EXHIBIT 10.18
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is entered into this 17th day
of October 2006, effective as of the Commencement Date (as defined below), by
and among Ivivi Technologies, Inc. (the "Company"), a New Jersey corporation,
having an office at 000-X Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000; Xxxxx
Consulting, Inc. (the "Consultant"), a New Jersey corporation, having an office
at 0 Xxxxxxx Xxxxx, Xxxxxxx XX 00000 and, as to Sections 3, 5, 7, 9(a), 9(b),
10, 11, 12(b) and 13 through 22 (inclusive) only, Xxxxxx Xxxxx, Ph.D. (the
"Consultant's Representative"), an individual residing at (the Company,
Consultant and Consultant's Representative, each a "Party" and collectively, the
"Parties").
WITNESSETH THAT:
WHEREAS, Consultant is in the business of providing consulting services in
the field of bio-electromagnetics and magnetic bio-effects;
WHEREAS, Consultant's Representative is an expert in the field of
bio-electromagnets and magnetic bio-effects;
WHEREAS, prior to the date of this Agreement, Consultant was engaged to
provide consulting services to the Company (the "Prior Consulting Services");
WHEREAS, the Company desires to continue to engage Consultant to provide
consulting services to the Company and Consultant desires to continue to be
engaged as a consultant to the Company, and
WHEREAS, each Party believes it to be in their respective best interests to
enter into an agreement to set forth the terms pursuant to which Consultant
shall continue to be engaged as a consultant to the Company.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and the agreements herein set forth, the Parties, intending to be
legally bound, hereby agree as follows:
1. ENGAGEMENT. The Company hereby agrees to continue to engage Consultant, and
Consultant hereby accepts the continued engagement with the Company, on the
terms and subject to the conditions set forth in this Agreement.
2. TERM. Consultant's continued engagement under this Agreement shall commence
on March 1, 2006 (the "COMMENCEMENT DATE") and, subject to earlier termination
pursuant to Section 8 hereof, shall continue until March 1, 2011 (the "TERM");
provided, however, unless either the Company or Consultant gins written notice
to the other at least ninety (90) days prior to the expiration of the
then-current Term that such Party elects not to renew this Agreement, the
then-current Term shall automatically be extended for additional one-year
periods. In no event shall the election of the Company not to extend the Term be
deemed a Without Cause Termination or a Good Reason Termination (as such
capitalized terms are defined in Section 8 below).
3. CONSULTANT'S REPRESENTATIVE. The Parties agree that the Consultant's
Representative will be assigned by Consultant to perform the Consulting Services
(as defined below), on behalf of Consultant, as Consultant's sole representative
throughout the Term. Consultant and Consultant's Representative represent and
warrant that Consultant's Representative (i) owns, and at all times during the
Term shall own, 100% of the outstanding stock of Consultant, (ii) is, and at all
times during the Term, shall be the sole director and officer of Consultant, and
(iii) is qualified and properly trained to perform the Consulting Services.
Without limitation of the foregoing, it is understood and agreed that
Consultant's Representative shall perform all duties, on behalf of Consultant,
with respect to the Consulting Services and such obligations may not be assigned
or delegated by Consultant or Consultant's Representative without the prior
written consent of the Company.
4. CONSULTING SERVICES. During the Term, Consultant shall be engaged to cause
Consultant's Representative to serve as the Science Director and the Chairman of
the Scientific Advisory Board of the Company and/or in such other position or
capacity as the Company and Consultant shall agree in writing (the "Consulting
Services"). It is understood and agreed that the scope of the Consulting
Services shall include, without limitation, the following:
(a) Causing the Consultant's Representative to serve as the Company's
Science Director and the Chairman of the Scientific Advisory Board of the
Company;
(b) Reviewing technological developments that are in the Company's best
interest and reporting the same to the Company on a periodic basis;
(c) Acting as principal investigator and providing recommendations to the
Company for future clinical research applications for the Company's
technologies;
(d) Providing instruction and assistance to the Company for all technical
and medical aspects of FDA submissions and compliance, including, without
limitation, assistance with regard to regulatory approval of products;
(e) Providing instruction and assistance to the Company for all technical
and medical aspects of marketing;
(f) Causing Consultant's Representative to represent the Company at
strategic meetings or conferences as Science Director, upon reasonable
notice by the Company;
(g) Organizing telephonic, electronic and person to person meetings with
the members of the Company's Scientific Advisory Board, as requested by the
Company;
(h) Causing Consultant's Representative to be available to attend the
Company's Board of Directors (the "Board") meetings;
-2-
(i) Responding to questions and inquiries made by the Company, either
orally or in writing, as the same maybe requested from time to time;
(j) Providing reasonable endorsement of products;
(k) Advising the Company on new product development;
(l) Providing periodic reports as to the Consulting Services and, if
requested in writing, providing time sheets indicating the amount of time
expended and the area of Consultant's services that consumed the time;
(m) Performing and providing direction for research and development of
electromagnetic and other systems, equipment, or devices for therapeutic
purposes ("DEVICES"), including, without limitation, the commercial
exploitation thereof by developing any such Devices;
(n) Performing tests and providing recommendations with respect to signal
configurations for the optimization of the Devices;
(o) Directing clinical and basic research projects related to the effect of
EMF therapy upon pain, edema, blood circulation, and tissue and bone growth
and repair in general, and, including, but not limited to, the oral cavity;
(p) Providing direction to the Company for future clinical and research
applications of its technology;
(q) Preparing and tracking all patent applications that Consultant, in
consultation with the Company's officers, deem are necessary for the
Company's successful operation;
(r) Communicating with other professionals employed or retained by the
Company;
(s) Developing, on a periodic basis, a detailed budget for all proposed
research, together with time frames and bench xxxx goals, which shall be
submitted to the Company's Chief Financial Officer, the Chairman of the
Board and other executive officers of the Company in a timely manner; and
(t) Reporting on all on-going research on at least a monthly basis,
describing the progress of the research and identifying how the research is
progressing in comparison to the budget, time frames, and goals.
Consultant shall cause Consultant's Representative to perform such duties as are
consistent with the Consulting Services. Consultant shall, and shall cause the
Consultant's Representative to, render the Consulting Services conscientiously
and devote its and their best efforts and abilities thereto, it being
acknowledged that the Consulting Services shall be non-exclusive, subject to
Consultant's and Consultant's Representative's compliance with the terms and
provisions of this Agreement, including, without limitation, Section 10 below.
Consultant shall observe, and Consultant's Representative to observe, all
applicable policies and directives promulgated from time to time by the Company
for independent contractors. Consultant shall not be required to cause
Consultant's Representative to perform any duties that would, or would be likely
to, result in non-compliance with or violation of any applicable law,
regulation, regulatory bulletin, and/or any other regulatory requirement. The
Consulting Services will be principally performed in Oakland, New Jersey and at
such other location as Consultant and the Company mutually agree.
