Exhibit 10.9
Execution Copy
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 28th day of December 1995, by and
between IMRE Corporation, a Delaware corporation having its principal office at
000 Xxxxx Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (the "Company") and Xxxxx
Xx Xxxxx, M.D. (the "Employee").
WHEREAS, the Company desires to employ the Employee in an executive
capacity as President and Chief Operating Officer on the terms and conditions
set forth herein; and the Employee is willing to accept and undertake such
employment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the Company and the Employee agree as follows:
ARTICLE 1
EMPLOYMENT; TERM; DUTIES
1.1 EMPLOYMENT. Upon the terms and conditions hereinafter set forth,
the Company hereby employs the Employee, and the Employee hereby accepts
employment, as President and Chief Operating Officer of the Company. Also it is
the intention of the Company to cause Employee to be included in the management
slate of directors for election to the Board of Directors, and to be elected as
such, during the first year of the initial Term (as defined in Section 1.2).
1.2 TERM. Unless sooner terminated as provided in Article 5 hereof,
the Employee's employment hereunder shall be for a term commencing on January 8,
1996 and ending on December 31, 2000. The actual term of employment hereunder,
giving effect to any early termination of employment under Article 5 hereof, is
referred to as the "Term".
1.3 DUTIES. During the Term, the Employee shall perform such
executive duties for the Company and for its subsidiaries, consistent with her
position hereunder, and as typically associated with the duties of a President
and Chief Operating Officer of a publicly-held corporation, as reasonably may be
assigned to her from time to time by the Chief Executive Officer of the Company.
Employee shall report directly to the Chief Executive Officer of the Company.
Except as contemplated by Section 1.5, the Employee shall devote her entire
business time, attention and energies to the performance of her duties
hereunder.
1.4 EXCLUSIVE AGREEMENT. The Employee represents and warrants to the
Company that she is not a party to any agreement or arrangement, whether written
or oral, in effect which would
prevent the Employee from rendering the services contemplated hereunder to the
Company during the Term.
1.5 OTHER ACTIVITY. Notwithstanding the foregoing, but subject to
her fiduciary duties to the Company under applicable law, the Company
acknowledges and understands that Employee may serve as a director or consultant
to other companies and may work on committees of professional or civic
associations or educational institutions not in competition with the Company in
the field of research, development, manufacture or sales of Protein A
Immunoadsorbtion Columns; provided, however, that the performance of such
services shall not restrict or limit in any manner the Employee's ability to
perform her duties hereunder.
1.6 INSURANCE. The Company shall obtain, and shall use its
commercially reasonable best efforts to maintain during the Term, Director's and
Officer's Insurance and Product Liability Insurance policies, with full defense
coverage, of at least $3,000,000 and $16,000,000, respectively, with regard to
all actions undertaken by the Employee in her capacity as an officer, director
and employee of the Company. In addition, the Company shall research and use
its commercially reasonable best efforts to obtain and maintain during the Term
additional Director's and Officer's Insurance coverage for the Employee in the
amount of $2,000,000.
ARTICLE 2
COMPENSATION
2.1 BASE SALARY. For all services rendered by the Employee hereunder
and in consideration of all covenants and conditions undertaken by her pursuant
to this Agreement, the Company shall pay the Employee an annual base salary
("Base Salary") of $210,000 per year in equal semi-monthly installments. Each
year during the Term, the Board of Directors of the Company shall review the
Base Salary with a view to determining whether it would be appropriate to
increase such Base Salary. The annual base salary payable to the Employee
hereunder, as it may be so increased, thereafter shall constitute the Base
Salary.
If the first or last month of the Term is not a full calendar month,
then any calculation of Base Salary for such period shall be prorated for the
number of days in such months during which the Employee was employed.
2.2 BONUSES.
(a) In addition to the Base Salary, the Company may pay the
Employee a cash bonus (the "Bonus Amount") equal to an amount up to 25% of the
Base Salary with respect to a fiscal year within 90 days after the end of such
fiscal year. The Bonus Amount, if any, shall be based on the performance of the
Employee
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during a fiscal year, as evaluated by the Board of Directors, in its sole
discretion. It is acknowledged and agreed that, while no such Bonus Amount
shall be withheld unreasonably, the determination and the payment of the Bonus
Amount to the Employee shall be at the sole discretion of the Board of Directors
of the Company which may consider, among other matters, the financial condition
of the Company at the time. In exercising its discretion pursuant to this
subsection, the Board of Directors shall act in a manner at least as favorable
to the Employee as governs the award of bonuses to other executive officers and
key employees of the Company.
