Pitsakis
May 19, 2005
- 1 -
INDEPENDENT CONSULTANT AGREEMENT
THIS INDEPENDENT CONSULTANT AGREEMENT (this "Agreement") is
made as this 19th of May 2005 by and between Diasense, Inc. ("the
Company") a Pennsylvania corporation, located at 0000 Xxxxxxxxxxx
Xxxx, Xxxxxxxx 0000, Xxxxxxxxxx, XX 00000 and Xxxxxxx Xxxxxxxx,
an individual residing at 00 Xxxxxxxx Xxxxxx, Xxxxx, XX 00000-
0017 (the "Consultant").
WHEREAS, the Company is engaged in the business of
developing commercial applications for its intellectual property
relating to infrared spectroscopy; and
WHEREAS, the Consultant possesses valuable knowledge,
expertise, and experience relating to the intellectual property
of the Company, that the Company believes would benefit the
Company;
NOW, THEREFORE, in consideration of the foregoing premises,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Engagement. The Company hereby engages the Consultant as
an independent consultant to perform consulting services for the
Company in accordance with the terms of this Agreement. In
particular, the Consultant is engaged to perform the following
project for the Company: (i) write white papers for certain
patents held by the Company, (ii) assist the Company in its
efforts to sell or license its intellectual property by providing
technical expertise as required to interested parties, (iii)
assist the Company in its efforts to complete the development of
the next generation of the Diasensorr. The Consultant hereby
accepts such engagement and agrees to render such consulting
services for the Company in accordance with the terms of this
Agreement.
2. Consulting Services.
2.1. During the term of this Agreement, the Consultant shall
provide independent advisory and consulting services to the
Company and to the clients of the Company from time to time, as
requested by the CEO or other authorized officer of the Company
in connection with the Company's business or as specified in
paragraph 1 above.
2.2. Independent Contractor. The Consultant shall render all
consulting services pursuant to this Agreement as an independent
contractor, and nothing in this Agreement shall be construed as
creating a relationship between the Company and the Consultant,
or any employee or agent of the Consultant, which may be
characterized as an employer/employee, principal/agent,
partnership, or joint venture relationship. The Consultant shall
have no right or authority at any time to make any contract,
agreement or commitment on behalf of the Company, to execute any
documents on behalf of the Company, to bind the Company in any
manner or hold itself out as an officer, agent, employee or
authorized representative of the Company without the prior
written consent of the President of the Company.
a. The Consultant shall meet with and consult with the officers
and other designated employees of the Company, on a periodic
basis upon reasonable request of the President or other
authorized officers of the Company, concerning the progress of
the Consultant in performing any services pursuant to this
Agreement.
b. The Consultant shall provide the Company with monthly status
reports.
2.3. Consultant Warranties. The Consultant represents and
warrants that:
a. All of the services to be provided by the Consultant
pursuant to this Agreement shall at all times comply with
applicable laws, rules, regulations and ordinances and shall be
conducted in accordance with the standards prevalent in the data
mining industry; and
b. The Consultant is qualified and competent in the field of
infrared spectroscopy and shall perform such services with the
standards of care, skill, and diligence prevalent in the
scientific community.
3. Compensation.
3.1. Rate of Pay. Starting May 19, 2005, the Company
agrees to pay to the Consultant a consultant fee of $75 per hour
up to a maximum of $5,000 per month. Any amount greater than
$5,000 in total for any given month shall require written
authorization from the Company in advance. The Company agrees to
pay the Consultant on the 5th day of each month for the total
hours invoiced through the last day of the prior month. The
Consultant shall invoice the Company on or before the 2nd day of
each month for services rendered the prior month.
3.2. Additional Benefits. The Consultant shall not be
entitled to receive any benefits, including health and welfare
benefits.
