EXHIBIT 10.22
NOCICEPTECH PHARMACEUTICALS, INC.
KEY EMPLOYEE AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Executive") and Nociceptech Pharmaceuticals, Inc., a Delaware
corporation ("Nociceptech" or "Company") on the last date on which both parties
have signed this Agreement.
1. POSITION AND RESPONSIBILITIES.
1.1 The Company will employ Executive and Executive shall serve in
an executive capacity as President and Chief Executive Officer ("CEO") and
perform the duties customarily associated with such capacity from time to time
and at such place or places as the Company shall reasonably designate or as
shall be reasonably appropriate and necessary in connection with such
employment.
1.2 Executive will, to the best of Executive's ability, devote
Executive's full business time and best efforts to the performance of
Executive's duties hereunder and to the business and affairs of the Company.
Executive agrees to serve as a director and/or officer of the Company if elected
by the shareholders and the Board of Directors of the Company (the "Board"), as
the case may be, and to perform such executive duties as may be reasonably
assigned to Executive in his capacity as CEO by the Board from time to time. In
his position with the Company, Executive will report to the Board directly.
1.3 The employment relationship between the parties shall be
governed by the general employment policies and procedures of the Company,
including those relating to the protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
procedures, this Agreement shall control.
2. COMPENSATION.
2.1 SALARY. The Company shall pay to Executive for the services to
be rendered hereunder an annual base salary of $250,000, less standard payroll
deductions and withholdings. Executive's annual base salary shall be paid in not
less than monthly installments in accordance with Company policy. Executive's
salary shall be subject to periodic review and may be increased by the Board (or
any authorized committee thereof), in its sole discretion.
2.2 BONUS. Executive shall also be eligible to receive an annual
performance bonus of up to $100,000, less standard payroll deductions and
withholdings, based upon Executive's achievements of certain milestones and
performance objectives established by the Board in consultation with Executive
and provided Executive remains employed with the Company throughout the
applicable bonus year. The Board (or any authorized committee thereof), in its
sole discretion, shall determine the extent to which
1
Executive has achieved the performance targets upon which Executive's bonus is
based, and the amount of bonus to be paid to Executive, if any. The Board may,
in its sole discretion, pay any bonus due to Executive pursuant to this Section
2.2 in cash, stock, or options to purchase Company common stock pursuant to the
Company's then-governing stock option plan, or in any combination thereof. Any
bonus due pursuant to this Section 2.2 shall be conveyed to Executive within
thirty (30) days of Executive's employment anniversary date. Any option to
purchase Company common stock granted to Executive pursuant to this Section 2.2
shall have an exercise price payable by the Executive equal to the fair market
value of the shares subject to the option as of the date of the grant, and shall
be subject to the terms and conditions of the governing equity incentive plan,
option grant notice and stock option agreement. The Board (or any authorized
committee thereof) may review Executive's bonus periodically, and may increase
Executive's bonus range in its sole discretion.
2.3 STOCK PURCHASE. Company shall sell to Executive, and Executive
shall purchase from the Company, one million one hundred thousand (1,100,000)
shares of common stock of the Company (the "Stock"), pursuant to the terms and
conditions set forth in the Founder's Stock Purchase Agreement attached hereto
as EXHIBIT A. The Stock shall be subject to the Company's right to repurchase
(the "Repurchase Option"), but shall vest and be released from the Repurchase
Option in accordance with the vesting schedule set forth in the Founder's Stock
Purchase Agreement.
2.4 STOCK OPTIONS. The Company may also, in its sole discretion,
gram Executive options to purchase shares of the Company's common stock from
time to time. The applicable equity incentive plan, stock option agreement(s)
and grant notice(s) shall govern any such options.
2.5 STANDARD COMPANY BENEFITS. Executive will be entitled to all
rights and benefits for which he is eligible under the terms and conditions of
the standard Company benefits programs (including medical and dental insurance
plans) which may be in effect from time to time and provided by the Company to
its executive employees generally. The Company may modify its benefits programs
from time to time as it deems necessary.
3. CONFIDENTIAL INFORMATION, RIGHTS AND DUTIES.
3.1 PROPRIETARY INFORMATION. Executive will be required as a
condition of employment to sign and abide by the Company's Proprietary
Information and Inventions Agreement (the "Proprietary Information Agreement"),
a form of which is attached hereto as Exhibit B.
3.2 FORMER EMPLOYMENT. Nothing in the Proprietary Information
Agreement shall limit or otherwise circumscribe any confidentiality agreement
Executive may have previously entered into with Company. In Executive's work for
the Company, Executive will be expected not to use or disclose any confidential
information, including trade secrets, of any former employer or other person to
whom Executive has an obligation of confidentiality. Rather, Executive will be
expected to use only that information which
2
is generally known and used by persons with training and experience comparable
to Executive's own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company.
3.3 EXCLUSIVE PROPERTY. Executive agrees that all Company-related
business procured by the Executive, and all Company-related business
opportunities and plans made known to Executive while employed by the Company,
are and shall remain the permanent and exclusive property of the Company.
4. OTHER ACTIVITIES DURING EMPLOYMENT.
4.1 ACTIVITIES. Except as expressly allowed by Sections 4.1 and
4.2 of this Agreement, Executive will not during his employment with the Company
undertake or engage in any other employment, occupation or business enterprise
without the Board's prior written consent. Executive may engage in civic and
not-for-profit activities 90 long as such activities do not materially interfere
with the performance of his duties hereunder. Subject to the limitations of
Section 4.2 of this Agreement and with the prior written consent of the Board,
Executive may serve as a director of other corporations and may devote a
reasonable amount of his time to other types of business or public activities
not expressly mentioned in this Section. The Board may rescind its consent to
Executive's service as a director of other corporations or participation in
other business or public activities if the Board, in its sole discretion,
determines that such activities materially compromise or threaten to materially
compromise the Company's business interests.
4.2 NON-COMPETITION. During his employment with the Company,
except on behalf of the Company, Executive will not directly or indirectly,
whether as an officer, director, stockholder, partner, proprietor, associate,
representative, investor, consultant, or in any capacity whatsoever engage in,
become financially interested in, be employed by or have any business connection
with any other person, corporation, firm, partnership or other entity whatsoever
known by him to compete directly with the Company, anywhere in the world, in any
line of business engaged in (or planned to be engaged in) by the Company;
provided, however, that the Executive may purchase or otherwise acquire up to
(but not more than) one percent (1%) of any class of securities of any
enterprise (but without participating in the activities of such enterprise) if
such securities are listed on any national or regional securities exchange or
have been registered under Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
5. NONSOLICITATION. During his employment with the Company and
for two (2) years thereafter, Executive shall not, without first obtaining the
prior written consent of the Company, directly or indirectly solicit, induce,
persuade or entice, or attempt to do so, or otherwise cause, or attempt to
cause, any employee or independent contractor of the Company to terminate his or
her employment or contracting relationship in order to become an employee or
independent contractor of any other person or entity.
