Ex-10.36 Agreement With Mycosol, Inc.



 






EXHIBIT 10.36 AGREMENT WITH MYCOSOL, INC.




MEMORANDUM OF AGREEMENT




JUNE 1, 2004




The following outlines the terms of an Agreement between Mycosol, Inc., a
Delaware corporation and its wholly owned subsidiary Elion Inc. (collectively
“Mycosol” or the “Corporation”), located at 14001 Weston Parkway, Suite 112,
Cary, North Carolina 27513, and Veridien Corporation, a Delaware corporation
(“Veridien”) with principal offices at 2875 MCI Drive, Suite B, Pinellas Park,
Florida 33782. This Agreement replaces and supercedes the Strategic Alliance
Preliminary Agreement between Mycosol and Veridien dated December 10, 2003.



For good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:




	1.	 	Mycosol and Veridien hereby formed a strategic alliance with the common
focus on the market for Anti-Infectives. Mycosol’s products include but
are not limited to M301, its library of related analogs and homologs, and
their future products (the “Mycosol Technology”) have been identified as
the initial products to complement Veridien’s product portfolio.
	 
	2.	 	Veridien has previously invested $175,000 in Mycosol’s Series A Preferred
Stock Financing (the “Series A Financing”), which represents a (*)% fully
diluted ownership interest in Mycosol. For the purposes of this
Agreement, fully diluted ownership interest (“Fully Diluted Ownership
Interest”) means all issued and outstanding stock of the Corporation
through the completion of Series A Financing plus all debt obligations,
warrants, options, etc. which are convertible into stock of the
Corporation and includes all stock issued or to be issued by the
Corporation pursuant to its Series A Financing as well as shares issued or
to be issued to the Principals or otherwise.
	 
	3.	 	Veridien, and/or any partnership or legal business entity in which
Veridien participates, and/or any third party investor in Mycosol for
which Veridien assists in identifying and/or assists in securing their
investment in Mycosol (hereinafter identified as the “Veridien Group”) has
the right to invest an additional $1,325,000 in Mycosol by way of 17
monthly installments of $75,000 commencing June 1, 2004, and the earlier
of the 1st day or 1st business day of every month thereafter (“Due Date”),
and the final 18th installment of $50,000. If the sum of all investments
made by the Veridien Group totals $1.5 million, the Veridien Group shall
have acquired a combination of Preferred Stock and Common Stock Warrants
representing 37.5% Fully Diluted Ownership Interest in Mycosol. If the
Veridien Group invests less than $1.5 million, the percentage of Fully
Diluted Ownership Interest in Mycosol will be prorated in direct
proportion to the actual investment. Subject to the terms in this
Agreement, Veridien may stop making payments at anytime and will not have
any further financial obligations.
	 
	4.	 	Dick Klein, Jeff Selph and Jim Hriso (collectively “Initial Principals”)
and Veridien will complete the following share exchange. Within ten (10)
business days of the date hereof, Veridien will transfer to the Initial
Principals in a proportion to be determined by the Initial Principals
6,000,000 Restricted (restricted pursuant to Rule 144) Veridien Common
shares (the “Restricted Veridien Shares”) and $110,000 in cash. The
Initial Principals shall contemporaneously transfer to Veridien an
appropriate number of Mycosol Common Stock, which shares will represent a
12.50% ownership interest in Mycosol on a Fully Diluted Ownership Interest
basis. Notwithstanding the foregoing, the parties agree that although the
Restricted Veridien Shares shall be issued in the names of the Initial
Principals respectively, said shares shall not be delivered directly to
the Initial Principals but shall instead be held in














