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EXHIBIT 4.1f
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is made as of April 18, 1996 (the
"Effective Date"), by and between Guilford Pharmaceuticals Inc., a Delaware
corporation, with its principal offices at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 (the "Company"), and Xxxxx X. Xxxx, M.D., of 00000 Xxxx
Xxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxx 00000 (the "Consultant").
WHEREAS, the Company desires to engage the Consultant, and the
Consultant desires to be engaged by the Company, pursuant to the terms
contained in this Agreement;
NOW THEREFORE, in consideration of the mutual promises of the
parties hereunder, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the
Consultant hereby agree as follows:
1. Services. The Company hereby retains the Consultant to
perform, and the Consultant hereby agrees to render to the Company, consulting
and advisory services as requested from time to time by the Company (the
"Services"). Such Services may include, but shall not be limited to, the
following: serving on any advisory board in the area of targeted controlled
delivery of drugs in biodegradable polymers, helping to identify and recruit
candidates and business prospects helpful to the business of the Company,
advising and assisting the Company in connection with the acquisition and/or
development of new technologies and advising regarding the development of
potentially competitive products and participating in such meetings pertaining
to the business of the Company as the Company may from time to time reasonably
request. The Consultant agrees to use reasonable efforts to perform the
Services and to make himself available to render the Services for up to 38 days
per year, at the Company's discretion, at times which are mutually acceptable,
during the term of this Agreement.
2. Consulting Fees.
(a) As complete consideration for the performance of the
Services by the Consultant under this Agreement, the Company agrees, subject to
the terms of this Agreement, to pay the Consultant a cash retainer and issue
stock options as provided in this Section 2.
(b) The Company agrees to pay the Consultant a cash retainer,
payable monthly in arrears within 10 days of the end of each month during the
term of the Agreement, as follows:
(i) $115,000 per annum ($9,583.33 per month) for the
first year of this Agreement;
(ii) $125,000 per annum ($10,416.66 per month) for the
second year of this Agreement;
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(iii) $135,000 per annum ($11,250 per month) for the third
year of this Agreement; and
(iv) $145,000 per annum ($12,083.33 per month) for the
fourth year of this Agreement.
(c) The Company hereby issues to the Consultant stock options
covering the Company's common stock as follows:
(i) Subject to Section 2(e) and (f) below, 50,000
non-qualified stock options issued as of the
Effective Date, valid for 10 years from issuance, at
an exercise price of $10.00 per share, vesting 40% on
December 15, 1996 and the remaining 60% on the first
anniversary of the Effective Date, provided the
Consultant has continuously served in a consulting
capacity with the Company as of the applicable
vesting date.
(ii) Subject to Section 2(e) below, 50,000 non-qualified
stock options issued as of the Effective Date, valid
for 10 years from issuance, at an exercise price of
the closing price per share on the last trading day
prior to the Effective Date (the "Exercise Price"),
vesting 16,666 options on the second anniversary of
the Effective Date, 16,667 options on the third
anniversary of the Effective Date, and 16,667 options
on the fourth anniversary of the Effective Date,
provided the Consultant has continuously served in a
consulting capacity with the Company as of the
applicable vesting date (or in the case of the
options vesting on the fourth anniversary of the
Effective Date, through the term of this Agreement).