3
6. AT-WILL EMPLOYMENT. Executive's employment relationship with the
Company is at-will. Accordingly, both the Executive and the Company may
terminate the employment relationship at any time with or without cause or
advance notice.
7. GENERAL PROVISIONS.
7.1 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction, as if such invalid,
illegal or unenforceable provisions had never been contained herein.
7.2 WAIVER. If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
7.3 ENTIRE AGREEMENT. This Agreement, including all exhibits,
constitutes the complete, final, and exclusive embodiment of the entire
agreement between Executive and the Company with regard to the subject matter
contained herein. It is entered into without reliance on any promise or
representation other than those expressly contained herein, and it cannot be
modified or amended except in a writing signed by a duly authorized officer of
the Company and Executive. Each party has carefully read this Agreement, has
been afforded the opportunity to be advised of its meaning and consequences by
him or its respective attorneys, and signed the same of his or its own free
will.
7.4 COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which need not contain signatures of more than one party,
but all of which taken together will constitute one and the same Agreement
Facsimile signatures shall be deemed as effective as original signatures.
7.5 HEADINGS AND CONSTRUCTION. The headings of the sections hereof
are inserted for convenience only and shall not be deemed to constitute a part
hereof or to affect the meaning thereof. For purposes of construction, of this
Agreement, any ambiguities shall not be construed against either party as the
drafter.
7.6 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which will not be withheld unreasonably.
7.7 ARBITRATION. To provide a mechanism for rapid and economical
dispute resolution, Executive and the Company agree that any and all disputes,
claims, or causes of action, in law or equity, arising from or relating to this
or its enforcement,
4
performance, breach, or interpretation, or to Executive's employment with the
Company or the termination of that employment, will be resolved, to the fullest
extent permitted by law, by final, binding, and confidential arbitration
conducted by the American Arbitration Association ("AAA"), under its
then-existing Rules and Procedures, at the AAA location closest to the Company's
principal place of business. Both parties shall be entitled to conduct
sufficient discovery in any arbitration to ascertain the facts and law at issue
in the dispute. Resolution of the dispute shall be based solely upon the law
governing the claims and defenses pleaded, and the arbitrator may not invoke any
basis other than such controlling law. The arbitrator shall issue a written
opinion setting forth the facts and law supporting any award. The Company shall
bear the costs of arbitration; however, the prevailing party shall be entitled
to recover reasonable attorney fees and costs incurred in the arbitration to the
extent allowed by law. Executive understands and agrees that under this Section
7.7 of the Agreement, Executive is waiving his right to a jury trial and his
right to file any administrative agency charge with regard to any such disputes,
claims or causes of action, including, but not limited to, all federal and state
statutory and common law claims, claims related to Executive's employment with
the Company or to the termination of that employment, claims related to any
breach of contract, tort, wrongful termination, discrimination, wages or
benefits, or claims for any form of equity or compensation Nothing in this
Section 7.7 of the Agreement is intended to prevent either the Executive or the
Company from obtaining injunctive relief in court to prevent irreparable harm
pending the conclusion of any arbitration. The prevailing party in any such
court action shall be entitled to recover his or its reasonable attorneys' fees
and costs incurred in connection with such proceeding.
7.8 GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of the
State of California as applied to contracts made and to be performed entirely
within California.
7.9 EXHIBITS.
Exhibit A - Founder's Stock Purchase Agreement
Exhibit B - Proprietary Information and Inventions Agreement
5
IN WITNESS WHEREOF, the parties executed this agreement on the dates noted
below.
NOCICEPTECH PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________
Title: Chief Scientific Officer
_____________________________
Date:______________________________
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
DATE: 30 March 2001
6
EXHIBIT A
FOUNDER'S STOCK PURCHASE AGREEMENT
7
LUPERX PHARMACEUTICALS, INC.
FOUNDER STOCK PURCHASE AGREEMENT
THIS FOUNDER STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the
30th day of March, 2001, by and between LUPERx PHARMACEUTICALS, INC., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ M.D., Ph.D. ("Purchaser").
WHEREAS, the Company desires to issue, and Purchaser desires to acquire,
stock of the Company as herein described, on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. PURCHASE AND SALE OF STOCK. Purchaser hereby agrees to purchase from
the Company, and the Company hereby agrees to sell to Purchaser, an aggregate of
one million (1,000,000) shares of the Common Stock of the Company (the "Stock")
at one tenth of one cent ($0.001) per share, for an aggregate purchase price of
one thousand dollars ($1,000), payable in cash.
The closing hereunder, including payment for and delivery of the Stock
shall occur at the offices of the Company immediately following the execution of
this Agreement, or at such other time and place as the parties may mutually
agree.
2. REPURCHASE OPTION
(a) In the event Purchaser's relationship with the Company (or a parent
or subsidiary of the Company) terminates for any reason (including death or
disability), or for no reason, with or without cause, such that after such
termination Purchaser is no longer an employee of, or consultant to, the Company
(and regardless of whether or not Purchaser is then serving as a director of the
Company), then the Company shall have an irrevocable option (the "Repurchase
Option"), for a period of ninety (90) days after said termination, or such
longer period as may be agreed to by the Company and the Purchaser, to
repurchase from Purchaser or Purchaser's personal representative, as the case
may be, at the original price per share indicated above paid by Purchaser for
such Stock ("Option Price"), up to but not exceeding the number of shares of
Stock that have not vested in accordance with the provisions of Sections 2(b),
2(d) and 2(e) below as of such termination date.
(b) One hundred percent (100%) of the Stock shall initially be subject
to the Repurchase Option. On the date one (1) year from the Vesting Commencement
Date (as set forth on the signature page to this Agreement) (the "Vesting
Anniversary Date") twenty-five percent (25%) (two hundred fifty thousand
(250,000) shares) of the Stock subject to the Repurchase Option shall vest and
be released from the Repurchase Option. Thereafter, 1/48th of the Stock shall
vest and be released from the Repurchase Option on a monthly basis measured from
the Vesting Anniversary Date, until all the Stock is released from the
Repurchase Option
1
(provided in each case that Purchaser remains an employee of, or a consultant
to, the Company (or a parent or subsidiary of the Company) as of the date of
such release).