3.3. Warrants. Upon execution of this Agreement,
the Consultant shall be issued a stock purchase warrant to
purchase up to 1,227,000 shares of the Company's restricted
common stock at an exercise price of $0.01 per share (the
"Warrants"), exercisable for a period of five (5) years. The
Warrants shall vest (become exercisable by the Consultant) if and
when the following milestones are acheived in the development of
the Company's non-invasive glucose monitor: (i) 100,000 shall
vest immediately upon issuance; (ii) 150,000 Warrants shall vest
upon completion of phase 1, (iii) 250,000 Warrants shall vest
upon completion of phase 2; and (iv) 727,000 Warrants shall vest
upon delivery to the Company of a working prototype of the non-
invasive glucose monitor. At all times relevant to this
agreement the Company shall have the sole, final and exclusive
right to determine whether any offer to merge or sell the Company
or any offer to buy or license of its intellectual property is in
the Company's best interest.
3.4. Securities Law Representations and Warranties.
The Consultant understands that the Warrants and the stock
issuable upon exercise of the Warrants (collectively, the
"Securities") have not been registered under the Securities Act
on the grounds that the sale thereof pursuant to this Agreement
is exempt pursuant to Sections 4(2) and 4(6) of the Securities
Act and the applicable state securities laws (the "State Laws")
and that the reliance of the Company on such exemption is
predicated in part on the representations, warranties, covenants
and acknowledgments in this Agreement.
3.5. NonDistribution. The Consultant represents and
warrants to the Company that the Securities are being acquired by
the Consultant for its own account for investment, not as a
nominee or agent, and without a view to resale or other
distribution within the meaning of the Securities Act and the
State Laws, and the rules and regulations thereunder, and
Consultant agrees not to distribute the Securities in violation
of the Securities Act or the State Laws.
3.6. Restrictions on Transfer. The Consultant (i)
acknowledges that the Securities have not been registered under
the Securities Act and the State Laws, and that the Securities
must be held indefinitely by it unless the resale thereof is
subsequently registered under the Securities Act and the State
Laws or an exemption from registration is available; (ii) is
aware that any routine sales of the Securities made under Rule
144 of the Securities Act may be made only in limited amounts and
in accordance with the terms and conditions of that Rule and that
in such cases where the Rule is not applicable, compliance with
some other registration exemption will be required; (iii) is
aware that Rule 144 is not presently available for use by the
Consultant for the sale of the Securities; and (iv) is aware
that, the Company is not obligated to register any sale, transfer
or other disposition of the Securities.
3.7. Accredited Investor. The Consultant represents
and warrants to the Company that it is an Accredited Investor as
such term is defined in Rule 501(a) of Regulation D of the
Securities Act and is capable of evaluating the risks and merits
of the purchase of the Securities.
3.8. Tools, Equipment, Supplies, and Office Space. The
Consultant shall provide his own equipment, supplies and shall
bear all expenses consequent to this Agreement and not
specifically assumed by the Company.
3.9. Exclusivity. The Company and the Consultant agree
that the Consultant is engaged on an exclusive basis by the
Company and that Consultant may work for other persons or
entities not engaged in research and development of technology
similar to the Company's intellectual property at the same time
Consultant shall be performing services for the Company.
3.10.Consultant Fee. The payment of the consulting fee
to the Consultant by the Company pursuant to this Agreement shall
not be subject to withholding by the Company for federal, state,
or local income taxes, FICA, or other applicable taxes, and the
Company shall not pay any payroll taxes with respect to such
consulting fee.
a. The Consultant shall be solely responsible for the payment
of any and all taxes imposed upon it by reason of the
payment of such consulting fee by the Company.
b. The consulting fee shall be reported by the Consultant as
ordinary income for federal, state, and local income tax
purposes, and shall be treated by the Company for such
purposes as an ordinary and necessary business expense.
c. The Consultant agrees not to take a position inconsistent
with the position taken by the Company with respect to the
treatment of the consulting fee payable by the Company to
the Consultant pursuant to this Agreement.
4. Term and Termination.
4.1. Term of Agreement. The term of this Agreement shall
commence on May 19, 2005 and shall continue until May 19, 2007,
at which time it may, upon written agreement of the parties,
continue on a month to month basis thereafter, unless terminated
pursuant to paragraph 4.2.
