MANAGEMENT CONSULTING AGREEMENT
MANAGEMENT CONSULTING AGREEMENT
This
Management Consulting Agreement is made as of July 7, 2003. between
Response 13iomedieai Corp. ("Response" or the "Company") and Katan Associates,
Inc. (the "Consultant").
| 1. | Engagement - Response
hereby agrees to engage the services of the Consultant and the Consultant
hereby accepts such engagement by the Company to perform consulting services
for the Company on the terms contained herein. |
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| 2. | Duties - The Consultant
shall render the services described in the Consultant's letter dated July
7, 2003 and attached as Schedule A hereto, and such other matters as may
be requested by the CEO of the Company from time to time. |
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| 3. | Term and Termination
- This Agreement shall commence on Aug 1, 2003 and expire June 30, 2005
provided, however, that after September 30, 2003 either party may terminate
this agreement upon 30 days written notice delivered to the other party,
which termination may be with or without cause and for any reason whatsoever. |
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| 4. | Remuneration. |
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(a) |
Fees. For
services provided, the Company agrees to pay the Consultant a retainer
of US$5,000 per month for the term of the Agreement. |
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(b) |
Options. As further consideration of the services provided hereunder, the Company shall grant the Consultant a stock option (the "Consultant's Stock Option") to purchase up to 200,000 common shares of Response, exercisable at $0.50 in accordance with policies of the TSX Venture Exchange and the Company's Stock Option Plan. The options shall vest as follows: 25% upon grant, and an additional 25% in each of the three subsequent 6 month periods. Additionally, the vesting of the Consultant's Stock Option will be conditional upon Response successfully completing either an equity financing or partnership transaction as outlined in paragraphs 3(d) and 3(e) below. The shares underlying such options shall have registration rights and other standard provisions. |
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(c) |
Reimbursement of Expenses. The
Company shall reimburse the Consultant for all reasonable and properly
documented expenses related to this engagement. Any expenses in excess
of $100 are to be approved in writing in advance by the CEO of Company. |
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(d) |
Financing Success Fees. In the
event that the Company completes an equity financing with an investor
introduced by the Consultant and pre-qualified by Response, Response shall
pay the Consultant a success fee equal to 5% of the gross proceeds provided
by each investor introduced to Response by the Consultant. The success
fee is payable within 5 business |
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days of Response closing the financing.
In the situation where an investor's proceeds are received by Response
in trenches, the Consultant's fee shall be payable on the same terms at
the time each tranche is received by Response, The terms of this paragraph
will be further amplified by a formal finder's fee agreement executed
by Response and the Consultant prior to an equity financing. The success
fee will only be payable with respect to prospective investors introduced
by the Consultant and pre-qualified by Response (the "Named Investors").
All Named Investors shall be identified and attached as a schedule to
the finder's fee agreement. It is understood by both Response and the
Consultant that in the event a financing is conducted through a third
party investment banking firm, underwriter or agent (the "Agent") introduced
by the Consultant to Response, then Response will negotiate an aggregate
commission or finder's fee payable to the Agent (the "Agent's Fee") for
the financing and the Consultant's success fee will be payable out of
the Agent's Fee. |
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| (e) |
Partner Finder's Fees. In the
event that the Company completes a partnering transaction with a prospective
partner introduced by the Consultant and pre-qualified by Response ("Named
Partner") and where licensing fees are paid by the Named Partner, Response
shall pay the Consultant a partner finder's fee (the "Partner's Fee")
equal to 5% of the amount of the licensing fee within 5 business days
of Response receiving the funds. The terms of this paragraph will be further
amplified by a formal Partner's Fee agreement executed by Response and
the Consultant prior to initiating the partnering transaction. All Named
Partners shall be identified and attached as a schedule to the Partner's
Fee agreement. |
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| 5. | Restrictive Covenants. | |
| (a) | Non-Compete. The Consultant agrees
not to render any services during the term of this Agreement to any company
or person engaged in a business which is competitive to the Company. |
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| (b) |
Confidentiality. The Consultant
shall keep in confidence and shall not disclose or make available to third
parties or make any use of any information or documents relating to his/her
services under this Agreement or to the product, methods of manufacture,
trade secrets, processes, business or affairs of the Company (other than
information in the public domain through no fault of the Consultant),
except with the prior written consent of the Company or to the extent
necessary in performing tasks assigned to the Consultant by the
Company. Upon termination of this Agreement, the Consultant will return
to the Company all documents and other materials related to the services
provided hereunder or furnished to the Consultant by the Company. The
Consultant's obligations under this Section 4(b) shall survive termination
of this Agreement. |
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(c) |
Delivery of Records. Upon the
termination of the Consultant's engagement with the Company, the Consultant
will deliver to the Company all books, records, lists, brochures and other
property belonging to the Company or developed in connection with the
business of the Company. |
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| 4. | Ownership of Work Product
