EXHIBIT 10.1
 
PHARMAGEN, INC.
CONSULTING SERVICES AGREEMENT
 
This Consulting Services Agreement (this “Agreement”) is entered into on
December 9, 2013 (the “Effective Date”) by and between Pharmagen, Inc., a Nevada
corporation (the “Company”), and Bagel Boy Equity Group II, LLC, a Nevada
limited liability company (the “Consultant”). Each of the Company and the
Consultant shall be referred to individually as a “Party” and collectively as
the “Parties.”
 
RECITALS
 
WHEREAS, the Company desires to add members to its management team, specifically
an Interim-Chief Operations Officer and Chairman of its Board of Directors;
 
WHEREAS, in addition, the Company desires to identify prospective acquisition
candidates that fulfill its strategic plan;
 
WHEREAS, the Consultant, through individuals acting on its behalf, namely
Richard A. Wolpow, has commercial experience in a variety of business segments
related to the business of the Company, including operations and knowledge of
and relationships with prospective acquisition candidates;
 
WHEREAS, the Company wishes to engage the Consultant on the terms and subject to
the conditions set forth herein; and
 
WHEREAS, Consultant wishes to provide the Company with consulting services.
 
NOW, THEREFORE, for good and adequate consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereto hereby agree as follows:
 
1. CONSULTING SERVICES

The Company hereby authorizes, appoints and engages the Consultant to perform
the following services in accordance with the terms and conditions set forth in
this Agreement:

A. The Company agrees to designate Richard A. Wolpow (“Wolpow”) as the Company’s
Interim-Chief Operations Officer (COO), a position that is not considered to be
an executive officer position for purposes of reporting to the Securities and
Exchange Commission, and Consultant agrees to make Wolpow available to serve as
the Company’s Interim-COO during the term of this Agreement.
 
 
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B. Consultant will make introductions (whether by written, oral, data, or other
forms of communication) to potential acquisition targets of the Company
(“Acquisition Targets”) and/or make introductions to persons and entities that
may provide the Company with capital financing (“Capital Financing”) (completed
Capital Financing transactions or transactions with Acquisition Targets that
were originated through introductions provided by Consultant are generally
referred to collectively as a “Consultant Transaction” or “Consultant
Transactions”).
 
For purposes of this agreement, “capital financing” shall be defined to include
all financing that provides funding for the Company’s business operations,
regardless of whether such funding is secured or unsecured, or involves an
equity or debt interest in the Company.
 
C. The Company agrees to make available, and Consultant agrees to fill, one (1)
seat on the Company’s board of directors (“Board of Directors”), as Chairman of
the Board, during the term of this Agreement. The Company agrees to elect Wolpow
to fill this seat and Consultant agrees to make Wolpow available to serve on the
Board of Directors during the term of this Agreement.
 
D. Consultant will work as many hours as Consultant deems necessary.
 
E. Consultant will primarily perform the foregoing services from Consultant’s
home or office but may be required to travel, including travel to the Company’s
office.
 
F. Consultant will generally provide the services during normal business hours
from Monday through Friday.
 
G. Consultant’s day-to-day activities will be determined by Consultant using
best efforts to ensure activities are related to business priorities set by the
Company.
 
H. Consultant will submit to the Company, when requested or on a regular
periodic basis, complete and accurate reports of the status of Consultant’s
efforts.
 
2. TERM OF AGREEMENT

A. This Agreement shall be in full force and effect for one (1) year beginning
on the date hereof (the “Initial Term”). Following the Initial Term, this
Agreement will automatically renew for successive one (1) year terms (each a
“Renewal Term”) unless terminated by either Party as set forth below. The
Initial Term and any Renewal Term may be referred to herein as the term of the
Agreement.
 
B. Subject to subsection C, below, during the Initial Term and any Renewal Term,
either Party may terminate this Agreement at any time, with or without cause,
with at least ninety (90) days advance notice.
 
 
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C. Notwithstanding the foregoing, the Company may not exercise its right to
terminate the Agreement if there are any “Outstanding Transactions” (defined
below).