(iii) Subject to Section 2(d), (e) and (f) below, 50,000
non-qualified stock options issued as of the
Effective Date, valid for 10 years from issuance, at
the Exercise Price, vesting 119 months following the
Effective Date, provided the Consultant has
continuously served in a consulting capacity with the
Company as of the vesting date, but subject to
accelerated vesting as follows:
(A) 15,000 options vesting 30 days following
receipt by the Company in the aggregate
cumulative sum of at least $5 million for the
development by the Company of a "New Polymer
Product" (i.e., a product in the Field, as
defined in Section 4(a) below, other than
"GLIADEL", i.e., PCPP:SA with 3.85% BCNU)
pursuant to one or more strategic alliance,
research and development or similar
transaction(s) between the Company and one or
more third party companies;
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(B) 10,000 options vesting 30 days following
receipt by the Company of a cumulative
aggregate sum of at least $3 million for the
development of products in the Field from new
external sources other than those
contemplated in (A) above (e.g., from
government agencies or foundations);
(C) 5,000 options vesting 30 days following
execution of the first license agreement, if
any, between the Company and the
Massachusetts Institute of Technology ("MIT")
and/or The Xxxxx Xxxxxxx University ("JHU")
pursuant to which the Company (in its
absolute discretion) licenses any new polymer
composition or use patent(s) (other than the
patent applications listed in the License
Agreement between Guilford and MIT and JHU
contemplated in Section 2(e) below) invented
by the Consultant and/or his collaborator,
Xxxxxx X. Xxxxxx, Ph.D. of MIT;
(D) 10,000 options vesting 30 days following the
filing by the Company of an Investigational
New Drug for a New Polymer Product containing
a drug other than BCNU;
(E) 10,000 options vesting 30 days following
enrollment of the first patient in a Phase
III Clinical Trial sponsored by the Company
for a New Polymer Product containing a drug
other than BCNU;
(F) 10,000 options vesting 30 days following
submission by the Company of a New Drug
Application for a New Polymer Product; and/or
(G) 10,000 options vesting 30 days following the
closing of a public or private equity
offering (but not including any issuance of
equity to any corporate partner for GLIADEL)
during the term of the Agreement pursuant to
which the Company has raised at least
$10,000,000;
provided that notwithstanding the occurrence of some or all of the
events listed in (A) through (G) above, nothing shall obligate the
Company to issue or vest in excess of 50,000 stock options pursuant to
this Section 2(c)(iii).
(d) Provided that the Consultant was not terminated for cause
(as defined below), or Consultant did not voluntarily terminate the Agreement,
or the Agreement did not terminate due to the death or disability of
Consultant, the provisions of each of Section 2(c)(iii)(A), (B) and (E) shall
survive any termination or expiration of the Agreement for a period of two (2)
years,
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and the provisions of Section 2(c)(iii)(F) shall survive any termination or
expiration of the Agreement until the end of the 119th month following the
Effective Date.
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(e) The stock options described in Section 2(c)(i), (ii) and
(iii) above shall accelerate and vest upon the effective date of a merger where
the Company is not the surviving entity or a disposition of substantially all
of the assets of the Company. In the event of death of Consultant, the legal
representative of the estate or heir will have up to a year thereafter to
exercise vested stock options, but unvested stock options will cease to vest
upon Consultant's death.
(f) The stock options described in Section 2(c)(i) and (iii)
above shall be subject to the condition subsequent that the Company enters into
a License Agreement with MIT and JHU in form and content acceptable to the
Company, MIT and JHU, with respect to the invention of Consultant and Xxxxx
Xxxx, M.D., entitled "Controlled Local Delivery of Chemotherapeutic Agents for
Treating Solid Tumors" (MIT case no. 6651) and related domestic and foreign
filings as may be set forth in any such License Agreement prior to December 15,
1996.
(g) All tax consequences of fees and other consideration
under this Agreement shall be the responsibility of the Consultant.
(h) The parties hereto agree that the Consultant shall
receive no other compensation (other than reimbursement of reasonable expenses)
for the Consultant's service on behalf of the Company, whether on any advisory
board or otherwise.
