EXHIBIT 3.1
INDEPENDENT CONTRACTOR AGREEMENT
This Independent Contractor Agreement (the "Agreement") is made and
entered into as of this 15th day of April, 2003, ("Effective Date"), by and
between CRYO CELL INTERNATIONAL, INC., a Delaware corporation having a principal
place of business at 0000 XxXxxxxx Xxxxx Xxxx, Xxxx. X, Xxxxxxxxxx, Xxxxxxx
00000 (the "Company") and XXXXXXXX-XXXXXX ENTERPRISES, INC., a Florida
corporation having a principal place of business at 0000 Xxxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xx. Xxxxxxxxxx, Xxxxxxx, 00000, (the "Contractor").
W I T N E S S E T H
WHEREAS, the Company is in the business of preservation, processing and
storage of blood based stem cells (the "Business"); and
WHEREAS, the Company desires to retain the Contractor to provide
certain services relating to the Business, and the Contractor desires to be so
retained and to perform those services for the Company.
NOW, THEREFORE, the Contractor and the Company agree as follows:
1. Character and Extent of Services. During the Term of this Agreement,
pursuant to and subject to terms and conditions of this Agreement, the
Contractor shall provide the services of its employee, Xxxx X. Xxxxxxxx,
("Xxxxxxxx"), to the Company as the Company's interim President and Chief
Operating Officer and the operational, investment and financial advisory
services, on a non-exclusive basis, described as follows (collectively
"Contractor's Services"):
(A) Assist in the analysis and evaluation, from an operational
and financial point of view, the Company and its business and
prospects, including any business or operating plan and the
appropriateness of the capital structure of the Company as it presently
exists and as it may be modified by any proposed financing and plans;
(B) Assist in the determination of an appropriate plan to raise
equity and/or debt financing for the Company, and at the request of the
Company, render financial and operational advice in connection with the
design and implementation of a process to solicit, coordinate and
evaluate proposals for any other potential or actual transaction;
(C) Review the following information of the Company:
(i) Operating statements, balance sheets, and projections;
(ii) Material corporate documents, contracts, and other
legal documents;
(iii) Internal policies and procedures;
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(iv) Any other Company and/or industry information that
Contractor determines to be relevant to its analysis;
(D) Assist in the preparation and dissemination of confidential
information materials for potential investors, and, with Company's
consent, strategic partners in any other potential or actual
transaction; and
(F) Provide additional advisory and administrative services as
Contractor deems reasonably necessary.
Subject to the directions of the Board of Directors of the Company ("Board") and
the Company Chief Executive Officer ("CEO"), Houghton, as interim President and
Chief Operating Officer shall be responsible on an interim basis for general
administration, oversight, care, and management of the property and business of
the Company and all of its departments, and shall have authority over its other
officers and employees, subject only to the provisions of the bylaws of the
Company ("Bylaws") and other corporate documents, controls exercised by the
Board and CEO, and provisions of law, including any limitations upon the
Contractor's authority or conduct for the Company. The parties acknowledge and
agree that the services to be provided by Houghton under this Agreement are
personal and may not be delegated by the Contractor. The parties also
acknowledge and agree that, as President, Houghton shall have power during the
Term to sign, execute, and deliver on behalf of the Company any papers necessary
to be signed, executed, and delivered by the President of the Company in
carrying on the business of the Company, except in cases where the signing and
execution thereof shall be expressly delegated by the Board or CEO or by the
Bylaws or some other corporate document to some other officer or agent of the
Company, or shall be required by law to be otherwise signed or executed,
including any limitations upon the Contractor's authority or conduct for the
Company.
