Exhibit 10.4
PRO-PHARMACEUTICALS, INC.
CONSULTING AGREEMENT
(Burton Firtel)
CONSULTING AGREEMENT entered into as of March 1, 2002 (the "Effective
Date"), by and between Pro-Pharmaceuticals, Inc., a Nevada corporation having an
address of 189 Wells Avenue, Newton, Massachusetts 02459 (the "Company") and
Burton Firtel, an individual having an address at 555 Sherman Avenue, Hamden,
Connecticut 06518 ("Consultant").
WHEREAS, the Company has requested that the Consultant provide certain
consulting services in connection with the business development and financing of
the Company, and other professional tasks for the Company as it may request (the
"Services"); and
WHEREAS, the Consultant is willing to provide Services to the Company
in connection with the terms and conditions herein set forth;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Provision of Services. The Consultant agrees to provide Services as
stated above and as directed by the Company.
2. Compensation. In consideration of the Services, the Company shall
grant to the Consultant, pursuant to a non-qualified stock option agreement,
substantially in the form attached hereto as Exhibit A, with respect to each
month of Services, options to purchase 2,000 shares the Company's common stock,
exercisable at $3.50 per share.
3. Expenses. The Company shall reimburse the Consultant for
out-of-pocket expenses reasonably incurred by the Consultant in the course of
performing the Services, provided Consultant delivers vouchers or other
documentation evidencing such expenses to the satisfaction of the Company.
4. Termination.
(a) Without Cause. This Consulting Agreement has no defined term and
may be terminated by either party for any reason and without cause upon thirty
(30) days' prior written notice.
(b) Termination for Cause. The Company shall have the right, upon
written notice thereof to the Consultant, to terminate immediately the
Consultant's engagement pursuant to this Agreement (such termination, for
"cause") if the Consultant (i) is grossly negligent in the performance of
Services and other duties hereunder, (ii) is convicted of a felony or other
violation which in the reasonable judgment of the Company' senior management
could materially impair the Company from substantially meeting its business
objectives, (iii) has in the reasonable judgment of such management breached
Section 5, 6 or 7 hereof, or (iv) is found to have committed any act of fraud,
misappropriation of funds or embezzlement with respect to the Company.
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(c) Effect of Termination. No termination of this Consulting Agreement
shall affect the obligations, promises or covenants contained herein which are
expressly made to extend beyond the term of this Consulting Agreement,
including, without limitation, as set forth under Section 5, 6 or 7 hereof. The
effective date of termination of this Consulting Agreement is referred to as the
"Termination Date".
5. Property; Confidentiality.
(a) Definitions. For the purposes of this Consulting Agreement the
following terms shall have the meanings set forth below:
"Confidential Information" shall mean all information related to the
business, operations, products or services of the Company, and all reports,
presentations, drawings, know-how, data, inventions, discoveries, improvements,
ideas, plans, analysis, memoranda and other information or materials provided to
Consultant by or on behalf of the Company and/or its subsidiaries and other
affiliates, collectively and individually, or developed by Consultant in
connection with Consultant's engagement by the Company (including, without
limitation, the Work) or arising out of the Work, or preparation for it or other
related activities.
"Work" shall mean all designs, plans, presentations, reports, know-how,
data, inventions, discoveries, improvements, ideas, trademarks, copyrights, and
other works of authorship, and all other materials, information, work or other
intangible or intellectual property, collected, prepared, developed or edited by
Consultant in the performance of or in connection with the Services.
For the purpose of this Section 5, the term "Company" shall include the Company
and its respective subsidiaries and other affiliates, collectively and
individually.
(b) Intellectual Property Rights. The parties acknowledge and agree
that any Work being created at the instance of the Company will be deemed work
made for hire under the United States copyright laws. The Company shall have the
right to use all or any portion of the Work as it sees fit. The Company may
alter the Work, add to it, or combine it with any other work or works, in its
sole discretion. All rights in and to the Work and all material submitted by
Consultant to the Company as part of the Work or part of the process of creating
the Work, will be the property of the Company whether or not ultimately used by
the Company. No rights in or to the Work are reserved to Consultant.
