Exhibit 99.4
[LOGO] Lpath
CONSULTANT AGREEMENT
THIS CONSULTANT AGREEMENT ("Agreement") is entered into as of February
1, 2006 ("Effective Date"), by and between Xxxxx Xxxxxxxxx, Ph.D.
("Consultant"), and Lpath, Inc., a Nevada corporation (the "Company"). In
consideration of the retention of Consultant as a scientific consultant and
independent contractor to the Company, and of the compensation received by
Consultant from the Company, the Company and Consultant hereby agree as follows:
1. DESCRIPTION OF SERVICES.
(a) CONSULTANT. Consultant will advise the Company as an
independent contractor in areas of science relevant to the Company's business,
including in the area of lysolipids (as well as any component in lysolipid
signaling pathways) as potential targets for drug discovery (the "Project").
(b) EXCLUSIVITY. Unless as otherwise agreed to in writing,
Consultant will, during the term of this Agreement, work exclusively with the
Company on matters relating to (a) any composition of matter or method that is
protected by (i) any Company trade secret or (ii) any Company intellectual
property that is either issued, pending, or filed at the time of termination or
(b) the use, research, or development, for any therapeutic or diagnostic
purpose, of (i) any sphingolipid or sphingolipid metabolite, (ii) any
lysophosphatidic acid or lysophosphatidic acid metabolite, or (iii) any
component of their respective biosynthetic/metabolic pathways, as well as
molecules that specifically interact with any of these components (the "Field").
The Company acknowledges that Consultant is a faculty member of the California
State University (the "University"), and the Company recognizes that
Consultant's primary responsibility is to the University. In connection with his
University faculty position, Consultant may have entered into certain agreements
with the University relating to ownership of intellectual property rights,
conflicts of interest, and other matters, and may be subject to certain policy
statements of the University (collectively, the "University Agreements"). If any
provision of this Agreement is in conflict with the University Agreements to
which Consultant is subject or a party, then the University Agreements will
govern to the extent of such conflict, and the conflicting provisions of this
Agreement will not apply. If requested, Consultant agrees to promptly furnish
the Company with copies of such University Agreements. Notwithstanding this,
Consultant represents that (i) all of his current consulting activities or
consultancy obligations, and (ii) all restrictions or policies of the University
that may limit or restrict Consultant's consulting activities or limiting rights
to inventions resulting from such activities are in no way conflicting with this
Agreement. Other than with respect to the University, Consultant agrees that he
has not entered into, and will not enter into, any written or oral agreement
with any entity, company, or person that is or may be (or has the potential to
be) a competitor of the Company in the Field.
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Consultant understands that while he is a Consultant to the Company, he is not
to breach any obligation of confidentiality that he has to others, Consultant
agrees that the provision of any requested consulting services performed
hereunder will not be conducted on time that is required to be devoted to the
University or any other third party. Unless otherwise agreed, Consultant agrees
not use the funding, resources, and/or facilities of the University or any other
third party to perform his obligations under this Agreement, and not to perform
his obligations under this Agreement in a manner that would give the University
or any third party rights to any technology or intellectual property.
2. TIME COMMITMENT. Subject to his obligations to the University,
Consultant will devote a significant portion of the normal workweek, as well as
some time outside the normal workweek, to provide scientific and intellectual
property-related counsel to personnel working on projects on behalf of the
Company.
3. COMPENSATION.
(a) CASH COMPENSATION. For all services rendered, the
Consultant will be paid the sum of $9,670.00 per month ("Direct Compensation").
In addition, the Company will pay San Diego State University, where Consultant
is a faculty member, the sum of $57,683.27 ($41,982 + 37.4% fringe benefit rate)
to enable Consultant to devote more time to his activities with Company.
However, Consultant will abide by the "Professional Activities, External"
section of the San Diego State University Policy file. Such amounts are subject
to change from time to time as mutually agreed to by the parties. Consultant
understands that, while serving in his capacity as a consultant to the Company
under this Agreement, he is not a salaried employee of the Company, and that he
is not entitled to receive any benefits offered by the Company, unless otherwise
agreed. Consultant is responsible for reporting his activities to the relevant
governmental agencies, and he understands that the Company will not withhold
from his compensation hereunder any amount for payment of any federal, state, or
local taxes that may be due as a result of Consultant's provision of services
hereunder, and that the Consultant has sole responsibility to pay such taxes, if
any, and to file such returns as may be required by applicable laws and
regulations.