 






	 	 	escrow for a period of one year from the date of closing of said share
exchange pursuant to terms of a certain escrow agreement to be entered into
between the parties prior to or at closing of the share exchange. The
principal terms of said escrow agreement will provide that the Initial
Principals shall receive their respective Restricted Veridien Shares only
in the event that they continue their employment and/or consulting with
Mycosol, Inc. until the end of the one year escrow period (subject to
exceptions for death, disability, wrongful termination, liquidation event,
and other reasonable special circumstances). In the event that an Initial
Principal fails to satisfy the terms of escrow, then his respective
Restricted Veridien Shares shall not be delivered to said Initial Principal
but shall instead be forfeited to Mycosol, Inc. The parties agree to said
foregoing principal terms of the escrow agreement and agree to execute such
escrow agreement substantially in a form with these terms at or before
closing of said share exchange. The parties further agree that said
Restricted Veridien Shares are acquired by the Initial Principals or
Mycosol, as applicable, as of the closing date of the share exchange
described above. In addition and concurrently, Veridien will offer to
acquire the shares of the current five Mycosol Series A shareholders by
offering to exchange their Preferred shares for Restricted Veridien Common
Stock at a per share price of $.07.






	5.	 	The agreement of the parties is that upon completion of the aggregate
investments contemplated in paragraphs 2, 3 and 4, excluding any of the
Preferred Series A shareholders conversion (the “Aggregate Investments”),
the Veridien Group will own a 50% interest in Mycosol (or more, depending
on the Preferred Series A shareholder participation in the stock swap
contemplated in Paragraph 4) on a Fully Diluted Ownership Interest basis.
	 
	6.	 	The Initial Principals will repay all accrued loans to Mycosol
contemporaneously with the transfer set out in paragraph 4.
	 
	7.	 	The Initial Principals purport to be owed deferred salaries and waive any
claim or entitlement to same. All necessary paperwork confirming same
will be delivered to Mycosol within ten (10) business days of the date
hereof.
	 
	8.	 	The parties acknowledge that Taro Pharmaceutical (“Taro”) is considering
providing funding for the right and/or license to develop and market the
Mycosol Technology for the dermatology application. If Mycosol or its
subsidiary company, Elion Medical, enters into a strategic alliance with
Taro, those funds would be used for therapeutic medical-related activities
(including budgeted overhead absorption) and be separate and distinct from
the non-therapeutic medical funding contemplated under this Agreement and
would not apply to the Aggregate Investments nor reduce Veridien’s and/or
the Veridien Group’s rights or options under this Agreement to provide the
$1.5 million funding unless otherwise agreed by Mycosol and Veridien.
	 
	9.	 	The parties acknowledge that Mycosol’s Series A Financing is for up to $2
million and for which this Agreement represents $1.5 million of funding or
75% of that financing. Upon the execution of this Agreement, the Veridien
Group has the potential to become a significant and possible majority
shareholder in Mycosol and Veridien will have the right to elect two (2)
representatives to Mycosol’s Board of Directors. The parties hereto agree
to use their best efforts to help identify and arrange up to the
additional $500,000 in Series A financing. In any event, this does not
create an obligation on any of the parties to fund this directly or to
guarantee said amount.
	 
	10.	 	In the event that the Veridien Group raises money from one or more third
parties with a major purpose of those funds being to directly or
indirectly finance Mycosol’s business operations, then at least 20% of
those funds up to $300,000 would be transferred to a Mycosol-controlled
reserve account (“Reserve”). These Reserve funds will be used by Mycosol
to fund its














 






	 	 	operational needs in the event that the monthly funding from the Veridien
Group is not then available. The parties agree to target an ongoing Reserve
of $300,000 (four months investment at $75,000 per month). If the
Aggregate Investments are fulfilled except for the Reserve, the Reserve
would then be used to complete the Aggregate Investments.






	11.	 	The Initial Principals will have entered into a two-year Consulting
Contract (the “Contacts”) with Mycosol under which they will receive an
aggregate monthly consulting fee of $29,166 through the end of 2004 and
$35,416 from 2005 through the end of the Contracts and to be disbursed by
Mycosol in accordance with the Contracts. The Initial Principals, acting
reasonably, will accept some portion of payment of the Contracts in
free-trading shares of Veridien Form S-8 stock or similar instrument. Any
payments in free-trading stock would be credited to the Veridien Aggregate
Investments hereunder at a price per share of the Veridien stock at the
time of issue. If payments related to the Contracts result in additional
non-budgeted expenses to the Initial Principals [versus an employment
contract where such expenses are customarily paid by the employer] such as
a self-employment [FICA] tax, Mycosol will reimburse those additional
expenses to the Initial Principals, an amount not to exceed seven (7)
percent of the Contracts’ amount. Subject to the fulfillment of the
Aggregate Investments, the Principals’ full time and attention will be
provided to Mycosol, Elion and Veridien or as otherwise set out herein.
	 
