CONSULTING AGREEMENT
This Consulting Agreement is made and entered into as of the 1st day
of April, 1998, by and between Aronex Pharmaceuticals, Inc., a Delaware
corporation (hereinafter referred to as the "Company") and Xxxxx Xxxxx-Xxxxx,
M.D. (hereinafter referred to as the "Consultant").
WHEREAS, the Consultant desires to provide special expertise and
knowledge to the Company in the area of oncology and clinical research and to
consult with the Company on such specific research projects in the area as may
be agreed on from time to time in writing between the Company and the
Consultant, which written agreement(s) shall be incorporated herein by reference
and made a part hereof (hereinafter, the "Consulting Subjects"); and
WHEREAS, the Company desires to retain the Consultant as an
independent contractor on the terms and conditions hereinafter set forth to
provide consulting and advisory services to the Company based on the
Consultant's special knowledge and expertise in the Consulting Subjects;
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises and representations contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Consultant agree as follows:
1. Expertise of Consultant.
1.1 The Consultant represents that he has special expertise and
knowledge concerning the Consulting Subjects and that he is willing to and
wishes to provide his consultation and advisory services to the Company in
connection with such area or areas.
1.2 The Consultant hereby represents and warrants to the Company that
the Consultant is not a party to any agreement with any other entity and is not
bound by any obligations to any other entity which will prevent or encumber the
Consultant from performing such services for the Company, except for those
agreements, if any, identified on Exhibit A hereto and approved by the Company.
2. Independent Contractor.
2.1 The Consultant hereby agrees to perform for the Company or any
affiliate, parent or subsidiary of the Company and to provide to the Company or
any affiliate, parent or subsidiary of the Company his personal consultation and
advisory services in the Consulting Subjects in accordance with the terms of
this Agreement. To the extent services pursuant to this Agreement are performed
for or at the request of an affiliate, parent, or subsidiary, the term "Company"
as used herein shall include such entity.
2.2 Throughout the entire term of this Agreement, the Consultant shall
be an independent contractor with the full power and authority to select the
means, method and manner of performing his services hereunder; provided,
however, that the Consultant will perform consulting and advisory or other
services in the areas designated by the Company. The Consultant will in no way
be considered to be an agent, employee or servant of the Company. The Consultant
shall have no authority to bind the Company in any capacity for any purpose.
2.3 It is not the purpose or intention of this Agreement or the
parties to create, and the same shall not be construed as creating, any
partnership, joint venture, agency, or employment relationship. However, as
specified below, due to the nature of this independent contractor relationship,
it is the intent of the parties that, during the term of this Agreement, the
Consultant shall owe to the Company fiduciary duties of the utmost loyalty and
fidelity.
3. General Duties and Compensation.
3.1 During the term of this Agreement, the Consultant shall, at such
times and locations as are reasonably requested by the Company and at either the
Company's offices, The University of Texas System Cancer Center and M.D.
Xxxxxxxx Hospital and Tumor Institute or such other location or laboratory
facilities agreed on between the Consultant and the Company, provide personal
consultation and advisory services as may from time to time be agreed on between
the Company and the Consultant, perform and supervise the performance by others
of research with respect to (a) Consulting Subjects, and (b) any other areas of
interest on which the Consultant and the Company shall mutually agree. The
Consultant shall be so available during the term of this Agreement for such
periods as may be agreed on from time to time between the Company and the
Consultant, as and when specific research projects are agreed on.
3.2 For the performance of his obligations under this Agreement, the
Company shall pay the Consultant a fee at the rate of $48,000.00 per year,
one-half of which shall be payable in cash and one-half of which shall be
payable in the form of a grant of the Company's common stock, par value $.001
per share (the "Common Stock"). The cash portion of such fee shall be payable
monthly on the 15th day of each month during the term of this Agreement. The
Common Stock portion of such fee for each year during the term of this Agreement
shall be payable on April 15th of such year, and shall vest with respect to 1/12
of the shares of Common Stock so granted on the 15th day of each month of such
year, subject to forfeiture of the then unvested portion of such shares on the
expiration of the term or other termination of this Agreement prior to the end
of such year. The number of shares of Common Stock to be granted shall be
determined by reference to the fair market value of the Common Stock as of April
1st of the year in which such grant is made, which shall be (i) $3.50 per share
of Common Stock for the grant to be made with respect to the 1998 calendar year
and (ii) the Average Closing Price (as defined below) for any subsequent
calendar year during the term of this Agreement. For purposes of this Agreement,
the "Average Closing Price" as of April 1st of any year shall mean the average
closing price of the Company's Common Stock reported on the Nasdaq Stock Market
or any national securities exchange on which the Common Stock is then listed
during the period of 10 consecutive trading days ending one day before such
date. In addition, the Company shall reimburse the Consultant for reasonable and
necessary expenses which are incurred in connection with his providing of
consulting services and with respect to which the Consultant promptly provides
to the Company a detailed expense account, provided that any item of expense
over $1,500 has been approved by the Company in advance and in writing.
