Exhibit 10.10
Vital Health Technologies, Inc.
Form 10-KSB
File No. 000-15243
INDEPENDENT CONTRACTOR / CONSULTANT AGREEMENT
This agreement, dated 8/29/00 , between Vital Health
Technologies, L.L.C. ("VHT") a Minnesota Limited
Liability Company, and "CONTRACTOR"), an individual. SRC
Funding, Inc.
Period of agreement: To begin as of the date above.
Services to be provided:
1. Engagement of contractor. VHT hereby engages
CONTRACTOR on a work-for-hire, as needed to provide
services as listed above. VHT shall pay compensation to
CONTRACTOR as itemized in Exhibit A.
* CONTRACTOR shall determine CONTRACTOR'S own
working hours. If working at VHT'S premises, time
schedules will be agreed on between VHT and
CONTRACTOR
* CONTRACTOR shall be assigned the Work. but
shall be responsible for and will conduct all of
CONTRACTOR'S business in CONTRACTOR'S own name and
in such mariner as it may see fit.
* CONTRACTOR will pay all expenses whatever of
CONTRACTOR'S activities and be responsible for the
acts and expenses of CONTRACTORS employees, and
CONTRACTOR'S own profits and losses.
* Nothing in this Agreement shall be construed to
constitute CONTRACTOR as the partner, employee or
agent of VHT nor shall either party have any
authority to bind the other in any respect, it being
intended that each shall remain as an independent
contractor responsible only for its own actions.
* CONTRACTOR Agrees to indemnify VHT against all
claims based on or arising out of this Agreement,
including limitation claims for taxes.
* CONTRACTOR shall not be considered an employee
and shall have no right to any employee benefits. As
neither CONTRACTOR nor its personnel are VHT's
employees. VHT shall not take any action or provide
CONTRACTOR'S personnel with any benefits or
commitments inconsistent with any of such
undertakings by CONTRACTOR. In particular:
* VHT will not withhold FICA (Social Security)
from CONTRACTOR'S payments.
* VHT will not make state of federal unemployment
insurance contributions on behalf of CONTRACTOR or
its personnel.
* VHT will not withhold state and federal income
tax from payment to CONTRACTOR.
* VHT will not make disability insurance
contributions on behalf of CONTRACTOR.
* VHT will not obtain worker's compensation
insurance on behalf of CONTRACTOR or its personnel.
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2. Trade Secrets. This Agreement is intended to establish
and protect the rights of VHT with respect to
confidential information, including without limitation,
undisclosed financial information, customer lists,
business plans, product development plans, computer
software source code, hardware engineering designs,
inventions, developments and other work product, pending
trademark, copy or patent applications, contents or ideas
contained therein, know how and show how or other
confidential or secret information concerning the
business and affairs of the corporation and/or its
directors, officers or employees which is directly or
indirectly useful to VHT in any aspect of VHT's business
(collectively referred to for purposes of this Agreement,
but without changing their respective legal character, as
Trade Secrets") for which the CONTRACTOR will be paid
compensation as an independent contractor of VHT.
CONTRACTOR therefore agrees that CONTRACTOR will not,
during the term of this Agreement or at any time
thereafter, use for CONTRACTOR or for others, any
information and material which is identified by VHT or
third parties as Trade Secrets or which the CONTRACTOR
has reason to believe is of a confidential or secret
nature, and will not disclose during the term of this
Agreement or at any time thereafter, directly or
indirectly, to any person outside the employ of VHT any
such Trade Secrets without the express consent of an
OFFICER of VHT and that CONTRACTOR will use such Trade
Secrets exclusively in furtherance of CONTRACTOR'S lawful
duties under this agreement. VHT and CONTRACTOR further
agree to treat this agreement, the work to be performed,
and the Work Product as confidential and shall disclose
the same to CONTRACTORS employees only on a need to know
basis.
CONTRACTOR agrees that VHT Trade Secrets constitute
unique and valuable assets of VHT and represent a
substantial investment of time and expense by VHT and its
predecessors, and that any disclosure or other use of
such knowledge or information other than for the sole
benefit of VHT would be wrongful and would cause
irreparable harm to VHT The foregoing obligations of
confidentiality, however, shall not apply to any
knowledge or information which is now published or which
subsequently becomes generally publicly known in the form
in which it was obtained from VHT other than as a direct
or indirect result of the breach of this Agreement by
CONTRACTOR.
