Transition Agreement
This Agreement is made as of September
25, 2005, by and between AXM Pharma, Inc., a Nevada company with
its principal offices at 7251 West Lake Mead Blvd, Suite 300 Las
Vegas, Nevada, 89128 (the “Company”); Wei Shi Wang (the
“Shareholder”) and Tripoint Capital Advisors, LLC, a
Maryland limited liability company, with its principal offices at
400 Professional Drive, Suite 310, Gaithersburg, Maryland 20879;
The MacLellan Group, LLC, a California company, with its
principal offices at 8324 Delgany Avenue, Playa del Rey, California
90293; Law Offices of Louis E. Taubman, PC, a New York
Professional Corporation, with its principal offices at 225
Broadway, Suite 1200, New York, New York 10007; Investor
Communications Company, LLC., a Maryland limited liability company,
with its principal offices at 400 Professional Drive, Suite 310,
Gaithersburg, Maryland 20879; Douglas MacLellan; Mike Boswell;
Louis Taubman; Mark Elenowitz; and Tom Bostic Smith (referred to
individually as a “Transitioning Party” and together
as the “Transitioning Parties”).
Witnesseth
WHEREAS, the Transitioning Parties have
been employed by or serving on behalf of the Company in various
roles including as consultants, board members and/or attorneys both
as individuals and/or in a corporate capacity;
WHEREAS, Messrs. MacLellan and Elenowitz
have resigned as directors of the Company and the other
Transitioning Parties intend to resign from their respective
positions;
WHEREAS, the Company, the Shareholder and
the Transitioning Parties agree that it is in the best interests of
the Company for an orderly transition to occur from the
Transitioning Parties to those persons who will be fulfilling
similar roles in the future on behalf of the Company.
NOW, THEREFORE, in consideration of the
premise and the mutual promises and covenants contained herein and
subject specifically to the conditions hereof, and intending to be
legally bound thereby, the parties agree as follows:
1. Duties of the
Transitioning Parties
a.
The Transitioning Parties agree to use
their best efforts to assist the Company with an orderly transition
of the duties and functions currently performed by the
Transitioning Parties. This orderly transition will include
the following items:
i.
Turnover of all books, records (including
any related software programs); and all other Company
property , including the names and contact information for all of
the Company’s merchant bankers, investors and other financial
contacts or consultants: customer lists, vendor contacts,
contracts, financial records and all other
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Confidential Information (as defined
below); and the printing company information and any related
software to enable the Company to make filings on Edgar
in accordance with its past practice, without any additional
expense), excluding only the Transitioning Parties’
personal notes, attorney work product and their laptop computers,
provided that all Confidential Information on such computers shall
remain subject to Section 2 below
ii.
Facilitate communications with
institutional investors, currently invested in the Company, with
whom one or more Transitioning Parties is the primary contact on
behalf of the Company.
iii.
Facilitate communications with outside
service providers, currently employed by the Company, with whom one
or more Transitioning Parties is the primary contact on behalf of
the Company.
iv.
In the case of Law Offices of Louis E.
Taubman, PC, assist new securities counsel to the Company by
delivering, without any charge to the Company, originals or
copies of any past filings, copies of all legal files (excluding
attorney work product) for matters where it acted as counsel to the
Company and reasonable access for questions regarding open legal
matters ( provided that the Company furnishes it with
copies of any Company documents no longer in its possession and
which are needed to respond to such questions.) The Company
further agrees that such former counsel may, in its discretion,
make copies of any of such files, at its own expense,
for its own records, provided that doing so does not unreasonably
delay the transfer of the files to the Company’s new counsel
and that such former counsel’s office keeps the non-public
portion of such files confidential in accordance with Section 2
below.
b.
During the term of this Agreement,
Transitioning Parties will expeditiously fulfill the above listed
duties during normal business hours from their own offices with due
consideration for Transitioning Parties personal and professional
schedules and the Company’s needs for its records and
business information.
c.