3.3 The Consultant shall himself pay, and the Company shall have no
liability for, all social security, federal income taxes, unemployment
insurance, workmen's compensation insurance, pensions, annuities or other
liabilities or taxes incurred by or on behalf of or for the benefit of the
Consultant or any of his agents, employees or servants who are not employed by
the Company arising out of the performance by the Consultant of his obligations
under this Agreement.
4. Duty of Faithfulness owed by Consultant to Company During Term of
Agreement.
4.1 During the term of this Agreement or any extension thereof, the
Consultant shall faithfully perform and provide the services contemplated by
this Agreement for the Company, and the Consultant shall not perform the same or
similar services for any other entity.
4.2 In addition to the other obligations agreed to by the Consultant
in this Agreement, the Consultant agrees that following the termination of this
Agreement, he shall not at any time directly or indirectly (a) induce, entice,
solicit any employee or consultant of the Company to leave his employment, or
(b) contact, communicate or solicit any customer of the Company derived from any
customer list, customer lead, mail, printed matter or information secured from
the Company or its present or past employees, or (c) in any other manner use any
customer lists or customer leads, mail, telephone numbers, printed materials or
material of the Company relating thereto.
5. Disclosure and Ownership of Information.
5.1 For the purposes of this Agreement, "Proprietary Information"
shall mean all information, ideas, concepts, improvements, discoveries and
inventions (including those relating to research, development, financial and
sales data, pricing or trading terms, evaluations, opinions, interpretations,
the identity of customers or of their requirements or of key contacts within the
customer's organizations, and marketing and merchandising techniques (i)
possessed, acquired or developed by the Company at any time, irrespective of
their subject or nature, or (ii) conceived, made, developed or acquired by the
Consultant or disclosed or made known to the Consultant, individually or jointly
with others, in connection with or as a result of the Consultant's performance
under this Agreement that relate to the business, products or services of the
Company and/or to the Consulting Subjects. The term "Proprietary Information"
shall include, without limitation, all test data, documents, memoranda, notes,
records, files, correspondence, drawings, manuals, models, specifications,
designs, computer programs, maps and all other writings or materials of any type
embodying any of such Proprietary Information.
5.2 All Proprietary Information is and shall be the sole and exclusive
property of the Company.
5.3 (a) During the term of this Agreement, the Consultant shall
promptly disclose in writing to the Company all Proprietary Information
conceived, developed, made or acquired by the Consultant, either individually or
jointly with others, whether patentable or not, and whether or not reduced to
practice, irrespective of whether the Consultant utilized the Company's time,
data, facilities or material and irrespective of whether such Proprietary
Information is conceived, developed, discovered or acquired by the Consultant on
the job, at home, or elsewhere.
(b) The Consultant hereby specifically agrees to sell, assign and
transfer to the Company or its nominee, and by the execution of this Agreement
does hereby sell, assign and transfer to the Company or its nominee, all of his
worldwide right, title and interest in and to all of the Proprietary Information
described in Section 5.3(a), and any United States or foreign applications for
patents, copyrights, certificates of invention and other industrial rights that
may be filed thereon, including divisions, continuations, continuations in part,
reissues or extension thereon. Both during the term of this Agreement and
thereafter, the Consultant agrees to at any time assist the Company and/or its
nominee in the protection of such Proprietary Information assigned herein to the
Company or its nominee, both in the United States and foreign countries,
including, but not limited to, the execution of all lawful oaths and all
assignment documents requested by the Company or its nominee in the preparation,
prosecution, issuance and enforcement of any applications for United States or
foreign patents, including divisions, continuations, continuations in part, or
reissued and/or extensions thereof, of any industrial property rights and
certificates of invention; and/or any United States or foreign rights protecting
proprietary or confidential information. If such assistance takes place after
the term of this Agreement has expired, the Consultant shall be paid by the
Company at a reasonable rate (taking into consideration the services performed
by the Consultant as well as the Consultant's normal and customary rates) for
any time actually spent so assisting the Company or its nominee.
5.4 The Consultant recognizes that the protection of the Proprietary
Information of the Company against unauthorized disclosure and use is of
critical importance to the Company, and therefore, the Consultant agrees to use
his best efforts and exercise utmost diligence to protect and safeguard the
Proprietary Information of the Company and its affiliates, if any, and, except
as may be expressly required by the Company in connection with the Consultant's
performance of his obligations to the Company under this Agreement, the
Consultant shall not, either during the term of this Agreement or thereafter,
directly or indirectly, use for his own benefit or for the benefit of another,
or disclose to another, any of such Proprietary Information.