2. Term. The term of this Agreement ("Term") shall be for an initial
period of three (3) months commencing April 15, 2003, ("Commencement Date"),
until July 14, 2003, and thereafter shall continue automatically without further
notice or action on a month-to-month basis until terminated on the date
("Termination Date"), specified by either party on thirty (30) days prior
written notice; provided always, however, that this Agreement may be terminated
immediately:
(A) By either party, if there has been a single material breach
of the terms of this Agreement (other than an illegal act for which no
cure period shall apply) by the other party hereto which the defaulting
party has failed to cure within 10 days; or
(B) by either party if there has been a second material breach
of the terms of this Agreement by the other party; or
(C) by the Company if the Contractor (i) consistently fails to
perform its duties hereunder in a competent manner, or (ii) engages in
illegal or unethical conduct which reflects adversely upon Contractor's
honesty and integrity in the performance of its duties
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as a representative or executive of the Company, or which is clearly
detrimental to the interests of the Company; or
(D) by the Company if the Contractor provides "Just Cause,"
which, for the purposes of this clause, shall mean any of the
following: (1) commission of acts by Contractor or its employees,
agents or representatives constituting criminal behavior; (2) habitual
neglect of the Contractor's duties; (3) Houghton's death or disability;
or (4) dishonesty, defalcation or insubordination of Contractor or any
of its employees, agents or representatives in regard to the Company's
business.
3. Independent Contractor. It is understood and agreed that the
Contractor is an independent contractor in the performance of this Agreement,
that the Contractor shall perform the contracting activity under the control of
the Company as to the result of such activity only and not as to the means by
which such result is accomplished and that the Contractor's employee, Houghton,
is providing services for the Company during the Term on a full time basis.
Further, the Contractor shall not be entitled to participate in any plans,
arrangements or distributions by the Company pertaining to any bonus, profit
sharing, insurance or similar benefits for Company employees, including, but not
limited to, vacation pay, sick leave, holiday pay, retirement benefits, social
security benefits, disability or unemployment insurance benefits, health or
accident insurance, etc. The Contractor is neither an agent nor employee of the
Company, and, except for the limited authority granted Houghton during the Term,
as expressly provided herein, neither the Contractor nor its representatives has
any authority whatsoever to bind the Company by contract or agreement of any
kind. The Company shall not withhold federal or state income taxes from the
Contractor's fees payable hereunder and shall not pay FICA, state unemployment
or other employment taxes or disability payments with respect to the Contractor
or Houghton, such items and such payments being the sole responsibility of the
Contractor.
4. Compensation. For and in consideration of Contractor's Services to
be rendered by Contractor to the Company during the Term, the Company shall pay
Contractor $30,000 per month, or such greater amount as the Board may authorize
from time to time, payable in $15,000 payments on the fifteenth and last day of
the month in arrears for each month for which such services are rendered
hereunder; provided always, however, if the Commencement Date is not on the
first day of the month, or the Termination Date is not the last day of the
month, a prorated installment of monthly installment of compensation as herein
provided shall be paid to Contractor at the then current compensation rate for
the fractional month during which the Commencement Date and/or Termination Date
occurs.
5. Expenses. Contractor shall be solely responsible for all expenses
incurred by the Contractor during the Term of this Agreement and shall not be
entitled to reimbursement from the Company unless otherwise agreed to in advance
by the Company.
6. Confidentiality. The Contractor acknowledges that, in the course of
providing services hereunder, the Contractor will learn certain confidential
information about the Company's business. The Contractor agrees to keep all such
information strictly confidential and not use it for Contractor's own benefit
nor disclose or divulge such information to any person outside of the Company.
The parties acknowledge that the provisions of this Section 6 shall not apply to
any
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information which: (i) had been rightfully in the possession of the recipient
prior to its disclosure to the recipient; (ii) had been in the public domain
prior to its disclosure to the recipient; (iii) has become part of the public
domain by publication or by any other means except an unauthorized act or
omission on the part of the recipient; (iv) had been supplied to the recipient
without restriction by a third p arty who is under no obligation to maintain
such information in confidence; (v) is required to be disclosed by any federal
or state law, rule or regulation or by any applicable judgment, order or decree
or any court or governmental body or agency having jurisdiction in the premises;
or (vi) during the Term is required in the ordinary course of business to
promote, market and sell the Company's Business.