3. Ownerships Work Product. All copyrights, patents,
trade secrets, or other intellectual property rights
associated with any ideas, concepts, techniques.
inventions, processes, or works of authorship developed
or created by CONTRACTOR or its personnel during the
course of performing VHT's Work (collectively, the "Work
Product") shall belong, exclusively to VHT and shall, to
the extent possible, be considered a work made for hire
for VHT within the meaning of title 17 of the United
States Code. CONTRACTOR herewith automatically assigns
and irrevocably transfer and shall cause its personnel
automatically to assign and irrevocably transfer at the
time of creation of the Work Product, without any
requirement of further consideration, any right title, or
interest it or they may have in such Work Product,
including any copyrights or other intellectual property
rights pertaining thereto. Upon request of VHT CONTRACTOR
shall take such further actions, and shall cause its
personnel to take such further actions, including
execution and delivery of instruments of conveyance, as
may be appropriate to give full and proper effect to By
virtue of this Agreement, all rights, title, and interest
to all Work Product of CONTRACTOR, and confidential
information, and all improvements developed within the
course and scope of the performance by CONTRACTOR Of this
Agreement, whether or not patentable or copyrightable,
including without limitation source code computer
programs, manuals and related materials is hereby
assigned to and shall become the property of VHT
CONTRACTOR shall promptly disclose to VHT all such Work
Product, confidential information and improvements. To
the extent reasonably required by VHT CONTRACTOR shall
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cooperate with VHT in connection with any application for
patenting or copyrighting any such Work Product,
confidential information and improvements and shall
execute all documents tendered by VHS to evident its
ownership thereof and will cooperate with VHT in
obtaining, defending and enforcing VHT's rights therein.
4 . Pre-existing Works License. CONTRACTOR claims and
hereby reserves and retains ownership of the works
identified in Exhibit B attached hereto, which CONTRACTOR
created before entering into this Agreement. With respect
to such works, and without Rather charge, to the extent
the same are utilized, are necessary for or otherwise
relate to the Work, VHT shall have a non-exclusive
license to Use such works in machine-readable form
throughout VHT's organization. Pursuant to such license,
VHT may also modify and make additional copies of such
works for internal use and installation by VHT CONTRACTOR
shall also make available the source code version of such
works, as requested by VHT for support and maintenance
purposes, provided that the use and handling of all
source code shall be subject to strict confidentiality
procedures. VHT is cautioned against making unreviewed
changes to such works that could disrupt or impair the
functioning of the Software.
5. Noncompetition During the term of this Agreement and
for the (6) month period following the termination of
this Agreement, CONTRACTOR will not directly or
indirectly:
* Own, manage operate or control, be employed by or
act as a consult-ant, director agent or advisor to, or in
any other manner, perform any services for any
corporation, partnership, person, firm or other business
or business entity that is engaged in competition, with
any part of VHT 's business, including without
limitation, the business of manufacture, development,
design, marketing, distribution, or sale of variance
cardiographs and/or such other products as VHT designs,
manufactures, develops, distributes, sells or markets
during the Term or has proposed to design, manufacture,
develop, distribute, sell or market during the six month
period after the expiration of the Term.
* Interfere with the actual or prospective
relationship of VHT for any competitive reason induce or
attempt to induce any employee or consultant of VHT to do
any of the foregoing or to induce any employee of VHT to
his/her employment, or to otherwise discontinue or
interfere with the relationship of VHT (whether
contractual or otherwise) with any customer or any other
employee's employment with VHT for any competitive
reason.
6. Term and Termination. This Agreement will become
effective on the date first shown above and will
continue in effect until terminated as provided by law
for termination or removal of independent Contractors,
Officers, Directors, Consultants or other.
7. Contractor's Obligations on Termination of Agreernent.
Upon completion of the Work Product or earlier
termination of this Agreement, the CONTRACTOR will
deliver to VHT and will not keep in its possession nor
deliver to anyone else, the originals or copies of any
and all information and material referred to in the
Agreement, including Work Product of the CONTRACTOR,
and all notes, memoranda, specifications, devices,
documents, electronic media published to CONTRACTOR, or
any other material containing or disclosing any such
information or material, including specifically source
code or other hard copy output embodying the Work
Product developed by CONTRACTOR pursuant to this
Agreement CONTRACTOR is specifically prohibited from
using the Work Product for any other purpose
whatsoever. All Work Product and confidential
information of VHT shall be and are the sole and
exclusive property of VHT whether or not made or
developed by the CONTRACTOR.
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8. Representations and Warranties of CONTRACTOR.
CONTRACTOR warrants that:
* CONTRACTOR'S performance of the services called for by
this Agreement do not violate any applicable law, rule,
or regulation; any contracts with third-party rights in
any patent, trademark, copyright, trade secret, or
similar right; and
* CONTRACTOR has read and understands this Agreement and
has sufficient right, title, and interest to grant and
convey the rights accorded to VHT under section 4 hereof.
* CONTRACTOR warrants that all Work under this Agreement
shall be performed in a workmanlike manner and in
substantial conformity with the specifications published
by CONTRACTOR with respect thereto, if any.
9. Benefit. The obligations under this Agreement shall be
binding upon and shall inure to the benefit of VHT its
successors and assigns and shall be binding upon and
shall inure to the benefit of CONTRACTOR, and
CONTRACTORS., heirs, successors, and legal
representatives of CONTRACTOR.
10. Attorney's fees-, remedies. In the event of any legal
action, whether in law or by equity, or pursuant to any
type of alternative dispute resolution mechanism, the
prevailing party shall be awarded its costs,
disbursements and expenses of such action, including
reasonable attorney's fees.
11. General Provisions. This Agreement sets forth the
entire understanding of the parties with respect to the
matters herein. No amendment or modification to this
Agreement shall be effective unless the same shall be
reduced to writing and executed by the parties hereto.
