Document:

Consultancy Agreement

 
Exhibit 10.38

 
Dated                May 2, 2003 
 
(1)    BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC 
 
(2)    BARRY MUNCASTER 
 

 
CONSULTANCY AGREEMENT 
 

 
Dechert 
2
Serjeant’s Inn 
London 
EC4Y
1LT 
 
Date: 7.3.03 
Ref: CE305/326614 
1320911 
 

 
THIS AGREEMENT is made
on May 2, 2003 
 
BETWEEN:— 
 

	(1)	 	BIOPROGRESS PLC a company registered in England under number 04617139 whose registered office is at Hostmoor Avenue, March, Cambs., PE15 0AX (“the
Company”); and 

 

	(2)	 	BARRY MUNCASTER of Woodlands Place, Moulton Road, Kennett, Suffolk CB8 8QT (“the Consultant”). 

 
IT IS AGREED as follows:— 
 

	1.	 	DEFINITIONS 

 
In this agreement the following expressions shall unless the context otherwise requires have the following meanings:— 
 

	1.1	 	“Board” the Board of Directors of the Company or a duly authorised committee thereof; 

 

	1.2	 	“Commencement Date” May 6, 2003; 

 

	1.3	 	“Confidential Information”:— 

 

	1.3.1	 	any trade secrets, trading details or other information of a confidential nature relating to any company in the Group (including, without limitation, details of
activities, businesses, forward planning programmes or finances of any such company); and 

 

	1.3.2	 	any other information specifically designated by any company in the Group as confidential; and 

 

	1.3.3	 	any information in relation to which any company in the Group owes a duty of confidentiality to any third party; 

 

	1.4	 	“the Term” the period of one year from the Commencement Date; 

 

	1.5	 	“directly or indirectly” (without prejudice to the generality of the expression) whether as principal or agent (either alone or jointly or in
partnership with any other person firm company) or as a shareholder or holder of loan capital in any other company or being concerned or interested in any other person firm or company and whether as a director partner consultant employee or
otherwise; 

 

	1.6	 	“Group” together the Company, any holding company of the Company and any subsidiary and subsidiary undertakings of the Company and of such holding
company within the meanings of sections 258, 736 and 736A of the Companies Act 1985 and any associated company whether in the United Kingdom or overseas; 

 

	1.7	 	“Termination Date” the date of the termination of this agreement. 

 

	2.	 	TERM 

 
The Consultant shall carry out the Consultant’s duties during the Term. The parties may agree to extend the Term for any further
period. The Consultant acknowledges and agrees that he shall not be entitled to any notice of termination under this agreement, however, in the event of its early termination for any reason prior to the expiry of the Term the Group shall pay
forthwith upon termination all sums due and owing to the Consultant at the time of termination and an amount equal to the full sum that would have been paid to the Consultant between the date of termination and the end of the Term. 
 

	3.	 	CONSULTANT’S DUTIES 

 

	3.1	 	The Consultant shall perform his duties in a good, efficient and proper manner. These duties are to act as consultant to the Company and to provide such assistance
and advice as may be necessary relating to matters such as:— 

 

	 	(a)	 	the strategy of the Company; 

 

	 	(b)	 	the performance of the Company and its subsidiaries; 

 

	 	(c)	 	present and future availability of the use of resources; 

 

	3.2	 	During the Term, the Consultant shall use all proper means to the best of his ability to maintain and improve the business of the Company and the Group and further
their respective reputation and interests. 

 

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	3.3	 	As and when reasonably required by the Company, the Consultant shall provide the Company with details of time spent by the Consultant on his duties under this
agreement. 

 

	3.4	 	The Consultant shall, if requested, carry out his duties at the March, Cambridgeshire offices of the Company, other wise the Consultant shall perform his duties at
his home office. 

 

	3.5	 	The Consultant shall ensure that he is available as required and for a maximum of twelve days per month during the Term for the purposes of performing his duties
under this agreement. Additionally, the Consultant agrees to make himself available at such times and for such periods as may be necessary (or as reasonably required) to deal with matters of significance to the Company or otherwise falling within
the scope of his responsibilities under this agreement. 