(c) In the event that Purchaser does not commence continuous service as
an employee of, or a consultant to, the Company by April 15, 2001, then the
Company shall have an irrevocable option, for a period of ninety (90) days after
such date, or such longer period as may be agreed to by the Company and the
Purchaser, to repurchase from Purchaser or Purchaser's personal representative,
as the case may be, at the Option Price, one hundred percent (100%) of the
Stock.
(d) In the event of a Corporate Transaction, the Repurchase Option shall
lapse as to twenty-five percent (25%) of the Stock then subject to the
Repurchase Option, and twenty-five percent (25%) of the Stock then subject to
the Repurchase Option shall become fully vested.
(e) If Purchaser is terminated without Cause (as defined below) or if
Purchaser terminates his employment for Good Cause (as defined below) at any
time within twelve (12) months following a Corporate Transaction, the Repurchase
Option shall lapse as to fifty percent (50%) of the Stock then subject to the
Repurchase Option, and fifty percent (50%) of the shares of Stock then subject
to Repurchase Option shall immediately become fully vested.
(f) For purposes of the Repurchase Option, "Cause" shall mean
misconduct, including: (i) conviction of any felony or any crime involving moral
turpitude or dishonesty; (ii) participation in a fraud or act of dishonesty
against the Company; (iii) willful and material breach of Purchaser's duties
that has not been cured within 30 days after written notice from the Company's
Board of Directors of such breach; (iv) intentional and material damage to the
Company's property or (v) material breach of the Proprietary Information and
Inventions Agreement. For purposes of the Repurchase Option, "Good Cause" shall
mean any of the following actions taken without Cause by the Company or a
successor corporation or entity without Purchaser's consent: (i) substantial
reduction of Purchaser's rate of compensation other than in connection with
reductions to the rate of compensation of all officers; (ii) material reduction
in Purchaser's duties, provided, however, that a change in job position
(including a change in title) shall not be deemed a "material reduction" unless
Purchaser's new duties are substantially reduced from the prior duties; (iii)
failure or refusal of a successor to the Company to assume the Company's
obligations under this Agreement in the event of a Corporate Transaction as
defined below; or (iv) relocation of Purchaser's principal place of employment
to a place greater than 50 miles from Purchaser's then current principal place
of employment.
3. EXERCISE OF REPURCHASE OPTION. The Repurchase Option shall be exercised by
written notice signed by an officer of the Company or by any assignee or
assignees of the Company and delivered or mailed as provided in Section 17(a).
Such notice shall identify the number of shares of Stock to be purchased and
shall notify Purchaser of the time, place and date for settlement of such
purchase, which shall be scheduled by the Company within the term of the
Repurchase Option set forth in Section 2(a) above. The Company shall be entitled
to pay for any shares of Stock purchased pursuant to its Repurchase Option at
the Company's option in cash or by offset against any indebtedness owing to the
Company by Purchaser (including without limitation any Note given in payment for
the Stock), or by a combination of both. Upon delivery of such notice and
payment of the purchase price in any of the ways described above, the
2.
Company shall become the legal and beneficial owner of the Stock being
repurchased and all rights and interest therein or related thereto, and the
Company shall have the right to transfer to its own name the Stock being
repurchased by the Company, without further action by Purchaser.
4. ADJUSTMENTS To STOCK. If, from time to time, during the term of the
Repurchase Option there is any change affecting the Company's outstanding Common
Stock as a class that is effected without the receipt of consideration by the
Company (through merger, consolidation, reorganization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, change in corporation structure or other
transaction not involving the receipt of consideration by the Company), then any
and all new, substituted or additional securities or other property to which
Purchaser is entitled by reason of Purchaser's ownership of Stock shall be
immediately subject to the Repurchase Option and be included in the word "Stock"
for all purposes of the Repurchase Option with the same force and effect as the
shares of the Stock presently subject to the Repurchase Option, but only to the
extent the Stock is, at the time, covered by such Repurchase Option. While the
total Option Price shall remain the same after each such event, the Option Price
per share of Stock upon exercise of the Repurchase Option shall be appropriately
adjusted.
5. CORPORATE TRANSACTION. In the event of (a) a sale of substantially all of
the assets of the Company; (b) a merger or consolidation in which the Company is
not the surviving corporation (other than a merger or consolidation in which
shareholders immediately before the merger or consolidation have, immediately
after the merger or consolidation, greater stock voting power); or (c) a reverse
merger in which the Company is the surviving corporation but the shares of the
Company's common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise (other than a reverse merger in which shareholders
immediately before the merger have, immediately after the merger, greater stock
voting power); or (d) any transaction or series of related transactions in which
in excess of fifty percent (50%) of the Company's voting power is transferred,
other than the sale by the Company of stock in transactions the primary purpose
of which is to raise capital for the Company's operations and activities ((a)
through (d) being collectively referred to herein as a "Corporate Transaction"),
then the Repurchase Option may be assigned by the Company to any successor of
the Company (or the successor's parent) in connection with such Corporate
Transaction. To the extent that the Repurchase Option remains in effect
following such a Corporate Transaction, it shall apply to the new capital stock
or other property received in exchange for the Stock in consummation of the
Corporate Transaction, but only to the extent the Stock is at the time covered
by such right. Appropriate adjustments shall be made to the price per share
payable upon exercise of the Repurchase Option to reflect the effect of the
Corporate Transaction upon the Company's capital structure; provided, however,
that the aggregate Option Price shall remain the same.
6. TERMINATION OF REPURCHASE OPTION. Sections 2, 3,4 and 5 of this Agreement
shall terminate upon the exercise in full or expiration of the Repurchase
Option, whichever occurs first.
