Document:

Consulting Agreement among Aeolus Pharmaceuticals, Inc. and John L. McManus

 EXHIBIT 10.119 
  
 CONSULTING AGREEMENT 
  
 This CONSULTING AGREEMENT is entered into by and between Aeolus Pharmaceuticals, Inc., a Delaware corporation, having a place of business at 79 T. W.
Alexander Drive, 4401 Research Commons, Suite 200, P.O. Box 14287, Research Triangle Park, NC 27709 (“Aeolus”), and John L. McManus, having a place of business at 23811 Inverness Place, Laguna Niguel, CA 92677
(“Consultant”). 
  
 WHEREAS, Aeolus wishes to engage
Consultant for certain services, and Consultant wishes to provide such services, all subject to the terms and conditions of this Agreement. 
  
 NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, and intending to be legally bound, Aeolus and Consultant agree as follows:

  
 1. Services to be Provided. Consultant shall have the
title of President. During the term of this Agreement, Consultant shall perform for Aeolus services related to duties and responsibilities commensurate with this title. Specific projects or assignments shall be authorized on behalf of Aeolus by
Richard P. Burgoon, Jr., Chief Executive Officer and/or the Board of Directors of the Company.. 
  
 2. Compensation. 
  
 (a) Aeolus shall compensate Consultant $10,000.00 per month for the Services performed. At July 31, 2005 and at the end of each full month of consulting
during the term of this Agreement, Consultant will be granted a stock option to purchase 10,000 shares of the Aeolus Pharmaceuticals, Inc. Common Stock, par value $0.01 per share, with an exercise price equal to the closing stock price on the last
day of that month. During the term of this Agreement, if Aeolus secures at least $5,000,000 in equity financing, or of there is a change of control such that another entity acquires and/or merges with Aeolus, then Consultant shall be entitled to
receive a bonus of $75,000 when such acquisition and/or merger is completed. 
  
 (b) Aeolus shall reimburse Consultant for out-of-pocket travel, hotel, telephone and meal expenses reasonably incurred by Consultant in performing the Services, provided that the travel was approved in advance by
Aeolus and the expenses are incurred in accordance with Aeolus’ customary reimbursement policies. 
  
 3. Ownership of Results. 
  
 (a) All findings, conclusions and data and all methods, inventions, discoveries, trade secrets, techniques, processes and know-how, whether or not
patentable, that are made by Consultant, either alone or with others, in the performance of the Services or which result, to any extent, from use of Aeolus’ materials, premises or other property (collectively, “Inventions”) shall
become the exclusive property of Aeolus. Consultant hereby assigns, transfers and conveys all of its right, title and interest in and to any and all Inventions. 
  

			
	1	 	McManus 6-05

 (b) Upon the request and at the expense of Aeolus, Consultant will execute and deliver any and all
instruments and documents and take such other acts as may be necessary or desirable to document Aeolus’ rights or to enable Aeolus to apply for, prosecute and enforce patents, trademark registrations or copyrights in any jurisdiction with
respect to any Inventions or to obtain any extension, validation, re-issue, continuance or renewal of any such intellectual property right. 
  
 4. Confidentiality. Consultant will not, either during or for a period of ten (10) years after the term of this Agreement, disclose to any third
person or use the results of the Services or any confidential or proprietary information of Aeolus or its collaborators (“Confidential Information”) for any purpose other than the performance of the Services, without the prior written
authorization of Aeolus. This obligation shall not apply to information that: 
  
 (a) is now, or hereafter becomes, through no act or failure to act on the part of Consultant, generally known or available; 
  
 (b) is known by Consultant at the time of receiving such information; 
  
 (c) is hereafter furnished to Consultant by a third party, which did not acquire such information directly or indirectly
from Aeolus; 
  
 (d) is independently developed by Consultant
without use or knowledge of such information; or 
  
 (e) is
required by law, or order of any court or governmental authority to be disclosed by Consultant; in such event, however, Consultant must give Aeolus sufficient advance written notice to permit it to seek a protective order or other similar order with
respect to such Information and Consultant may disclose only the minimum Information required to be disclosed in order to comply, whether or not a protective order or similar order is obtained. 
  
 For purposes of this Section 4, “Confidential Information” includes, without
limitation, the results of the Services and the structure and activity of chemical compositions, know-how, data, process, technique, formula work-in-process, patent applications, marketing methods and plans, pricing information, manufacturing or
engineering information and any other unpublished information related to the business or financial condition of Aeolus and its affiliates and business partners. Consultant will require its employees to maintain the Confidential Information in
accordance with the terms of this Agreement. 
  
