Exhibit 10.1
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (the “Agreement”) is made and entered into by and
between VIRAL GENETICS, INC., a Delaware corporation (the
“Company”), and Bada Pharasi, an individual residing in
the city of Pretoria, South Africa (“Advisor”)
effective this 1 st day of April, 2007.
(the “Parties”)
WHEREAS the Company is
an early-stage business engaged in the development of certain
technologies, investigational drugs, pharmaceutical products, and
medical knowledge (“Technology”); and
WHEREAS Advisor has
experience, knowledge, contacts, and skills which are beneficial to
the development of the Company and its areas of focus;
and
WHEREAS the Company
wishes to engage Advisor and to define the nature of the
relationship, to protect certain confidential information owned or
possessed by the Company, and to establish certain other
representations, warranties and covenants.
NOW THEREFORE , for
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as
follows.
1) Non-Exclusive Engagement of Advisor;
Term . The Company hereby engages Advisor
as “Special Advisor to the Board of Directors, Africa”
and as the non-exclusive provider of the advisory services
described in this Agreement, for a term (the “Term”),
which will commence on the date of this Agreement and end March 31,
2008. This Agreement may be renewed in writing by the mutual
consent of the parties hereto for additional one-year
terms.
2) Advisor Services. On
the terms and conditions set forth in this Agreement, Advisor will
provide the following services to the Company as directed by the
Company (the “Services”):
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a)
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Advisor will advise and assist the Company with the
development, evaluation, analysis, testing, research, and study of
its Technology in Africa, and in particular in the Republic of
South Africa (the “Territory”);
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b)
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Advisor shall advise and assist the Company with
communication and strategy formulation with drug regulatory
authorities in the Territory;
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c)
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Advisor will advise and assist the Company on other
medical issues with respect to the Company’s products and
drug candidates;
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d)
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Advisor will advise and assist the Company by
introducing it to other potential advisors able and willing to
assist the Company in the Territory;
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e)
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Advisor will advise, guide and assist the Company on
presentations to investors, strategic partners, and other parties
in connection with Company’s efforts in the Territory;
and
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f)
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Advisor will assist and advise the Company in other
areas in which Advisor has expertise as reasonably requested from
time to time by the Company.
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3) Method of Providing Services
. It is understood that the Company will not control
the manner nor prescribe the method by which the Services under
this Agreement are to be performed by Advisor. Advisor shall be
available for a teleconference meeting with the management of the
Company at least once per month during the Term. Advisor will
perform Services, and may communicate with the Company’s
management and other parties, through personal meetings,
correspondence, telephone or video conferences, and such other
methods,
and at such times, as mutually determined, subject
to the reasonable convenience of the parties. Unless requested
otherwise by the Company, Advisor shall communicate with the
Company’s management through the Company’s President.
Acting in good faith and consistent with ordinary business
practices with respect to advisory relationships, Advisor shall
devote a reasonable amount of time per month to the provision of
the Services described herein.
4) Performance .
Advisor agrees to at all times faithfully, industriously, and to
the reasonable best of his abilities, experience, and talents,
perform all of the Services that may be required of and from them
pursuant to the express and explicit terms hereof.
5) Independence of Parties.
Nothing contained in this Agreement shall constitute
either party as an employee, partner, co-venturer or agent of the
other, it being intended that each shall act as an independent
contractor with respect to the other. Advisor is not authorized to
speak on behalf of the Company or bind it in any manner.
Advisor’s role is exclusively advisory in nature.
6) Compensation.
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a)
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Fees . For and in
consideration of the agreement of Advisor to enter into this
Agreement and to use their best efforts in pursuit of the
Company’s business, the Company shall grant to Advisor fifty
thousand (50,000) shares of common stock on each three-month
anniversary date of the date affixed hereof.
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b)
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Benefits, Other Consideration,
Expenses . No benefits, vacation pay, or
other consideration or remuneration of any kind shall be owed to
Advisor by the Company, unless specifically referenced herein.
Expenses incurred in Advisor’s provision of the Services
shall be reimbursed by the Company provided that they are
pre-approved in writing by the Company.
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7) C ompany Representations
and Warranties . The Company hereby
represents and warrants, knowing that Advisor is relying thereon,
that:
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a)
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The Company is duly organized, validly existing and
in good standing under the laws of the state of
Delaware.
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b)
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All shares issued to Advisor under this Agreement
will be duly and validly issued, fully paid and non-assessable, and
will be delivered free and clear of any liens, claims or
encumbrances, except for restrictions imposed by reference to the
registration requirements of the Securities Act of 1933.
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c)
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The Company represents that the information
concerning the Company and its business, as furnished and to be
furnished to Advisor in writing, will be complete and correct in
all material respects and will not contain any untrue statement of
material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in light of the
circumstances under which such statements are made. The Company
will notify Advisor promptly concerning any statement which is not
accurate or which is or has become incomplete or misleading in any
material respect. The Company understands that Advisor is and will
be relying on the continuing accuracy of such information in
carrying out its functions under this Agreement.
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8) Advisor Representations.
Advisor hereby represents, knowing that the Company
is relying thereon, that:
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a)
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Advisor is not a U.S. Person and was outside of the
United States at the time of executing this Agreement.
