AGREEMENT
Exhibit
10.32
THIS
AGREEMENT ( “Agreement”) is made and effective as of March 17, 2008, by and
between Cyberkinetics Neurotechnology Systems, Inc., a Delaware corporation
(the
“Company”) and Xxxx X. Xxxxxx (“Xx. Xxxxxx”).
RECITALS
WHEREAS,
the Company and Xx. Xxxxxx have agreed to terminate that certain Employment
Agreement dated September 18, 2006 by and between the Company and Xx. Xxxxxx
(the “Employment Agreement”) and to modify the severance obligations of the
Company pursuant to Section 5 of the Employment Agreement and enter a consulting
arrangement as set forth herein;
WHEREAS,
the parties wish to memorialize their agreement pursuant to which the Employment
Agreement shall be terminated and to which Xx. Xxxxxx shall receive certain
consideration in receipt thereof, release the Company from its obligation to
pay
cash severance under the Employment Agreement, provide consulting services
to
the Company and otherwise to be obligated to the Company under the terms of
this
Agreement.
NOW
THEREFORE, in consideration of the mutual covenants herein contained, and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. TERMINATION
OF EMPLOYMENT AGREEMENT. The Company and Xx. Xxxxxx hereby consent and agree
that the Employment Agreement shall be terminated pursuant to Section 5(b)
thereof as of the date hereof.
2. SEVERANCE.
The Company and Xx. Xxxxxx hereby consent and agree that the Company is hereby
released of its obligation to pay any severance or benefits payable under the
Employment Agreement in connection with its termination as set forth in Section
1 above in exchange for the following:
(a) The
Company shall issue to Xx. Xxxxxx 325,000 shares of the Company’s common stock,
$0.001 par value per share (“Common Stock”), which shares shall not be
registered under the Securities Act of 1933, as amended.
(b) The
Company shall issue to Xx. Xxxxxx 325,000 restricted shares of Common Stock,
which restricted shares shall not be registered under the Securities Act of
1933, as amended, and which restricted shares shall vest and the restrictions
thereon shall lapse upon the earlier to occur of (i) any sale, merger or other
transaction resulting in a change in control of the Company; or (ii) the date
on
which the U.S. Food and Drug Administration (FDA) approves, conditionally
approves or makes known its intent to approve or conditionally approve the
Company’s application for humanitarian device exemption (HDE) for its Andara OFS
Therapy for spinal cord injury, as long as Xx. Xxxxxx continues to be engaged
by
the Company on such vesting date under the terms and conditions of this
Agreement (or another agreement mutually agreed upon);
(c) All
outstanding unvested option shares held by Xx. Xxxxxx shall immediately vest
upon the execution of this Agreement and such options shall be exerciseable
for
a period of ninety (90) days following the termination of the Services Term
(as
defined below);
(d) The
restrictions on all outstanding shares of restricted Common Stock issued to
Xx.
Xxxxxx on September 18, 2006 shall immediately lapse on the execution of this
Agreement;
(e) For
a
period of twelve (12) months following the date of this Agreement, the Company
shall pay Xx. Xxxxxx an amount in cash, in accordance with the payroll practices
of the Company, equal to the amount expended by Xx. Xxxxxx in connection with
(i) the purchase of life insurance equivalent to that provided by the Company
during Xx. Xxxxxx’x employment and (ii) his election, to the extent allowed by
law, to exercise applicable rights under the Consolidated Omnibus Budget
Reconciliation Act of 1986 (“COBRA”) to maintain health and dental insurance
coverage plus
the
amount of U.S. state and federal tax payable by Xx. Xxxxxx in connection with
the receipt of such amount.
3. TERMS
OF
ENGAGMENT. Subject to the terms and conditions set forth in this Agreement,
the
Company hereby offers and Xx. Xxxxxx hereby agrees to be engaged by the Company
as a consultant as of the date hereof. Xx. Xxxxxx’x engagement, subject to
earlier termination as hereafter provided, shall be for a term of seven (7)
months commencing on the date hereof (the “Services Term”). In the event that
Xx. Xxxxxx and the Company wish to extend the Services Term, an amendment to
this Agreement shall be executed in accordance with Section 20
hereof.
