**Exhibit 10.7**

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (*hereinafter*“AGREEMENT”) is made this 15th day of February, 2001 (EFFECTIVEDATE) and is entered into by CytoGenix, Inc. with its principal place ofbusiness at 9881 South Wilcrest, Houston, Texas, 77099 (*hereinafter* “CYGX”), andMichael D. Skillern whose address is 5868 A-1 Westheimer No. 466, Houston,Texas  77057 (*hereinafter* “CONSULTANT”).

 

WHEREAS CYGX is engaged inthe research, development, and commercialization of single-stranded DNA expressiontechnology, molecular and cellular biology research, and in general businessactivities; and

 

WHEREAS CONSULTANT isengaged in the development and commercialization of proprietary technology andin general business activities; and

 

WHEREAS CYGX desires toretain the services of CONSULTANT and CONSULTANT desires to perform certainservices for CYGX along the general terms and conditions herein set forth;

 

NOW, THEREFORE, inconsideration of the mutual covenants and promises contained herein and othergood and valuable considerations, the receipt and sufficiency of which ishereby acknowledged by the parties hereto, the parties agree as follows:

 

1                                          SERVICES.

 

1.1                                 GENERAL.  The CONSULTANT agrees to perform consultingand provide related services to and for CYGX as may be reasonably requestedfrom time to time by CYGX.

 

1.2                                 SCOPE.  Such consulting and related services shallinclude, but are not limited to development of single-stranded DNA expressiontechnology, and/or technological approaches that could complement or competewith CYGX’s technology.  In addition tosuch consulting and related services requested by CYGX, CONSULTANT may developof his own volition and independent of any request by CYGX subject matter inareas including, but not limited to, molecular and cellular biology,biochemistry, or other areas relevant to the research, development,commercialization, and related business activities conducted by CYGX.  After disclosure by CONSULTANT to CYGX, CYGXshall have the first option to negotiate for rights to such subject mattervoluntarily developed by CONSULTANT. Either party may terminate negotiations atany time and for any reason.

 

 

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1.3                                 RELATIONSHIP.  For all services rendered by CONSULTANT forCYGX, CONSULTANT is an independent contractor to perform services as describedin Section 1.2 and is not subject to control by CYGX except as to the resultsto be accomplished.  This AGREEMENT isnot a partnership agreement and CONSULTANT is neither an agent nor arepresentative of CYGX.  CONSULTANT assuch an independent contractor shall determine his own work hours and worklocation, furnish his own tools and materials, control how work results areachieved, and shall be responsible for all tax liability incurred for servicesrendered as an independent contractor.

 

1.4                                 CONFLICT OFINTEREST.  During theCONSULTATION PERIOD (as defined in Section 2), the CONSULTANT shall not engagein any activity that is a conflict of interest with the business of CYGX,including any competitive employment, business or other activity, andCONSULTANT shall not assist any other person or organization that he knowscompetes or intends to compete with CYGX. This conflict provision SHALL NOTinclude and SHALL NOT limit CONSULTANT from consulting, becoming employed, orengaging in business activities that are related to any subject mattervoluntarily developed by CONSULTANT that has been disclosed to CYGX (asdescribed in Section 1.2) and for which CYGX has declined negotiation. CYGXshall notify CONSULTANT IN WRITING of its desire to negotiate for rights to anysuch subject matter disclosed by CONSULTANT within 15 days of receipt ofdisclosure as described in Section 1.2.

 

2                                          TERM. The term ofthis AGREEMENT (CONSULTATION PERIOD) is from the date of execution of thisAGREEMENT (EFFECTIVE DATE) and shall expire on December 31, 2001 unless thisAGREEMENT is later extended by written agreement by both parties.  This AGREEMENT may be terminated sooner inaccordance with the provisions of Section 5.

 

3                                          GRANT OF OPTION.

 

3.1                                 GRANT OF OPTION.  CYGX agrees to grant and does hereby grantCONSULTANT an option to acquire up to Three Million (3,000,000) shares of CYGXCommon Stock for the price and terms set forth herein below in Section 3.2.Such option is divisible and transferrable and any such division or transferrequest must be made in writing by CONSULTANT with signature guaranteed by afinancial institution or notary public.

 

 

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3.2                                 PRICE AND OTHERTERMS.  The BASE PRICE to be paid byCONSULTANT if the option is exercised will be $0.001 per each share of CYGXCommon Stock.  Such BASE PRICE shallinclude the right to any dividends that have been accrued on such CommonStock.  Such option comprehends thateach share of CYGX Common Stock shall be restricted pursuant to securitieslaw.  Upon the request of CONSULTANT,CYGX will register for resale with all appropriate regulatory authorities up toOne Million (1,000,000) Common Shares owned by CONSULTANT or his assigns. CYGXshall be prompt in this provision but shall not be responsible for delays inregistration caused by regulatory agencies.

