CONSULTING AGREEMENT
MEDICAL ADVISORY BOARD
THIS AGREEMENT (the "Agreement") is made and entered into this 1st day
of October, 2001 between Xxxxxx Xxxxxxx ("Consultant") and Vital Living,
Inc., a Nevada corporation (the "Company").
RECITALS
WHEREAS, the Company develops and distributes clinical based nutritional
products and requires assistance of individuals experienced in the natural
health care products industry to advise it in connection with its
development, formulation, and testing of new and existing products; and
WHEREAS, the Company desires to engage Consultant to advise it with
regard to its products and Consultant desires to accept such engagement.
NOW, THEREFORE, for receipt of good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
TERMS AND CONDITIONS
1. Engagement and Scope. The Company hereby engages Consultant to
perform independent consulting services (the "Services") for the Company, and
Consultant hereby accepts such engagement upon the terms and conditions
hereinafter set forth. Consultant shall consult, advise, assist and perform
such duties, assume such responsibilities and devote such time, attention and
energy to the business of the Company as reasonably necessary. Consultant's
duties shall include, but not limited to, the following:
(a) Act in an advisory capacity to the Company by becoming a
member of the Company's nutritional advisory board (the
"Advisory Board") and fulfilling all the duties of a member of
the board including attending all board meetings, which shall
be held at least four times annually;
(b) Assist in the creation and development of products and
product descriptions and scientifically support all
representations and claims made by the Company as to the
efficacy of its products;
(c) Consult with manufacturers, chemists and other necessary
companies and individuals to finalize product formulas and
concepts.
(d) Provide narration, scripting and appear in media
presentations, the format of which shall include but not be
limited to written, audio, and video, that promote the Company
and products produced or sold by the Company;
(e) Be available to appear at and participate in corporate
rallies, meetings, conference calls, or other corporate
promotional functions a maximum of five times per year;
(f) Perform such additional services in connection with its
engagement as the Company and Consultant may agree upon; and
(g) Allow the Company to utilize the Consultant's CV and
picture on its corporate literature subject to Consultant's
approval, said approval not to be unreasonably withheld.
In performing the duties required under this Agreement, Consultant, at all
times, shall exercise his professional independent judgment, based on his
training, experience and expertise. Consultant shall at all times comply
with the ethical rules and opinions of the professional organizations of
which he is a member. If any conflict arises between Consultant's duties
hereunder and Consultant's ethical obligations, Consultant shall immediately
bring the matter to the attention of the chief executive officer, president
or chairman of the board of directors of the Company.
2. Term and Termination of Agreement. The term of this Agreement
shall begin on the date hereof and shall continue for three years thereafter,
unless earlier terminated as set forth herein.
(a) By the Company. This Agreement may be terminated by the
Company with or without cause by giving the Consultant ten
(10) days written notice.
(b) By Consultant. Notwithstanding any provision of this
Agreement to the contrary, this Agreement may be terminated by
the Consultant with or without cause. Consultant is required
to give a minimum of 90 days notice to terminate the agreement
without cause. For the purposes of this subparagraph "Cause"
shall mean the Company's insolvency or bankruptcy, a
misrepresentation of any fact by the Company inducing any
action by Consultant.
(c) By Death or Permanent Disability. This Agreement shall
terminate, without Cause, upon the death or permanent
disability of Consultant. For purposes Agreement, the term
"permanent disability" shall mean that Consultant is unable,
by reason of independently substantiated medical or
psychological condition, to carry out or perform the duties
required of him hereunder, with or without reasonable
accommodation, for a continuous period of at least ninety (90)
days.
3. Compensation; Stock Warrants. As an inducement for the
Consultant to begin and to perform all services rendered under this
Agreement, the Company agrees to issue the Consultant stock
warrants, (the "Warrants") giving the Consultant the right to
purchase three hundred thousand shares (300,000) of common stock
$0.001 par value, of the Company (the "Warrant" shares), which are
to be fully earned and become fully vested and exercisable as of
the effective date of the Agreement. The exercise price of the
Warrant Shares shall be THIRTY-FIVE CENTS ($.35) per share.
(a) Medical Malpractice Insurance. For the term of this
Agreement, the Company shall pay for and continue to maintain
the Consultant's medical malpractice insurance premium at
coverage levels currently maintained and paid for by the
Company as of the date of this Agreement. Company shall pay
said premium as required to sustain the medical malpractice
tail coverage indefinitely as described herein which the
Company understands to equate to no more than approximately
one additional year's premium.
