Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Executive") and Neurologix, Inc., a Delaware corporation
(the "Company") as of September 21, 2004 (the "Commencement Date").
WHEREAS, the Company desires to provide for the service and employment
of the Executive with the Company and the Executive wishes to perform services
for the Company, all in accordance with the terms and conditions provided
herein.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the Executive and the Company hereby agree as follows:
Section 1. EMPLOYMENT. The Company does hereby employ the Executive
and the Executive does hereby accept employment as Chief Executive Officer of
the Company. The Executive shall have all the duties, responsibilities and
authority attendant to the office of a chief executive and shall render
services consistent with such position on the terms set forth herein and shall
report to the Board of Directors of the Company (the "Board") with his primary
contact being the Chairman of the Board. In addition, the Executive shall have
such other executive and managerial powers and duties with respect to the
Company as may reasonably be assigned to him by the Board, to the extent
consistent with his position and status as set forth above. The Executive
agrees to devote all of his working time and efforts to the business and
affairs of the Company, subject to periods of vacation and sick leave to which
he is entitled, and shall not engage in activities that substantially interfere
with such performance; provided, however, that this Agreement shall not be
interpreted to prohibit the Executive from continuing his current consulting
relationships with Cascadia Capital LLC, Special Situations Fund and NGN
Capital, and membership on the boards of directors of SCOLR Pharma, Inc. and
Applied NeuroSolutions, Inc., to the extent that such relationships and board
memberships do not interfere with Executive's fulfillment of his duties to the
Company.
Section 2. TERM OF AGREEMENT. Subject to Section 6 hereof, the term
(the "Term") of this Agreement shall commence on the Commencement Date and
shall continue for a period of eighteen (18) months (the "Initial Term");
provided that, upon expiration of the Initial Term, the Term shall be
automatically extended an additional eighteen (18) months, unless the Executive
or the Company shall provide to the other a written notice of non-renewal prior
to the expiration of the Initial Term (the "Notice of Non-Renewal").
Section 3. BOARD MEMBERSHIP. Simultaneously with the execution hereof,
the Company shall cause the Executive to be appointed to the Board as a Class I
Director and the Executive shall continue to serve as a member of the Board
throughout his period of employment as Chief Executive Officer of the Company,
subject to the By-laws of the Company. The Executive shall not be paid any
additional compensation for his service as a member of the Board but shall be
entitled to reimbursement for expenses in accordance with the policies of the
Board.
Section 4. LOCATION. Although the Company's corporate offices are
located in Fort ▇▇▇, New Jersey, the Executive may choose to use his home
office and equipment if it does not unreasonably interfere with Executive's
fulfillment of his duties to the Company. If the Executive so chooses to use
his home office and equipment, he agrees to do so without any charge to the
Company for the cost associated with doing so; to the extent that any
additional equipment or software is required to perform his services, such
equipment will be provided by the Company.
Section 5. COMPENSATION.
(a) BASE SALARY. Effective as of the Commencement Date, the
Company shall pay the Executive a base salary ("Base Salary") at an initial
rate of $150,000 per year, payable in accordance with the Company's policies
relating to salaried employees, but no less frequently than monthly. The
Executive's Base Salary shall be increased as set forth below, in each case
effective as of the closing date of the relevant triggering event.
(i) In the event that the Company closes a financing
with gross proceeds equal to at least $2.5 million ($2,500,000),
including corporate partner contributions in the form of up-front
payments or payments based on milestones which, in the judgment of the
Board, are likely to be realized within eighteen (18) months following
the date of such closing (the "Corporate Payments"), then the
Executive's base salary shall be increased to $175,000.
(ii) In the event that the Company enters into a
corporate partnership pursuant to which, in the judgment of the Board,
the Company shall be able to defray more than fifty percent (50%) of
the Company's future clinical trial costs for its ▇▇▇▇▇▇▇▇▇'▇ disease
or epilepsy protocols, then the Executive's base salary shall be
increased to $175,000.
(iii) In the event that the Company closes a financing
including Corporate Payments in an amount that is equal to or greater
than $2.5 million ($2,500,000) but less than $5 million ($5,000,000),
then the Executive's base salary shall be increased to an amount
between $175,000 and $200,000 that is proportional to the linear
increase between $2.5 million ($2,500,000) and $5 million
($5,000,000).