(b) In addition to the Bonus Amount, if any, the Company shall
pay the employee a one-time sign-on bonus payable as follows:
(i) $50,000 on the closing of an approximately $1 million
bridge financing, currently scheduled to occur in December 1995;
(ii) $50,000 on the closing of an anticipated equity
financing (the "Equity Financing"), scheduled to occur in the first fiscal
quarter of 1996 and expected to raise gross proceeds of approximately $6 million
(the "Equity Financing Bonus"); and
(iii) $85,000 on December 31, 1996 (the "1996 Signing
Bonus").
(c) In the event of a sale by the Company of all, or
substantially all, of its assets prior to the conversion or redemption of any
classes of outstanding preferred stock of the Company issued in connection with
any equity financing after the date hereof, and provided that the Employee prior
to such time has exercised any and all stock options provided under Section
4.1(a) hereof exercisable by such Employee, the Company shall pay Employee on
the consummation of such sale, a bonus in an amount equal to 3% of the net
proceeds payable to the holders of the preferred stock of the Company of such
sale.
2.3 STOCK OPTIONS. The Company shall issue to the Employee options
to purchase shares of the Company's common stock (the "Common Stock") as
provided in Article 4 of this Agreement.
2.4 DEDUCTIONS. The Company shall deduct from the compensation
described in Sections 2.1 and 2.2 any Federal, state or city withholding taxes,
social security contributions and any other amounts which may be required to be
deducted or withheld by the Company pursuant to any Federal, state or city laws,
rules or regulations.
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2.5 DISABILITY ADJUSTMENTS. Any compensation otherwise payable to
the Employee pursuant to Section 2.1 in respect of any period during which the
Employee is disabled (as contemplated in Section 5.1) shall be reduced by any
amounts paid to the Employee for loss of earnings or the like under any
disability insurance plan or policy the premiums for which are paid for in their
entirety by the Company.
ARTICLE 3
BENEFITS; EXPENSES
3.1 BENEFITS. During the Term, the Employee shall be entitled to
participate in such compensation and incentive plans and group life, health,
accident, disability and hospitalization insurance plans, pension plans and
retirement plans as the Company may make available to its other executive
officers, including, specifically, a $1 million term life insurance policy, to
be paid for by the Company, provided that the Employee is insurable at
reasonable rates for a person of her age, with the Employee's family as the
designated beneficiaries thereof. In addition, the Employee shall be entitled
to include her family in the Company's life, health and hospitalization plans
under terms applicable to families of its other executive officers.
3.2 EXPENSES. The Company agrees that the Employee is authorized to
incur reasonable and customary expenses in the performance of her duties
hereunder, including travel and entertainment costs, and upon presentation of
appropriate documentation thereof, the Company promptly shall pay or reimburse
the Employee for such reasonable expenses. It is understood and agreed that
Company shall relocate Employee's primary residence (the "Relocation") from
Seattle, Washington to the San Diego, California area prior to or as soon as
practicable after the Company relocates its corporate headquarters to the San
Diego, California area. Employee shall be reimbursed for reasonable and
documented relocation expenses involved in moving to San Diego from Seattle,
including airfares and other usual expenses incurred in connection with up to
two house-hunting trips for Employee and her husband and packing and moving
expenses. In addition, the Company shall reimburse Employee for reasonable,
usual and documented closing costs on the sale of her Seattle home, including
real estate commissions and other usual closing costs, as well as the
reasonable, usual and documented closing costs on the purchase of a home in the
San Diego area within two years after the date of sale of her Seattle house.
The Company shall pay for up to three months of temporary housing in San Diego
or Seattle if required for Employee or her spouse. The Company shall also pay
Employee an additional $5,000 (net after tax) for miscellaneous relocation
expenses. In the event that any reimbursement by the Company of expenses of the
Employee hereunder is deducted by the Company, and results in additional taxes
due and payable by the Employee, the Company shall pay to
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the Employee an additional sum equal to the amount of such additional tax
liability of the Employee.
3.3 VACATIONS. During each full year of the Term, the Employee shall
be entitled to four (4) weeks of paid vacation to be taken at times determined
by the Employee which do not unreasonably interfere with the performance of her
duties hereunder.
3.4 CONSULTING SERVICES. For consulting services provided by
Employee prior to the effective date of this Agreement, the Company agrees to
pay the Employee for 20 days of consulting at the rate of $1,000 per day, plus
reasonable and documented travel expenses.
