;
and (4) identify potential investors that best meet the Company's objectives.
Xxxxxx agrees that he shall cause Advisor to perform these services in a
professional manner.
3. TIME OF PERFORMANCE OF ADVISORY SERVICES. The specific
time, schedule and place of the performance of the advisory services shall be
determined by the Advisor in its sole discretion. The Advisor shall devote a
minimum of sixty (60) days annually to the provision of the advisory services
contemplated hereunder. The Advisor agrees to be available to the Company during
normal business hours, on a regular basis, as necessary to ensure the timely and
professional performance of the duties of the Advisor hereunder.
4. COMPANY'S OBLIGATIONS. The Company shall make available
the information, resources and Company personnel and timely perform those tasks
necessary to enable Advisor to provide the services. The Company will keep the
Advisor informed on a current basis of all material developments which may
impact the financial performance of the Company, its businesses, outlook or
financial condition.
5. ADDITIONAL SERVICES. If mutually agreed, Advisor may
provide additional services to the Company not described herein, but Advisor
shall not be obligated to provide any such services unless the nature and terms
of such services and the compensation to be provided are mutually agreed in
advance in writing.
6. COMPENSATION. In consideration of the advisory services
to be provided hereunder, the Company will pay advisory fees to Xxxxxx/Advisor
as follows:
(a) A cash retainer payment in the amount of Sixty Thousand
Dollars ($60,000) per year to the Advisor to provide the
advisory services contemplated hereby, provided however
that any payments in excess of $60,000 per year to the
Advisor must be approved in writing in advance by the
Company prior to the Advisor spending more than sixty
(60) days of advisory services per year. The cash fee
shall be payable monthly to the Advisor during the Term
at $5,000 per month. Advisor agrees to keep reasonably
appropriate records of time expended by him on behalf of
the Company. Advisor shall be paid an additional fee of
$1,000 per day for any time expended by him beyond 60
days per year, subject to provisions of Article 5 above.
(b) Subject to the terms and conditions set forth in this
Agreement, the Company hereby grants to Xxxxxx
non-qualified stock options under the Plan entitling
Xxxxxx to acquire Three Hundred Thousand (300,000)
shares of common stock of the Company with an exercise
price of $0.68/share. These options will vest and become
exercisable in accordance with the terms of the Plan,
and upon the following schedule: options to acquire
150,000 shares shall vest on August 1, 2001, and options
to acquire 150,000 shares shall vest on August 1, 2002.
(c) The Company also hereby grants to Xxxxxx non-qualified
stock options under the Plan entitling Xxxxxx to acquire
up to an additional Four Hundred Thousand (400,000)
shares of common stock of the Company, which will vest
and become exercisable in accordance with the terms of
the Plan, and upon the following schedule:
(i) Options to acquire One Hundred Thousand
(100,000) shares shall vest upon completion of
satisfactory arrangements in streamlining
university/licensor relationships and product
development arrangements with a suitable third
party. The exercise price for these options
shall be 125% of the exercise price for the
options granted pursuant to Section 6(b) above.
(ii) Options to acquire One Hundred Thousand
(100,000) shares shall vest upon Company
conclusion of a strategic partner alliance for
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one or more of the Company's business. The
exercise price for these options shall be 150%
of the exercise price for the options granted
pursuant to Section 6(b) above.
(iii) Options to acquire One Hundred Thousand
(100,000) shares shall vest upon Company
conclusion of Phase I clinical studies of heat
activated liposomes. The exercise price for
these options shall be 175% of the exercise
price for the options granted pursuant to
Section 6(b) above.
(iv) Options to acquire One Hundred Thousand
(100,000) shares shall vest upon conclusion of a
definitive agreement with a strategic partner
for the sale and distribution of the Company's
heat activated liposomes. The exercise price for
these options shall be 200% of the exercise
price for the options granted pursuant to
Section 6(b) above.
(d) Subject to the terms, conditions and limitations set
forth in this Agreement and the Plan, Xxxxxx may
exercise any and all stock options granted under this
Agreement, at any time prior to 5:00 P.M. (EST) on May
1, 2011, upon notice to the Company at its principal
office at 00000-0 Xxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
00000-0000, Attention: Xxxxxxx Xxxx, President (or at
such other location as the Company may advise the
Executive in writing), at which time all unexercised
options shall expire and be of no further force or
effect.