(iv) In the event that the Company closes a financing
including Corporate Payments in an amount that is at least $5 million
($5,000,000), then the Executive's base salary shall be increased to
$200,000.
(b) ANNUAL BONUS. The Executive shall not be entitled to
receive any guaranteed bonus, provided that the Board, in its sole discretion,
may grant to the Executive a performance-based bonus based on the achievement
of certain goals, including but not limited to completion of out-licensing
agreements or other revenue-generating transactions.
(c) EQUITY PARTICIPATION. As of the Commencement Date, the
Executive shall be granted the following stock options in accordance with the
Company's 2000 Stock Option Plan and a stock option agreement to be entered
into by and between the Company and the Executive (the "Stock Option
Agreement") in accordance with the terms set forth in this Agreement. The
exercise price of the options referred to in (i) and (ii) of this subparagraph
5(c) shall be $0.75 and all such options shall have a term of ten (10) years
unless terminated earlier as set forth below or in the Stock Option Agreement
(which shall be in accordance with the terms of this Agreement). The stock
options described below are intended to qualify as incentive stock options
within the meaning of the Internal Revenue Code of 1986, as amended (the
"Code"), to the maximum extent permitted under the Code as set forth in the
Stock Option Agreement.
(i) Base Grant. The Executive shall be granted an
option to purchase 250,000 shares of Company common stock (the "Base
Grant") which options shall vest with respect to (A) 25,000 shares on
the date hereof, (B) 100,000 shares on March 31, 2005, (C) 100,000
shares on December 31, 2005 and (D) 25,000 shares on March 31, 2006,
and shall become exercisable with respect to (x) 125,000 shares on
March 31, 2005, (y) 100,000 shares on December 31, 2005 and (z) 25,000
shares on March 31, 2006.
(ii) Incentive Grant. The Executive shall be granted
an option to purchase 900,000 shares of Company common stock (the
"Incentive Grant"). Except as otherwise provided in this subparagraph
5(c)(ii), notwithstanding anything to the contrary herein, the
Incentive Grant shall expire on June 30, 2005 if, for any reason, the
Company has not closed a financing(s) and/or Corporate Payment
transaction with gross proceeds of at least five million dollars ($5
million) on or prior to such date. If the Company does close a
financing(s) described above prior to June 30, 2005, at a price per
share of Company common stock that is at least $1.30 but less than
$2.65 (without taking into account the value of warrants, if any,
included in the financing), then, upon closing of such financing(s),
one percent (1%) of the shares of Company common stock underlying the
Incentive Grant shall expire for each $0.03 decrement of price below
$2.65 per share. The unexpired portion of the Incentive Grant shall
vest one-third on the closing of the last financing(s) on or prior to
June 30, 2005, and two-thirds monthly ratably over the subsequent
twenty-four (24) month period, provided that the Executive remains
either a director or an officer of the Company during such time. For
purposes of this paragraph 5(c), the "price per share" shall be
calculated using the weighted average of all financings done at a
price greater than or equal to $1.30 prior to June 30, 2005. All share
prices referenced herein shall be adjusted for all stock splits,
reverse splits, stock dividends, recapitalization and similar
transactions. In the event that all equity offerings done at prices
per share greater than $1.30 do not equal five million ($5 million),
then Corporate Payments shall be included in calculating the five
million ($5 million) threshold referred to in this paragraph 5(c).
(iii) Change of Control. In the event that there is
consummated a transaction pursuant to which (A) in the case of a
merger or other reorganization, the Company is not the surviving
entity or (B) the Company sells all or substantially all of its assets
("Change of Control"), then all outstanding stock options, whether
vested or unvested, exercisable or not exercisable, shall vest and
become exercisable, provided that the Incentive Grant shall vest only
if, and to the extent that the condition for exercisability thereof
set forth in subparagraph 5(c)(ii) shall have been satisfied on or
before the closing of such Change of Control; and provided that this
paragraph 5(c)(iii) shall not apply to any Change of Control in which:
(i) a majority of the Board of Directors of the Company remains the
same before and after the Change of Control; or (ii) the Executive
continues to be employed by the Company in accordance with the terms
of this Agreement after the Change of Control.
