BUSINESS ADVISORY BOARD CONSULTING AGREEMENT
BUSINESS
ADVISORY BOARD
This Business Advisory Board Consulting
Agreement (the “Agreement”)
is made as of this 22nd day of
June, 2009, between Shrink Nanotechnologies, Inc., a Delaware corporation (the
"Company"),
and Xxxxxx Xxxxxxxxx (the "Consultant")
and shall be effective upon execution by the Company and the Consultant (the
"Effective
Date"). The Company and the Consultant are collectively
referred to herein as the “Parties.”
The Consultant has a long history of
experiences and successes in a business area which shall broadly be referred to
as the diagnostics, life sciences and biotech fields, and these fields are of
particular interest to the Company. The Company wishes to retain the
Consultant in a consulting capacity and as a member of one or more panels (a
“Panel”)
of the Company's Business Advisory Board (the “BAB”)
and the Consultant desires to perform such consulting services. Accordingly, the
Parties agree as follows:
1. Services. The
Consultant will advise the Company's management, employees and agents, at
reasonable times, in matters related to the relevant field of interest (“Field of
Interest”), as requested by the Company and set forth in Exhibit A
attached hereto.Consultant will provide consulting services, which shall amount
to not less than two days per month, as reasonably requested by the Company and
as the Consultant’s schedule permits. Consultation may be sought by
the Company over the telephone, in person, at the Company's offices or another
reasonable location or through written correspondence, and will involve
reviewing activities and developments in the Field of
Interest. Additionally, Consultant may be requested to attend, to the
extent Consultant’s schedule permits, one or more in person meetings with other
members of a Panel or the BAB, upon reasonable notice being given to the
Consultant, in keeping with the terms of this Agreement.
1.1 Strategic
Parties. As a part of this Agreement, Consultant is to assist the
Company in developing new relevant business relationships with strategic parties
in the United States and around the world. For the purposes Section
3.3 of this Agreement, any such party shall be referred to as a “Strategic
Party” and such a Strategic Party shall retain such a definition under
Section 3.3 of this Agreement until the earlier date of either (i) two years
subsequent to the Term, or (ii) immediately following the date which Consultant
is not serving as a member of the Company’s Board of Directors.
1.1.1 Consultant
shall provide Company with reasonable notice (“SP
Notice”) of a referral to a potential Strategic Party. For
five (5) business days following a SP Notice, Company shall have the right to
disclose to Consultant any prior business contacts or relationships with a
potential Strategic Party (a “Notice of
Prior Contacts”). In the event Company fails to provide a
Notice of Prior Contacts, such a potential Strategic Party shall become a
Strategic Party under Section 3.3 of this Agreement.
2. Term and
Termination. The term of this Agreement will begin on the
Effective Date of this Agreement and will end on the first year anniversary
(based on a 360 day year containing four (4) ninety (90) day quarterly periods)
of this Agreement or upon earlier termination as provided below (the "Term");
provided that the Term may be renewed, by mutual assent by the Parties, for
successive one-year periods. This Agreement may be terminated at any time upon
sixty (60) days written notice by either party. The Consultant
agrees, following the termination of this Agreement or upon earlier request by
the Company, to promptly return all drawings, tracings, and all visual or
written materials in the Consultant’s possession that were supplied by the
Company in conjunction with the Consultant’s consulting services under this
Agreement, or generated by the Consultant in the performance of consulting
services under this Agreement.
3. Compensation. The
right, title and interest in the Compensation discussed in this Section 3 shall
be earned, vest and be due and payable, during the Term, in equal quarterly
amounts, commencing on July 15, 2009, on the first day of the quarterly period
immediately subsequent to a quarterly period in which this Agreement was
effective. The Consultant shall be compensated for services rendered
as set follows:
3.1 Every
quarter and at the option of the Consultant, either: (i) $20,000 (the “Quarterly
Cash Fee”), or (ii) 20,000 common shares of Company stock (the “Quarterly
Stock Fee”).