 

3.3                                 METHOD OFEXERCISE OF OPTION.  CONSULTANTshall exercise his option by giving CYGX written notice of his election to doso, and shall pay CYGX if such amounts are due said BASE PRICE as provided inSection 3.2 within 30 days of said exercise date.

 

4.                                       CONSIDERATION

 

4.1                                 CONSULTINGFEES.  CYGX agrees to pay CONSULTANTa cash fee of Four Thousand dollars ($4,000) upon execution of this agreement.CONSULTANT agrees to devote 20 hours per month to CYGX and fulfillment ofCONSULTANT’s obligations as described in this AGREEMENT. Following execution ofthis Agreement, CONSULTANT may be paid Four Thousand dollars ($4,000) per monthor the equivalent in CYGX equity, products, services, license rights,equipment, or any other valuable consideration agreed upon each month betweenthe parties, tendered at the end of the calendar month for such services.Balances due CONSULTANT will not accrue. Payment, in whatever form, must beconveyed in an agreed form each month on the first business day following the 1stof the month. CYGX reserves the right to convey payment without agreement inCYGX unregistered common stock. The mean closing price for the preceding monthshall be the basis for payments conveyed in CYGX unregistered common stock.CONSULTANT shall have the right to forego consideration for any month andprovide consulting services without consideration, by giving written noticeprior to the first of the month.

 

4.2                                 VOLUNTARYSUBJECT MATTER.  Upon disclosureby CONSULTANT and election by CYGX to negotiate for rights to such subjectmatter, CONSULTANT shall receive payment in the form of cash, equity in CYGXCommon Stock, or interest in such subject matter as determined by mutualwritten agreement by and between CONSULTANT and CYGX.

 

 

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4.3                                 EXPENSES. CYGX shallreimburse CONSULTANT for all reasonable and necessary expenses paid byCONSULTANT in connection with or related to the performance of his servicesunder this AGREEMENT. CONSULTANT shall submit to CYGX itemized statements inthe form satisfactory to CYGX. CYGX agrees to pay each such statement within 30days of receipt thereof.

 

4.4                                 BENEFITS. CONSULTANTshall not be entitled to any benefits, coverage, or privileges, includingwithout limitations, social security, unemployment, medical, or pensionpayments as may be available to the employees of the CYGX.

 

5.               TERMINATION. CYGX orCONSULTANT may terminate this AGREEMENT, effective immediately upon receipt ofwritten notice.

 

6.               COOPERATION. Consultantshall use his best efforts in the performance of his obligations under thisAGREEMENT. CYGX shall provide such access to its information and property asmay be reasonably required in order to permit the CONSULTANT to perform hisobligations hereunder. The CONSULTANT shall cooperate with CYGX personnel;shall not interfere with the conduct of the business of CYGX; and shall observeall rules, regulations, confidentiality and security provisions of CYGXconcerning the safety, confidentiality and security of persons and property,real, personal and intellectual.

 

7.               DISCLOSURE ANDASSIGNMENT OF INTELLECTUAL PROPERTY.  CONSULTANT will disclose promptly to CYGX any new development ofintellectual property arising from CONSULTANT’s obligations to CYGX asdescribed in Section 1, and provide complete information and disclosure ofvoluntarily developed subject matter subject to acceptance by CYGX and mutualwritten agreement about consideration to CONSULTANT for said voluntarilydeveloped subject matter as described in Section 4.2.  Upon the request and at the expense of CYGX, CONSULTANT willassist CYGX in filing for patents and or copyrights to protect saidintellectual property.  As the inventoror author of intellectual property developed under this AGREEMENT, theCONSULTANT agrees to assign, subject to mutual agreement, such intellectualproperty to CYGX.

 

8.               CONFIDENTIALITY. Confidentialinformation is being disclosed by CYGX to CONSULTANT and by CONSULTANT to CYGXto enable mutually advantageous possible research and business relationships.CYGX and CONSULTANT wish to preserve and protect the confidential material andinformation which may be disclosed between CYGX and CONSULTANT. Therefore, theparties agree as follows:

 

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8.1                                 CONFIDENTIALINFORMATION. The term “CONFIDENTIAL INFORMATION” means anysecret or proprietary information or material relating to CYGX’s orCONSULTANT’s research, development or business activities.

