EXHIBIT 10.17
CONSULTING AGREEMENT
(Xxxxxx X. Xxxxxx, Xx.)
This Consulting Agreement dated as of July 23, 2001 (this "Agreement"),
is made by and between Mimeon, Inc., a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxxx, Xx. ("Consultant").
WHEREAS, the Company desires to engage Consultant to perform consulting
services on behalf of the Company and Consultant desires to perform such
services on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein the parties hereby agree as follows:
1. TERM. The Company agrees to retain Consultant, and Consultant
agrees to provide services to and on behalf of the Company on the terms and
conditions set forth in this Agreement during the period commencing on the date
hereof and ending on the second anniversary of the date hereof subject to
earlier termination as provided herein. This Agreement may be renewed for one or
more additional one (1) year renewal terms by mutual agreement of the Company
and Consultant prior to the expiration of the initial term or then applicable
renewal term.
2. SERVICES. Consultant shall provide services to the Company as
may be reasonably requested by the Company from time to time.
3. COMPENSATION.
3.1 As compensation for his services hereunder, the
Company shall pay Consultant a consulting fee payable quarterly in arrears on
the last day of September, December, March and June of each year during the term
of this Agreement and all renewal terms of this Agreement. Such consulting fee
shall initially be $0.00, but shall increase upon the occurrence of the
following events: (i) to $25,000 per 365-day period on and after the Initial
Milestone Date (as defined below) and continuing until the Second Milestone Date
(as defined below), (ii) to $50,000 per 365-day period on and after the Second
Milestone Date and continuing until the Third Milestone Date (as defined below);
and (iii) to $100,000 per 365-day period on and after the Third Milestone Date.
As used herein, the term "Initial Milestone Date" shall mean the date
upon which the cumulative Cash Flow (as defined below) received by the Company
shall be greater than $7,150,000; the term "Second Milestone Date" shall mean
the date upon which the cumulative Cash Flow received by the Company shall be
greater than $17,150,000; and the term "Third Milestone Date" shall mean the
earlier to occur of (i) the date upon which the cumulative Cash Flow received by
the Company shall be greater than $50,000,000, (ii) the consummation by the
Company of an Initial Public Offering (as defined below) or (iii) the sale of
the Company in a
merger or consolidation in which the Company is not the surviving corporation or
in which the Company is the surviving corporation but becomes a wholly-owned
subsidiary of another corporation, or involving the sale of substantially all of
the Company's assets. The term "Cash Flow" shall include all funds received by
the Company (other than funds which must be repaid), including, without
limitation, the proceeds of the sale of equity securities by the Company and the
committed proceeds for equity and research funding in connection with a
strategic alliance or corporate partnering transaction with a third party in the
Field of Interest (as defined below). The term "Field of Interest" shall mean
the field of sequencing, chemical, enzymatic or biological synthesis, production
or modification of linear and branched sugars and glycoconjugates. The term
"Initial Public Offering" means a firm commitment underwritten public offering
of the Company's common stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended, in which the price per share is at
least $5.00 (subject to equitable adjustment in the event of stock splits and
the like) and the aggregate gross proceeds to the Company from such offering are
not less than $10,000,000.
3.2 Consultant shall be reimbursed for all reasonable,
appropriate or necessary travel and other out-of-pocket expenses incurred in the
performance of his duties hereunder upon submission and approval of written
statements and bills in accordance with the then regular reimbursement
procedures of the Company.
4. TERMINATION.
4.1 TERMINATION EVENTS. The engagement of Consultant by
the Company pursuant to this Agreement may be terminated under the following
circumstances:
(a) DEATH. Upon the death of Consultant, which
termination shall be effective as of the date of Consultant's death.
(b) DISABILITY. If, in the opinion of a
physician satisfactory to both Consultant and the Company, Consultant has been
unable to perform the services to be performed by Consultant under this
Agreement due to a physical or mental illness which has resulted in such
disability for not fewer than 180 consecutive days; provided, however, that if
Consultant and the Company do not agree on a physician, Consultant and the
Company shall each select a physician and these two together shall select a
third physician whose determination as to disability shall be binding on both
parties. Termination under this Section 4.2 shall be effective after 30 days'
written notice has been given to Consultant following the determination of such
a disability.
(c) CAUSE. The Company may terminate the
Consultant's engagement hereunder for Cause. For purposes of this Agreement, the
Company shall have "Cause" to terminate Consultant's engagement hereunder in the
event:
(i) (A) Consultant shall have willfully
failed and continued to fail substantially to perform the services required
under this Agreement (other than any failure resulting from the Consultant's
incapacity due to physical or mental illness) for 30 days after a written demand
specifying such failure and demanding performance is delivered to Consultant
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on behalf of the Company and (B) such failure to perform has had a material,
adverse effect on the business or financial condition of the Company; provided,
however, the Company shall be deemed not to have "Cause" unless and until each
of the conditions specified in clauses (A) and (B) of this sentence have been
satisfied;
(ii) Consultant shall have engaged in
(A) any material and intentional misappropriation of funds, properties or assets
of the Company, it being understood that "material" for these purposes shall
take into account both the amount of funds, properties or assets misappropriated
and the circumstances thereof or (B) any malicious damage or destruction of any
property or assets of the Company, whether resulting from Consultant's willful
actions or omissions or Consultant's gross negligence; or
(iii) Consultant shall (A) have been
convicted of a crime involving moral turpitude or constituting a felony or (B)
entered a plea of nolo contendere to any such crime, either of which has had a
material adverse effect on the business of the Company; or
Termination under this Section 4.1(c) shall be effective after 30 days' written
notice has been given to Consultant specifying that Cause exists and exactly
what the Cause is for such termination.
(d) WITHOUT CAUSE. The Company may terminate
the Consultant's engagement hereunder without Cause upon ninety (90) days' prior
written notice to the Consultant. In the event that the Company terminates the
Consultant's engagement without Cause, the Company shall continue to pay the
Consultant the fees payable in accordance with Section 3.1 until the date six
months after the date of the notice of termination.
(e) RESIGNATION. Consultant may terminate his
engagement hereunder upon ninety (90) days' prior written notice to the Company.
4.2 LIQUIDATED DAMAGES. In the event that the engagement
of Consultant by the Company is terminated pursuant to Sections 4.1(c) or (e),
Consultant shall promptly pay the Company liquidated damages equal to:
LD = (48 - M) X P
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48
Where: LD = The liquidated damages due to the Company
pursuant to this Section 4.2.
M = The number of calendar months that have
elapsed, in whole or in part, since the
date of this Agreement.
P = The greater of (i) $100,000 or (ii) the
total amount of compensation received by
Consultant pursuant to
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this Agreement during the calendar year
preceding the termination of his
engagement.
The Consultant acknowledges that it would be difficult to measure or
prove the actual damages that the Company would incur in the event of a
termination of Consultant's services pursuant to Sections 4.1(c) or (e) and
agrees that this formula for determining liquidated damages is a reasonable
method for estimating such damages.
4.3 SURVIVAL. Notwithstanding any other provision of this
Section 4, the provisions of Sections 5, 6, 7, 8, 9 and 10 hereof shall survive
the expiration or sooner termination of this Agreement.
5. CONFIDENTIALITY
5.1 Consultant understands that the Company continually
obtains and develops valuable proprietary and confidential information
concerning its scientific or business affairs (the "Confidential Information")
which may become known to him in connection with his engagement by the Company.
5.2 Consultant acknowledges that all Confidential
Information, whether or not in writing and whether or not labeled or identified
as confidential or proprietary, is and shall remain the exclusive property of
the Company or the third party providing such information to Consultant or the
Company. By way of illustration, but not limitation, Confidential Information
may include Inventions (as defined in Section 6.1), trade secrets, technical
information, know-how, research and development activities of the Company,
product and marketing plans, customer and supplier information and information
disclosed to the Company or to him by third parties of a proprietary or
confidential nature or under an obligation of confidence. Confidential
Information is contained in various media, including without limitation, patent
applications, research data and observations, records of clinical trials,
computer programs in object and/or source code, technical specifications,
laboratory notebooks, supplier and customer lists, internal financial data and
other documents and records of the Company.
5.3 Consultant agrees that Consultant shall not, during
the term of his engagement by the Company and thereafter, publish, disclose or
otherwise make available to any third party, other than employees of the
Company, any Confidential Information except as expressly authorized in writing
by the Company. Consultant agrees that Consultant shall use such Confidential
Information only in the performance of his duties for the Company and in
accordance with any Company policies with respect to the protection of
Confidential Information. Consultant agrees not to use such Confidential
Information for his own benefit or for the benefit of any other person or
business entity.
5.4 Consultant agrees to exercise all reasonable
precautions to protect the integrity and confidentiality of Confidential
Information in his possession and not to remove any materials containing
Confidential Information from the Company's premises except to the extent
necessary to his performance of consulting services for the benefit of the
Company. Upon the termination of his engagement by the Company, or at any time
upon the Company's request,
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Consultant shall return immediately to the Company any and all materials
containing any Confidential Information then in his possession or under his
control.
5.5 Confidential Information shall not include
information which (a) is or becomes generally known within the Company's
industry through no fault of Consultant; (b) was known to him at the time it was
disclosed as evidenced by his written records at the time of disclosure; (c) is
lawfully and in good faith made available to him by a third party who did not
derive it from the Company and who imposes no obligation of confidence on
Consultant; or (d) is required to be disclosed by a governmental authority or by
order of a court of competent jurisdiction, provided that such disclosure is
subject to all applicable governmental or judicial protection available for like
material and reasonable advance notice is given to the Company.
6. ASSIGNMENT OF INVENTIONS
6.1 Consultant agrees promptly to disclose to the Company
any and all ideas, concepts, discoveries, inventions, developments, trade
secrets, methods, data, information, improvements, chemical or biological
materials and know-how that are conceived, devised, invented, developed or
reduced to practice or tangible medium by Consultant, under his direction or
jointly with others during any period that Consultant is engaged by the Company,
whether or not during normal working hours or on the premises of the Company,
which relate, directly or indirectly, to the business of the Company and arise
out of his engagement by the Company (hereinafter "Inventions").
6.2 Consultant hereby assigns to the Company all of his
right, title and interest to the Inventions and any and all related patent
rights, copyrights and applications and registrations therefor. During and after
his engagement by the Company, Consultant shall cooperate with the Company, at
the Company's expense, in obtaining proprietary protection for the Inventions
and Consultant shall execute all documents which the Company shall reasonably
request in order to perfect the Company's rights in the Inventions. Consultant
hereby appoints the Company his attorney to execute and deliver any such
documents on his behalf in the event Consultant should fail or refuse to do so
within a reasonable period following the Company's request.
6.3 Consultant further represents that the attached
SCHEDULE A contains a complete list of all inventions in the Field of Interest,
made, conceived or first reduced to practice by Consultant, under his direction
or jointly with others prior to his engagement with the Company ("Prior
Inventions") and which are not assigned to the Company hereunder. If there is no
such SCHEDULE A attached hereto, Consultant represents that there are no such
Prior Inventions.
7. OTHER AGREEMENTS
7.1 Consultant hereby represents to the Company that,
except as provided in Section 7.3 or as identified on SCHEDULE B, Consultant is
not bound by any agreement or any other previous or existing business
relationship which conflicts with or prevents the full performance of his duties
and obligations to the Company (including his duties and obligations
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under this or any other agreement with the Company) during the period of his
engagement by the Company.
7.2 Consultant understands that the Company does not desire to
acquire from him any business information Consultant may have or any trade
secrets, know-how or confidential business information Consultant may have
acquired from others. Therefore, Consultant agrees that during the period of his
engagement by the Company, Consultant will not improperly use or disclose any
proprietary information or trade secrets of any former or concurrent employer,
or any other person or entity with whom Consultant has an agreement or to whom
Consultant owes a duty to keep such information in confidence. Those persons or
entities with whom Consultant has such agreements or to whom Consultant owes
such a duty are identified in Section 7.3 or on SCHEDULE B.
7.3 Consultant recognizes that as a faculty member of the
Massachusetts Institute of Technology ("M.I.T."), Consultant is responsible for
ensuring that any consulting agreement that Consultant enters into with a
for-profit entity is not in conflict with the patent, consulting or other
policies of M.I.T., and Consultant hereby represents and warrants that
Consultant has determined that this Agreement complies with all such policies of
M.I.T. If Consultant is required by M.I.T. to disclose to M.I.T. any proposed
agreements with industry, Consultant hereby represents that Consultant has made
such disclosure and obtained any necessary formal approvals of this Agreement by
M.I.T.
8. EXCLUSIVE COMMITMENT. Consultant agrees that during the period
of his engagement by the Company and for a period of one (1) year after
termination or cessation of such engagement for any reason, Consultant shall
not, without the Company's prior written consent, which shall not be
unreasonably withheld, become involved, as a principal, employee, partner, or
holder of more than 5% of the outstanding capital stock of any business
enterprise that has committed significant resources to the Field of Interest. In
addition, for so long as Xxxxxxxxx Xxxxxxxx is a principal of Polaris Venture
Partners III, L.P. ("Polaris") and Polaris is a holder of capital stock of the
Company, Consultant shall not, without the prior verbal consent of Xxxxxxxxx
Xxxxxxxx, which shall not be unreasonably withheld, perform consulting services
in the Field of Interest for or on behalf of any business enterprise.
9. GENERAL NON-SOLICITATION. Consultant agrees that during his
engagement with the Company and for a period of two (2) years after the
termination or cessation of such engagement for any reason, Consultant shall not
solicit, divert or take away, or attempt to divert or take away, the business or
patronage of any of the clients, customers or accounts, or prospective clients,
customers or accounts, of the Company which were contacted, solicited or served
by him while engaged by the Company; provided, that the scope of this provision
shall be limited to the business of developing or selling products or services
in the Field of Interest.
10. NON-SOLICITATION OF EMPLOYEES AND CONSULTANTS. Consultant
agrees that during his engagement by the Company and for a period of two (2)
years after the termination or cessation of such engagement for any reason,
Consultant shall not directly or indirectly (i) recruit, solicit or hire any
employee of the Company, or induce or attempt to induce any employee to
discontinue his or her employment relationship with the Company or (ii) without
the
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written consent of the Company, which shall not be unreasonably withheld,
solicit, recruit or hire any consultant then actively engaged by the Company to
perform services in the Field of Interest, or induce or attempt to induce such
consultant to terminate his or her consulting relationship with the Company.
11. GENERAL
11.1 The Company and Consultant agree that Consultant will
be an independent contractor for all purposes, including but not limited to
payroll and tax purposes, and that Consultant shall not in any way represent
himself to be an employee, partner or joint venturer with or of the Company.
11.2 All notices hereunder shall be in writing and shall
be given to the other party at the address or facsimile number set forth below,
or at such other address or facsimile number as either may specify in writing to
the other. All notices shall be effective 5 calendar days after being deposited
in the United States mail with proper postage affixed for first class registered
or certified mail, return receipt requested, or when delivered personally or
dispatched by facsimile, addressed:
If to the Company: Mimeon, Inc.
Bay Colony Corporate Center
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxxxx
Telephone: 000.000.0000
Facsimile: 781.290.0880
If to Consultant: Xxxxxx X. Xxxxxx, Xx.