For purposes of this Agreement, an Outstanding Transaction is defined as any
transaction with an Acquisition Target, or a Capital Financing that was
contingent on Consultant continuing to work for the Company, that is closed by
the Company but the parties have not realized their full liquidation. A party to
a transaction is deemed to have “realized their full liquidation” when: (a) in
the event of an acquisition, the Company has paid the full cash consideration
(not including promissory notes or earn-out provisions) due under the agreement
for the acquisition target and the target or the target owners and affiliates
have had the opportunity (without respect to holding periods and lock-up
agreements) to fully liquidate all stock or other equity consideration received
in the acquisition; or (b) in the event of Capital Financing, the investors or
lenders have been fully repaid and have had the opportunity (without respect to
holding periods and lock-up agreements) to fully liquidate (or otherwise
cancelled or terminated) all stock or other equity consideration received as
part of the financing.

D. Notwithstanding the foregoing, the Company may terminate this Agreement at
any time for Cause. For purposes of this Agreement, “Cause” shall mean (a) the
misconduct or neglect on the part of Consultant in the performance of any duties
that may be reasonably required; (b) the occurrence of circumstances that make
it impossible for the business of the Company to be continued; (c) the sale,
merger or other disposition of the Company; or (d) the commission by Consultant
of an act of fraud, misappropriation, embezzlement, dishonesty or any crime of
moral turpitude. Any compensation owed to Consultant, as set forth in Section 3
below, shall be paid to Consultant within five (5) business days should the
Company elect to terminate the Agreement pursuant to this provision.

3. COMPENSATION TO CONSULTANT

The Consultant shall be paid compensation under this Agreement as follows:

A. On the Effective Date, the Company shall issue to Consultant, as a
“Commencement Bonus”, warrants to purchase up to three percent (3%) of the
outstanding shares of common stock of the Company, the form of which is attached
hereto as Exhibit A (the “Commencement Warrants”). The calculation of the number
of shares which may be purchased upon exercise of the Commencement Warrants
shall be done at the time of exercise, and shall be adjusted for any stock
splits or other restructuring. Further, the exercise of the Commencement
Warrants shall be subject to two (2) separate milestones, as set forth therein,
each of which shall apply to one-half (1/2) of the warrants thereunder, and
which must be satisfied prior to their exercise. The Parties understand and
agree that Consultant has foregone significant opportunities to accept this
engagement and that the Company derives substantial benefits from the execution
of this Agreement and the ability to announce its relationship with Consultant.
Accordingly, the Commencement Bonus constitutes payment for Consultant’s
agreement to provide the services contemplated by the Agreement and is a
nonrefundable, non-apportionable, and non-ratable retainer and is not a
prepayment for future services.
 
 
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B. During the term of this Agreement, the Company shall pay Consultant fifteen
thousand dollars ($15,000.00) per month (“Consulting Fee”) beginning on the
first day of the first full calendar month following the execution of this
Agreement by the Parties. The Consulting Fee shall be paid by the Company, on a
quarterly basis, by executing and delivering a Warrant Agreement to Consultant.
The Warrant Agreement, the form of which is attached hereto as Exhibit B (the
“Consulting Warrants” and, together with the Commencement Warrants, the
“Warrants”), shall provide Consultant with cashless warrants exercisable into
the Company’s common stock. The number of shares to be issued shall be based on
any Consulting Fee that is then due and owing and calculated using the
Conversion Price on the date the warrants are exercised, except that the
Warrants cannot be exercised within six (6) months of the date hereof (“Exercise
Date”).

The “Conversion Price” shall be the greater of: (i) the Variable Conversion
Price (defined below) and (ii) the Fixed Conversion Price (defined below)
(subject, in each case, to equitable adjustments for stock splits, stock
dividends or rights offerings by the Company relating to the Company’s
securities or the securities of any subsidiary, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events). The
“Variable Conversion Price” shall mean 50% multiplied by the Market Price
(defined below). “Market Price” means the average of the lowest five (5) Trading
Prices (defined below) for the Company’s common stock during the ten (10)
Trading Day period ending on the last complete Trading Day prior to the Exercise
Date. “Trading Price” means, for any security as of any date, the closing bid
price on the Over-the-Counter Bulletin Board, or applicable trading market (the
“OTCBB”) as reported by a reliable reporting service (“Reporting Service”)
designated by Consultant (i.e. Bloomberg) or, if the OTCBB is not the principal
trading market for such security, the closing bid price of such security on the
principal securities exchange or trading market where such security is listed or
traded or, if no closing bid price of such security is available in any of the
foregoing manners, the average of the closing bid prices of any market makers
for such security that are listed in the “pink sheets” by OTC Markets Group,
Inc. If the Trading Price cannot be calculated for such security on such date in
the manner provided above, the Trading Price shall be the fair market value as
mutually determined by the Company and Consultant. “Trading Day” shall mean any
day on which the Company’s common stock is tradable for any period on the OTCBB,
or on the principal securities exchange or other securities market on which the
common stock is then being traded. The “Fixed Conversion Price” shall mean
$0.05.