7. ESCROW OF UNVESTED STOCK. As security for Purchaser's faithful performance
of the terms of this Agreement and to insure the availability for delivery of
Purchaser's Stock upon exercise of the Repurchase Option herein provided for,
Purchaser agrees, at the closing
3
hereunder, to deliver to and deposit with the Secretary of the Company or the
Secretary's designee ("Escrow Agent"), as escrow agent in this transaction,
three (3) stock assignments duly endorsed (with date and number of shares blank)
in the form attached hereto as Exhibit A, together with a certificate or
certificates evidencing all of the Stock subject to the Repurchase Option; said
documents are to be held by the Escrow Agent and delivered by said Escrow Agent
pursuant to the Joint Escrow Instructions of the Company and Purchaser set forth
in Exhibit B attached hereto and incorporated by this reference, which
instructions shall also be delivered to the Escrow Agent at the closing
hereunder. Purchaser hereby acknowledges that the Secretary of the Company, or
the Secretary's designee, is so appointed as the escrow holder with the
foregoing authorities as a material inducement to make this Agreement and that
said appointment is coupled with an interest and is accordingly irrevocable.
Purchaser agrees that Escrow Agent shall not be liable to any party hereof (or
to any other party). Escrow Agent may rely upon any letter, notice or other
document executed by any signature purported to be genuine and may resign at any
time. Purchaser agrees that if the Secretary of the Company, or the Secretary's
designee, resigns as Escrow Agent for any or no reason, the Board of Directors
of the Company shall have the power to appoint a successor to serve as Escrow
Agent pursuant to the terms of this Agreement. Purchaser agrees that if the
Secretary of the Company resigns as Secretary, the successor Secretary shall
serve as Escrow Agent pursuant to the terms of this Agreement.
8. PARACHUTE PAYMENTS.
(a) If any payment or benefit you would receive pursuant to a Corporate
Transaction from the Company or otherwise ("Payment") would (i) constitute a
"parachute payment" within the meaning of Section 280g of the Internal Revenue
Code of 1986, as amended (the "Code"), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then such Payment shall be reduced to the Reduced Amount. The "Reduced
Amount" shall be either (x) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax or (y) the largest
portion, up to and including the total, of the Payment, whichever amount, after
taking into account all applicable federal, state and local employment taxes,
income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), results in your receipt, on an after-tax basis, of the greater
amount of the Payment notwithstanding that all or some portion of the Payment
may be subject to the Excise Tax. If a reduction in payments or benefits
constituting "parachute payments" is necessary so that the Payment equals the
Reduced Amount, reduction shall occur in the following order unless you elect in
writing a different order (provided, however, that such election shall be
subject to Company approval if made on or after the date on which the event that
triggers the Payment occurs): reduction of cash payments; cancellation of
accelerated vesting of stock awards; reduction of employee benefits. In the
event that acceleration of vesting of stock award compensation is to be reduced,
such acceleration of vesting shall be cancelled in the reverse order of the date
of grant of your stock awards unless you elect in writing a different order for
cancellation.
(b) The accounting firm engaged by the Company for general audit
purposes as of the day prior to the effective date of the Corporate Transaction
shall perform the foregoing calculations. If the accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, entity or
group effecting the Corporate Transaction, the Company shall appoint a
nationally recognized accounting firm to make the determinations required
hereunder.
4.
The Company shall bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder.
(c) The accounting firm engaged to make the determinations hereunder
shall provide its calculations, together with detailed supporting documentation,
to the Company and you within fifteen (15) calendar days after the date on which
your right to a Payment is triggered (if requested at that time by the Company
or you) or such other time as requested by the Company or you. If the accounting
firm determines that no Excise Tax is payable with respect to a Payment, it
shall furnish the Company and you with an opinion reasonably acceptable to you
that no Excise Tax will be imposed with respect to such Payment. Any good faith
determinations of the accounting firm made hereunder shall be final, binding and
conclusive upon the Company and you.
9. RIGHTS OF PURCHASER. Subject to the provisions of Sections 7, 10, 13 and
15 herein, Purchaser shall exercise all rights and privileges of a shareholder
of the Company with respect to the Stock deposited in escrow. Purchaser shall be
deemed to be the holder for purposes of receiving any dividends that may be paid
with respect to such shares of Stock and for the purpose of exercising any
voting rights relating to such shares of Stock, even if some or all of such
shares of Stock have not yet vested and been released from the Repurchase
Option.
10. LIMITATIONS ON TRANSFER. In addition to any other limitation on transfer
created by applicable securities laws, Purchaser shall not assign, hypothecate,
donate, encumber or otherwise dispose of any interest in the Stock while the
Stock is subject to the Repurchase Option. After any Stock has been released
from the Repurchase Option, Purchaser shall not assign, hypothecate, donate,
encumber or otherwise dispose of any interest in the Stock except in compliance
with the provisions herein and applicable securities laws. Furthermore, the
Stock shall be subject to any right of first refusal in favor of the Company or
its assignees that may be contained in the Company's Bylaws.
11. RESTRICTIVE LEGENDS. All certificates representing the Stock shall have
endorsed thereon legends in substantially the following forms (in addition to
any other legend which may be required by other agreements between the parties
hereto):
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION
SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH
HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES SUBJECT
TO SUCH OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE
COMPANY."
(b) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
5
(c) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT
OF FIRST REFUSAL OPTION IN FAVOR OF THE COMPANY AND/OR ITS ASSIGNEE(S) AS
PROVIDED IN THE BYLAWS OF THE COMPANY."
(d) Any legend required by appropriate blue sky officials.
12. INVESTMENT REPRESENTATIONS. In connection with the purchase of the Stock,
Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Stock. Purchaser is
purchasing the Stock for investment for Purchaser's own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Act.
(b) Purchaser understands that the Stock has not been registered under
the Act by reason of a specific exemption therefrom, which exemption depends
upon, among other things, the bona fide nature of Purchaser's investment intent
as expressed herein.
(c) Purchaser further acknowledges and understands that the Stock must be
held indefinitely unless the Stock is subsequently registered under the Act or
an exemption from such registration is available. Purchaser further acknowledges
and understands that the Company is under no obligation to register the Stock.
Purchaser understands that the certificate evidencing the Stock will be
imprinted with a legend which prohibits the transfer of the Stock unless the
Stock is registered or such registration is not required in the opinion of
counsel for the Company.
(d) Purchaser is familiar with the provisions of Rules 144, under the Act,
as in effect from time to time, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly, from the
issuer thereof (or from an affiliate of such issuer), in a non-public offering
subject to the satisfaction of certain conditions.
The Stock may be resold by Purchaser in certain limited circumstances
subject to the provisions of Rule 144, which requires, among other things: (i)
the availability of certain public information about the Company and (ii) the
resale occurring following the required holding period under Rule 144 after the
Purchaser has purchased, and made full payment of (within the meaning of Rule
144), the securities to be sold.