3.1.1 Quarterly
Cash Fee. At any time subsequent to the end of a quarterly period, at
the time such a quarterly payment under Section 3.1 is due, Consultant shall
only be entitled to receive a maximum amount of Quarterly Cash Fees derived by
multiplying: (i) fifteen percent (15%) and (ii) the aggregate of: (A) the (net
of fees) amount, exclusive of a pass through investment, of any new debt or
equity investment into the Company by a non-affiliated third party (a “New
Investment”) during the Term of this Agreement; and (B) all Strategic
Party Cash (referred to in Section 3.3) received by the Company during the Term
of this Agreement. A non-affiliated third party shall mean a party
who is not presently an obligee of the Company or a Company
shareholder. To be
clear, for example, if during the Term, a New Investment was made which provided
the Company with $1,000,000 (net of fees), unless the Company was provided a
written election from consultant stating all fees due under this Agreement would
be paid in Quarterly Stock Fees, exactly $120,000 (i.e. the total amount of all
Quarterly Cash Fees under this Agreement) of this New Investment would be made
available to, and reserved for, Consultant to pay Quarterly Cash
Fees. Additionally, if the above example New Investment was only
$500,000, and there were no additional New Investments made during the Term,
then a maximum of $75,000 would be available to be paid to Consultant under this
Section 3.1.1 in Quarterly Cash Fees.
3.1.2 Deferral. To
the extent the Company has not completed a New Investment at the time Consultant
may exercise a right related to the above Sections 3.1 and 3.1.1, Consultant may
elect to defer such rights until the date any subsequent quarterly payment under
Section 3.1 is due (a “Deferral”). Once
any compensation under this Section 3.1 is earned, the termination of this
Agreement by either party or by mutual agreement, shall not affect the Company’s
obligations to make such payments pursuant to Section 3.1. However,
by the 90th day
subsequent to the end of the Term, Consultant shall have exercised all rights
due under this Agreement related to Section 3.1.
3.2 Consultant
understands that any restricted shares, and any securities issued in respect
thereof, shall bear the following legend:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THESE
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
3.3 Additional
Success Fees. The below success fees shall be paid within ninety days
subsequent to the end of the Company’s fiscal year end (December 31) from cash
received by the Company from either: (i) sublicensing agreements the Company
enters into with Strategic Parties or (ii) revenues generated from the sale of
goods or services to a Strategic Party. Cash received by the Company
related to this Section 3.3 shall be referred to as “Strategic
Party Cash.” Consultant shall be paid the greater dollar value
in Success Fees as follows:
3.3.1 Net
of all royalties and dividends payments, five percent (5%) of sublicensing
Strategic Party Cash received by the Company from a Strategic Party;
or
3.3.2 Net
of costs of goods or services and a pro-rata allocation of sales, general and
administrative costs, three percent (3%) of the revenues received by the Company
from the sale of goods and services to or through a Strategic
Party.
3.3.3 Under
this Section 3.3, 3.3.1 and 3.3.2, the Company shall receive a credit of an
amount equal to the amount of Quarterly Cash Fees paid to Consultant at the time
a payment under Section 3.3, 3.3.1 and 3.3.2 is due, and in any event, such an
amount shall not exceed $80,000.
3.4. The
maximum amount of payments which may become due to Consultant under Sections
3.3, 3.3.1, 3.3.2 and 3.3.3 is five million dollars ($5,000,000).
3.5 The
Company shall reimburse the Consultant for all pre-approved and reasonable
expenses incurred in the performance of this Agreement.
4. Certain Other
Contracts. Company is aware that Consultant is involved in
several professional engagements with various commercial
entities. The Consultant will not disclose to the Company any
information that the Consultant is obligated to keep secret pursuant to an
existing confidentiality agreement with a third party, and nothing in this
Agreement will impose any obligation on the Consultant to the
contrary. The consulting work performed hereunder will not be
conducted on time that is required to be devoted to any other third party. The
Consultant shall not use the funding, resources and facilities of the any other
third party to perform consulting work hereunder and shall not perform the
consulting work hereunder in any manner that would give any third party rights
to the product of such work. The Consultant has disclosed and, during
the Term, will disclose to the President of the Company any conflicts between
this Agreement and any other relevant agreements binding the
Consultant.
5. Direction of Projects and
Inventions to the Company. Subject to the Consultant's obligations under
any confidentiality or other written obligations to third parties (including
academic institutions which Consultant is employed by), during the Term of this
Agreement, the Consultant will use his best efforts to disclose to the President
of the Company, on a confidential basis, technology and product opportunities
which come to the attention of the Consultant in the Field of Interest, and any
invention, improvement, discovery, process, formula or method or other
intellectual property relating to or useful in, the Field of Interest
(collectively "New
Discoveries"), whether or not patentable or copyrightable, and whether or
not discovered or developed by Consultant.