ARTICLE 4
STOCK OPTIONS
4.1 STOCK OPTIONS.
(a) Subject to Section 4.1(f) hereof, the Company shall grant to
the Employee, pursuant to an Incentive Stock Option Plan to be adopted by the
Company, ten year incentive stock options (qualified to the extent permitted by
law) to purchase 3% of the Company's Common Stock outstanding on the date
hereof, on a fully diluted basis (after allocation of new options to management,
employees, directors and consultants, and including issued and to-be-issued
warrants) at an exercise price equal to $1.50 per share (the "Options"). The
Options shall contain anti-dilution provisions that prevent dilution of the
percentage of the Company's Common Stock which may be purchased by the Employee
on exercise of the Options as a result of issuance of the Company's securities
subsequent to the occurrence of the Equity Financing by the Company, and all
additional options granted pursuant to such anti-dilution provisions shall be at
the same exercise price as the original Options. Except as provided in clauses
(b) and (c) hereof, 25% of the Options shall vest immediately upon the granting
thereof by the Company and the remainder shall vest ratably and daily over four
(4) years from the date of grant.
(b) In the event of a termination (as described in Article 5),
and except as otherwise provided in Section 4.1(c) and 4.1(d) hereof, all
Options which have not vested as of the Termination Date shall cease vesting and
shall be cancelled as of the Termination Date. All vested Options shall be
cancelled ninety (90) days after the Termination Date except that, in the event
of a termination pursuant to Section 5.2(b) or 5.4 hereof, the exercise period
for the Options shall be extended at the election of the Employee in her sole
discretion, for five (5) years following the Termination Date.
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(c) Upon the Employee's death or Disability (as defined in
Section 5.1 below) all Options shall vest immediately and all Option rights
provided for under this Agreement shall transfer to the Employee's designated
beneficiary. All Options shall be cancelled ninety (90) days after the
Employee's death or Disability, except that, at the election of the Employee's
designated beneficiary in his or her sole discretion, the exercise period for
the Options shall be extended for five (5) years following the Employee's death
or Disability.
(d) Notwithstanding anything to the contrary in the foregoing,
in the event of a termination of this Agreement in any of the cases identified
in Section 5.2(b) or 5.4 hereof, all Options shall vest immediately upon such
Termination Date. In addition, all Options shall vest immediately upon the
consummation of any merger, consolidation, corporate reorganization or transfer
of all or substantially all the assets of the Company, whether or not the
Employee continues as President and Chief Operating Officer of the surviving
entity.
(e) The Company may grant Employee options to purchase the
Company's Common Stock in addition to the Options at such times and on such
terms as may be decided from time to time by the Board of Directors, in its sole
discretion.
(f) Notwithstanding anything herein to the contrary, it is
understood and agreed that any grant of Options pursuant to this Article 4 is
wholly contingent on the Company's obtaining shareholder approval subsequent to
the date hereof for the adoption of such Incentive Stock Option Plan and to
increase the number of shares of currently authorized Common Stock of the
Company to such number so as to allow for the grant of the Options (the
"Shareholder Consent"). The Company shall use its best efforts to create such
Incentive Stock Option Plan within thirty (30) days of the date hereof, and to
obtain the adoption and approval of the Board of Directors therefor as soon as
practicable thereafter, and the Company shall grant the Options to the Employee
simultaneously with the closing of the Equity Financing; provided, however, that
if the Equity Financing has not closed by February 15, 1996, the Options shall
be granted promptly upon the written request of the Employee. The Company shall
use its best efforts to obtain the Shareholder Consent at the 1996 annual
meeting of shareholders. In the event the Company is unable to obtain the
Shareholder Consent, the Company shall use its best efforts to obtain the
Shareholder Consent at the next succeeding annual meeting of shareholders.
ARTICLE 5
DEATH; DISABILITY; TERMINATION
5.1 DEATH; DISABILITY. The Employee's employment hereunder shall
terminate upon her death or, at the election of
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the Company, by written notice to the Employee if the Employee becomes Disabled
(as such term is hereinafter defined). In the event of a termination of the
Employee's employment for death or Disability, the Company shall pay the
Employee (or her legal representatives, as the case may be) an amount equal to
Employee's Base Salary for one year, reduced (but not to a negative number) by
any amounts paid or to be paid to the Employee (or her legal representatives, as
the case may be) by insurance provided by the Company pursuant to Section 3.1
hereof.
