Exhibit 10.18
CONSULTING
AGREEMENT
THIS CONSULTING
AGREEMENT (this “
Agreement ”) is entered into as of June 9, 2005
(“the Effective Date ”), by and between
APHTON CORPORATION , a Delaware corporation (the “
Company ”), and DOV MICHAELI , a resident of
the State of California (“ Consultant
”).
In consideration of the mutual
representations, warranties, covenants and agreements contained in
this Agreement, the parties hereto agree as follows:
1. Engagement .
(a) Retention . The Company
agrees to engage Consultant, and Consultant agrees to accept such
engagement, to perform services for the Company as a consultant,
subject to the terms and conditions of this Agreement.
(b) Engagement Period . The
term during which Consultant shall serve as a consultant to the
Company shall commence on the Effective Date and continue until
June 8, 2006, unless earlier terminated pursuant to this Agreement,
(the “ Initial Term ”). At least thirty (30)
days prior to the expiration of the Initial Term, the Company may
advise Consultant of the Company’s desire to extend the term
of this Agreement and the basis under which it is willing to so
extend. Upon the mutual agreement of the Company and Consultant,
the term of this Agreement may be extended for an additional period
of time (the Initial Term and any such extension period shall
hereinafter be referred to as the “ Engagement Period
”).
(c) Duties and
Responsibilities . During the Engagement Period, Consultant
shall be available to assist the Company and provide services
relating to the business of the Company, from time to time,
including without limitation, securing a long-term commitment, as
evidenced in writing signed by all applicable parties, from Dexa
Medica and/or an Asian Partner (as defined below) to financially
support the development, manufacturing and commercialization of one
or more potential products of the Company. During the Engagement
Period, it is expected that Consultant will devote approximately
eighty (80) hours per month to his duties hereunder.
(d) Consulting Fee . In
consideration of Consultant’s services hereunder, during the
Engagement Period, Consultant shall be paid a consulting fee of One
Hundred Twenty-Five Thousand Dollars ($125,000) (the “
Consulting Fee ”) per year, payable in accordance with
the Company’s payment procedures for consultants, as to which
the Company shall make no deductions or withholdings and as to
which Consultant shall be responsible for the payment of all
federal, state and local taxes. Upon extending this Agreement, if
applicable, the parties shall mutually agree on the applicable
Consulting Fee and timing of payment of such Consulting Fee that
shall apply hereunder during such additional extension period. In
addition, the Consultant shall be eligible for payment of a
finder’s fee of 1% of any Up Front Payment on any long-term
financial commitment acceptable to the Company by Dexa Medica
and/or an Asian Partner that he secures for the Company during the
Engagement Period; provided that the name of such Asian Partner is
set forth on Schedule I hereto, as amended from time to time by
mutual agreement between the Company and Consultant. It shall be
the obligation of Consultant to notify the Company in writing of
any new potential Asian Partner and request that the Company sign
and deliver to Consultant an amended Schedule I that includes the
name of such new potential Asian Partner, if agreed to by the
Company. For purposes hereof, “Up Front Payment” shall
mean and refer to any cash payment made by Dexa Medica or an Asian
Partner to the Company within 30 (thirty) days after the
Consultant’s obtaining
a signed and enforceable agreement, which
evidences Dexa Medica’s or the applicable Asian
Partner’s, as the case may be, long-term commitment to
financially support the development, manufacturing and
commercialization of one or more potential products of the Company.
For purposes of this Agreement. “Asian Partner” means
any entity or organization that maintains it corporate headquarters
in a country located in Asia and has made an Up Front
Payment.
(e) Independent Contractor .
Consultant is an independent contractor of the Company and is not
entitled to any benefits, privileges or reimbursements (other than
as described in (f) below) given or extended by the Company to its
employees. Consultant acknowledges that he is not an employee of
the Company for any purpose and shall be responsible for any
payments, of all federal, state and local taxes incident to the
performance of services.
(f) Expenses . In addition to
the Consulting Fee, during the Engagement Period, Consultant shall
be reimbursed, in accordance with the Company’s then expense
reimbursement policy, for documented out-of-pocket expenses
properly and reasonably incurred by him on behalf of or in
connection with the business of the Company that are authorized by
the Company in advance in writing.
