EXHIBIT 10.21
SOMAXON PHARMACEUTICALS, INC.
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "AGREEMENT") is effective as of August 25,
2003 (the "EFFECTIVE DATE"), by and between SOMAXON PHARMACEUTICALS, INC., a
Delaware corporation (the "COMPANY"), and XXXXX XXXX (the "CONSULTANT").
Section 1. Services
The Company hereby retains Consultant and Consultant hereby agrees to
render consulting services ("SERVICES") to the Company for the term of this
Agreement. The Services shall be those duties set forth in EXHIBIT A hereto,
which may be amended by the mutual consent of the parties. The Consultant will
not perform any Services for the Company except as authorized or requested by
the Company.
Section 2. TERM AND TERMINATION
a. This Agreement is effective as of the Effective Date, and will
terminate on the date of acceptance for filing of an NDA for the
initial Licensed Product (as each such term is defined in that
certain License Agreement of even date herewith by and between the
Company and ProCom One, Inc. (the "LICENSE AGREEMENT")) (the
"TERMINATION DATE"), unless terminated earlier pursuant to
subsection (b) below or extended by mutual consent of the Consultant
and the Company.
b. This Agreement may be terminated by either the Company or the
Consultant (a) for cause at any time prior to the Termination Date
by giving written notice of termination setting forth in reasonable
detail the basis for the termination and providing the other party
with thirty (30) days' opportunity to cure or (b) upon the
termination of the License Agreement.
c. Termination of this Agreement shall not affect (i) the Company's
obligation to pay for Services previously rendered by the Consultant
or expenses reasonably incurred by the Consultant for which the
Consultant is entitled to reimbursement under Section 3 of this
Agreement, or (ii) the Consultant's continuing obligations to the
Company under Sections 5 and 6 of this Agreement.
d. In connection with the Consultant's Services to the Company, the
Consultant agrees to be available for consultation by telephone, fax
or e-mail on a regular basis throughout the year on reasonable prior
notice, and be available to attend meetings with the Chairman, CEO
or Board of Directors of the Company at the Company's headquarters
on reasonable prior notice, in any case for not less than the
equivalent of five (5) business days per month.
e. During the term of this Agreement, Consultant shall render the
Services on an exclusive basis to the Company. However, it is
understood by the Company that Consultant (i) is currently involved
in ventures in other than the Consulting Field (as hereinafter
defined), (ii) will involve himself in additional ventures in other
than the Consulting Field during the term of this Agreement, and
(iii) performs consulting services for third parties on matter
outside of the Consulting Field. Company expressly agrees to
Consultant's continued participation in such activities.
Furthermore, Company expressly agrees to Consultant's participation
in activities arising from opportunities that arise through the
operation of Section 2(f) immediately below.
f Consultant's Services as set forth in Exhibit A include the duty to
"identify, cultivate and develop product licensing contacts,
partnering contacts, corporate acquisition contacts and
international business partners and to help the Company to negotiate
related agreements within the Consulting Field" (each referred to as
a "BUSINESS OPPORTUNITY"). In the event that the Company, after
review and consideration of a given Business Opportunity, elects not
to pursue such Business Opportunity, the Company shall promptly
notify Consultant and Consultant shall be free to pursue such
Business Opportunity independently of the Company and free of any
financial or other obligations to the Company.
Section 3. COMPENSATION
a. As compensation for the Services to be rendered pursuant to this
Agreement, the Company shall pay to Consultant the sum of $8,333 per
month, to be paid monthly on the last calendar day of each month.
Compensation for Consultant's services rendered during the first and
last months shall be calculated on a pro-rata basis.
b. The Company shall reimburse, in accordance with its standard
business practices, the Consultant's actual travel and other
out-of-pocket expenses reasonably incurred in performing such
Services after submission of reasonably detailed invoices
documenting such expenses.
Section 4. RELATIONSHIP OF THE PARTIES; NO CONFLICTS
a. Notwithstanding any provision of this Agreement to the contrary, the
Consultant is and shall at all times be an independent contractor
and not an employee of the Company. The Consultant shall have no
right under this Agreement, or as a result of his consulting
services to the Company, to participate in any other employee,
retirement, insurance or other benefit program of the Company, nor
will the Company make any deductions from the Consultant's
compensation for taxes, the payment of which shall be solely the
Consultant's responsibility.
b. The Consultant shall pay, when and as due, any and all taxes
incurred as a result of his compensation hereunder, including
estimated taxes, and if requested by the Company, provide the
Company with proof of said payments.
c. The Consultant represents and warrants that neither this Agreement
nor the performance thereof will conflict with or violate any
obligation of the Consultant or right of any third party.
