Exhibit 10.10
XENACARE
Alan Xenakis, MD, ScD, MPH
President/CEO
7700 Congress Avenue
Suite 3208
Boca Raton, Florida 33487
561-999-0126
To: Rik J. Deitsch, Ph.D.
From: Alan P. Xenakis, MD
Date: September 28, 2004
RE: Letter of Intent between XenaCare and NutraPharma
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Dear Dr. Deitsch:
Thank you for the opportunity to provide Site of Care Investment and Dividend
Reinvestment Management Services to NutraPharma.
This Letter of Intent (LOI) summarizes the conversations with XenaCare (Frank
Rizzo and myself), our mutual staffs and you from February 22, 2004 to September
24, 2004. This LOI will serve as the basis of the agreement between us.
XenaCare (Manager) will perform services as described in the original exhibit
attached to this letter for NutraPharma (Investor).
In summary, XenaCare will make all decisions to invest in the opening of 15
Sites of Care reflecting current costs of opening sites of care at a $250,000
investment and other use of Investor's investment at the Manager's sole
discretion without the requirement of first consulting with the Investor for
each opening.
Such investment may include, but not limited to, operating systems that help
productivity and revenue generation of non-prescription pharmaceutical sales at
the Site of Care such as training, marketing, and audio/teleconferencing and
database management. Investor recognizes the Manager's expertise and gives
Manager full power and authority to carry out these decisions on Investor's
behalf.
Providing NutraPharma follows this letter of Intent, these services will begin
on November 22, 2004 and will continue at the level appropriate to the schedule
of Investment and Reinvestment by the Investor.
Page two - Letter of Intent, September 28, 2004
In consideration for XenaCare's performance of these services, NutraPharma
agrees to invest a minimum of $25,000 on or before each of the following dates:
October 22, 2004, November 22, 2004, and December 23, 2004. Further, NutraPharma
will place into XenaCare LLC's account the remainder of the $250,000 in one lump
sum without prepayment penalty no later than February 15, 2005.
XenaCare and NutraPharma have agreed that the Investment will follow the
enclosed Dividend Reinvestment Plan. Under no circumstances, however, will
NutraPharma be eligible for any cash return of investment under the terms of the
previously agreed upon and attached DRIP Plan, should NutraPharma so chose,
until March 15, 2006 or a minimum of one year after the final payment of its
investment.
If the minimum of the above stated investment timeline is not adhered to by the
Investor then XenaCare will have the full rights to adjust the total amount of
investment managed offices from 15 to whatever the total may equitably be based
on the costs of the Sites of Care and lost opportunity costs at the time of the
final investment.
On it's part, NutraPharma agrees to provide XenaCare on a timely basis support
in identifying and enrolling Site of Care Physicians for purposes of management
of the investment. Should NutraPharma not effectively assist XenaCare in
identifying and enrolling Site of Care Physicians then XenaCare shall deduct the
cost of said service from NutraPharma's original investment as a cost of
managing NutraPharma's Investment.
If NutraPharma fulfills it's total investment obligation by no later then
February 15, 2005, participates in the DRIP plan and assists in identifying and
enrolling participation SOC physicians, and only if the original investors are
given an opportunity to participate in a second round of financing, then
NutraPharma shall be eligible for participation in the second round of financing
opportunity in a plan consistent with the original investors.
Should a second round of financing occur, and NutraPharma achieves eligibility
then NutraPharma will have a 30 day notice to participate. NutraPharma's current
investment carries no voting privileges and therefore under no circumstances can
NutraPharma block any future rounds of financing that XenaCare may wish to
participate in.
If this agreement accurately summarizes the terms of our earlier agreements
(attached) and conversations, please sign below on this and the attached copy.
Please also sign the Dividend Reinvestment Agreement. Retain one copy for your
records and return one signed copy to me. My email address is
Axenakismd@xenacare.com. My fax number is 561-999-9086.
Sincerely,
Alan P. Xenakis, MD, Sc.D, MPH
CEO/President
Encl.