(d) FRINGE BENEFITS.
(i) General. The Executive shall be entitled to
participate in each health, disability, fringe, welfare and pension
benefit and incentive program adopted from time to time by the Company
for the benefit of, and which generally apply to, similarly situated
employees of the Company.
(ii) Vacation. The Executive shall be entitled to take
three (3) weeks of paid vacation annually, subject to the terms of the
Company's vacation policies as they relate to executive officers.
(e) REIMBURSEMENTS. The Company shall promptly reimburse the Executive for
all direct expenses incurred by the Executive in the performance of
his duties under this Agreement, including travel and entertainment.
Section 6. TERMINATION.
(a) NOTICE OF TERMINATION.
(i) "Notice of Termination" shall mean a notice that
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provisions so indicated.
(ii) Any purported termination of the Executive's
employment by the Company or by the Executive shall be communicated by
written Notice of Termination to the other party hereto in accordance
with Section 10 hereof.
(b) DATE OF TERMINATION. Upon the Date of Termination, the
Term shall expire. "Date of Termination" shall mean:
(i) if the Executive's employment is terminated
because of death, the date of the Executive's death, or
(ii) if the Executive's employment is terminated for
any other reason, the date specified in the Notice of Termination,
which shall not be a date prior to the date such Notice of Termination
is given or the expiration of any required notice period.
(c) ACCRUED AND UNPAID BENEFITS. Following the termination
of the Executive's employment with the Company for any reason, the Executive
shall receive:
(i) any earned, but unpaid, Base Salary,
(ii) any earned, but unpaid, bonus,
(iii) the cash equivalent of any accrued, but unused,
vacation and
(iv) any accrued employee benefits, subject to the
terms of the applicable employee benefit plans.
The amounts payable under subparagraphs 6(c)(i),
(ii) and (iii) shall be paid within thirty (30) days
following the Date of Termination.
(d) DEATH OR DISABILITY. In the event that the Executive's
employment hereunder is terminated by reason of the Executive's death or
Disability (as defined below), the Company shall pay the amounts described in
Section 6(c) above and all benefits payable to the Executive, if any, under the
terms of the Company's compensation and benefit plans, programs or
arrangements. All outstanding stock options, whether vested or unvested,
exercisable or not exercisable, shall as of the Date of Termination, vest and
become exercisable, provided that the Incentive Grant shall vest only if, and
to the extent, the condition for exercisability thereof set forth in
subparagraph 5(c)(ii) hereof shall have been satisfied on or before the Date of
Termination. All vested options which are then exercisable shall remain
exercisable by the Executive or the Executive's legal representative for a
period of ninety (90) days from the Date of Termination, but in no event beyond
the original term of the option, and shall thereafter terminate. For the
purposes of this Agreement, "Disability" shall mean that the Executive (i) is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an accident
and health plan of the Company. The Executive's Disability will be established
if a qualified medical doctor selected by the parties so certifies in writing.
If the parties are unable to agree on the selection of such a doctor, each
party will designate a qualified medical doctor who together will select a
third doctor who will make the determination. The Executive will make himself
available for an examination by a doctor selected in accordance with this
paragraph (d).
(e) TERMINATION FOR CAUSE. The Company may terminate the
Executive's employment under this Agreement for Cause (as defined below) at any
time, in which event any rights of the Executive to continued employment under
the Agreement shall thereupon cease and the Executive shall immediately resign
from his position as a member of the Board. Upon a termination for Cause, the
Company shall pay to the Executive the amounts described in Section 6(c) above.
As of the Date of Termination, all outstanding unvested options to purchase
Company common stock shall terminate immediately.
(i) As used herein, termination for "Cause" shall mean
the occurrence of any of the following:
(A) that Executive shall have been convicted of,
or pleads guilty or nolo contendere to, a misdemeanor
involving theft or moral turpitude or any felony;
(B) that Executive shall have engaged in conduct
that constitutes gross neglect or willful gross misconduct
(including misappropriation or embezzlement of property of,
or fraud with respect to, the Company or its subsidiaries or
their affiliates) with respect to Executive's employment
duties; provided, however, that for purposes of determining
whether conduct constitutes willful gross misconduct, no act
on Executive's part shall be considered "willful" unless it
is done by Executive in bad faith and without reasonable
belief that his action was in the best interests of the
Company; or
(C) The Executive violates any material provision
of the Company's Code of Conduct and Ethics.