The warrant rights granted hereby shall be cumulative. The Warrants shall
be exercisable at any time and from time to time, in whole or in part;
provided, however, that warrants may be exercised for no longer than
three (3) years from the date of this Agreement. The warrants shall be
exercised by written notice directed to the Company, accompanied by a
check payable to the Company for the Warrant shares being purchased. The
Company shall make immediate delivery of such purchased shares, fully
paid and non-assessable, registered in the name of Consultant. The
certificates evidencing such shares shall bear the following restrictive
legend, unless and until such shares have been registered in accordance
with the Securities and Exchange Act of 1933, as amended (the "Act"):
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), OR
THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN ANY
MANNER UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND THE SECURITIES LAWS
OR ANY APPLICABLE JURISDICTIONS OR UNLESS PURSUANT TO ANY EXEMPTION
THEREFROM.
The Company shall use its best efforts to register the Warrant Shares
under the Act at the earlier of such time as it registers shares issuable
pursuant to a qualified employee stock option plan or such time as it
registers shares beneficially owned by or issued to executive officers or
directors of the Company, or after one year, at the written request of
the Consultant.
If, and to the extent that the number of shares of common stock of the
Company shall be increased or reduced by an action other than for value,
including but not limited to change of par value, split,
reclassification, distribution or a dividend payable in stock, or the
like, the number of shares subject to the Warrant and the warrant price
per share shall be proportionately adjusted. If the Company is
reorganized or consolidated or merged with another corporation,
Consultant shall be entitled to receive warrants covering shares of such
reorganized, consolidated, or merged company in the same proportion, at
an equivalent price, and subject to the same conditions. For purposes of
the preceding sentence, the excess of the aggregate fair market value of
the shares subject to the warrant immediately after any such
reorganization, consolidation, or merger over the aggregate warrant price
of such shares shall not be more than the excess of the aggregate fair
market value of all shares subject to the Warrant immediately before such
reorganization, consolidation, or merger over the aggregate warrant price
of such shares, and the new warrant or assumption of the old Warrant
shall not give Consultant additional benefits which he did not have under
the old Warrant, or deprive him of benefits which he had under the old
Warrant.
Consultant shall have no rights as a stockholder with respect to the
Warrant Shares until exercise of the Warrant and payment of the Warrant
Price as herein provided.
4. Expenses. Company shall reimburse Consultant for reasonable
business and travel expenses Consultant incurs as a result of his performance
hereunder.
5. Consultant Statements, Acts. Consultant shall not make any
statement, which would be deleterious to the reputation and good will of the
Company or any of its officers, directors or employees.
6. Confidentiality of Information.
(a) Since the work for which the Consultant is to be
retained will include knowledge and information of a
confidential nature to, or which is a trade secret of, the
Company Consultant shall receive such knowledge and
information in confidence, and shall not (except as required
in the conduct of the Company's business or as authorized in
writing by the Company), publish, disclose, or make any use of
any such information or knowledge, or authorize anyone else to
do so, unless and until such information or knowledge shall
have ceased to be secret or confidential as evidenced by
general public knowledge.
(b) Since the work of which Consultant shall be retained
may include access to knowledge or information of a
confidential nature to, or is a trade secret of, or relates in
any way to, a customer, distributor, distribution method,
marketing of products or supplier of the Company, Consultant
shall receive such knowledge and information in confidence and
shall execute and abide by any agreement which, in the opinion
of the Company, is necessary to protect the interest of the
Company's customers, distributors or suppliers in such
knowledge or information.
(c) Consultant specifically acknowledges the
confidential nature of all information relating in any manner
whatsoever to the formulas, prices, costs, engineering,
distribution method, marketing of products, technical data,
and manufacturing processes of the Company, whether or not
Consultant is specifically instructed as to the confidential
nature of the information or not, and shall not disclose such
information in accordance with the terms of this paragraph.
7. Return of Proprietary Subject Matter. All documents, written
information, notebooks, records and any other information relating to
confidential information or trade secrets of the Company or its customers,
suppliers or distributors, and all tangible work product created by
Consultant pursuant to this Agreement, shall be the property of the Company
and shall be delivered by Consultant to the Company on termination of this
Agreement.