3. Term. The term of this Agreement shall commence on the
Effective Date and shall continue for a term of four (4) years, unless further
extended or renewed by mutual agreement of the parties hereto, or unless
earlier terminated as hereinafter provided. This Agreement may be terminated
as follows:
(a) automatically upon the death of the Consultant;
(b) by the Company, if, due to the illness or disability of
the Consultant, the Consultant is unable to perform his obligations under this
Agreement for a period in excess of three (3) consecutive months or 120 days
out of any 12 month period;
(c) by the Company on written notice "for cause"; "for cause"
as used in this Agreement shall mean (i) the failure or refusal on the part of
the Consultant to timely perform his duties under this Agreement; (ii) a
material breach by the Consultant of any other provision of this Agreement;
(iii) the commission by the Consultant of a fraudulent or dishonest act in the
Consultant's relations with the Company; (iv) the conviction of the Consultant
for any crime involving a felony, fraud, embezzlement or the like or an act of
moral turpitude; or (v) other willful, reckless or negligent misconduct or
similar action on the part of the Consultant that is materially damaging or
detrimental to the Company.
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4. Exclusivity and Non-Competition.
(a) The Consultant will consult exclusively for the Company
(except with respect to specific matters with the Company's prior consent), and
will not accept employment from or consult for any other commercial entities,
in the area of targeted controlled delivery of chemotherapeutics, biologicals
and/or other agents for the treatment of cancer (the "Field"). For the
avoidance of doubt: (i) the parties acknowledge that the Consultant has been
and is performing investigations and consulting in the area of antiangiogenesis
for the treatment of cancer, and agree that such investigations and consulting
can continue except that the targeted controlled delivery of such agents for
the treatment of cancer shall be included within the Field as used in this
Agreement; (ii) "targeted" means directing delivery of the product (whether the
active drug, the product or any other component of the product) by design to
the site of the cancer (whether locally placed at the site, introduced
systemically or otherwise); "controlled" means release of the active drug by
design in a polymer vehicle, which vehicle releases the drug over some
non-trivial period of time at the site of the cancer; for a product to be
considered in the Field, it must be both targeted and controlled, and not just
one or the other; (iii) this Section 4(a) will not preclude the Consultant from
engaging in academic research, so long as the Consultant is not consulting
(whether as a consultant or an employee) in the Field for a commercial entity;
and (iv) the Field is intended to encompass therapeutics, not diagnostics or
imaging agents.
(b) The Consultant will disclose in writing to the Company,
in the person of the Chief Executive Officer and the General Counsel of the
Company, prior to the commencement of this Agreement and on every anniversary
during the term of this Agreement (as the same may be extended or renewed), the
Consultant's membership on scientific advisory boards, boards of directors and
similar bodies and commercial entities with which he has a consulting or
employment relationship or an ownership interest of more than 1% of any equity
in a public or private company (in which event such percentage ownership will
be disclosed), which information such disclosees shall keep confidential for a
period of five (5) years from disclosure, provided that such obligation of
confidence shall not apply to information (i) which was at the time of
disclosure or subsequent thereto comes into the public domain through no fault
of the Company, or (ii) which the Company had in its possession at the time of
disclosure by the Consultant, or (iii) which the Company receives in good faith
from a third party who is not, to the Company's knowledge in good faith, under
an obligation of confidentiality to the Consultant with respect to the
information in question, or (iv) which the Company is required to disclose by
law (the contingencies in (i) through (iv) above, "Standard Exceptions to
Confidentiality"), provided that nothing herein shall limit such disclosees
from disclosing such information as they may deem necessary or desirable in the
event of a dispute regarding whether or not this exclusivity provision has been
breached by the Consultant. The Company will use its commercially reasonable
best efforts to destroy the Consultant's written disclosures of memberships and
consultancies no later than five (5) years following disclosure thereof
hereunder.
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(c) In the event of any early termination of this Agreement
by the Consultant prior to the expiration of the four year term set forth in
Section 3 above (or any mutually agreed extension or renewal thereof), the
Consultant agrees that he will not, for a period of one year thereafter, accept
employment from or consult for any other commercial entities in the Field,
provided that this Section 4(c) will not preclude the Consultant from engaging
in academic research.