(ii) Notwithstanding the foregoing, the Company may
not terminate Executive's employment for Cause unless (x) a
determination that Cause exists is made and approved by a majority of
the Board (excluding the Executive) and (y) Executive is given at
least fifteen (15) days written notice of the Board meeting called to
make such determination and, if curable, an opportunity to cure during
such notice period.
(f) TERMINATION OTHER THAN FOR CAUSE. The Company may
terminate the Executive's employment under this Agreement without Cause at any
time, in which event any rights of the Executive to continued employment under
the Agreement shall thereupon cease. In the event of such a termination without
Cause, the Executive shall be entitled to receive a lump sum payment on the
Date of Termination equal to the greater of (i) 25% of Base Salary then in
effect or (ii) the amount of Base Salary then in effect that the Executive
would have received had he remained employed for the remainder of the Term. The
Executive shall also be entitled to receive continued health and medical
benefits for the longer of three (3) months from the Date of Termination or the
remainder of the Term. In addition, the Company shall pay to the Executive the
amounts set forth in Section 6(c) hereof. All outstanding stock options,
whether vested or unvested, exercisable or not exercisable, shall as of the
Date of Termination, vest and become exercisable, provided that the Incentive
Grant shall vest only if, and to the extent, the condition for exercisability
thereof set forth in subparagraph 5(c)(ii) hereof shall have been satisfied on
or before the Date of Termination. All vested options shall remain exercisable
by the Executive for a period of ninety (90) days from the Date of Termination,
but in no event beyond the original term of the option, and shall thereafter
terminate. In the event the Company sends a Notice of Non-Renewal as provided
in paragraph 2 hereof, then (i) the Company shall pay to the Executive the
amounts set forth in section 6(c) hereof, (ii) the Executive shall be entitled
to receive a lump sum payment on the Date of Termination equal to twenty-five
percent (25%) of Base Salary as then in effect, (iii) the Executive shall
receive continued health and medical benefits for a period of three (3) months
from the date of Termination, and (iv) all the provisions of this section 6(f)
regarding all outstanding stock options shall be applicable.
(g) TERMINATION BY THE EXECUTIVE.
(i) In the event that the Executive terminates his
employment hereunder, any outstanding vested and unvested stock
options (regardless of exercisability) shall expire and terminate on
the Date of Termination and the Executive shall be entitled to receive
only the amounts set forth in Section 6(c) above; provided, however,
that such options shall not expire or terminate if Executive remains
on the Board of Directors or if Executive and the Company reach a
mutually acceptable agreement regarding such options.
(ii) The Executive shall have the right to terminate
his employment for Good Reason (as defined below). In the event that
the Executive terminates his employment for Good Reason, he shall be
entitled to receive a lump sum payment on the Date of Termination
equal to the greater of (i) 25% of Base Salary then in effect or (ii)
the amount of Base Salary then in effect that the Executive would have
received had he remained employed for the remainder of the Term. The
Executive shall also be entitled to receive continued health and
medical benefits for the longer of three (3) months or the remainder
of the Term. In addition, the Company shall pay to the Executive the
amounts set forth in Section 6(c) hereof. All outstanding stock
options, whether vested or unvested, exercisable or not exercisable,
shall as of the Date of Termination, vest and become exercisable,
provided that the Incentive Grant shall vest only if, and to the
extent, the condition for exercisability thereof set forth in
subparagraph 5(c)(ii) hereof shall have been satisfied on or before
the Date of Termination. All vested options shall remain exercisable
by the Executive for a period of ninety (90) days from the Date of
Termination, but in no event beyond the original term of the option,
and shall thereafter terminate.
(iii) "Good Reason" shall mean any of the following
actions or failures to act, but in each case only if it occurs while
the Executive is employed by the Company and then only if it is not
consented to by the Executive in writing:
(A) a material adverse change in the Executive's
title, duties or responsibilities including the assignment to
the Executive of any duties that are materially inconsistent
with his status as Chief Executive Officer of the Company; or
(B) a reduction by the Company in the Executive's
Base Salary;
(C) a Change of Control (as defined in Section
5(c)(iii) hereof), provided that this Section 6(g)(iii) shall
not apply to any Change of Control in which: (i) a majority
of the Board of Directors of the Company remains the same
before and after the Change of Control; or (ii) the Executive
continues to be employed by the Company in accordance with
the terms of this Agreement after the Change of Control.