8. Non-Competition Agreement. Consultant acknowledges that the
business plan of the Company is dependent on the Company's relationship with
businesses engaged in the camping industry and therefore Consultant agrees
that during the term of this Agreement, he will not, directly or indirectly,
whether as a partner, employee, agent, consultant, advisor, owner,
stockholder, lender or in any other capacity, engage in, or have any
association with any entity in the camping industry with respect to the
distribution of natural health care products without prior written approval
from the Company, which approval may be withheld by the Company in its sole
and absolute discretion.
9. Indemnification. The Company shall indemnify, defend and hold
harmless Consultant from any claims arising out of the performance of the
duties described in paragraph 1 hereunder or his membership on the Advisory
Board, except for actions arising out of conduct by the Consultant that
constitutes gross negligence in the performance of those duties.
10. Arbitration. Any and all controversies, disputes or claims arising
out of or relating to this Agreement, or any breach thereof, shall be
resolved by arbitration at the election or either party in accordance with
the rules then observed by the American Arbitration Association, and judgment
upon any award rendered by the arbitration may be entered by any court of
competent jurisdiction.
11. Assignment of Inventions. Consultant will disclose promptly to the
Company all discoveries, improvements, inventions, and ideas conceived or
made by Consultant, either individually by Consultant or with others, during
the term of this Agreement, which are related to the actual or anticipated
business of the Company. Consultant hereby assigns all such discoveries,
improvements, inventions, and ideas to the Company and will treat such
information as confidential information in accordance with Section 6 hereof.
Consultant will execute all documents that the Company may request to
evidence that such discoveries, improvements, inventions, and ideas are the
exclusive property of the Company, including, without limitation, assignments
of the same. All productions, presentations or research made, developed, or
discovered by Consultant shall also become the property of the Company.
12. Notices. All notices require to be given under this Agreement to
either party shall be in writing, and deemed duly given if delivered by hand,
or if addressed and mailed by certified mail, return receipt requested, to
the address set forth below its name:
CONSULTANT: Xxxxxx Xxxxxxx
0000 X. 00xx Xxxxxx
Xxxxxxx, XX 00000
COMPANY: Vital Living, Inc.
0000 X. Xxxxx Xx.
Xxxxx, XX 00000
13. Assignment. This Agreement, and Consultant's rights and
obligations hereunder, may not be assigned by Consultant without the express
consent of the Company. The Company may assign its rights, together with its
obligations hereunder, to any of its affiliates or in connection with any
sale, transfer or other disposition of all or substantially all of its
business or assets. This Agreement and the obligations of the Company
arising hereunder shall be binding on all successors and assigns, or
transferee of the assets of the Company.
14. Waiver of Breach. The waiver by either party of any provision of
this Agreement shall not operate or be construed as a waiver of any
subsequent beach.
15. Remedies. In the event of breach of any of the terms of this
Agreement by either party hereto, the non-breaching party will be entitled,
where appropriate, to apply for an obtain injunctive relief in any court of
competent jurisdiction without limitation as to any other or future remedies
which may be available.
16. Survival of Obligations. No termination of this Agreement or of
Consultant's work hereunder for any reason shall relieve Consultant of or
release Consultant from those obligations set forth in Paragraphs 5, 6, and 7
of this Agreement, which obligations shall survive such termination.
17. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with
respect to the engagement of the Consultant by the Company and contains all
of the covenants and agreements between the parties with respect to such
engagement.
18. Severability. If any provisions of this Agreement shall be
unenforceable the remaining provisions shall, nonetheless, remain in full
force and effect.
19. Modifications. This Agreement may be amended, modified or
superseded and the terms or covenants hereof may be waived, only by a written
instrument executed by both of the parties hereto.
20. Separate Counterparts. This Agreement may be executed in separate
counterparts, which shall collectively and separately be considered one and
the same Agreement. No party shall be bound by this Agreement unless and
until all parties have executed it.
21. Governing Law. This Agreement is executed in, shall be governed by
and construed in accordance with the laws of the State of Arizona.
22. Headings. The headings of the paragraphs are for reference only
and are not part of the Agreement or to be used to construe terms of the
Agreement.
23. Relationship of the Parties. Each party is and shall perform it s
obligations under this Agreement as an independent contractor, and as such,
shall have and maintain complete control over all of their respective
employees, agents and operations. Neither party nor anyone employed by it
shall be, represent, purport to act or be deemed to be the agent,
representative, employee, or servant of the other party.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound
hereby have executed this Agreement as of the date first written above.
VITAL LIVING, INC.
a Nevada corporation
By: /S/ Xxxxxxx X. Xxxxx
Its: C.E.O.
/S/ Xxxxxx Xxxxxxx
CONSULTANT