 

A.           CYGXCONFIDENTIAL INFORMATION includes without limitation: business records andplans, financial statements, customer lists and records, trade secrets,  technical information and reports, products,inventions, pricing structure, discounts, costs, copyrights, patentapplications and other intellectual property, market or business segment to beserviced by CYGX, purposes for which CYGX’s service is offered, scientificdata, laboratory or clinical procedures, and other proprietary informationwhether or not owned or developed by CYGX, which is not generally known otherthan by CYGX, and which CONSULTANT may obtain through any direct or indirectcontact with CYGX and which is not available from any other source than CYGX.

 

B.             Asused herein, CONSULTANT’s CONFIDENTIAL INFORMATION shall mean any and allinformation, know-how and data, technical or non-technical, which relates tothe subjects named herein and which is disclosed to CYGX by or on behalf ofCONSULTANT under this AGREEMENT.

 

C.             The partyproviding its CONFIDENTIAL INFORMATION is the DISCLOSER.  The party receiving CONFIDENTIAL INFORMATIONis the RECIPIENT.

 

D.            CONFIDENTIALINFORMATION does not include:

 

i.                                          CONFIDENTIALINFORMATION that was known to the RECIPIENT prior to the disclosure byDISCLOSER; or

 

ii.                                       CONFIDENTIALINFORMATION that is or becomes publicly known through no fault or omissionattributable to the RECIPIENT; or

 

iii.                                    CONFIDENTIALINFORMATION that is rightfully given to the RECIPIENT from sources independentof DISCLOSER.

 

8.2.                              PROTECTION OFCONFIDENTIAL INFORMATION. CONSULTANT understands and acknowledgesthat the CYGX CONFIDENTIAL INFORMATION has been developed or obtained by CYGXby the investment of significant time, effort and expense, and that the CYGXCONFIDENTIAL INFORMATION is a valuable, special and unique asset of CYGX whichprovides CYGX with a significant competitive advantage. Therefore, CONSULTANTagrees to hold in confidence and to not disclose the CYGX CONFIDENTIALINFORMATION to any person or entity without the prior written consent of CYGX.

 

8.3                                 NOCOPYING.  RECIPIENT will not copy or modify anyCONFIDENTIAL INFORMATION without the prior written consent of DISCLOSER.

 

 

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Unauthorized Disclosure ofInformation.  If it appears that eitherparty has disclosed (or has threatened to disclose) CONFIDENTIAL INFORMATION inviolation of this AGREEMENT, the party whose information is or has beendisclosed shall be entitled to an injunction to restrain the disclosing partyfrom disclosing, in whole or in part, the CONFIDENTIAL INFORMATION. The partiesshall be prohibited by this provision from pursuing other remedies, including aclaim for losses and damages.

 

8.4                                 RETURN OFCONFIDENTIAL INFORMATION. Upon the written request of DISCLOSER, RECIPIENT shall return toDISCLOSER all materials whether written, magnetically stored or reduced to anyother tangible medium containing the CONFIDENTIAL INFORMATION.  At the written request of DISCLOSER,RECIPIENT shall also deliver to DISCLOSER written statements signed byRECIPIENT certifying that all materials have been returned within Thirty (30)days of receipt of the request.

 

9.                                       SEVERABILITY.  Should any part of this AGREEMENT, exceptSection 3 and Section 4, for any reason be declared invalid or unenforceable,such decision shall not affect the validity or enforceability of any remainingportion, which remaining portion shall remain in force and effect as if thisAGREEMENT had been executed with the invalid or unenforceable portion thereofeliminated and it is hereby declared the intention of the parties hereto thatthey would have executed the remaining portion of this AGREEMENT without includingtherein any such part, parts or portion which may, for any reason, be hereafterdeclared invalid or unenforceable. Should any material term of this AGREEMENTbe in conflict any laws or regulations, the parties shall in good faith attemptto negotiate a lawful modification of this AGREEMENT which will preserve, tothe greatest extent possible, the original expectation of the parties. Shouldany provision of this AGREEMENT be****or become void because of being atvariance with a law or decree of any pertinent governmental body, the remainderof this AGREEMENT shall remain binding on both parties. The****parties will use their bestefforts to agree upon any changes****in this AGREEMENT which may be necessaryin order to adjust its remaining provisions with regard to the omission of anyinvalid term in order to make this AGREEMENT workable. If Section 3 or Section4 are declared invalid or unenforceable, this AGREEMENT shall be consideredterminated in its entirety, effective upon such declaration of invalidity orunenforceability by either party.