Page three - Letter of Intent, September 28, 2004
The undersigned agree to the terms and conditions set forth in this document and
are authorized to execute this Letter of Agreement.
XenaCare, LLC NutraPharma
By:/s/Alan P. Xenakis, MD_ By:/s/ Rik J. Deitsch
Print Name: Alan P. Xenakis, MD Print Name: Rik J. Deitsch, Ph.D.
Title: CEO, Founder and Managing Partner Title: CEO
Date:11/1/2004 Date:11/1/2004
Schedule A
Nutra Pharma Site Of Care Investment
Parties
XenaCare LLC, A Delaware Corporation ("Manager"), agrees to manage the
$250,000 investment from Nutra Pharma ("Investor") in XenaCare's Site of
Care Physician Development Program on the following terms:
The Manager
1. XenaCare, LLC is a rapidly growing national healthcare limited liability
company (the "Manager") under and pursuant to Title 6 Chapter 18 of the
Delaware Code (the Delaware Limited Liability Company Act). The Manager
received a certificate of formation that was executed and filed with the
Delaware Secretary of State on the 20th day of December, 2001 pursuant to
Section 18-20 of the Delaware Limited Liability Company Act. The Manager
operates as a healthcare management services and product company with
exclusive contract, lease rights and privileges within physician offices
(Sites of Care) for providing to patients the benefits of protocol and
product development technologies, as well as the expertise to supervise
and/or manufacture, distribute, sell and/or resell FDA guideline supported
non-prescription pharmaceuticals, tests, personnel and other related
services. The Manager currently primarily operates in New York and Florida
with its Corporate office located at 7700 Congress Avenue, Suite 3208, Boca
Raton, Florida, 33487
Purpose
2. The Site of Care (SOC) Investment Plan ("Plan") provides a method and
opportunity for the Investor to Invest $250,000 into the opening of Fifteen
(15) new SOC without payment of brokerage, management or service charges.
Benefits
The requirement for investment in each Site of Care is $16,668 (15 SOC
require $250,000) as per Schedule A, Exhibit 1. The Cost Requirement for
the Manager to identify, market, cluster and contract fifteen (15) eligible
SOC for the Plan is normally $37,500 ($2,500 per office). This Cost
Requirement is waived for the Investor under the terms of the initial 15
offices. The Investor has declared that it wishes to take the Dividends
from each SOC and reinvest the dividends back into new SOC openings as per
Schedule B.
SOC Operation
3. The Manager shall manage all new Sites of Care to maximize their
productivity and effectiveness. Every reasonable attempt will be made to
have the Investor's invested SOC care reach profitability and achieve
dividend projections based on a resource based relative value scale as
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Maintenance SOC
depicted in Schedule A, Exhibit 3, Resource Based Relative Value Evaluation
and Schedule A, Exhibit 4, Dividend Schedule. If however, an SOC, for
reasons not the fault of the Manager, becomes unfavorable to Administrate
and Operate as determined by the Manger with a full-time Nurse Educator
then the Investor shall continue to receive its Dividend from its
Investment for as long as sold NPP's generate revenue from the SOC. This
SOC shall be designated as a Maintenance SOC.
There are no brokerage commissions, service charges or management fees for
the Manager to administrate the resource based relative value plan.
The Investor shall receive quarterly statements as to all Sites of Care
that it has an Investment in as well as the status and schedule for the
reinvestment of all dividend assets generated from its original investment.
Participation in an Invested SOC may be terminated at any time by the
Investor. Cancellation shall become effective 60 days after certified mail
Receipt by the Manager of such a cancellation.
Non-Assignability
4. The Right to participate in the Resource Based Relative Value Plan is not
assignable by the Investors to any other entity
Purchase Price
5. The purchase price of the original 15 Sites Of Care purchased by the
Manager on behalf of the Investor is $16,668 per Site of Care. The Investor
will not be charged any brokerage or management fee as outlined in
paragraph 2. Dividends will be accrued by the Manager for full reinvestment
under terms of Schedule B.
