Exhibit 10.16
CRITICAL THERAPEUTICS, INC.
CONSULTING AGREEMENT
This Agreement dated as of January 31, 2001 is between Critical
Therapeutics, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇▇ ▇▇▇▇,
M.D. (the "Consultant"), a member of the medical staff at The University of
Pittsburgh Medical School (together with any other non-profit institution with
which the Consultant may be affiliated in the future, the "Institution").
1. SERVICES
1.1 Services. The Company hereby retains the Consultant to perform such
consulting and advisory services in the Field (as defined in Section 1.2) as the
Company may from time to time reasonably request (the "Services"). The
Consultant shall also serve as a member of the Company's Scientific Advisory
Board ("SAB") until his membership is terminated by him or by written notice
from the Company's Board of Directors.
1.2 The Field. During the term of this Agreement, the term "Field" shall
mean the discovery and development of therapeutic products for application in
critical care and inflammation and diagnostic products intended to be sold in
conjunction with such therapeutic products. Following termination of this
Agreement, for purposes of Section 1.4(a), the term "Field" shall be limited to
those projects that were either (a) actually undertaken by the Company or (b)
described in a written proposal approved by the Company's Board of Directors or
(c) pursued to the extent that the Company developed or obtained proprietary
scientific or business information relating thereto, before termination of this
Agreement.
1.3 Commitment The Consultant agrees to make himself available to render
the Services from time to time as requested by the Company at such times and
locations as may be mutually agreed, provided that the Consultant shall not be
required to devote time equivalent to more than 42 days per year to the
performance of the Services.
1.4 Exclusivity.
(a) Subject to the following sentence and subsection l.4(c), the
Consultant agrees that he will not, without the approval of the Company, render
advice or services in the Field (whether as a director, scientific advisory
board member, officer, employee, consultant or otherwise) to a for-profit
entity. It is understood that nothing herein shall be construed to restrict or
limit the duties the Consultant is performing or may perform in the course of,
or incidental to, his appointment at the Institution, including but not limited
to research sponsored by a third party commercial entity, nor shall anything
herein be construed to restrict or limit the Consultant's right to serve as an
advisor to any hospital, or to any governmental or not-for-profit organization.
The Consultant's obligations under this subsection 1.4(a) shall be applicable
during the term of this Agreement and for the one (1) year period following
termination of this Agreement.
(b) Notwithstanding the foregoing, in the event that, during the
term of this Agreement, the Consultant performs research which is sponsored by a
third party commercial entity and in the Field, the Consultant shall provide
prompt written notice to the Company and the Company may, at its option,
terminate this Agreement as provided in Section 7.4.
(c) In the event that, at any time during the term of this Agreement
and the period of one (1) year following termination hereof, the Consultant is
not principally employed by the Institution and if, notwithstanding a reasonably
diligent search of not less than ninety (90) days (the "Search Period"), he is
unable (i) to find Alternate Employment with a non-profit employer or (ii)
because of the restrictions of Section 1.4(a), to find Alternate Employment with
a for-profit employer, then the Company may only enforce Consultant's
obligations under this Section 1.4 after the expiration of the Search Period if
it either.
(x) narrows the scope of the "Field" to the extent that
Section 1.4(a) does not bar any Alternate Employment he does find or
(y) pays the Consultant compensation in an amount equal to the
Consultant's annual rate of compensation last received from the
Institution, commencing at the end of the Search Period and
continuing on a bi-weekly basis until such time as the Consultant
commences Alternate Employment; provided that if Consultant would be
able to secure Alternate Employment but for the lack of suitable
compensation, the Company may enforce Consultant's obligations under
Section 1.4(a) by paying Consultant an amount equal to the
difference between the compensation last paid by the Institution to
the Consultant and the compensation payable by such employment.
As used herein, "Alternate Employment" means a position commensurate
with Consultant's principal skills and the stature of his current employment and
at a level of compensation not less than that last paid Consultant by the
Institution.
2. TERM
Subject to Section 7, this Agreement will be for a term beginning as of
the date set forth in the first paragraph and ending four years thereafter.