-3-
Consultant shall cause Consultant's Representative to devote at least 450 hours
during each three (3) month period of the Term to the performance of the
Consulting Services on behalf of Consultant.
5. INDEPENDENT CONTRACTOR. It is expressly agreed that, performing the Prior
Consulting Services the Consultant was, and in performing the Consulting
Services hereunder the Consultant is, acting solely as an independent
contractor. Neither Consultant nor Consultant's Representative, in connection
with the Prior Consulting Services had, and, under this Agreement shall have,
the authority to act for, bind, or otherwise commit the Company and neither
Consultant nor Consultant's Representative shall hold itself or himself out as
having any such authority. It is expressly agreed that the acts or omissions of
Consultant and/or Consultant's Representative shall not be deemed the acts or
omissions of the Company. Consultant and Consultant's Representative acknowledge
and agree that Consultant's employees and agents (including, without limitation,
Consultant's Representative) are not, and shall not be, employees or agents of
the Company and are not, and shall not be, entitled to compensation from, or
employee benefits of, the Company. The Company shall not (a) pay any
contributions to Social Security, unemployment insurance, or federal or state
withholding taxes with respect to Consultant or the fees paid to Consultant
pursuant to this Agreement or in connection with the Prior Consulting Services,
(b) carry workers' compensation or other accident or health insurance to cover
Consultant's employees or agents (including, without limitation, Consultant's
Representative), or (c) provide any other contributions or benefits to
Consultant or Consultant's employees or agents (including, without limitation,
Consultant's Representative) that might be expected in an employer-employee
relationship and Consultant and Consultant's Representative expressly waive any
right to such participation or coverage. Consultant and Consultant's
Representative hereby expressly acknowledge and agree that (a) Consultant is an
independent contractor and that neither it nor Consultant's Representative is,
was, or shall be deemed to be or have been, an employee of the Company, (b)
neither this Agreement nor any arrangement with respect to the Prior Consulting
Services shall constitute or be evidence of any agreement or understanding,
express or implied, that Consultant or Consultant's Representative is or was an
employee of the Company or has or had any rights as an employee of the Company,
(c) except with respect to the terms explicitly set forth in this Agreement
relating to the 2004 Stock Award (as defined in Section 7 below), the Company
neither had, nor shall have, any direct or indirect obligations to Consultant's
Representative in connection with the Prior Consulting Services, this Agreement
or otherwise arising as a result of Consultant's Representative's performance
(on behalf of Consultant) of the Prior Consulting Services or the Consulting
Services, (d) with respect to any fees or other payment to Consultant under this
Agreement or in connection with the Prior Consulting Services, Consultant shall
make and pay all contributions, tax payments, estimated tax payments or other
tax liabilities, as required for itself and its employees and agents (including,
without limitation, Consultant's Representative), (c) Consultant shall bear sole
responsibility for paying compensation and providing benefits to its employees
and agents (including, without limitation, Consultant's Representative), and (f)
Consultant shall comply with applicable U.S. immigration and federal, state and
local labor and employment laws, rules and regulations with respect to its
employees and agents (including, without limitation, Consultant's
Representative). It is understood and agreed that Consultant has the fall power
and authority to enter into this Agreement and to select the means, manner and
method of performing the Consulting Services with direction by the Company and
Consultant's employees and agents (including, without limitation, Consultant's
Representative) shall at all times be under Consultant's direction and control.
Compliance by Consultant or its employee and agents (including, without
limitation, Consultant's Representative) with the Company's stated objectives or
practices shall not affect Consultant's status as an independent contractor and
shall not relieve Consultant of the obligations assumed by it under this
Agreement. Notwithstanding the foregoing, the Company shall have the right to
direct the priority of the Consulting Services to be rendered, as the Company,
in its sole discretion, determines.
-4-
6. MONTHLY CONSULTING FEES; DISCRETIONARY PERFORMANCE FEE: EXPENSES
(a) MONTHLY CONSULTING FEES. As payment for all Consulting Services
rendered by Consultant under this Agreement, the Company shall pay to Consultant
the sum of $6,300 per month (prorated for partial months) (the "MONTHLY
CONSULTING FEES"). Notwithstanding the foregoing, upon the completion of an
initial public offering of the Company's common stock (the "IPO"), the Monthly
Consulting Fees will be increased as follows: (a) if the gross proceeds of the
IPO are at least $10,000,000, the Monthly Consulting Fees will be increased to
$20,000 per month (prorated for partial months); (b) if the gross proceeds of
the IPO are greater than $5,000,000, but less than $10,000,000, the Monthly
Consulting Fees will be increased to $15,000 per month (prorated for partial
months); and (c) if the gross proceeds of the IPO are $5,000,000 or less, the
Monthly Consulting Fees will be increased to $10,000 per month (prorated for
partial months). The Monthly Consulting Fees shall be subject to periodic review
(which shall occur at least annually) and such periodic increases as the Board
or the Compensation Committee of the Board (the "COMPENSATION COMMITTEE") shall
deem appropriate in its discretion. The term "MONTHLY CONSULTING FEES" as used
in this Agreement shall refer to the Monthly Consulting Fees, as the same nay be
increased in accordance with the terms of this Section 6(a). Nothing in this
Agreement shall constitute an assurance that the Company will consummate the IPO
All Monthly Consulting Fees shall be payable without deduction for federal
income, social security, or state or local income taxes. The Monthly Consulting
Fees shall be paid on the last day of the calendar month in which they are
earned. If any Monthly Consulting Fees earned by Consultant are not paid within
thirty (30) days of the due date thereof, Consultant shall notify the Company in
writing and the Company shall have fifteen (15) days from receipt of such notice
to cure such payment, unless other arrangements have been made by mutual
agreement between Consultant and the Company. In the absence of such special
arrangement and if within the fifteen (15) days cure period the outstanding
Monthly Consulting Fees are not paid, then the outstanding Monthly Consulting
Fees shall be deemed a late payment and shall be deemed a late payment and shall
accrue interest at the Prime Rate (as defined below) from the date such Monthly
Consulting Fees were due. As used herein, "Prime Rate" means the rate set forth
as the "Prime Rate" in The Wall Street Journal published most recently prior to
the date such. past due Monthly Consulting Fees became due and payable to
Consultant.
-5-
-6- (b) PERFORMANCE FEES. In addition to the Monthly Consulting Fees,
during the Term Consultant will be eligible for an annual performance-based fee
(the "PERFORMANCE FEE"), the amount of which, if any, shall be determined in the
Board's or the Compensation Committee's sole discretion. The criteria for
determining the Performance Fee shall include, without limitation, the Company's
performance, the Company's assessment of Consultant's contributions to the
Company performance, and the level of discretionary bonuses and/or fees to be
awarded to the Company's executive level employees and agents. The Performance
Fee, if any, shall be determined as of the end of each fiscal year during the
Term and payable within sixty (60) days of the last day of each such year. To be
eligible to receive any Performance Fee (or portion thereof), Consultant must be
engaged by the Company both at the time the amount of the Performance Fee, if
any, is determined, and at the time any such Performance Fee is to be paid. All
Performance Fees shall be payable without deduction for federal income, social
security, or state or local income taxes.