The Consulting Fee may be paid in cash if both Parties so agree. The Company
shall receive a twenty five percent (25%) discount on any Consulting Fees paid
in cash.
 
 
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C. Notwithstanding the foregoing, in no event shall Consultant be entitled to
exercise any portion of the Warrants if the number of shares of Common Stock
issuable upon the exercise of the portion of the Warrants with respect to which
the determination of this proviso is being made, would result in beneficial
ownership by the Consultant and its affiliates of more than 9.99% of the
outstanding shares of Common Stock. For purposes hereof, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder,
provided, further, however, that the limitations on conversion may be waived by
Consultant upon, at the election of Consultant, not less than 61 days’ prior
notice to the Company.
 
If the Company enters into an agreement for the sale of all or substantially all
of its assets, or a transaction that will result in the voting control of the
Company changing from one party or group of affiliated parties to another party
or group of affiliated parties, then the Company agrees to give Consultant
sufficient advance notice to exercise his waiver rights hereunder.
 
D. During the term of this Agreement, the Company shall compensate Consultant
for making Wolpow available to serve on the Board of Directors, as contemplated
in Section 1(C) above (“Director’s Fee”). The Director’s Fee shall accrue and be
payable on the same terms and in the same amount as the Company compensates
other members of the Board of Directors for the services provided by them to the
Company in their capacity as members of the Board of Directors.
 
E. During the term of this Agreement, the Company shall compensate Consultant
for any closed Consultant Transactions or Non-Consultant Transactions (the
“Commission Fee”). The Commission Fee, for each transaction contemplated herein,
shall be equal to three percent (3%) of the “Aggregate Consideration” (defined
below) for all Non-Consultant Transactions and five percent (5%) of the
Aggregate Consideration for all Consultant Transactions.

For purposes of this Agreement, the Aggregate Consideration is defined as: (a)
in the event of an acquisition, the total fair market value on the date of
payment of all sale proceeds and other consideration contributed, paid or
payable directly and indirectly by Company in connection with the acquisition,
including cash, notes, options, warrants, securities or other property,
consulting arrangements and covenants not to compete, debt and other obligations
assumed, and any other form of consideration, including contingent
consideration, and (b) in the event of Capital Financing, the total capital
received by the Company, its beneficiaries, or designees.

To the extent the Aggregate Consideration consists of contingent payment
obligations (whether or not related to future earnings or operations), for
purposes of measuring the Commission Fee, the Aggregate Consideration deemed
paid at closing will include One Hundred Percent (100%) of the face value of
such contingent payments, without regard to whether the conditions for payment
of such contingent amounts will be satisfied.
 
 
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The Commission Fee shall be paid by Company when the Aggregate Consideration is
(a) paid to an acquisition target or (b) received by the Company in the event of
Capital Financing, whichever is applicable. The Commission Fee shall be payable
in cash or the Company’s common stock, or a combination thereof, based on the
agreement of the Parties. If the Company’s common stock is used to pay any
portion of a Commission Fee, the number of shares owed shall be calculated using
the same price as the applicable transaction.
 
F. During the term of this Agreement, Consultant shall participate in any bonus
programs in which other members of the Company’s management team participate,
and at similar compensation levels.
 
G. Consultant shall be reimbursed for pre-approved, actual authorized business
and travel expenses. Consultant will submit expense reports with supporting
receipts for reimbursement, and the Company shall remit reimbursement payments
within fifteen (15) days of receipt of Consultant’s expense reports.