5.5 On termination of this Agreement, or at any other time on request,
the Consultant shall immediately deliver to the Company all documents embodying
any of the Company's Proprietary Information, including all test data.
5.6 If during the term of this Agreement, the Consultant creates any
work of authorship fixed in any tangible medium of expression that is the
subject matter of copyright and that relates to the Company's (or its
affiliate's, if any) business, products, or services, the Company shall be
deemed the author of such work if the work is prepared by the Consultant in the
scope of his or her consultancy by virtue of the work being a work made for hire
or, if the work was not prepared by the Consultant within the scope of his or
her employment or consultancy but was specially ordered by the Company as a
contribution to a collective work, as a part of a motion picture or other
audio-visual work, as a translation, as a supplementary work, as a compilation
or as an instructional test, then the work shall be considered to be work made
for hire and the Company shall be the author of the work. With regard to any
other work of authorship fixed in any tangible medium of expression that is the
subject matter of copyright and which relates specifically to the business,
products or services of the Company or to the Consulting Subjects, the
Consultant agrees to, and does hereby, assign to the Company all worldwide
right, title and interest in and to such works. Both during the term of this
Agreement and thereafter, the Consultant agrees to assist the Company and its
nominee, at any time, in the protection of the Company's worldwide right, title
and interest in and to the work and all rights of copyright therein, including,
but not limited to, the execution of all formal assignment documents requested
by the Company or its nominee and the execution of all lawful oaths and
applications of registration of copyright in the United States and foreign
countries.
With regard to any work of authorship described above, the Company
agrees that it will consider and approve in its sole discretion such works for
publication purposes on the request of the Consultant, provided that any such
publications (i) shall be limited to scientific publications, (ii) shall
identify clearly the relationship of the Consultant to the Company, and (iii)
shall not be permitted if there would be, as a result of such publication, any
risk presented to potentially patentable developments, until steps have been
taken to protect such developments.
5.7 Notwithstanding anything in this Article 5 to the contrary, the
Company acknowledges that the Consultant is currently, and will be throughout
the term of this Agreement, an employee of The University of Texas System Cancer
Center, M. D. Xxxxxxxx Hospital and Tumor Institute ("Xxxxxxxx"), and that
nothing herein shall interfere or conflict with any existing employment
agreements or relationships between the Consultant and Xxxxxxxx. The Company
further acknowledges that the term "Proprietary Information," as defined in
Section 5.1 hereof and as used in this Article 5, shall not include any
information, ideas, concepts, improvements, discoveries and inventions which the
Consultant, individually or jointly, conceives, makes, develops or acquires, or
which is disclosed or made known to the Consultant, while the Consultant is
working under the Research and Development Contract between the Company and
Xxxxxxxx, or on any other sponsored research and development agreement
applicable to Xxxxxxxx, but shall only apply to such information, ideas,
concepts, improvements, discoveries and inventions conceived, made, developed or
required, individually or jointly, or made known or disclosed to the Consultant,
while the Consultant is engaged in performing services to the Company under this
Agreement.
6. Term and Termination.
6.1 The initial term of this Agreement (the "Initial Term") shall be
for a period of one year from the effective date of this Agreement. On
expiration of the Initial Term (and on expiration of the term of any subsequent
extension), the term of this Agreement shall be automatically renewed and
extended for an additional one-year period, unless one of the parties shall give
written notice to the other of its intention to terminate this Agreement at
least 30 days prior to the expiration of the Initial Term or any subsequent
one-year extension, in which case this Agreement shall terminate on the
expiration of the Initial Term or subsequent one-year extension, as the case may
be.
6.2 Not used.
6.3 Termination of this Agreement shall not affect the Company's
obligation to pay for services previously performed by the Consultant and shall
not effect the Consultant's continuing obligations to the Company in Sections
3.3, 4.2, and 5.1 through 5.6 above, whether such termination is made
voluntarily or involuntarily, by the Company or the Consultant, with or without
cause.
7. Terms Applicable to the Issuance of Common Stock.
7.1 Unless the offering, sale and delivery of shares of Common Stock
issuable to the Consultant pursuant to this Agreement have been registered and
continue to be so at the date of exercise hereof under the Securities Act of
1933, as amended (the "Act"), the Consultant agrees that the shares of Common
Stock which the Consultant acquires thereby shall be acquired for investment
without a view to distribution, within the meaning of the Act, and shall not be
sold, transferred, assigned, pledged or hypothecated in the absence of an
effective registration statement for the shares of Common Stock under the Act
and applicable state securities laws or an applicable exemption from the
registration requirements of the Act and any applicable state securities laws.