	12.	 	Veridien will give Mycosol 25-day prior written notice if the Veridien
Group does not intend to make a further investment under the Aggregate
Investments (“Notice”). Upon receipt of that Notice, Mycosol, at its sole
option, shall be free to raise additional capital from other sources.
	 
	13.	 	Failure to make an investment in Mycosol by the Due Date will allow
Mycosol to notify Veridien that such amount is required immediately and
needs to be paid within a cure period. Such investment amount can be
cured by payment of said monthly investment amount to Mycosol within a
specified number of business days (“Cure”) from the Due Date. For the
first two (2) payments of this Agreement totaling $150,000, the Cure will
be ten (10) business days. Thereafter, the Cure will be forty (40)
business days.
	 
	14.	 	Veridien will receive an Option from the Initial Principals and their
related partners and assigns to acquire all or a portion of their
remaining Mycosol Common and/or Preferred shares, which shares, in total,
will represent up to (*)% of the issued and outstanding stock of Mycosol
on a fully diluted basis (the “Option”). The Option can only be exercised
after the successful completion of Paragraph 4 and provided Veridien is
current with the Aggregate Investments under this Agreement. If Veridien
exercises 100% of the Option, then the purchase price for the shares is
fixed at $2,200,000. If Veridien exercises its Option in more than one
traunch, then the purchase price of each traunch will be prorated
proportionally to the total fixed price of $2,200,000. If Veridien gives
notice to Mycosol pursuant to Paragraph 12 and/or ceases to make a payment
toward the Aggregate Investments and fails to Cure said payment, then the
Option will be prorated proportionally based on the percent (%) of actual
Aggregate Investments in Mycosol as to that date [including the 6,000,000
Veridien shares which, for these purposes, will be considered to have a
value of $500,000] divided by $2 million. Veridien can exercise the
Option for twelve months from the date the Aggregate Investments cease or
to May 31, 2006, whichever is sooner. Payment of the Option to the
Initial Principals can, at Veridien’s option, be made through a
combination of a lump sum cash payment and Veridien Restricted Common
Stock (Rule 144) and whereby the number of shares of any stock payment
will be determined using 80% of the prior 10-day average closing Veridien
Common shares price as reported in the Wall Street Journal from the date
the Option is exercised. Notwithstanding the foregoing in the event that
Veridien issues any Restricted Common Stock (Rule 144) pursuant to
transactions described in this Paragraph 14, the parties agree to enter
into a certain escrow agreement substantially similar to that escrow
agreement described in Paragraph 4 above for














 






	 	 	purposes of securing the further employment and/or consulting of the
Initial Principals during the 1 year escrow term.






	15.	 	The Initial Principals would support its relationship with Veridien and
contribute to the development of the Veridien Business Plan and develop a
Mycosol Business Plan in support of its relationship with Veridien.
Should the Aggregate Investments cease short of the entire investment
contemplated in paragraph 3, then the Initial Principals’ support to and
efforts on behalf of Veridien would cease.
	 
	16.	 	Mycosol’s VP Business Development, subject to fulfillment of the
Aggregate Investments, will devote his fulltime services to the Veridien
Marketing, Sales, and Business Development effort for Year One and Year
Two. Veridien will pay and/or reimburse reasonable travel and promotion
expenses for work on Veridien’s behalf.
	 
	17.	 	Mycosol’s CEO will devote 75% of his fulltime services, subject to
fulfillment of the Aggregate Investments, to the Veridien Marketing,
Sales, Technology, and Business Development efforts for Year One and Year
Two. Veridien will pay and/or reimburse reasonable travel and promotion
expenses for work on Veridien’s behalf.
	 
	18.	 	Mycosol’s President, and Mycosol’s in-house technology resources, subject
to fulfillment of the Aggregate Investments, will be devoted to not less
than 25% of their time or to such other time as mutually agreed, to
provide technology support to the then current Veridien Marketing, Sales,
and Business Development efforts during Year One and Year Two. Veridien
will pay and/or reimburse reasonable travel and promotion expenses for
work on Veridien’s behalf.
	 