(d) The Consultant represents and warrants to the Company
that the Consultant is, as of and including the date hereof, under no
contractual or other restriction or obligation, including agreements or
understandings with other parties, which conflicts with this Agreement, the
performance of his duties hereunder or the other obligations of the Consultant
to the Company. The Consultant hereby represents and warrants that he has no
present plans to terminate his present full-time employment with JHU or some
other comparable academic institution to join any commercial enterprise or
engage in other business or private practice.
(e) Nothing in this Agreement shall be deemed to limit the
Company from engaging other consultants or employees in the Field or otherwise.
5. Independent Contractor Relationship. It is understood and
agreed that the Consultant's relationship with the Company is that of an
independent contractor and that neither this Agreement nor the Services to be
rendered hereunder shall for any purpose whatsoever or in any way or manner
create any employer-employee relationship between the parties.
6. Assignments; Inventions. The Consultant hereby agrees to
use his best efforts without further compensation to assign or to have assigned
to the Company all of his right, title and interest in and to, any and all
inventions, processes, systems, improvements, modifications, secrets, designs
or discoveries, whether or not made, possessed, discovered or conceived by him,
individually or jointly with any other person or persons, whether made in or
out of working hours, free and clear of all liens, charges and encumbrances,
created or conceived by him during the term of this Agreement and patented or
reduced to practice within one year thereafter, which relate to the business of
the Company and which are not owned by The Xxxxx Xxxxxxx University pursuant to
the Xxxxx Xxxxxxx School of Medicine Intellectual Property Guidelines (dated
January 1, 1995), a copy of which is attached hereto as Exhibit 1 and
incorporated herein by reference (collectively, the "Inventions").
7. Disclosure of Inventions. The Consultant agrees to
promptly disclose Inventions to the Company. With respect to the Inventions,
the Consultant will, either during the term of or after the expiration or
termination of this Agreement for any reason, at the request and at the sole
cost of the Company, sign, execute, make and do all such deeds, documents, acts
and things as the Company and its duly authorized agents may reasonably
require, and further agrees to:
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(i) apply for, obtain and vest in the name of the Company
alone (unless the Company otherwise directs) letters
patent or other invention protection in any country
throughout the world and when so obtained or vested
to extend, renew and restore the same;
(ii) defend any opposition proceedings in respect of such
applications and any opposition proceedings or
petitions or applications for revocation of such
letters, patents or other analogous protection; and
(iii) perform any other lawful acts which the Company may
reasonably request to carry out the purpose of this
Agreement.
8. Confidentiality.
(a) The Consultant agrees that he will not at any time
publish, reveal, sell, make accessible, give away or disclose to others or use
for his own benefit or except for the benefit of the Company, any research,
development, engineering and manufacturing data, plans, designs, formula,
processes, specifications, techniques, trade secrets, financial information,
customer or supplier lists or other information which are, or pursuant to the
terms hereof become, the property or confidential information of the Company or
any of its clients, customers, consultants, licensees or affiliates, or which
are acquired by him directly as a result of his acting as consultant to the
Company, except to such extent as may be required by law. The Consultant
agrees that he will not make any notes or memoranda relating to any matter that
is a art of the trade, activities or business of the Company or concerning any
of its dealings otherwise than for the benefit of the Company. The Consultant
shall at the Company's request return or destroy all tangible embodiments of
such confidential information prior to or at the termination of this Agreement.
(b) The parties agree to keep the fact and all terms of this
Agreement strictly confidential except: (i) in case of any Standard Exceptions
to Confidentiality; (ii) to the extent the Company deems disclosure necessary
or desirable under its public reporting obligations under securities laws;
(iii) to the extent mutually agreed by the parties hereto; and (iv) to the
extent the Consultant needs to disclose same to MIT pursuant to any obligation
to clear this Agreement with MIT, provided that Consultant will request
confidential treatment to be afforded same to the greatest extent possible.
