EXHIBIT 10.5
AMENDED AND RESTATED CONSULTING AGREEMENT
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THIS AMENDED AND RESTATED CONSULTING AGREEMENT ("Agreement") is made as
of this May 16, 2001 by and between Genaera Corporation, a Delaware corporation
(formerly named Magainin Pharmaceuticals Inc.) (the "Company"), and Xx. Xxxxxxx
Xxxxxxx ("Consultant").
WHEREAS, the Company and the Consultant are currently parties to a
Consulting Agreement (the "Original Agreement") dated as of September 12, 2000
(the "Effective Date");
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the covenants and conditions set
forth in this Agreement, the parties, intending to be legally bound, agree as
follows:
1. Resignation as Director. Consultant hereby
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voluntarily and irrevocably resigns as a director of the Company
effective as of the date of the 2001 annual meeting of stockholders of
the Company. In connection and in furtherance of such resignation,
Consultant agrees that he shall not be included in the Company's
nominees for director or otherwise stand for election as a director of
the Company at such meeting.
2. Consulting Arrangement. The Company hereby retains
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Consultant as a consultant to the Company to perform the consulting
services in accordance with the terms and conditions hereinafter set
forth.
2.1 Term. The period during which consulting services shall be
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provided under this Agreement (the "Consulting Term") began on
the Effective Date and shall end on the fifth anniversary
thereof, subject to the provisions for earlier termination
thereof set forth in Section 5 of this Agreement.
2.2 Duties and Responsibilities as a Consultant. During the
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Consulting Term, Consultant shall provide consulting services
to the Company as an independent contractor and not as an
employee of the Company. Consultant shall at all times during
the Consulting Term act as an independent contractor and
during such period nothing hereunder shall create or imply a
relationship of employer-employee between the Company and
Consultant. Consultant shall provide such consulting and
advisory services to the Company as may be reasonably
requested from time to time by the chief executive officer of
the Company. Consultant shall have access to secretarial
assistance and a small office for consulting services to be
provided at the Company, as appropriate.
2.3 Extent of Service as a Consultant. During the Consulting Term,
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Consultant agrees to devote such time, attention and energy as
is necessary to fulfill his duties and responsibilities as a
Consultant under Section 2.2 hereof, but in no event shall
Consultant be required to spend more than one day in any week
or
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more than a total of 9 days during the Consulting Term in such
consulting activities.
2.4 Compensation for Consulting Services.
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(a) Within the period of the Consulting Term, Company
shall pay Consultant (i) with respect to the period
from the Effective Date until the first anniversary
thereof, the sum of $271,631.72, and (ii) with
respect to the period from the first anniversary of
the Effective Date until the fifth anniversary of the
Effective Date, the annual sum of $45,000.00 (for a
total payment of $180,000.00 for such four-year
period commencing on the first anniversary of the
Effective Date). In all cases, the applicable amount
shall be payable in prorated amounts upon the dates
that the Company regularly pays its senior
executives.
(b) Consultant acknowledges that the period within which
the Company will make available the purchase of
health insurance under COBRA commenced as of the
Effective Date. Consultant shall not be entitled to
any benefits provided to employees of the Company
during the Consulting Term, and, Consultant
specifically acknowledges that he is not entitled to
participate in any of the Company's benefit plans,
including, without limitation, the Company's health
and life insurance, disability insurance or 401(k)
plans.
(c) Consultant alone, and not the Company, will be solely
responsible for payment of all federal, state and
local taxes in respect of the payments to be made and
benefits to be provided to him under this Agreement.
2.5 Stock Options. The Company has previously granted Consultant
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options to acquire a total of 423,000 shares of the Company's
common stock (the "Stock Options") as set forth on Attachment
A hereto pursuant to various stock option agreements (the
"Option Agreements"). The Company and Consultant hereby
acknowledge and agree that (i) the provisions of the Option
Agreements will continue to apply to the Company and
Consultant during the Consulting Term, (ii) during the
Consulting Term, Consultant may exercise the Stock Options as
such options have vested, or will vest during the Consulting
Term, in accordance with the terms of the Option Agreements,
and iii) all provisions of the Option Agreements relating to
the period of employment of Consultant by the Company or its
subsidiaries shall instead refer to the period of Consultant's
services as a consultant to the Company during the Consulting
Term.