3. COMPENSATION AND EXPENSES
3.1 Compensation. As full compensation for the Services, the Company
shall pay the Consultant (i) $75,000 during the first year of this Agreement,
(ii) $77,250 during the second year of this Agreement, (iii) $79,567.50 during
the third year of this Agreement and (iv) $81,954.53 during the fourth year of
this Agreement. Such fees shall be payable in arrears on the earlier of the date
of closing of the Company's first institutional equity financing or October 31,
2001, and thereafter bi-weekly in arrears in accordance with the Company's
regular payroll practices
3.2 Expenses. The Consultant shall be entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred by the Consultant in
the performance of the Services following submission of written expense
statements and other supporting documentation in accordance with the policy and
practice of the Company.
4. THIRD PARTY RESTRICTIONS AND POLICIES
4.1 Absence of Restrictions. The Consultant represents that, except as set
forth on Exhibit A, he is presently under no contractual or other restriction or
obligation which is inconsistent with the Consultant's execution of this
Agreement or the performance of the Services, and during the term of this
Agreement, the Consultant will not enter into any agreement, either written or
oral, which conflicts with this Agreement. In the event of any conflict between
the Consultant's obligations under this Agreement and his obligations under any
such other restriction or obligation set forth on Exhibit A, such other
restriction or obligation shall take precedence.
4.2 Compliance with Institutional Policies. The Company recognizes that,
as a member of the medical staff of the Institution, the Consultant is
responsible for ensuring that any consulting agreement the Consultant enters
into with a for-profit entity is not in conflict with the patent, ownership of
inventions, consulting or other policies of the Institution, and the Consultant
represents and warrants that the Consultant has determined that this Agreement
complies with all such Institution policies. If the Consultant is required by
the Institution to disclose to it any proposed agreements, the Consultant
represents that he has made such disclosure and obtained any necessary formal
approvals of this Agreement by the Institution.
5. OWNERSHIP OF INVENTIONS
5.1 "Inventions" means all inventions, ideas, discoveries, developments,
methods, data, information, improvements and biological or chemical materials,
(whether or not reduced to practice and whether or not protectible under state,
federal, or foreign patent, copyright, trade secrecy or similar laws) which are
conceived, created or developed by the Consultant (whether alone or with others)
(i) in the course of providing Services or as a direct result of Confidential
Information acquired by Consultant and on the premises or at the direct expense
of the Company and (ii) are not generated in the course of the Consultant's
activities as an employee of the Institution and are not owned by the
Institution or assignable to the Institution.
5.2 Ownership by Company. Subject to Section 5.4 below, all Inventions are
and shall remain the exclusive property of the Company, and the Company may use
or pursue them without restriction or additional compensation. The Consultant
shall promptly and fully disclose to the Company any and all Inventions. The
Consultant shall maintain complete written records of all Inventions and of all
work or investigations done or carried out by the Consultant at all stages
thereof, which records shall be the exclusive property of the Company.
5.3 Assignment of Inventions. Subject to Section 5.4 below, the Consultant
hereby assigns and agrees to assign to the Company all of the Consultant's
right, title and interest in and to any Inventions. The Consultant agrees to
cooperate fully in obtaining patent, copyright or other proprietary protection
for such Inventions, all in the name of the Company and at the Company's cost
and expense, and shall execute and deliver all requested applications,
assignments and other documents, and take such other measures, as the Company
shall reasonably request in order to perfect and enforce the Company's rights in
the Inventions (including transfer of possession to the Company of all
Inventions embodied in tangible materials), and hereby appoints the Company its
attorney to execute
and deliver any such documents on its behalf in the event the Consultant fails
or refuses to do so.
5.4 Avoidance of Claims by Institution. The Consultant will not perform
any Services for the Company on the premises of the Institution or with its
facilities or funds or in any other manner which could result in claims by
Institution of rights in any Inventions without the express prior agreement of
Company and Institution. In furtherance of the foregoing, the Company shall have
no rights under this Agreement in or to any publication, invention, discovery,
improvement, or other intellectual property whatsoever, whether or not
publishable, patentable, or copyrightable, which is developed as a result of
research under the control of the Institution. The Company also acknowledges and
agrees that it will enjoy no priority or advantage as a result of the
Consultant's consultancy created by this Agreement in gaining access, whether by
license or otherwise, to any proprietary information or intellectual property
that arises from any research undertaken by the Consultant in his capacity as an
employee of the Institution. Notwithstanding the foregoing, it is understood
that Consultant shall have the right to disclose, and shall disclose, to the
Institution's office of Corporate Sponsored Research and Licensing, in
confidence, all Inventions which relate to Consultant's research at the
Institution in order that the Institution may independently verify that such
Inventions are not subject to the policies of the Institution.
