Exhibit 99.3
[LOGO] Lpath
CONSULTANT AGREEMENT
THIS CONSULTANT AGREEMENT ("Agreement") is entered into as of January 1,
2006 ("Effective Date"), by and between Xxxxxxx Xxxxxxx ("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 areas drug discovery and development, and such other areas as
requested by the Company. In performing these services, Consultant will report
to the Company's Chief Executive Officer. Consultant's title will be "Vice
President, Development" or some other similar title, as the Company may from
time to time decide upon, that contains the phrase "Vice President."
(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 the subject of an issued patent or pending patent application,
or (b) the use, research, or development, for any therapeutic, prophylactic, 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 these components (the "Field").
Consultant represents that (i) all of his current consulting or other business
obligations, and (ii) all restrictions or policies of other entities with whom
Consultant has a business relationship that may limit or restrict Consultant's
consulting or other activities or impact rights to inventions or other
technology resulting from such activities, are in no way conflicting with this
Agreement. 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
(a "Competitor"). Consultant understands that while he is a Consultant to the
Company, he is not to breach any obligation of confidentiality that he may have
to others.
2. TERM OF AGREEMENT AND TIME COMMITMENT. The consulting services
provided under the terms of this Agreement will commence on January 1, 2006.
This contract will end on December 31, 2007 (the "Term"), unless terminated
earlier in accordance with this Agreement. Unless otherwise directed by the
Company, Consultant will work a minimum of 36 hours per week on the Company
projects during the term of this Agreement, and will generally be present
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at the Company's facilities four (4) days per week.
3. COMPENSATION.
(a) CASH COMPENSATION.
(i) BASE COMPENSATION. For all services rendered,
Consultant will be paid $170,000.00 per year, calculated on a weekly basis for
52 weeks of 36 hours per week. Consultant will provide to the Company weekly
accountings of his time and will be paid monthly, based on those accountings and
the terms of this Agreement. The Consultant understands that he is not an
employee or director of the Company, and that he is not entitled to receive any
benefits offered by the Company to its employees or directors, including any
employee benefit program, unemployment benefits, or otherwise. Consultant shall
be 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.
(ii) COMPENSATION FOR HOURS IN EXCESS OF 36 PER WEEK.
Any hours in excess of 36 hours per week will first be offset against the
Deficient Hour Accrual, which is understood to mean the accumulation, from
previous weeks under this Agreement, of hours UNDER the 36-hour-per-week
"threshold" that have yet to be offset against hours worked by Consultant in a
week in excess of 36 hours. If the balance of the Deficient Hour Accrual is zero
or has been fully offset, hours worked beyond 36 in one week will be compensated
as follows: For the first 8 hours worked in excess of 36 per week, Consultant
will be compensated at an hourly rate of $100 per hour. For hours in excess of
44 per week, Consultant will be compensated at an hourly rate of $150 per hour,
it being understood that the Company reserves the right to direct Consultant to
work no more than 36 hours per week, in which event Consultant shall not be
entitled to be compensated for more than 36 hours per week.
(iii) DEFERRAL OF EXCESS HOURS. Consultant, at his
discretion, may elect to defer any hours in excess of 48 hours per week to a
future date to be applied to weeks when the Consultant works less than 36 hours.
The Company may unilaterally defer 50% of those hours in excess of 48 per week
to be applied to a future week when Consultant works less than 36 hours.
(b) STOCK OPTIONS. The Company will recommend to its Board
of Directors (the "Board") that Consultant be granted options to purchase
100,000 shares of the Company's common stock. The date of the grant will be
determined by the date of the Board action, and the option exercise price will
be equal to the fair market value on the grant date. The options will vest over
4 years, with a one-year cliff. The options will expire 10 years after the grant
date.
(c) OTHER COMPENSATION. At the Company's discretion, it may
recommend to its Board that the Company grant Consultant additional compensation
as follows:
(i) A restricted-stock grant of up to 30,000 shares
of the Company's common stock after the Company's product candidate achieves
initial entry into man during the Term.
(ii) Other discretionary compensation (in the form of
either cash or stock options) may be considered in conjunction with grants to
all executives for corporate achievements, such as corporate collaborations or
strategic partnerships, achieved during the
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Term. The amount of such additional compensation, if any, will be based on the
value of the transaction and the relative contribution of any executive to the
successful outcome, as determined by the Board.
(iii) TRAVEL COMPENSATION. Consultant will be paid $50
per hour for travel time while traveling on Company-authorized trips over 100
miles from both the Company's facility and from Consultant's home. Work
performed at the site of travel or while traveling is considered part of
Consultant's base 36 hour work week, and shall not be subject to this provision.
(d) SOLE COMPENSATION. The fees and other compensation
provided in this section 3 constitute Consultant's sole compensation for
rendering services to the Company.
4. INDEPENDENT CONTRACTOR. During the Term, Consultant's
relationship with the Company shall at all times be that of an independent
contractor, and nothing in this Agreement will 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 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. 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; PROVIDED, HOWEVER, that the
provisions of this Agreement will be strictly observed by Consultant with
respect to such other persons, firms, or corporations. All such consulting or
employment relationships must be disclosed in writing to the Company's Chief
Executive Officer.
Since Consultant shall 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. 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").