(c) STOCK OPTION GRANTS. During the Term, Consultant shall be eligible to
receive from time to time stock option grants in amounts, if any, to be
determined by the Board or the Compensation Committee in its sole discretion.
Such discretionary stock option grants, if any, will be subject the terms and
conditions established within the Company's stock option plan or any successor
stock option plan as may be in place from time to time and a separate stock
option grant agreement between the Company and Consultant that sets forth, among
other things, the exercise price, expiration date and vesting schedule of such
options.
(d) EXPENSES. Consultant shall be promptly reimbursed by the Company for
all reasonable business expenses that are pre-approved by the Company, provided
that such expenses are deductible by the Company for U.S. Federal income tax
purposes and were incurred by Consultant during the Term in connection with the
performance of the Consulting Services and provided further that Consultant
promptly presents to the Company an itemized account of such expenditures,
together with supporting vouchers, in accordance with the Company's policies for
independent contractors as are in effect from time to time.
(e) NO FEES FOR SCIENTIFIC ADVISORY BOARD SERVICES. The Company and the
Consultant hereby acknowledge and agree that notwithstanding anything to the
contrary contained in this Agreement, neither the Consultant nor the
Consultant's Representative shall receive any compensation for Consultant's
Representative's services in his capacity as Chairman or a member of the
Company's Scientific Advisory Board other than reimbursement for expenses
incurred by the Consultant on behalf of the Company.
7. 2004 STOCK GRANT. Consultant's Representative acknowledges that, on January
5, 2004, the Company issued to him 140,000 shares of its common stock (the "2004
Stock Grant"), including 16,000 shares that were vested immediately upon
issuance and 124,000 shares subject to forfeiture that vest in five (5) equal
yearly installments on January 5 of each year following the year of the grant
through and including January 5, 2009 (the "Vesting Schedule"). Consultant's
Representative further acknowledges and agrees that the shares issued in
connection with the 2004 Stock Grant are subject to the Voting Agreement dated
as of January 5, 2004, as amended (the "Voting Agreement"), and Consultant's
Representative shall execute any applicable lock-up or voting right agreements
as may be required by the Company in connection with the IPO. The shares issued
in connection with the 2004 Stock Grant are further restricted by the Securities
Act of 1933 (the "Act") and Consultant's Representative will cooperate with the
Company in the preparation and execution of any documents or filings pursuant to
the Act with respect to Consultant's Representative's shares.
-6-
8. TERMINATION EVENTS. This Agreement and Consultant's engagement to provide the
Consulting Services hereunder may be terminated as follows:
(a) DEATH. In the event of Consultant's Representative's death, this
Agreement and the Consultant's engagement to perform the Consulting Services
shall automatically terminate on the date of death.
(b) DISABILITY. In the event of Consultant's Representative's Disability
(as defined below), the Company may terminate this Agreement and Consultant's
engagement to perform the Consulting Services upon notice to Consultant. As used
in this Agreement, "Disability" means a physical or mental disability that
prevents Consultant's Representative from performing, on behalf of Consultant,
the Consulting Services for a period of at least 90 consecutive days in any
12-month period or 120 non-consecutive days in any 12-month period.
Notwithstanding any physical or mental disability that prevents Consultant's
Representative from performing, on behalf of Consultant, the Consulting
Services, (i) the Company shall continue to pay the Consulting Fees to
Consultant, and (ii) the shares of stock granted to Consultant's Representative
in connection with the 2004 Stock Grant shall continue to vest in accordance
with the Vesting Schedule, in each case, through and until the date that the
Company terminates this Agreement and Consultant's engagement to perform the
Consulting Services as a result of Consultant's Representative's Disability.
(c) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate this
Agreement and Consultant's engagement to perform the Consulting Services
hereunder at any time for Cause (as defined below) by delivering a written
notice of termination to Consultant (a "Termination for Cause") As used in this
Agreement, "Cause" shall mean:
(i) the continued failure by Consultant to follow, or cause
Consultant's Representative to follow, the lawful duties delegated to Consultant
by the Company's Chief Executive Officer, the Company's President and/or the
Board (other than a failure resulting from an illness or other incapacity of
Consultant's Representative) ten (10) days following written notice of such
failure is delivered to Consultant on behalf of the Company that specifically
identifies the manner in which it is alleged that Consultant has not
substantially performed, or caused Consultant's Representatives to perform, such
duties;
(ii) Consultant's and/or Consultant's Representative's willful
misconduct or gross negligence that is, or reasonably could be expected to be,
injurious in the reasonable discretion of the Company to the business,
operations or reputation of the Company (monetarily or otherwise);
(iii) Consultant's and/or Consultant's Representative's commission of
a fraudulent, illegal or dishonest act in respect of the Company,
-7-
(iv) Consultant's failure to adhere, or cause Consultant's
Representative to adhere, to any applicable policy or procedure of the Company,
which failure has, or reasonably could be expected to hay; an adverse effect on
the business, operations or reputation of the Company (monetarily or otherwise);
(v) Consultant's or Consultant's Representative's conviction of, or
guilty or nolo contendere plea to, a felony or other criminal act involving
moral turpitude; or
(vi) Consultant's or Consultant's Representative's breach of any of
the terms of Section 10 of this Agreement or other material breach of its or his
representations, warranties, covenants or other obligations set forth in this
Agreement.
The Company's termination of this Agreement and Consultant's engagement to
perform the Consulting Services hereunder shall not be deemed a `Termination for
Cause" unless and until there shall have been delivered to Consultant a copy of
a resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to Consultant and Consultant
is given an opportunity, together with counsel, to be heard before such Board),
finding that, in the good faith opinion of such Board, Consultant and/or
Consultant's Representative is guilty of the conduct described in any of
subparagraphs (i)-(vi) (inclusive) above, and specifying the particulars thereof
in detail.
(d) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate
this Agreement and Consultant's engagement to perform the Consulting Services
hereunder at any time for no reason or any reason (other than for Cause or as a
result of Consultant's Representative's death or Disability) by delivering a
written notice to Consultant (a "WITHOUT CAUSE TERMINATION").
(e) VOLUNTARY TERMINATION BY CONSULTANT. Consultant may voluntarily
terminate this Agreement and Consultant's engagement to perform the Consulting
Services hereunder other than for Good Reason (as defined below) by giving the
Company sixty (60) days advance written notice of termination (a "VOLUNTARY
TERMINATION"); provided, however, the Company reserves the right to accept
Consultant's notice of Voluntary Termination and to accelerate such notice and
make the termination of this Agreement and Consultant's engagement to perform
the Consulting Services hereunder effective immediately, or on any other date
prior to the date set forth in Consultant's notice of Voluntary Termination as
Consultant deems appropriate.