2.6 Return of Company Property. Consultant acknowledges that, in
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accordance with the Original Agreement, he has returned to the
Company all lists, books, records, documents, credit cards and
other materials or property in his possession, custody or
control which are or were owned by the Company or any of its
subsidiaries or affiliates, or which are or were used by
Consultant or any other officers, employees or agents of the
Company or any of its subsidiaries or affiliates in
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connection with the conduct of the business of the Company or
any of its subsidiaries or affiliates, except those materials
and property agreed upon by the Company and Consultant to be
necessary for the execution of the Consultant's obligations
and responsibilities, which materials and property Consultant
shall return at the end of the Consulting Term. Consultant
will not deliver to any other person or entity any property of
the Company or copies of any property of the Company, or
permit any copies thereof to be made by any other person or
entity.
3. General Release. In consideration of the foregoing
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promises and payments as described in Section 2 above. Consultant
hereby knowingly, willingly and voluntarily remises, waives, releases
and forever discharges the Company and its subsidiaries and affiliates,
the directors, officers, employees, advisors and agents of the Company
and its subsidiaries and affiliates, and the heirs, executors,
administrators, successors and assigns of such parties (collectively
referred to as the "Releasees") of and from any and all manner of
actions and causes of action, suits, debts, dues, accounts, bonds,
covenants, contracts, agreements, judgments, claims and demands
whatsoever in law or equity which Consultant, his heirs, executors,
administrators or assigns has, had or may hereafter have against the
Releasees or any of them from or by reason of any cause, matter or
thing whatsoever from the beginning of his employment with the Company
to the date of this Agreement, excepting only claims against the
Company relating to its obligations under this Consulting Agreement and
including, without in any way limiting the generality of the foregoing,
any and all matters relating to his employment by the Company and the
termination thereof and his serving as a director of the Company and
his resignation thereof, any and all claims under any federal, state or
local law, any common law claims and all claims for counsel fees and
costs. Consultant covenants and agrees never to commence, aid in any
way, prosecute or permit to be commenced against the Releasees any
action or other proceeding based upon any matters that are the subject
of or covered by the foregoing. Nothing in this Section 3 shall affect
or modify in any manner (i) the rights of Consultant and the
obligations of the Company to indemnify Consultant for acts or matters
occurring prior to the Effective Date, if and to the extent required
pursuant to the Company's By-Laws or the Delaware General Corporation
Law, in each case as in effect on or prior to the Effective Date, and
(ii) the rights, if any, of Consultant under any directors and officers
insurance policy purchased by the Company and in effect on or prior to
the Effective Date.
4. Development and Confidential Information, Etc.
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(a) Consultant acknowledges that he is in possession of
proprietary and confidential of the Company (the
"Confidential Information") received during the
period of his employment by the Company. Consultant
shall be under a continuing duty, which duty
expressly shall survive the termination of this
Consulting Agreement, to continue to safeguard and
not to disclose any of the Confidential Information,
as well as any additional Company Confidential
Information that may come into his possession during
the term of this Consulting Agreement; except,
however, that this duty shall not apply with respect
to any information that
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is in the public domain or that otherwise is
disclosed or enters the public domain through no
fault of Consultant.
5. Early Termination of the Consulting Term. The
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Consulting Term shall terminate prior to the expiration of the
Consulting Term upon the occurrence of any one of the following events:
(a) Death. In the event that Consultant dies during the
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Consulting Term, the Consulting Term shall terminate.
(b) Breach by Consultant. In the event Consultant
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violates any of his obligations under this Agreement,
the Company may, upon seven (7) days prior notice to
Consultant, terminate the Consulting Term; provided,
however, that Consultant shall have a reasonable
opportunity to cure any breach of his obligations
under Section 2.2, 2.3 or 2.6 of this Agreement
during such seven (7) days' notice period. In the
event of a termination pursuant to this Section 5(b),
all payment obligations of the Company set forth in
this Agreement shall terminate, and Consultant shall
not be entitled to receive any unpaid portion of the
cash payments set forth in Section 2.4(a) of this
Agreement.