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If, at any time during the period of TWO years following the expiration
or termination of this Agreement, Consultant is involved in any Competitive
Activities, then Consultant shall immediately notify the 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.
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 which 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. 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/her retention by
the Company as a 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.
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 assignment 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, invented, developed, or
made known by or to Consultant arising specifically out of
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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 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 a 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 prior 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. NON-SOLICITATION. 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.
12. TERMINATION. The initial term of this Agreement will be through
December 31,
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2007. At the Company's option, this Agreement will also terminate upon notice to
Consultant in the event of Consultant's inability for any reason to perform
Consultant's services. Upon such termination of this Agreement or upon
expiration of the term 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.
Termination of this Agreement for any reason will not affect
Consultant's obligations under Sections 4, 5, 7, 8, 9, 10, 11, 16, and 17, which
Sections shall survive expiration or termination of this Agreement.
(a) TERMINATION WITHOUT CAUSE OR BY CONSULTANT. If the Company
terminates this Agreement without Cause (defined below in section 12(c)) prior
to December 31, 2007, Consultant will be paid $100,000.00 within 30 days of
termination, and all stock options that would otherwise have vested prior to the
end of this agreement will immediately become vested. A condition precedent to
the Company's obligation to fulfill the payment and vesting obligations in this
Section 12(a) 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. If Consultant terminates this
Agreement by providing notice to the Company, which termination shall be
effective immediately, Consultant's right to further compensation, including the
receipt of stock, vesting of stock options, etc. shall cease immediately upon
termination.
(b) TERMINATION FOLLOWING CHANGE OF CONTROL. If the Company (or its
successor or assignee) terminates this Agreement without Cause within 18 months
(or such shorter period representing the balance of the term of this Agreement)
following a change of control at the Company, Consultant will be paid $170,000
within 30 days of termination, and all unvested stock options granted to
Consultant will immediately become vested. A condition precedent to the
Company's obligation to fulfill the payment and vesting obligations in this
Section 12(b) 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. For purposes of this Agreement,
"CHANGE OF CONTROL" shall mean (a) the Company is party to a merger or
consolidation whereby the Company is NOT the surviving entity and whereby the
transaction results in the voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
another entity) at least fifty (50%) percent of the combined voting power of the
voting securities of the Company or such surviving or other entity outstanding
immediately after such merger or consolidation; or (b) the sale or disposition
of all or substantially all of the Company's assets (or consummation of any
transaction having similar effect).
(c) TERMINATION FOR CAUSE. If Consultant is terminated for Cause,
Consultant will not be entitled to additional compensation due to the
termination, effective immediately as of the date the Company provides
Consultant notice of such termination. Stock option vesting will cease at the
date of notice of such termination. For purposes of this Agreement, "CAUSE"
shall mean (i) gross negligence or willful misconduct in the performance of
duties to the Company where such gross negligence or willful misconduct has
resulted or is likely to result in substantial and material damage to the
Company or its subsidiaries; (ii) repeated absence from the Company that in the
reasonable judgment of the Company is unjustified; (iii) a material or willful
violation of any federal or state law which results or is likely to result in
substantial and
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material harm to the company or its standing and reputation; (iv) commission of
any act of fraud with respect to the Company; (v) conviction of a felony or a
crime involving moral turpitude causing material harm to the standing and
reputation of the Company, or (vi) during the Term Consultant provides services
to a Competitor, in each case as determined in good faith by the Board. The
Company and Consultant agree that any disagreement regarding the propriety of
such a Termination for Cause will be submitted to a mediator, whose decision
will be considered binding by both parties. The mediator will be selected by
mutual agreement between the Company and the Consultant.
13. RESPONSIBILITY OF CONSULTANT. Except for purposes of Section 12,
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.
14. 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.
15. AMENDMENTS; WAIVERS; NOTICES. This Agreement may be modified,
amended, or supplemented only by a written instrument duly executed by
Consultant and an officer of the Company, with proper approvals from the
Company's Board of Directors. 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:
If to the Company: Lpath, Inc.
Attn: Xxxxx Xxxxxxxx
0000 Xxxxxx Xx., Xxxxx X
Xxx Xxxxx, XX 00000
If to Consultant, the address set forth below his signature.
16. 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
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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.
17. 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 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 would bear the costs of the arbitrator, the forum, and
any filing fees for any arbitration initiated by the company, or any arbitration
initiated by Consultant where Consultant is the prevailing party. If the Company
prevails in an arbitration initiated by Consultant, the parties shall equally
share the costs of the arbitrator, the forum, and any filing fees. Each of
Consultant and the Company shall 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 shall survive termination of this Agreement.
18. 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.
19. 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 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.
20. REPRESENTATION. By executing this Agreement, Consultant
acknowledges that he understands and agrees that he has been encouraged, and had
the opportunity to, consult with his/her own personal attorney in connection
with this Agreement.
21. ASSIGNMENT. Due to the personal nature of the consulting
services to be rendered
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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.
22. 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 Nevada corporation
By:
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Signature Signature
Xxxxxxx Xxxxxxx Xxxxx Xxxxxxxx, President & CEO
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Printed Name Printed Name and Title
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Date Date
[SIGNATURE PAGE TO CONSULTANT AGREEMENT]
