CONSULTING SERVICES AGREEMENT
THIS AGREEMENT FOR THE PROVISION OF CONSULTING SERVICES is made and
entered into as of March 24, 2000 by and between the MNI Group Inc. (the
"Company"), a New Jersey corporation, and Xxxxxxxx X. Xxxxxx, M.D.
("Consultant"), an independent consultant.
WHEREAS, the Company has developed an Internet website called
xxxxxxxxxxxxxxxxxxx.xxx ("WHN"), which will provide dynamic healthcare content
primarily relating to women, including information on acute ailments, chronic
illnesses, nutrition, fitness and wellness, and access to medical databases,
publications and realtime medical news and will include facilities for
e-commerce transactions of healthcare-related products, principally the
Company's branded line of Fem Choice women's products; and
WHEREAS, Consultant is a Professor of Clinical Medicine at Columbia
University College of Physicians and Surgeons and the founder and Director of
the Partnership for Women's Health at Columbia University and possesses in-depth
knowledge in the areas of women's health; and
WHEREAS, the Company and Consultant are mutually desirous of
establishing an initial relationship pursuant to this Agreement, with the
intention of amplifying and expanding their relationship in the future; and
WHEREAS, until such time as their relationship may be so amplified, the
Company desires to obtain the services of Consultant as Chairperson of its
Medical Advisory Board and principal medical spokesperson as outlined herein;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, the Company and Consultant agree as follows:
1.0 SERVICES. Commencing as of the date hereof, Consultant shall become
Chairperson of the Medical Advisory Board ("CMAB") of WHN and the principal
medical spokesperson for the Company. In such capacities, and in addition to
such further services as shall be appropriate to Consultant's position as CMAB
of WHN and as the principal medical spokesperson for the Company, or as
otherwise agreed between the parties, Consultant shall have the following
duties:
a. Help define WHN's mission, consistent with her vision, which
is for WHN to become a world class site for gender-specific
medicine with a primary emphasis on women's health, and to
direct WHN's staff to accomplish this goal;
b. Identify and recruit health care professionals (both MD's
and PhD's) with areas of expertise that will enhance the
quality and scope of the medical information provided on
WHN;
c. Become involved in the development of a Continuing Medical
Education ("CME") program under the auspices of WHN and
identify and recruit health care professionals (both MD's and
PhD's) with areas of expertise to act as presenters under that
program;
d. Identify new research and other medical developments
related to women's health that will enhance the respective
information included on WHN and enhance the purpose and
value thereof;
e. Participate periodically in chat room discussions, seminars
and investor meetings and presentations;
f. Personalize data on the Company's website by preparing
introductions for each of the major sections on WHN covering
fourteen (14) health sections covering seventy-three (73)
health topics and as the number of major sections expand,
preparing introductions for each of the subsequent sections;
and
g. Make public appearances on behalf of WHN and at other
speaking engagements (where appropriate) promote the WHN
site.
Consultant's duties pursuant to this Agreement shall not include any implicit or
explicit endorsement of any products.
2.0 COMPENSATION; TIME DEVOTED TO PROVISION OF SERVICES.
2.1 COST COMPENSATION. Consultant shall be entitled to and the Company
shall pay to Consultant for services rendered during the term of this Agreement
the sum of $250,000, of which $100,000 shall be paid upon the execution of this
Agreement and $150,000 shall be paid upon the first anniversary thereof.
2.2 EQUITY-BASED COMPENSATION. As additional compensation for services
rendered during the term of this Agreement, Consultant shall be granted options
to purchase a total of 3,985,000 shares of common stock of the Company. The
options shall be granted upon the execution of this Agreement at the then fair
market value thereof (the closing bid price on the date of grant), shall have a
term of five (5) years and shall vest 20% upon grant, with an additional 20%
vesting on each six (6) month anniversary of the date of grant (with accelerated
vesting in the event of a sale of the Company), subject to Consultant's
continued performance under this Agreement during the vesting period with
respect to the unvested portion of the options. The options shall have such
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further terms and conditions as are set forth in the Stock Option Agreement
annexed hereto as Exhibit A. The Company acknowledges and agrees that Consultant
shall be entitled to assign from the stock options granted to Consultant
pursuant to this Agreement 398,500 stock options to her agent, Xxxxxxx Xxxxxx.