6. Governing Law. This Agreement shall be governed by
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and interpreted under the laws of the Commonwealth of Pennsylvania,
without giving effect to the principles of conflicts of law thereof.
7. Notices. All notices and other communications
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required or permitted hereunder or necessary or convenient in
connection herewith shall be in writing and shall be deemed to have
been given when hand delivered or mailed by registered or certified
mail, as follows (provided that notice of change of address shall be
deemed given only when received):
If to the Company, to:
Genaera Corporation
0000 Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention: President and Chief Executive Officer
With a required copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
If to Consultant, to:
Xxxxxxx X. Xxxxxxx, M.D., Ph.D.
000 Xxxxxx Xxxx
0
Xxxxxx, XX 00000
With a required copy to:
Xxxxx X. Xxxxxxxxxxx, Esquire
Xxxxxxxxxxx & Associates, P.C.
000 Xxxxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
or such other names or addresses as the Company or Consultant, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
8. Contents of Agreements; Amendment and Assignment.
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(a) Except as stated herein, this Agreement supersedes
all prior agreements between the parties, including,
without limitation, the Employment Agreement between
the parties dated February 22, 1988, as amended on
June 22, 1992, and sets forth the entire
understanding between the parties with respect to the
subject matter hereof. This Agreement includes and
subsumes the Original Agreement as amended and
restated hereby. This Agreement may not be modified
except as set forth in writing executed by a duly
authorized officer of the Company and by Consultant.
(b) All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and
be enforceable by the respective heirs, executors,
administrators, legal representatives, successors and
assigns of the parties hereto, except that the duties
and responsibilities of Consultant hereunder are of a
personal nature and shall not be assignable or
delegable in whole or in part by Consultant and the
Company may not transfer or convey its rights
hereunder to any third party other than an affiliate
of the Company without the prior express written
consent of Consultant.
9. Severability. Should any provision of this
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Agreement, or the application thereof to any person or circumstance, be
deemed invalid or unenforceable in any jurisdiction then, to the extent
that no essential purpose of this Agreement is thereby frustrated, the
remainder of it shall not be affected thereby.
10. Remedies Cumulative; No Waiver. No remedy conferred
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upon the Company by this Agreement is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and
shall be in addition to any other remedy given hereunder or now or
hereafter existing at law or in equity. No delay or omission by the
Company in exercising any right, remedy or power hereunder or existing
at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by the Company from time
to time and as often as may be deemed expedient or necessary by the
Company in its sole discretion.
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11. Miscellaneous. All section headings are for
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convenience only. This Agreement may be executed in counterparts, each
of which is an original. It shall not be necessary in making proof of
this Agreement or any counterpart hereof to produce or account for any
of the other counterparts.
12. Consultation with Legal Counsel, Etc. Consultant and
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Company acknowledge that no promise or inducement for this Agreement
has been made except as set forth herein. Consultant acknowledges that
this Agreement is executed without Consultant's reliance upon any
statement or representation by or on behalf of the Company; that
Consultant has had an opportunity to discuss this Agreement with his
attorney; and that Consultant is legally competent to and does
voluntarily execute this Agreement and accept full responsibility
therefore.
13. Formation of New Company. In the event Consultant
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shall determine in the future to form a company to engage in research,
development and commercialization efforts relating to isoleucine and/or
MSI-1436 ("NEWCO"), Consultant and the Company shall discuss in good
faith a potential relationship between NEWCO and the Company, including
the licensing of intellectual property by the Company to NEWCO, and the
participation in NEWCO by the Company as an equity holder.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date and year first above written.
GENAERA CORPORATION
By: /s/ Xxx Xxxxxxxx Xxxxxx, M.D.
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Name: Xxx Xxxxxxxx Xxxxxx, M.D.
Title: President and Chief Executive Officer
CONSULTANT
By: /s/ Xxxxxxx X. Xxxxxxx, M.D., Ph.D.
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Name: Xxxxxxx X. Xxxxxxx, M.D., Ph.D.
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