7. Covenant Not to Compete. The Contractor hereby agrees that
Contractor will not, either during the Term or until the first anniversary of
the Termination Date, engage in any business activities on behalf of any
enterprise that competes with the Company in the Business. The Contractor will
be deemed to be engaged in such competitive business activities if Contractor
participates in such a business enterprise as an employee, officer, director,
contractor, agent, partner, proprietor, or other participant; provided that the
ownership of no more than 2 percent of the stock of a publicly traded
corporation engaged in a competitive business shall not be deemed to be engaging
in competitive business activities; further, no provision of this Agreement
shall preclude the Contractor from making passive investments in any company or
from becoming involved in the parent, affiliate or subsidiary company of any
company involved in the Company's Business as long as the Contractor has no
involvement in such competing entity.
The Contractor further agrees that the Contractor shall not for
Contractor or for any other person, firm, corporation, partnership or other
entity, for a period of one (1) year from the Termination Date, directly or
indirectly:
(i) solicit any sales agent, employee, former employee who was
employed by the Company in the preceding 90 days or full-time
employee of the Company for the purposes of hiring or retaining
such sales agent, employee or contractor,
(ii) contact any present or prospective client of the Business of
the Company ("Company Clients") to solicit such Company Clients
to enter into a contract or arrangement with any competitor of
the Company, or
(iii) make known names and/or addresses of the Company Clients or
any information relating in any manner to the Company's trade or
business relationships with such Company Clients; provided
always, however, that the provisions of this Section shall not
apply to any information which: (i) had been rightfully in the
possession of the recipient prior to its disclosure to the
recipient; (ii) had been in the public domain prior to its
disclosure to the recipient; (iii) has become part of the public
domain by publication or by any other means except an
unauthorized act or omission on the part of the recipient; (iv)
had been supplied to the recipient without restriction by a third
party who is under no obligation to maintain such information in
confidence; or (v) is required to be disclosed by any federal or
state law, rule or regulation or by any applicable judgment,
order or decree or any court or governmental body or agency
having jurisdiction in the premises.
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8. Ownership of Developments. All copyrights, patents, trade secrets,
or other intellectual property rights associated with any ideas, concepts,
techniques, inventions, processes, or works of authorship develop or created by
Contractor during the course of performing work for the Company or its clients
(collectively, the "Work Product") shall belong exclusively to the Company and
shall, to the extent possible, be considered a work made by the Contractor for
hire for the Company within the meaning of Title 17 of the United States Code.
To the extent the Work Product may not be considered work made by the Contractor
for hire for the Company, the Contractor agrees to assign and automatically
assigns at the time of creation of the Work Product, without any requirement of
further consideration, any right, title, or interest the Contractor may have in
such Work Product. Upon the request of the Company, at the Company's expense,
the Contractor shall take such further actions, including execution and delivery
of instruments of conveyance, as may be reasonably appropriate to give full and
proper effect to such assignment; provided always, however, if the Contractor's
assistance is required after the Termination Date, as herein provided, then the
Company shall compensate the Contractor at a reasonable rate, which shall be
determined by multiplying a determined number of hours reasonably expended by
the Contractor in performance of such duties by the reasonable hourly rate of
Two Hundred Fifty ($250) Dollars per hour.
Solely for purposes of Sections 6, 7, 8, 9, 10 and 11 hereof only, the
term "Company" also shall include any existing or future subsidiaries of the
Company that are operating during the time periods described herein and any
other entities that directly or indirectly, through one or more intermediaries,
control, are controlled by or are under common control with the Company during
the periods described herein.
9. Remedies. The Contractor acknowledges and agrees that the Company's
remedy at law for a breach or threatened breach of any of the above provisions
of Section 6, 7 and 8 would be inadequate and the breach shall per se be deemed
as causing irreparable harm to the Company. In recognition of this fact, in the
event of a breach by the Contractor of any of the provisions of Section 6, 7 and
8 of this Agreement, the Contractor agrees that, in addition to any remedy at
law available to the Company, the Company shall be entitled to obtain injunctive
relief, or any other appropriate equitable remedy, without having to post a bond
or other security. It is expressly understood and agreed by the Contractor that
although the parties consider the restrictions contained in this Agreement to be
reasonable, if a court determines that the time or territory or any other
restriction contained in this Agreement is an unenforceable restriction on the
activities of the Contractor, such provision in this Agreement shall not be
rendered void but shall be deemed to be amended to apply as to such maximum time
and territory and to such extent as such court may judicially determine or
indicate to be reasonable.