Should any portion of this Agreement be determined by the
courts to be in conflict with any applicable law, the
validity of the remaining portions shall not be affected
thereby. Each of the rights and remedies enumerated herein
shall be independent of the other and shall be separately
enforceable, and all of such rights and remedies shall be
in addition to, and not in lieu of any other rights and
remedies available to VHT at law or in equity, all of
which shall be cumulative
12. The validity and interpretation of this Agreement
shall be governed by the laws of the state of Minnesota
This Agreement may not be assigned by CONTRACTOR. Any
litigation relating to the interpretation and/or
enforcement of this Agreement shall be exclusively venued
in the state or federal courts sitting in Hennepin or
Xxxxxx County Minnesota and CONTRACTOR consents to this
exclusive venue and agrees that the fort= is convenient to
both parties and waives any right to contest the same. The
provisions of Section 2 - 11 this Agreement shall survive
termination of this Agreement.
IN WITNESS WHERE OF, this Agreement has been executed as of
the date first above written.
/s/Vital Health Technologies
Vital Health Technologies, L.L.C.
________________________
(Contractor)
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Exhibit A
COMPENSATION
Contractor will provide services to Vital Health Technologies
that are in alignment with the development plan and equity
reorganization of Vital Heart Systems, Inc. (Exhibit B).
Contractor will be compensated based on the achievement of
two separate milestones.
1.) Negotiation of final settlements on substantially all
outstanding judgment debt.
2.) The completion of the development plan and equity
reorganization as described in the agreement between the two
companies.
* Compensation for the achievement of the 1st milestone
Contractor will be credited with 40,000 warrants to purchase
shares of Vital Heart Systems, Inc. common stock at a price of
.049 per share. Warrants shall have a 5-year term from the date
of issue. Warrants will be issued following the equity
reorganization of Vital Heart Systems, Inc.
* Compensation for the achievement of the 2nd milestone
Contractor will be credited with an additional 60,000 warrants on
the same terms as described above.
* Contractor will also rive a cash bonus in the amount of
$10,000 for the achievement of the milestone contractor
/s/SRC Funding
Contactor
/s/ Vital Health Technologies
Vital Health Technologies
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EXHIBIT B
TERMS OF CONVERSION AGREEMENT WITH VITAL HEART SYSTEMS, INC.
Vital Health Technologies, L.L.C. was recently formed for
the purpose of providing a mechanism for funding the
reorganization and development of Vital Heart Systems,
Inc. The Company has a formal agreement which includes a
12-month bridge loan at an interest rate of 10% with a
security interest in all assets of Vital Heart Systems,
and will maintain ownership of any assets paid for
directly and he Id in the name of Vital Health
Technologies L.L-C. Aurora Capital Management, has a
security interest in the patents of Vital Heart Systems
with virtually the same conversion features as Vital
Health Technologies. The agreement calls for funding to
be provided in phases as the Company deems appropriate.
Any capital not currently needed will remain in an
appropriate account in the name of Vital Health
Technologies, L.L C.
At which time key benchmarks are achieved, conversion
will take place and each unit of Vital Health
Technologies, L.L.C. will convert to shares of Vital
Heart Systems, Inc. common stock by dividing $5,000 by an
amount equal to the 30 day average trading price of Vital
He an Systems, Inc. common Stock. immediately prior to
the effective date of the merger, or $.50 per share,
should the 30-day average exceed $.50 per share
The key benchmarks necessary for the conversion of the
debt include:
1.) Successful completion of a I for 60 reverse stock
split of Vital Heart Systems, Inc. common stock.
2.) Settlement of all outstanding debts of Vital Heart
Systems, Inc. (excluding any debt that falls under the
statute of limitations and any debt which Has a
conversion to stock provision). Settlements must be in
accordance with the budgeted amount of common stock
allocated for the specific purpose of creditor
settlements.
3.) Completion and filing of all past corporate tax
returns -and SEC reporters.
4) The establishment of a transfer agent and trading
system for Vital Heart Systems. Inc. common stock.
The Board of Governors of Vital Health Technologies, Inc.
will determine if satisfactory completion of the
benchmarks has been achieved and reserves the right to
waive or modify one or more of the benchmarks if
sufficient progress has been made.
Forecast of post merger equity structure assuming sale of
100 Units:
Investors in Vital Health Technologies
(converted at 50 cents per share) 1,000,000
*Aurora Capital Management, L.L.C. 1,000,000
Vital Heart Current Shareholders
(following a I for 60 reverse stock split) 400,000
Creditors of Vital Heart 600,000
Total Shares 3,000,000
Development Team Warrants 300,000
Agent Warrants (Fundraising) 100,000
Total Warrants 400,000
*Aurora Capital Management, L.L.C. shares are issued as part
of an original agreement entered into in 1997. ACM will be
issued additional stock as a creditor and warrants for
development team services.
The Company expects to seek an additional $ 1,000.000 to
$2,000,000 of equity capital to implement Vital Heart Systems
long-term operating plan after the initial reorganization
efforts are completed.
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