For the purposes of this Agreement, the Employee shall be deemed to be
"Disabled" or have a "Disability" if as a result of the occurrence of mental or
physical disability during the Term she has been unable to perform her duties
hereunder for six (6) consecutive months or one hundred eighty (180) days in any
twelve (12) consecutive month period, as determined in good faith by the Board
of Directors of the Company; provided, however, that if Employee develops a
mental or physical disability during the Term, and it is determined, in the
reasonable professional judgment of an independent, objective and qualified
medical expert in the field of such disability, that the Employee will be unable
to perform her duties hereunder and that such disability will continue for six
(6) consecutive months or one hundred eighty (180) days in any twelve (12)
consecutive month period, then the Company shall be permitted to terminate the
Employee's employment immediately, subject to payment by the Company of the
Employee's Base Salary for the full six (6) months or one hundred eighty (180)
days of such Disability in addition to the termination payment by the Company in
an amount equal to Employee's Base Salary for one year as provided above.
In the event that the employment of the Employee hereunder is
terminated by the Company upon the Employee's death or Disability, the
Employee's family, for a period of two (2) years from the Termination Date,
shall be entitled to maintain coverage under the Company's health and
hospitalization insurance plans on the same terms as existed prior to such
Termination Date, subject to the payment of applicable costs therefor by the
Employee's representatives, and further subject to the policies and provisions
of such insurance carriers and applicable law.
The Employee acknowledges that the payments referred to in this
Section 5.1 constitute the only payments to which the Employee (or her legal
representatives, as the case may be) shall be entitled to receive from the
Company under this Agreement in the event of a termination of her employment for
death or Disability, and that except for such payments and subject to Section
4.1(c) hereof, the Company shall have no further liability or obligation to her
(or her legal representatives, as the case may be) under this Agreement.
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The date of any termination of employment under this Section 5.1 or
Sections 5.2, 5.3 or 5.4 is referred to herein as the "Termination Date".
5.2 TERMINATION OF EMPLOYMENT BY EMPLOYEE.
(a) Notwithstanding any provision to the contrary herein,
unless otherwise provided herein or unless otherwise provided by law, the
Employee at any time upon thirty (30) days' written notice to the Company, may
terminate her employment by the Company hereunder. Except as otherwise provided
in Section 5.2(b) below, the Company shall not be liable to Employee for the
payment of any amount on such termination.
(b) In the event that the Employee terminates her employment
following (i) an uncured material breach of this Agreement by the Company, (ii)
the consummation of a merger, consolidation, corporate reorganization or
acquisition of all or substantially all the assets of the Company which does not
provide for the Employee to assume the duties of President and Chief Operating
Officer of the surviving entity, (iii) the filing by the Company under any state
or Federal bankruptcy or insolvency laws, (iv) the failure by the Company to
relocate its corporate headquarters to the San Diego, California metropolitan
area within one (1) year from the date hereof (v) the failure of the Company to
consummate the Equity Financing prior to August 1996, (vi) any action by the
Company, Board of Directors or shareholders which would constitute a demotion of
the Employee, whether formal or de facto (e.g., reduction of her authority or
incidents of office), the failure of necessary action to be taken to elect the
Employee as President and Chief Operating Officer of the Company, or any action
being taken to remove her from either or both such positions, or (vii) the
failure of the Company to institute and adopt an Incentive Stock Option Plan and
award the Options to Employee as provided in Article 4 hereof, or the failure of
the Company to obtain the Shareholder Consent as provided in Section 4.1(f)
hereof within thirty (30) days after the date of the 1997 annual meeting of
shareholders established by the By-laws of the Company, then such termination by
the Employee shall be deemed for all purposes including for purposes of
severance payments and benefits provided under Section 5.4 hereof, to be a
termination by the Company of the employment of the Employee hereunder without
cause pursuant to Section 5.4. The Company shall have thirty (30) days
following receipt of written notice by the Employee to the Company of the
material breach described in item (i) above, setting forth in reasonable detail
the matters constituting such breach, to cure such breach.
5.3 TERMINATION OF EMPLOYMENT WITH CAUSE. In addition to any other
remedies available to it at law, in equity or as set forth in this Agreement,
the Company shall have the right, upon written notice to the Employee, to
immediately terminate her
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employment hereunder if the Employee (a) breaches evidences a pattern of willful
breach in any material respect any material provision of this Agreement or a
pattern of willful violation of any reasonable policies or orders of the Board
of Directors and such pattern of willful breach or violation does not cease
within thirty (30) days after the Employee's receipt of written notice thereof
from the Board of Directors of the Company setting forth in reasonable detail
the matters constituting such pattern; or (b) has been convicted of a felony.