(c) Assignment of Property. This Consulting Agreement shall operate as
a perpetual, unlimited, and irrevocable assignment by Consultant to the Company
of the copyright and any and all other proprietary or other intellectual
property rights or interests, in or to any Work, held by or on behalf of
Consultant (including, without limitation, any such interest arising as a result
of a determination that the Work does not constitute a work made for hire under
the United States copyright laws). In the event of any dispute arising out of or
concerning this Consulting Agreement, no acts of the Company undertaken for the
purpose of prosecuting, registering or preserving any patent or copyright in the
Work shall be considered in determining the character of the Work as a work made
for hire. Consultant shall execute such documents and do such further acts as
Company may request reasonably (and subject to Company's reimbursement of
Consultant's out of pocket expense of doing so) to perfect Consultant's rights
in the Work and said intellectual property rights and aid in enforcement and
exploitation of such rights and the assignment of the Consultant's rights to the
Company.
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(d) Confidentiality. Consultant agrees to (i) refrain from using the
Confidential Information for any purpose that would be adverse to the interests
of the Company, and (ii) hold the Confidential Information strictly confidential
and not disclose it to any person or entity other than the Company's employees
or representatives. The foregoing obligations shall not apply to any information
that (i) is publicly known at the time of its disclosure, (ii) is lawfully
received by Consultant from a third party not under an obligation of
confidentiality to the Company, (iii) is published or otherwise made known to
the public by the Company, or (iv) was generated independently by Consultant
without reference to or the use of Confidential Information. Consultant's
obligation under this subsection shall survive any termination of this
Consulting Agreement.
(e) Return of Confidential Information. Consultant shall deliver
promptly to the Company after the Termination Date, and at any other time as the
Company may request, all Confidential Information, which shall at all times be
and remain the property of the Company.
6. Non-Competition. The Consultant agrees that during the period in
which he provides Services and for one (1) year after the Termination Date,
without prior written permission from the Company, the Consultant will not use
the Confidential Information, Work or other results of the Services in any
manner which could directly or indirectly compete with the business of the
Company. For purposes of the foregoing, the Consultant shall not, directly or
indirectly, be engaged by or invest in any entity involved in the application of
carbohydrate-based chemistry as a technique to reduce toxicity of, or increase
efficacy of, pharmaceuticals (a "Competitive Entity"), whether by way of
becoming an agent, employee, director, officer, partner, stockholder, consultant
or otherwise; provided, however, that the foregoing shall not prohibit the
Consultant from merely investing in any entity competitive with the Company
whose securities are listed on a national securities exchange, or traded in any
established over-the-counter securities market.
7. Non-Solicitation. During the period in which Services are rendered
and for a period of two (2) years immediately after the Termination Date, the
Consultant shall not (i) either directly or indirectly solicit or take away, or
attempt to solicit or take away employees of the Company, either for the
Consultant's own business or for any other person or entity, or (ii) either
directly or indirectly recruit, solicit or otherwise induce or influence any
proprietor, partner, stockholder, lender, director, officer, employee, sales
agent, joint venturer, investor, lessor, supplier, customer, agent,
representative or any other person which has a business relationship with the
Company to discontinue, reduce or modify such employment, agency or business
relationship with the Company.
8. Injunctive Relief. The Consultant acknowledges that a violation of
Sections 5, 6 or 7 of this Consulting Agreement would cause irreparable harm to
the Company for which no adequate remedy at law exists and the Consultant
therefore acknowledges and agrees that, in addition to any other remedies
available, the Company shall be entitled to injunctive relief to enforce the
terms of this Consulting Agreement, without waiving available damages, remedies
or other relief.
9. Waiver of Liability. The Consultant acknowledges that the Company
shall bear no liability for (a) bodily and/or personal injury or death or
property damage caused to the Consultant, its employees or agents, or others by
the Consultant in the performance of the Services, (b) medical expenses or
injuries sustained by the Consultant, its employees or agents in the performance
of the Services, or (c) any professional liability of the Consultant.
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10. Independent Contractor. The Consultant is an independent
contractor, and is not, and shall not be considered (by virtue of this
Consulting Agreement or otherwise) an employee, agent, partner or joint venturer
of the Company, whether for tax purposes or any other purpose. The Consultant is
not authorized to act on behalf of the Company, and shall not have the right to
bind the Company to any agreement with a third party or to incur any obligation
or liability on behalf of the Company.
