AGREEMENT
This AGREEMENT (this "Agreement") dated as of August 27, 1997
(the "Agreement") by and between Genta Incorporated, a Delaware corporation (the
"Company"), and Xxxx O.P. Ts'o, Ph.D. (the "Consultant");
WHEREAS, the Consultant has served as a director of the Company
for a number of years, has served as a consultant to the Company pursuant to a
Consulting Agreement between the Consultant and the Company, dated February 2,
1989 (the "Prior Agreement") and has considerable and invaluable knowledge of
the business and history of the Company;
WHEREAS, the Company desires that it be able to call upon the
experience and knowledge of the Consultant with respect to the Company from time
to time, in accordance with the terms hereof; and
WHEREAS, the Consultant is willing to render such services to the
Company on the terms and conditions hereinafter set forth in this Agreement;
NOW, THEREFORE, in consideration of the promises and mutual
covenants contained herein and for other good and valuable consideration, the
parties agree as follows:
1. Term. Subject to paragraph 5, from the date of the
Consultant's resignation from the Board of Directors of the Company (the
"Commencement Date") and continuing for a 1 (one) year period (the "Term"), the
Consultant shall be retained by the Company as a consultant as provided in this
Agreement.
2. Position and Responsibilities. (a) The Consultant hereby
agrees to make available to the Company and its directors during the Term the
benefit of the Consultant's knowledge of the Company's and its subsidiaries'
affairs, provided that, except for telephone inquiries, the Consultant shall not
be required to devote more than 1 (one) day per calendar month.
(b) Prior to entering into this Agreement with the Company, the
Consultant was employed, and continues to be employed, by the Xxxxx Xxxxxxx
University (the "University"). The Company recognizes that in connection with
the Consultant's employment by the University, the Consultant has continuing
responsibility to the University. In connection with such employment, the
Company acknowledges that the Consultant is subject to a Patent and Invention
Policy of the University in the form attached hereto as Exhibit A (the "Patent
Policy"). The Company hereby acknowledges the existence of the Patent Policy and
agrees to take no actions which would result in the Consultant's violating the
Patent Policy.
(c) Prior to entering into this Agreement with the Company, the
Consultant was employed, and continues to be employed, by CellGene Laboratory,
L.P. ("CellGene") as a
Managing Director and Chairman of the Board of Managing Directors, and was
employed, and continues to be employed by CellGene's General Partner, NAMTA
Corporation ("NAMTA") as CEO and Chairman of the Board of Directors. CellGene is
a reference laboratory providing tests for prenatal and various cancer cells
circulating in blood. NAMTA Corporation is a consulting and management company
with a special interest in trading with Asia. The Company recognizes that in
connection with the Consultant's employment by CellGene and NAMTA or their
successors or other parties in interest, the Consultant's primary
responsibilities are to CellGene and NAMTA or their successors or other parties
in interest. The Company hereby acknowledges that in connection with such
employment, the Consultant may have acquired and may continue to acquire
confidential and proprietary information relative to the business and operations
of CellGene and NAMTA or their successors or other parties in interest. The
Company agrees to take no action which would result in the Consultant being
asked or required to use or divulge any such confidential or proprietary
information, acquired without violation of law, relative to the business and
operations of CellGene or NAMTA or their successors or other parties in
interest, and the Company further agrees to make no claim to such confidential
or proprietary information, acquired without violation of law, relative to the
business and operations of CellGene or NAMTA on the Company's behalf. As used in
this paragraph, the term "proprietary information" has the same meaning as it
does in paragraph 6 of this Agreement, except that references to the "Company"
shall mean CellGene and NAMTA.
3. Compensation. The Company shall issue to the Consultant at the
commencement of this Agreement 15,400 shares of Genta common stock. Furthermore,
during the Term of this Agreement, the Company shall pay the Consultant at a
rate of $1,000 per month. Notwithstanding anything to the contrary in the Prior
Agreement, and subject to Section 4, the Consultant shall not be entitled to
receive any other payment or benefits. The Consultant acknowledges that all
stock options previously granted to him by the Company are hereby cancelled.
4. Expenses. Subject to the Company's prior approval, the
Consultant shall be reimbursed for necessary and reasonable expenses incurred by
the Consultant in connection with the performance of his duties hereunder
including, without limitation, reasonable travel expenses and shall receive an
additional $2,500 per day for any in-person attendance at any meeting of the
Company.
5. Termination. This Agreement and the Consultant's retention
hereunder may be immediately terminated by the Company upon the Consultant's
breach of this Agreement.