10. Indemnification; Exculpation; Insurance. Recognizing that
Contractor, in performing Contractor Services contemplated hereby, will be
acting as a limited representative of and relying on information provided by the
Company, the Company agrees to the provisions of Schedule 1 hereto, and it is
specifically understood and agreed that the indemnification provisions of
Schedule 1 shall be binding on the successors and assigns of the parties hereto
and of the Indemnified Parties, subject always to any applicable statutes of
limitations and the limitations of Schedule 1 hereof. The Company also
acknowledges and agrees that, as of the Effective Date and during the Term, the
Company shall continue to carry in force for the benefit of Contractor and
Houghton the
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liability and errors and omissions insurance it currently carries and shall
provide to Contractor with a Certificate of Insurance or other reasonable
documentation from time to time evidencing such coverage.
11. Expert Witness Fee. In addition to the provisions of Section 11
hereof, if the Contractor or any of Contractor's representatives, employees,
consultants or other professional personnel, including Houghton, appears as a
witness or participate, is deposed or is otherwise involved at any time in any
action or proceeding involving the Company, including litigation or arbitration
against the Company or participation in SEC or other regulatory matters or
proceedings involving the Company, then the Company or any of their respective
affiliates, the Company will pay Contractor a fee of $250 per hour for each such
person being so involved, and the Company will also reimburse Contractor for all
reasonable expenses incurred by Contractor by reason of its or any of its
representatives, employees, consultants or other professional personnel being
involved therein. The provisions of this Section 11 shall survive the
Termination Date and continue to apply after completion of the Term.
12. Representations of Contractor. Contractor has represented and
hereby represents and warrants to the Company that Contractor is not subject to
any restriction or non-competition covenant in favor of any other person or
entity, and that the execution of this Agreement by Contractor and engagement b
y the Company and the performance of duties hereunder will not violate or be a
breach of any agreement with a former employer or any other person or entity.
Further, Contractor agrees to indemnify the Company for any claim, including,
but not limited to, attorneys' fees and expenses of investigation, by any such
third party that such third party may now have or may hereafter come to have
against Contractor based upon or arising out of any restriction or
non-competition agreement or invention and secrecy agreement between Contractor
and such third party.
13. Consent To Personal Jurisdiction and Venue; Waiver of Jury Trial.
Subject always to the provisions of Section 14 hereof, each of the parties
hereby consents to personal jurisdiction and venue, for any action arising out
of a breach or threatened breach of this Agreement, exclusively in the United
States District Court for the Middle District of Florida, Tampa Division, or in
the Circuit Court in and for Pinellas County, Florida; each of the parties
hereby agrees that any action brought by such party, alone or in combination
with others, against the other party, whether arising out of this Agreement or
otherwise, shall be brought exclusively in the United States District Court for
the Middle District of Florida, Tampa Division, or in the Circuit Court in and
for Pinellas County, Florida. Each party hereby agrees that any controversy
which may arise under this Agreement would involve complicated and difficult
factual and legal issues. Therefore, if a court of law determines for any reason
that the arbitration clause of Paragraph 14 of this Agreement is unenforceable,
then any action brought by a party against the other party, whether arising out
of this Agreement or otherwise, shall be determined by a judge sitting without a
jury.
14. Arbitration. The parties hereto agree to submit all
controversies, claims, disputes, and matters in question arising out of, or
related to, this Agreement or the breach of this Agreement, or the relations
between the signatories to this Agreement to mediation. In the event either
party disagrees with the finding of the mediator, the particular matter shall be
decided by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. The signatories agree that the arbitration
shall take place exclusively in Clearwater, Florida, and shall be governed by
the law of the state of Florida. Any award rendered by the
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arbitrator shall be final, and judgment maybe entered upon it in accordance with
applicable law in any court having jurisdiction thereof, including a federal
district court, pursuant to the Federal Arbitration Act. The arbitrator may
grant the Company injunctive relief, including mandatory injunctive relief, to
protect the rights of the Company, but shall not be limited to such relief. This
provision shall not preclude the Company from seeking temporary or preliminary
injunctive relief in a court of law to protect its rights, nor shall the filing
of such an action constitute any waiver by the Company of its right to mediate
or arbitrate. In connection with the mediation or arbitration of any dispute
between the signatories to this Agreement, each signatory may utilize all
methods of discovery authorized by the Federal and Florida Rules of Civil
Procedure.
