PRIVATE AND CONFIDENTIAL
October
15, 2005
X.X.
Group, LLC
0000
Xxxxxxx Xxxxxx
Westfield,
MA 01085
Re:
Business
Advisory Services
Dear
Xx.
Xxxxxx:
This
letter agreement (“Agreement”) confirms the terms upon which Neuralstem, Inc.
(the “Company”), engages The X.X. Group, LLC (“Consultant”), to provide business
advisory services to the Company.
This
Agreement will be deemed to be effective as of October 15, 2005.
1. Scope
of Engagement.
The
Company hereby engages (the “Engagement”) Consultant as its non-exclusive
business advisor to provide advisory services regarding strategic business
development, the identification and recruiting of perspective board members,
and
the identification of strategic partners and related services (collectively,
“services”). The Company has the unequivocal right to engage other companies to
provide similar and other advisory services.
2. Scope
of Work.
In
connection with the Engagement, Consultant will: (i) familiarize itself to
the
extent it deems appropriate, or as otherwise reasonably requested by the
Company, with the business, operations, financial condition and prospects of
the
Company; (ii) identify possible board candidates; (iii) identify possible
strategic partners or acquisition targets and (iv) perform such other advisory
services within the scope of this engagement as the Company or its board of
directors shall reasonably request.
3. Company
Responsibilities, Representations and Warranties.
(a)
In
connection with the Engagement:
(i) The
Company agrees to use commercially reasonable efforts to cooperate with
Consultant and will furnish to Consultant all information and data concerning
the Company (the “Information”) which Consultant and the Company reasonably deem
appropriate for purposes of Consultant’s rendering of its services hereunder,
and will provide Consultant reasonable access to the Company’s officers,
directors, employees, contractors, consultants, representatives and advisors
during normal business hours of operation applicable to such persons and subject
to all applicable confidentiality restrictions;
(ii) The
Company represents and warrants to Consultant that all information included
or
incorporated by reference in any documents or otherwise made available to
Consultant by the Company to be communicated to possible candidates in which
Consultant is involved: (i) will be complete and correct to the best of the
Company’s knowledge and will not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
made,
in light of the circumstances under which they were made, not misleading; and
(ii) any projected financial information or other forward-looking information
that the Company provides to Consultant will be made by the Company in good
faith based on management estimates, facts and assumptions that the Company
believes are reasonable; and
(iii) The
Company agrees to promptly notify Consultant if the Company believes that any
information that was previously provided to Consultant has become materially
misleading.
(b) Any
advice rendered by Consultant during the Engagement or in meetings with the
Company and/ or its Board of Directors, as well as any written materials
provided by Consultant, are intended solely for the benefit and confidential
use
of the Company and will not be reproduced, summarized, described or referred
to
or given to any other person for any purpose without Consultant’s prior written
consent (except for the Company’s accountants, attorneys and similarly employed
and/or engaged persons).
(c)
Consultant
understands that the Company possesses and will possess Proprietary Information
which is important to its business. For purposes of this Agreement, "Proprietary
Information" is information that was or will be developed, created, or
discovered by or on behalf of the Company, or which became or will become known
by, or was or is conveyed to the Company (including, without limitation,
"Results" as defined below), which has commercial value in the Company's
business. "Proprietary Information" includes, but is not limited to, information
about trade secrets, cell lines, reagents, antibodies, computer programs,
designs, technology, ideas, know-how, processes, formulas, compositions, data,
techniques, improvements, inventions (whether patentable or not), works of
authorship, business and product development plans, customers and other
information concerning the Company's actual or anticipated business, research
or
development, or which is received in confidence by or for the Company from
any
other person, but excludes any information that Consultant can document (i)
is,
or through no improper action or inaction by Consultant or any affiliate or
agent, becomes generally known to the public, (ii) was in Consultant’s
possession or known by Consultant prior to using it in performing the Services,
(iii) was rightfully disclosed to Consultant by a third party without
restriction, or (iv) is required to be disclosed by law, government regulation,
or court order. In addition, Proprietary Information does not include
information (including "Results") generated by the Consultant unless the
information is generated as a direct result of the performance of Services.
Consultant understands that the Services arrangement creates a relationship
of
confidence and trust between Consultant and the Company with regard to
Proprietary Information. All Proprietary Information and all title, patents,
patent rights, copyrights, trade secret rights, and other intellectual property
and rights anywhere in the world in connection therewith (collectively "Rights")
shall be the sole property of the Company. Consultant hereby assigns to the
Company any Rights Consultant may have or acquire in such Proprietary
Information. At all times, both during the term of this Agreement and after
its
termination, Consultant will keep in confidence and trust and will not use
or
disclose any Proprietary Information without the prior written consent of an
officer of the Company. Consultant acknowledges that any unauthorized disclosure
or unauthorized use of Proprietary Information will constitute a material breach
of this Agreement and cause substantial harm to the Company for which damages
would not be a fully adequate remedy, and, therefore, in the event of any such
breach, in addition to other available remedies, the Company shall have the
right to obtain injunctive relief without the need to post bond or other
security.