5.5 Third Party Claims. Unless covered by an appropriate agreement between
any third party and the Company, the Consultant shall not engage in any
activities or use any facilities in the course of providing Services, which
could result in claims of ownership to any Inventions being made by such third
party.
6. CONFIDENTIAL INFORMATION AND MATERIALS
6.1 "Materials" means all tangible biological or chemical materials
furnished to the Consultant by the Company in connection with performance of the
Services, as well as any other materials derived from such materials, including
any progeny derived from a cell line, monoclonal antibodies or recombinant
proteins produced from such materials, and substances routinely purified from
any source material included in such materials. It is understood that Materials
shall not include any tangible biological or chemical materials discovered, made
or prepared at the Institution by the Consultant or under the Consultant's
direction, and transferred to the Company by the Institution, nor shall it
include any derivatives of such materials and that the rights and obligations of
the Company and of the Consultant with respect to any such material shall be
governed by a duly executed agreement between the Institution and the
Consultant.
6.2 "Confidential Information" means any information relating to the
scientific or business affairs of the Company that is treated by the Company as
confidential or proprietary. Confidential Information is contained in various
media, including records of research data and observations, records of clinical
trials, patent applications, computer programs, supply and customer lists,
internal financial data and other documents and records of the Company, whether
or not labeled or identified as "Confidential" or prepared by the Consultant in
the performance of the Services hereunder. Any similar information obtained by
or given to the Company about or belonging to its suppliers; licensors,
licensees, partners; affiliates, customers, potential customers or others is
referred to herein as "Third Party Confidential Information" and is subject to
the exclusions comparable to those set forth in the next paragraph.
Confidential Information does not include information which (a) was known
to the Consultant at the time it was disclosed; other than by previous
disclosure by the Company; (b) is at the time of disclosure or later becomes
publicly known under circumstances involving no breach of this Agreement; (c) is
made available to the Consultant by a third Party who did not derive it from the
Company and who imposes no obligation of confidence on the Consultant; or (d) is
required to be disclosed by a governmental authority or by order of a court of
competent jurisdiction, provided that such disclosure is subject to all
available protection and reasonable advance notice is given to the Company.
6.3 Consultant Acknowledgement. During the course of performing the
Services, Consultant may become aware of or have access to Confidential
Information and/or Materials. Consultant acknowledges the Company is and shall
at all times remain the sole owner of the Confidential Information and
Materials.
6.4 Nondisclosure and Nonuse of Confidential Information and Materials.
The Consultant shall not directly or indirectly publish, disseminate or
otherwise disclose, deliver or make available to any third party any
Confidential Information, Materials or Third Party Confidential Information,
other than in furtherance of the purposes of this Agreement, and only then with
the prior written consent of the Company; nor will the Consultant use such
Confidential Information, Materials or Third Party Confidential Information for
the Consultant's own benefit or for the benefit of any other third party.
6.5 Publications. The Consultant agrees to submit to the Company a copy of
any proposed manuscript or other materials to be published or otherwise publicly
disclosed which contains information describing or deriving from those
activities within the Field with respect to which the Consultant has actually
performed Services for the Company prior to publication to enable the Company to
determine if patentable Inventions or Confidential Information of the Company
would be disclosed. The Company shall have a 45-day period in which to make such
determination. The Consultant shall cooperate with the Company in this respect
and shall delete from the manuscript or other disclosure any Confidential
Information if requested by the Company and shall assist the Company in filing
for patent protection for any patentable Inventions prior to publication or
other disclosure.