Section 5. INTELLECTUAL PROPERTY
a. The Consultant agrees to assist the Company in any reasonable manner
to obtain and enforce for the Company's benefit any patents,
copyrights and other property rights in any and all countries, with
respect to any Intellectual Property (defined below), and the
Consultant agrees to execute, when requested, patent, copyright or
similar applications and assignments to the Company and any other
lawful documents deemed necessary by the Company to carry out the
purposes of this Agreement with respect thereto. In the
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event that the Company is unable for any reason to secure, after
making diligent efforts to do so, the Consultant's signature to any
document required to apply for or execute any patent, copyright or
other applications with respect to any Intellectual Property
(including improvements, renewals, extensions, continuations,
divisions or continuations in part thereof), after a written demand
is made therefor upon the Consultant (which shall refer to the
provisions of this paragraph), the Consultant hereby irrevocably
designates and appoints the Company and its duly authorized officers
and agents as the Consultant's agents and attorneys-in-fact to act
for and on the Consultant's behalf and instead of the Consultant, to
execute and file any such application and to do all other lawfully
permitted acts to further the prosecution and issuance of patents,
copyrights, mask works or other rights thereon with the same legal
force and effect as if executed by the Consultant.
b. All right, title and interest of every kind and nature whatsoever in
and to the Intellectual Property made, discussed, developed,
secured, obtained or learned by the Consultant during the term of
this Agreement shall be the sole and exclusive property of the
Company for any purposes or uses whatsoever, and shall be disclosed
promptly by the Consultant to the Company.
c. "INTELLECTUAL PROPERTY" includes any and all new or useful art,
discovery, improvement, technical development, or invention, whether
or not patentable and all related know-how, designs, trademarks,
formulae, processes, manufacturing techniques, trade secrets, ideas,
artworks, software or other copyrightable or patentable work, that
the Consultant, solely or jointly with others, makes, conceives or
reduces to practice which relate directly to the Consulting Field.
d. "CONSULTING FIELD" shall mean (i) the Field as defined in the
License Agreement, and (ii) pharmaceuticals, the primary indication
of which is in the field of psychiatry.
e. Improvements, as defined in the License Agreement, are subject to
the right of reversion to ProCom One, Inc. as set forth in Section
9.4 of the License Agreement. Somaxon acknowledges that Intellectual
Property, as defined above, may include Improvements and that such
inclusion shall not affect the operation of such Section 9.4.
Section 6. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
a. The Consultant recognizes and acknowledges that certain knowledge
and information which he or she may acquire or develop relating to
the business of the Company, including, without limitation,
technical and non-technical information including patent, copyright,
trade secret, and proprietary information, techniques, sketches,
drawings, models, inventions, know-how, processes, apparatus,
equipment, algorithms, software programs, software source documents,
and formulae related to the current, future and proposed products
and services of the Company and its suppliers and customers, and
includes, without limitation, its respective information concerning
research, experimental work, development, design details and
specifications, engineering, financial information, procurement
requirements, purchasing, manufacturing, customer lists, business
forecasts, sales and merchandising and marketing plans and
information (collectively, "CONFIDENTIAL INFORMATION") are the
valuable property of the Company or otherwise the subject of a
license and/or right of first negotiation granted by ProCom One,
Inc. to the Company pursuant to the License Agreement.
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b. The Consultant covenants and agrees that, without the prior written
consent of the Company, the Consultant will not use, disclose,
divulge or publish any Confidential Information at any time during
the term hereof or thereafter except as may be necessary to perform
the Services; provided, however, that the Consultant shall not be
obligated to treat as confidential, any Confidential Information
that (i) was publicly known at the time of disclosure to the
Consultant, (ii) becomes publicly known or available thereafter
other than by means in violation of this Agreement or any other duty
owed to the Company by the Consultant, or (iii) is lawfully
disclosed to the Consultant by a third party.
c. The Consultant agrees not to disclose to the Company, or use in
connection with the Consultant's efforts for the Company, any
Confidential Information belonging to any third party, including the
Consultant's prior employers, or any prior inventions made by him
and which the Company is not otherwise legally entitled to learn of
or use.
d. Upon termination of his service hereunder, the Consultant agrees to
promptly deliver to the Company, all Confidential Information
belonging to the Company in his possession that is written or other
tangible form (together with all copies or duplicates thereof,
including computer files), and all other property, materials or
equipment that belong to the Company, its customers or its
suppliers.
Section 7. NON-SOLICITATION
a. During the term of this Agreement and for a period of twelve (12)
months thereafter, the Consultant agrees that, without the prior
written consent of the Company, the Consultant will not, directly or
indirectly, on his behalf or on behalf of any other person or
entity, (i) call upon, solicit, divert or take away or attempt to
solicit, divert or take away any of the customers, business or
consultants of the Company; or (ii) employ, solicit or attempt to
solicit for employment any person who is then an employee of the
Company or who was an employee of the Company at any time during the
twelve (12) month period immediately prior to the date of the
subject solicitation.
b. The parties acknowledge that the foregoing restrictions placed upon
the Consultant are necessary and reasonable in scope and duration
and are a material inducement to the Company to execute, deliver and
perform its obligations arising under or pursuant to this Agreement,
and that despite such restrictions the Consultant will be able to
earn his livelihood and engage in his profession during the term of
this Agreement.