(e) Purchaser further understands that at the time Purchaser wishes to
sell the Stock there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, Purchaser would be precluded from selling the Stock under Rule 144
even if the minimum holding period requirement had been satisfied.
(f) Purchaser further warrants and represents that Purchaser has either
(i) preexisting personal or business relationships, with the Company or any of
its officers, directors or controlling persons, or (ii) the capacity to protect
his own interests in connection with the purchase of the Stock by virtue of the
business or financial expertise of himself or of professional
6.
advisors to Purchaser who are unaffiliated with and who are not compensated by
the Company or any of its affiliates, directly or indirectly.
13. MARKET STAND-OFF AGREEMENT. Purchaser shall not sell, dispose of transfer,
make any short sale of, grant any option for the purchase of, or enter into any
hedging or similar transaction with the same economic effect as a sale, any
Common Stock or other securities of the Company held by Purchaser, including the
Stock (the "Restricted Securities"), for a period of time specified by the
managing underwriter (not to exceed one hundred eighty (180) days) following the
effective date of a registration statement of the Company filed under the Act.
Purchaser agrees to execute and deliver such other agreements as may be
reasonably requested by the Company and/or the managing underwriter which are
consistent with the foregoing or which are necessary to give further effect
thereto, provided that all similarly situated officers are similarly bound. In
order to enforce the foregoing covenant, the Company may impose stop- transfer
instructions with respect to Purchaser's Restricted Securities until the end of
such period. The underwriters of the Company's stock are intended third party
beneficiaries of this Section 12 and shall have the right, power and authority
to enforce the provisions hereof as though they were a party hereto.
14. SECTION 83(b) ELECTION. Purchaser understands that Section 83(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income
the difference between the amount paid for the Stock and the fair market value
of the Stock as of the date any restrictions on the Stock lapse. In this
context, "restriction" includes the right of the Company to buy back the Stock
pursuant to the Repurchase Option set forth in Section 2(a) above. Purchaser
understands that Purchaser may elect to be taxed at the time the Stock is
purchased, rather than when and as the Repurchase Option expires, by filing an
election under Section 83(b) (an "83(b) Election") of the Code with the Internal
Revenue Service within thirty (30) days from the date of purchase. Even if the
fair market value of the Stock at the time of the execution of this Agreement
equals the amount paid for the Stock, the 83(b) Election must be made to avoid
income under Section 83(a) in the future. Purchaser understands that failure to
file such an 83(b) Election in a timely manner may result in adverse tax
consequences for Purchaser. Purchaser further understands that an additional
copy of such 83(b) Election is required to be filed with his or her federal
income tax return for the calendar year in which the date of this Agreement
falls. Purchaser acknowledges that the foregoing is only a summary of the effect
of United States federal income taxation with respect to purchase of the Stock
hereunder, and does not purport to be complete. Purchaser further acknowledges
that the Company has directed Purchaser to seek independent advice regarding the
applicable provisions of the Code, the income tax laws of any municipality,
state or foreign country in which Purchaser may reside, and the tax consequences
of Purchaser's death. Purchaser assumes all responsibility for filing an 83(b)
Election and paying all taxes resulting from such election or the lapse of the
restrictions on the Stock.
15. REFUSAL TO TRANSFER. The Company shall not be required (a) to transfer on
its books any shares of Stock of the Company which shall have been transferred
in violation of any of the provisions set forth in this Agreement or (b) to
treat as owner of such shares or to accord the right to vote as such owner or to
pay dividends to any transferee to whom such shares shall have been so
transferred.
7
16. NO EMPLOYMENT RIGHTS. This Agreement is not an employment contract and
nothing in this Agreement shall affect in any manner whatsoever the right or
power of the Company (or a parent or subsidiary of the Company) to terminate
Purchaser's employment for any reason at any time, with or without cause and
with or without notice.
17. MISCELLANEOUS.
(a) NOTICES. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or sent by
telegram or fax or upon deposit in the United States Post Office, by registered
or certified mail with postage and fees prepaid, addressed to the other party
hereto at his address hereinafter shown below its signature or at such other
address as such party may designate by ten (10) days' advance written notice to
the other party hereto.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
the successors and assigns of the Company and, subject to the restrictions on
transfer herein set forth, be binding upon Purchaser, Purchaser's successors,
and assigns. The Repurchase Option of the Company hereunder shall be assignable
by the Company at any time or from time to time, in whole or in part.
(c) ATTORNEYS' FEES; SPECIFIC PERFORMANCE. Purchaser shall reimburse the
Company for all costs incurred by the Company in enforcing the performance of,
or protecting its rights under, any part of this Agreement, including reasonable
costs of investigation and attorneys' fees. It is the intention of the parties
that the Company, upon exercise of the Repurchase Option and payment of the
Option Price, pursuant to the terms of this Agreement, shall be entitled to
receive the Stock, in specie, in order to have such Stock available for future
issuance without dilution of the holdings of other shareholders. Furthermore, it
is expressly agreed between the parties that money damages are inadequate to
compensate the Company for the Stock and that the Company shall, upon proper
exercise of the Repurchase Option, be entitled to specific enforcement of its
rights to purchase and receive said Stock.
(d) GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware. The parties
agree that any action brought by either party to interpret or enforce any
provision of this Agreement shall be brought in, and each party agrees to, and
does hereby, submit to the jurisdiction and venue of, the appropriate state or
federal court for the district encompassing the Company's principal place of
business.
(e) FURTHER EXECUTION. The parties agree to take all such further action
(s) as may reasonably be necessary to carry out and consummate this Agreement as
soon as practicable, and to take whatever steps may be necessary to obtain any
governmental approval in connection with or otherwise qualify the issuance of
the securities that are the subject of this Agreement.
(f) INDEPENDENT COUNSEL. Purchaser acknowledges that this Agreement has
been prepared on behalf of the Company by ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel to the
Company and that ▇▇▇▇▇▇ Godward LLP does not represent, and is not acting on
behalf of, Purchaser. Purchaser has been provided with an opportunity to
consult with Purchaser's own counsel with respect to this Agreement.
8.
(g) ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes and merges all prior agreements or understandings, whether written or
oral. This Agreement may not be amended, modified or revoked, in whole or in
part, except by an agreement in writing signed by each of the parties hereto.
