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EXHIBIT 10.55
[LXR BIOTECHNOLOGY INC. LETTERHEAD]
June 11, 1999
Dr. X. Xxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxxxx:
The purpose of this letter is to set forth the substance of the agreement
("Agreement") between LXR BIOTECHNOLOGY INC. ("Company") and you in connection
with the termination of your consulting relationship with the Company. You have
previously acted as a consultant to the Company under the letter agreement
dated July 29, 1998 ("Consulting Agreement"). The Company and you are also
entering into an Assignment and Assumption Agreement dated the date hereof
("Assignment") pursuant to which the Company is licensing certain technology to
you and you are agreeing to assume certain obligations.
1. TERMINATION OF CONSULTANCY. Your last day of consulting with the
Company shall be June 10, 1999 ("Termination Date"). You acknowledge that you
have not acted as an employee of the Company during the period covered by the
Consulting Agreement. You also acknowledge that effective as of June 10, 1999,
you ceased to be a director of the Company.
2. ACCRUED COMPENSATION. Effective as of the Termination Date, the
Company has paid you all accrued compensation payable to you under the
Consulting Agreement.
3. TERMINATION PAYMENT; TAX REPORTS. In consideration of the termination
of the Consulting Agreement and the amendment of certain provisions regarding
your options to purchase Company stock held by you (as provided in section 9
below), the Company will (i) make a cash payment to you in the amount of
$240,000 (less any amounts paid to you under the Consulting Agreement for
periods subsequent to June 10, 1999, including the prorated June payment and
any later payments), and (ii) forgive the unpaid principal amount of $30,000
plus accrued interest of $4,584 owed by you to the Company as of the
Termination Date. The cash payment will be paid to you in one lump sum within
30 days of the later of the Termination Date or the date on which you sign and
return this Agreement. You will be solely responsible for all tax returns and
payments required to be filed with or made to any federal, state or local tax
authority with respect to receipt of payments under this Agreement and
indebtedness forgiven pursuant to it; the Company will not withhold or make
payments on your behalf. The Company will report the amount paid to you,
including the amount of indebtedness forgiven, by filing Form 1099-MISC with
the Internal Revenue Service as required by law.
4. HEALTH INSURANCE. To the extent provided by the federal COBRA law or,
if applicable, state insurance laws, and by the Company's current group health
insurance policies, you will be eligible to continue your group health
insurance benefits at your own expense
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through January 31, 2000. Later, you may be able to convert to an individual
policy through the provider of the Company's health insurance, if you wish. The
Company will continue to pay COBRA premiums for you and your dependents through
August 31, 1999, but not thereafter.
5. OTHER COMPENSATION OR BENEFITS. You acknowledge that, except as
expressly provided in this Agreement, you will not receive any additional
compensation, severance or benefits after the Termination Date, whether under
this Agreement, the Consulting Agreement or the Assignment.
6. EXPENSE REIMBURSEMENT. You agree that, within 60 days of the
Termination Date, you will submit your final documented expense reimbursement
statement reflecting all business expenses you incurred through the Termination
Date, if any, for which you seek reimbursement. The Company will reimburse you
for these expenses pursuant to its regular business practice.
7. RETURN OF COMPANY PROPERTY. You represent that you have previously
returned to the Company all Company documents (and all copies thereof) and
other Company property that you have had in your possession at any time,
including, but not limited to, Company files, notes, drawings, records,
business plans and forecasts, financial information, specifications,
computer-recorded information, tangible property (including, but not limited to,
computers), credit cards, entry cards, identification badges and keys, and any
materials of any kind that contain or embody any proprietary or confidential
information of the Company (and all reproductions thereof); provided, however,
that you may retain confidential and proprietary information to the extent it
relates to the technology licensed to you under the Assignment.
8. ASSIGNMENT OF EQUIPMENT AND WARRANTY OF TITLE. Attached hereto as
Exhibit B is a list of equipment ("Equipment") which you previously provided to
the Company. In further consideration of the compensation payable to you under
this Agreement and the technology licensed to you under the Assignment, you
hereby sell, assign and quitclaim to the Company, its successors and assigns,
any right, title and interest you may have in the Equipment. Additionally, you
hereby warrant and agree to defend the Company's ownership of the Equipment in
case of a claim to the contrary by any third party based on any claim or right
arising or existing on or prior to the date hereof. You further represent that
you receive that, as of the date of this Agreement, there is no third party
with any valid claim to ownership or possession of the Equipment and that, to
the best of your knowledge, no such claim has been asserted.
9. EXPIRATION OF STOCK OPTIONS. In further consideration of the
compensation payable to you under this Agreement and the technology licensed to
you under the Assignment, you agree that all options to purchase common stock
of the Company, whether vested or unvested, and whether granted as incentive or
nonqualified stock options, including without limitation options to purchase
300,000 shares of the Company's common stock granted to you effective as of
April 20, 1998, shall be deemed to be canceled and rescinded effective as of
September 11, 1999, to the extent you do not exercise any vested stock options
before that date. You also agree that vesting of your stock options shall cease
effective as of the Termination Date.
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10. PROPRIETARY INFORMATION OBLIGATIONS. A copy of the Employee Invention
Assignment and Confidentiality Agreement you signed in connection with your
previous employment by the Company is attached hereto as Exhibit C. You hereby
reaffirm your continuing obligations to the Company under that agreement. You
also hereby reaffirm your obligations to the Company contained in the
Consulting Agreement under the headings "Invention Assignment" and
"Confidential Information," which obligations shall survive termination of the
Consulting Agreement.
11. NONDISPARAGEMENT. Both you and the Company agree not to disparage the
other party, and the other party's officers, directors, employees, shareholders
and agents, in any manner likely to be harmful to them or their business,
business reputation or personal reputation; provided that both you and the
Company may respond accurately and fully to any question, inquiry or request
for information when required by legal process.
12. RELEASE. In exchange for the payments and other consideration under
this Agreement, you agree to execute the Release Agreement attached hereto as
Exhibit A.
13. EFFECTIVE DATE. This Agreement shall not be effective until the
eighth day after this Agreement was executed by you and has not been revoked by
you; provided that the Company has also executed this Agreement by that date.
14. MISCELLANEOUS. This Agreement, including the Exhibits, together with
the Assignment, constitutes the complete, final and exclusive embodiment of the
entire agreement between us with regard to the subject matter hereof. It is
entered into without reliance on any promise or representation, written or
oral, other than those expressly contained herein, and it supersedes any other
agreements, promises, warranties or representations in their entirety,
including without limitation the Consulting Agreement. This Agreement may not
be modified or amended except in a writing signed by both you and a duly
authorized officer of the Company. This Agreement will bind, and inure to the
benefit of, your heirs and personal representatives and the successors and
assigns of both you and the Company. If any provision of this Agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and the
provision in question will be modified by the court so as to be rendered
enforceable. This Agreement will be deemed to have been entered into and will
be construed and enforced in accordance with the laws of the State of
California as applied to contracts made and to be performed entirely within
California.
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If this Agreement is acceptable to you, please sign below and on the attached
Release Agreement, which is part of this Agreement, and return the originals of
both to the Company.
Sincerely,
LXR BIOTECHNOLOGY INC.
By: /s/ X. Xxxx Xxxx
----------------------------
X. Xxxx Xxxx
Acting President
ACCEPTED AND AGREED:
X. Xxxxx Xxxxx
Date: /s/ X. Xxxxx Xxxxx
--------------------------
Exhibit A - Release Agreement
Exhibit B - List of Equipment
Exhibit C - Employee Invention Assignment and Confidentiality Agreement
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EXHIBIT A
RELEASE AGREEMENT
Except as otherwise set forth in this Agreement, I hereby release, acquit
and forever discharge the Company, its subsidiaries, and their officers,
directors, agents, servants, employees, attorneys, shareholders, successors,
assigns and affiliates, of and from any and all claims, liabilities, demands,
causes of action, costs, expenses, attorney fees, damages, indemnities and
obligations of every kind and nature, in law, equity, or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, arising out of
or in any way related to agreements, events, acts or conduct at any time prior
to and including the execution date of this Agreement, including but not
limited to: all such claims and demands directly or indirectly arising out of
or in any way connected with my previous employment with, or consulting for,
the Company or the termination of that employment or consulting; claims or
demands related to compensation, bonuses, commissions, stock, stock options, or
any other ownership interests in the Company, vacation pay, fringe benefits,
expense reimbursements, severance pay, or any other form of compensation;
claims pursuant to any federal, state or local law, statute, or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as
amended; the federal Americans with Disabilities Act of 1990; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); the California
Fair Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; harassment; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph
hereof is in addition to anything of value to which I was already entitled. I
further acknowledge that I have been advised by this writing, as required by
the ADEA, that: (a) my waiver and release do not apply to any rights or claims
that may arise after the execution date of this Agreement; (b) I have been
advised hereby that I have the right to consult with an attorney prior to
executing this Agreement; (c) I have twenty-one (21) days to consider this
Agreement (although I may choose to voluntarily execute this Agreement
earlier); (d) I have seven (7) days following the execution of this Agreement
by the parties to revoke the Agreement; and (e) this Agreement will not be
effective until the date upon which the revocation period has expired, which
will be the eighth day after this Agreement is executed by me, provided that
the Company has also executed this Agreement by that date ("Effective Date").