15. Survival. Upon the Termination Date, Contractor's obligation to
perform Contractor Services pursuant to Section 1 hereof, and the Company's
obligation to pay Contractor compensation pursuant to Section 4 hereof, shall
terminate; provided always, that the Contractor shall be entitled to receive any
compensation or other payment expressly provided for herein which has accrued
for the period through the Termination Date; and, accordingly the following
provisions shall remain in full force and effect in case of termination of this
Agreement by either party: (i) the compensation provisions of Section 4; (ii)
the confidentiality provisions of Section 6; (iii) the confidentiality
provisions of Section 7; (iv) the ownership provisions of Section 8; (v) the
remedies provisions of Section 9; (vi) the indemnification provisions of Section
10; (vii) the expert witness fee provisions of Section 11; (viii) the
Contractor's representation provisions of Section 12; (ix) the jurisdiction and
venue provisions of Section 13; (x) the arbitration provisions of Section 14;
and (xi) the other terms and provisions hereof which by reasonable implication
should survive termination (including without limitation any rights of the
Contractor or the Company hereby expressly vested in such party as of the
Termination Date).
16. Governing Law. This Agreement shall be governed in all respects
by the laws of the State of Florida.
17. Counterparts and Facsimile. This Agreement may be executed in any
number of counterparts, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall constitute
one instrument. A facsimile signature shall be considered the same as an
original.
18. Entire Agreement; Modification. This Agreement contains the whole
agreement between the parties hereto with respect to the Contractor's engagement
with the Company. No agreement or understanding which modifies this Agreement
shall be binding upon the Company or the Contractor unless in writing and duly
signed by the Company and the Contractor.
19. Severability. In the event it is determined by a court of
competent jurisdiction that any provision herein contained is illegal or
unenforceable, such determination shall solely affect such provision and shall
not impair the remaining provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto or their duly authorized
representatives have signed, sealed and delivered this Agreement effective as of
the day and year first above written.
CRYO-CELL INTERNATIONAL, INC.
By: /s/ Xxxxxxxx Xxxxxx
-------------------
Xxxxxxxx Xxxxxx, Interim CEO
XXXXXXXX-XXXXXX ENTERPRISES, INC.:
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Xxxx X. Xxxxxxxx, as Vice-President
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Schedule 1
To
Independent Contractor Agreement
This Schedule 1 is a part of and is incorporated into that certain
Independent Contractor Agreement (together the "Agreement") dated April 15,
2003, by and between CRYO CELL INTERNATIONAL, INC., a Delaware corporation, (the
"Company") and XXXXXXXX-XXXXXX ENTERPRISES, INC., (the "Contractor"). This
Agreement will confirm that the Company agrees to indemnify and hold harmless
Contractor and its affiliates, each of their respective directors, officers,
attorneys and other agents, stockholders, members and employees of Contractor,
including without limitation Xxxx X. Xxxxxxxx ("Xxxxxxxx") and its affiliates
and each other person, if any, controlling Contractor or any of its affiliates
(Contractor, Houghton and each such other entity or person being referred to as
an "Indemnified Person"), to the full extent lawful, from and against any
losses, claims, damages, expenses or liabilities or actions (including, without
limitation, shareholder actions and actions a rising from the use of information
contained in any confidential information or materials or omissions from such
materials) related to or arising out of this engagement or Contractor's role in
connection with the Company herewith, and will pay (or, if paid by an
Indemnified Person, reimburse such Indemnified Person) for all fees and expenses
(including, without limitation, counsel fees and charges for the time of
Contractor at the rate of $250 hourly and Contractor's professional employees at
their then current hourly rates) incurred by such Indemnified Person in
connection with investigating, preparing for or defending any such action or
claim, whether or not in connection with pending or threatened litigation in
which any Indemnified Person is a party; further, all covenants, representations
and warranties of the Company contained in this Agreement or otherwise provided
in accordance herewith shall survive for purposes of indemnification pursuant to
the Agreement and the provisions of this Schedule 1, subject always to any
applicable statutes of limitations and the limitations of Schedule 1 hereof.
