Consulting Agreement - Axm Pharma Inc. and Aston Organization
ASTON ORGANIZATION
417 ORCHID AVE. CORONA DEL MAR, CA 92625
PH 800-715-9999 FAX 815-328-0698
February 2, 2004
Mr. Peter Cunningham
President and CEO
Axm Pharma, Inc.
4695 Macarthur Court, 11th Floor
Newport Beach, California 92660
Dear Mr. Cunningham:
This will confirm the arrangements, terms and conditions pursuant to
which Aston Organization ("Advisor") has been retained to serve as a consultant
to Axm Pharma, Inc. (the "Company") for a twelve (12) month period, with a
mutual extension clause for an additional twelve (12) months, commencing on the
date hereof, subject to the term-ination provisions set forth in Paragraph 2
hereof. For good and valuable consideration, the sufficiency of which is hereby
acknowledged, the undersigned, hereby agree to the following terms and
conditions:
1. Duties of Advisor. Advisor shall, as more fully set forth
below in this Paragraph 1, assist the Company in broker
relations. Advisor agrees to:
(a) assist the Company in its presentation to the
brokerage community and seek to introduce the Company
to security firms and brokers;
(b) assist the Company in identifying analysts in the
brokerage community to initiate coverage on the
Company;
(c) coordinate a comprehensive Investor Relations
campaign including featured profiles by several
reputable groups lead generation, among other
activities; and
(d) be available on request, on appropriate notice, to
meet with the Company's Management and/or Board of
Directors for quarterly management meetings.
The services described in Paragraph 1 may be rendered by Advisor
without any direct supervision by the Company and at such time and place in such
manner (whether by conference, telephone, letter or otherwise) as Advisor may
reasonably determine.
2. Term. The term of Advisor's engagement hereunder shall be for
twelve (12) months and may be extended for an additional
twelve (12) months upon mutual written consent, commencing on
the date hereof (the "Term"). Notwithstanding the foregoing,
however, this Agreement can be terminated by either party upon
30 days written notice. The Company shall only deliver shares
to Advisor that have vested.
3. Compensation and Expense Reimbursement.
200,000 Shares of AXM Pharma, Inc. restricted common stock
with piggy-back registration rights at next registration,
which rights shall inure to the benefit of Aston and its
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assignees or transferees issued to "Aston Organization" and
delivered to Aston Organization. 20,000 shares shall vest and
be issued immediately, The remaining 180,000 shares shall be
issued immediately but shall vest in Aston Organization, or
its designated assignees, ratably (15,000 shares per month)
over the twelve (12) month period commencing thirty (30) days
after the Effective Date and be delivered to Aston
Organization promptly following the date on which they vest.
4. No Agency Authority. The Advisor shall not have and shall not
hold itself out as having any authority to act as agent for
the Company or bind it in any way.
5. All expenses incurred by Advisor on behalf of the Company
shall be borne by Company after it has authorized such
expenses in writing
6. Responsibilities, Representations and Warranties.
(a) Company's Responsibilities, Representations and
Warranties. In connection with Advisor's engagement,
the Company will furnish Advisor with any information
concerning the Company that Advisor deems reasonable
and appropriate and will provide Advisor with access
to the Company's officers, directors, accountants,
counsel and other advisors. The Company represents
and warrants to Advisor that all such information
concerning the Company, does not and will not contain
any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein not misleading in light of the
circumstances under which such statements are made.
The Company represents and warrants to Advisor that
any financial projections or forecasts provided to
Advisor are "forward looking statements" as that term
is used in Section 21E of the Securities Exchange
Commission Act of 1934 and represent the best
currently available estimates by the management of
the Company of the future financial performance by
the Company (or its business) and are based upon
reasonable assumption. The Company acknowledges and
agrees that Advisor will be using and relying upon
such information supplied by the Company and its
officers, agent and others and upon any other
publicly available information concerning the Company
without any independent investigation or verification
thereof or independent appraisal by Advisor of the
Company or its business or assets.
(b) Advisor's Responsibilities, Representations and
Warranties. Advisor agrees that it will only
communicate regarding the Company to licensed
brokerage professionals and will not engage in any
solicitation of the public with regard to the Company
or its securities. Notwithstanding the foregoing,
Advisor may provide approved information regarding
the Company (i) in response to unsolicited inquiries
by the Company's shareholders; (ii) to valid trade
and industry publications, newspapers and
periodicals; and (iii) otherwise engage in
communications which are normal and customary for an
investor relations firm and which do not involve
solicitation of investors in connection with its role
as an investor relations firm for the Company.
Advisor further agrees that it will only disclose
information specifically provided to it by the
Company for dissemination and will keep confidential
any information marked as such by the Company.
Advisor agrees that it will not make any undisclosed
payments to brokers or others and will generally act
within the letter and the spirit of U.S. securities
laws, rules and regulations at all times.
Advisor shall provide a detailed written report
regarding its activities to the Company on a
quarterly basis. Such written report shall contain a
written affirmation from the Advisor that it is in
compliance with the terms of this Agreement on the
date of such report.
6. Available Time. Advisor shall make available such time as it,
in its reasonable discretion, shall deem appropriate for the
performance of its obligations under this Agreement.
7. Relationship. Nothing herein shall constitute Advisor as an
employee or agent of the Company, except to such extent as
might hereinafter be agreed upon in writing for a particular
purpose. Except as might hereinafter be expressly agreed,
Advisor shall not have the authority to obligate or commit the
Company in any manner whatsoever.
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8. Confidentiality Relating to this Agreement. Neither the
Company nor Advisor shall disclose,except to its partners,
accountants and attorneys or as required by applicable law,
rule or regulation (including but not limited to periodic and
other reports required by the Securities Exchange Act of 1934,
as amended and the Securities Act of 1933, as amended, without
specific consent from the other party, any information
relating to the Agreement or any Transactions contemplated
hereby, including without limitation, the existence of this
Agreement.
9. Assignment. This Agreement shall not be assignable by any
party except to successors to all or substantially all of the
business of either party for any reason whatsoever without the
prior written consent of the other party, which consent may
not be unreasonably withheld by the party whose consent is
required.
10. Amendment. This Agreement may not be amended or modified
except in writing signed by both parties.
11. Governing Law. This Agreement shall be deemed to have been
made and delivered in California State and this Agreement
shall be governed as to validity, interpretation,
construction, effect, and in all other respects by the
internal laws of the State of California.
Advisor is delighted to accept this engagement and looks forward to
working with you on this assignment. Please confirm that the foregoing correctly
sets forth our agreement by signing this enclosed duplicate of this letter in
the space provided and returning it, whereupon this letter shall constitute a
binding agreement as of the date first above written.
Very Truly Yours,
Aston Organization
By: /s/ Thomas C. Ronk
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Thomas C Ronk
President
AGREED AND ACCEPTED AS OF
THE DATE FIRST ABOVE WRITTEN:
AXM PHARMA, INC.
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By: /s/ Peter Cunningham
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Peter Cunningham
President and CEO