Filed by Bowne Pure Compliance



 




Exhibit 10.18




EXECUTION COPY




CONSULTING AND NON-COMPETITION AGREEMENT




This Consulting Agreement (this “Agreement”) is entered into as of January
 _____, 2008 (the
“Effective Date”), by and between Isolagen, Inc., a Delaware corporation (the “Company”), and
Nicholas L. Teti (the “Consultant”).



WHEREAS, the Consultant currently serves as the Company’s Chairman and Chief Executive Officer
pursuant to that certain Employment Agreement, dated as of June 5, 2006 between the Company and the
Consultant (the “Employment Agreement”); and



WHEREAS, the Company desires that the Consultant serve as the Company’s Non-Executive Chairman
of the Board and member of its Board of Directors, and provide additional services to the Company
as an independent contractor; and



WHEREAS, the Consultant desires to serve as the Company’s Non-Executive Chairman of the Board
and member of its Board of Directors, and provide such additional services as an independent
contractor; and



WHEREAS, the Company and the Consultant desire that the Employment Agreement be terminated and
superseded; and



NOW, THEREFORE, in consideration of the mutual representations, promises and agreements
contained herein, the adequacy and sufficiency of which are hereby acknowledged, the Company and
the Consultant hereby agree as follows:



1. Term of Agreement. The Company hereby engages the Consultant as a consultant,
subject to the terms and conditions hereof, for the period commencing as of the Effective Date and
ending on June 30, 2009 (the “Term”), except as the Term may be extended by mutual written
agreement of the parties hereto. The period during which the Consultant is performing services
under this Agreement shall be referred to herein as the “Consulting Period.”



2. Consulting Services. During the Consulting Period, the Consultant shall perform
consulting services for the Company and its subsidiaries. Such consulting services are
anticipated to include working with Company management at a strategic level with respect to the
Company’s development and product acquisition activities, capital structures, investor relations
and reduction of production costs, and to follow up on clinical trials. The Consultant will devote
such business time as is necessary or desirable to accomplish his duties and responsibilities under
this Agreement.


 


 









 





3. Independent Contractor.



(a) The Consultant shall perform the consulting services described in



Section 2 as an independent contractor without the power to bind or represent the Company for
any purpose whatsoever. Nothing herein contained shall be construed to constitute the parties
hereto as partners or as joint venturers, or either as agent of the other, or as employer and
employee. The Consultant shall not present himself as an employee of the Company or any of its
affiliates.



(b) The Consultant shall not be entitled to participate in any employee benefit plans
maintained by on behalf of the Company or any of its affiliates during the Consulting Period. The
Consultant hereby acknowledges his separate responsibility for all federal and state withholding
taxes, Federal Insurance Contribution Act taxes, workers’ compensation and unemployment
compensation taxes and business license fees, if applicable.



(c) Subject only to such specific limitations as are contained in this Agreement, the manner,
means, details or methods by which the Consultant performs his obligations under this Agreement
shall be solely within the discretion of the Consultant. The Company shall not have the authority
to, nor shall it, supervise, direct or control the manner, means, details or methods utilized by
the Consultant to perform his obligations under this Agreement and nothing in this Agreement shall
be construed to grant the Company any such authority.



4. Compensation.



(a) Consulting Fee. In remuneration for the consulting services to be performed under
this Agreement by the Consultant during the Consulting Period, the Consultant shall receive an
annual consulting fee equal to one hundred thousand dollars ($100,000) (the “Consulting Fee”),
payable no less frequently than monthly in arrears. The Consulting Fee shall be in addition to,
and not in lieu of, those fees or other remuneration to which the Consultant may be entitled
pursuant to Company policies in his position of Non-Executive Chairman and member of the Board of
Directors.