(f) TERMINATION BY CONSULTANT FOR GOOD REASON. Consultant may terminate
this Agreement and Consultant's engagement to perform the Consulting Services
hereunder for Good Reason by giving the Company written notice of termination (a
"GOOD REASON TERMINATION"). As used in this Agreement, "GOOD REASON" shall mean,
in the absence of a written consent of Consultant:
(i) the failure of the Company to pay any Monthly Consulting Fees due
to Consultant or the reduction by the Company in the amount of the Monthly
Consulting Fees due to Consultant, other than failures and/or reductions that
are remedied by the Company within 30 days after receipt of written notice
thereof given by Consultant;
-8-
(ii) any material failure by the Company to comply with any material
provision of this Agreement, other than failures that are remedied by the
Company within thirty (30) days after receipt of written notice thereof given by
Consultant; or
(iii) the Company's continued requirement that Consultant perform
services that would result in a non-compliance with or violation of any
applicable law, regulation, regulatory bulletin, and or other regulatory
requirement thirty (30) days after the Company's receipt of written notice from
Consultant that sets forth the basis for Consultant's objection to performing
such services.
(g) MUTUAL AGREEMENT. This Agreement and Consultant's engagement to perform
the Consulting Services hereunder may be terminated at any time pursuant to a
mutual written agreement between the Company and Consultant (a "MUTUAL
TERMINATION").
(h) EXPIRATION OF TERM. This Agreement and Consultant's engagement to
perform the Consulting Services shall automatically terminate upon expiration of
the Term.
9. EFFECT OF TERMINATION.
(a) TERMINATION BY THE COMPANY FOR CAUSE; TERMINATION BY CONSULTANT WITHOUT
GOOD REASON: MUTUAL AGREEMENT. In the event that this Agreement and Consultant's
engagement to perform the Consulting Services is terminated as a result of a
Termination for Cause, a Voluntary Termination, or a Mutual Termination, then
this Agreement, the Consulting Period and Consultant's engagement to perform the
Consulting Services shall terminate and the Company's sole obligation under this
Agreement or otherwise shall be to (i) pay to Consultant any Monthly Consulting
Fees earned, but not yet paid, through the effective date of termination, and
(ii) pay or reimburse Consultant for any expenses incurred by Consultant through
the effective date of termination in accordance with Section 6(d) above
(collectively, the "ACCRUED OBLIGATIONS"). Consultant's Representative
understands and agrees that, in the event of a Termination for Cause, a
Voluntary Termination, or a Mutual Termination, all shares of stock issued to
Consultant's Representative in connection with the 2004 Stock Grant that have
not vested prior to the effective date of termination shall be forfeited
(b) DEATH; DISABILITY. In the event that this Agreement and Consultant's
engagement to perform the Consulting Services is terminated as a result of
Consultant's Representative's death or Disability, then this Agreement, the
Consulting Period and Consultant's engagement to perform the Consulting Services
shall terminate and the Company's sole obligation under this Agreement or
otherwise shall be to (i) pay to Consultant the Accrued Obligations, and (ii)
subject to Consultant's and Consultant's Representative's or Consultant's
Representative's estates', as applicable, execution, delivery and non-revocation
of a general release in a form satisfactory to the Company (the "RELEASE")
(which Release, among other things, will include a general release of the
Company, its affiliates and their respective officers, directors, managers,
members, shareholders, partners, employees and agents, as well as their
respective successors and assigns from all liability and such other terms deemed
necessary by the Company for its protection), continue to pay to Consultant the
Monthly Consulting Fees in accordance with Section 6(a) above for a period of
twelve (12) months following the effective date of termination. Consultant's
Representative understands and agrees that, in the event that this Agreement and
Consultant's engagement to perform the Consulting Services is terminated as a
result of Consultant's Representative's death of Disability, all shares of stock
issued to Consultant's Representative in connection with the 2004 Stock Grant
that have not vested prior to the date of Consultant's Representative's death or
the date that this Agreement is terminated as a result of Consultant's
Representative's Disability, as applicable, shall be forfeited.
-9-
(c) WITHOUT CAUSE TERMINATION; GOOD REASON TERMINATION.
(i) In the event that this Agreement and Consultant's engagement to
perform the Consulting Services is terminated as a result of a Without Cause
Termination or a Good Reason Termination prior to the seven (7) year anniversary
of the Commencement Date, then this Agreement, the Consulting Period and
Consultant's engagement to perform the Consulting Services shall terminate and
the Company's sole obligation under this Agreement or otherwise shall be to (A)
pay to Consultant the Accrued Obligations, and (B) subject to Consultant's and
Consultant's Representative's execution, delivery and non-revocation of the
Release, continue to pay to Consultant the Monthly Consulting Fees in accordance
with Section 6(a) for a period of twenty-four (24) months following the
effective date of termination.
(ii) In the event that this Agreement and Consultant's engagement to
perform the Consulting Services is terminated as a result of a Without Cause
Termination or a Good Reason Termination after the seven (7) year anniversary of
the Commencement Date, then this Agreement, the Consulting Period and
Consultant's engagement to perform the Consulting Services shall terminate and
the Company's sole obligation under this Agreement or otherwise shall be to (A)
pay to Consultant the Accrued Obligations, and (B) subject to Consultant's and
Consultant's Representative's execution, delivery and non-revocation of the
Release, continue to pay to Consultant the Monthly Consulting Fees in accordance
with Section 6(a) for a period of twelve (12) months following the effective
date of termination.
[The Company acknowledges and agrees that, in the event of a Termination
without Cause or a Good Reason Termination, the shares of the Company's common
stock issued to Consultant's Representative in connection with the 2004 Stock
Grant shall continue to vest in accordance with the Vesting Schedule; provided,
however, in the event of a Termination without Cause or a Good Reason
Termination: within twelve (12) months following a Change of Control (as defined
below), all such shares of common stock of the Company that were granted to
Consultant's Representative in connection with the 2004 Stock Grant shall be
deemed fully vested upon the date of termination.] As used in this Agreement,
"Change of Control" means:
(A) Any "person" (as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the "beneficial owner"
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 50% of the total voting
power represented by the Company's then outstanding voting securities;
provided, however, the consummation of the IPO and/or the exercise or
conversion of any instruments as of the closing date of the 1PO tail not be
deemed a Change of Control;
-10-
(B) The consummation of a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least
fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately
alter such merger or consolidation; or
(C) The consummation of the sale or disposition by the Company of all or
substantially all of the Company's assets.
(d) EXPIRATION OF TERM.
(i) In the event that this Agreement and Consultant's engagement to
perform the Consulting Services terminates upon the expiration of the Term as a
result of Consultant's notice to the Company of its election not to renew this
Agreement or the Company's notice to Consultant of its election not to renew
this Agreement beyond the seven (7) year anniversary of the Commencement Date,
then this Agreement, the Consulting Period and the Consultant's engagement to
perform the Consulting Services shall terminate and the Company's sole
obligation under this Agreement or otherwise shall be to pay to Consultant the
Accrued Obligations.