 5. Use of
Aeolus’ Name. Consultant shall not use the name, trademarks or logo of Aeolus or any variant thereof, in any advertising, publicity, patent application or other publication without the prior written permission of Aeolus. 
  
 6. Reports. Upon Aeolus’ request, Consultant shall furnish
written or oral reports to Aeolus regarding the status of the Services. Aeolus shall have the right to use the advice, data and any reports resulting from the Services for any purpose whatsoever. 
  

			
	2	 	McManus 6-05

 7. Term and Termination. 
  
 (a) The term of this agreement shall be from June 20, 2005 until June 30, 2006, unless extended by mutual agreement of the
parties. 
  
 (b) Each party may terminate this Agreement for any
reason, upon thirty (30) days written notice to the other party. In such event, Aeolus shall be responsible for any compensation owed to Consultant under Section 3 for Services rendered prior to the effective date of such termination; and Consultant
shall return any materials in Consultant’s possession that were supplied by Aeolus or generated by Consultant under this Agreement. The provisions of Sections 4 and 5 shall survive termination of this Agreement and the completion of the
Services. 
  
 (c) If Aeolus terminates this Agreement for any
reason other than for cause prior to December 31, 2005, Consultant shall be entitled to a termination fee equivalent to one (1) month’s worth of the monthly compensation of Section 3 in existence at the time of such termination. The provisions
of this Section 7(c) shall not apply if Consultant terminates this Agreement. 
  
 8. No Conflicting Agreements. Consultant represents that it/he/she is not a party to any existing agreement which would prevent Consultant from entering into and performing this Agreement. Consultant will not
enter into any other agreement that is in conflict with Consultant’s obligations under this Agreement, without Aeolus’ prior written consent. 
  
 9. Independent Contractor. Consultant is an independent contractor under this Agreement and shall not be deemed an employee of Aeolus. Consultant
will not be entitled to participate in any benefit plan of an Aeolus employee. However, as an officer of Aeolus, Consultant will be covered under the Company’s insurance plans including its directors and officer’s policy. Neither party is
authorized to bind the other party to any agreement, contract, obligation or liability. 
  
 10. Entire Agreement, Amendment and Assignment. 
  
 (a) This Agreement is the sole agreement between Consultant and Aeolus with respect to the Services to be performed hereunder and it supersedes all prior agreements and understandings with respect thereto, whether
oral or written. 
  
 (b) No modification to any provision of this
Agreement shall be binding on a party unless in writing and signed by the party to be bound. 
  
 (c) All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective legal representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of Consultant hereunder are of a personal nature and may not be assigned or delegated in whole or in part. 
  

			
	3	 	McManus 6-05

 11. Governing Law. This Agreement shall be governed by and interpreted in accordance with laws of
the State of Delaware, without giving effect to any conflict of laws provisions. 
  
 12. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given when hand delivered or mailed by registered or certified mail to the addresses specified in
the initial paragraph or when delivered by facsimile, with proof of transmission. 
  
 13. Counterparts. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bears the authorized signatures of Consultant and Aeolus. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, but all of which together shall constitute but one and the same instrument. 
  
 IN WITNESS WHEREOF, the undersigned authorized representative of each party
intending to be legally bound, have each duly executed this Agreement as of the date signed below. 
  

					
	AEOLUS PHARMACEUTICALS, INC.	 	 
			
	By:	 	 /s/ Richard P. Burgoon, Jr.

	 	 
	Name:	 	Richard P. Burgoon, Jr.	 	 
	Title:	 	Chief Executive Officer	 	 
	Date:	 	June 20, 2005	 	 
		
	CONSULTANT	 	 
			
	By:	 	 /s/ John L. McManus

	 	Mailing Address:
	Name:	 	John L. McManus	 	

	Date:	 	June 20, 2005	 	  

  

  

 Social Security Number

  

			
	4	 	McManus 6-05Consulting Agreement among Aeolus Pharmaceuticals, Inc. & McManus & Company, Inc

 EXHIBIT 10.120 
  
 McManus & Company, Inc. 
 23811 Inverness Place 
 Laguna Niguel, California 92677 
 (949) 481-9820        Fax: (949) 481-9829 
  
 June 16, 2005 
  
 Richard Burgoon, Jr. 
 Chief Executive Officer 
 Aeolus Pharmaceuticals, Inc. 
 79 T. W. Alexander Drive 
 4401 Research Commons, Suite 200 
 Research Triangle Park, NC 22709 
  