(b) Outstanding Equity Awards. The Company and the Consultant acknowledge and agree
that (x) the stock option grant relating to an aggregate of 2,000,000 shares of the Company’s
Common Stock and (y) the stock option grant relating to an aggregate of 500,000 shares of the
Company’s Common Stock, in each case previously awarded by the Company to the Consultant effective
June 5, 2006, shall (i) remain in full force and effect, (ii) continue to be governed by the
original terms of the applicable stock option grant agreements between the Company and the
Consultant, and (iii) continue to vest in accordance with the original terms of such agreements.


 


 









 





(c) Severance Pay. The Consultant acknowledges and agrees that he is not entitled to
any severance or termination pay or benefits under Section 4 of the Employment Agreement.



(d) 2007 Bonus. The Company agrees that notwithstanding the termination of the
Employment Agreement, the Consultant remains eligible for an Annual Bonus (as defined in Section
2(c) of the Employment Agreement) with respect to the Company’s 2007 fiscal year.



5. Expenses. The Company shall pay or reimburse the Consultant for all reasonable
expenses incurred by the Consultant in connection with the performance of his services under this
Agreement including, without limitation, travel and lodging expenses, consistent with Company
expense policies following receipt of appropriate documentation; provided, however, for all periods
commencing as of the Effective Date the Company shall not provide, or reimburse the Consultant for,
the use of an automobile or membership fees or dues payable in respect of the Consultant’s members
in private clubs or professional associations or organizations.



6. Santa Barbara Office. The Company and the Consultant acknowledge and agree that
the office currently maintained by the Company in Santa Barbara, California area shall be sublet as
soon as practicable following the Effective Date and each party agrees to cooperate fully with the
other to effect such sublease.



7. Termination. During the Term, this Agreement and the Consulting Period may be
terminated at any time by the Company or the Consultant upon 30 days’ prior written notice to the
other party. In the event of the termination of this Agreement pursuant to this Section 7, the
Company’s obligations under Section 4(a) shall cease, effective on the effective date of such
termination. Following the termination of this Agreement and the Consulting Period for any reason,
the Consultant shall be entitled to purchase any or all of the vested stock options described in
Section 4(b) on the terms and conditions set forth in the applicable stock option agreements
between the parties. The Consultant agrees that as of or following the termination of this
Agreement and the Consulting Period for any reason or for no reason, he shall immediately resign as
Non-Executive Chairman of the Company and member of the Company’s Board of Directors if so
requested by the Company.


 


 









 





8. Non-Competition. During the period of the Consultant’s services hereunder, the
Consultant shall not, within any state or foreign jurisdiction in which the Company or any
subsidiary of the Company is then providing services or products or marketing its services or
products (or engaged in active discussions to provide such services), or within a 50-mile radius of
any such state or foreign jurisdiction, directly or indirectly own any interest in,
manage, control, participate in, consult with, render services for, or in any manner engage in
any business engaged in by the Company (unless the Board of Directors shall have authorized such
activity and the Company shall have consented thereto in writing). The term “business engaged in
by the Company” shall mean the development and commercialization of autologous fibroblast system
technology for application in, among other therapies, dermatology, surgical and post-traumatic
scarring, skin ulcers, cosmetic surgery, periodontal disease, reconstructive dentistry, vocal
chord injuries, urinary incontinence, and digestive and gastroenterological disorders and other
applications relating to the market for autologous fibroblast or UMC cells and the five derivative
cell lines: osteoblast, chondroblast, fibroblast, adipocyte, and neuroectoderm. Investments in
less than five percent of the outstanding securities of any class of a corporation subject to the
reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended, shall not be prohibited by this Section 8. The Company understands and acknowledges that
the Consultant will become employed by Den-Mat Holdings, LLC as its Chief Executive Officer at or
about the commencement of the Consulting Period and agrees that, as of the Effective Date, such
employment is not in violation of this Section 8.