6.6 Use and Return of the Confidential Information and Material. The
Consultant shall exercise all commercially reasonable precautions to protect the
integrity and confidentiality of the Confidential Information, Materials and
Third Party Confidential Information. The Consultant acknowledges that the use
of Materials is at the sole risk of the Consultant, and agrees to use the
Materials in accordance and compliance with any and all appropriate guidelines
or regulations established by any governmental authority. The Consultant will
not remove any Confidential Information or copies thereof or physical samples of
Materials from the Company's premises except to the extent necessary to perform
the Services. Upon termination of this Agreement, and in any case upon the
Company's request, the Consultant shall return immediately to the Company all
copies and other tangible manifestations of Confidential Information and all
Materials then in the Consultant's possession or control. The Consultant shall
return any Third Party Confidential Information upon request of the third party
or the Company.
7. TERMINATION
7.1 Early Termination for Failure to Close Equity Financing. In the event
that the Company fails to consummate an equity financing raising at least
$10,000,000 on or prior to October 31, 2001, the Company may in its discretion
terminate this Agreement upon no less than thirty (30) days' prior written
notice given to the Consultant no later than November 30, 2001.
7.2 Early Termination by the Consultant. The Consultant may terminate this
Agreement at any time without cause upon written notice to the Company.
7.3 Early Termination by Either Party for Breach. In the event of any
material breach of this Agreement by either party that is not cured within ten
(10) days after written notice from the non-breaching party, the non-breaching
party may terminate this Agreement by giving written notice to the breaching
party; provided that (a) if such breach is incapable of being cured, this
Agreement shall terminate immediately upon such notice and (b) if such breach is
capable of being cured but cannot be cured within such 10-day period and the
breaching party has promptly commenced action to cure such breach and is
diligently prosecuting such cure, such breach shall not constitute grounds for
termination unless it is not cured within ninety (90) days after the
non-breaching party's notice of such breach.
7.4 Early Termination for Conflicting Research. In the event that
Consultant gives notice of his intent to perform research which is sponsored by
a third party commercial entity and in the Field pursuant to Section 1.4 above,
the Company may, at its option, terminate this Agreement upon not less than ten
(10) days' prior written notice to the Consultant given within thirty (30) days
after the Consultant's notice.
7.5 Early Termination due to Death or Disability. This Agreement shall
terminate upon the death of the Consultant or upon 30 days' written notice from
either party in the event of the Consultant's Disability. As used herein,
"Disability" means the Consultant's inability by reason of physical or mental
impairment to perform the services contemplated herein for ninety (90) or more
days within any six-month period.
7.6 Effect of Termination. Termination of this Agreement shall not affect
any liabilities accrued hereunder through the date of termination. The
provisions of Sections l.4(a), 5, 6, 7.6, and 8 shall survive termination;
provided that the Consultant's obligations under Sections 6.4 and 6.5 shall
survive for only five (5) years following termination. In the event this
Agreement is terminated after vesting and repurchase restrictions have been
imposed upon any shares of the Company's capital stock owned by the Consultant,
if and to the extent provided in a separate Restricted Stock Agreement between
Consultant and the Company, termination of this Agreement shall result in
termination of vesting of, and/or the imposition of repurchase rights with
respect to, certain shares held by the Consultant
8. MISCELLANEOUS
8.1 Status. The Company and the Consultant agree that the Consultant will
be an independent contractor for all purposes, including but not limited to
payroll and tax purposes, and that the Consultant shall not, as a result of the
relationship established by this Agreement, in any way represent himself to be
an employee, partner, joint venturer or agent with or of the Company.
8.2 Publicity. Subject to the policies of the Institution, Consultant
consents to the use by the Company of his name and likeness in written materials
or oral presentations to current or prospective customers, investors or others,
provided that such materials or presentations accurately and appropriately
describe the nature of Consultant's relationship with or contribution to the
Company, and further provided that Company shall have provided Consultant a
reasonable prior opportunity to review and comment thereon.