 Dear Rick: 
  
 This will confirm the terms of our mutual understanding and agreement
(“Agreement”) in connection with the efforts of McManus & Company, Inc. (“M&C”) to provide consulting services to Aeolus Pharmaceuticals, Inc. or its affiliates, sister companies or principals (collectively the
“Company” or “Aeolus”) as follows: 
  
 1.
Appointment. 
  
 The Company hereby authorizes M&C to
provide the Company services in connection with the outsourcing of the accounting, finance and administration functions. These services shall include but are not limited to: 
  

	 	•	 	Accounts payable/accounts receivable supervision 

  

	 	•	 	Cash management 

  

	 	•	 	Purchasing management 

  

	 	•	 	Budgeting 

  

	 	•	 	Audit coordination, facilitation and administration 

  

	 	•	 	Human resources administration 

  

	 	•	 	Insurance administration 

  

	 	•	 	Contract administration 

  

	 	•	 	Shareholder services 

  

	 	•	 	Accounting 

  

	 	•	 	Financial statement preparation 

  

	 	•	 	Lease administration 

  

	 	•	 	Patent coordination 

  

	 	•	 	Legal coordination 

  

	 	•	 	Board of directors facilitation/minutes, and 

  

	 	•	 	Other corporate activities 

  

					
	 CONFIDENTIAL
	 	 	 	Aeolus Pharmaceuticals, Inc.

 Furthermore, it is agreed that M&C will become an agent of the Company. Michael P. McManus is
appointed Chief Accounting Officer and Treasurer and will perform all duties typically associated with such position as well as be given all of the responsibilities. 
  
 It is understood that M&C is acting as a consultant only and is not a licensed securities or real estate broker or
dealer. 
  
 M&C may, at M&C’s own expense, use
employees or consultants to perform the Services under this Agreement. 
  
 Michael P. McManus, as an officer of Aeolus will be covered under the Company’s insurance plans including its directors and officers policy. 
  
 2. Compensation. 
  
 Outsourcing Compensation 
  
 The Company will pay M&C a monthly payment of $12,500 in cash for the duration of this agreement beginning on June 15, 2005. The parties each agree to
review, in good faith, the monthly payment after September 15, 2005 to determine, in good faith and based upon the work-load requirements of the Company, if the monthly compensation needs to be adjusted. 
  
 Incentive Compensation. 
  
 On the last day of each month during the term of this Agreement, Michael P.
McManus will be granted a stock option to purchase 1,250 shares of the Aeolus Pharmaceuticals, Inc. Common Stock, par value $0.01 per share, with an exercise price equal to the closing stock price on the last day of that month. 
  
 Other Compensation 
  
 Michael P. McManus shall also be entitled to receive any other compensation
given to other executive officers of the Company at a level commensurate with their levels of responsibilities and at a value determined by the board of directors. Other compensation would include but not be limited to stock option grants, long-term
incentive plans and cash bonuses. 
  
 Out-of-Pocket
Expenses 
  
 Aeolus will reimburse M&C for actual and
reasonable out-of-pocket expenses on a monthly basis. 
  
 3.
Fees. 
  
 The fees due M&C as set forth in Section 2
above shall be paid by bank or cashier’s check. 
  

					
	 CONFIDENTIAL
	 	 	 	Aeolus Pharmaceuticals, Inc.

 4. Term 
  

The initial term of this Agreement shall begin as of June 15, 2005 and shall expire June 15, 2006. Thereafter, this Agreement will automatically renew
for one (1) year periods, unless either party gives to the other written notice at least ninety (90) days prior to the commencement of the next year, of such party’s intent not to renew this Agreement. 
  
 5. Termination. 
  
 This Agreement may be terminated at the option of Aeolus at any time for
cause. For purposes of this Agreement, “cause” shall be defined as any of the following, provided however, that the board of directors of the Corporation by a duly adopted resolution has determined the presence of such cause in good faith:
(i) M&C’s material breach of any of its duties and responsibilities under this Agreement; or, (ii) M&C’s commission of an act of fraud or willful misconduct or gross negligence in the performance of its duties. 
  
 Aeolus shall have the right to terminate this Agreement without cause at any
time immediately upon written notice to M&C, but any such termination shall be without prejudice to M&C’s rights to receive all payments under this agreement. Such payment will be due and payable upon termination of this agreement.

  
 M&C, Inc. shall have the right to terminate this Agreement
with or without cause at any time. 
  