(ii) In the event that this Agreement and Consultant's engagement to
perform the Consulting Services terminates upon the expiration of the Term as a
result of the Company's notice to Consultant of its election not to renew this
Agreement beyond the initial five (5) year Term or beyond the first one (1) year
renewal of the Term, then this Agreement, the Consulting Period and the
Consultant's engagement to perform the Consulting Services shall terminate and
the Company's sole obligation under this Agreement or otherwise shall be to (A)
pay to Consultant the Accrued Obligations, and (B) subject to Consultant's and
Consultant's Representative's execution, delivery and non-revocation of the
Release, continue to pay to Consultant the Monthly Consulting Fees in accordance
with Section 6(a) for a period of twenty-four (24) months following the
effective date of termination.
All Accrued Obligations shall be paid to Consultant on the last day of the
calendar month following the effective date of this Agreement and Consultant's
engagement to perform the Consulting Agreement. Except with respect to the
Accrued Obligations, any payments required to be made by the Company to
Consultant following the termination of this Agreement shall commence on the
first business day of the calendar month following the 8th day after
Consultant's and Consultant's Representative's execution and delivery of the
Release; provided, however, that if necessary to comply with the restriction in
Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended (the
"CODE") concerning payments to "specified employees," such payments shall not
commence until the first business day of the seventh month following the
effective date of termination and the first such payment shall include the
cumulative amount of any payments that would have been paid prior to such date
if not for such restriction. Consultant shall have no obligation to seek a
substitute engagement or otherwise mitigate the Company's obligations to make
the payments set forth in this Section 9.
-11-
10. CONFIDENTIAL INFORMATION, DEVELOPMENTS: NON-SOLICITATION AND
NON-COMPETITION, AND OTHER COVENANTS.
(a) CONFIDENTIAL INFORMATION. Consultant and Consultant's Representative
acknowledge that, in connection with the Prior Consulting Services Consultant
and Consultant's Representative were afforded, and, in connection with the
Consulting Services under this Agreement Consultant and Consultant's
Representative will be afforded, access to Confidential Information relating to
the Company, its business, potential business or that of its customers and
vendors. "CONFIDENTIAL INFORMATION" includes all trade secrets, know-how,
show-how, theories, technical, operating, financial, and other business
information, whether or not reduced to writing or other medium and whether or
not marked or labeled confidential, proprietary or the like, specifically
including, but not limited to, information regarding source codes, software
programs, computer systems, algorithms, formulae, concepts, creations, costs,
plans, materials, enhancements, research, specifications, works of authorship,
techniques, documentation, models and systems, sales and pricing techniques,
designs, inventions, discoveries, products, improvements, modifications,
methodology, processes, concepts, records, files, memoranda, reports, plans,
proposals, price lists, customer, client, and supplier lists and information,
product development and project procedures. Confidential Information does not
include (i) general skills, experience, or information that is generally
available to the public, other than information that has become generally
available as a result of Consultant's or any if its employee's or agents' direct
or indirect act or omission, or (ii) information that is required to be
disclosed pursuant to any applicable law, regulation, judicial or administrative
order or decree, or request by any other regulatory organization having
authority pursuant to law; provided, however, that Consultant and/or
Consultant's employees or agents (including, without limitation, Consultant's
Representative), as applicable, shall have first given written notice to the
Company to afford it a reasonable opportunity to obtain a protective order
requiring that the Confidential Information not be disclosed and, in the event
such protective order is not obtained, Consultant and/or its employees or agents
(including, without limitation, Consultant's Representative), as applicable,
shall disclose only that portion of the Confidential Information that Consultant
or Consultant's Representative is legally obligated to disclose.
With respect to Confidential Information of the Company and its customers
and vendors:
(i) Consultant and its employees and agents (including, without
limitation, Consultant's Representative) have used, and will use, Confidential
Information only in the performance of the Prior Consulting Services and the
Consulting Services for the Company Neither Consultant nor any of its employees
or agents (including, without limitation, Consultant's Representative) have
used, or will use, Confidential Information at any time (during or after
Consultant's engagement by the Company) for its or their own personal benefit,
for the benefit of any other individual or entity, or in any manner adverse to
the interests of the Company or its customers or vendors;
-12-
(ii) Neither Consultant nor its employees and agents (including,
without limitation, Consultant's Representative) have disclosed, or will
disclose, Confidential Information at any time (during or after Consultant's
engagement by the Company) except to authorized Company personnel, unless the
Company consented or consents in advance in writing or unless the Confidential
Information indisputably became or becomes of public knowledge or enters the
public domain (other than through Consultant's or its employees' or agents'
direct or indirect act or omission);
(iii) Consultant and its employees and agents (including, without
limitation, Consultant's Representative) have safeguarded, and will safeguard,
the Confidential Information by all reasonable steps and have abided by, and
will continue to abide by, all policies and procedures of the Company in effect
from time to time regarding storage, copying, destruction, and handling of
documents;
(iv) Consultant and Consultant's Representative acknowledge that the
Company may be required to sign non-disclosure or confidentiality agreements
with customers or vendors, prospective customers or vendors, and other third
parties in which the Company agrees that its employees and agents (and its
agents' employees and agents) will not disclose Confidential Information of such
customers or vendors, prospective customers or vendors, or other third parties.
By executing this Agreement, Consultant and Consultant's Representative
acknowledge and agree that the Company may rely, and will rely, on this
Agreement for purposes of entering into such other agreements. Further,
Consultant and Consultant's Representative will execute and abide by all
confidentiality agreements reasonably requested by the Company's customers, or
vendors, prospective customers or vendors, and other third parties; and
(v) Consultant and its employees and agents (including, without
limitation, Consultant's Representative) will return all materials, substances,
models, software, prototypes and the like containing and/or relating to
Confidential Information, together with all other property of the Company and
its customers and vendors to the Company when Consultant's consulting
relationship with the Company terminates or otherwise on demand and, at that
time Consultant and Consultant's Representative will certify to the Company, in
writing, that Consultant and its employees and agents (including, without
limitation, Consultant's Representative) have complied with this Agreement.
Neither Consultant nor its employees and agents (including, without limitation,
Consultant's Representative) shall retain any copies or reproductions of
correspondence, memoranda, reports, notebooks, drawings, photographs, databases,
diskettes, or other documents or electronically stored information of any kind
relating in any way to the business, potential business or affairs of the
Company and its customers and vendors.