5.4 TERMINATION OF EMPLOYMENT WITHOUT CAUSE.
(a) Notwithstanding any provision to the contrary herein and
unless otherwise provided by law, the Company at any time upon thirty (30) days'
written notice to the Employee, in its sole and absolute discretion and for any
or no reason, may terminate the employment of the Employee hereunder without
cause. In such event, the Company shall pay the Employee, within ten (10) days
following the Termination Date, an amount equal to the Employee's Base Salary
less (i) $50,000, if the Equity Financing Bonus has been paid prior to the
Termination Date and (ii) $85,000, if the 1996 Signing Bonus has been paid prior
to the Termination Date.
(b) In the event that the employment of the Employee hereunder
is terminated by the Company without cause, all Options shall vest immediately
upon the Termination Date as provided in Section 4.1(d) hereof. If the Options
have not been granted to the Employee as of the Termination Date, the Company
shall pay to the Employee, within ten (10) days following the Termination, an
additional payment equal; to the Employee's Base Salary, i.e., in addition to
the payment described in Section 5.4(a).
(c) In the event that the employment of the Employee hereunder
is terminated by the Company without cause, the Company, at no cost to the
Employee; and for a period of two (2) years from the Termination Date shall
continue to provide the Employee with at least the same group life, health,
accident, disability and hospitalization insurance plans as were in effect with
respect to the Employee on the date of such termination, and shall continue to
provide coverage for the Employee's family on the same terms as existed prior to
such Termination Date.
(d) The Employee acknowledges that the payments referred to in
Section 5.2 and this Section 5.4 constitute the only payments which the Employee
shall be entitled to receive from the Company under this Agreement in the event
of any termination pursuant to Section 5.2, 5.3 and this Section 5.4, and that
except for such payments and such other obligations as are expressly provided
herein the Company shall have no further liability or obligation to her under
this Agreement.
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(e) The Employee shall have no duty to mitigate damages in order
to receive any severance payments and benefits provided in this Section 5.4.
ARTICLE 6
TAG-ALONG RIGHTS
6.1 TAG-ALONG RIGHTS. The Company shall grant the Employee such
rights to participate in sales by principal stockholders or the Company of the
Common Stock, as shall be set forth in that certain Tag-Along Rights Agreement
being executed concurrently herewith.
ARTICLE 7
REGISTRATION RIGHTS
7.1 REGISTRATION OF EMPLOYEE STOCK.
(a) As soon as practicable after consummation of the Equity
Financing, but in no event later than September 30, 1996, the Company, upon the
Employee's written request, shall use all reasonable efforts to prepare and file
with the Securities and Exchange Commission a registration statement and such
other documents, if then required, as may be necessary to permit a public
offering and sale of shares of the Common Stock acquired by the Employee prior
to the date hereof or granted to the Employee pursuant to the terms hereof or
granted to the Employee in connection with the Options (the "Registrable Stock")
in compliance with the provisions of the Securities Act of 1933, as amended (the
"Securities Act"). If the Employee does not sell the Registrable Stock within a
reasonable period of time after such registration, the Company need not maintain
the effectiveness of such registration; provided, however, if the Company fails
to maintain the effectiveness of such registration, the Employee thereafter may
re-exercise her rights under this subsection, without limitation, but she may
not do so earlier than ninety (90) days after the applicable registration
statement has become ineffective. If the Employee is no longer employed by the
Company at the time of her request for registration hereunder, the Employee must
provide written notice to the Company that she intends to sell the Registrable
Stock within a reasonable period of time after such registration.
(b) The Company shall have the right to include in any
registration statement filed pursuant to this Section 7.1 other securities of
the Company then proposed to be distributed.
7.2 PIGGYBACK REGISTRATION.
(a) If the Company proposes to register shares of Common Stock
or securities convertible into or exercisable for Common Stock under the
Securities Act (other than pursuant to a
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registration statement on Form S-4 or S-8 or any successor form, or filed in
connection with an exchange offer or an offering of securities solely to the
existing shareholders or employees of the Company), solely where such sale will
be both for the Company's account and for the account of a selling shareholder,
then the Company shall give written notice of such proposed filing to the
Employee at least ten (10) days before the anticipated filing date, and such
notice shall offer the Employee the opportunity to register such number of
shares of Registrable Stock as the Employee may request. The Employee shall
notify the Company in writing specifying whether or not it elects to include any
Registrable Stock in such registration statement within five (5) days after
delivery of the Company's notice to the Employee. The Company shall use its
best efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Employee to include such securities in such
offering on the same terms and conditions as any similar securities of the
Company included therein; provided, however, that if the managing underwriter or
underwriters of such offering determines that the total amount or kind of
securities which it or the Company, and any other persons or entities, intend to
include in such offering is such as to materially and adversely affect the
success of such offering, then the amount of Registrable Stock requested to be
offered for the account of the Employee shall be reduced or limited on a pro
rata basis with the securities of all persons and entities other than the
Company participating in the offering, to the extent required by such managing
underwriter. Notwithstanding the foregoing, if, at any time after giving
written notice of its intention to register Common Stock or other securities
convertible into or exercisable for Common Stock and prior to the effectiveness
of the registration statement filed in connection with such registration, the
Company determines for any reason either not to effect such registration or to
delay such registration, the Company, at its election, by delivery or written
notice to the Employee, (i) in the case of a determination not to effect
registration, may relieve itself of its obligations to register any Registrable
Stock in connection with such registration, or (ii) in the case of determination
to delay the registration, may delay the registration of such Registrable Stock
for the same period as the delay in the registration of such other shares of
Common Stock or other securities convertible into or exercisable for Common
Stock.
(b) Notwithstanding anything to the contrary herein, if the
Company registers shares of Common Stock or securities convertible into or
exercisable for Common Stock under the Securities Act in an underwritten public
offering and
(i) the Employee owns unregistered Registrable Stock at the
time such underwritten public offering is registered under the Securities Act,
the Employee shall agree
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to refrain from exercising the registration rights granted in this Section 7
with respect to such Registrable Stock for such period of time as the managing
underwriter of such underwritten public offering deems reasonable; or
(ii) the Employee owns Registrable Stock which has been
registered under the Securities Act pursuant to Section 7.1 or this 7.2 hereof
prior to the time such underwritten public offering is registered under the
Securities Act, the Employee shall agree that it will not sell, distribute,
offer to sell, contract to sell, agree to sell, grant any option to purchase, or
agree to offer, sell or otherwise transfer or dispose of (nor announce any
offer, sale, grant of an option to purchase or otherwise dispose of), directly
or indirectly, any such registered Registrable Stock for such period of time as
the managing underwriter of such underwritten public offering deems reasonable.
(c) Notwithstanding anything to the contrary herein, the Company
shall have the right to grant registration rights to other parties subsequent to
the date hereof. In such event and in connection with the grant of piggyback
registration rights to other parties, the parties hereto acknowledge and agree
that such other parties shall have the right to participate on a pro rata basis
with the parties hereto in any registration to which such piggyback registration
rights apply.
(d) FURNISH INFORMATION. The Employee shall furnish to the
Company such reasonable information regarding the Employee, the Registrable
Stock, and the intended method of disposition of such securities as are required
to effect the registration of Registrable Stock as to which the Employee has
requested registration.
(e) EXPENSES OF REGISTRATION. All expenses incident to the
Company's performance of or compliance with this Article 7 including, without
limitation, all registration and filing fees, fees and expenses of complying
with state securities or blue sky laws, printing expenses and fees and
disbursements of counsel for the Company and of independent public accountants
(including the expense of any special audit), but excluding underwriting
commissions and discounts and the fees and disbursements of counsel for the
Employee, shall be borne by the Company. The Employee shall bear her own pro
rata share (calculated according to the number of her shares as a fraction of
the total number of shares covered by such registration statement) of all
underwriting commissions and discounts incurred in connection with any offering
of Registrable Stock with respect to a registration pursuant to this Article 7,
as well as her expenses if she has counsel separate from counsel for the
Company. The fees and expenses of complying with state blue sky laws shall be
borne by the sellers of securities included in such
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registration if and to the extent that the appropriate administrative official
of such state requires that such sellers (rather than the Company) pay such fees
and expenses.
(f) INDEMNIFICATION AND CONTRIBUTION. In the event any shares
of Registrable Stock are included in a registration statement under this Article
7:
(i) To the extent permitted by law, the Company shall
indemnify, defend and hold harmless the Employee, any underwriter (as defined in
the Securities Act), any other person or entity selling securities in such
registration statement, and each director and officer of, and person, if any,
who controls such underwriter or such other person or entity within the meaning
of the Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"); any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; provided, however, that the indemnity agreement
contained in this subsection (i) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for any
such loss, claim, damage, liability, or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by, or which results from the bad faith or gross negligence of, the
Employee, or any underwriter for the Employee.