 6. Indemnification

  
 The Company agrees to indemnify and hold M&C and each of
its respective affiliates and their respective directors, officers, employees, agents and controlling persons harmless from and against any loss, damage, expense (including legal and other related fees and expenses), liability or claim arising out
of negligent or other wrongful actions or inactions by the Company, its affiliates or its officers or employees. M&C shall advise the Company in writing of any such claim of liability within a reasonable time after first receipt of any notice or
other information which would suggest the likelihood of such claim or action. 
  
 While representing itself as an agent of the Company, M&C agrees to indemnify and hold the Company harmless from and against any loss, damage, expense (including legal and other related fees and expenses),
liability or claim arising out of negligent or other wrongful actions by M&C or its officers or employees under this Agreement. The Company shall advise M&C in writing of any such claim of liability within a reasonable time after first
receipt of any notice or other information which would suggest the likelihood of such claim or action. 
  

					
	 CONFIDENTIAL
	 	 	 	Aeolus Pharmaceuticals, Inc.

 7. Accurate Information. 
  
 The Company hereby represents and warrants that all information provided M&C pertaining to the Company shall be true and
correct; and the Company shall hold M&C harmless from any and all liability, expenses or claims arising from the disclosure or use of such information. 
  
 8. Applicable Law. 
  
 This Agreement is governed by and construed under the laws of the State of California, and any action brought by either party against the other party to
enforce or interpret this Agreement shall be brought in an appropriate court of such State. 
  
 9. Notices. 
  
 Any
notice, request, instruction or other document to be given under this Agreement by either party to the other party shall be in writing and (a) delivered personally; (b) sent by telecopy; (c) delivered by overnight express (charges prepaid); or (d)
sent by registered or certified mail, postage prepaid: 
  

			
	If to Company to:	  	Aeolus Pharmaceuticals, Inc., 4401 Research Commons, Suite 200, P.O. Box 14287, Research Triangle Park, NC 27709
		
	If to M&C to:	  	McManus & Company, Inc., 23811 Inverness Place, Laguna Niguel, CA 92677

  
 or at such other address for a party
as shall be specified by like notice. Any notice which is delivered personally, telecopied or sent by overnight express in the manner provided in this section 8 shall be deemed to have been duly given to the party to whom it is addressed upon actual
receipt by such party. Any notice which is addressed and mailed in the manner herein provided shall be conclusively presumed to have been given to the party to whom it is addressed at the close of business, local time of the recipient, on the third
business day after it is so placed in the mail. 
  
 10.
Complete Understanding. 
  
 This Agreement shall
constitute the entire agreement and understanding between the parties and supersedes all prior agreements and understanding, both written and oral, between the parties hereto with respect to the subject matter. 
  
 11. Headings and Capitalized Terms. 
  
 The headings herein are for convenience only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of its provisions. 
  

					
	 CONFIDENTIAL
	 	 	 	Aeolus Pharmaceuticals, Inc.

 12. Successors and Assigns. 
  
 The terms and conditions of this Agreement shall insure to the benefit of and be binding upon the parties and their
respective successors and permitted assigns. Neither M&C nor Company may assign their rights or delegate their obligations under this Agreement without the prior written consent of the other. 
  
 13. Modification and Waiver. 
  
 None of the terms or conditions of this Agreement may be waived except in
writing by the party that is entitled to the benefits thereof. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by M&C and Company. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision (whether or not similar) nor shall such waiver constitute a continuing waiver. 
  
 14. Invalid Provisions. 
  
 If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws by any court of competent jurisdiction,
such illegality, invalidity or unenforceability shall not affect the legality, enforceability or validity of any other provisions or of the same provision as applied to any other fact or circumstance and such illegal, unenforceable or invalid
provision shall be modified to the minimum extent necessary to make such provision legal, valid or enforceable, as the case may be. 
  
 If the foregoing correctly sets forth our Agreement, please sign and return the enclosed copy of this letter. 
  

	
	Sincerely,
	
	 /s/ Michael P. McManus

	Michael P. McManus
	Executive Vice President
	McManus & Co., Inc

  
 AGREED TO AND ACCEPTED AS OF THE
DATE HEREOF 
  

			
		
	By:	 	 /s/ Richard Burgoon, Jr.

	 	 	Richard Burgoon, Jr.
	 	 	Chief Executive Officer
	 	 	Aeolus Pharmaceuticals, Inc.

  

					
	 CONFIDENTIAL
	 	 	 	Aeolus Pharmaceuticals, Inc.

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