4. Fees.
As
compensation for its services, the Company agrees to issue Consultant upon
execution of this agreement, a warrant to purchase One-Million (1,000,000)
shares of the Company’s common stock for $.50 per share. If not exercised, this
warrant shall expire nine-months after the Company’s stock begins trading on a
national exchange or over the counter. The warrant shall be in substantially
the
same form as attached hereto as Exhibit
A.
5.
Expenses.
The
Company will reimburse Consultant for expenses which the Company has
pre-approved in writing whether or not any financing is consummated.
6.
Indemnification.
The
Company agrees to indemnify and hold harmless Consultant and its affiliates
(and
their respective control persons, directors, officers, employees and agents)
to
the full extent lawful against any and all claims, losses, damages, liabilities,
costs and expenses as incurred (including all reasonable fees and disbursements
of counsel and all reasonable travel and other out-of-pocket expenses incurred
in connection with investigation of, preparation for and defense of any pending
or threatened claim and any litigation or other proceeding arising therefrom)
arising out of or related to Consultant’s Engagement hereunder (a “Consultant
Claim”), except that the Company shall not be obligated to indemnify, hold
harmless and/or pay any fees or expenses to any person for a Consultant Claim
if
such Consultant Claim arises out of or is based upon any action or failure
to
act by Consultant, that is found in a judicial determination to constitute
bad
faith, willful misconduct or gross negligence on the part of Consultant. The
Company will not, without the prior written consent of Consultant, settle any
litigation relating to Consultant’s Engagement hereunder unless such settlement
includes an express, complete and unconditional release of Consultant and its
affiliates (and their respective control persons, directors, officers, employees
and agents) with respect to all claims asserted in such litigation or relating
to Consultant’s Engagement hereunder.
7.
Term
and Termination.
Consultant’s Engagement hereunder may be terminated, with or without cause, by
either the Company or Consultant upon 30 days’ prior written notice to the other
party at any time. However, no termination will affect Consultant’s right to (a)
expense reimbursement under Section 5 herein, (b) receipt of payment of the
fees
pursuant to Section 4 herein and (c) the indemnification contained in Section
7
herein.
8.
Governing Law;
Jurisdiction; Waiver of Jury Trial; Optional Arbitration.
This
Agreement will be deemed made in Massachusetts and will be exclusively governed
by the laws of the State of Massachusetts with regards to the conflict of law
principles contained therein. Any dispute arising hereunder, if not settled
by
mutual agreement, shall be settled by arbitration. The arbitration shall be
conducted in accordance with the rules then obtaining of the American
Arbitration Association by a single arbitrator appointed in accordance with
such
rules. Arbitration shall take place in Massachusetts. The Company irrevocably
submits to the jurisdiction of any court of the State of Massachusetts, for
the
purpose of any suit, action or other proceeding arising out of this Agreement,
or any of the agreements or transactions contemplated hereby, which is brought
by or against the Company. Each of the Company and Consultant hereby knowingly,
voluntarily and irrevocably waive any right it may have to a trial by jury
in
respect of any claim based upon, arising out of or in connection with this
Agreement and the transactions contemplated hereby.
9.
Independent
Contractor.
The
Company acknowledges and agrees that (a) Consultant will act as an independent
contractor and is being retained solely to assist the Company in corporate
finance and merger and acquisition matters, and that Consultant is not being
retained to advise the Company on, or to express any opinion as to, the wisdom,
desirability or prudence of consummating any financing; and (b) Consultant
is
not and will not be construed as a fiduciary of the Company or any affiliate
thereof and will have no duties or liabilities to the equity holders or
creditors of the Company, and affiliates of the Company or any other person
by
virtue of this Agreement and the retention of Consultant hereunder, all of
which
duties and liabilities are hereby expressly waived. Neither equity holders
nor
creditors of the Company are intended beneficiaries hereunder. The Company
confirms that it will rely on its own counsel, accountants and other similar
expert advisors for legal, accounting, tax and other similar advice. Consultant
agrees to be solely responsible for paying all of its own taxes that accrue
from
the receipt of compensation from the Company.
10.
Miscellaneous.
This
Letter Agreement may not be modified or amended except in writing executed
in
counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument.
If
the
foregoing correctly sets forth our agreement, please so indicate by signing
below and returning an executed copy to Consultant. This Agreement may be
executed by the exchange by facsimile/telecopy or e-mail/electronic signature
between the parties of signed counterparts of this Agreement. We look forward
to
working with you and the rest of the management team in a long-term relationship
that assists the Company in achieving its business goals.
| X.X. GROUP, LLC | NEURALSTEM, INC. | ||||
| By: | By: | ||||
|
Name:
Xxxx Xxxxxx
Title:
Manager
|
Name: X. Xxxxxxx
Xxxx Title: CEO |
||||