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Telephone: 000.000.0000
Facsimile: 617.258.8827
11.3 This Agreement may not be assigned by either party
except that the Company may assign this Agreement in connection with the sale of
all or substantially all of the Company's assets to a publicly-held company or
the acquisition of the Company by a publicly-held company by means of merger,
consolidation or stock purchase. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
other legal representatives and, to the extent that any assignment hereof is
permitted hereunder, their assignees.
11.4 This Agreement supersedes all prior agreements,
written or oral, with respect to the subject matter of this Agreement. This
Agreement may be changed only by a written instrument signed by both parties
hereto.
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11.5 In the event that any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and all other
provisions shall remain in full force and effect. If any of the provisions of
this Agreement is held to be excessively broad, it shall be reformed and
construed by limiting and reducing it so as to be enforceable to the maximum
extent permitted by law.
11.6 No delay or omission by the Company in exercising any
right under this Agreement will operate as a waiver of that or any other right.
A waiver or consent given by the Company on any occasion is effective only in
that instance and will not be construed as a bar to or waiver of any right on
any other occasion.
11.7 Consultant acknowledges that the restrictions
contained in this Agreement are necessary for the protection of the business and
goodwill of the Company and are reasonable for such purpose. Consultant agrees
that any breach of this Agreement by him will cause irreparable damage to the
Company and that in the event of such breach, the Company shall be entitled, in
addition to monetary damages and to any other remedies available to the Company
under this Agreement and at law, to equitable relief, including injunctive
relief, and to payment by Consultant of all costs incurred by the Company in
enforcing of the provisions of this Agreement, including reasonable attorneys'
fees. Consultant agrees that should Consultant violate any obligation imposed on
him in this Agreement, Consultant shall continue to be bound by the obligation
until a period equal to the term of such obligation has expired without
violation of such obligation.
11.8 This Agreement shall be governed by, and construed
and enforced in accordance with, the substantive laws of the Commonwealth of
Massachusetts without regard to its principles of conflicts of laws. Any action,
suit or other legal proceeding which Consultant may commence to resolve any
matter arising under or relating to any provision of this Agreement shall be
commenced only in a court of the Commonwealth of Massachusetts (or, if
appropriate, a federal court located within Massachusetts), and Consultant
hereby consents to the jurisdiction of such court with respect to any action,
suit or proceeding commenced in such court by the Company.
CONSULTANT HAS READ ALL OF THE PROVISIONS OF THIS AGREEMENT AND
CONSULTANT UNDERSTANDS, AND AGREES TO, EACH OF SUCH PROVISIONS.
CONSULTANT UNDERSTANDS THAT THIS AGREEMENT MAY AFFECT HIS RIGHT TO
ACCEPT EMPLOYMENT WITH OR PERFORM SERVICES ON BEHALF OF OTHER COMPANIES DURING
AND AFTER THE PERIOD OF HIS ENGAGEMENT BY THE COMPANY.
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IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as a contract under seal as of the date first written above.
MIMEON, INC.
By: /s/ Xxxxxx Xxxxxxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxxxxxx
President
/s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.
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[Letterhead of MOMENTA]
June 23, 2003
Xx. Xxxxxx X. Xxxxxx, Xx.
00 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Xx. Xxxxxx:
Reference is made to the Consulting Agreement dated July 23, 2001 between
Momenta Pharmaceuticals, Inc. (formerly Mimeon, Inc.) and you (the "Agreement").
Capitalized terms used herein and not otherwise defined shall have the meanings
given such terms in the Agreement.
Pursuant to Section 1 of the Agreement, Company and Consultant hereby agree to
extend the term of the Agreement for one additional year, from July 23, 2003
through July 22, 2004, upon the same terms and conditions, including, without
limitation, those governing compensation, as are set forth in the Agreement.
Very truly yours,
/s/ Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
Vice President, Licensing and Business Development
Consultant
By: /s/ Xx. Xxxxxx X. Xxxxxx, Xx.
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Xx. Xxxxxx X. Xxxxxx, Xx.