Subject to Section 1 (a) (iv),
Transitioning Parties will not be required to incur any out of
pocket expenses in connection with their duties hereunder and agree
that if they anticipate incurring any such expenses they will seek
approval in advance from the Company but will not be required to
incur such expenses until they have received reasonable assurance
from the Company that they will be reimbursed.
2. Confidential
Information
Transitioning Parties acknowledge that,
in the course of performing their duties for the Company, they may
have obtained information relating to the Company, which the
Company deems as
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confidential ("Confidential
Information"). Transitioning Parties shall hold at all times,
both during the term of this agreement and at all times thereafter,
such Confidential Information in the strictest confidence, and
shall not use such Confidential Information for any purpose, other
than as may be reasonably necessary for the performance of their
duties pursuant to this Agreement, without the Company's prior
written consent. Transitioning Parties shall not disclose any
Confidential Information to any person or entity, other than to
their own employees or consultants as may be reasonably necessary
for purposes of performing their duties hereunder, without the
Company's prior written consent. The foregoing
notwithstanding, the term "Confidential Information" shall not
include information which (i) becomes generally available to the
public, other than as a result of a breach hereof, (ii) was
available on a non-confidential basis prior to its disclosure to
Transitioning Parties by the Company, or (iii) becomes available to
Transitioning Parties on a non-confidential basis from a source
other than the Company, provided that such source is not bound by a
confidentiality agreement with respect to such information.
The foregoing notwithstanding, Transitioning Parties may
disclose Confidential Information to the extent required by law or
regulation, including but not limited to court orders, subpoenas,
civil investigative demands and interrogatories.
3.
Mutual Release of Claims
a.
In consideration for the services to be
performed hereunder and the mutual promises made herein, the
sufficiency and receipt of which are hereby acknowledged, and
subject to Section 3(c) below, the Company and the Shareholder and
their representatives, including, without limitation, their agents,
employees, servants, directors, officers, attorneys, whether now
employed or previously employed, as well as their subsidiaries,
affiliates, successors, heirs, administrators and assigns and any
of their respective agents, employees, servants, directors and
officers, hereby release and discharge the Transitioning Parties
and their representatives, including, without limitation, their
agents, employees, servants, directors, officers, attorneys,
whether now employed or previously employed, as well as their
subsidiaries, affiliates, successors, heirs, administrators and
assigns and any of their respective agents, employees, servants,
directors and officers from any and all claims, actions, causes of
action, suits, debts(including all open invoices), dues, sums of
money, accounts, reckoning, bonds bills, specialties, covenants,
controversies, agreements, promises, variances, trespasses,
damages, judgments, executions, claims and demands at law, in
admiralty, or equity(all of the foregoing being hereinafter
sometimes collectively referred to as “the Claims”)
against the Transitioning Parties, of which the Company’s
continuing directors or the Shareholder are presently
aware, including but not limited to any claims relating to
the legal standing of the agreement between the Company and
Investor Communications Company, LLC, Tripoint Capital Advisors,
LLC or Law Offices of Louis E. Taubman, PC;
claims regarding any expenses submitted by Transitioning Parties
during their employment by or service on behalf of the Company;
Claims regarding any actual or perceived conflicts between the
Company and the Transitioning Parties or between one or more of the
Transitioning Parties; Claims regarding the status of Douglas
MacLellan or Mark Elenowitz as directors of the Company; Claims
arising from the performance of their duties
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in the ordinary course, on behalf of the
Company, excluding any matters set forth in Section 3 (c)
below, any Claims which the Company or the Shareholder hereafter
become aware of ;provided, however,
that the Company, its current directors and the Shareholder shall
be deemed to be aware of any information which has been
included in any public filings or releases made by the
Company (or in any public filings made by the Transitioning Parties
pursuant to Sections 13 or 16 of the Securities Exchange Act of
1934, as amended) or any information which has been previously
provided to the continuing directors or the Shareholder in
correspondence (including email).
b.
For and in consideration of the mutual
promises made herein, the sufficiency of which are hereby
acknowledged, Transitioning Parties and their
representatives, including, without limitation, their agents,
employees, servants, directors, officers,