(e) Notwithstanding any language to the contrary contained
herein, if this Agreement is in effect at the time of
the occurrence of a "Change of Control" event, all stock
options granted to Xxxxxx pursuant to Sections 1 and 6
hereof shall automatically vest 100% and immediately
become exercisable upon the occurrence of a Change of
Control event. For purposes of this Agreement, "Change
of Control" event means (A) if any Person, or
combination of Persons (as hereinafter defined), or any
affiliate of any of the above, is or becomes the
"beneficial owner" (as defined in Rule l3d-3 promulgated
under the Securities Exchange Act of 1934) directly or
indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the total number of
outstanding shares of common stock of the Company; (B)
if individuals who, at the date of this Agreement,
constitute the Board (the "Incumbent Directors") cease,
for any reason, to constitute at least a majority
thereof, provided that any new director whose election
was approved by a vote of at least 75% of the Incumbent
Directors shall be treated as an Incumbent Director; or
(C) the Company sells substantially all of its assets,
or transfers its Liposome business or substantially all
of the assets related to the Liposome business, to a
purchaser other than a subsidiary, or enters into a
joint venture with a third party with respect to the
Liposome business in which the Company does not retain
voting control. For purposes hereof, "person" shall mean
any individual, partnership, joint venture, association,
trust, or other entity, including a "group" as referred
to in section 13(d)(3) of the Securities Exchange Act of
1934.
7. REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Advisor from time to time for all reasonable and customary out-of-pocket
business expenses incurred in the performance of his duties hereunder, provided
that the Advisor has had such expenses pre-approved (either verbally or written)
and shall submit vouchers and other reasonable supporting data to substantiate
the amount of said expenses. The Company shall reimburse the Advisor for such
expenses monthly during the Term upon receipt of an invoice from the Advisor
summarizing such expenses.
8. TERM OF AGREEMENT AND PAYMENT UPON TERMINATION. Unless earlier
terminated in accordance with the provisions of this Section 8, the term (the
"Term") of this Agreement shall be for a two-year period commencing on the date
hereof and ending on May 18, 2003, provided however, that the Company shall have
the right,
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in its sole and absolute discretion, to terminate this Agreement effective as of
the one-year anniversary date of the date of this Agreement, upon written notice
to the Advisor at least thirty (30) days prior to such anniversary date (the
"Term"). The Agreement shall automatically be extended for one-year periods on
each annual anniversary date thereafter, unless either party notifies the other
party in writing of its desire to terminate this Agreement at least thirty (30)
days prior to such annual anniversary date.
During the Term hereof, the Company shall have the right
to terminate this Agreement effective upon delivery of written notice thereof to
the Advisor upon the occurrence of any of the following events:
(i) If the Advisor has breached any provisions of
this Agreement and has failed to cure such
breach within thirty (30) days of written notice
from the Company describing such breach;
(ii) If the Advisor fails or is unable for any reason
to substantially perform the duties required of
him hereunder due to a mental or physical
illness, condition, incapacity or disability,
for a continuous period of sixty (60) days;
(iii) Upon the death of Xxxxxx.
Upon termination of this Agreement for any reason, the
Advisor shall be entitled to be paid (i) an amount equal to all reimbursable
expenses the Advisor has incurred in accordance with the terms hereof, in
providing services hereunder prior to the termination date, and (ii) all fees
payable to the Advisor pursuant to Section 6(a) hereof, earned by the Advisor
with respect to the advisory services rendered prior to the date of termination,
which shall remain due and payable in full in the manner contemplated by Section
6 above. The Advisor shall render a final invoice for all reimbursable expenses.
Notwithstanding any other language to the contrary granted herein, if the
Company terminates this Agreement prior to May 18, 2003 for any reason other
than those set forth in subsections (i) - (iii) immediately above, all stock
options granted to Xxxxxx pursuant to Sections 1(b) and 6(b) hereof, shall
automatically vest 100% and immediately become exercisable for a one-year period
after the effective date of termination. Otherwise, all unvested options shall
automatically and immediately be forfeited and null and void and of no further
legal force or effect upon termination of this Agreement. Upon termination of
this Agreement, the Advisor shall immediately return to the Company all
information, records and other materials which the Company may have provided to
the Advisor and Company shall return to the Advisor any property of the Advisor
not purchased and paid for by the Company.