11. Dispute Resolution.
The parties shall follow the following dispute resolution processes in
connection with any and all disputes, controversies or claims arising out of
this Consulting Agreement:
(i) The Company and the Consultant (collectively, the "Parties" and
individually, a "Party") shall attempt to settle any disputes through good faith
negotiations between and among them.
(ii) If the Parties should fail to resolve the dispute within 30 days
after the date of the initial demand for negotiation, then the Parties shall
refer the matter to mediation conducted by JAMS/Endispute, Boston, Massachusetts
office, or such other mediation service as the Parties may mutually agree upon,
and shall attempt in good faith to settle the dispute before such mediation
agency. Each Party shall bear its own expenses in connection with the mediation,
and shall equally share the filing and other administrative fees of the
mediation service. The Parties shall be represented in the mediation by
representatives having final settlement authority over the matter in dispute.
(iii) Any dispute not finally resolved within 90 days after the initial
demand for negotiation shall be referred to the American Arbitration
Association, Boston, Massachusetts Office ("AAA") for binding arbitration.
Selection of one neutral arbitrator by the Parties shall be from the panel list
provided by the AAA and in accordance with the appointment rules of the AAA.
Each Party shall bear its own expenses in connection with any arbitration and
the Parties shall equally share the filing and other administrative fees of the
AAA and the expenses of the arbitrator; provided, however, that the prevailing
Party shall be entitled to receive from the non-prevailing Party reimbursement
of all expenses, including without limitation reasonable attorneys' fees,
incurred in connection with any such arbitration proceeding.
12. Compliance by Consultant Personnel. Consultant represents and
warrants that (i) it has informed and will inform such of its employees, agents
or other personnel, if any, who perform Services as to the requirements of this
Consulting Agreement and (ii) such employees, agents or other personnel shall
have entered into such written agreements with Consultant in order to assure
that the Company shall have the benefits of the rights and obligations under
Sections 5, 6 and 7 hereof.
13. Miscellaneous.
(a) Entire Agreement; Amendment. This Consulting Agreement constitutes
the entire understanding of the parties with respect to its subject matter, may
be modified only in a writing signed by both parties, and shall supersede any
and all other agreements between them regarding such subject matter.
(b) No Assignment. This Consulting Agreement shall not be transferred
or assigned by either party without the prior written consent of the other
party.
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(c) Waiver. Any waiver of a violation of this Consulting Agreement
shall only constitute a waiver of that particular violation and shall not
constitute a waiver of any different or continuing default. The exercise of any
right or remedy provided in this Consulting Agreement shall be without prejudice
to the right to exercise any other right or remedy provided by law or equity.
(d) Modification of Invalid Provisions. If any provision of this
Consulting Agreement is found to be invalid, illegal or unenforceable, a
modified provision shall be substituted which carries out as nearly as possible
the original intent of the parties and the remaining provisions shall in not be
affected by such modification.
(e) Notices. Any notice or other communication required or permitted to
be made under this Consulting Agreement shall be sufficiently made or given on
(i) date of personal delivery if delivered in person, (ii) the next day after
sending if sent by fax or next-day courier service, or (iii) the third day after
mailing if sent certified or registered mail or air mail, postage prepaid, and
addressed to the other party at the address set forth on the first page of this
Consulting Agreement or to any other address designated by the other party in
writing.
(f) Governing Law. This Consulting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to its principles on conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date and year first above written.
PRO-PHARMACEUTICALS, INC.
By: /s/ David Platt
----------------------
David Platt, Ph.D.
President
/s/ Burton Firtel
----------------------
Burton Firtel
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Exhibit A
PRO-PHARMACEUTICALS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Non-Qualified Stock Option Agreement dated as of March 1, 2002 (the
"Effective Date") by and between Pro-Pharmaceuticals, Inc., a Nevada
corporation, (the "Company"), and Burton Firtel (the "Optionee").