4. REPRESENTATIONS AND WARRANTIES OF CONSULTANT

Consultant represents and warrants to and agrees with the Company that:
 
A. This Agreement has been duly authorized, executed and delivered by
Consultant. This Agreement constitutes the valid, legal and binding obligation
of Consultant, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by applicable federal or state securities
laws, and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditor's rights
generally;
 
B. The consummation of the transactions contemplated hereby will not result in
any breach of the terms or conditions of, or constitute a default under, any
agreement or other instrument to which Consultant is a party, or violate any
order, applicable to Consultant, of any court or federal or state regulatory
body or administrative agency having jurisdiction over Consultant or over any of
its property, and will not conflict with or violate the terms of Consultant's
current employment or any consulting agreements to which Consultant is a party;
and
 
C. Consultant will promptly disclose to the Company any third party with which
Consultant may have a potential or actual conflict of interest, and will further
disclose to any such third party reasonably requested by the Company, the
existence of Consultant’s relationship with the Company pursuant to this
Agreement. Consultant shall provide copies of all such disclosure to the
Company.
 
 
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5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents, warrants, covenants to and agrees with Consultant
that:

A. This Agreement has been duly authorized, and executed by the Company and is a
binding obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by applicable federal or
state securities laws, except in each case as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditor's
rights generally.

6. INDEPENDENT CONTRACTOR
 
Both the Company and the Consultant agree that the Consultant will act as an
independent contractor in the performance of its duties under this Agreement.
Nothing contained in this Agreement shall be construed to imply that Consultant,
or any employee, agent or other authorized representative of Consultant, is a
partner, joint venturer, agent, officer or employee of the Company. Neither
party hereto shall have any authority to bind the other in any respect vis a vis
any third party, it being intended that each shall remain an independent
contractor and responsible only for its own actions.

Consultant shall pay all costs of sub-contractors and Consultant’s employees
incurred in connection with this Agreement.

7. NOTICES

Any notice, request, demand, or other communication given pursuant to the terms
of this Agreement shall be deemed given upon delivery, if hand delivered or sent
via facsimile, or any other method of traceable delivery (including Federal
Express), correctly addressed to the addresses of the Parties indicated below or
at such other address as such Party shall in writing have advised the other
Party.

If to the Company:
Pharmagen, Inc.
9337 Fraser Avenue
Silver Spring, MD 20910
Facsimile: (___)___________
Attn: Mackie A. Barch, CEO

 
If to Consultant:
Bagel Boy Equity Group II, LLC
408 40th Street
Newport Beach, CA 92663
Facsimile: (949) 631-1981

 
8. ASSIGNMENT
 
This contract shall inure to the benefit of the Parties hereto, their heirs,
administrators and successors in interest. This Agreement shall not be
assignable by either Party hereto without the prior written consent of the
other.
 
 
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10. CHOICE OF LAW AND VENUE
 
This Agreement and the rights of the Parties hereunder shall be governed by and
construed in accordance with the laws of the State of California including all
matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws. Any action brought by any
Party hereto shall be brought within the State of California, County of Orange.

11. ENTIRE AGREEMENT
 
Except as provided herein, this Agreement, including exhibits, contains the
entire agreement of the Parties, and supersedes all existing negotiations,
representations, or agreements and all other oral, written, or other
communications between them concerning the subject matter of this Agreement.
There are no representations, agreements, arrangements, or understandings, oral
or written, between and among the Parties hereto relating to the subject matter
of this Agreement that are not fully expressed herein.

12. SEVERABILITY
 
If any provision of this Agreement is unenforceable, invalid, or violates
applicable law, such provision, or unenforceable portion of such provision,
shall be deemed stricken and shall not affect the enforceability of any other
provisions of this Agreement.

13. CAPTIONS
 
The captions in this Agreement are inserted only as a matter of convenience and
for reference and shall not be deemed to define, limit, enlarge, or describe the
scope of this Agreement or the relationship of the Parties, and shall not affect
this Agreement or the construction of any provisions herein.

14. COUNTERPARTS
 
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which shall together constitute one and the
same instrument.

15. MODIFICATION
 
No change, modification, addition, or amendment to this Agreement shall be valid
unless in writing and signed by all Parties hereto.

16. ATTORNEYS FEES
 
Except as otherwise provided herein, if a dispute should arise between the
Parties including, but not limited to arbitration, the prevailing Party shall be
reimbursed by the non-prevailing Party for all reasonable expenses incurred in
resolving such dispute, including reasonable attorneys' fees.
 