9. Publication of Company Information. Subject to Section 8
above, the Consultant may publish information relating to the Field if in each
instance the Consultant provides Company thirty (30) days for review and
comment upon the manuscript or other material for such publication. Expedited
reviews for abstracts or poster presentations may be arranged if mutually
agreeable to the Consultant and the Company. In addition, if requested in
writing by the Company, the Consultant will withhold such publication an
additional sixty (60)
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days to allow for filing a patent application or taking such other measures as
the Company deems appropriate to establish and preserve available proprietary
rights.
10. Breach of Agreement. The Consultant and the Company
agree that any material breach of this Agreement by either of them could cause
irreparable damage to the other party, and that in the event of such material
breach, in addition to any other remedies hereinbefore mentioned, the
non-breaching party shall have the right to obtain injunctive relief,
including, without limitation, specific performance or other equitable relief
to prevent the violation of the breaching party's obligations hereunder. It is
expressly understood and agreed that nothing herein contained shall be
construed as prohibiting the non-breaching party from pursuing any other
remedies available for such material breach including, without limitation, the
recovery of damages by the non-breaching party.
11. Assignment; Binding Effect. The Services to be rendered
by the Consultant are personal in nature. The Consultant may not assign or
transfer this Agreement or any of his rights or obligations hereunder. In no
event shall the Consultant assign or delegate responsibility for actual
performance or Services or any other obligations hereunder. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties and their respective legal representatives, successors and assigns.
12. Notices. All notices and other communications hereunder
shall be delivered or sent by registered or certified mail or by a major
recognized express courier service (such as Federal Express), return receipt
requested, addressed to the Company at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attn.: Xx. Xxxxx X. Xxxxx, or to the Consultant at the address
set forth above, or to such other address as either party may designate in
writing to the other.
13. Entire Agreement. This Agreement constitutes the entire
agreement between the parties as to the subject matter hereof and supersedes
and terminates as of this date any prior agreements between the parties for the
Services engaged hereunder. No provision of this Agreement shall be waived,
altered or canceled except in writing signed by the party against whom such
waiver, alteration or cancellation is asserted. Any such waiver shall be
limited to the particular instance and time and shall not constitute a waiver
of any subsequent instance without a specific waiver in writing by the party
against whom such waiver is sought to be enforced.
14. Counterpart. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, without giving
effect to conflict of laws.
16. Severability. In the event that any term of this
Agreement is held to be invalid, illegal, or unenforceable, such invalidity,
illegality, or unenforceability shall not affect any other portion of this
Agreement, and there shall be deemed substituted therefor such term as
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will most fully realize the intent of the parties as expressed in this
Agreement to the fullest extent permitted by applicable law, the parties hereby
declaring their intent that this Agreement be construed in such fashion as to
maintain its existence, validity, and enforceability to the greatest extent
possible.
17. Xxxxx Xxxxxxx University Not A Party. The parties
acknowledge that The Xxxxx Xxxxxxx University, the Consultant's employer as of
the date hereof, is not a party to this Agreement, which is a private contract
between the Consultant and the Company. Notwithstanding the foregoing, the
parties agree as follows: with the limited exception of citing Consultant's
faculty title and institutional affiliation, the Company and its affiliates
will not use the names, likenesses, or logos of the Xxxxx Xxxxxxx University,
any of its Schools or Divisions, or the Xxxxx Xxxxxxx Hospital and Health
System in any of their fundraising or investment documents, general
publications, advertisements, or marketing and promotional materials without
the prior written permission of the Xxxxx Xxxxxxx University. A request for
such permission must be submitted by the Consultant to the School of Medicine's
Conflict of Interest Review Coordinator, who in appropriate circumstances, will
have it reviewed by the School of Medicine's Office of Public Affairs.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
GUILFORD PHARMACEUTICALS INC.
By: /s/ Xxxxx X. Xxxxx, M.D. /s/ Xxxxx X. Xxxx, M.D.
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Name: Xxxxx X. Xxxxx, M.D. Xxxxx X. Xxxx, M.D.
Title: President and Chief Executive Officer
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Exhibit 1: Xxxxx Xxxxxxx School of Medicine Intellectual Property Guidelines
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