Administration
6. The Resource Based Relative Value Plan shall be administered on behalf of
the Investor by the Manager and shall report to the Investor on a regular
basis. All administrative costs of the Plan, including expenses of the
Manager, shall be paid by the Manager.
Reports
7. Statements will be sent to the Investor on a quarterly basis by the
Manager. The statements will set out the Site of Care opening record date,
the dividend status, the amount of cash dividend available for
reinvestment, and applicable withholding taxes. These statements are an
Investor's continuing record of its initial investment and status of its
dividends and their reinvestment. In addition, the Investor will be sent
annually the appropriate information for income tax reporting purposes.
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Schedule B
Nutra Pharma Dividend Reinvestment Plan
XenaCare LLC, A Delaware Corporation ("Manager") agrees to manage the
Dividend Reinvestment of a $250,000 investment from Nutra Pharma
("Investor") in XenaCare's Site of Care Physician Program on the following
terms:
The Manager
1. XenaCare, LLC is a rapidly growing national healthcare limited liability
company (the "Manager") under and pursuant to Title 6 Chapter 18 of the
Delaware Code (the Delaware Limited Liability Company Act). The Manager
received a certificate of formation that was executed and filed with the
Delaware Secretary of State on the 20th day of December, 2001 pursuant to
Section 18-20 of the Delaware Limited Liability Company Act. The Manager
operates as a healthcare management services and product company with
exclusive contract, lease rights and privileges within physician offices
(Sites of Care) for providing to patients the benefits of protocol and
product development technologies, as well as the expertise to supervise
and/or manufacture, distribute, sell and/or resell FDA guideline supported
non-prescription pharmaceuticals, tests, personnel and other related
services. The Manager currently primarily operates in New York and Florida
with its Corporate office located at 7700 Congress Avenue, Suite 3208, Boca
Raton, Florida, 33487
Purpose
2. The Site of Care Reinvestment Plan ("Plan") provides a method and
opportunity for the Investor to reinvest all of it's earned cash assets
from the previously invested $250,000 in the original fifteen(15) SOC's
into the opening of new SOC or maximizing already existing SOC without
payment of any brokerage, management or service charges for the first 15
offices.
The declaration of the available dividend assets to the Investors for
reinvestment is at the discretion of the Manager. Dividend payment dates
for the original investment are expected quarterly from time of first
investment Site of Care Opening.
Benefits
3. The reinvestment price for new Sites of Care or maximizing existing Sites
of Care on behalf of the Investor shall be the cost of Opening a New Site
of Care or maximizing that Site of Care at the time of the dividend
reinvestment. The requirement of the reinvestment shall be set at 100% of
the cost that would be required if the Manager were to open or maximize the
Site of Care with its own investment.
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There are no brokerage commissions, service charges or management fees for
the Manager to administrate the plan for the initial 15 offices. XenaCare
reserves the right to assess the Investor fair and customary management
fees to cover the Cost Requiremen for the Manager to identify, market,
cluster and contract a new SOC opened beyond the original 15. Full
investment of dividends is achieved when the plan accrues the Investor
assets and reinvests at the point the Dividend reaches the requirement
necessary to fund the opening of a new Site of Care.
The Investor shall receive quarterly statements as to all Sites of Care
that it has an Investment in as well as the status and schedule for the
reinvestment of all dividend assets generated from its original investment.
Participation in the Plan may be terminated at any time by either party.
Cancellation shall become effective 60 days after certified mail receipt by
the Manager or Investor of such a cancellation.
Non-Assignability
4. The Right to participate in the Plan is not assignable by the Investors to
any other entity
Method of Dividend Reinvestment
5. The Investor's dividend assets shall be reinvested at 100% of their cash
value after deduction of any applicable withholding tax. The Investor will
be credited with the number of Sites of Care from its original Investment
(15) and any new Sites of Care equal to the dividends reinvested for 95% of
the cost of such openings.