 

10.                                 ASSIGNMENT. This AGREEMENT shall run onlyto CYGX and CONSULTANT and/or their successors in interest and only to theextent to which they have agreed to and been made a part of this agreement. Itshall not be assigned to any third party without prior written consent of CYGX,CONSULTANT and such third party.

 

 

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11.                                 NOTICES. Any notices under thisAgreement shall be made as follows:

 
| To CYGX:       |   | Jonathan F. Elliston, Ph.D., J.D. |
|----------------|--------|-----------------------------------|
|           |   | 9881 South Wilcrest               |
|           |   | Houston, Texas 77099              |
|           |   |                              |
| To CONSULTANT: |   | Mike Skillern                     |
|           |   | 5868 A-1 Westheimer No. 466       |
|           |   | Houston, Texas 77057              |

 

12.           APPLICABLELAW; ATTORNEY’S FEES. This AGREEMENT is governed by and construed under thelaws of the State of Texas, and any action brought by either party against theother party to enforce or interpret this AGREEMENT shall be brought in anappropriate court of such State. In the event of any such action, theprevailing Party shall recover all costs and expenses thereof, includingreasonable attorney’s fees from the losing party.

 

 

IN WITNESS WHEREOF, the parties hereto haveexecuted this agreement as of the EFFECTIVE DATE set forth above.

 
| CytoGenix, Inc. |                                      |   | CONSULTANT              |
|-----------------|-------------------------------------------|--------|-------------------------|
|            |                                      |   |                    |
| By:             | /s/ Malcolm H. Skolnick                   |   | /s/ Michael D. Skillern |
|            | Malcolm H. Skolnick,  President & CEO |   | Michael D. Skillern     |
|            |                                      |   |                    |
| Date:           | 16 Feb, 2001                              |   |                    |
|                 |                                           |        |                         |  |  |

 

 

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Addendum1 to the CONSULTING AGREEMENT

BetweenMichael D. SKILLERN (SKILLERN) and CytoGenix, Inc. (CYGX)

DatedFebruary 15, 2001

 

 

 

CytoGenix, Inc. hereby amends section 3.1 **of the CONSULTING AGREEMENT** wherein fromThree Million (3,000,000) CYGX common shares is increased to Three MillionSeven Hundred Thousand (3,700,000) CYGX common shares.

 

CytoGenix, Inc. hereby agrees to pay $3,700cash to SKILLERN under section 4.1 of this CONSULTING AGREEMENT for the monthof June, 2001.  SKILLERN agrees to waive$300 of the consideration due under the same section for the same period.  SKILLERN understands that an "IRS form1099" from CytoGenix to SKILLERN for $3,700 is a consequence of thisprovision.

 

SKILLERN hereby requests that CytoGenix, Inc.pay the aforementioned funds toward option exercise of section 3.2 of theCONSULTING AGREEMENT.  SKILLERN has notyet requested that any portion of the shares conveyed herein to be registeredfor resale as required in section 3.2 of the CONSULTING AGREEMENT.

 

 
| AGREED AND ACCEPTED: |   | AGREED AND ACCEPTED: |
|----------------------|--------|----------------------|
|                 |   |                 |
|                 |   |                 |
|                 |   |                 |
| Michael Skillern     | (date) |                 | Malcolm Skolnick, CEO | (date) |
|                 |   |                 | CytoGenix, Inc. |   |
|                 |   |                 | Signed with board consent |   |

 

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In the event CYGX's president is removed fromoffice without his consent and agreement or if CytoGenix, Inc. defaults on anyagreement which holds the assets of CytoGenix, Inc. as collateral **then for good and valuable consideration**SKILLERNis hereby granted a worldwide, non-exclusive **royalty-free**License to use any technology owned **by**,assigned or licensed to CytoGenix, Inc. SKILLERN's license granted herewith shall be effective as to the date ofthis CONSULTING AGREEMENT, shall **continue**in perpetuity, and shall bear no license fee or other charges.

 

 

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SKILLERN hereby requests that CytoGenix, Inc.herewith issue said Three Million Seven Hundred Thousand (3,700,000) to thepersons and in the amounts described as follows:

 
| Alejandro Bernal                       |   | 1,000,000 |   |
|----------------------------------------|--------|-----------|--------|
| Allan Richardson                       |   | 600,000   |   |
| Mike Skillern                          |   | 1,000,000 |   |
| Quantum Bit Induction Technology, Inc. |   | 500,000   |   |
| Chabal of Sarasota                     |   | 200,000   |   |
| Donna Skillern                         |   | 200,000   |   |
| Linda Taylor                           |   | 200,000   |   |
| Total                                  |   | 3,700,000 |   |

 

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