10. NONCOMPETITION. During the Term of this Agreement, neither
Xxxxxx nor Advisor will engage in, carry on, consult with, or otherwise
participate in as a designing or advisory Advisor, directly or indirectly, any
business in competition with the microwave cancer treatment device or liposome
drug therapy for cancer treatment that is being designed, developed,
manufactured, marketed, distributed and sold by the
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Company, either for himself, as a member of a partnership, as a stockholder
(except as a stockholder of less than one percent (1%) of the issued and
outstanding stock of a publicly-held corporation whose gross assets exceed one
hundred million dollars) or as an investor, employee, officer, director,
advisor, agent, or associate of any person, partnership, corporation or other
entity (other than the Company) that is in such business.
11. CONFIDENTIAL INFORMATION. Xxxxxx and the Advisor each agree that
the Company's business interests require a confidential relationship between the
Company and the Advisor and the fullest practical protection and confidential
treatment of all proprietary information, trade secrets and know-how of the
Company, including without limitation, all concepts, techniques, ideas,
protocols, formulae, devices, methods, designs, plans, procedures, programs,
inventions, innovations, and information regarding customers, costs, prices,
earnings, products, systems, sources of supply, and marketing, financial and
business budgets and plans (collectively the "Confidential Information"), which
the Company provides the Advisor access to in connection with the Advisor's
services under this Agreement. Xxxxxx and the Advisor each agree, both during
the Term of this Agreement and thereafter for so long as any such information
remains confidential and proprietary to the Company, to keep secret and treat
confidentially all such Confidential Information, and not to disclose, divulge,
reveal, report, publish, transfer, or use or aid others in using, any such
Confidential Information. If either Xxxxxx or the Advisor provides any of the
Company's Confidential Information to any subcontractor, the Advisor will make
certain that the subcontractor is legally obligated to maintain the
confidentiality of such information.
Xxxxxx and the Advisor each acknowledge and agree that all Confidential
Information relative to the Company's microwave technology and devices for
treating cancer, as well as all formulae and ideas concerning liposome drug
therapy, shall remain the sole and exclusive property of the Company, and all
improvements, enhancements or modifications to the Company's devices, technology
or drug therapy formulae and techniques developed by the Advisor or under
Advisor's supervision as part of his advisory services hereunder shall be the
sale and exclusive property of Celsion.
The obligation to maintain the confidentiality of such information shall
not apply to any information:
(a) which is publicly known or generally known within the
trade;
(b) which becomes publicly known or generally known within
the trade without breach of any obligation of the recipient to the disclosing
party;
(c) which is obtained by the recipient from someone not a
party to this Agreement if the recipient is not aware of any such obligation on
the part of the person or entity providing the information to keep such
information confidential; or
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(d) which is required to be disclosed by law, court order or
government regulation.
12. REMEDIES. Xxxxxx and the Advisor each recognize and acknowledge
that if Xxxxxx breaches the provisions of Sections 10 or 11, damages to the
Company would be difficult if not impossible to ascertain, and because of the
immediate and irreparable damage and loss that may be caused to the Company for
which it would have no adequate remedy, the Advisor therefore agrees that the
Company, in addition to and without limiting any other remedy or right it may
have, shall be entitled to seek an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any such breach, and Xxxxxx and the
Advisor each hereby waives any and all defenses he/it may have on the grounds of
lack of jurisdiction or competence of a court to grant such an injunction or
other equitable relief. The existence of this right shall not preclude the
applicability or exercise of any other rights and remedies at law or in equity
which the Company may have.
13. INDEPENDENT CONTRACTOR. In rendering services hereunder, the
Advisor is acting solely as an independent contractor and not as an agent,
employee or partner of the Company for any purpose. Neither Xxxxxx nor the
Advisor has any authority to bind the Company in any contractual manner nor to
represent to others than the relationship between the Company and the Advisor is
other than stated herein. The Advisor shall be responsible for filing all tax
returns and paying all federal, state, local and foreign taxes (including
without limitation, income taxes, employment taxes, unemployment taxes and
self-employment taxes) due with respect to the compensation paid to the Advisor
and Xxxxxx pursuant to Section 6 hereof. Other than the stock options granted to
Xxxxxx pursuant to Section 6 hereof, neither Xxxxxx nor the Advisor shall be
entitled as a result of any services provided under this Agreement to
participate in or receive any benefits from any employee benefit plan maintained
by the Company.