Section 8. INDEMNIFICATION
a. The Company shall indemnify, defend and hold harmless the Consultant
from and against losses and expenses (including reasonable
attorneys' fees, judgments, settlements and all other costs, direct
or indirect) actually and reasonably incurred by reason of, or based
upon, any threatened, pending or completed action, suit, proceeding,
investigation or other dispute relating or pertaining to any alleged
act or failure to act within the scope of the Services, provided
that the Consultant acted in good faith and in a manner the
Consultant reasonably believed to be in the best interests of the
Company and, if any criminal proceedings are involved, had no
reasonable cause to believe the Consultant's conduct was unlawful.
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b. The Consultant agrees to cooperate in all respects with the Company
in the defense of any such claim. The Consultant also agrees and
undertakes to repay defense costs and expenses, including attorneys'
fees, reasonably incurred in defending against any such claim which
may be advanced by the Company prior to the final disposition of any
proceeding relating to such claim, if a court of competent
jurisdiction ultimately shall determine that the Consultant is not
entitled to indemnification pursuant to this Agreement or the
indemnification is not consistent with any applicable law or
regulation.
Section 9. RIGHTS AND REMEDIES UPON BREACH
If the Consultant breaches or threatens to commit a breach of any of
the provisions of Sections 5, 6 or 7 of this Agreement (the
"RESTRICTIVE COVENANTS"), the Company shall have the right and
remedy to seek specific enforcement of the Restrictive Covenants by
any court of competent jurisdiction, it being agreed that any breach
or threatened breach of the Restrictive Covenants may cause
irreparable injury to the Company and that money damages may not
provide an adequate remedy to the Company. The Company shall also
have any other rights and remedies available to the Company under
law or in equity.
Section 10. MISCELLANEOUS
a. This Agreement shall be governed in all respects by the laws of the
State of California, without regard to any provisions thereof
relating to conflict of laws among different jurisdictions.
b. Except as provided in Section 9 above, the parties agree that any
dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this
Agreement shall be settled by arbitration to be held in San Diego
County, California, in accordance with the rules then in effect of
the American Arbitration Association. The arbitrator may grant
injunctions or other relief in such dispute or controversy, and may
award the prevailing party its counsel fees and expenses. The
decision of the arbitrator shall be final, conclusive and binding on
the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court of competent jurisdiction. The
costs and expenses of such arbitration, including each party's
respective counsel fees and expenses, shall be paid by the
non-prevailing party, unless otherwise determined by the arbitrator.
c. This Agreement, together with the License Agreement, set forth the
entire agreement of the parties with respect to the Services to be
provided by the Consultant and supersedes any prior agreements or
term sheets between them with respect to the subject matter of this
Agreement. This Agreement may only be amended in writing by the
Company and the Consultant and their respective permitted successors
and assigns.
d. Neither party may subcontract or otherwise delegate its obligations
under this Agreement without the other party's prior written
consent, and the services to be provided by the Consultant hereunder
may only be performed by the Consultant personally. Subject to the
foregoing, this Agreement will be binding upon and inure to the
benefit of the parties and their respective heirs, legal
representatives, successors and assigns.
e. Either party's failure to enforce any right resulting from a breach
of any provision of this Agreement shall not operate or be construed
as a waiver of any other or subsequent breach by the other party.
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f. All notices required or permitted to be given by one party to the
other under this Agreement shall be sufficient if sent by either
certified mail return receipt requested, nationally recognized
courier, facsimile or hand delivery to the parties at the respective
addresses set forth below or to such other address as the party to
receive the notice has designated by written notice to the other
party. All notices shall be effective (i) when delivered personally,
(ii) when transmitted by telecopy, electronic or digital
transmission with receipt confirmed, (iii) the business day when
delivered by a nationally recognized courier, or (iv) upon receipt
if sent by certified or registered mail.
g. If any of the provisions of this Agreement are found to be invalid
under an applicable statute or rule of law, they are to be enforced
to the maximum extent permitted by law and beyond such extent are to
be deemed omitted from this Agreement, without affecting the
validity of any other provision of this Agreement.
h. This Agreement may be executed in counterparts, each of which will
be deemed an original and all of which together shall constitute one
and the same instrument.
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Having understood and agreed to the foregoing, the Company and the
Consultant have signed this Agreement as of the day and year written above.
CONSULTANT SOMAXON PHARMACEUTICALS, INC.
/s/ Xxxxx Xxxx By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxx Xxxx Name: Xxxxxxx Xxxxx
Title: President and Chief Executive
Officer
EXHIBIT A
DUTIES OF CONSULTANT
Consultant shall perform the following duties for the Company:
- Provide strategic advice and review concerning the Company's product
development efforts, including research and clinical development
programs within the Consulting Field;
- Identify, cultivate and develop product licensing contacts,
partnering contacts, corporate acquisition contacts and
international business partners and negotiate related agreements
within the Consulting Field; and
- Provide such other assistance within the Consulting Field as may be
reasonably requested by the Company.
"CONSULTING FIELD" shall mean (i) the Field as defined in the License Agreement,
and (ii) pharmaceuticals, the primary indication of which is in the field of
psychiatry.