4.2. Termination Rights of the Company. Notwithstanding anything
contained in this Agreement which may be inconsistent or to the
contrary, the Company may discharge the Consultant and terminate
this Agreement at any time, without cause, with 15 days advance
written notice to the Consultant. In the event Consultant
determines to terminate this agreement, Consultant shall provide
the Company with 15 days advance written notice.
4.3. Payment in the Event of Termination. In the event that the
Company terminates this Agreement in accordance with Section 4.2,
all obligations of the Company arising under this Agreement shall
cease effective with the date of termination; provided, however,
the Company shall be obligated after the date of termination to
pay any consulting fee or reimburse any expense or fulfill any
other obligation accruing prior to the date of termination.
5. Ownership of Work Product. The Consultant hereby
acknowledges and agrees that the Consultant will be expected to
do creative work in connection with the performance of its
services under this Agreement which may lead to inventions,
discoveries, developments, procedures, ideas, innovations,
systems, programs, know-how, knowledge, technology, processes,
methods, procedures, works of authorship, information, lists and
other work product (collectively, the "Work Product").
5.1. The Consultant hereby agrees that all right, title,
and interest in and to the Work Product and all material, texts,
analyses, evaluations, and other items produced, written or
generated by the Consultant in connection with the performance of
the services under this Agreement (the "Materials") shall be the
sole and exclusive property of the Company.
5.2. The Consultant hereby grants and conveys any and all
rights of copyright and any and all other rights, title, and
interest in and to the Work Product and the Materials to the
Company.
6. Confidential Information. During the term of this Agreement
and at all times from and after the date of termination of this
Agreement, the Consultant, and any of its employees, officers or
agents, shall not at any time, directly or indirectly, disclose,
copy, sell, lease, license, or use any Confidential or
Proprietary Information (as defined in Section 6.1) concerning
the Company, its business, or its clients, except as may be
necessary to perform the services required by this Agreement and
upon written authorization by the Company.
6.1. All Work Product, Materials, and all other
information, whether written or otherwise, regarding the
Company's business, including but not limited to, information
regarding clients, client lists, lead sheets, costs, prices,
earnings, systems, operating procedures, prospective and executed
contracts and other business arrangements, sources of supply and
programs, analysis, formulae, data, algorithms, methods,
processes, techniques, and know-how of the Company shall be
deemed to be "Confidential or Proprietary Information" for
purposes of this Agreement.
6.2. The Consultant agrees to return to the Company all
computer hardware and software, telephones, books, records, lists
and other written, typed or printed materials, whether furnished
by the Company or prepared by the Consultant pursuant to this
Agreement, which contain any confidential or proprietary
information relating to the Company, its business, or its
clients, promptly upon the request of the Company and upon the
termination of this Agreement, and the Consultant shall neither
make nor retain any copies of such materials without the prior
written consent of the President of the Company.
6.3. The obligations of the Consultant and its employees
pursuant to this Section 6 shall survive the termination of this
Agreement.
6.4. The Consultant hereby acknowledges and agrees that,
for purposes of this Section 6, the clients of the Company shall
be deemed to be third-party beneficiaries of this Agreement and
shall have the right to enforce the terms of this Section 6
directly against the Consultant.
7. Restrictive Covenants
7.1. During the term of this Agreement and for a period
of twelve (12) months following the termination thereof, Consultant
will not, directly or indirectly, be engaged in a Competitive
Capacity either alone or in connection with any person,
organization, firm, association, corporation, or other entity
engaged in research and development of technology similar to the
Company's intellectual property. This restriction does not
prevent the Consultant from being employed by, or otherwise
working for, a person or entity that is not engaged in research
and development of technology similar to the Company's
intellectual property.
7.2. Definitions. For purposes of this Agreement, the
following definitions apply:
"Engaged" means to be employed or associated as employee,
officer, director, agent, owner, partner, joint venturer,
independent contractor, consultant, controlling investor, or
guarantor.
"Competitive Capacity" means being integrally involved in
the type of work the Consultant was performing for the Company
during the period of the independent contractor relationship with
the Company, or during the last twelve (12) months of the
independent contractor relationship with the Company, whichever
is shorter. "Competitive Capacity" does not include being
employed by a competitor of the Company in a non-competitive
capacity.