14. ARBITRATION. Subject to the provisions of Section 12, the
parties shall attempt in good faith to resolve all claims, disputes and other
disagreements arising hereunder by negotiation. In the event that a dispute
between the parties cannot be resolved within thirty (30) days of written notice
from one party to the other party, such dispute shall, at the request of either
party, after providing written notice to the other party, be submitted to
arbitration in Columbia, Maryland in accordance with the arbitration rules of
the American Arbitration Association then in effect. The notice of arbitration
shall specifically describe the claims, disputes or other matters in issue to be
submitted to arbitration. The parties shall jointly select a single arbitrator
who shall have the authority to hold hearings and to render a decision in
accordance with the arbitration rules of the American Arbitration Association.
If the parties are unable to agree within ten (10) days, the arbitrator shall be
selected by the Chief Judge of the Circuit Court for Xxxxxx County, Maryland.
The discovery rights and procedures provided by the Federal Rules of Civil
Procedure shall be available and enforceable in the arbitration proceeding. The
written decision of the arbitrator so appointed shall be conclusive and binding
on the parties and enforceable by a court of competent jurisdiction. The
expenses of the
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arbitration shall be borne equally by the parties to the arbitration, provided,
however, that each party shall pay for and bear the cost of its own experts,
evidence and legal counsel, unless rules otherwise in the arbitration. Both
parties agree to use their best efforts to cause a final decision to be rendered
with respect to the matter submitted to arbitration within sixty (60) days after
its submission.
15. REPRESENTATION BY COUNSEL. Each of the parties hereto
acknowledges that (i) it or he has read this Agreement in its entirety and
understands all of its terms and conditions, (ii) it or he has had the
opportunity to consult with any individuals of its or his choice regarding its
or his agreement to the provisions contained herein, including legal counsel of
its or his choice, and any decision not to was its or his alone, and (ii) it or
he is entering into this Agreement of its or his own free will, without coercion
from any source.
16. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement between
the parties, superseding all prior agreements, either oral or written. This
Agreement may not be amended or any provision hereof waived except by a document
signed by both parties hereto. This Agreement may not be terminated except as
provided herein.
(b) This Agreement shall be deemed to be made in and shall
be governed and construed in accordance with the laws of the State of Maryland,
excluding principles of conflicts of law. Any legal action to enforce any
arbitral awards under this Agreement shall be brought in the courts of the State
of Maryland.
(c) Any notice given under this Agreement shall be given
when delivered in person or by registered or certified mail, postage prepaid,
return receipt requested or by other delivery service providing evidence of
receipt, to the party to whom such notice is to be given at the following
address or at such other address as either party shall hereafter give notice of
to the other in writing:
If to the Company to: Celsion Corporation
00000-0 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx
If to Advisor to: Xx. Xxxx Xxxxxx
Sundari Enterprises
c/o Morphochem, Inc.
00 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxxx, Xxx Xxxxxx 00000
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(d) This Agreement shall not restrict or prevent Advisor
from pursuing other business interests or providing advisory or other services
to other parties while this Agreement is in effect.
(e) If the Company provides Advisor any documents or records
of the Company or copies thereof in connection with the services provided by the
Advisor under this Agreement, Advisor will, at the Company's request at any
time, promptly return all of such documents and records to the Company at the
Company's expense.
(f) This Agreement is effective as of the date hereof and
shall be legally binding upon and inure to the benefit of, the parties hereto
and their respective heirs, personal representatives, successors and permitted
assigns. As used herein, the term "successors" shall include without limitation,
any successor by way of share exchange, merger, consolidation, sale of all or
substantially all of the assets, or similar reorganization. Neither party may
assign any of its rights or obligations hereunder without the prior written
consent of the other party.
(g) If any one or more of the terms or provisions of this
Agreement shall for any reason be held to be invalid, illegal or unenforceable,
in whole or in part, such provision(s) shall be deemed null and void, and the
remaining provisions of this Agreement shall remain operative and in full force
and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives effective as of the date
written above.
WITNESS/ATTEST: CELSION CORPORATION
[SIG] By: /s/ XXXXXXX X. XXXXXX (SEAL)
-------------------------------- ----------------------------------
Print Name: XXXXXXX X. XXXXXX
---------------------
Title: SVP/FINANCE/CFO
--------------------------
SUNDARI ENTERPRISES
[SIG] By: /s/ XXXX XXXXXX (SEAL)
-------------------------------- ----------------------------------
Print Name: X. Xxxxxx
---------------------
Title: CHAIRMAN/CEO
--------------------------
[SIG] /s/ XXXX XXXXXX (SEAL)
-------------------------------- --------------------------------------
Xxxx Xxxxxx
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