In addition, the Company agrees to issue 15,000 stock options to members of
Consultant's office staff, who will be assisting Consultant in connection with
her performance of services under this Agreement, as follows: Xxxxxxxxx Xxxxxx -
10,000 stock options and Polesta Xxxxxxxxxx - 5,000 stock options. All of the
stock options assigned to Xxxxxxx Xxxxxx or issued to members of Consultant's
office staff will be subject to all the terms and conditions set forth in this
Agreement applicable to the stock options granted to Consultant pursuant to this
Section 2.2. All such stock options shall be issued pursuant to Stock Option
Agreements substantially in the form annexed hereto as Exhibit B. In addition,
for a period of five (5) years following the date hereof, the sale of shares
issuable upon the exercise of options covered by this Section 2.2 shall be
subject to the volume restrictions applicable under Rule 144 of the Rules and
Regulations under the Securities Act of 1934, as amended. Within six (6) months
following the date hereof, the Company shall file a Registration Statement on
Form S-8 to register the common stock reserved for issuance under the options
granted to Consultant pursuant to this Section 2.2. The holders of all other
options granted pursuant to this Section 2.2 and Section 8.0 hereof shall be
afforded the opportunity (to the extent permitted by the underwriter, if any, of
the offering registered thereby) to register the resale of the shares underlying
such options in any Registration Statement filed by the Company under the
Securities Act of 1933, as amended, which permits such registration.
2.3 REIMBURSEMENT OF EXPENSES. the Company shall reimburse Consultant
for all reasonable travel expenses (including first class airfare and comparable
hotel accommodations) incurred by Consultant in connection with appearances made
by Consultant on behalf of the Company, consistent with the Company's standard
employee expense reimbursement policy and upon the presentation of appropriate
supporting documentation.
2.4 TIME DEVOTED TO PROVISION OF SERVICES. The parties acknowledge that
it is not their intention to establish a minimum amount of time that Consultant
shall be required to devote to her duties under this Agreement. At the same
time, Consultant acknowledges that the fulfillment of her duties under this
Agreement will require a meaningful devotion of her professional time to the
affairs of the Company, for which she is receiving substantial compensation,
including a significant equity interest in the Company. Notwithstanding the
foregoing, Consultant will not be required (i) to limit or otherwise restrict
her current professional activities or (ii) to work for the Company more than
the maximum number of hours of outside work permitted by her contractual
arrangement with Columbia University or any Columbia University policy
applicable to Consultant. Consultant shall retain her professorship at Columbia
University and shall be free to join the faculty of any medical school (in
whatever capacity) as well as retain the right to conduct a private medical
practice.
However, during the term of this Agreement, Consultant agrees that she
will not in any manner act in either an advisory or consultative capacity to
another company's website engaged in providing women's health information or
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become an officer or director of a company engaged principally in providing
women's healthcare information over the Internet. This provision shall not
preclude Consultant from (i) continuing to serve as an advisor to Dr. Xxxx.Xxx
or continuing to act in her capacity at the Columbia Partnership for Women's
Health or any other future website affiliated or associated with Columbia
University or any of its affiliates or (ii) appearing as an occasional guest
speaker or other participant in chat rooms, seminars or any other programs that
are to be delivered over the Internet. With respect to other professional
opportunities which Consultant believes will not conflict with her duties under
this Agreement, upon request by Consultant, the Company will review such
opportunities and agrees to not unreasonably withhold its consent for
Consultant's pursuit thereof.
3.0 NATURE OF RELATIONSHIP.
3.1 INDEPENDENT CONTRACTOR STATUS. Consultant shall perform as an
independent contractor and not as an employee of the Company. Consultant will
not act as, and is not, an agent or employee of the Company for any purpose, and
shall not enter into or incur any obligation on behalf of the Company except as
provided herein.