6. Inventions Discovered by the
Consultant While Performing Services Hereunder. The Consultant will
promptly and fully disclose to the President of the Company any invention,
improvement, discovery, process, formula, technique, method, trade secret, or
other intellectual property, whether or not patentable, whether or not
copyrightable (collectively, "Invention")
made, conceived, developed, or first reduced to practice by the Consultant,
either alone or jointly with others, while performing services hereunder. The
Consultant hereby assigns to the Company all of his right, title and interest in
and to any such Inventions. The Consultant will execute any documents necessary
to perfect the assignment of such Inventions to the Company and to enable the
Company to apply for, obtain, and enforce patents or copyrights in any and all
countries on such Inventions. The Consultant hereby irrevocably designates the
Secretary of the Company as his agent and attorney-in-fact to execute and file
any such document and to do all lawful acts necessary to apply for and obtain
patents and copyrights, and to enforce the Company's rights under this
paragraph. This Section 6 will survive the termination of this
Agreement.
7. Confidentiality.
7.1 The
Consultant acknowledges that, during the course of performing his services
hereunder, the Company will be disclosing information to the Consultant, and the
Consultant will be developing information related to the Field of Interest,
Inventions, projects, products, potential customers, personnel, business plans,
and finances, as well as other commercially valuable information (collectively
"Confidential
Information"). The Consultant acknowledges that the Company's business is
extremely competitive, dependent in part upon the maintenance of secrecy, and
that any disclosure of the Confidential Information would result in serious harm
to the Company. The Consultant agrees that the Confidential
Information will be used by the Consultant only in connection with consulting
activities hereunder, and will not be used in any way that is detrimental to the
Company. The Consultant agrees not to disclose, directly or
indirectly, the Confidential Information to any third person or entity, other
than representatives or agents of the Company. The Consultant will treat all
such information as confidential and proprietary property of the
Company. The term "Confidential
Information" does not include information that (i) is or becomes
generally available to the public other than by disclosure in violation of this
Agreement, (ii) was within the relevant party's possession prior to being
furnished to such party, (iii) becomes available to the relevant party on a
non-confidential basis, or (iv) was independently developed by the relevant
party without reference to the information provided by the
Company. The Consultant may disclose any Confidential Information
that is required to be disclosed by law, government regulation or court order.
If disclosure is required, the Consultant will give the Company advance notice
so that the Company may seek a protective order or take other action reasonable
in light of the circumstances. Upon termination of this Agreement,
the Consultant will promptly return to the Company all materials containing
Confidential Information as well as data, records, reports and other property,
furnished by the Company to the Consultant or produced by the Consultant in
connection with services rendered hereunder, together with all copies of any of
the foregoing. Notwithstanding such return, the Consultant shall continue to be
bound by the terms of the confidentiality provisions contained in this Section 7
for a period of two years after the termination of this Agreement.
7.2 If
the Consultant has a conflict of interest, or potential conflict of interest,
with respect to any matter presented at a meeting of the BAB, he shall excuse
himself from the discussion of such matter and at the time of the execution of
this Agreement, Consultant shall disclose and describe all potential conflicts
of interest that may arise from the execution of this Agreement with respect to
prior engagements Consultant is a party to.
7.3 The
attached Exhibit C Non-Disclosure Agreement shall be incorporated herein as if
it were a term of the same Agreement.
8. Freedom to
Publish.
8.1 Notwithstanding
the confidentiality provisions, or any other provision, of this Agreement, the
Consultant may publish and make oral presentations of the results of the
Consultant's work performed pursuant to this Agreement under the terms set forth
in this Section 8.
8.2 The
Consultant acknowledges that publication or oral disclosure of any Invention or
other work prior to filing for patent or copyright protection could result in
the complete loss of any commercial value of the Consultant's research to the
Company, and/or the Consultant, as the case may be. The Consultant will provide
the Company with sufficient disclosure regarding Inventions owned by the Company
under Section 6 at least 90 days prior to publication to allow the Company to
evaluate such disclosure; Consultant will work with the Company to file patent
or copyright applications prior to disclosure or publication, or to modify such
publication if such disclosure regarding Inventions owned by the Company under
Section 6 would materially affect the business of the Company.
9. Use of Name. It is
understood that the name of the Consultant will appear in disclosure documents
required by securities laws, and in other regulatory, administrative filings and
public relations materials in the ordinary course of the Company's business. The
above-described uses will be deemed to be acceptable uses.
10. No Conflict: Valid and
Binding. The Consultant represents that neither the execution of this
Agreement nor the performance of the Consultant's obligations under this
Agreement will result in a violation or breach of any other agreement by which
the Consultant is bound. The Company represents that this Agreement has been
duly authorized and executed and is a valid and legally binding obligation of
the Company, subject to no conflicting agreements.
