CONSULTING AGREEMENT
This
Consulting Agreement (the “Agreement”) is made and entered into as of the First
day of October, 2005 (the “Effective Date”) by and between Xxxxxx Systems, Inc.,
a Delaware corporation (the “Company”), and Xxxxxx X. Xxxxxxx, M.D. (the
“Consultant”).
WITNESSETH:
WHEREAS,
the
Company desires to retain the Consultant and the Consultant desires to be
retained by the Company, all pursuant to the terms and conditions hereinafter
set forth;
NOW,
THEREFORE, in
consideration of the foregoing and the mutual promises and covenants herein
contained, it is agreed as follows:
| 1. |
Retention
of Consultant. The
Company agrees and does hereby retain the Consultant pursuant to
the terms
set forth herein. The Consultant does hereby accept such retention,
subject to and upon the terms and conditions hereinafter set forth.
[It is
understood and agreed, that unless specifically otherwise authorized
by
the Company, all services provided by the Consultant hereunder shall
be
provided by Xxxxxx X. Xxxxxxx,
M.D.]
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| 2. |
Duties
of Consultant.
The Company hereby retains the Consultant to perform the following
consulting services for the Company: a) assistance with patient enrollment
for the Company’s SEPET pilot clinical trial, b) assistance with
monitoring and analysis of clinical data from the SEPET Pilot Clinical
Trial. and c) design of future clinical protocols. Such services
shall be
provided in person or telephonically as requested by the Company
and the
Consultant will be available to devote the time necessary to meet
the
objectives contemplated by this
Agreement.
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| 3. |
Compensation.
In
consideration for the services to be performed by the Consultant
as
provided herein, the Company agrees to and shall pay the Consultant
compensation as follow:
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The
Consultant shall receive a fee of $10,000/month, payable bi-monthly in equal
amounts of $5,000 on the 15th
and
30th
of each
month for a term of three (3) months commencing on the Effective Date. The
term
can be renewable upon the expiration upon the mutual agreement of both the
Company and Consultant.
The
Consultant will also receive a five-year non-qualified stock option to purchase
30,000 shares of the Company’s common stock, to be granted pursuant to the
Company’s 2005 Stock Incentive Plan. The shares will be exercisable at the
current market price on the date of grant. The vesting of the stock options
shall be determined based on the achievement of the following milestones :
1)
One-half (50%) (15,000 shares) of the options shall vest on November 8, 2005
if
the Company has enrolled 5 patients for the SEPET pilot clinical trial by
November 8, 2005 (“Milestone 1”); 2) if the Company has enrolled 15 patients
before December 31, 2005 (“Milestone 2”) AND Milestone 1 was achieved,
one-hundred percent (100%) (30,000 shares) of the options shall vest on December
31, 2005; and 3) if the Company has achieved Milestone 2 but NOT Milestone
1,
then 25,000 shares will vest on December 31, 2005 (i.e the 5,000 shares
associated with Milestone 1 shall be forfeited). If Milestones 1 and 2 are
not
achieved, and as long as the Consultant is still retained by the Company in
his
capacity as an advisor regarding the SEPET clinical trials, 25,000 unvested
shares of the stock options shall vest on a pro-rata on a monthly basis over
the
period of 12 months beginning after the initial three month term of this
Agreement.
| 4. |
Reimbursement
of Expenses.
The Company will reimburse Consultant for all reasonable out-of-pocket
expenses incurred by Consultant in connection with the furnishing
of
services under this Agreement. The Consultant will abide by Company
policies which include the completion of Travel Request Forms prior
to the
incurrence of expenses. All expenditures in excess of $200 individually
must be approved by the Company prior to incurring such expenses,
including travel and entertainment
costs.
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5
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Status
of Consultant as an Independent Contractor.
The Consultant is retained only for the purposes and to the extent
set
forth herein, and the Consultant’s relationship to the Company during the
term of this Agreement shall be that of an independent contractor,
and
nothing in this Agreement shall be construed as equating Consultant
as an
employee of the Company. The Consultant recognizes that no amount
will be
withheld from his compensation for payment of any federal, state,
or local
taxes, and that the Consultant has sole responsibility to pay such
taxes,
if any, and to file such returns as shall be require by applicable
laws
and regulations. Consultant is not entitled to any medical coverage,
life
insurance, participation in the Company’s savings plan, or other benefits
afforded to the Company’s regular employees. Consultant has no power or
authority to act for, represent, or bind the Company or any company
affiliated with the Company in any manner. Further, nothing herein
shall
be construed as establishing a joint venture or partnership between
the
Consultant and the Company. The Consultant is free to utilize his
entire
time, energy and skill in such manner and for such purposes as he
sees
fit.