Purchase Price
6. The purchase price of Sites Of Care purchased by the Manager on behalf of
the Investor with reinvested dividends will be 95% of the cost that would
be required if the Manager, at the time of the reinvestment, were to open
or maximize the Site of Care with its own investment. The Investor will not
be charged any brokerage or management fee. Dividends will be accrued by
the Manager until full investment for each new Site of Care is attained.
Fractional Assets utilization
Reinvestment SOC Dividend Eligibility
7. It is to the benefit of both the Manager and the Investor to open Sites of
Care as soon as possible. The Manager then has the discretion to utilize
the Investor's fractional dividend assets to assist in the opening of a new
Site of Care. Upon the time that the Investor has dividend assets in
aggregate from any combination of the original SOC which achieve 95% of the
cost of opening the new SOC, then the reinvested SOC will immediately be
deemed eligible for the Investor accrue new dividend assets from said
reinvestment SOC. Unless notified in writing from the Investor, said new
accrued dividend assets from reinvestment SOC's will be utilized by the
Manager to assist in the opening of another new SOC.
Dividend Reinvestment Term
8. The Term for eligibility for reinvestment from SOC dividends from this
agreement shall be for a period of three (3) years from the date of this
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Right to Change Initial Reinvestment Charge
contract. Excluding the original fifteen (15) SOC any reinvestment into a
new SOC may at the Manager's discretion reflect new operations initial
opening costs. Under these circumstances the cost to the Investor to
reinvest in a new SOC may exceed $16,668 to achieve 95% of the cost of
opening the new SOC. If this situation occurs then the Manager will share
this cost information with the Investor and give the investor the right of
refusal within 30 days to reinvest into a new SOC at said elevated
reinvestment cost or take the dividend in question as cash.
Administration
The Plan shall be administered on behalf of the Investor by the Manager and
shall report to the Investor on a regular basis. All administrative costs
of the Plan, including expenses of the Manager, shall be paid by the
Manager.
Statements and Reports
9. Statements will be sent to the Investor on a quarterly basis by the
Manager. The statements will set out the Site of Care opening record date,
the dividend status, the amount of cash dividend available for
reinvestment, and applicable withholding taxes. These statements are an
Investor's continuing record of its initial investment and status of its
dividends and their reinvestment. In addition, the Investor will be sent
annually the appropriate information for income tax reporting purposes.
Please sign the following Dividend Schedule you wish the Manager to manage
for you:
I ____________________ Accept the terms of Schedule B of Dividend
Reinvestment and Refuse the option of Dividend Cash Return in Schedule C at
this time.
I ____________________ Refuse the terms of Schedule B of Dividend
Reinvestment and Accept the option of Dividend Cash Return in Schedule C at
this time
Schedule C
NutraPharma Dividend Return
XenaCare LLC, A Delaware Corporation ("Manager"), agrees to manage the
$250,000 investment from NutraPharma ("Investor") in XenaCare's Site of
Care (SOC) Physician Development Program (Plan) on the following terms:
The Manager
1. XenaCare, LLC is a rapidly growing national healthcare limited liability
company (the "Manager") under and pursuant to Title 6 Chapter 18 of the
Delaware Code (the Delaware Limited Liability Company Act). The Manager
holds a certificate of formation that was executed and filed with the
Delaware Secretary of State on the 20th day of December, 2001 pursuant to
Section 18-20 of the Delaware Limited Liability Company Act.
The Manager operates as a healthcare management services and product
company with exclusive contract, lease rights and privileges within
physician offices (SOC) for providing to patients the benefits of protocol
and product development technologies, as well as the expertise to supervise
and/or manufacture, distribute, sell and/or resell FDA guideline supported
non-prescription pharmaceuticals, tests, personnel and other related
services. The Manager currently primarily operates in New York and Florida
with its Corporate office located at 7700 Congress Avenue, Suite 3208, Boca
Raton, Florida, 33487
Purpose
Plan Benefits and Waived Total Cost Requirement
2. The Plan provides a method and opportunity for the Investor to Invest
$250,000 into the opening of fifteen(15) new SOC without payment of any
brokerage, management or service charges. The investment requirement for
the Plan in each SOC is $16,668 as per Schedule A, Exhibit 1. The
requirement for investment in each Site of Care is $16,668 (15 SOC require
$250,000) as per Schedule A, Exhibit 1. The Cost Requirement for the
Manager to identify, market, cluster and contract fifteen (15) eligible SOC
for the Plan is normally $37,500 ($2,500 per office). This Total Cost
Requirement will be waived for the Investor under the terms of the initial
opening of the first 15 SOC. The Investor has declared that it wishes to
take the Dividends from each SOC and reinvest the dividends back into new
SOC openings as per Schedule B.