 
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17. NON-COMPETE AND CONFIDENTIALITY
 
A. Consultant shall not, during the term of this Agreement, for any reason,
without the express written consent of the Company, either directly or
indirectly: (i) become associated with, render services to, invest in,
represent, advise or otherwise participate in as an officer, employee, director,
stockholder, partner, promoter, agent of, consultant for or otherwise, any
business which is competitive with the business of the Company or any of its
subsidiaries; (ii) for its own account or for the account of any other person or
entity, interfere with the Company’s relationship with any of its suppliers,
material customers, accounts, brokers, representatives or agents; (iii) call on,
solicit, or take away any of Company’s customers or potential customers, either
for Consultant or for any other person or entity; or (iv) solicit or take away
or attempt to solicit or take away any of Company’s employees or contractors
either for Consultant or for any other person or entity.
 
B. For purposes of this Agreement, “Confidential Information” shall mean any and
all information, in any form or medium, concerning or relating in any way to the
Company or any of its affiliates or subsidiaries, or any of their businesses,
operations, technology or financial affairs or the services to be provided
hereunder, including, but not limited to, technical or non-technical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, and lists of or identifying information
about actual or potential customers or suppliers, whether or not reduced to
writing, certain unpatented information relating to the research and
development, manufacture or serving of the Company's products, information
concerning proposed new products, market feasibility studies and proposed or
existing marketing techniques or plans and any other information of the Company
or its affiliates or its subsidiaries that is confidential, special, unique,
proprietary, or gives the Company, its affiliates or subsidiaries a competitive
advantage and/or significantly enhances any of their goodwill, whether
designated confidential or not, and/or whether written, oral or obtained by
viewing the Company’s or any of its affiliate’s or subsidiary’s premises, data
and/or information.
 
Confidential Information is the sole property of the Company and constitutes
confidential trade secrets of the Company, to be held by the Consultant in trust
and solely for the Company’s benefit. The Consultant agrees that, except as
required under this Agreement, it will not publish, reproduce, disclose or make
any use of any such Confidential Information unless (i) the Company authorizes
the publication or disclosure of such information in writing; or (ii) the
Consultant is required by law to disclose, but the Consultant shall first give
notice to the Company so that the Company may seek a protective order requiring
that the information and/or documents to be disclosed be used only for the
purposes for which the order was issued.
 
 
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The Consultant agrees to take at least the same precautions to ensure the
protection, confidentiality, and security of the Confidential Information
entrusted to it as it would to protect its own confidential information, but in
no event less than a reasonable standard. The Consultant shall also limit the
access to such Confidential Information to only those persons having a need to
know, and such persons shall be instructed concerning their obligations to
maintain confidentiality. The Consultant shall return to the Company all
Confidential Information, or destroy and certify such destruction of all
Confidential Information, promptly upon the Company’s request. The Consultant
acknowledges that monetary damages may not alone be a sufficient remedy for
unauthorized disclosure of Confidential Information. The Consultant further
agrees that the Company shall be entitled, without waiving any other rights or
remedies, to such injunctive or equitable relief as may be deemed proper by a
court of competent jurisdiction. Further, the Consultant acknowledges and agrees
that if there is a breach or threatened breach of the provisions of this
section, then the Company will be irrevocably harmed and entitled to a temporary
restraining order, injunction, and/or other equitable relief against the
commencement or continuance of such breach without the requirement of posting a
bond or proving injury as a condition of relief.

18. REPRESENTATION.
 
The Parties acknowledge that this agreement was prepared by the law firm of
Clyde Snow & Sessions, which represents both parties in their general corporate
and securities matters. The Parties further acknowledge and agree that the terms
and conditions of the agreement was reached between them, and that Clyde Snow &
Sessions acted only as a drafter of this Agreement and did not represent either
party in connection herewith. Any conflict of interest in acting as a drafter of
this Agreement is hereby waived by the Parties.

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed as of the date first set forth above.

“Company”
 
“Consultant”
         
Pharmagen, Inc.,
 
Bagel Boy Equity Group II, LLC,
 
a Nevada corporation
 
a Nevada limited liability company
                 
/s/ Mackie A. Barch
 
/s/ Richard A. Wolpow
  By:
Mackie A. Barch
  By:
Richard A. Wolpow
  Its: Chief Executive Officer   Its: Manager  

 
 
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Exhibit A
Commencement Warrants
 

 
 
 
 
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Exhibit B
 
Consulting Warrants
 

 
 
 
 
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