 

	3.6	 	The Consultant shall normally ensure that he is available as described in clause 3.5 above to perform his duties and shall not be unavailable to provide services for
more than one continuous month in any 12 month period (unless prevented from performing his duties as a result of sickness or accident) without the Company’s consent. In the event that the Consultant becomes unavailable for any reason to
perform his duties under this agreement the Consultant shall be obliged promptly to notify the Company of his unavailability. 

 

	3.7	 	The Consultant may provide services to any other party and the Consultant may undertake outside offices, employment and other business activities provided however
that the Consultant shall inform the Company forthwith of any proposed appointment or engagement with any person, firm or company where such proposed appointment or engagement relates to a business which is in competition with any of the businesses
operated by any company in the Group or in which any company in the Group has a direct investment (in which case the Consultant shall obtain the written consent of the Company before undertaking any such appointment or engagement, such consent not
to be unreasonably withheld or delayed by the Company). 

 

	3.8	 	The Consultant shall comply at all times with any policies adopted from time to time by the Company relating to insider dealing. 

 

	4.	 	CONSULTANCY FEE 

 

	4.1	 	The Company shall pay to the Consultant a consultancy fee of £96,000 plus VAT (if appropriate) per annum. 

 

	4.2	 	The consultancy fee referred to in clause 4.1 will be payable in equal monthly instalments of £8,000 (plus VAT if applicable) in arrears after receipt by the
Company of an appropriate invoice and the Company shall settle such invoice within 7 days of receipt. 

 

	4.3	 	For the avoidance of doubt, the consultancy fee shall be due and payable each month during the Term regardless of the actual number of days provided by the
Consultant during any given month. The days to be provided by the Consultant to a maximum of twelve each month shall be on a use them or lose them basis and any days not used by the Company shall not be carried forward from month to month.

 

	4.4	 	In the event that the Company requires a day or days in excess of the maximum number to be provided by the Consultant in any given month, and subject to the
availability of the Consultant, then the Company shall pay an additional fee of £600 (plus VAT if applicable) per diem or part thereof. 

 

	5.	 	AUTHORITY 

 
The Consultant shall not without the prior consent of the Board incur on behalf of the Company or any company in the Group any capital
expenditure in excess of such sums as are authorised from time to time and shall not enter into on behalf of the Company or any company in the Group any commitment, contract or arrangement outside the scope of the Consultant’s duties under this
agreement. The Group will not expect or ask the Consultant to perform any duty or act beyond the scope of this agreement which in any circumstance could be deemed to be or be construed to be that of acting as an officer or director of the Group.

 

	6.	 	CONFIDENTIALITY 

 
The Consultant shall not at any time during or after the Term except in the proper performance of the Consultant’s duties under this
agreement or as may be required by law or by any regulatory authority, use, disclose or divulge to any person, firm or company and Confidential Information which has or may have come to his knowledge either during the Consultant’s prior
engagement by the Company or during the course of this agreement, save that this obligation shall not extend to any matters which are or shall be in the public domain otherwise than due to the Consultant’s default. 
 

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	7.	 	TERMINATION BY EVENTS OF DEFAULT 

 

	7.1	 	If the Consultant shall have committed a breach of this agreement which is not capable of remedy or, if capable of remedy, shall have failed to remedy such a breach
within 30 days of being notified of such breach by the Company, the Company may at any time without prejudice to any rights or claims it may have against the Consultant by notice in writing terminate this agreement with immediate effect and without
any liability to pay any compensation, damages or fees in relation to any period after the date on which this agreement is terminated if at any time the Consultant shall:— 

 

	7.1.1	 	become bankrupt or compound with his creditors or suffer execution against his effects; or 

 

	7.1.2	 	be prohibited by law from holding the office of director in any company; or 

 

	7.1.3	 	be guilty of gross default or misconduct affecting the business of the Company; or 

 

	7.1.4	 	wilfully neglect to carry out the Consultant’s duties; or 

 

	7.1.5	 	commit any fundamental breach of any part of this agreement or its or his respective obligations under it; or 

 

	7.1.6	 	become incapacitated from performing his duties under this agreement by reason of illness, injury or otherwise for a consecutive period exceeding 3 months;

 

	7.1.7	 	have conducted himself or itself in any manner which, in the reasonable opinion of the Company, has brought or is likely to bring the Company into disrepute.