7.3. Non-Solicitation of Employees or Consultants. During
the term of this Agreement and for a period of twelve (12) months
thereafter, the Consultant (i) will not recruit, solicit, or
encourage any person to leave the Company or any of the Company's
customers or (ii) will not hire for the Consultant, or any other
person or entity, whether as a part-time or full-time employee,
consultant, independent contractor, or otherwise, any employee or
consultant of the Company or any of the Company's customers or
any former employee or consultant of the Company who, as of the
date hired or engaged, worked for or provided services to the
Company during the prior twelve (12) months.
7.4. Reasonableness of Restrictions. The Consultant has
carefully read and considered the provisions of this section,
and, having done so, agrees (i) that the restrictions set forth
herein are reasonable in terms of scope, duration, geographic
area, and otherwise, (ii) that the protection afforded to the
Company hereunder is necessary to protect its legitimate business
interests, (iii) that the agreement to observe such restrictions
form a material part of the consideration for this Agreement, and
(iv) that upon the termination of this Agreement, the Consultant
will be able to earn a livelihood without violating the foregoing
restrictions.
7.5. Interpretation of these Covenants. In the event
that, notwithstanding the foregoing, any of the provisions of
this section shall be held to be invalid or unenforceable, the
remaining provisions thereof shall nevertheless continue to be
valid and enforceable as though the invalid or unenforceable
parts had not been included therein. In the event that any
provision of this section relating to the time period and/or the
areas of restriction and/or related aspects shall be declared by
a court of competent jurisdiction to exceed the maximum
restrictiveness such court deems reasonable and enforceable, the
time period and/or areas of restriction and/or related aspects
deemed reasonable and enforceable by the court shall become and
thereafter be the maximum restriction in such regard, and the
restriction shall remain enforceable to the fullest extent deemed
reasonable by such court.
7.6. Enforcement. The Consultant understands that the
Consultant's failure to comply with any and all obligations
contained in Section 7 will cause the Company to suffer
irreparable injury and harm, the full extent of which will or may
be impossible to ascertain, and for which monetary damages will
not be an adequate remedy. Accordingly, the Consultant agrees
that, in addition to any other remedies available to it at law or
in equity, the Company will be entitled to preliminary and
permanent injunctive relief to enforce, or to prevent a breach
of, the terms of this Agreement without the necessity of posting
bond or security, which the Consultant expressly waives.
8. Assignment. The Consultant shall not have the right to
assign any rights or delegate any duties or obligations arising
under this Agreement without the prior written consent of the
Company. The Company shall have the right to assign this
Agreement and to delegate its duties under this Agreement to any
entity controlled by or under common control with the Company
upon written notice to the Consultant.
9. Law And Interpretation. This Agreement shall be governed
by, interpreted, and construed in accordance with the internal
laws of the Commonwealth of Pennsylvania without application of
its conflicts of laws principles. This Agreement may be executed
in any number of counterparts, each of which shall be an original
but all of which shall constitute one and the same instrument.
With respect to each and every term and condition in this
Agreement, the parties understand and agree that the same has
been mutually negotiated, prepared, and drafted, and that if at
any time the parties hereto desire or are required to interpret
or construe any such term or condition or any agreement or
instrument subject hereto, no consideration shall be given to the
issue of which party hereto actually prepared, drafted, or
requested any term or condition of this Agreement or any
agreement or instrument subject hereto.
10. Courts. Any dispute arising from the interpretation or
operation of this Agreement shall be resolved in the state courts
of Pennsylvania or in the United States District Court and the
parties hereby agree that this agreement was entered into in
Pennsylvania and consent to, elect, and waive any objection to
the laying of venue in such courts in the event of litigation
hereunder.
IN WITNESS WHEREOF, the Company and the Consultant have
executed and delivered this Agreement, each intending it to
constitute an instrument under seal, on the date first above
written.
Diasense, Inc.
Date: June 10, 2005 By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: CEO
Xxxxxxx Xxxxxxxx
Date: June 10, 2005 By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title:
