EXHIBIT 10.4
CONSULTATION AND SCIENTIFIC ADVISORY BOARD AGREEMENT
This Agreement, effective as of March 10, 1995, is between Inspire
Pharmaceuticals, Inc. (the "Company"), a Delaware corporation, and Xxxxxxx
Xxxxxxx, M.D. ("Consultant").
W I T N E S S E T H
WHEREAS, Consultant is a faculty member at the University of North Carolina
at Chapel Hill (the "University");
WHEREAS, pursuant to the University's regulations concerning professional
consulting and additional workload, Consultant is permitted to enter into
consulting agreements with private companies;
WHEREAS, the Company desires to have the benefit of Consultant's knowledge
and experience, and Consultant desires to provide consulting services to the
Company, all as hereinafter provided in this Agreement; and
WHEREAS, the Company desires to have Consultant serve as Chairman of the
Company's Scientific Advisory Board (the "SAB"), and Consultant desires to serve
as Chairman of such SAB;
NOW, THEREFORE, in consideration of the promises and mutual agreements
hereinafter set forth, the Company and Consultant hereby agree as follows:
1. Consultation and Scientific Advisory Board. The Company shall retain
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Consultant as a consultant, and Consultant shall serve the Company as a
consultant and Chairman of the SAB upon the terms and conditions hereinafter set
forth.
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2. Term. Subject to the terms and conditions hereinafter set forth, the
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term of the Consultant's consulting arrangement and service on the SAB hereunder
(hereinafter referred to as the "Consultation Period") shall commence on the
date hereof, and shall continue for a period of three (3) years; provided,
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however, that the Consultation Period shall automatically be extended for
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additional periods of one (1) year each unless and until either party shall give
the other party thirty (30) days notice of termination prior to the end of the
initial Consultation Period or any one (1) year extension thereof (in the manner
hereinafter provided).
3. Consulting and SAB Member Duties.
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3.1. During the Consultation Period, Consultant shall render to
Company or to Company's designee such consulting services in his areas of
expertise and knowledge related to the field of airway diseases and the
development of low molecular weight molecules for therapeutic or diagnostic
purposes (the "Field"), at such times and places as Company may from time to
time reasonably request. The Company shall give Consultant reasonable advance
notice of any services required of him hereunder.
3.2. All work to be performed by Consultant for the Company shall be
under the general supervision of the Company.
3.3. Consultant shall perform the consulting services in a manner
consistent with the needs of the Company as determined by the Board of Directors
or the President of the Company. All work performed by Consultant to the Company
shall be at times reasonably convenient to the Consultant, and nothing contained
herein shall interfere with Consultant's teaching responsibilities, research
duties or other responsibilities required by the University, his other teaching
and administrative responsibilities or the policies of the
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University or the Consultant's Department regarding the scheduling of outside
services (see Exhibit A).
3.4. During the Consultation Period, Consultant shall serve as
Chairman of the SAB which will meet periodically to advise the Company on
scientific affairs. As Chairman of the SAB, Consultant will advise the Chief
Executive Officer of the Company regarding the selection of other active and
effective members of the SAB, and will recommend such proposed members to the
Board of Directors for consent and approval.
4. Compensation.
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4.1. Consulting Fees. The Company shall pay to the Consultant the
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following annual consulting fees:
Year One: $40,000
Year Two: $45,000
Year Three: $50,000
Such consulting fees shall be payable in arrears in twelve (12) equal
monthly installments within ten (10) days of the last day of each month.
4.2. Reimbursement of Expenses. The Company shall reimburse the
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Consultant for all reasonable and necessary expenses incurred or paid by the
Consultant in connection with, or related to, the performance of his services
under this Agreement. The Consultant shall submit to the Company itemized
monthly statements, in a form satisfactory to the Company, of such expenses
incurred in the previous month. The Company shall pay to the Consultant the
amounts shown on each such statement within thirty (30) days after receipt
thereof. Notwithstanding the foregoing, the Consultant shall not incur total
expenses in excess of $500.00 per month without the prior written approval of
the Company.
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4.3. Benefits. The Consultant shall not be entitled to any
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benefits, coverages or privileges, including, without limitation, social
security, unemployment, medical or pension payments, made available to employees
of the Company.
5. Equity to Consultant. In partial consideration of the consulting
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services and service on the SAB, the Company shall grant to Consultant founder's
stock consisting of seven hundred thousand (700,000) shares of the Company's
Common Stock, $.001 par value per share, under the terms of a Restricted Stock
Purchase Agreement to be executed by the Company and Consultant.
6. Termination. The Consultation Period shall terminate upon the
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occurrence of any of the following events:
(a) Immediately and without notice upon the death or legal incapacity of
the Consultant;
(b) At the option of the Board of Directors of the Company, with cause,
immediately upon written notice to the Consultant; or
(c) At the option of the Consultant, in his sole discretion, upon ninety
(90) days prior written notice to the Company.
For the purposes of subsection (b) above, the term "for cause" shall mean (i)
material failure to perform assigned duties for the Company, as described in
this Agreement, or any acts or omissions constituting gross negligence or
willful misconduct in relation to such duties, (ii) commission of a material
breach of any obligation under this Agreement, or (iii) conviction for, pleading
guilty to, or pleading nolo contendere to any crime involving moral turpitude or
any crime that is a felony. In the event of such termination, the Consultant
shall be entitled to payment for services performed and expenses paid or
incurred prior to the effective date of termination, subject to the limitation
on reimbursement of expenses set forth in Section 4.2. Such payments shall
constitute full settlement of any and
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all claims of the Consultant under this Agreement for compensation or
reimbursement of expenses against the Company. Notwithstanding the foregoing,
the Company may terminate the Consultation Period, effective immediately upon
receipt of written notice, if the Consultant breaches or threatens to breach any
provision of Sections 7, 8, or 10.
7. Cooperation. The Company shall provide such access to its information
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and property as may be reasonably required in order to permit the Consultant to
perform his obligations hereunder. The Consultant shall cooperate with the
Company's personnel, shall not interfere with the conduct of the Company's
business and shall observe all rules, regulations and security requirements of
the Company concerning the safety of persons and property.
8. Inventions; Proprietary Information and Materials.
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8.1. Inventions.
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8.1.1. All inventions, discoveries, tangible materials, computer
programs, data, technology, designs, innovations and improvements (whether or
not patentable and whether or not copyrightable) related to the Field which are
made, conceived, reduced to practice, created, written, designed, discovered or
developed by the Consultant, solely or jointly with others and whether during
normal business hours or otherwise, in the course of performing services
requested by the Company or thereafter if resulting directly or indirectly
derived from Proprietary Information and Materials of the Company (as defined
below) (collectively, "Inventions") shall be the sole property of the Company.
The Consultant hereby assigns to the Company all Inventions and any and all
related patents, copyrights, trademarks, trade names, and other industrial and
intellectual property rights and applications therefor, in the United States and
elsewhere and appoints any officer of the Company as his duly authorized
attorney to execute, file, prosecute and protect the same
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before any government agency, court or authority. Upon the request of the
Company and at the Company's expense, the Consultant shall execute such further
assignments, documents and other instruments as may be reasonably necessary or
desirable to fully and completely assign all Inventions to the Company and to
assist the Company in any reasonable manner and at the expense of the Company in
applying for, obtaining and enforcing patents or copyrights or other rights in
the United States and in any foreign country with respect to any Invention.
8.1.2. The Consultant shall promptly disclose to the Company all
Inventions and will maintain adequate and current written records (in the form
of notes, sketches, drawings and as may be specified by the Company) to document
the conception and/or first actual reduction to practice of any Invention. Such
written records shall be available to and remain the sole property of the
Company at all times.
8.1.3. Consultant shall not perform any duties under this Agreement
on the premises of the University or in any other manner that could result in
claims by the University of rights in any work product generated by Consultant
while performing duties requested by the Company hereunder, unless the Company
and the University have entered into a written agreement that allocates
ownership of such work product, in which case the terms of such agreement shall
on the premises of the University or in any other manner that could result in
claims by the University of rights in any work product generated by Consultant
while performing duties requested by the Company hereunder, unless the Company
and the University have entered into a written agreement that allocates
ownership of such work product, in which case the terms of such agreement shall
prevail in the event of any conflict with this Section 8.1.
8.2. Proprietary Information and Materials.
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8.2.1. The Consultant acknowledges that his relationship with
the Company is one of high trust and confidence and that in the course of his
service to the Company he will have access to and contact with Proprietary
Information and Materials (as defined in subparagraph 8.2.2 below). The
Consultant agrees that he will not, during the
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Consultation Period or at any time thereafter, disclose to others, or use for
his benefit or the benefit of others, any Proprietary Information or Invention.
8.2.2. For purposes of this Agreement, Proprietary Information
and Materials shall mean, by way of illustration and not limitation, all
information and tangible materials (whether or not patentable and whether or not
copyrightable) owned, possessed or used by the Company, including, without
limitation, any Invention, formula, vendor information, customer information,
apparatus, equipment, trade secret, process, research, report, technical data,
know-how, computer program, software, software documentation, hardware design,
technology, marketing or business plan, forecast, unpublished financial
statement, budget, license, price, cost and employee list that is communicated
to, learned of, developed or otherwise acquired by the Consultant in the course
of performing services as a consultant to the Company.
8.2.3. The Consultant's obligations under this Section 8.2 shall
not apply to any information or tangible material that (i) is or becomes known
to the general public under circumstances involving no breach by the Consultant
or others of the terms of this Section 8.2, (ii) is generally disclosed to third
parties by the Company without restriction on such third parties, or (iii) is
approved for release by written authorization of the Board of Directors of the
Company.
8.2.4. Upon termination of this Agreement or at any other time
upon request by the Company, the Consultant shall promptly deliver to the
Company all records, files, memoranda, notes, designs, data, reports, price
lists, customer lists, drawings, plans, computer programs, software, software
documentation, sketches, laboratory and research notebooks and other documents
(and all copies or reproductions of such materials) and
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tangible materials in the possession of Consultant and which were provided to
the Consultant by the Company.
8.2.5. The Consultant represents that his retention as a
consultant with the Company and his performance under this Agreement does not,
and shall not, breach any agreement that obligates him to keep in confidence any
trade secrets or confidential or proprietary information of his or of any other
party or to refrain from competing, directly or indirectly, with the business of
any other party. The Consultant shall not disclose to the Company any trade
secrets or confidential or proprietary information of any other party.
8.2.6. The Consultant acknowledges that the Company from time to
time may have agreements with other persons or with the United States
Government, or agencies thereof, that impose obligations or restrictions on the
Company regarding inventions made during the course of work under such
agreements or regarding the confidential nature of such work. The Consultant
agrees to be bound by all such obligations and restrictions that are known to
him and to take all action necessary and reasonable to discharge the obligations
of the Company under such agreements.
8.3. Remedies. The Consultant acknowledges that any breach of the
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provisions of this Section 8 shall result in serious and irreparable injury to
the Company for which the Company cannot be adequately compensated by monetary
damages alone. The Consultant agrees, therefore, that, in addition to any other
remedy it may have, the Company shall be entitled to seek the specific
performance of this Agreement by the Consultant and to seek both temporary and
permanent injunctive relief (to the extent permitted by law) to prevent the
violation of Consultant's obligations hereunder without the necessity of proving
actual damages.