(ii) To the extent permitted by law, the Employee will
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other person or entity selling securities in such registration statement,
and each director and officer of, and person, if any, who controls such
underwriter or such other person or entity, against any losses, claims, damages
or liabilities (joint or several) to which the Company or any such director,
officer, controlling person, or underwriter or
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controlling person, or such other person or entity or director, officer or
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs as a result of written information furnished by the Employee in
her capacity as a shareholder of the Company (as distinguished from information
provided by the Employee in her capacity as an officer or director of the
Company) expressly for use in connection with such registration or results from
the bad faith or gross negligence of the Employee, provided, however, that
Employee's indemnification obligation hereunder shall be limited to an amount
equal to the net proceeds received by Employee pursuant to the registration of
Registrable Securities hereunder, and, further provided, that the indemnity
agreement contained in this subsection shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Employee, which consent shall
not be unreasonably withheld.
(iii) Promptly after receipt by an indemnified party
under this Section 7.2(e) of notice of the commencement of any action (including
any governmental action), such indemnified party shall deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. An indemnified party shall have the right to
retain its own counsel, however, but the fees and expenses of such counsel shall
be at the expense of the indemnified party, unless (x) the employment of such
counsel has been specifically authorized in writing by the indemnifying party,
(y) the indemnifying party has failed timely to assume the defense and employ
counsel, or (z) the named parties to any such action (including any impleaded
parties) include both the indemnified party and the indemnifying party, and the
indemnified party shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for all indemnified
parties). The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action,
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if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7.2(e), but the omission so to deliver written notice to the indemnifying party
shall not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 7.2(e).
(iv) If the indemnification provided for in subsection (i)
and (ii) of this Section 7.2(e) is unavailable or insufficient to hold harmless
an indemnified party under such subsection in respect of any losses, claims,
damages or liabilities or action in respect thereof or referred to therein, then
each indemnifying party in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as is
appropriate to reflect the relative fault of the Company, on the one hand, and
the Employee on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or actions as well as any
other relevant equitable considerations, including the failure to give the
notice required under such subsections. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact relates to information supplied by the Company on
the one hand, or the Employee, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Employee agree that it would
not be just and equitable if contribution pursuant to this Section 7.2(e)(iv)
were determined by pro rata allocation or by any other method of allocation
which did not take account of the equitable considerations referred to above in
this subsection. No person guilty of fraudulent misrepresentations (within the
meaning of Section 11(f) of the Securities Act), shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
(v) The obligations of the Company and the Employee under
this Section 7.2(e) shall survive the completion of any offering of Registrable
Stock in a registration statement under this Article 7.
ARTICLE 8
INVENTIONS; NON-DISCLOSURE,
8.1 INVENTIONS. Subject to the provisions of Section 2870 of the
California Labor Code, all processes, technologies and inventions (collectively,
"Inventions"), including new contributions, improvements, discoveries,
trademarks and trade names, conceived, developed, invented, made or found by the
Employee, alone or with others, during the Term of her employment by the
Company, whether or not patentable and whether or not
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conceived, developed, invented, made or found on the Company's time or with the
use of the Company's facilities or materials and which relate to the business of
the Company, shall be the property of the Company and shall be promptly and
fully disclosed by the Employee to the Company. The Employee shall perform all
necessary acts (including, without limitation, executing and delivering any
confirmatory assignments, documents or instruments requested by the Company) to
vest title to any such Invention in the Company and to enable the Company, at
its expense, to secure and maintain domestic and/or foreign patents or any other
rights for such Inventions.
8.2 NON-DISCLOSURE. The Employee, at any time during the Term and
thereafter, shall not directly or indirectly, use, disclose or furnish to any
other person, firm or corporation except in the course of the proper performance
of her duties hereunder (a) any information of a confidential nature relating to
any process, technique or procedure of the Company; or (b) any information of a
confidential nature obtained as a result of her current or future relationship
with the Company, which information is not specifically a matter of public
record; or (c) any other trade secrets of the Company; except that the Employee
shall not be liable under the terms of this Section 8.2 for using, disclosing or
furnishing any of the foregoing which: (1) are or become generally available to
the public other than as a result of a disclosure in violation of this
Agreement; or (2) are generally known in any industry in which the Company is or
may become involved; or (3) are required to be disclosed by the Employee
pursuant to law or the order of a court of competent jurisdiction, or other
legal process or authority, it being understood, however, that the Employee
shall provide the Company with prompt notice of the requirement for such
disclosure as soon as practical after the Employee is notified thereof and prior
to its disclosure thereof so as to enable the Company to challenge the order
compelling such disclosure if the Company so desires. Promptly upon the
expiration or termination of the Employee's employment hereunder for any reason,
the Employee shall surrender to the Company all documents, drawings, work
papers, lists, memoranda, records and other data (including all copies)
constituting or disclosing any of the foregoing information.