 

	7.2	 	The Consultant may at any time without prejudice to any rights or claims he may have against the Company by notice in writing terminate this agreement with immediate
effect if the Company shall have committed a breach of this agreement which is not capable of remedy or, if capable of remedy, shall have failed to remedy such a breach within 14 days of being notified of such breach by the Consultant.

 

	8.	 	OBLIGATIONS ON TERMINATION 

 

	8.1	 	On termination of this agreement for any reason, the Consultant shall immediately deliver to the Company all records, documents, accounts, letters and papers of
every description including copies thereof within his possession or control relating to the affairs and business of the Company and any other property belonging to the Company. 

 

	8.2	 	On termination of this agreement for any reason, the Consultant shall also, if requested to by the Company, resign any directorship which the Consultant may hold in
any company in the Group and if the appropriate resignation shall not be signed and delivered by the Consultant to the Company within 7 days after such request, the Consultant agrees that the Board of Directors of the Company may appoint any
director of the Company to sign such notice of resignation for and on behalf of the Consultant in his name for such purpose. 

 

	8.3	 	The company shall forthwith pay to the Consultant all sums due, falling due and outstanding at the date of termination. 

 

	9.	 	SELF-EMPLOYED STATUS 

 
The Consultant warrants and represents to the Company that he is an independent contractor and as such will bear sole responsibility for
the payment of any income tax and employer’s and employee’s national insurance contributions which may be found due in relation to any fee payable pursuant to this agreement. The Consultant accordingly agrees fully to indemnify and to keep
fully indemnified the Company and each company in the Group against all and any liabilities for income tax, employer’s and employee’s national insurance and any other statutory deduction arising in respect of any fee payable under this
agreement. The Consultant is not and shall not be deemed to be an employee of the Company for any purpose whatsoever. The termination of this agreement by the Company or the expiry of its term without renewal shall not in any circumstances
constitute or be deemed to constitute a dismissal for any purposes. 
 

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	10.	 	NOTICES 

 
Any notice:— 
 

	 	(i)	 	shall be in writing; 

 

	 	(ii)	 	to be given to the Company shall be sufficiently served if either delivered personally to or sent by first class post to its registered office for the time being;

 

	 	(iii)	 	to be given to the Consultant shall be sufficiently served if delivered to him personally or sent by first class post to his usual or last known address;

 

	 	(iv)	 	if posted shall be deemed to be served at the time when in the ordinary course of post such notice would have been received. 

 

	 Executed as a Deed and delivered by
	  	 )

	
	 the Company acting by:—
	  	 )

	 	  	 /s/ Malcolm Brown

	 	  	 Director

	
	 	  	 /s/ Elizabeth Edwards

	 	  	 Director/Secretary
  

	 Signed as a Deed and delivered by    )
	  	 
	
	 the Consultant in the presence of:—    )
	  	 /s/ Eunice M. Bond

	
	 Eunice M. Bond
	  	 
	
	 17 Shepperson Grove
	  	 
	
	 March
	  	 
	
	 Cambridgeshire
	  	 
	
	 PE15 9ES
	  	 

 

5Joint Development Agreement

 
Exhibit 10.39

 
Dated                2003 
 
BIOPROGRESS TECHNOLOGY INTERNATIONAL INC 
 
and 
 
FARMASIERRA, S.A. 
 