(b) DEVELOPMENTS. Consultant and Consultant's Representative have
disclosed, and will disclose, promptly and fully to the Company and to no one
else: (i) all inventions, ideas, improvements, discoveries, works,
modifications, processes, software programs, works of authorship, documentation,
formulae, techniques, designs, methods, trade secrets, technical specifications
and technical data, know-how and show-how, concepts, expressions or other
developments whatsoever or any interest therein (whether or not patentable or
-13-
registrable under copyright, trademark or similar statutes or subject to
analogous protection) made, authored, devised, developed, discovered, reduced to
practice, conceived or otherwise obtained by Consultant, Consultant's
Representative or Consultant's other employees and agents (collectively,
together with all patent rights, copyrights, trade secret rights and other
intellectual property rights, worldwide, and the right to xxx for present, past
and future infringements thereof, the "Developments"), solely or jointly with
others, during the course of Consultant's engagement by the Company (whether
prior to or after the date of this Agreement) that (A) are related to the
business of the Company or any of the products or services being researched,
developed, distributed, manufactured or sold by the Company or which may be used
in relation therewith or (B) result from tasks assigned to Consultant,
Consultant's Representative or any other employee or agent of Consultant by the
Company; (ii) any Development that is related to the business of the Company and
in which Consultant and/or Consultant's Representative had an assignable
interest at the time of Consultant first engagement by the Company, (iii) any
Development made using the time, materials or facilities of the Company, even if
such Development does not relate to the business of the Company. The
determination as to whether a Development is related to the business of the
Company shall be made solely by an authorized representative of the Company. Any
Development relating to the business of the Company disclosed within six (6)
months following the termination of Consultant's engagement by the Company shall
be deemed to fall within the provisions of this Section 10(b). The "business of
the Company" as used in this Section 10(b) includes the actual business
currently conducted by the Company, as well as any business conducted by the
Company during the course of the Prior Consulting Services and any business in
which the Company proposes to engage at any time during the period of
Consultant's engagement. Consultant and Consultant's Representative agree that,
to the maximum extent possible, all such Developments listed above and the
benefits thereof are and shall immediately become the sole and absolute property
of the Company from conception, as "works made for hire" (as that term is used
under the U.S. Copyright Act of 1976, as amended) or otherwise. Neither
Consultant nor Consultant's Representative shall have an interest in any
Developments. To the extent that title to any Developments or any materials
comprising or including any Developments did not or does not, by operation of
law, vest in the Company, Consultant and Consultant's Representative hereby
irrevocably assign to the Company all of Consultant's and Consultant's
Representative's right, title and interest (including, without limitation,
tangible and intangible rights such as patent rights, trademarks, copyrights and
all other intellectual property rights, worldwide, and the right to xxx for
present, past and future infringements thereof) that Consultant and/or
Consultant's Representative may have or may acquire in and to all such
Developments, benefits and/or rights resulting therefrom, and agree promptly to
execute any further specific assignments related to such Developments, benefits
and/or rights at the request of the Company- Consultant and Consultant's
Representative also hereby assign to the Company, or waive if not assignable,
all of Consultant's and/or Consultant's Representative's "moral rights" in and
to all such Developments, and agree promptly to execute any further specific
assignments or waivers related to moral rights at the request of the Company.
Consultant and Consultant's Representative agree to assist the Company without
charge for so long as Consultant is engaged by the Company and for as long
thereafter as may be necessary (but at the Company's expense including
reasonable compensation to Consultant and/or Consultant's Representative if
Consultant is no longer engaged by the Company): (1) to apply, obtain, register
and renew for, and vest in, the Company's benefit alone (unless the Company
otherwise directs), patents, trademarks, copyrights, mask works, and other
protection for such Developments in all countries, and (2) in any controversy or
legal proceeding relating to Developments.
-14-
In the event that the Company is unable to secure Consultant's and/or
Consultant's Representative's signature after reasonable effort in connection
with any patent, trademark, copyright, mask work or other similar protection
relating to a Development, Consultant and Consultant's Representative hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as Consultant's and Consultant's Representative's agent and
attorney-in-fact, to act for and on Consultant's and Consultant's
Representative's behalf and stead to execute and file any such application and
to do all other lawfully permitted acts to further the prosecution and issuance
of patents, trademarks, copyrights, mask works or other similar protection
thereon with the same legal force and effect as if executed by Consultant or
Consultant's Representative.
(c) COVENANT AGAINST COMPETITION AND SOLICITATION.
(i) Consultant and Consultant's Representative acknowledge and
understand that, in view of the nature of Consultant's engagement by the
Company, Consultant's and Consultant's Representative's relationship with the
Company will afford Consultant and its employees and agents (including, without
limitation, the Consultant's Representative) extensive access to Confidential
Information of the Company. Consultant and Consultant's Representative therefore
agree that during the Restricted Period (as defined below), neither Consultant
nor Consultant's Representative shall, anywhere in the world, either directly or
indirectly, as an owner, stockholder, member, partner, joint venturer, officer,
director, consultant, independent contractor, agent, or employee, with or
without remuneration, engage in any business or other commercial activity that
is engaged in or is seeking to engage in the business of (i) designing,
developing and/or commercializing electrotherapeutic technologies or (ii)
designing, developing, marketing, selling, distributing and/or providing any
products or services that are of the same nature as a product or service
provided by the Company or a product or service which the Company is developing
or seeking to provide and of which the Consultant or Consultant's Representative
has knowledge. Notwithstanding the foregoing, nothing herein shall be deemed to
prohibit Consultant's or any Consultant's Representative's ownership of less
than 5% of the outstanding shares of any publicly traded corporation that
conducts a competitive business. As used in this Agreement, "Restricted Period"
means during the course of Consultant's engagement by the Company and a period
following the termination of Consultant's engagement by the Company (for any
reason or no reason and regardless of which Party initiated the termination)
equal to the longer (i) eighteen (18) months, and (ii) the period, if any,
following termination of Consultant's engagement by the Company during which the
Company continues to pay Consultant the Monthly Consulting Fees in accordance
with the terms of Section 9 above.
(ii) Consultant and Consultant's Representative further agree that,
during the Restricted Period, neither nor Consultant's Representative shall,
directly or indirectly, either on its or his own behalf or on behalf of any
other individual or commercial enterprise: (A) contact, communicate, solicit, or
transact any business with or assist any third party in contacting,
communicating, soliciting, or transacting any business with (1) any of the
customers, or vendors of the Company, (2) any prospective customers or vendors
of the Company being solicited (with the knowledge of Consultant or Consultant's
Representative) at the time of the termination of Consultant's engagement, or
(3) any individual or entity who or which was within the most recent twelve (12)
month period a customer or vendor of the Company, for the purpose of inducing
-15-
such client, customer or vendor or prospective client, customer or vendor to be
connected to or benefit from any business competitive with that of the Company
or to terminate its or their business relationship with the Company, (B) perform
services related to those provided by the Company for (or assist any third party
arty in performing services related to those provided by the Company for) any
individual or entity who or which is or was (within the most recent twelve (12)
month period) a customer of the Company; (C) solicit, induce or assist any third
party in soliciting or inducing any individual or entity who or which is then
(or was at any time within the preceding 12 months) an employee, consultant,
independent contractor, or agent of the Company to leave the employment of the
Company or cease performing services for the Company, (D) hire or engage or
assist any third party in hiring or engaging, any individual or entity who or
which is or was (at any time within the preceding 12 months) an employee,
consultant, independent contractor, or agent of the Company, or (B) solicit,
induce or assist any third party in soliciting or inducing any other person or
entity (including, without limitation, any third-party service provider or
distributor) to terminate its relationship with the Company or otherwise
interfere with such relationship.