11. Notices. Any notice
provided under this Agreement shall be in writing and shall be deemed to have
been effectively given (i) upon receipt when delivered personally, (ii) one day
after sending when sent by private express mail service (such as Federal
Express), or (iii) 5 days after sending when sent by regular mail to the
following address:
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In the case of the Company:
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In the case of the
Consultant:
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Attention:
Xxxxxx Xxxxxxxxx
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0000
Xxxxx xxx Xxxxx, Xxxxx 000
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0000 Xxxxxx Xxx
Xxxxx
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Xxxxxxxx,
Xxxxxxxxxx 00000
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Xxxxxxxx, Xxxxxxxxxx 00000
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or to
other such address as may have been designated by the Company or the Consultant
by notice to the other given as provided herein.
12. Independent Contractor:
Withholding. The Consultant will at all time be an independent
contractor, and as such will not have authority to bind the Company. The Parties
acknowledge that this Agreement is not a contract within the meaning of Section
2750 of the California Labor Code, and the Consultant is not an employee of the
Company for any purpose under the California Labor Code. Consultant
will not act as an agent nor shall he be deemed to be an employee of the Company
for the purposes of any employee benefit program, unemployment benefits, or
otherwise. 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 file such
returns as shall be required by applicable laws and regulations. Consultant
shall not enter into any agreements or incur any obligations on behalf of the
Company.
13. Assignment. Due to
the personal nature of the services to be rendered by the Consultant, the
Consultant may not assign this Agreement. The Company may assign all rights and
liabilities under this Agreement to a subsidiary or an affiliate or to a
successor to all or a substantial part of its business and assets without the
consent of the Consultant. Subject to the foregoing, this Agreement will inure
to the benefit of and be binding upon each of the heirs, assigns and successors
of the respective parties.
14. Severability. If any
provision of this Agreement shall be declared invalid, illegal or unenforceable,
such provision shall be severed and the remaining provisions shall continue in
full force and effect.
15. Remedies. The
Consultant acknowledges that the Company would have no adequate remedy at law to
enforce Sections 4, 5, 6 and 7 hereof. In the event of a violation by the
Consultant of such Sections, the Company shall have the right to obtain
injunctive or other similar relief, as well as any other relevant damages,
without the requirement of posting bond or other similar measures.
16. Governing Law; Entire
Agreement; Amendment. This Agreement shall be governed by the laws of the
State of California applicable to agreements made and to be performed within
such State, represents the entire understanding of the parties, supersedes all
prior agreements between the parties, and may only be amended in
writing.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
Shrink
Nanotechnologies,
Inc.
Consultant
____________________________ _____________________________
By: Xxxx
X.
Xxxx
By: Xxxxxx Xxxxxxxxx
Its:
CEO
an individual
EXHIBIT
A
Fields of
Interest
The
Consultant has reviewed information provided by the Company and other
information which may be publicly available on the world-wide-web, and is
familiar with the specific research efforts and business projects that the
Company is engaged in and is actively pursuing. Additionally,
Consultant has previously met with representatives of the Company on an informal
basis and has some basic understanding of the technology the Company has access
to and the projects that the Company is pursuing.
The
Company wishes to pursue the development of strategic relationships in order to
make its technologies commercially relevant and available in the US domestic and
international marketplaces. More specifically, the Company is
interested in developing strategic relationships in the solar, biotech and
biomedical businesses.
Description of
Services
Assist
management of the Company by:
1. Evaluate
merger and acquisition opportunities in the diagnostics field;
2. Assist
in shaping the general business direction of the Company;
3. Participate
in meetings with potential investors;
4. Recruiting
of Business Advisory Board Members, prospective Boardmembers to the Company
Board ofDirectors and Consultants to the Company;
5. Recruiting
full-time management and personnel to the Company;
6. Reviewing
the feasibility of the business goals of the Company and developing strategies
for achievingthem;
7. Identifying
and developing relationships with potential strategic partners;
8. Identifying,
reviewing and advising the Company, in a form (oral, writing or other) that is
generallyacceptable by scientists advising businesspersons in order to be
reasonably commercially useful, as to themost recent scientific advances in the
Field of Interest, as well as other scientific developments and intellectual
property in the Field of Interest; and
9. Providing
advice, support, theories, techniques and improvements in the Company's
commercial productdevelopment activities.