3.2 BENEFITS AND TAXES. Except as provided herein, Consultant shall not
be entitled or eligible to participate in any benefits or privileges given or
extended by the Company to its employees. Consultant (and not the Company) shall
be responsible for and shall make all required payments of Federal and State
withholding taxes, FICA and FUTA payments, and such other tax liabilities as may
result from her entering into this Agreement.
4.0 INTENTIONALLY OMITTED.
5.0 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Consultant has entered
into a Letter Agreement dated even date herewith (the "Confidentiality
Agreement") with the Company pursuant to which Consultant has agreed not to
disclose and to keep confidential certain secret and confidential information of
the Company, all as is more fully set forth in the Confidentiality Agreement.
The terms of the Confidentiality Agreement are hereby incorporated herein and
made a part hereof.
6.0 TERM AND TERMINATION.
6.1 TERM. This Agreement shall, upon execution by both the Company and
Consultant, be deemed to be effective as of the date hereof and shall continue
in full force and effect for a period of three (3) years.
6.2 TERMINATION FOR CAUSE.
a. This Agreement may be terminated by the Company "for cause"
if Consultant is convicted of a felony, is suspended from the practice of
medicine in the State of New York, or acts in willful and gross dereliction of
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her duties under this Agreement. In addition, the Company shall have the right
to terminate this Agreement "for cause" in the event of a breach of Consultant's
warranty set forth in Section 9.1 hereof or in the event of Consultant's death
or disability. Consultant shall be deemed to be permanently disabled after three
(3) consecutive months during which she was unable to perform a minimum of 75%
of her regular full business day's agenda. Termination of this Agreement "for
cause" (other than by reason of Consultant's death) shall be made by delivery to
Consultant of a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the Company's directors at a meeting of the
Company's Board of Directors called and held for the purpose (after thirty (30)
days prior written notice to Consultant and reasonable opportunity for the
Consultant and her counsel to be heard prior to such vote), finding that in the
good faith business judgment of the Board, the Consultant was guilty of the
conduct or in breach of the warranty set forth above or had become permanently
disabled (as defined) and specifying the particulars thereof.
b. This Agreement may be terminated by Consultant "for cause" if
(i) the Company shall be in material breach of its obligations under this
Agreement and fails to correct such breach within three (3) days after receipt
of written notice thereof from Consultant or (ii) the Company removes Consultant
from or fails to reelect her to the position of Chairperson of its Medical
Advisory Board.
6.3 TERMINATION FOR CONVENIENCE. Either the Company or Consultant may
terminate this Agreement without cause by providing the other party with written
notice of not less than thirty (30) days.
7.0 EFFECTS OF TERMINATION.
7.1 TERMINATION BY THE COMPANY "FOR CAUSE" OR TERMINATION BY CONSULTANT
"FOR CONVENIENCE". In the event the Company shall terminate this Agreement "for
cause" or Consultant shall terminate this Agreement "for convenience",
Consultant shall not be entitled to receive any further cash compensation from
the Company pursuant to this Agreement and all options which are not vested as
of the date of termination shall terminate. In addition, in the event the
Company shall terminate this Agreement "for cause" (other than in the event of
Consultant's death or disability) or Consultant shall terminate this Agreement
"for convenience", Consultant shall refund to the Company the cash compensation
she received from the Company pursuant to this Agreement prior to the
termination thereof in excess of what her pro rata compensation would have been
had her cash and equity-based compensation been payable in equal monthly
installments over the entire three (3) year term of this Agreement.
7.2 TERMINATION BY THE COMPANY "FOR CONVENIENCE" OR TERMINATION BY
CONSULTANT "FOR CAUSE". In the event the Company shall terminate this Agreement
"for convenience" or Consultant shall terminate this Agreement "for cause",
Consultant shall be entitled to immediate payment of any further cash
compensation payable by the Company pursuant to this Agreement and all options
which are not then vested shall immediately vest.