(g) Termination . Subject to
the provisions of Section 3 below, at any time during the
Engagement Period, either the Company or Consultant shall have the
right to terminate the Engagement Period upon delivery of written
notice thirty (30) days prior to the effective date of such
termination to the non-terminating party. Except for the continuing
obligations of the Consultant pursuant to Section 2 below, neither
the Company nor Consultant shall have further obligations hereunder
from and after the date of such termination.
2. Confidential Information,
Non-Competition and Non-Solicitation of the Company.
(a) Agreement Not to Disclose
Confidential Information . (i) Consultant acknowledges he has
read and understands the Company’s Consultant Confidentiality
Agreement (“ Confidentiality Agreement ”), which
is attached hereto as Exhibit “A” and is
incorporated by reference as part of this Agreement. Consultant
will hold all Confidential Information (as that term is defined by
the Confidentiality Agreement) in trust and confidence. In this
regard, during and subsequent to the Engagement Period, Consultant
will be bound by, and comply with, the Confidentiality Agreement.
Consultant shall use Confidential Information only for the purposes
contemplated in connection with Consultant’s engagement by
the Company and for the sole benefit of the Company; shall not use
Confidential Information for any other purpose; and shall not
disclose or cause to be disclosed Confidential Information to any
employee, consultant, or third party, except as required in the
course and scope of Consultant’s engagement by the Company
and only if the employee, consultant, or third party has executed a
confidentiality agreement with the Company. Consultant further
acknowledges that the Confidentiality Agreement may be amended from
time to time, and as such this paragraph survives and applies to
all such amendments.
(ii) Failure of any Confidential
Information to be marked or otherwise labeled as confidential or
proprietary information shall not affect its status as Confidential
Information.
(iii) All Confidential Information
and other materials relating in any way to any Confidential
Information shall be and remain the Company’s sole property
during and after the Engagement Period.
(iv) Consultant will not copy or
duplicate, or permit to be copied or duplicated, any Confidential
Information or other materials relating in any way to Confidential
Information, other than as necessary to fulfill his obligations to
the Company, without the express prior written consent of the
Company.
(v) Consultant shall take all
reasonable steps needed or requested by the Company to ensure that
all Confidential Information is kept confidential.
(vi) Upon demand by the Company,
Consultant will immediately return all Confidential Information,
including any notes and other materials related thereto, to the
Company and will represent to the Company in writing at such time
that he has complied with the provisions of this
subparagraph.
(b) Agreement to Comply with
Company Policy Regarding Inventions and Ideas . Consultant
acknowledges he has read and understands the Confidentiality
Agreement with respect to Inventions and Ideas (as defined in the
Confidentiality Agreement). Consultant acknowledges and agrees that
during and subsequent to the Engagement Period, Consultant will be
bound by, and comply with, the Confidentiality Agreement, as it
relates to Inventions and Ideas. Consultant further acknowledges
that the Confidentiality Agreement may be amended from time to
time, and Consultant agrees that this paragraph survives and
applies to all such amendments.
(c) Agreement Not to Compete
. During the Engagement Period (the “ Non-Compete
Period ”), Consultant will not directly or indirectly (on
his own behalf or on behalf of any other person or entity) engage
in any business (or own an interest in an individual
proprietorship, partnership, corporation, joint venture, trust or
other form of business entity, whether as an individual proprietor,
partner, shareholder, joint venture, officer, director, consultant,
broker, employee, sales person, trustee, independent contractor, or
in any manner whatsoever (except for a passive ownership interest
not exceeding five percent (5%) of a publicly traded entity)), that
is of the type and character or that is competitive with any
business conducted by the Company at any time during the Engagement
Period. The parties hereby agree that the Company is currently
engaged in the business of developing products using immunotherapy
technology for neutralizing hormones that participate in
gastrointestinal system and reproductive system cancer and
non-cancer diseases and is also engaged in the business of research
and development in the area of biotechnology, including but not
limited to, hybridoma, monoclonal antibodies, and recombinant DNA
(the “ Business ”).
(d) Agreement Not to Recruit the
Company’s Employees or Consultants . Consultant agrees
that both during the Engagement Period and for a period of two (2)
years following expiration or termination, as the case may be, of
the Engagement Period for any reason (the “ Non-Solicit
Period ”), Consultant will not directly or indirectly (on
his own behalf or on behalf of any other person or entity) recruit,
solicit or otherwise induce any employee or consultant of the
Company, or any individual or entity that had been employed or
engaged as a consultant by the Company within