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9. Independent Contractor Status. The Consultant shall perform all
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services under this Agreement as an "independent contractor" and not as an
employee or agent of the Company. The Consultant is not authorized to assume or
create any obligation or responsibility, express or implied, on behalf of, or in
the name of, the Company or to bind the Company in any manner.
10. Noncompetition.
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10.1. Consultant represents and warrants that, as of the date hereof,
except as set forth in Exhibit A, he is not a party to any agreement or
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arrangement that would require him to conduct activities in the Field for
another party or would prevent him from carrying out his obligations to the
Company under this Agreement. During the Consultation Period, Consultant shall
immediately disclose to the Company the occurrence of either of the activities
described in the preceding sentence. If Consultant fails to notify the Company
of such activities within thirty (30) days of the occurrence thereof, the
Company shall have the right to terminate this Agreement immediately upon notice
to Consultant.
10.2. Consultant understands the confidential nature of the
information and materials he will acquire or develop in performing his services
under this Agreement. Consultant acknowledges that if such information or
materials were revealed to competitors of the Company, then such disclosure
could cause damage to the Company. Therefore, for the duration of the
Consultation Period and for one (1) year thereafter, Consultant shall not engage
in any activities that would compete with the Company, in the Field, except as
to activities disclosed on Exhibit A or activities for which Consultant has
previously notified the Company under Section 10.1 including without limitation
becoming employed by, serving as a consultant for, serving as a member of a
scientific advisory board (or a comparable organization) for, or acting in any
manner on behalf of any other for-profit enterprise that
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conducts activities competitive with those of the Company in the Field, without
first obtaining the written consent of the Company. The Company agrees not to
unreasonably withhold or delay its consent to activities by Consultant in
competitive areas with respect to which the Company either has no business or
does not intend to develop business.
11. Notices. All notices required or permitted under this Agreement shall
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be in writing delivered by a recognized national overnight courier, personal
delivery, or facsimile transmission and shall be deemed effective upon receipt.
The parties shall designate their addresses and facsimile numbers.
12. Pronouns. Whenever the context may require, any pronouns used in this
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Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
13. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
14. Amendment. This Agreement may be amended or modified only by a
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written instrument executed by both the Company and the Consultant.
15. Governing Law. This Agreement shall be construed, interpreted and
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enforced in accordance with the laws of the State of North Carolina.
16. Successors and Assigns. This Agreement shall be binding upon, and
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inure to the benefit of, both parties and their respective successors and
assigns, including any corporation with which, or into which, the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Consultant are personal and shall not be assigned by him.
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17. Miscellaneous.
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17.1. No delay or omission by the Company or the Consultant in
exercising any right under this Agreement shall operate as a waiver of that or
any other right. A waiver or consent given by the Company or Consultant on any
one occasion shall be effective only in that instance and shall not be construed
as a bar or waiver of any right on any other occasion.
17.2. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
17.3. In the event that any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
INSPIRE PHARMACEUTICALS, INC.
By: /s/ H. Xxxx Xxxxxxxx
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Name: H. Xxxx Xxxxxxxx
Title: President / CEO
CONSULTANT
/s/ Xxxxxxx Xxxxxxx, M.D.
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Xxxxxxx Xxxxxxx, M.D.
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EXHIBIT A
Disclosure of Activities in the Field
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1. Glaxo activities include consulting, research and clinical development of
amiloride for the treatment of lung disease in Cystic Fibrosis. Assistance
and consulting also provided in study design, FOA discussions, and multi-
center study of CF patients.
2. Participation in clinical studies and other consultations regarding gene
transfer in CF at the present time. Intend to continue studies of gene
transfer in connection with CF/airway diseases.
3. University policy varies by Department, but generally, no outside
Consultation is permitted which would require services in excess of one-
half day per week.
4. Consultant shall be permitted to conduct research activities at the
University under grants sponsored by the Federal Government or any non-
profit organization.
5. Consultant shall be permitted to fulfill any teaching duties required by
the University.
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