The parties agree as follows:
1. Grant and Exercise Rights. In consideration of the services provided to the
Company by the Optionee pursuant to the Consulting Agreement, dated as of March
1, 2002, by and between the Company and the Optionee (the "Consulting
Agreement"), the Company hereby grants to the Optionee, with respect to each
month of such services beginning March 2002, an option (the "Option")
exercisable for $3.50 per share to purchase two thousand (2,000) shares of
common stock, par value $.001 per share, of the Company (the "Common Stock").
Each such Option shall be immediately exercisable upon the first day of the
following month in which such services were provided.
2. Relationship to Plan. The Option is not granted pursuant to the Company's
2001 Stock Incentive Plan (the "Plan").
3. Termination of Option. Exercise rights with respect to each monthly Option
shall terminate on the tenth anniversary of its date of grant unless the
Optionee's death occurs prior to such date in which event the termination date
shall be the first anniversary of the date of death.
4. "Lock-Up" Agreement. The Optionee agrees that upon the Company's request at
any time, whether before or after the exercise of the Option, the Optionee shall
enter into an agreement pursuant to which, if the Company deems it necessary or
desirable to make any public offering of shares of Common Stock, then without
the prior written consent of the Company or the managing underwriter, if any, of
any such offering, the Optionee shall not sell, make any short sale of, loan,
grant any option for the purchase of, pledge, or otherwise encumber or otherwise
dispose of any shares of Common Stock issued or issuable pursuant to the Option,
during such period (not to exceed 210 days) commencing on the effective date of
the registration statement relating to such offering as the Company may request.
5. Methods of Exercise. In the event that the Optionee's service as a consultant
under the Consulting Agreement has not been terminated and except as contained
in this ss.5 or as may otherwise be agreed by the Optionee and the Company, the
Option shall be exercisable only by a written notice in form and substance
acceptable to the Company (the "Election Notice"), specifying the number of
shares to be purchased and accompanied by payment in cash of the aggregate
purchase price for the shares for which the Option is being exercised; provided,
that the Optionee shall be entitled to pay the Exercise Price for the shares of
Common Stock for which the Option is being exercised by surrendering a number of
such shares having a Fair Market Value equal to the Exercise Price required to
be paid. Thereupon, the Company shall issue to the Optionee such number of fully
paid and nonassessable shares of Common Stock as is computed using the following
formula:
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X = Y (A-B)
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A
Where X = the number of shares of Common Stock to be issued to the Optionee
pursuant to this ss.5;
Y = the number of shares of Common Stock issuable under this Option;
A = the Fair Market Value for the Common Stock as of the date of the exercise;
and
B = the Exercise Price in effect under this Option at the time the exercise is
made pursuant to this ss.5.
6. Characterization of Option for Tax Purposes. The Option is intended not to
qualify as an "incentive stock option" under the Internal Revenue Code of 1986,
as amended, and shall be subject to different tax treatment than that accorded
incentive stock options (including the possibility of income tax withholding in
accordance with the Plan).
7. Withholding. At the request of the Company, the Optionee agrees to remit to
the Company an amount sufficient to satisfy any federal, state, local or other
withholding tax requirements (whether so required to secure for the Company an
otherwise available tax deduction or otherwise) if and to the extent required by
law prior to the delivery of any certificate or certificates representing shares
of Common Stock to be issued upon exercise of the Option.
8. Compliance with Laws. The obligations of the Company to sell and deliver
Shares upon exercise of the Option are subject to all applicable laws, rules,
and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by government agencies as may be deemed
necessary or appropriate by the Board of Directors of the Company (the "Board")
or the relevant committee of the Board. If so required by the Board or such
committee, no shares shall be delivered upon the exercise of the Option until
the Optionee has given the Company a satisfactory written statement that he is
purchasing such shares for investment, and not with a view to the sale or
distribution of any such shares, and with respect to such other matters as the
Board may deem advisable in order to assure compliance with applicable
securities laws. All shares issued upon exercise of the Option shall bear
appropriate restrictive legends.
9. General. The Optionee may not transfer, assign, or encumber any of his or her
rights under this Agreement without the prior written consent of the Company,
and any attempt to do so shall be void. This Agreement shall be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts (without reference to principles of conflicts or
choice of law). The captions of the sections of this Agreement are for reference
only and shall not affect the interpretation or construction of this Agreement.
This Agreement shall bind and inure to the benefit of the parties and their
respective successors, permitted assigns, heirs, devisees, and legal
representatives.