For purposes of this definition, none of the actions
described in clauses (A) through (C) above shall constitute
"Good Reason" with respect to the Executive if it was an
isolated and inadvertent action not taken in bad faith by the
Company and if it is remedied by the Company within 30 days
after receipt of written notice thereof given by the
Executive (or, if the matter is not capable of remedy within
30 days, then within a reasonable period of time following
such 30 day period, provided that the Company has commenced
such remedy within said 30 day period); provided that "Good
Reason" shall cease to exist for any action described in
clauses (A) through (C) above on the 60th day following the
later of the occurrence of such action or the Executive 's
knowledge thereof, unless the Executive has given the Company
written notice thereof prior to such date.
(h) RELEASE OF EMPLOYMENT CLAIMS. The Executive agrees, as
a condition to receipt of the payments and benefits provided for in sections
6(f) and (g) hereof, that he will execute a release agreement, releasing any
and all claims arising out of the Executive's employment (other than
enforcement of this Agreement and the Executive's rights under any of the
Company's incentive compensation and employee benefit plans and programs to
which he is entitled under this Agreement).
Section 7. CONFIDENTIALITY; NON-COMPETITION; NON-SOLICITATION;
INTELLECTUAL PROPERTY.
(a) CONFIDENTIALITY. "Confidential Information" shall mean
non-public information about the Company and its subsidiaries or their
affiliates, and their respective clients and customers that is not disclosed by
the Company or its subsidiaries for financial reporting purposes and that was
learned by the Executive in the course of his employment with the Company,
including, without limitation, any proprietary knowledge, trade secrets, data,
formulae, information and client and customer lists and all papers, resumes and
records (including computer records) of the documents containing such
Confidential Information. Confidential Information does not include information
regarding the Executive's own compensation and benefits.
(i) The Executive acknowledges that in his employment
with the Company, he will occupy a position of trust and confidence.
The Executive shall not, except as may be required to perform his
duties hereunder or as required by applicable law, without limitation
in time or until such information shall have become public other than
by the Executive's unauthorized disclosure, disclose to others or use,
whether directly or indirectly, any Confidential Information.
(ii) The Executive acknowledges that all Confidential
Information is specialized, unique in nature and of great value to the
Company and its subsidiaries, and that such Confidential Information
gives the Company and its subsidiaries a competitive advantage. The
Executive agrees to deliver or return to the Company, at the Company's
request at any time or upon termination or expiration of his
employment or as soon thereafter as possible, all documents, computer
tapes and disks, records, lists, data, drawings, prints, notes and
written information (and all copies thereof) furnished by or on behalf
of or for the benefit of the Company and its subsidiaries or their
affiliates or prepared by the Executive during the term of his
employment by the Company, but excluding documents relating to the
Executive's own compensation and benefits.
(b) NON-COMPETITION. During the Executive's employment with
the Company and during the one (1) year period commencing on the Date of
Termination, if any, or the expiration of the Term, the Executive shall not,
directly or indirectly, whether as owner, consultant, employee, partner,
venturer, agent, through stock ownership, investment of capital, lending of
money or property, rendering of services, or otherwise, compete with the
Company or any of its affiliates or subsidiaries in any business in which any
of them is engaged or developing while the Executive is employed with Company
(such businesses are hereinafter referred to as the "Business"), or assist,
become interested in or be connected with any corporation, firm, partnership,
joint venture, sole proprietorship or other entity which so competes with the
Business. For purposes of this Section 7, the Business consists of any venture
for profit involving central nervous system gene therapy; provided however that
for purposes of this subparagraph 7(b), the top 20 pharmaceutical companies
(based on worldwide sales) shall not be deemed to be in competition with the
Company provided that the Executive's position within any such top 20
pharmaceutical company does not relate to or involve central nervous system
gene therapy. During the one (1) year period commencing on the Date of
Termination, the restrictions imposed by this Section 7(b) shall not apply to
any business in which the Company or its affiliates and subsidiaries were not
engaged, or developing, at the time of termination of the Executive's
employment hereunder or to any geographic area in which the Company or its
affiliates and subsidiaries were not engaged in the Business at the time of
termination. Notwithstanding anything herein to the contrary, the Executive's
consulting relationships and board memberships set forth in Section 1 hereof
shall not be deemed to be a violation of this Section 7(b).