(b) OTHER COMPENSATION. At the Company's discretion, it may
recommend to its Board of Directors that the Company grant Consultant additional
compensation in the form of stock options.
(c) EXPENSE REIMBURSEMENT. Reasonable out-of-pocket expenses
incurred by Consultant while providing services hereunder (including reasonable
travel expenses incurred in connection with providing such consulting services)
will be reimbursed promptly by the Company, subject to customary verification in
a form reasonably acceptable to the Company.
(d) SOLE COMPENSATION. The foregoing fees, other
compensation, and reimbursement of expenses are Consultant's sole compensation
for rendering services to the Company pursuant to this Agreement.
4. INDEPENDENT CONTRACTOR. Under this Agreement, Consultant's
relationship with the Company shall at all times be that of an independent
contractor, and nothing in this Agreement shall be construed to create any
agency or employer-employee relationship between the Company and Consultant.
Except as expressly provided herein or as may otherwise be
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authorized in advance in writing by the Company, Consultant shall have no
authority to act on behalf of or to enter into any contract, incur any liability
or obligation, or make any representation on behalf of the Company, unless
advance approval is obtained from the Chief Executive Officer. The Company
agrees that during the term of this Agreement, or any extension or renewal
thereof, Consultant may be employed by other persons, firms, or corporations,
including the University; PROVIDED, HOWEVER, that the provisions of this
Agreement will be strictly observed by Consultant with respect to such other
persons, firms, or corporations.
Since Consultant will not be an employee of the Company, it is
understood that Consultant shall not be entitled to any of the benefits under
the Company's retirement or group insurance plans or any other employee
benefits. Consultant is solely responsible for all taxes, withholdings, and
other similar local, state, U.S., or international statutory obligations,
including, without limitation, workers compensation insurance, Social Security,
federal, state, or any other employee payroll taxes; and Consultant agrees to
defend, indemnify, and hold the Company harmless from any and all claims made by
any entity on account of an alleged failure by Consultant to satisfy any such
tax or withholding obligations. In the performance of all services hereunder,
Consultant will comply with all applicable laws and regulations.
5. NON-COMPETITION AND NON-SOLICITATION. During the Term, and for a
period of one year following the expiration or termination of this Agreement,
Consultant agrees that he will not provide services as an owner, partner,
shareholder, joint venturer, corporate officer, director, employee, consultant,
principal, agent, trustee or licensor, or in any other similar capacity
whatsoever, for any person, firm, partnership, association, corporation,
business organization, entity, or enterprise that is, or is about to become,
directly or indirectly, engaged in any business or program that competes
directly with or is substantially similar to any business or program that the
Company (or any subsidiary or affiliate of the Company) was involved in (or was
in the planning or development stage) during the 120-day period immediately
prior to Consultant's ceasing to provide services to the Company or any
subsidiary or affiliate of the Company; such business or program shall include,
but not be limited to, those directly involved with or relating to the Field
(such involvement shall hereinafter be called "Competitive Activities").
If, at any time during the a period of TWO years following the
expiration or termination of this Agreement, Consultant is involved in any
Competitive Activities, then Consultant shall immediately notify Company in
writing of such involvement, including the name of the Business and the nature
of Consultant's involvement, and Consultant agrees to fully respond to
reasonable questions by the Company regarding such involvement and to provide
such further assurances reasonably requested by the Company that Consultant is
not and will not be in breach of the Proprietary Information and Inventions
Agreement attached hereto as Exhibit A.
Consultant acknowledges and agrees that the Company's employees and its
staff relationships with such employees are valuable assets. Therefore,
Consultant further agrees that during the term of this Agreement and for a
two-year period following expiration or termination of this Agreement, he will
not, as principal, independent contractor, partner, member, employer, agent,
consultant, shareholder, investor, or in any other individual or representative
capacity whatsoever: directly or indirectly solicit, raid, entice, or induce any
employee or consultant of the Company to be employed by any person, firm, or
corporation.