6. Confidentiality. The Consultant acknowledges that the Company
possesses and will continue to possess information that has been created,
discovered, developed, acquired or otherwise become known to the Company
(including, without limitation, information created, discovered, developed or
made known to the Consultant during the period the Consultant was associated
with the Company including, without limitation, during the term of this
Agreement), which information has commercial business value. All such
information, which relates either to (A) the business and operations of the
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Company, including without limitation, strategies, forecasts, potential new
products, unpublished financial statements, budgets, projections, patent
applications filed by the Company, legal advice rendered to the Company,
licenses, prices, costs, and supplier lists, or (B) information disclosed by
representatives of the Company to the Consultant relating to its activities in
the field of single mismatch discrimination and in the control of gene
expression using steric blockers is hereinafter called "Proprietary
Information".
In consideration of the compensation received by the Consultant
from the Company and the covenants contained in this Agreement, the Consultant
agrees as follows:
(a) All Proprietary Information is and shall continue to be the
sole property of the Company and its assigns, and the Company and its assigns
are and shall continue to be the sole owner of all rights in connection
therewith. The Consultant shall maintain in strictest confidence any and all
Proprietary Information and shall not disclose the same to any third party;
provided, however, that the obligation of confidentiality by the Consultant
shall not apply to any information, documents, materials or things otherwise
within the definition of Proprietary Information but which:
(i) Consultant receives at any time from a third party
lawfully in possession of same and having the right
to disclose same;
(ii) is, as of the effective date of this Agreement, in
the public domain, or subsequently enters the
public domain through no fault of the Consultant;
(iii) has been previously approved by the Company in
writing to be released from the confidentiality
obligations hereunder;
(iv) is required to be disclosed to (or by) a court or
other governmental authority, provided reasonable
notice of the impending disclosure is provided to
the Company, and the Company has agreed to such
disclosure in writing or has exhausted its right to
contest such disclosure;
(v) consists of intellectual property, including
patents, which have been assigned to Xxxxx Xxxxxxx
University prior to the date of this Agreement, in
which the Company has an interest; or
(vi) consists of inventions or improvements or works of
authorship set forth on Exhibit C to the Prior
Agreement and initialled by the Consultant.
(b) The Consultant hereby agrees that he will not use any
Proprietary Information, including any Proprietary Information that the
Consultant learns or develops in the course of the performance of the
Consultant's duties under this Agreement, except exclusively for the purpose
contemplated by this Agreement (and then only for the benefit of
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the Company) and for no other purpose. Subsections 6(a) and (b) of this
Agreement are intended to, and shall, supersede Section 1 of the Prior
Agreement. The Consultant further agrees that he will not intentionally use any
confidential information learned by him in connection with his association with
the Company in any manner detrimental to the Company.
(c) All documents, records, equipment and other physical
property, whether or not pertaining to Proprietary Information, furnished to the
Consultant by the Company or produced by the Consultant or others in connection
with his association with the Company shall be and remain the sole property of
the Company. The Consultant will, upon request by the Company, return to the
Company all documents, notes, drawings, specifications, programs, data, customer
lists and other materials of any nature pertaining to his association and work
with the Company, including any copies of such materials, and the Consultant
shall not use any of the foregoing or any reproduction of any of the foregoing.
All obligations of the parties under this Section 6 shall survive
expiration or termination of the Agreement and shall continue in effect for a
period of five (5) years from the Commencement Date.
7. Non Public Information. The Consultant recognizes that in the
course of his duties hereunder, he may receive from the Company or others
information which may be considered "material, nonpublic information" concerning
a public company that is subject to the reporting requirements of the Securities
and Exchange Act of 1934, as amended. The Consultant agrees not to:
(a) Buy or sell any security, option, bond or warrant while in
possession of relevant material, nonpublic information received from the Company
or others in connection herewith;
(b) Provide the Company with information with respect to any
public company that may be considered material, nonpublic information, unless
first specifically agreed to in writing by the Company; or
(c) Provide any person with material, nonpublic information,
received from the Company, including any relative, associate or other individual
who intends to, or may, (a) trade securities with respect to the Company which
is the subject of such information, or (b) otherwise directly or indirectly
benefit from such information.
This Section shall survive the termination of this Agreement.
8. Indemnification Agreement. The Company hereby confirms the
continuing validity of the Indemnification Agreement dated October 4, 1989 (the
"Indemnification Agreement") by and between the Company and the Consultant and
agrees to indemnify the Consultant to the fullest extent permitted by law for
any liability of the Company which may in the future be asserted against the
Consultant. Furthermore the Company confirms that, pursuant to its Restated
Certificate of Incorporation, the Consultant is
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not personally liable to the Company or any of its stockholders for monetary
damages for breach of duty as a director, except for liability:
(a) for any breach of the director's duty of loyalty to the
Company and its stockholders;
(b) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violations of law;
(c) under Section 174 of the Delaware General Corporation Law,
relating to the improper payment of dividends or improper redemption; or
(d) for any transaction from which the director derived an
improper personal benefit.