(c) NON-SOLICITATION OF CUSTOMERS AND SCIENTIFIC ADVISERS.
During the Executive's employment with the Company and during the one (1) year
period commencing on the Date of Termination, if any, or the expiration of the
Term, the Executive shall not, directly or indirectly, influence or attempt to
influence customers or suppliers of the Company or any of its subsidiaries or
their affiliates to divert their business to any business, individual, partner,
firm, corporation or other entity that is then a direct competitor of the
Company or its subsidiaries or their affiliates (each such competitor, a
"Competitor of the Company"); provided, however, that if the Executive is
employed by customers or suppliers of the Company following his termination of
employment and such employment does not violate Section 7(b) hereof, the normal
execution of his duties in connection with such employment shall not constitute
a violation of this Section 7(c).
(d) NON-SOLICITATION OF EMPLOYEES.
(i) The Executive recognizes that he will possess
confidential information about other employees of the Company and its
subsidiaries or their affiliates relating to their education,
experience, skills, abilities, compensation and benefits, and
interpersonal relationships with customers of the Company and its
subsidiaries or their affiliates.
(ii) The Executive recognizes that he will also
possess confidential information about scientific consultants and
advisers to the Company and its subsidiaries or their affiliates
relating to their experience, skills, abilities and their professional
relationships with the Company and its subsidiaries or the affiliates.
(iii) The Executive agrees that, during the
Executive's employment with the Company and during the one (1) year
period commencing on the Date of Termination he will not, directly or
indirectly, solicit or recruit any employee, scientific consultant or
scientific advisor of the Company or its subsidiaries or their
affiliates for the purpose of being employed, or retained as the case
may be, by him or by any Competitor of the Company on whose behalf he
is acting as an agent, representative or employee and that he will not
convey any such confidential information or trade secrets about other
employees, scientific consultants or scientific advisors of the
Company and its subsidiaries or their affiliates to any other person.
(iv) The provisions of subparagraphs 7(b), (c) and (d)
hereof shall not apply if the Executive is terminated without cause or
resigns for good reason.
(e) INTELLECTUAL PROPERTY. The Executive shall disclose
promptly and in writing to the Company all inventions, creative works and any
other intellectual property, whether or not patentable or copyrightable,
conceived or created solely or jointly by the Executive during the period of
his employment which relate to the business of the Company, and the Executive
shall assign all of his interest in them to the Company. The Executive shall
execute all papers at the Company's expense, which the Company shall deem
necessary to apply for and obtain domestic and foreign patents and copyright
registrations, and to protect and enforce the Company's interest in them. These
obligations shall continue beyond the period of the Executive's employment with
respect to inventions or creations conceived or made by the Executive alone or
in conjunction with other employees or consultants of the Company or its
subsidiaries or their affiliates during the period of his employment.
(f) REMEDIES. In the event of a breach or threatened breach
of this Section 7, the Executive agrees that the Company shall be entitled to
apply for injunctive relief in a court of appropriate jurisdiction to remedy
any such breach or threatened breach, the Executive acknowledging that damages
would be inadequate and insufficient.
(g) SURVIVAL OF PROVISIONS. The obligations contained in
this Section 7 shall, to the extent provided in this Section 7, survive the
termination or expiration of the Executive's employment with the Company and,
as applicable, shall be fully enforceable thereafter in accordance with the
terms of this Agreement. If it is determined by a court of competent
jurisdiction in any state that any restriction in this Section 7 is excessive
in duration or scope or is unreasonable or unenforceable under the laws of that
state, it is the intention of the parties that such restriction may be modified
or amended by the court to render it enforceable to the maximum extent
permitted by the law of that state.
Section 8. NO VIOLATION OF THIRD-PARTY RIGHTS.