(f) SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
9.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
LUPERX PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Title: Chief Scientific Officer
Address:
------------------------------------------
------------------------------------------
PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION
2 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR CONSULTANT AT
THE WILL OF THE COMPANY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING
IN THIS AGREEMENT SHALL CONFER UPON PURCHASER ANY RIGHT WITH RESPECT TO
CONTINUATION OF SUCH EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE COMPANY, NOR
SHALL IT INTERFERE IN ANY WAY WITH PURCHASER'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME, WITH OR
WITHOUT CAUSE.
PURCHASER:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ M.D., PH.D.
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
VESTING COMMENCEMENT
DATE: April 2, 2001
10.
SPOUSAL CONSENT
I am married to ▇▇▇▇▇▇ ▇▇▇▇▇ M.D., PH.D. the Purchaser pursuant to the
attached Founder Stock Purchase Agreement. I acknowledge that I have read the
foregoing Founder Stock Purchase Agreement and that I know its contents. I am
aware that by its provisions my spouse agrees to sell all his Shares of the
Company, including my community property interest in them, if any, on the
occurrence of certain events and that I must agree to sell Shares transferred to
me in certain circumstances. I hereby consent to such sale, approve of the
provisions of the Agreement, and agree that those Shares and my interest in them
are subject to the provisions of the Agreement and that I will take no action at
any time to hinder operation of the Agreement on those Shares or my interest in
them.
Dated: 3/30/2001
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
(Signature of Spouse)
11.
EXHIBIT A
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, ▇▇▇▇▇▇ ▇▇▇▇▇ M.D., PH.D. hereby sells, assigns and
transfers unto LUPERX PHARMACEUTICALS, INC., a Delaware corporation (the
"Company"), pursuant to the Repurchase Option under that certain Founder Stock
Purchase Agreement, dated March 30, 2001, by and between the undersigned and the
Company (the "Agreement")________________________shares of Common Stock of the
Company standing in the undersigned's name on the books of the Company
represented by Certificate No.__________________and does hereby irrevocably
constitute and appoint the Company's Secretary attorney to transfer said stock
on the books of the Company with full power of substitution in the premises.
This Assignment may be used only in accordance with and subject to the terms and
conditions of the Agreement, in connection with the repurchase of shares of
Common Stock issued to the undersigned pursuant to the Agreement, and only to
the extent that such shares remain subject to the Company's Repurchase Option
under the Agreement.
Dated: ____________
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
(Signature)
▇▇▇▇▇▇ ▇▇▇▇▇ M.D., Ph.D.
-------------------------
(Print Name)
[INSTRUCTION: Please do not fill in any blanks other than the signature line.
The purpose of this Assignment is to enable the Company to exercise its
repurchase option set forth in the Agreement without requiring additional
signatures on the part of Purchaser.]
EXHIBIT B
JOINT ESCROW INSTRUCTIONS
Escrow Agent
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ Godward LLP
Five Palo Alto Square
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
As Escrow Agent for both LUPERX PHARMACEUTICALS, INC., a Delaware corporation
("Corporation") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ PH.D. ("Purchaser"), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the
terms of that certain Founder Stock Purchase Agreement dated as of 3/30/01
("Agreement") , to which a copy of these Joint Escrow Instructions is attached
as Exhibit B, in accordance with the following instructions:
1. In the event Corporation or an assignee shall elect to exercise the
Repurchase Option set forth in the Agreement, the Corporation or its assignee
will give to Purchaser and you a written notice specifying the number of shares
of stock to be purchased, the purchase price, and the time for a closing
thereunder at the principal office of the Corporation. Purchaser and the
Corporation hereby irrevocably authorize and direct you to close the transaction
contemplated by such notice in accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver the same, together .with the certificate
evidencing the shares of stock to be transferred, to the Corporation against the
simultaneous delivery to you of the purchase price (which may include suitable
acknowledgment of cancellation of indebtedness) for the number of shares of
stock being purchased pursuant to the exercise of the Repurchase Option.
3. Purchaser irrevocably authorizes the Corporation to deposit with you
any certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as specified in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as his
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and complete any transaction herein contemplated,
including but not limited to any appropriate filing with state or government
officials or bank officials. Subject to the provisions of this paragraph 3,
Purchaser shall exercise all rights and privileges of a shareholder of the
Corporation while the stock is held by you.
4. This escrow shall terminate upon the exercise in full or expiration of
the Repurchase Option, whichever occurs first.
1.
5.. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder; provided, however, that if at the time of
termination of this escrow you are advised by the Corporation that any property
subject to this escrow is the subject of a pledge or other security agreement,
you shall deliver all such property to the pledgeholder or other person
designated by the Corporation.
6. Except as otherwise provided in these Joint Escrow Instructions, your
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith and
in the exercise of your own good judgment, and any act done or omitted by you
pursuant to the advice of your own attorneys shall be conclusive evidence of
such good faith.
8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree of any court,
you shall not be liable to any of the parties hereto or to any other person,
firm or corporation by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under any
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. Your responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be Secretary of the Corporation or if you shall resign by written
notice to each party. In the event of any such termination, the Secretary of the
Corporation shall automatically become the successor Escrow Agent unless the
Corporation shall appoint another officer or assistant officer of the
Corporation as successor Escrow Agent, and Purchaser hereby confirms the
appointment of such successor as his attorney-in-fact and agent to the full
extent of your appointment.
12. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
13. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are
2.
authorized and directed to retain in your possession without liability to anyone
all or any part of said securities until such dispute shall have been settled
either by mutual written agreement of the parties concerned or by a final order,
decree or judgment of a court of competent jurisdiction after the time for
appeal has expired and no appeal has been perfected, but you shall be under no
duty whatsoever to institute or defend any such proceedings.
14. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery, including delivery
by express courier, or five (5) days after deposit in the United States Post
Office, by registered or certified mail with postage and fees prepaid, addressed
to each of the other parties entitled to such notice at the following addresses,
or at such other addresses as a party may designate by ten days' advance written
notice to each of the other parties hereto.
CORPORATION: LUPERX Pharmaceuticals, Inc.
c/o Interwest Partners, LP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
PURCHASER: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Ph.D.
21892 Empanada
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ESCROW AGENT: Cooley Godward LLP
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Five Palo Alto Square
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
15. By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.
16. You shall be entitled to employ such legal counsel and other experts
(including, without limitation, the firm of ▇▇▇▇▇▇ Godward LLP) as you may deem
necessary properly to advise you in connection with your obligations hereunder.