I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS. In giving this release, which includes claims which may be
unknown to me at present, I acknowledge that I have read and understand Section
1542 of the California Civil Code which reads as follows: "A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive
and relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any unknown or
unsuspected claims I may have against the Company.
By: /s/ X. Xxxxx Xxxxx Date: September 10, 1999
---------------------------
(Signature)
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EXHIBIT B
[THE OHIO STATE UNIVERSITY LETTERHEAD]
October 26, 1992
X. Xxxxx Xxxxx, Ph.D.
0000 Xxxxxx Xxxxx Xx.
Xxxxxxxx, Xxxx 00000
================================================================================
TRANSFER OF EQUIPMENT -- LETTER OF APPROVAL
================================================================================
At the request of Xxxxx X. Xxxxxxxx, M.D., Chairman of the Department of
Otolaryngology at The Ohio State University, and pursuant to agreement(s)
between The Ohio State University and X. Xxxxx Xxxxx, Ph.D., the items/equipment
listed herein are hereby transferred from The Ohio State University to X. Xxxxx
Xxxxx, Ph.D.
(1) Transilluminator, model number CR1766, OSU inventory number 880012.
(1) Computer with keyboard, disk drives and monitor, model number DTK
386-SX-16, OSU inventory number 875352.
(1) Spectrometer, Luminescence, model number LS-508, Well Plate Reader, OSU
Purchase Order number 205048.
(1) Bio Dot Apparatus, OSU Purchase Order number 202591.
(1) Eppindorf Microcentrifuge, model number 5415C, OSU Purchase Order number
202617.
(1) Sartorius Top-Load Balance, model number B3105. OSU Purchase Order number
200147.
(1) Computer with keyboard, disk drives and monitor, model number DTK 80386,
OSU inventory number 864087.
(1) Nikon Diaphot Microscope, model number 76516, OSU inventory number 828305.
(continued on page two)
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Equipment Transfer
The Ohio State University - X. Xxxxx Xxxxx, Ph.D.
10/26/92
Page Two
This equipment has been approved for transfer from The Ohio State University to
X. Xxxxx Xxxxx, Ph.D.
This letter of approval issued by the Office of Surplus Materials Disposal &
Recycling shall also serve as the official authorization for release of this
equipment to X. Xxxxx Xxxxx, Ph.D. as witnessed by signature of the Manager of
the Office of Surplus Materials Disposal & Recycling below.
All ownership and title to this equipment is hereby transferred to X. Xxxxx
Xxxxx, Ph.D.
/s/ XXXXXXX X. XXXXX 10/26/92
-------------------- -----------
Xxxxxxx X. Xxxxx Date
/CDJ
\transfer\tran001
cc: Xxxxx X. Xxxxxxxx, M.D.
A. L. Xxxxxxx
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EXHIBIT C
LXR BIOTECHNOLOGY, INC.
EMPLOYEE INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT
In consideration of my employment with LXR Biotechnology, Inc., a Delaware
corporation (the "Company"), I hereby represent to, and agree with the Company
as follows:
1. COMPANY BUSINESS. I understand that the Company is engaged in a
continuous program of research, development, production and marketing in
connection with its business and that, as an essential part of my employment
with the Company, I may be expected to make new contributions to and create
inventions of value for the Company.
2. DISCLOSURE OF INVENTIONS. From and after the date I first became
employed with the Company, I will promptly disclose in confidence to the
Company all inventions, improvements, designs, original works of authorship,
formulas, processes, compositions of matter, computer software programs,
databases, mask works, and trade secrets ("Inventions"), whether or not
patentable, copyrightable or protectible as trade secrets, that are made or
conceived or first reduced to practice or created by me, either alone or
jointly with others, during the period of my employment, whether or not in the
course of my employment.