(d) NON-DISPARAGEMENT. Consultant and Consultant's Representative agree
that during the Term and all times thereafter, neither Consultant nor
Consultant's Representative shall disparage the reputation of the Company or any
of its officers, directors, employees, or representatives. The Company agrees
that it will instruct its officers and directors to refrain from disparaging the
reputation of Consultant or Consultant's Representative.
(e) REASONABLE RESTRICTIONS. Consultant and Consultant's Representative
acknowledge and agree that the restrictions on the activities in which
Consultant and Consultant's Representative may engage that are set forth in this
Section 10 and the location and period of time for which such restrictions apply
are reasonable and necessary to protect the Company's legitimate business
interests. In the event of Consultant's or Consultant's Representative's breach
or threat of breach of any of the provisions set forth in this Section 10, the
Company would suffer irreparable harm and damages would be an inadequate remedy.
Consultant and Consultant's Representative further acknowledge that the business
of the Company is global and, accordingly, the restrictions cannot be limited to
a particular geographic area. Consultant and Consultant's Representative hereby
waive the right to assert the defense that such breach or violation can be
compensated adequately in damages at law. Accordingly, Consultant and
Consultant's Representative agree that, in the event of Consultant's or
Consultant's Representative's breach or threatened breach of any of the
provisions of this Section 10, the Company shall be entitled to temporary,
preliminary and permanent injunctive or other equitable relief in any court of
competent jurisdiction (without being obligated to post a bond or other
collateral) and to an equitable accounting of all earnings, profits and other
benefits arising, directly or indirectly, from such violation, which rights
shall be cumulative and in addition to (rather than instead of) any other rights
or remedies to which the Company may be entitled at law or in equity. In
addition (and not instead of those rights), Consultant and Consultant's
Representative farther covenant that Consultant and Consultant's Representative
shall be responsible for payment of the fees and expenses of the Company's
attorneys and experts, as well as the Company's court or forum costs, pertaining
to any suit, arbitration, mediation, action or other proceeding (including the
costs of any investigation related thereto) arising directly or indirectly out
of Consultant's or Consultant's Representative's violation or threatened
violation of any of the provisions of this Section 10. Consultant and
Consultant's Representative further understand and agree that, in addition to
any of the remedies set forth above or otherwise at law or in equity, any
post-termination payments owed to Consultant pursuant to Sections 9(b), 9(c) or
9(d)(ii) will be forfeited in the event of Consultant's or Consultant's
Representative's breach of any of its or his obligations under this Section 10
or any other provision of this Agreement that survives termination of this
Agreement. Consultant and Consultant's Representative understand and agree that
its and his obligations under this Section 10 shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right that Consultant and/or Consultant's
Representative may have against the Company.
-16-
(f) SEPARATE COVENANTS. in the event that any court of competent
jurisdiction shall determine that any one or more of the provisions of this
Section 10 shall be unenforceable in any respect, then such provision shall be
deemed limited and restricted to the extent that the court shall deem the
provision to be enforceable. It is the intention of the parties hereto that the
covenants and restrictions set forth in Section 10 be given the broadest
interpretation permitted by law. The invalidity or unenforceability of any
provision of Section 10 shall not affect the validity or enforceability of any
other provisions thereof The covenants and restrictions contained in Section 10
shall be deemed a series of separate covenants and restrictions. If, in any
judicial proceeding, a court of competent jurisdiction should refuse to enforce
all of the separate covenants and restrictions in Section 10, then such
unenforceable covenants and restrictions shall be deemed eliminated from the
provisions of Section 10 for the purpose of such proceeding to the extent
necessary to permit the remaining separate covenants and restrictions to be
enforced in such proceeding.
11. INDEMNIFICATION. Consultant and Consultant's Representative hereby indemnify
the Company and holds it harmless from any and all losses, suits, actions,
judgments, penalties, fines, costs, damages, liabilities or claims of any kind
or nature, whether joint or several (Including, without limitation, reasonable
legal or any other expenses incurred by the Company in connection with the
preparation for or defense of any actions, claim or proceeding, whether or not
resulting in any all liability) to which the Company may become subject or
liable or which may be incurred by or assessed against the Company under any
statute, common law, contract or otherwise arising out of (a) Consultant's
performance (or Consultant's Representative's performance on behalf of
Consultant) of the services in connection with the Prior Consulting Services or
the Consulting Services pursuant to this Agreement, including, without
limitation, any actions or omissions by Consultant's Representative, (b)
Consultant's failure to make or pay all contributions, tax payments, estimated
tax payments or other tax liabilities, pay compensation and provide benefits to
its employees and agents, or comply with applicable immigration, labor, and
employment laws, rules and regulations as required by Section 5 of this
Agreement, (c) Consultant's and/or the Consultant's Representative's breach of
any of the provisions of Section 10, or (iv) the Consultant's and/or the
Consultant's Representative's material breach of any of the other
representations, terms or provisions of this Agreement or the arrangement
pertaining to the Prior Consulting Services. The indemnity and expense
reimbursement agreement and obligations set forth herein shall be in addition to
any other rights, remedies or indemnification that the Company may have or be
entitled to at common law or otherwise.