The Consultant also agrees that the shares of Common Stock which he may acquire
pursuant to this Agreement will not be sold or disposed of in any manner which
would constitute a violation of any other applicable securities laws, whether
federal or state. In addition, the Consultant agrees (A) that the certificates
representing the shares of Common Stock issued under this Agreement may bear
such legend or legends as the Company deems appropriate in order to assure
compliance with applicable securities laws, and (B) that the Company may give
instruction to its transfer agent, if any, to stop transfer of the shares of
Common Stock issued under this Agreement on the stock transfer records of the
Company, if such proposed transfer would in the opinion of counsel satisfactory
to the Company constitute a violation of any applicable securities law or any
such agreements.
7.2 The Consultant hereby represents and warrants that no provision
in, or activity contemplated by this Agreement, including, without limitation,
the compensation to be received by him pursuant to Section 3.2, violates or
conflicts with any agreement, regulation or policy by which he is bound or to
which he is subject, whether related to his employment or otherwise, except as
disclosed on Exhibit A hereto and agreed to by the Company. The Consultant
agrees that if any such violation or conflict exists or arises in the future, he
will be solely responsible for the satisfactory resolution thereof, without
recourse to the Company, including, without limitation, any required forfeitures
or dispositions of compensation, stock options or shares of restricted stock (or
other unrestricted shares held by the Consultant). The Consultant agrees to
disclose to his employer the compensation arrangements contained in this
Agreement, and to provide the Company an acknowledgment thereof by such employer
or other evidence of such disclosure.
8. Miscellaneous.
8.1 This Agreement shall inure to the benefit of and be binding on the
respective heirs, executors, successors, representatives and assigns (and, to
the extent the last sentence of Section 2.1 applies, affiliates, parents and
subsidiaries) of the parties, as the case may be; provided, however, the
obligations of each party herein to the other herein are personal and may not be
assigned without the express written consent of such other party.
8.2 The laws of the State of Texas will govern the interpretation,
validity and effect of this Agreement without regard to the place of execution
or the place of performance thereof, and the courts in Houston, Xxxxxx County,
Texas shall have personal jurisdiction over the Company and the Consultant to
hear all disputes arising out of this Agreement and venue shall be proper with
such courts to hear such disputes. In the event either the Company or the
Consultant is not able to effect service of process on the other in any
litigation brought in such courts with respect to such disputes, it is agreed
that the Secretary of State for the State of Texas shall be an agent of the
Company and the Consultant to receive service of process.
8.3 Notices or payments given by one party to the other hereunder
shall be deemed to have been properly given or paid if deposited with the United
States Postal Service, registered or certified mail, addressed to the Consultant
at the address listed below his signature on the last page hereof, and to the
Company at the following address, or in either case to such other address as the
party receiving notice shall have designated by written notice to the other
party:
Aronex Pharmaceuticals, Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000-0000
Attention: Chairman
8.4 This Agreement replaces all previous agreements and discussions
relating to the subject matters hereof and constitutes the entire agreement
between the Company and the Consultant with respect to the subject matters of
this Agreement. Without limiting the foregoing, this Agreement supersedes and
terminates, effective April 1, 1998, the Consulting Agreement dated July 1,
1996, as amended, between the Company and the Consultant. This Agreement may not
be modified in any respect by any verbal statement, representation or agreement
made by any employee, officer representative of the Company or by any written
document unless it is signed by an officer of the Company.
8.5 If any term or provision of this Agreement is deemed invalid,
contrary to or prohibited under applicable laws or regulations of any
jurisdiction, such provision shall be revised to the extent permitted by law and
the remaining provisions hereof shall not be invalidated.
8.6 Both the Consultant and the Company recognize that irreparable
injury or damage will result to the business of the other in the event of the
breach of any covenant herein, and each such party therefore agrees that in the
event of such breach by it, the other party shall be entitled, in addition to
any legal or equitable remedies and damages available, to an injunction to
restrain the violation of this Agreement by the breaching party and all other
persons acting for or on behalf of the breaching party.
IN WITNESS WHEREOF, the parties have executed this Agreement in
duplicate originals effective the date first stated above.
ARONEX PHARMACEUTICALS, INC.
By:
Xxxxx Xxxxx-Xxxxx, M.D.
Address: Xxxxxxxx X. Xxx, Ph.D
The University of Texas Chairman of the Board and
M.D. Xxxxxxxx Cancer Center Chief Executive Officer
0000 Xxxxxxxx Xxxx.
Xxxxxxx, Xxxxx 00000