You may rely upon the advice of such counsel, and you may pay such counsel
reasonable compensation therefor. The Corporation shall be responsible for all
fees generated by such legal counsel in connection with your obligations
hereunder.
17. This instrument shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. It is
understood and agreed that references to "you" and "your" herein refer to the
original Escrow Agents. It is understood and agreed that the Corporation may at
any time or from time to time assign its rights under the Agreement and these
Joint Escrow Instructions.
3.
18. This Agreement shall be governed by and interpreted and determined in
accordance with the laws of the State of Delaware, as such laws are applied by
State courts to contracts made and to be performed entirely in Delaware by
residents of that state.
Very truly yours,
LUPERX PHARMACEUTICALS, INC.
BY /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Ph.D.
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Ph.D.
Chief Scientific Officer
PURCHASER
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ M.D., Ph.D.
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ M.D., Ph.D
ESCROW AGENT:
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ Godward LLP
4.
EXHIBIT B
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
8
LUPERX PHARMACEUTICALS, INC.
EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by LUPERX
PHARMACEUTICALS, INC. (the "Company"), and the compensation now and hereafter
paid to me. I hereby agree as follows:
1. NONDISCLOSURE.
1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all times during
my employment and thereafter, I will hold in strictest confidence and will not
disclose, use, lecture upon or publish any of the Company's Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing. I will obtain Company's
written approval before publishing or submitting for publication any material
(written, verbal, or otherwise) that relates to my work at Company and/or
incorporates any Proprietary Information. I hereby assign to the Company any
rights I may have or acquire in such Proprietary Information and recognize that
all Proprietary Information shall be the sole property of the Company and its
assigns.
1.2 PROPRIETARY INFORMATION. The term "PROPRIETARY INFORMATION" includes
(a) tangible and intangible information relating to antibodies and other
biological materials, cell lines, samples of assay components, media and/or cell
lines and procedures and formulations for producing any such assay components,
media and/or cell lines, formulations, products, processes, know-how, designs,
formulas, methods, developmental or experimental work, clinical data,
improvements, discoveries, plans for research, new products, marketing and
selling, business plans, budgets and unpublished financial statements, licenses,
prices and costs, suppliers and customers, and information regarding the skills
and compensation of other employees of the Company. Notwithstanding the
foregoing, it is understood that at all such times, I am free to use information
which is generally known in the trade or industry, which is not gained as result
of a breach of this Agreement, and my own, skill, knowledge, know-how and
experience to whatever extent and in whichever way I wish.
1.3 THIRD PARTY INFORMATION. I understand, in addition, that the Company
has received and in the future will .receive from third parties confidential or
proprietary information ("THIRD PARTY INFORMATION") subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. During the term of my employment and
thereafter. I will hold Third Party Information in the strictest confidence and
will not disclose to anyone (other than Company personnel who need to know such
information in connection with their work for the Company) or use, except in
connection with my work for the Company. Third Party information unless
expressly authorized by an officer of the Company in writing.
1.4 NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS AND OTHERS. During
my employment by the Company will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or any
other person to whom I have an obligation of confidentiality, and I will not
bring onto the premises of the Company any unpublished documents or any property
belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only information
which is generally known and used by persons with training and experience
comparable to my own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company.
2. ASSIGNMENT OF INVENTIONS.
2.1 PROPRIETARY RIGHTS. The term "PROPRIETARY RIGHTS" shall mean all
trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.
2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which
I made prior to the commencement of my employment with the Company are excluded
from the scope of this Agreement. To preclude any possible uncertainty, I have
set forth on Exhibit A (Previous Inventions) attached hereto a complete list of
all Inventions that I have, alone or jointly with others, conceived, developed
or reduced to practice or caused to be conceived, developed or reduced to
practice prior to the
commencement of ray employment with the Company, that I consider to be my
property or the property of third parties and that I wish to have excluded from
the scope of this Agreement (collectively referred to as "PRIOR INVENTIONS"). If
disclosure of any such Prior Invention would cause me to violate any prior
confidentiality agreement, I understand that I am not to list such Prior
Inventions in Exhibit A but am only to disclose a cursory name for each such
invention, a listing of the party(ies) to whom it belongs and the fact that face
disclosure as to such inventions has not been made for that reason. A space is
provided on Exhibit A for such purpose. If no such disclosure is attached I
represent that there are no Prior Inventions. If, in the course of my employment
with the Company, I incorporate a Prior Invention into a Company product,
process or machine, the Company is hereby granted and shall have a nonexclusive,
royalty-free, irrevocable, perpetual, worldwide license (with rights to
sublicense through multiple tiers of sublicensees) to make, have made, modify,
use and sell such Prior Invention. Notwithstanding the foregoing, I agree that I
will not incorporate, or permit to be incorporated. Prior Inventions in any
Company Inventions without the Company's prior written consent.
2.3 ASSIGNMENT OF INVENTIONS. Subject to Sections 2.4, and 2.6, I hereby
assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and to
any and all Inventions (and all Proprietary Rights with respect thereto) whether
or not patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by me, either alone or jointly with
others, during the period of my employment with the Company. Inventions assigned
to the Company, or to a third party as directed by the Company pursuant to this
Section 2, are hereinafter referred to as "COMPANY INVENTIONS."
2.4 NONASSIGNABLE INVENTIONS. I recognize that in the event of a
specifically applicable state law, regulation, rule, or public policy ("Specific
Inventions Law"), this Agreement will not be deemed to require assignment of any
invention which qualifies fully for protection under a Specific Inventions Law
by virtue of the fact that any such invention was, for example, developed
entirely on my own time without using the Company's equipment supplies,
facilities, or trade secrets and neither related to the Company's actual or
anticipated business, research or development, nor resulted from work performed
by me for the Company. In the absence of a Specific Inventions Law, the
preceding sentence will not apply.
2.5 OBLIGATION TO KEEP COMPANY INFORMED. During the period of my
employment and for six (6) months after termination of my employment with the
Company. I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me. either alone or
jointly with others. In addition. I will promptly disclose to the Company all
patent applications filed by me or on my behalf within a year after termination
of employment. At the time of each such disclosure, I will advise the Company in
writing of any inventions that I believe fully qualify for protection under the
provisions of a Specific Inventions Law: and I will at that time provide to the
Company in writing all evidence necessary to substantiate that belief. The
Company will keep in confidence and will not use for any purpose or disclose to
third parties without my consent any confidential information disclosed in
writing to the Company pursuant to this Agreement relating to Inventions that
qualify fully for protection under a Specific Inventions Law. I will preserve
the confidentiality of any Invention that does not fully qualify for protection
under a Specific Inventions Law.