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IN WITNESS WHEREOF, the Company and the Optionee have executed and
delivered this Agreement, which may be in counterpart originals, intending it to
be effective as an agreement under seal as of the Effective Date.
PRO-PHARMACEUTICALS, INC.
By:
-------------------------------
Name:
Title:
Optionee:
-----------------------------------
Burton Firtel
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PRO-PHARMACEUTICALS, INC.
Amendment No. 1 to
CONSULTING AGREEMENT
(Burton Firtel)
AMENDMENT NO. 1, dated as of November 14, 2002, to the Consulting
Agreement entered into as of March 1, 2002 (the "Consulting Agreement"), by and
between Pro-Pharmaceuticals, Inc., a Nevada corporation having an address of 189
Wells Avenue, Newton, Massachusetts 02459 (the "Company") and Burton Firtel, an
individual having an address of 555 Sherman Avenue, Hamden, Connecticut 06518
(the "Consultant").
WHEREAS, the Company and the Consultant desire to amend the Consulting
Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. All capitalized terms used herein shall have the respective meanings
ascribed to them in the Consulting Agreement, unless otherwise defined herein.
2. Section 2 is hereby deleted and replaced in its entirety, to
read in its amended form as follows:
2. Compensation. In consideration of the Services, the Company
shall grant to the Consultant, pursuant to a non-qualified stock option
agreement as amended effective as of the date hereof, substantially in
the form attached hereto as Exhibit A, on an annual basis commencing as
of the effective date of this Consulting Agreement, an option to
purchase 24,000 shares of the Company's common stock, exercisable at
$3.50 per share. Such option will vest in twelve (12) equal monthly
installments of 2,000 shares, in each case as of the first day of the
following month in which such Services were provided.
3. The Consulting Agreement as amended hereby shall remain in full
force and effect.
This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, and both of which together shall be
considered one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
1 to Consulting Agreement as of the date first written above.
PRO-PHARMACEUTICALS, INC.
By: /s/ David Platt
------------------------
David Platt, Ph.D.
President
/s/ Burton Firtel
------------------------
Burton Firtel
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Exhibit A
PRO-PHARMACEUTICALS, INC.
Amendment No. 1 to
NON-QUALIFIED STOCK OPTION AGREEMENT
(Burton Firtel)
AMENDMENT NO. 1, dated as of November 14, 2002, to the Non-Qualified
Stock Option Agreement dated as of March 1, 2002 (the "Stock Option Agreement"),
by and between Pro-Pharmaceuticals, Inc., a Nevada corporation (the "Company"),
and Burton Firtel (the "Optionee").
WHEREAS, the Company and the Optionee desire to amend the Stock Option
Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. All capitalized terms used herein shall have the respective meanings
ascribed to them in the Stock Option Agreement, unless otherwise defined herein.
2. Section 1 is hereby deleted and replaced in its entirety, to read in
its amended form as follows:
1. Grant and Exercise Rights. In consideration of the services
provided to the Company by the Optionee pursuant to the Consulting
Agreement, dated as of March 1, 2002, by and between the Company and
the Optionee, as amended by Amendment No. 1 dated as of the date hereof
(as so amended, the "Consulting Agreement"), the Company hereby grants
to the Optionee, as of March 1, 2002, an option (the "Option")
exercisable for $3.50 per share to purchase twenty-four thousand
(24,000) shares of common stock, par value $.001 per share, of the
Company (the "Common Stock"). The Option will vest in twelve (12) equal
monthly installments of 2,000 shares, in each case as of the first day
of the following month in which such services were provided.
3. Section 3 is amended by deleting the words "each monthly" in the
first line thereof and replacing such words with "the".
4. Section 5 is amended by deleting in its entirety the definition for
the variable "Y" and replacing it with the following definition: "the number of
shares of Common Stock currently being exercised under this Option".
5. The Stock Option Agreement as amended hereby shall remain in full
force and effect.
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This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, and both of which together shall be
considered one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
1 to Non-Qualified Stock Option Agreement as of the date first written above.
PRO-PHARMACEUTICALS, INC.
By:
-------------------------
David Platt, Ph.D.
President
Optionee:
------------------------
Burton Firtel
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