- Any and all know-how, ideas, discoveries, inventions, improvements,
4. formula, methods, processes, systems, plans and any other knowledge
or information of a technical or scientific nature or of a business nature
pertinent to the Company's scientific or business interests whether protectable
as industrial or intellectual property right or not, which the Consultant
may conceive develop or acquire whether solely or jointly with any other
party in furtherance of the engagement with the Company will be the sole
and exclusive property of the Company; however, the Company agrees to
name the Consultant as the inventor on any patent applications made as
a result of work performed by him under this Agreement, provided that
all such patent applications are assigned to Response. |
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| 5. | Independent Contractor
- The Consultant's relationship with the Company shall be that of
an independent contractor and not that of an employee. The Consultant
will not be eligible for any employee benefits, nor will the Company make
any deductions from the Consultant's fees for taxes, which shall be the
Consultant's responsibility. The Consultant shall have no authority to
enter into contracts which bind the Company or create obligations on the
part of the Company without the express prior authorization of the Company. |
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| 6. | Effect of Waiver
- The waiver by either party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other provision or
any subsequent breach of the same provision thereof. |
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| 7. | Indemnification -
Company agrees to indemnify, defend and hold harmless Consultant from
and against any loss, damage, expense and liability that Company may incur
as a result of matters referenced in Sections 1, 2, and 3, except that
the indemnification shall not apply where it has been determined that
die Consultant, in the performance of his duties herein, has acted unlawfully
or with gross negligence. |
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| 8. | Severability - If
any portion of this Agreement is held, by a court of competent jurisdiction,
to conflict with any Federal, state or local law, such portion or portions
of this Agreement are hereby declared to be of no force and effect in
such jurisdiction and this Agreement shall otherwise remain in full force
and effect and be construed as if such portion had not been included herein. |
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| 9. | Miscellaneous | |
| (a) | Section headings are employed in this
Agreement for reference purposes only and shall not affect the interpretation
or meaning of this Agreement. |
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| (b) | This Agreement shall be governed by
and construed in accordance with the internal laws of Florida. |
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| (c) | This Agreement may be signed in counterparts,
each of which shall be an original and both of which shall constitute
one instrument. |
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first Above written.
| Response Biomedical Corp. | Katan Associates, |
| /s/ Xxxx Xxxxxx Xxxx Xxxxxx, President and CEO |
/s/ Xxxx Xxxxxxx Xxxx Xxxxxxx, Partner |
KATAN ASSOCIATES, Inc
0000 Xxxxx Xxxx, #000
Xxxxx Xxxxx, XX 00000
July 7, 2003
Response Biomedical Corp.
Xx. Xxxx Xxxxxx, President and CEO
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx, X00 0X0
Dear Xxxx:
This letter is to act as Exhibit A to the Management Consulting Agreement dated July 1, 2003 (the "Agreement") between Katan Associates, Inc. (" Katan") and Response Biomedical Corp. ("Response" or the "Company"). Under the terms of the Agreement, Katan shall, at the request of the CEO of the Company, render management advisory services, including but not limited to the following:
| 1. | Assist senior management
to develop and execute a financing strategy for the Company focused on
raising sufficient capital to implement its business plan and enhancing
overall market capitalization through an increased share price. Action Items: |
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a. |
Recommend a program to increase visibility
and validation of the Company throughout the industry. |
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b. |
Recommend specific industry related
financial functions for the Company to attend and facilitate/support such
attendance. |
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c. |
Provide introductions to industry partners
and investors, |
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d. |
Provide, advice on the structure of
a US and/or European based financing and facilitate placement thereof. |
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e. |
Recommend a program to list the Company
on the AMEX, NASDAQ or OTC bulletin board. |
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| 2. | Assist Senior Management to develop and implement a partnering strategy for the Company that maximizes value by: (i) having a partner assume development costs for new products; (ii) attracting up-front licensing fees- and (iii) earning compensation for the Company based on sales revenue, Action Items; |
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a. |
identify key Katan contacts within potential
partner organizations, make appropriate introductions and manage the negotiating
process to maximize the value to the Company of my ensuing partnership. |
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| b. | assist management to assess and execute on potential partnering opportunities for the Company's RAMP technology including, but not limited to, sales and marketing of existing RAMP products; in-licensing/out-licensing of technology. | |
| c. | represent the Company in its negotiations with new out-licensing partners where appropriate. | |
d. |
assist in determining a valuation for
specific partnering transactions as required. |
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July 7, 2003
Response Biomedical Corporation
Xx. Xxxx Xxxxxx, President and CEO
Please attach this to the accompanying Management Consulting Agreement.
Yours sincerely,
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, Partner
Xxxx Xxxxxxx
Partner