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6.
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Termination
of Agreement.
Each of the parties hereto shall have the right to terminate this
Agreement by giving the other party fifteen (15) days prior written
notice. Upon termination, the Consultant will be paid a pro rata
amount of
the monthly compensation as per Section 3 herein. Upon termination,
section 7. Confidentiality will remain in full force and effect for
a
three year period.
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7.
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Confidentiality.
By
acceptance hereof, the Consultant expressly acknowledges that the
list of
the Company’s customers, its trade secrets, know-how, data, marketing
techniques, business plans, products, technologies, intellectual
properties, trademark and other confidential information pertaining
to the
operations and business and financial affairs of the Company (the
“Confidential Information”) are valuable, special and unique assets of the
Company. The Consultant agrees that the Company’s Confidential Information
will be used by the Consultant only in connection with consulting
activities hereunder, and will not be used in any way for personal
benefit
or to the detriment of the Company. The Consultant agrees that it
shall
not disclose any Confidential Information to any person, firm,
corporation, association or other entity, for any reason or purpose
whatsoever and that disclosure of Confidential Information would
cause
irreparable injury to the Company. The Company shall have the right
to
obtain injunctive or other similar relief without the requirement
of
posting bond or other similar
measures.
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For
the
purposes of this Agreement, Confidential Information shall not include
information that (i) is or becomes generally available to the public other
than
as a result of a breach of this Agreement, (ii) was known to the receiving
party
prior to its disclosure hereunder, (iii) becomes known or available to the
receiving party on a non-confidential basis and not in contravention of
applicable law from a source (other than a party hereunder) which represents
that it is entitled to disclosure such Confidential Information, or (iv) is
required to be disclosed by operation of law.
Notwithstanding
the foregoing, if required pursuant to judicial or administrative subpoena
or
process or other legal obligation to disclose any Confidential Information,
Consultant may make such disclosure only to the extent required, in the opinion
of counsel for Consultant, to comply with such subpoena process or other
obligation. Consultant shall, as promptly as possible and in any event prior
to
the making of such disclosure, notify the Company of any such subpoena, process
or obligation and shall cooperate with the Company in seeking a protective
order
or other means of protecting the confidentiality of the Confidential
Information.
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8.
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Notices.
All notices and other communications which are required or permitted
hereunder shall be in writing and shall be delivered personally or
sent by
air courier (e.g., Federal Express) or first class certified or registered
mail, postage prepaid, return receipt requested to the following
address:
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If
to Consultant, addressed to:
Xxxxxx
X. Xxxxxxx
X.X.
Xxx 000
Xxxxxxxxx,
XX 00000
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If
to the Company, addressed to:
Xxxxxx Systems, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
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Either
party may designate any other address to which notice shall be given, by giving
written notice to the other of such change of address in the manner herein
provided.
| 9. |
Governing
Law. This
Agreement has been made in the State of California and shall be construed
and governed in accordance with the laws
thereof.
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| 10. |
Entire
Agreement. This
agreement contains the entire Agreement between the parties with
respect
to the rendering of the services described herein and may not be
altered
or modified, except in writing and signed by the party to be charged
thereby and supersedes any and all previous agreements between the
parties
with respect to the services.
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| 11. |
Severability.
If
any provision of this Agreement, or part thereof, is held to be
unenforceable, the remainder of such provision of this Agreement,
as the
case may be, shall nevertheless remain in full force and
effect.
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| 12. |
Assignment.
This Agreement may not be assigned by either of the parties hereto
without
the prior written consent of the other party, provided,
however,
that such prior written consent will not be necessary in the instance
where the Company is merged with and into another entity or the transfer
occurs in connection with sale of substantially all of the Company’s
assets.
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| 13. |
Execution
in Counterparts.
This Agreement may be executed in two or more counterparts, each
of which
shall be deemed an original agreement, but all of which together
shall
constitute one and the same
instrument.
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| 14. |
Headings,
Interpretation of Syntax.
The headings contained in this Agreement are for reference purposes
only
and shall not affect the meaning or interpretation of this Agreement.
All
references made and pronouns used herein shall be construed in the
singular or plural, and in such gender, as the sense and circumstances
require.
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IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above written.
| XXXXXX SYSTEMS, INC. | CONSULTANT | ||
| /s/ Xxx Factor | /s/ Xxxxxx X. Xxxxxxx | ||
|
Xxx Factor |
Xxxxxx X. Xxxxxxx |
||
|
Chief
Executive Officer
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