The Company will not, however, be responsible for any claims, losses,
damages, liabilities or expenses which result from any compromise or settlement
not approved by the Company or which are determined by a final judgment of a
court of competent jurisdiction to have resulted primarily from the fraud,
willful misconduct or gross negligence of any Indemnified Person, and no party
shall be entitled to actual collection of indemnification payments from the
Company pursuant hereto until such party actually incurs the loss, cost or
expense resulting from the Indemnifiable Claim for which indemnification is
sought. The Company also agrees that no Indemnified Person shall have any
liability to the Company for or in connection with this engagement, except for
any such liability for losses, claims, damages, liabilities or expenses incurred
by the Company, which are determined by a final judgment of a court of competent
jurisdiction to have resulted solely from the fraud, willful misconduct or gross
negligence of the Indemnified Person. The foregoing agreement shall be in
addition to any rights that any Indemnified Person may have at common law or
otherwise, including, without limitation, any right to contribution.
If any action or proceeding is brought against any Indemnified Person
in respect of which indemnity may be sought against the Company pursuant hereto,
or if any Indemnified Person receives notice from any potential litigant or a
claim which such person reasonably believes will
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result in the commencement of any such action or proceeding, such Indemnified
Person shall promptly notify the Company in writing of the commencement of such
action or proceeding, or of the existence of any such claim, but the failure to
so notify the Company of any such action or proceeding shall not relieve the
Company from any other obligation or liability which it may have to any
Indemnified Person otherwise than under this Agreement or with respect to any
other action or proceeding. In case any such action or proceeding shall be
brought against any Indemnified Person, the Company shall be entitled to
participate in such action or proceeding with counsel of the Company's choice,
or compromise or settle such action or proceeding with counsel of the Company's
choice or settle such action or proceeding, at its expense (in which case the
Company shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by such Indemnified Person); provided, however, that
such counsel shall be satisfactory to the Indemnified Person in the exercise of
its reasonable judgment. Notwithstanding the Company's election to assume the
defense of such action or proceeding, such Indemnified Person shall have the
right to employ separate counsel and to participate in the defense of such
action or proceeding, and the Company shall bear the reasonable fees, costs and
expenses of such separate counsel (and shall pay such fees, costs and expenses
at least quarterly), if (a) the use of counsel chosen by the Company to
represent such Indemnified Person would, in the judgment of the Indemnified
Person, present such counsel with a conflict of interest; (b) the defendants in,
or targets of, any such action or proceeding include both an Indemnified Person
and the Company, and such Indemnified Person shall have reasonably concluded
that there may be legal defenses available to it or to other Indemnified Persons
which are different from or additional to those available to the Company (in
which case the Company shall have the right to direct the defense o f such
action or proceeding on behalf of the Indemnified Person); (c) the Company shall
not have employed counsel satisfactory to such Indemnified Person in the
exercise of the Indemnified Person's reasonable judgment to represent such
Indemnified Person within a reasonable time after notice of the institution of
such action or proceeding; or (d) the Company shall authorize such Indemnified
Person to employ separate counsel at the Company's expense.
These indemnification provisions shall (i) remain operative and in full
force and effect regardless of any termination or completion of the engagement
of the Contractor; (ii) inure to the benefit of any successors, assigns, heirs
or personal representative of any Indemnified Person; and (iii) be in addition
to any other rights that any Indemnified Person may have.
CRYO-CELL INTERNATIONAL, INC.
By: /s/ Xxxxxxxx Xxxxxx
-------------------
Xxxxxxxx Xxxxxx, Interim CEO
HOUGHTON-WAGMANENTERPRISES, INC.:
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Xxxx X. Xxxxxxxx, as Vice President
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