8.3 BREACH OF NON-DISCLOSURE PROVISION. In the event that the
Employee shall breach Section 8.2 hereof, or in the event that any such breach
is threatened by the Employee, in addition to and without limiting or waiving
any other remedies available to the Company at law or in equity, the Company
shall be entitled to immediate injunctive relief in any court having the
capacity to grant such relief, to restrain any such breach or threatened breach
and to enforce the provisions of Section 8.2. The Employee acknowledges and
agrees that there is no adequate remedy at law for any such breach or threatened
breach and, in the event that any action or proceeding is brought seeking
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injunctive relief, the Employee shall not use as a defense thereto that there is
an adequate remedy at law.
8.4 REASONABLE RESTRICTIONS. The parties acknowledge that (a) the
agreements in this Article 8 are essential to protect the business and goodwill
of the Company, and (b) the foregoing restrictions are under all of the
circumstances reasonable and necessary for the protection of the Company and its
business.
ARTICLE 9
MISCELLANEOUS
9.1 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective legal representatives,
heirs, distributees and successors; provided, that the obligations of the
Employee under this Agreement shall not be delegable by her.
9.2 NOTICES. All notices and other communications hereunder and all
legal process in regard hereto shall be validly given, made or served if in
writing, when delivered personally (by courier service or otherwise), or when
actually received when mailed by first-class certified or registered United
States mail, postage-prepaid and return receipt requested, to the address of the
party to receive such notice or other communication set forth below, or at such
other address as any party hereto may from time to time advise the other party
in writing:
If to the Company:
IMRE Corporation
000 Xxxxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chairman of the Board of Directors
If to the Employee:
Xx. Xxxxx Xx Xxxxx
000 00xx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
9.3 SEVERABILITY. If any provision of this Agreement, or portion
thereof, shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such invalid or
unenforceable provision or portion thereof were not contained herein. In
addition, any such invalid or unenforceable
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provision or portion thereof shall be deemed, without further action on the part
of the parties hereto, modified, amended or limited to the extent necessary to
render the same valid and enforceable.
9.4 WAIVER. No waiver by a party hereto of a breach or default
hereunder by the other party shall be considered valid, unless in writing signed
by such first party, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or any other nature.
9.5 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
any and all prior agreements between the Company and the Employee, whether
written or oral, relating to any or all matters covered by and contained or
otherwise dealt with in this Agreement. No representation, warranty,
undertaking or covenant is made by either party hereto except as provided herein
and any representations, warranties undertakings or covenants not set forth
herein are specifically disclaimed. This Agreement does not constitute a
commitment of the Company with regard to the Employee's employment, express or
implied,other than to the extent expressly provided for herein.
9.6 AMENDMENT. No modification, change or amendment of this
Agreement or any of its provisions shall be valid, unless in writing and signed
by the party against whom such claimed modification, change or amendment is
sought to be enforced.
9.7 AUTHORITY. The parties each represent and warrant that they have
the power, authority and right to enter into this Agreement and to carry out and
perform the terms, covenants and conditions hereof.
9.8 TITLES. The titles of the Articles and Sections of this
Agreement are inserted merely for convenience and ease of reference and shall
not affect or modify the meaning of any of the terms, covenants or conditions of
this Agreement.
9.9 APPLICABLE LAW. This Agreement, and all of the rights and
obligations of the parties in connection with the employment relationship
established hereby, shall be governed by and construed in accordance with the
internal laws of the State of California without giving effect to principals
relating to conflicts of law.
9.10 ATTORNEYS' FEES. The cost of Employee's reasonable attorneys'
fees incurred in the negotiation of this Agreement in an amount not to exceed
$5,500 shall be borne by the Company.
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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
IMRE CORPORATION
By: /s/ Xxxxx X. Xxxxx
_______________________________
Name: Xxxxx X. Xxxxx
Title: Chairman of the Board
/s/ Xx. Xxxxx Xx Xxxxx
___________________________________
Xx. Xxxxx Xx Xxxxx
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