3. WORK FOR HIRE: ASSIGNMENT OF INVENTIONS. I acknowledge that
copyrightable works prepared by me within the scope of my employment are "works
for hire" under the Copyright Act and that the Company will be considered the
author thereof. I agree that all inventions that (a) are developed using
equipment, supplies, facilities or trade secrets of the Company, (b) result
from work performed by me for the Company or (c) relate to the Company's
business or current or anticipated research and development, will be the sole
and exclusive property of the Company ("Company Inventions") and are hereby
assigned by me to the Company.
4. LABOR CODE 2870 NOTICE. I have been notified and understand that I
shall not be obligated to assign to the Company any invention that qualifies
fully under the provisions of Section 2870 of the California Labor Code, which
states as follows:
ANY PROVISION IN AN EMPLOYMENT AGREEMENT WHICH PROVIDES THAT AN EMPLOYEE SHALL
ASSIGN, OR OFFER TO ASSIGN, ANY OF HIS OR HER RIGHTS IN AN INVENTION TO HIS OR
HER EMPLOYER SHALL NOT APPLY TO AN INVENTION THAT THE EMPLOYEE DEVELOPED
ENTIRELY ON HIS OR HER OWN TIME WITHOUT USING THE EMPLOYER'S EQUIPMENT,
SUPPLIES, FACILITIES, OR TRADE SECRET INFORMATION EXCEPT FOR THOSE INVENTIONS
THAT EITHER: (1) RELATE AT THE TIME OF CONCEPTION OR REDUCTION TO PRACTICE OF
THE INVENTION TO THE EMPLOYER'S BUSINESS, OR ACTUALLY OR DEMONSTRABLY
ANTICIPATED RESEARCH OR DEVELOPMENT OF THE EMPLOYER, OR (2) RESULT FROM ANY
WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER. TO THE EXTENT A
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PROVISION IN AN EMPLOYMENT AGREEMENT PURPORTS TO REQUIRE AN EMPLOYEE TO ASSIGN
AN INVENTION OTHERWISE EXCLUDED FROM BEING REQUIRED TO BE ASSIGNED UNDER
CALIFORNIA LABOR CODE SECTION 2870(a), THE PROVISION IS AGAINST THE PUBLIC
POLICY OF THIS STATE AND IS UNENFORCEABLE.
5. ASSIGNMENT OF OTHER RIGHTS. I hereby irrevocably transfer and assign
to the Company: (a) all worldwide patents, patent applications, copyrights,
mask works, trade secrets and other intellectual property rights in any Company
Invention; and (b) any and all "Moral Rights" (as defined below) that I may
have in or with respect to any Company Invention. I also hereby forever waive
and agree never to assert any and all Moral Rights I have in or with respect to
any Company Invention, even after termination of my work on behalf of the
Company. "Moral Rights" means any rights of paternity or integrity, any right
to claim authorship of an invention, to object to any distortion, mutilation or
other modification of, or other derogatory action in relation to, any
invention, whether or not such would be prejudicial to my honor or reputation,
and any similar right, existing under judicial or statutory law of any country
in the world, or under any treaty, regardless of whether or not such right is
denominated or generally referred to as a ""moral right".
6. ASSISTANCE. I agree to assist the Company in every proper way to
obtain for the Company and enforce patents, copyrights, mask work rights, and
other legal protections for the Company's inventions in any and all countries.
I will execute any documents that the Company may reasonably request for use in
obtaining or enforcing such patents, copyrights, mask works rights, trade
secrets and other legal protections. My obligations under this paragraph will
continue beyond the termination of my employment with the Company, provided
that the Company will compensate me at a reasonable rate after such termination
for time or expenses actually spent by me at the Company's request on such
assistance. I appoint the Secretary of the Company as my attorney-in-fact to
execute documents on my behalf for this purpose.
7. PROPRIETARY INFORMATION. I understand that my employment by the
Company creates a relationship of confidence and trust with respect to any
information of a confidential or secret nature that may be disclosed to me by
the Company that relates to the business of the Company or to the business of
any parent, subsidiary, affiliate, customer or supplier of the Company or any
other party with whom the Company agrees to hold information of such party in
confidence ("Proprietary Information"). Such Proprietary Information includes
but is not limited to Company Inventions, marketing plans, product plans,
business strategies, financial information, forecasts, personnel information
and customer lists.
8. CONFIDENTIALITY. At all times, both during my employment and after
its termination, I will keep and hold all such Proprietary Information in
strict confidence and trust, and I will not use or disclose any of such
Proprietary Information without the prior written consent of the Company,
except as may be necessary to perform my duties as an employee of the Company.