-17-
12. REPRESENTATIONS AND WARRANTIES.
(a) Consultant represents and warrants to the Company that (i) Consultant
has the legal authority to execute and perform this Agreement, (ii) this
Agreement is a valid and binding agreement enforceable against Consultant
according to its terms, (iii) has consulted with its attorneys and financial
advisors with respect to the terms of this Agreement (specifically including,
without limitation the provisions of Section 10), (iv) Consultant has at no time
assigned or otherwise transferred any interest in any Development (including,
but not limited to, any Developments arising from the Prior Consulting
Services), to any third party, or granted any third party any license,
permission, or other right with respect to any such Development, or permitted
any lien, security interest or other encumbrance to be imposed on any such
Development, or entered into any contract or other arrangement pursuant to which
the Consultant has agreed to any of the foregoing and (v) the execution and
delivery by Consultant of this Agreement does not, and the performance by the
Consultant of Consultant's obligations hereunder will not, with or without the
giving of notice or the passage of time, or both (A) violate any judgment, writ,
injunction, or order of any court, arbitrator, or governmental agency applicable
to the Consultant, or (B) conflict with, result in the breach of any provisions
of or the termination of, or constitute a default under, any agreement
(including, without limitation, any confidentiality, non-solicitation,
non-competition or similar agreement) to which Consultant is a party or by which
Consultant may otherwise be bound. Consultant acknowledges and agrees that the
Company has fully satisfied all of its obligations to Consultant with respect to
the Prior Consulting Services and that Consultant has no rights or claims
against the Company or its directors, officers, managers, members, shareholders,
partners, employees or agents, due to, arising out of or relating to, the Prior
Consulting Services, the obligations of the Parties with respect thereto, the
services performed by Consultant and/or the Consultant's Representative in
connection with the Prior Consulting Services or other consulting arrangement
or understanding (including, without limitation, any claims to severance
benefits or compensation of any kind) or otherwise
(b) Consultant's Representative represents and warrants to the Company that
(i) Consultant's Representative has the legal authority to execute and perform
and perform his obligations under Agreement, (ii) this Agreement is a valid and
binding agreement enforceable against Consultant's Representative according to
its terms, (iii) Consultant's Representative has consulted with his attorneys
and financial advisors with respect to the terms of this Agreement (specifically
including, without limitation, the provisions of Section 10), (iv) Consultant's
Representative has at no time assigned or otherwise transferred any interest in
any Development (including, but not limited to, any Developments arising from
the Prior Consulting Services), to any third party, or granted any third party
any license, permission or other right with respect to any such Development, or
permitted any lien, security interest or other encumbrance to be imposed on any
such Development, or entered into any contract or other arrangement pursuant to
which the Consultant's Representative has agreed to do of the foregoing and (v)
the execution and delivery by Representative of this Agreement does not, and the
performance by Consultant's Representative (on behalf of Consultant) of the
Consulting Services and the performance of his obligations hereunder will not,
with or without the giving of notice or the passage of time, or both (A) violate
any judgment, writ, injunction, or order of any court, arbitrator, or
governmental agency applicable to Consultant's Representative, or (B) conflict
with, result in the breach of any provisions of or the termination of, or
constitute a default under, any agreement (including, without limitation, any
confidentiality, non-solicitation, non-competition or similar agreement) to
which Consultant's Representative is a party or by which Consultant's
-18-
Representative may otherwise be bound. Consultant's Representative acknowledges
and agrees that he has no rights or claims against the Company or its directors,
officers, managers, members, shareholders, partners, employees or agents, due
to, arising out of or relating to, the Prior Consulting Services, the
obligations of the Parties thereunder, the services performed by Consultant
and/or Consultant's Representative in connection with the Prior Consulting
Services or other consulting arrangement or understanding (including, without
limitation, any claims to severance benefits or compensation of any kind) or
otherwise. Consultant's Representative understands that the Company may, for its
own benefit and in its sole discretion, maintain "key-man" life and disability
insurance policies with respect to Consultant's Representative and Consultant's
Representative agrees to cooperate with the Company in connection with the
Company's obtaining and maintaining such policies.
13. BINDING EFFECT: DELEGATION OF DUTIES PROHIBITED. This Agreement shall inure
to the benefit of, and shall be binding upon, the Company and Consultant and
their respective successors and assigns (including any entity with which the
Company may merge or consolidate or to which all or substantially all of its
assets may be transferred). With respect to Section 3,5,7, 9(a), 9(b), 10, 11,
12)b), and 13 through 22 (inclusive) only, this Agreement also shall be binding
upon Consultant's Representative and his heirs, executors and assigns. The
duties and covenants of Consultant and Consultant's Representative, being
personal, may not be delegated or assigned.
14. NOTICE. All notices, requests, demands and other communications required or
permitted hereunder shall be given in writing and shall be deemed to have been
duly given (a) on the date delivered if personally delivered, (b) on the date
sent by telecopier with automatic confirmation by the transmitting machine
showing the proper number of pages were transmitted without error, (c) upon
receipt by the receiving party of any notice sent by registered or certified
mail (first-class mail, postage pre-paid, return receipt requested) or (d) on
the date targeted for delivery if delivered by nationally recognized overnight
courier or similar courier service, in each case addressed to the Company,
Consultant and/or Consultant's Representative, as the case may be, at the
respective addresses indicated in the caption of this Agreement or such other
address as either party may in the future specify in writing to the other. In
addition, a copy (which shall not itself constitute notice) of any notice sent
to the Company hereunder shall be sent to: Xxxxxxxxxx Sandier PC, 00 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Tel. 973.597-2476, Fax: 000.000.0000,
Attention: Xxxxxx X. Xxxxxxxx, Esq.
15. GOVERNING LAW; JURISDICTION. Any and all actions or controversies arising
out of this Agreement or Consultant's engagement, including, without limitation,
tort claims, shall be construed and enforced in accordance with the internal
laws of the State of New Jersey, without regard to the choice of law principles
thereof. Consultant's engagement with the Company only shall be brought and
heard in the state and federal courts of the State of New Jersey, and the
Parties hereby irrevocably submit to the exclusive jurisdiction of such courts.
THE PARTIES HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY.
16. SURVIVAL. The provisions of Sections 5 and 9 through 22 (inclusive) of this
Agreement shall survive the termination of this Agreement and Consultant's
engagement to perform the Consulting Services.
-19-
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all agreements
and understandings (whether oral or written) between the parties concerning the
subject matter hereof. This Agreement may be modified by the parties hereto only
by a written supplemental agreement executed by both parties.
18. 280G CUT-BACK. Notwithstanding anything set forth in this Agreement to the
contrary, in the event that any payment or benefit provided under this Agreement
would, in the opinion of the independent certified accountants for the Company,
not be deemed to be deductible in whole or part in the calculation of the
Federal income tax of the Company or any other person making such payment or
providing such benefit by reason of Section 2800 of the Code, the aggregate
payments or benefits provided under this Agreement shall be reduced to the "safe
harbor" level under Section 2800 so that the entire amount which is paid or
provided to Consultant shall be deductible notwithstanding the provisions of
Section 2800 of the Code.
19. SEVERABILITY. If any term or provision of this Agreement shall be found to
be invalid or otherwise unenforceable by a court of competent jurisdiction, the
other provisions of this Agreement will remain in full force and effect Any
provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.
20. NO STRICT CONSTRUCTION. Given the full and fair opportunity provided to each
of the Parties to consult with theft respective counsel with respect to the
terms of this Agreement, ambiguities shall not be construed against any Party by
virtue of such Party having drafted the subject provision.
21. NO WAIVER. The waiver by any Party of a breach of any provision of this
Agreement shall not operate or be construed as a continuing waiver or as a
consent to or waiver of any subsequent breach hereof.
22. HEADINGS. The Article and Section headings in this Agreement are for the
convenience of reference only and do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof.
[Remainder of Page Intentionally Left Blank]
-20-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
IVIVI TECHNOLOGIES, INC.
By: /s/ Xxxxx XxXxxx
--------------------------------
Name: Xxxxx XxXxxx
Title: illegible
WITNESS: XXXXX CONSULTING, INC.:
/s/ signature By: /s/ Xxxxxx Xxxxx
---------------------------- ---------------------------------
Name: Xxxxxx Xxxxx, Ph.D.
Title: President
WITNESS
/s/ signature /s/ Xxxxxx Xxxxx
---------------------------- -------------------------------------
Xxxxxx Xxxxx, Ph.D., individually
-21-