8.3 Notice. All notices hereunder shall be in writing and shall be given
to the other party at the address or facsimile number set forth below, or at
such other address or facsimile number as either may specify in writing to the
other. All notices shall be effective when deposited in the United States mail
with proper postage for first class registered or certified mail, return receipt
requested, or when delivered personally or dispatched by facsimile, addressed:
If to the Company: CTI, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇
Facsimile:
If to the Consultant: ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
8.4 Assignment. This Agreement, and the rights and obligations hereunder,
may not be assigned or transferred by either party without the prior written
consent of the other party; provided that the Company may assign this Agreement
to any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company, but only if the Company obtains the agreement of such successor to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
8.5 Entire Agreement. This Agreement constitutes the entire agreement of
the parties, and supersedes all previous written or oral representations,
agreements and understandings between the Company and the Consultant, with
regard to the subject matter hereof. This Agreement may be amended or extended
only by a writing signed by both parties.(1)
8.6 Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the law of The Commonwealth of Massachusetts without regard to
any choice of law principle that would dictate the application of the law of
another jurisdiction.
8.7 Consent to Jurisdiction. The parties to this Agreement hereby
irrevocably consent and submit to the exclusive jurisdiction of any Commonwealth
of Massachusetts or Federal court sitting in Boston in any action or proceeding
of any type whatsoever arising out of or relating to this Agreement.
The parties hereby cause this Agreement to be signed as an instrument
under seal.
CRITICAL THERAPEUTICS, INC.
By: /s/ H. ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: H. ▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman of Board CTI
CONSULTANT:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇, M.D.
---------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇, M.D.
EXHIBIT A
CONFIDENTIAL
PREEXISTING RESTRICTIONS AND OBLIGATIONS:
Consultant is party to a Consulting Agreement for Members of the Kairos
Critical Care Science, Inc. [now Galileo Laboratories] Scientific Advisory
Board.
Consultant is party to a Consulting Agreement with CoAxia, Inc.
Consultant is a party to a Consulting Agreement with Chiron Corporation.
CRITICAL THERAPEUTICS, INC.
AMENDMENT NO. 1
TO
CONSULTING AGREEMENT
This Amendment No.1 dated January 22, 2003 (the "Amendment") to the
Consulting Agreement dated January 31, 2001 (the "Agreement") between Critical
Therapeutics, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇, M.D. (the "Consultant") is hereby entered into by the Company and the
Consultant. Except as set forth below, the Agreement shall remain in full force
and effect. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Agreement.
For valuable consideration, receipt of which is acknowledged, the parties
hereto agree as follows:
1. Acting in accordance with Section 8.5 of the Agreement, the Agreement
is hereby amended as follows:
a. Section 2 shall be deleted in its entirety and a new Section 2
shall be inserted in lieu thereof which shall read as follows:
"Subject to Section 7, this Agreement will be for a term beginning
as of January 31, 2001 and ending on January 31, 2007."
b. Subsection 3.1 shall be deleted in its entirety and a new
Subsection 3.1 shall be inserted in lieu thereof which shall read as follows:
"Compensation. As full compensation for the Services, the
Company shall pay the Consultant (i) $75,000 during the first year
of this Agreement, (ii) $77,250 during the second year of this
Agreement, (iii) $79,567.50 during the third year of this Agreement,
(iv) $81,954.53 during the fourth year of this Agreement, (v)
$84,413.17 during the fifth year of this Agreement and (vi)
$86,945.57 during the sixth year of this Agreement. Such fees shall
be payable bi-weekly in arrears in accordance with the Company's
regular payroll practices."
2. The Agreement, as supplemented and modified by this Amendment, together
with the other writings referred to in the Agreement or delivered pursuant
thereto which form a part thereof, contains the entire agreement among the
parties with respect to the subject matter thereof and amends, restates and
supersedes all prior and contemporaneous arrangements or understandings with
respect thereto.
3. Upon the effectiveness of this Amendment, on and after the date hereof,
each reference in the Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words
of like import, and each reference in the other documents entered into in
connection with the Agreement, shall mean and be a reference to the Agreement as
amended hereby. Except as specifically amended above, the Agreement shall remain
in full force and effect and is hereby ratified and confirmed.
4. This Amendment shall be governed by, and construed in accordance with,
the law of The Commonwealth of Massachusetts without regard to any choice of law
principle that would dictate the application of the law of another jurisdiction.
5. This Amendment may be executed in counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
[The remainder of this page has intentionally been left blank.]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
to Consulting Agreement as of the day and year first above written.
CRITICAL THERAPEUTICS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name:
Title:
CONSULTANT
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.