CV
See
Exhibit B
Prior Engagements and
Potential Conflicts of Interest*
* Only include engagements
which are either (i) within the past 3 years, and (ii) relevant engagements
prior to the past three years which may affect the Consultant’s performance
under this Agreement
Name of
Company Area
of Consultation
Exhibit
B
Curriculum
Vitae of Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx,
Ph.D.
0000 Xxxxxx Xxx
Xx
Xxxxxxxx, XX 00000
phone:
000-000-0000
e-mail:
xxxxxx.xxxxxxxxx@xxxxxxxxx.xxx
Senior
Management Executive
International
executive with more than 24 years experience in biotech and healthcare
companies. Versatile and entrepreneurial with a proven track record in general
management with P&L responsibility as well as management of corporate
functions such as research and development, manufacturing, marketing, business
development, licensing, mergers and acquisitions and several board memberships
of public and private companies.
PROFESSIONAL
EXPERIENCE:
President and
CEO
2006 -
present
Vectrant
Technologies, Inc.
Board
Positions
2006 -
present
Serving
on boards of Nanogen, GeneNews, Vectrant Technologies,
Sirius
Genomics, Smart Holograms (Chairman),
OxFord
BioDynamics, Magellan Diagnostics, Singulex, MedBioGene,
BioHelix,
Celula,Inc.
President and
CEO
2000 - 2006
Roche
Molecular Systems, Inc.
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·
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Grew
the RMS molecular IVD business from $640 million to $1.2 billion annually
by creating an industry leading product portfolio and spearheading global
marketing and sales efforts.
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·
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Attracted
corporate investments in excess of $1 billion and lead a staff of
1600.
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·
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Expanded
the PCR business into four new areas (Women’s Health, Microbiology,
Oncology and Genomics).
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·
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Doubled
the overall value of Roche Molecular Diagnostics during a six year
period.
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Head
of Global Business
Development 2000
Roche
Diagnostics
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·
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Responsible
for Global Business Development for the $7 Billion IVD business of Roche
Diagnostics, including global strategy, mergers and acquisitions, and
licensing/patents.
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·
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Led
the strategic vision process and established a new strategic architecture
for Roche Diagnostics.
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Head
of Integration
Office
1997 - 1999
Roche
Diagnostics
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·
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Managed
the merger of Roche Diagnostics’ IVD businesses and Boehringer
Mannheim.
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·
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Masterminded
the organizational structure and business strategy of the newly formed
Roche Diagnostics and coordinated the implementation of all integration
plans.
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The
Xxxxx-Xxxxxxxxxx union is considered to be the most successful industry
merger in recent years.
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Head
of Business Unit PCR
Europe
1991
- 1997
Roche
Diagnostics
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·
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Managed
the introduction of PCR IVD technology for Roche in
Europe.
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Responsible
for the global product portfolio planning and business strategy
for Roche Molecular Systems.
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Head
of Business Unit
Microbiology 1990
- 1991
Roche
Diagnostics
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·
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Supervised
a global microbiology business with $60 million in annual revenues,
including research, development, manufacturing and
marketing.
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Proposed
the divestiture of the microbiology business and located buyer (Becton
Xxxxxxxxx).
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Managed
the entire transaction and executed Roche’s complete integration
plan.
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Vice
President R&D Infectious
Diseases
1987 - 1990
Roche
Diagnostics
.
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·
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Head
of global R&D for infectious disease products for Roche Diagnostics;
included responsibility for development of IVD instrumentation for
infectious diseases.
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Vice
President of
Manufacturing 1985
- 1987
Roche
Diagnostics
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·
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Supervised
manufacturing operations for microbiological
diagnostics.
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Director
of R&D
Microbiology 1983
- 1985
Xxxxx
GmbH
Xxxxx
was a leading biotechnology company engaged in manufacturing industrial
enzymes.
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·
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Responsible
for genetic engineering and enzyme yield improvement for bacterial and
fungal manufacturing strains.
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Post-Doctoral
Fellowship
1983
French
Center for Nuclear Research in Saclay (near Paris)
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·
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Genetic
research with gram-negative
bacteria.
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EDUCATION/
AWARDS:
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Ø
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Diploma
in Biology (Masters Degree), Westfaelische Xxxxxxxx University,
Muenster
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Ph.D.
Degree in Microbiology/Molecular Biology, Westfaelische Xxxxxxxx
University, Muenster (summa cum
laude)
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Ø
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Published
several scientific articles, membership in professional associations
(EDMA, American Society for Microbiology, New York Academy of
Sciences)
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Ø
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University
of Muenster award for outstanding Ph.D.
thesis
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