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8.0 COLUMBIA UNIVERSITY. The parties acknowledge that Consultant is a
full professor of Clinical Medicine at Columbia University College of Physicians
and Surgeons and that Consultant's association with Columbia University enhances
Consultant's standing within the medical community thereby providing a benefit
to the Company through Consultant's rendering of services to the Company under
this Agreement. Accordingly, upon the execution of this Agreement, the Company
agrees to issue to the Department of Medicine at Columbia University College of
Physicians and Surgeons, options to purchase 500,000 shares of common stock of
the Company on and subject to all the terms and conditions set forth in this
Agreement applicable to the options to be granted to Consultant pursuant to
Section 2.2 hereof. Such stock options shall be granted to the Department of
Medicine and their disposition will be determined by Xx. Xxxxx Xxxxxxxxx, the
Chairman of the Department. Such stock options shall be issued pursuant to Stock
Option Agreement(s) substantially in the form annexed hereto as Exhibit B.
9.0 MISCELLANEOUS.
9.1 CAPACITY TO CONTRACT. Consultant warrants that she has the capacity
to enter into this Agreement, that her performance of services to the Company
pursuant to this Agreement is not restricted by and does not conflict with any
contractual obligations Consultant has to any other person or entity and that
the Chairman of the Department of Medicine at Columbia University College of
Physicians and Surgeons has reviewed this Agreement and has approved
Consultant's execution thereof.
9.2 ASSIGNMENT. This Agreement shall be binding on the parties and
their respective successors and permitted assigns. Except as provided in Section
2.2 hereof, neither party may assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other party, and
any such attempted assignment shall be void in the absence of such written
consent.
9.2 NOTICES. Any notices under this Agreement shall be in writing and
shall be hand-delivered or sent by Certified or Registered Mail to the party
receiving the notice at the address specified below:
If to the Company: The MNI Group Inc.
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxx, President
If to Consultant: Xxxxxxxx X. Xxxxxx, M.D.
000 Xxxx 00xx Xxxxxx, Xxx. X 0000
Xxx Xxxx, Xxx Xxxx 00000
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with a copy to: Xxxxxxx Xxxxxx
00 Xxxx 00xx Xxxxxx, Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
9.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
between residents of that State and executed in and to be performed in that
State, without giving effect to principles of conflicts of law.
9.4 MODIFICATIONS. No modifications, amendments, supplements to or
waivers of this Agreement or any of its provisions shall be binding upon the
parties hereto unless made in writing and duly signed by both parties.
9.5 WAIVER. A failure by either party to exercise any right provided
for herein or by the applicable law shall not be deemed to be a waiver of any
right hereunder. The remedies provided herein shall be cumulative and shall not
be exclusive of any rights or remedies provided under law.
9.6 COMPLETE AGREEMENT. This Agreement, together with the
Confidentiality Agreement incorporated by reference herein, sets forth the
entire understanding of the parties as to the subject matter therein and may not
be modified except in writing executed by both parties.
9.7 SEVERABILITY. In the event that any one or more of the provisions
of this Agreement are invalid or otherwise unenforceable, the enforceability of
the remaining provisions shall be unimpaired. 9.8 HEADINGS. The headings used in
this Agreement and the organization of this Agreement are for convenience only
and shall not affect in any way the interpretation of this Agreement.
9.8 HEADINGS. The headings used in this Agreement and the organization
of this Agreement are for convenience only and shall not affect in any way the
interpretation of this agreement.
9.9 LEGAL FEES IN CONNECTION WITH THIS AGREEMENT. The Company agrees to
pay or reimburse Consultant for, at Consultant's discretion, attorneys' fees and
disbursements incurred by Consultant in connection with the negotiation,
execution and delivery of this Agreement, including the Confidentiality
Agreement and Stock Option Agreement, up to a maximum of $10,000.
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IN WITNESS THEREOF, the parties have executed this Agreement effective
as of the day and year first written above.
THE MNI GROUP INC.
BY:___________________________
Xxxxxx X. Xxxx, President
___________________________
Xxxxxxxx X. Xxxxxx, M.D.