Upon termination of my employment with the Company, I will promptly deliver to
the Company all documents and materials of any nature pertaining to my work
with the Company and I will not take
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PROVISION IN AN EMPLOYMENT AGREEMENT PURPORTS TO REQUIRE AN EMPLOYEE TO ASSIGN
AN INVENTION OTHERWISE EXCLUDED FROM BEING REQUIRED TO BE ASSIGNED UNDER
CALIFORNIA LABOR CODE SECTION 2870(a). THE PROVISION IS AGAINST THE PUBLIC
POLICY OF THIS STATE AND IS UNENFORCEABLE.
5. ASSIGNMENT OF OTHER RIGHTS. I hereby irrevocably transfer and assign
to the Company: (a) all worldwide patents, patent applications, copyrights, mask
works, trade secrets and other intellectual property rights in any Company
Invention; and (b) any and all "Moral Rights" (as defined below) that I may have
in or with respect to any Company Invention. I also hereby forever waive and
agree never to assert any and all Moral Rights I may have in or with respect to
any Company Invention, even after termination of my work on behalf of the
Company. "Moral Rights" means any rights of paternity or integrity, any right to
claim authorship of an invention, to object to any distortion, mutilation or
other modification of, or other derogatory action in relation to, any invention,
whether or not such would be prejudicial to my honor or reputation, and any
similar right, existing under judicial or statutory law of any country in the
world, or under any treaty, regardless of whether or not such right is
denominated or generally referred to as a "moral right".
6. ASSISTANCE. I agree to assist the Company in every proper way to
obtain for the Company and enforce patents, copyrights mask work rights, and
other legal protections for the Company's Inventions in any and all countries.
I will execute any documents that the Company may reasonably request for use in
obtaining or enforcing such patents, copyrights, mask works rights, trade
secrets and other legal protections. My obligations under this paragraph will
continue beyond the termination of my employment with the Company, provided
that the Company will compensate me at a reasonable rate after such termination
for time or expenses actually spent by me at the Company's request on such
assistance. I appoint the Secretary of the Company as my attorney-in-fact to
execute documents on my behalf for this purpose.
7. PROPRIETARY INFORMATION. I understand that my employment by the
Company creates a relationship of confidence and trust with respect to any
information of a confidential or secret nature that may be disclosed to me by
the Company that relates to the business of the Company or to the business of
any parent, subsidiary, affiliate, customer or supplier of the Company or any
other party with whom the Company agrees to hold information of such party in
confidence ("Proprietary Information"). Such Proprietary Information includes
but it not limited to Company Inventions, marketing plans, product plans,
business strategies, financial information, forecasts, personnel information
and customer lists.
8. CONFIDENTIALITY. At all times, both during my employment and after
its termination, I will keep and hold all such Proprietary Information in
strict confidence and trust, and I will not use or disclose any of such
Proprietary Information without the prior written consent of the Company,
except as may be necessary to perform my duties as an employee of the Company.
Upon termination of my employment with the Company, I will promptly deliver to
the Company all documents and materials of any nature pertaining to my work
with the Company and I will not take
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with me any documents or materials or copies thereof containing any Proprietary
Information.
9. NO BREACH OF PRIOR AGREEMENT. I represent that my performance of all
the terms of this Agreement and my duties as an employee of the Company will
not breach any invention assignment, proprietary information or similar
agreement with any former employer or other party. I represent that I will not
bring with me to the Company or use in the performance of my duties for the
Company any documents or materials of a former employer that are not generally
available to the public or have not been legally transferred to the Company.
10. NOTIFICATION. I hereby authorize the Company to notify my actual or
future employers of the terms of this Agreement and my responsibilities
hereunder.
11. INJUNCTIVE RELIEF. I understand that in the event of a breach or
threatened breach of this Agreement by me the Company may suffer irreparable
harm and will therefore be entitled to injunctive relief to enforce this
Agreement.
12. GOVERNING LAW. This Agreement will be governed and interpreted in
accordance with the internal laws of the State of California, excluding that
body of law governing conflicts of law.
13. NO DUTY TO EMPLOY. I understand that this Agreement does not
constitute a contract of employment or obligate the Company to employ me for
any stated period of time. This Agreement shall be effective as of the first
day of my employment by the Company, namely: Oct.1, 1992.
LXR BIOTECHNOLOGY, INC. EMPLOYEE:
By: /s/ XXXXX XXXXXX /s/ X. XXXXX XXXXX
-------------------------- -------------------------------
Title: CEO X. XXXXX XXXXX
----------------------- -------------------------------
Name (Please print)