	19.	 	The parties agree that the Aggregate Investments by the Veridien Group as
set forth in this Agreement can be structured on a tax effective basis as
required to facilitate Veridien Group’s requirements and provided that the
Veridien Group’s proposed structure is reasonably acceptable to Mycosol,
acting reasonably.
	 
	20.	 	Upon execution of this Agreement, Veridien will be permitted to elect two
(2) seats on Mycosol’s Board of Directors. If the Veridien Group does not
fulfill at least 50% of the Aggregate Investments, Mycosol will be free to
add a fifth Director of their choosing to the Mycosol Board of Directors.
If the fifth Director Board seat will reasonably facilitate the funding of
Mycosol by a third party(ies), the two Board Directors representing
Veridien will not block appointment of that fifth Director. Veridien
wishes to invite Klein to serve and Klein wishes to serve on the Veridien
Board of Directors subject to the appropriate approvals.
	 
	21.	 	Year One shall commence June 1, 2004 and Year Two on June 1, 2005.
	 
	22.	 	Veridien has the right to participate in any new financing of Mycosol, at
its option.
	 
	23.	 	The parties agree to be bound by the terms of this Agreement and agree to
execute such further documents as may be required to support – but not
change – this Agreement.
	 
	24.	 	This Agreement shall be governed by and interpreted under the laws of the
State of Florida and the venue of Hillsborough County (Tampa Bay area)
without giving effect to the choice of laws principles thereof, and may
not be superceded, amended, modified except by written agreement between
the parties.
	 
	25.	 	This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof and supercedes all previous
understanding, agreements, communications, and














 






	 	 	representations, whether written or oral, concerning the subject matter to
which this Agreement relates.






	26.	 	The invalidity or unenforceability of any provision of this Agreement
will not affect the validity or enforceability of any other provision of
this Agreement.





A facsimile copy of this Agreement will be binding upon the parties if signed
by June 7, 2004.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mycosol, Inc.	 	 	 	Veridien Corporation
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Per:

	 	   /S/ Richard B. Klein
	 	June 7, 2004
	 	Per:
	 	/S/ Sheldon Fenton
	 	June 7, 2004	 	 	 	 
	

	 	
 
	 	
 
	 	 	 	
 
	 	
 	 	 	 	 
	

	 	Richard B. Klein, CEO
	 	Date
	 	 	 	Sheldon Fenton, CEO
	 	Date	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Per:

	 	   /S/ Jeffrey Selph
	 	June 7, 2004
	 	Per:
	 	/S/ Russ Van Zandt
	 	June 7, 2004	 	 	 	 
	

	 	
 
	 	
 
	 	 	 	
 
	 	
 	 	 	 	 
	

	 	Jeffrey Selph, President & COO
	 	Date
	 	 	 	Russ VanZandt, Chairman
	 	Date	 	 	 	 







	 	 	 	 	 	 	 	 	 	 	 
	For The Initial Principals,	 	Witnessed By,
	 
	 	 	 	 	 	 	 	 	 	 
	/S/ Richard B. Klein

	 	June 7, 2004
	 	/S/ James Melton
	 	June 7, 2004	 	 	 	 
	
 

	 	
 
	 	
 
	 	
 	 	 	 	 
	Richard B. Klein

	 	Date
	 	James Melton
	 	Date	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/S/ Jeffrey Selph

	 	June 7, 2004
	 	/S/ James Melton
	 	June 7, 2004	 	 	 	 
	
 

	 	
 
	 	
 
	 	
 	 	 	 	 
	Jeffrey Selph

	 	Date
	 	James Melton
	 	Date	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/S/ James Hriso

	 	June 7, 2004
	 	/S/ James Melton
	 	June 7, 2004	 	 	 	 
	
 

	 	
 
	 	
 
	 	
 	 	 	 	 
	James Hriso

	 	Date
	 	James Melton
	 	Date	 	 	 	 







(*) figures are for reference and will be included in a Mycosol Capitalization
Schedule to be completed within ten (10) business days of the signing of this
Agreement