 
JOINT DEVELOPMENT AGREEMENT

 

 

THIS AGREEMENT is made the 29th day of January 2003 
 
BETWEEN:— 
 

	(1)	 	BIOPROGRESS TECHNOLOGY INTERNATIONAL INC, (“BioProgress”) a company organised and existing under the law of the State of Nevada, of Hostmoor, March,
Cambs., and 

 

	(2)	 	FARMASIERRA, S.A. (“Farmasierra”) a company organised under the laws of Spain whose registered office is at Carretera de Irún, Km, 26,200
28700 San Sebastián de los Reyes, Madrid, Spain. 

 
WHEREBY IT IS AGREED as follows:— 
 

	1.	 	During the period when NRobe pilot and full scale machines are being developed Farmasierra and BioProgress will work exclusively together to develop BioProgress
NRobeTMdosage form technology for the global OTC, nutritional supplements and prescription medicines market,
with the exception that Peter Black Healthcare may be allowed to develop nutritional products. This collaboration will include the following:— 

 

	 	a.	 	A dedicated project team will be formed comprising appropriate personnel from each company at each party expenses. The project team will report their progress
against agreed objectives weekly to a management committee comprising Mr Barry Muncaster, Mr Graham Hind from BioProgress and Dr Tomas Olleros from Farmasierra. The management committee will meet monthly to review the progress of the project and
discuss any matters arising according to SCHEDULE 1. 

 

	 	b.	 	The management committee will develop a strategy to approach selected leading global Pharmaceutical companies and offer them exclusive opportunities to reformulate
specific prescription products in the NRobe Technology. The objective being to offer them increased protection against generic competition and possible product patent extensions. 

 

	 	c.	 	The strategy will be to secure cash contributions from the Pharmaceutical companies for access to the technology, which will go to BioProgress as contributions to
the project costs. In addition any laboratory development work pre-production product batches or any other work needing to be undertaken in a POM approved facility will be carried out by Farmasierra on a cost plus basis. 

 

	 	d.	 	From the date the 1/10th size
NRobeTM machine is delivered and accepted by Farmasierra, as stated in the Loan Agreement (Schedule 2. Method
of Repayment) Farmasierra will have a period of three years exclusivity to produce all NRobeTM pre full
production product validation batches for all Prescription and OTC medicines including Boots Nurofen should the contract with Boots for that product proceed. 

 

	 	e.	 	To enable Farmasierra to participate in the benefits of any improvements or extensions of the NRobeTM Intellectual property (IP) Farmasierra may contribute to during the project or thereafter, the NRobe patent number GB 0210811 shall be added to the
Patent License Agreement currently in existence between the parties. Any new NRobe IP introduced by Farmasierra will be the property of BioProgress, however, Farmasierra will have a royalty free right to use the IP and will receive 5% of any
proceeds received by BioProgress through the commercial exploitation of such IP. 

 

	 	f.	 	This Agreement together with the Loan Agreement of January 29, 2003 supersedes all previous agreements between the parties. It is also recognised by Borrower that
Lender had paid $125,000 as part of previously signed agreements. 

 
This Agreement shall be governed by and construed in accordance with the laws of England and Wales. 
 

	 Executed by:—
	 	 BioProgress TechnologyInternational Inc.,

	 	 	 acting by Barry J. Muncaster and

	 	 	 Graham Hind, two of its directors

	
	 Executed by:—
	 	 FARMASIERRA S.A.
 acting by Dr. Tomas Olleros President

 

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SCHEDULE 1 
 
Bioprogress – FARMASIERRA 
 
Meetings Schedule 
 

	 DATE

	  	 PLACE

	 4/5 February
	  	 March. England

	 4/5 March
	  	 Madrid. Spain

	 2/3 April
	  	 March

	 6/7 May
	  	 Madrid

	 3/4 June
	  	 March

	 3/4 July
	  	 Madrid

	 2/3 September
	  	 March

	 1/2 October
	  	 Madrid

	 4/5 November
	  	 March

	 2/3 December
	  	 Madrid

 
Note: Dates may be
changed as needed 
 

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