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Entry into Material Definitive Agreement
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On January 4, 2018
, Authentidate Holding Corp. (the “
Company
” or “
Authentidate
”) entered into a Consulting Agreement with Dr. Armando Moncada, M.D. (“
Moncada
” or the “
Consultant
”) pursuant to which the Company engaged Moncada to act as its Chief Medical Officer – Pathology and to provide certain consulting services in connection with the operation of the Company’s pathology laboratory, as specified in the Consulting Agreement.
The
Consulting Agreement provides for a term expiring December 31, 2020, however it may be terminated sooner by either party upon 30 day’s prior written notice. Further, either party may terminate the Consulting Agreement if the other party is in default of certain obligations, as specified therein, including the commission of an uncured breach of any of the terms of the agreement, or in the case of the Consultant, his failure to comply with the covenants set forth in the Consulting Agreement. In the event that the Consulting Agreement is terminated by the Company without cause, or by the Consultant due to a breach by the Company, the Consultant will be entitled to receive all fees earned through the date of termination, plus the Company shall pay the Consultant the applicable consulting fee for one additional month.
Pursuant to the
Consulting Agreement, the Company agreed to pay the Consultant the following consulting fees: (i) an amount of $40,000 upon the execution of the agreement, (ii) the sum of $25,000 per month, commencing February 1, 2018, and (iii) an additional sum of $40,000 on or about January 15, 2019 and January 15, 2020. Further, the Company agreed to grant the Consultant 280,000 restricted stock units (“
RSUs
”) pursuant to its 2011 Omnibus Equity Incentive Plan (the “
Plan
”), which RSUs will vest in the event that the Consultant remains engaged by the Company to the end of the term of the Consulting Agreement and subject to the achievement of certain performance criteria and the approval of the Company’s shareholders of an amendment to the Plan to increase the number of shares of common stock available for awards to be issued thereunder.
In addition, pursuant to the
Consulting Agreement, Moncada agreed to transfer and assign to the Company, in his personal capacity as well as in his capacity as a controlling member and/or officer of PCG Molecular, LLC and
Pathology Consultants of Georgia, Inc., all rights to the intellectual property of such entities, whether trademarks, patents, patent applications, service marks. The completion of the transaction to acquire the foregoing intellectual property rights is subject to the negotiation and execution of a definitive assignment agreement and other customary closing conditions. Accordingly, there can be no assurance that a definitive agreement will be reached by the parties.
The
Consulting Agreement, includes customary confidentiality, non-solicitation, and non-competition obligations that survive the termination of the agreement.
The foregoing
summary of the Consulting Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of Consulting Agreement, which the Company intends to file as an exhibit to its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2017.