(a) The Executive hereby represents, warrants and covenants
to the Company that the Executive:
(i) shall not, in the course of his employment with
the Company, infringe upon or violate any proprietary rights of any
third party (including, without limitation, any third party
confidential relationships, patents, copyrights, trade secrets or
other proprietary rights);
(ii) is not a party to any agreements with third
parties that prevent him from fulfilling the terms of employment and
the obligations of this Agreement or which would be breached as a
result of his execution of this Agreement; and
(iii) agrees to respect any and all valid obligations
which he may now have to prior employers or to others relating to
confidential information, inventions or discoveries which are the
property of those prior employers or others, as the case may be.
(b) If the Executive is in breach of any of the foregoing
representations, warranties and covenants and a court of competent jurisdiction
issues a final order (not including a temporary restraining order or other
order subject to interlocutory appeal) precluding the Executive from performing
his duties hereunder, the Company shall be entitled to terminate this Agreement
and treat the Executive as if he were terminated for Cause.
Section 9. WITHHOLDING. The Company shall make such deductions and
withhold such amounts from each payment made to the Executive hereunder as may
be required from time to time by law, governmental regulation or order.
Section 10. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be given by hand, facsimile or
first-class mail, certified or registered with return receipt requested, and
shall be deemed to have been duly given upon delivery or three (3) days after
mailing or twenty-four (24) hours after transmission of a facsimile to the
respective persons named below:
(a) If to the Company:
Neurologix, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Executive:
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
K. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may change such party's address for notices by notice duly given
pursuant hereto.
Section 11. DISPUTE RESOLUTION; ATTORNEYS' FEES. The Company and the
Executive agree that any dispute arising as to the parties' rights and
obligations hereunder, other than with respect to Section 7 hereof, shall be
resolved by binding arbitration in accordance with the rules of the American
Arbitration Association for resolution of employment disputes then in effect
and/or commercial disputes. Each party shall have the right, in addition to any
other relief granted by such arbitrator (or by any court with respect to relief
granted with respect to Section 7 hereof), to reasonable attorneys' fees based
on a determination by the arbitrator (or, with respect to Section 7 hereof, the
court) of the extent to which each party has prevailed as to the material
issues raised the dispute.
Section 12. GOVERNING LAW. This Agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the laws of the State of Delaware, without regard to its
conflicts of law principles.
Section 13. ENTIRE AGREEMENT; TERMINATION OF PRIOR AGREEMENTS. This
Agreement, together with the Stock Option Agreement, contains the entire
understanding of the parties relating to the employment of the Executive. This
Agreement terminates and supersedes any and all prior agreements and
understandings between the parties with respect to the Executive's employment
and compensation by the Company.
Section 14. WAIVER; MODIFICATION. Failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right
or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times. This
Agreement shall not be modified in any respect except by a writing executed by
each party hereto.
Section 15. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its
nature and the Executive shall not assign or transfer this Agreement or any
rights or obligations hereunder. In the event of the merger, consolidation,
transfer or sale of all or substantially all of the assets of the Company with
or to any other individual or entity or any similar event, this Agreement
shall, subject to the provisions hereof, be binding upon and inure to the
benefit of such successor and such successor shall discharge and perform all
the promises, covenants, duties and obligations of the Company hereunder.
Section 16. SEVERABILITY. Except as provided in Section 7(g) hereof,
in the event that a court of competent jurisdiction determines that any portion
of this Agreement is in violation of any statute or public policy, only the
portions of this Agreement that violate such statute or public policy shall be
stricken. All portions of this Agreement that do not violate any statute or
public policy shall continue in full force and effect. Furthermore, any court
order striking any portion of this Agreement shall modify the stricken terms as
little as possible to give as much effect as possible to the intentions of the
parties under this Agreement.
Section 17. HEADINGS; INCONSISTENCY. Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. In the event of any
inconsistency between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall control.
Section 18. COUNTERPARTS. This Agreement may be executed in
counterparts (including counterparts delivered by facsimile), each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
Section 19. REPRESENTATION BY COUNSEL; INTERPRETATION. Each party
acknowledges that it has had the opportunity to be represented by counsel in
connection with this Agreement. Any rule of law or any legal decision that
would require interpretation of any claimed ambiguities in this Agreement
against the party that drafted it has no application and is expressly waived.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has hereunto signed
this Agreement on the date first above written.
NEUROLOGIX, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary and Treasurer
EXECUTIVE
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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