2.6 GOVERNMENT OR THIRD PARTY. I also agree to assign all my right,
title and interest in and to any particular Company Invention to a third part,
including without limitation the United States, as directed by the Company.
2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are "works made for hire,"
pursuant to United States Copyright Act (17 U.S.C.. Section 101).
2.8 ENFORCEMENT OF PROPRIETARY RIGHTS. I will assist the Company in
every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to Company Inventions in any and all
countries. To that end I will execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Rights and the assignment thereof. In
addition, I will execute, verify and deliver assignments of such Proprietary
Rights to the Company or its designee. My obligation to assist the Company with
respect to Proprietary Rights relating to such Company Inventions in any and all
countries shall continue beyond the termination of my employment, but the
Company shall compensate me at a reasonable rate after my termination for the
time actually spent by me at the Company's request on such assistance.
In the event the Company is unable for any reason, after reasonable effort, to
secure my signature on any document needed in connection with the actions
specified in the preceding paragraph. I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney
in fact, which appointment is coupled with an interest, to act for and in my
behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of she preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Proprietary Rights assigned
hereunder to the Company.
3. RECORDS. I agree to keep and maintain adequate and current records (in the
form of notes, sketches, drawings and in any other form that may be required by
the Company) of all Proprietary Information developed by me and all Inventions
made by me during the period of my employment at the Company, which records
shall be available to and remain the sole property of the Company at all times.
4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by
the Company I will not, without the Company's express written consent engage in
any employment or business activity which is competitive with, or would
otherwise conflict with, my employment by the Company. I agree further that for
the period of my employment by the Company and for one (1) year after the date
of termination of my employment by the Company I will not, either directly or
through others, solicit or attempt to solicit any employee, independent
contractor or consultant of the Company to terminate his or her relationship
with the Company in order to become an employee, consultant or independent
contractor to or for any other person or entity.
5. No CONFLICTING OBLIGATION. I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company. I have not entered
into, and I agree I will not enter into, any agreement either written or oral in
conflict herewith.
6. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company Inventions,
Third Party Information or Proprietary Information of the Company. I further
agree that any property situated on the Company's premises and owned by the
Company, including disks and other storage media, filing cabinets or other work
areas, is subject to inspection by Company personnel at any time with or without
notice. Prior to leaving. I will cooperate with the Company in completing and
signing the Company's termination statement.
7. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique
and because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other
equitable relief, without bond and without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.
8. NOTICES. Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing. Such notice shall be deemed given upon personal
delivery to the appropriate address or if sent by certified or registered mail,
three (3) days alter the date of mailing.
9. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the
Company, I hereby consent to the notification of my new employer of my rights
and obligations under this Agreement.
10. GENERAL PROVISIONS.
10.1 GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement will
be governed by and construed according to the laws of the State of California,
as such laws are applied to agreements entered into and to be performed entirely
within California between California residents. I hereby expressly consent to
the personal jurisdiction of the state and federal courts located in Santa ▇▇▇▇▇
County, California for any lawsuit filed there against me by Company arising
from or related to this Agreement.
10.2 SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein. If moreover, any one or more of the provisions contained
in this Agreement shall for any reason be held to be excessively broad as to
EXHIBIT A
PREVIOUS INVENTIONS
TO: LUPERX PHARMACEUTICALS, INC.
FROM: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇
DATE: 30 March 2001
SUBJECT: PREVIOUS INVENTIONS
1. Except as listed in Section 2 below, the following is a complete list of
all inventions or improvements relevant to the subject matter of my employment
by LupeRx Pharmaceuticals. Inc. (the "COMPANY") that have been made or conceived
or first reduced to practice by me alone or jointly with others prior to my
engagement by the Company
[X] No inventions or improvements. ▇ ▇ ▇▇▇▇▇
[ ] See below:
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
[ ] Additional sheets attached.
1. Due to a prior confidentiality agreement I cannot complete the disclosure
under Section 1 above with respect to inventions or improvements generally
listed below, the proprietary rights and duty of confidentiality with respect to
which I owe to the following party(ies):
INVENTION OR IMPROVEMENT PARTY(ies) RELATIONSHIP
1. ________________________ __________ ____________
2. ________________________ __________ ____________
3. ________________________ __________ ____________
[ ] Additional sheets attached.
for the benefit of the Company, its successors, and its assigns.
10.4 SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.
10.5 EMPLOYMENT I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company's right
to terminate my employment at any time, with or without cause.
10.6 WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right. The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.
10.7 ENTIRE AGREEMENT The obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously employed,
or am in the future employed, by the Company as a consultant if no other
agreement governs nondisclosure and assignment of inventions during such period.
This Agreement is the final, complete and exclusive agreement of the parties
with respect to the subject matter hereof and supersedes and merges all prior
discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing and signed by the party to be charged. Any subsequent change or changes
in my duties, salary or compensation will not affect the validity or scope of
this Agreement.
This Agreement shall be effective as of the first day of my employment
with the Company, namely: _________,2001.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED our EXHIBIT A TO THIS AGREEMENT.
Dated:__________________
________________________
(SIGNATURE)
________________________
(PRINTED NAME)
ACCEPTED AND AGREED TO:
LUPERX PHARMACEUTICALS, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: CHIEF SCIENTIFIC OFFICER
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
-------------------------------------------
(Address)
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
DATED: 3|30|01
4.
duration, geographical scope, activity or subject it shall be construed by
limiting and reducing it, so as to be enforceable to the extent compatible with
the applicable law as it shall then appear.
10.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.
10.4 SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.
10.5 EMPLOYMENT. I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company's right
to terminate my employment at any time, with or without cause.
10.6 WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right. The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.
10.7 ENTIRE AGREEMENT. The obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously employed,
or am in the future employed, by the Company as a consultant if no other
agreement governs nondisclosure and assignment of inventions during such period.
This Agreement is the final, complete and exclusive agreement of the parties
with respect to the subject matter hereof and supersedes and merges all prior
discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing and signed by the party to be charged. Any subsequent change or changes
in my duties, salary or compensation will not affect the validity or scope of
this Agreement.
This Agreement shall be effective as of the first day of my employment
with the Company, namely: 3 April, 2001.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.
Dated: 30 March, 2001
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
(Signature)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------
(PRINTED NAME)