EXHIBIT 10.20
APPROVAL AGREEMENT
This APPROVAL AGREEMENT (this "Approval") dated as of March 7, 2006
("Effective Date") is entered into by and between Critical Therapeutics, Inc., a
Delaware corporation ("CRTX") and Xxxxx X. Xxxxxx, M.D. ("Xx. Xxxxxx").
WHEREAS, CRTX and Xx. Xxxxxx are parties to a Consulting Agreement
dated as of January 31, 2001, as amended by Amendment No. 1 dated as of January
16, 2003, (the "Agreement"); and
WHEREAS, the Agreement contemplates that Xx. Xxxxxx will obtain CRTX's
approval prior to rendering advice or services in the Field to a for-profit
entity;
WHEREAS, Xx. Xxxxxx has requested that CRTX grant such approval in
connection with the proposed formation by Xx. Xxxxxx and others of, and Xx.
Xxxxxx'x continuing involvement with, a new for-profit entity to be known as
Innovative Metabolics, Inc. ("IMI"), and CRTX has agreed to such request,
subject to the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions; References. Unless otherwise specifically defined herein, each
term used herein (including in the Recitals hereof) which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement.
2. Approval. As contemplated by Section 1.4(a) of the Agreement, and subject to
the conditions specified in Section 3 of this Approval, CRTX hereby approves the
rendering by Xx. Xxxxxx of advice and services in the Field to IMI solely with
respect to CRTX's technology related to physical and electrical stimulation of
the vagus nerve. For purposes of clarity, the use of Confidential Information
(as defined in Section 6.2 of the Agreement) in the area of CRTX's technology
related to physical and electrical stimulation of the vagus nerve shall not
produce any Inventions (as defined in Section 5.1 of the Agreement) for purposes
of the Agreement for as long as this Approval is in effect.
3. Conditions of Continued Effectiveness Of Approval.
(a) The approval contained in Section 2 of this Approval shall remain in effect
for the duration of the Agreement but only so long as each of the following
conditions is satisfied (or in the case of the conditions specified in (a)(2)
and (a)(3) below, is capable of being satisfied within the time period indicated
in such condition):
(1) Xx. Xxxxxx shall promptly become and remain an owner of shares of
the common stock of Innovative Metabolics, Inc. ("IMI").
(2) The negotiation and execution, on or prior to the one year
anniversary of the Effective Date, of a license agreement relating to
CRTX's technology related to
physical and electrical stimulation of the vagus nerve between CRTX and
IMI, on terms agreeable to each of the parties to such license
agreement. For avoidance of doubt, Xx. Xxxxxx acknowledges that CRTX is
not obligated to enter into such a license agreement and that CRTX may,
in its sole discretion, at any time and for any reason terminate
negotiations regarding such license agreement, in which case the
approval contained in Section 2 would terminate.
(3) IMI completes a round of equity financing (which may include an
issuance of convertible debt) on or prior to the one year anniversary
of the Effective Date, which provides immediate gross proceeds to IMI
of not less than $1,000,000.
(b) Except as expressly provided in this Approval, the Agreement shall remain
unchanged and in full force and effect and is hereby ratified and confirmed in
all respects.
5. Miscellaneous.
(a) Xx. Xxxxxx acknowledges and agrees that the execution and delivery by CRTX
of this Approval shall not be deemed to create a course of dealing or an
obligation to execute similar approvals, waivers or amendments under the same or
similar circumstances in the future.
(b) This Approval shall be binding upon and inure to the benefit of the parties
hereto and to the Agreement and their respective successors and assigns.
(c) This Approval 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.
(d) This Approval may be executed in any number of counterparts, each of which
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument. Each of the parties hereto understands and
agrees that this document (and any other document required herein) may be
delivered by any party thereto either in the form of an executed original or an
executed original sent by facsimile transmission to be followed promptly by
mailing of a hard copy original, and that receipt of a facsimile transmitted
document purportedly bearing the signature of Xx. Xxxxxx or CRTX shall bind Xx.
Xxxxxx or CRTX, respectively, with the same force and effect as the delivery of
a hard copy original.
(e) This Approval contains the entire and exclusive agreement of the parties
hereto with reference to the matters discussed herein. This Approval supersedes
all prior drafts and communications with respect hereto. This Approval may not
be amended except in accordance with the provisions of Section 8.5 of the
Agreement.
(f) If any term or provision of this Approval shall be deemed prohibited by or
invalid under any applicable law, such provision shall be invalidated without
affecting the remaining provisions of this Approval or the Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Approval to be
duly executed as of the day and year first above written.
CRITICAL THERAPEUTICS, INC.
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
Chief Operating Officer
XXXXX X. XXXXXX, M.D.
/s/ Xxxxx X. Xxxxxx, MD
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