9. Confidential Information; Non-Solicitation. The parties hereto recognize that a
major need of the Company is to preserve its specialized knowledge, trade secrets, and confidential
information. The strength and good will of the Company is derived from the specialized knowledge,
trade secrets, and confidential information generated from experience with the activities
undertaken by the Company and its subsidiaries. The disclosure of this information and knowledge
to competitors would be beneficial to them and detrimental to the Company, as would the disclosure
of information about the marketing practices, pricing practices, costs, profit margins, design
specifications, analytical techniques, and similar items of the Company and its subsidiaries. The
Consultant acknowledges that the proprietary information, observations and data obtained by him
while employed by the Company and during the Consulting Period concerning the business or affairs
of the Company are the property of the Company. By reason of his having been a senior executive of
the Company and through his providing services under this Agreement, the Consultant has or will
have access to, and has obtained or will obtain, specialized knowledge, trade secrets and
confidential information about the Company’s operations and the operations of its subsidiaries,
which operations extend throughout the United States. For purposes of this Section 9, “the
Company” shall mean the Company and each of its controlled subsidiaries. Therefore, the Consultant
hereby agrees as follows, recognizing that the Company is relying on these agreements in entering
into this Agreement:


 


 









 





(a) The Consultant will not use, disclose to others, or publish or otherwise make available to
any other party any inventions or any confidential business information about the affairs of the
Company, including but not limited to confidential
information concerning the Company’s products. “Confidential Information” shall include
commercial or trade secrets about Company’s products, methods, engineering designs and standards,
analytical techniques, technical information, customer information, employee information, or
financial and business records, any of which contains proprietary information created or acquired
by the Company and which information is held in confidence by Company. Confidential Information
does not include information which: (x) becomes generally available to the public, unless said
Confidential Information was disclosed in violation of a confidentiality agreement; or (y) becomes
available to the Consultant on a non-confidential basis from a source other than the Company or its
agents, provided that such source is not bound by a confidentiality agreement with the Company.



(b) During the Term and for 12 months thereafter, the Consultant will not directly or
indirectly through another entity (x) induce any employee of the Company to leave the Company’s
employ (unless the Board of Directors shall have authorized such employment and the Company shall
have consented thereto in writing) or in any way interfere with the relationship between the
Company and any employee thereof or (y) tortiously interfere with the Company’s business
relationship with any customer, supplier, licensee, licensor or other business relation of the
Company.



10. Representations.



(a) The Consultant hereby represents and warrants to the Company that as of the Effective
Date: (x) the execution, delivery and performance of this Agreement by the Consultant do not and
shall not conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which the Consultant is a party or by which he is bound,
and (y) upon the execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of the Consultant, enforceable in accordance with its terms. The
Consultant hereby acknowledges and represents that he has consulted with legal counsel regarding
his rights and obligations under this Agreement and that he fully understands the terms and
conditions contained herein.



(b) The Company hereby represents and warrants to the Consultant that (x) the execution,
delivery and performance of this Agreement by the Company do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument, order, judgment or
decree to which the Company is a party or by which it is bound; and (y) upon the execution and
delivery of this Agreement by the Consultant, this Agreement shall be the valid and binding
obligation of the Company, enforceable in accordance with its terms.


 


 









 





11. Indemnification. The Company will indemnify (and advance the costs of defense of)
and hold harmless the Consultant (and his legal representatives) to the fullest extent permitted by
the laws of the state in which the Company is incorporated, as in effect at the time of the subject
act or omission, or by the Certificate of Incorporation and Bylaws of the Company, as in effect at
such time or on the date of this Agreement, whichever affords greater protection to the Consultant,
and the Consultant shall be entitled to the protection of any insurance policies the Company may
elect to maintain generally for the benefit of its executive officers and directors, against all
judgments, damages, liabilities, costs, charges and expenses whatsoever incurred or sustained by
him or his legal representative in connection with any action, suit or proceeding to which he (or
his legal representatives or other successors) may be made a party by reason of his performing
services under this Agreement or having been an officer or director of the Company or any of its
subsidiaries except that the Company shall have no obligation to indemnify Consultant for
liabilities resulting from conduct of the Consultant with respect to which a court of competent
jurisdiction has made a final determination that Consultant committed gross negligence or willful
misconduct to the extent such a determination was made by the court in determining liability.



12. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby and supersedes any
prior agreement or understanding, including without limitation the Employment Agreement, which is
as of the Effective Date terminated and of no further legal force or effect, provided that the
Company shall pay or provide the Consultant any accrued but unpaid compensation earned pursuant to
the Employment Agreement through the Effective Date (such as accrued and unpaid salary) and the
Employee’s vested benefits under Company employee benefit plans, programs, and policies other than
equity or cash incentive programs, in each case in accordance with the terms of such plans,
programs and policies and the Employment Agreement.



13. Successors; Binding Agreement. This Agreement shall inure to the benefit of and
be enforceable by the Consultant and by his personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees and by the Company and its respective
successors and assigns.



14. Notices. All notices and other communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given when personally
delivered, when delivered by courier or overnight express service or five days after having been
sent by certified or registered mail, postage prepaid, addressed (x) if to the Consultant, to the
Consultant’s address set forth in the records of the Company, or if to the Company to Office of the
General Counsel, Isolagen, Inc., 405 Eagleview Blvd., Exton, Pennsylvania 19341 or (y) to such
other address as any party may have furnished to the other
parties in writing in accordance herewith, except that notices of change of address shall be
effective only upon receipt thereof.

 


 









 







15. Governing Law. The interpretation, construction and performance of this Agreement
shall be governed by and construed and enforced in accordance with the internal laws of the State
of California without regard to any conflict of laws principles.



16. Severability. In case any one or more of the provisions or part of a provision
contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in
any respect in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed
not to affect any other jurisdiction or any other provision or part of a provision of this
Agreement, nor shall such invalidity, illegality or unenforceability affect the validity, legality
or enforceability of this Agreement or any provision or provisions hereof in any other
jurisdiction; and this Agreement shall be reformed and construed in such jurisdiction as if such
provision or part of a provision held to be invalid or illegal or unenforceable had never been
contained herein and such provision or part reformed so that it would be valid, legal and
enforceable in such jurisdiction to the maximum extent possible. In furtherance and not in
limitation of the foregoing, the Company and the Consultant each intend that the covenants
contained in Sections 8 and 9 shall be deemed to be a series of separate covenants, one for each
and every state of the United States and any foreign country set forth therein. If, in any
judicial proceeding, a court shall refuse to enforce any of such separate covenants, then such
unenforceable covenants shall be deemed eliminated from the provisions hereof for the purpose of
such proceedings to the extent necessary to permit the remaining separate covenants to be enforced
in such proceedings. If, in any judicial proceeding, a court shall refuse to enforce any one or
more of such separate covenants because the total time, scope or area thereof is deemed to be
excessive or unreasonable, then it is the intent of the parties hereto that such covenants, which
would otherwise be unenforceable due to such excessive or unreasonable period of time, scope or
area, be enforced for such lesser period of time, scope or area as shall be deemed reasonable and
not excessive by such court.



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



18. Miscellaneous. No provision of this Agreement may be modified or waived unless
such modification or waiver is agreed to in writing and executed by the Consultant and by a duly
authorized officer of the Company. No waiver by any party hereto at any time of any breach by
another party hereto of, or failure to comply with, any condition or provision of this Agreement to
be performed or complied with by such other party shall be deemed a waiver of any similar or
dissimilar conditions or provisions at the same or at any prior or subsequent
time. Failure by the Consultant or the Company to insist upon strict compliance with any
provision of this Agreement or to assert any right which the Consultant or the Company may have
hereunder shall not be deemed to be a waiver of such provision or right or any other provision of
or right under this Agreement.



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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.



	 	 	 	 	 
	 	ISOLAGEN, INC.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	CONSULTANT 	 
	 	 	 
	 	 	 
	 	
NICHOLAS L. TETI