9. Release. The Consultant hereby releases and forever discharges
the Company, its subsidiaries and each of their respective past and present
directors, officers, shareholders, employees, agents, attorneys, servants,
predecessors, successors and assigns, and each of them separately and
collectively (hereinafter referred to separately and collectively as the
"Releasees") from any and all claims, liens, causes of action, obligations,
damages and liabilities that the Consultant may have against any of the
Releasees except under the Consultant's Indemnification Agreement and this
Agreement (the "Remaining Obligations"). Without limiting the foregoing, the
Consultant acknowledges that no Releasee has any obligation to the Consultant
under any agreements previously entered into, other than the Remaining
Obligations. The Company hereby releases and forever discharges the Consultant
and his agents, attorneys, servants, predecessors, successors and assigns, and
each of them separately and collectively (hereinafter referred to separately and
collectively as the "Releasors"), from any and all claims, liens, causes of
action, obligations, damages and liabilities that the Releasees may have against
the Consultant except under applicable law and the Remaining Obligations and
obligations in respect of the Consultant's activities undertaken prior to the
date hereof under the Prior Agreement (it being understood and agreed that the
Consultant shall have no obligation to continue to render the services set forth
on Exhibit B of such agreement).
10. Waiver. The Consultant and the Company expressly waive all
rights under section 1542 of the Civil Code of California, which provides:
" A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
The Consultant and the Company acknowledge that this Agreement is
intended to include and discharge certain claims as set forth in Section 9 which
the parties hereto do not know or suspect to exist at the time of execution and
expressly assumes all risks attendant
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to release of claims arising out of facts occurring at any time prior to the
execution of this Agreement which are unknown, unforeseen or latent.
11. Sale of Securities. Subject to any requirements of law in
relation to the sale of securities, the Company will relieve the Consultant of
his contractual obligation previously entered into requiring that the Consultant
not sell any common stock held in the Company (the "Common Stock") for a period
of 2 (two) years, provided, however, that, the Consultant hereby agrees that
from the Commencement Date until all of the Consultant's Common Stock has been
sold, the Consultant:
(a) will not sell, contract to sell, grant any option for the
sale of or otherwise dispose of directly or indirectly, more than 5000 shares of
common stock in any week (subject to adjustment for stock splits and the like);
(b) will not, directly or indirectly, through related parties, or
otherwise sell "short" or "short against the box" (as those terms are generally
understood) any equity security of the Company; or
(c) will not otherwise engage in any transaction which involves
hedging of the Consultant's position in any equity security of the Company.
12. Specific Performance. The Consultant acknowledges and agrees
that the Company's remedies at law for a breach or threatened breach of any of
the provisions of Section 6 would be inadequate and, in recognition of this
fact, the Consultant agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company, without posting any
bond, shall be entitled to obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available.
13. Binding Effect. This Agreement shall bind all of the
Consultant's heirs, executors, administrators, successors and assigns; and it
shall inure to the benefit of each Releasee and, in addition all heirs,
executors, administrators and assigns of each Releasee who is an individual.
14. Non-disparagement. The Consultant and the Company promise not
to make any written or oral statements, whether or not true, that disparage the
other's reputation or work product.
15. Withholding Taxes. All payments made under this Agreement
shall be subject to reduction to reflect taxes required to be withheld by law.
16. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles
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of conflicts of law. The Consultant hereby consents to be subject to the
jurisdiction of the courts of the State of New York.
(b) Entire Agreement; Amendment; Survival. The Consultant
warrants that no promise, inducement or agreement not expressed herein has been
made in connection with this Agreement; that this Agreement constitutes the
entire agreement between the Consultant and the Company with respect to the
consulting arrangement contemplated hereby and the other matters covered hereby
and that this Agreement cancels and supersedes all prior communications or
understandings between the Company and the Consultant with respect to such
subject matter. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the aforesaid
subject matter other than those expressly set forth herein. This Agreement may
not be altered, modified, or amended except by written instrument signed by the
parties hereto. The provisions of Sections 6, 7, 8, 9, 11 and 14 of this
Agreement shall survive any termination of this Agreement and shall survive
beyond the expiration of the Term.
(c) No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term of any other term of this Agreement.
(d) Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
(e) Successors; Binding Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, representatives, successors and assigns. This agreement may
not be assigned by the Consultant.
(f) Counterparts; Effectiveness. This Agreement may be
signed in counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Consultant:
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By: Xxxx O.P. Ts'o, Ph.X.
Xxxxx Incorporated:
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By: Xxxxxxx X. Xxxxx
Its: Interim Chairman
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