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6. NO CONFLICT WITH EXISTING AGREEMENTS. The Company hereby
acknowledges that it does not desire to acquire from Consultant any secret or
confidential know-how or information that Consultant may have acquired from
others. Accordingly, Consultant represents and warrants that Consultant is free
to divulge to the Company, without any obligation to, or violation of any right
of others, any and all information, practice or techniques which Consultant will
describe, demonstrate, divulge or in any other manner make known to the Company
during Consultant's performance of services hereunder.
7. CONSULTANT INVENTIONS. Subject to his University obligations,
Consultant will promptly disclose and assign to the Company, or any persons
designated by it, all improvements, inventions, formulae, processes, techniques,
know-how and data, whether or not patentable, made or conceived or reduced to
practice or learned by Consultant, either alone or jointly with others, during
the period of his retention by the Company as an Consultant that (a) arises from
or while providing services under this Agreement and which are related to or
useful in the business of the Company, or (b) result from tasks assigned
Consultant by the Company, or (c) are funded by the Company, or (d) result from
use of equipment or premises owned, leased, or contracted for by the Company
(all said improvements, inventions, formulae, processes, techniques, know-how
and data shall be collectively hereinafter called "Inventions"). Such obligation
to disclose Inventions shall continue for one year after expiration or
termination of this Agreement with respect to anything that would be an
Invention if made, conceived, reduced to practice, or learned during the term
hereof.
Consultant further agrees as to all Inventions to assist the Company at
any time, and not just during the term of this Agreement, in any and all
countries in connection with securing ,enforcing, defending, and maintaining
such intellectual property protection as the Company deems reasonable, which
assistance shall include the execution of documents, including those to
acknowledge assignments to the Company or persons designated by it, of
Consultant's entire worldwide right, title, and interest therein. In the event
that the Company is unable for any reason whatsoever to secure Consultant's
signature to any lawful and necessary document required to apply for or execute
any patent application with respect to an invention(s) (including reissues,
renewals, extensions, continuations, divisions or continuations in part
thereof), Consultant hereby irrevocably designates and appoints the Company and
its duly authorized officers and agents, as Consultant's agents and
attorneys-in-fact to act for and in Consultant's behalf and instead of
Consultant, to execute and file any such application and to do all other lawful
acts to further the prosecution and issuance of patents thereon with the same
legal force and effect as if executed by Consultant.
8. NON-DISCLOSURE AND NON-USE. The parties acknowledge that the
Company possesses and will possess information that has been created, discovered
or developed by, or has otherwise become known to, the Company (including
without limitation, information created, discovered, developed, invented, or
made known by or to Consultant arising specifically out of his retention as an
Consultant by the Company), and/or in which property rights have been assigned
or otherwise conveyed or disclosed to the Company, which information has
commercial value in the business in which the Company is engaged or intends to
engage. All of the aforementioned information is hereinafter called "Proprietary
Information." By way of illustration, but not limitation, Proprietary
Information includes Inventions, trade secrets, research results, processes,
formulae, data and know-how, improvements, inventions, techniques, marketing
plans, strategies, forecasts and customer lists. Proprietary Information also
includes
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any information which the Company has received from a third party which the
Company is obligated to treat as confidential or proprietary.
All Proprietary Information shall be the sole property of the Company
and its assigns, and the Company and its assigns shall be the sole owner of all
patents and other rights in connection therewith. Consultant hereby assigns to
the Company any and all worldwide rights, title, and interest Consultant may
have or acquire in all Proprietary Information. At all times during his
retention as an Consultant by the Company and at all times after expiration or
termination of this Agreement, Consultant will keep in confidence and trust all
Proprietary Information and will not disclose, sell, use, lecture upon, publish,
or otherwise disseminate any bona fide or potential Proprietary Information
without the written consent of the Company.
9. COMPANY MATERIALS. All documents, data, records, apparatus,
equipment, chemicals, molecules, organisms and other physical property, whether
or not pertaining to Proprietary Information, furnished to Consultant by the
Company or a third party or produced by Consultant or others in the course of
performance under this Agreement shall be and remain the sole property of the
Company and shall be returned promptly to the Company, along with any copy,
duplicate, or reproduction thereof, as and when requested by the Company. Should
the Company not so request, Consultant shall return and deliver all such
property upon expiration or termination of this Agreement for any reason, and
Consultant will not take with him any such property or any reproduction of such
property upon such expiration or termination.
10. COMPANY PROPERTY. All Proprietary Information and all title,
patents, patent rights, copyrights, mask work rights, trade secret rights, and
other intellectual property and rights anywhere in the world (collectively
"Rights") in connection therewith shall be the sole property of the Company.
Consultant hereby assigns to the Company any Rights Consultant may have or
acquire in such Proprietary Information. At all times, both during the term of
this Agreement and after its expiration or termination, Consultant will keep in
confidence and trust and will not use or disclose any Proprietary Information
without the prior written consent of an officer of the Company.
11. TERM AND TERMINATION. This Agreement expires December 31, 2010,
but is terminable prior to that date by either party at any time, with or
without advance notice, and with or without "Cause" (see definition below).
"Cause" is defined to mean: (i) conduct that in the good faith judgment
of the Company constitutes a material breach of Consultant's duty, (ii) lack of
sufficient progress with respect to a project or task assigned to Consultant,
leading the Company--in good faith--to conclude that any such project is not
viable, or (iii) Consultant's inability for any reason to provide consulting
services for a period exceeding 90 days. Should the agreement terminate due to
Consultant's refusal to continue to provide consulting services due to the
Company's relocation of its corporate headquarters to a facility more than 50
miles from the current facility, this would not be considered Cause. If the
Company hires Consultant as an employee and terminates this contract in the
process, this would be considered Cause.
If the Company terminates the agreement without Cause, the Company will
pay to Consultant an additional seven months of Direct Compensation, and any
stock options that would have vested had it not been for the application of a
"cliff" waiting period will vest.
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In the event the Company undergoes a change of control (i.e., if the
Company is acquired or merges with another corporation whereby the Company is
NOT the surviving entity and whereby the shareholders of the Company end up with
less than 50% ownership of the merged entity), after which the Agreement is
terminated without Cause (by the Company or its successors), the Company will
then pay to Consultant an additional twelve months of Direct Compensation. In
addition, if such termination occurs within 24 months following the change of
control, any unvested stock options previously granted to Consultant will
accelerate-vest by an additional 24 months, and Consultant will have up to 12
months to exercise any or all of his then-vested stock options. A condition
precedent to the Company's obligation to fulfill the payment and vesting
obligations in this Section 11 shall be Consultant's execution of a full and
complete release of all claims against the Company, its Board, officers, agents,
and affiliates in reasonable form as provided by the Company.
Compensation for activities beyond the scope and timeframe of this
Agreement will be negotiated as deemed necessary. Upon expiration or notice of
termination of this Agreement, the Company's obligation to pay any compensation,
except for services or expenses already accrued or incurred under Section 2,
will immediately cease and terminate.
Sections 4, 5, 7, 8, 9, 10, 11, 12, 15, 16, and 20 shall survive
expiration or termination of this Agreement.
12. RESPONSIBILITY OF CONSULTANT. The Company agrees not to hold
Consultant responsible for any inaccuracies, errors, or omissions in the
information or advice given, or for loss or damage resulting for the use of such
information or advice given.
13. REMEDIES. Consultant acknowledges and agrees that a breach of
this Agreement will result in immediate, irreparable, and continuing damage to
the Company for which there will be no adequate remedy at law; and agrees that
in the event of any such breach or violation or any threatened or intended
breach or violation of this Agreement, the Company and its successors and
assigns will be entitled to temporary, preliminary and permanent injunctive
relief and/or restraining orders enjoining and restraining such breach or
violation or such threatened or intended breach or violation and/or other
equitable relief (without needing to post any bond or other security) in
addition to such other and further relief as may be proper.
14. AMENDMENTS; WAIVERS; NOTICES. This Agreement may be modified,
amended, or supplemented only by a written instrument duly executed by
Consultant and the President of the Company. No term or condition or the breach
thereof will be deemed waived, unless it is waived in writing and signed by the
party against whom the waiver is claimed. Any waiver or breach of any term or
condition will not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other term or condition. The failure of any party to
insist upon strict performance of any term or condition hereunder will not
constitute a waiver of such party's right to demand strict compliance therewith
in the future. Any notice given by one party to the other pursuant to this
Agreement shall be in writing and shall be deemed to have been effectively given
(i) upon receipt when delivered personally, (ii) one (1) day after sending when
sent overnight by a nationally recognized overnight courier (e.g., FedEx), or
(iii) five (5) days after mailing when sent by certified U.S. mail, postage
prepaid, to the following address:
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If to the Company: Lpath, Inc.
Attn: Xxxxx Xxxxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx X
Xxx Xxxxx, XX 00000-0000
If to Consultant, the address set forth below his/her signature.
15. GOVERNING LAW; JURISDICTION AND VENUE. This Agreement will be
governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law. Except as
otherwise expressly provided in this Agreement, the parties agree that any
dispute regarding the interpretation or validity of this Agreement will be
subject to the exclusive jurisdiction of the state and federal courts in and for
the County of San Diego, California, and each party hereby agrees to submit to
the personal and exclusive jurisdiction and venue of such courts.
16. ARBITRATION. Except as otherwise expressly provided in this
Agreement, Consultant and the Company hereby agree to submit to final and
binding arbitration relating to: (i) any and all disputes arising out of or
relating to this Agreement its interpretation, enforcement, breach, or
performance hereunder, including the provision of services rendered under its
terms, or (ii) termination of Consultant's consulting services hereunder. Any
arbitration shall be conducted in San Diego, California and shall be before a
single, neutral arbitrator selected by the parties, in accordance with the rules
of the American Arbitration Association (the "AAA") for Employment Disputes. If
the parties are to be unable to agree on a single neutral arbitrator, the
arbitrator shall be selected pursuant to the AAA rules. The arbitrator shall
have the power to enter any award that could be entered by a judge of a trial
court of the State of California, and only such power, and shall follow the law.
The parties agree to abide by and perform any award rendered by the arbitrator.
The arbitrator shall issue the award in writing and therein state the essential
findings and conclusions on which the award is based. Judgment on the award may
be entered in any court having jurisdiction thereof. In no event shall the
demand for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute, or other matter in question
would be barred by the applicable statute of limitations. This agreement to
arbitrate shall be specifically enforceable under the prevailing arbitration
law, and shall be in accordance with the procedures established for arbitration
in the California Code of Civil Procedure. Both Consultant and the Company
understand that by agreeing to arbitrate their disputes, they are giving up
their right to have their disputes heard in a court of law and, if applicable,
by a jury. The Company shall bear the costs of the arbitrator, the forum, and
any filing fees. Each of the Consultant and the Company would bear its own
respective attorney's fees and all other costs, unless otherwise required or
allowed by law and awarded by the arbitrator. This provision will survive
termination of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in multiple copies,
each of which will be deemed an original and all of which will constitute a
single agreement binding on all parties.
18. ENTIRE AGREEMENT. This Agreement (together with documents and
agreements entered into herewith) constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements and
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understandings. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements have been made by any
party, or any one acting on behalf of any party, that are not embodied in this
Agreement with respect to the subject matter hereof.
19. REPRESENTATION. By executing this Agreement, Consultant
acknowledges that he/she understands and agrees that he/she has been encouraged,
and had the opportunity to, consult with his/her own personal attorney in
connection with this Agreement.
20. ASSIGNMENT. Due to the personal nature of the consulting
services to be rendered by Consultant hereunder, Consultant may not assign this
Agreement, in whole in part, or any of his rights or obligations hereunder,
except that Consultant may assign his right to receive compensation hereunder
for purposes of estate planning. The Company may assign its rights and
obligations hereunder without restriction. Subject to the foregoing, this
Agreement will inure to the benefit of and be binding upon each of the heirs,
assigns, and successors of the respective parties.
21. SEVERABILITY. If any provision of this Agreement shall be
declared invalid, illegal, or unenforceable, such provision shall be modified to
the extent necessary to render it compliant with applicable law, and, to the
extent it cannot be so modified, such provision shall be severed from this
Agreement and the remaining provisions shall continue in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CONSULTANT THE COMPANY
LPATH, INC.
------------------------------------ a Delaware corporation
(Signature)
XXXXX XXXXXXXXX, PH.D. By:
------------------------------------ ----------------------------------
(Printed Name) (Signature)
Xxxxx Xxxxxxxx, President & C.E.O.
-------------------------------------
(Printed Name and Title)
[SIGNATURE PAGE TO CONSULTANT AGREEMENT]
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