Dividend Return Schedule
3. By signing this Schedule the Investor wishes to take the dividends from
each invested SOC as return on a cash scheduled basis.
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Dividend Accounting and Investor Payout
The Investor shall become eligible for cash return on its dividends for
each of the fifteen (15) Invested SOC 90 days from the start date of each
SOC opening. Each 30 days thereafter, the Investor shall receive the
appropriate earned dividend from each eligible SOC. At the close of each
month after the initial 90 days from the start of each invested SOC, the
dividend accrued from the SOC shall be accounted for and the appropriate
dividend earnings shall be mailed to the Investor within fourteen days of
the month's close.
SOC Operation
4. The Manager shall manage all new SOC to maximize their productivity and
effectiveness. Every reasonable attempt will be made to have the Investor's
SOC reach profitability and achieve dividends based on a resource based
relative value scale as depicted in Schedule A, Exhibit 3, and Schedule A,
Exhibit 4, Dividend Schedule. If however, an SOC, for reasons not the fault
of the Manager, becomes unfavorable to administrate and operate as
determined by the Manger with a full-time Nurse Educator then the Investor
shall continue to receive its dividend from the Plan for as long as sold
NPP's generate revenue from the SOC. The SOC so involved shall be
designated as a Maintenance SOC.
Maintenance SOC
There are no brokerage commissions, service charges or management fees for
the Manager to administrate the Plan.
The Investor shall receive quarterly statements as to all SOC that it has
an Investment in. The Investor, if applicable, shall also receive quarterly
schedules for the reinvestment of all dividend assets generated from its
original investment.
Cancellation
Participation in an Invested SOC may be terminated at any time by the
Investor. Cancellation shall become effective 60 days after certified mail
receipt by the Manager of such a cancellation. At no time is the Manager
liable for the Investor's investment nor is the Investor eligible for a
refund of their investment.
Non-Assignability
5. The Right to participate in the Plan is not assignable by the Investors to
any other entity
Investment Price
6. The investment price for the original fifteen 15 SOC paid to the Manager
for the Plan on behalf of the Investor is $16,668 per SOC. For purposes of
this Plan only, the Investor will not be charged any brokerage fee above
the $16,668 per SOC. As advised by the Investor at the onset of this
contract in writing, dividends will be accrued by the Manager for full
reinvestment under terms of Schedule B.
Applicable Dividend Taxes
7. Plan of this agreement shall be administered on behalf of the Investor by
the Manager and shall report to the Investor on a regular basis. All
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administrative costs of the Plan, including expenses of the Manager, shall
be paid by the Manager. However any and all taxes applicable to Investor
earned dividends shall be the sole responsibility of the Investor.
Statements and Reports
8. Statements will be sent to the Investor on a quarterly basis by the
Manager. The statements will set out the SOC opening record date and the
dividend status paid to date and applicable withholding taxes. These
statements are an Investor's continuing record of its initial investment
and status of its dividends. In addition, the Investor will be sent
annually the appropriate information for income tax reporting purposes.
Please sign the following Dividend Schedule you wish the Manager to manage
for you:
I ____________________ refuse the terms of Schedule C of Cash Return on
Dividends and Accept the option of Dividend Reinvestment in Schedule B at
this time
I ____________________ accept the terms of Schedule C of Cash Return on
Dividends and Refuse the option of Dividend Reinvestment in Schedule B at
this time
XenaCare_____ Nutra Pharma_____
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