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b)
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Advisor has read and accepted Viral Genetics
Intellectual Property Agreement, attached hereto as Exhibit A,
which is part of this Agreement and the provisions of which shall
survive the expiration or earlier termination of this Agreement in
strict accordance with the time periods as described
therein.
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9) Stock
Certificates . All shares delivered to
Advisor pursuant to this Agreement shall bear a restrictive legend
in the form used by the Company or its transfer agent for the
issuance of securities under the exemption available hereunder, and
shall be deemed restricted securities under SEC Rule
144.
10) Changes to Common Stock
. In the event that the Company shall undertake a
recapitalization, reverse stock split, forward stock split,
reclassification, or other change to its common stock (a
“Change in Common Stock Properties”), the quantity of
shares which may be hereunder, shall be increased or decreased
proportionately, in accordance with the terms of said Change in
Common Stock Properties.
11) Extension and Renewal . The Term may be extended or renewed, and this Agreement may
be amended, only by the written agreement of the
parties.
12) Indemnification .
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a)
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The Company hereby indemnifies and defends the
Advisor and each of his executors, heirs, assigns, and
representatives, as applicable, (each, an “Indemnitee”)
against, and holds each Indemnitee harmless from, any loss,
liability, obligation, deficiency, damage or expense including,
without limitation, interest, penalties, reasonable
attorneys’ fees and disbursements (collectively,
“Damages”), that any Indemnitee may suffer or incur
based upon, arising out of, relating to or in connection with
(whether or not in connection with any third party
claim):
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i)
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any breach of any representation or warranty made by
the Company contained in this Agreement;
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ii)
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the failure of the Company to perform or to comply
with any covenant or condition required to be performed or complied
with in accordance with this Agreement; and
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iii)
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the good faith performance of the
Services.
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b)
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Indemnification Procedures for Third Party
Claims.
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i)
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Promptly after notice to an Indemnitee of any claim
or the commencement of any action or proceeding, including any
actions or proceedings by a third party (hereafter referred to as
“Proceeding” or “Proceedings”), involving
any Damage referred to in this Section, such Indemnitee shall, if a
claim for indemnification in respect thereof is to be made against
an Indemnitee pursuant to this Section, give written notice to the
Company, setting forth in reasonable detail the nature thereof and
the basis upon which such party seeks indemnification hereunder;
provided, however, that the failure of any Indemnitee to give such
notice shall not relieve the Company of its obligations hereunder,
except to the extent that the Company is actually prejudiced by the
failure to give such notice.
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ii)
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In the case of any Proceeding by a third party
against an Indemnitee, the Company shall, upon notice as provided
above, assume the defense thereof, with counsel reasonably
satisfactory to the Indemnitee, and, after notice from the Company
to the Indemnitee of its assumption of the defense thereof, the
Company shall not be liable to such Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in
connection with the defense thereof (but the Indemnitee shall have
the right, but not the obligation, to participate at its own cost
and expense in such defense by counsel of its own choice) or for
any amounts paid or foregone by the Indemnitee as a result of any
settlement or compromise thereof that is effected by the Indemnitee
(without the written consent of the Company).
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iii)
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Anything in this Section 12 notwithstanding, if both
the Company and the Indemnitee are named as parties or subject to
such Proceeding and either party determines with advice
of
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counsel that there may be one or more legal defenses
available to it that are different from or additional to those
available to the other party or that a material conflict of
interest between such parties may exist in respect of such
Proceeding, then the Company may decline to assume the defense on
behalf of the Indemnitee or the Indemnitee may retain the defense
on its own behalf, and, in either such case, after notice to such
effect is duly given hereunder to the other party, the Company
shall be relieved of its obligation to assume the defense on behalf
of the Indemnitee, but shall be required to pay any legal or other
expenses including, without limitation, reasonable attorneys’
fees and disbursements, incurred by the Indemnitee in such
defense.
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iv)
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If the Company assumes the defense of any such
Proceeding, the Indemntiee shall cooperate fully with the Company
and shall appear and give testimony, produce documents and other
tangible evidence, and otherwise assist the Company in conducting
such defense. The Company shall not, without the consent of the
Indemnitee, consent to entry of any judgment or enter into any
settlement or compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect of such claim
or Proceeding. Provided that proper notice is duly given, if the
Company shall fail promptly and diligently to assume the defense
thereof, then the Indemnitee may respond to, contest and defend
against such Proceeding and may make in good faith any compromise
or settlement with respect thereto, and recover from the Company
the entire cost and expense thereof including, without limitation,
reasonable attorneys’ fees and disbursements and all amounts
paid or foregone as a result of such Proceeding, or the settlement
or compromise thereof. The indemnification required hereunder shall
be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills or
invoices are received or loss, liability, obligation, damage or
expense is actually suffered or incurred.
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c)
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The provisions of this section 12 shall survive the
expiration or earlier termination of this Agreement.
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a)
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Either party may terminate this Agreement upon not
less than 15 days notice in the event of a material breach of this
Agreement or material non-performance by the other party, which
breach is not cured within 10 days after the giving of written
notice to the breaching party specifying the circumstances of such
breach.
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b)
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The Company may terminate this Agreement without
further notice to Advisor in the event that Advisor:
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i)
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is convicted a felony or a violation of any
securities laws;
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iii)
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has been grossly negligent in the performance of
Services at least three times in any consecutive 30-day period, and
Advisor has been notified in writing within 5 days of each such
occurrence; or
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