4. CAPACITY
AND PERFORMANCE.
(a) During
the Services Term, Xx. Xxxxxx shall be engaged by the Company as in independent
contractor and shall perform such duties and responsibilities on behalf of
the
Company as may reasonably be designated from time to time by the Company,
consistent with Xx. Xxxxxx’x prior position of Chief Financial Officer
(collectively, the “Services”).
(b) During
the Services Term, Xx. Xxxxxx shall devote no less than sixty-four hours per
month during the first month, no less than thirty-two hours per month during
the
second month, and thereafter on an as-needed basis, of his business time and
his
best efforts, business judgment, skill and knowledge to the advancement of
the
business and interests of the Company and to the discharge of his duties and
responsibilities necessary to carry out the function of this engagement.
5. COMPENSATION
AND EXPENSE REIMBURSEMENT. As compensation for all services performed by Xx.
Xxxxxx under this Agreement and during the Services Term and
subject
to performance of Xx. Xxxxxx’x duties and obligations, pursuant to this
Agreement or otherwise:
(a) Compensation.
During
the Term hereof, the Company shall pay Xx. Xxxxxx NINETY-FIVE DOLLARS ($95.00)
per hour, payable in accordance with the payroll practices of the Company;
and
(c) Benefits;
Expenses; Other Compensation. Except
as
expressly provided herein, the Company will not pay to Xx. Xxxxxx any benefits,
expenses or other compensation.
6. RELATIONSHIP
OF THE PARTIES.
(a) Independent
Contractor Status.
Xx.
Xxxxxx shall be an independent contractor. Xx. Xxxxxx shall act in accordance
with this status and Xx. Xxxxxx shall not hold himself out as an officer or
employee of the Company, nor shall Xx.
Xxxxxx make any claim based on any right or privilege applicable to the
Company’s employees. Under no circumstances shall Xx. Xxxxxx or Xx. Xxxxxx’x
agents, if any, look to the Company as their employer, or as a partner, agent,
or principal.
(b) Taxes.
Xx.
Xxxxxx shall pay, when and as due, any and all taxes incurred as a result of
Xx.
Xxxxxx’x compensation hereunder. Xx. Xxxxxx shall indemnify the Company for any
claims, losses, costs, fees, liabilities, damages or injuries suffered by the
Company arising out of Xx. Xxxxxx’x failure to pay any taxes due under this
section.
(c) Other
Costs. Xx.
Xxxxxx shall be directly responsible for all costs of self-employment, including
social security liabilities, federal, state and local income tax payments for
Xx. Xxxxxx. Xx. Xxxxxx also shall be directly responsible for all tax returns
and reports required by any governmental body, including charges or premiums
for
F.I.C.A., unemployment insurance and other taxes (including penalties and
interest).
7. REPRESENTATIONS.
(a) Capacity.
Xx.
Xxxxxx possesses the capacity to enter into this Agreement.
(b) Compliance
with Law; Company Policies.
Xx.
Xxxxxx will comply with all applicable federal and state laws and regulations,
as well as all applicable policies of the Company, relating to the performance
of the Services under this Agreement and will hold the Company harmless from
any
loss or damage caused by his breach of such requirements.
(c) No
Conflicts.
Xx.
Xxxxxx hereby represents and warrants that the execution of this Agreement
and
the performance of his obligations hereunder will not be in breach or be in
conflict with any other agreement to which Xx. Xxxxxx is a party or is bound
and
that Xx. Xxxxxx is not subject to any covenants against competition or similar
covenants that would affect the performance of his obligations hereunder. Xx.
Xxxxxx will not disclose or use any proprietary information of a third party
without such party's consent.
9.
NON-DISCLOSURE.
(a) For
purposes of this Section 9,
“the
Company”
shall
include any affiliates of the Company.
(b) As
used
herein, “Company
Confidential Information”
shall
mean all intellectual property and other proprietary information of the Company,
including without limitation:
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(i)
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the
Company’s business methods and
practices;
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(ii)
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databases
and information used in the Company’s
business;
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(iii)
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the
names
of
the Company’s suppliers and customers and the nature of their relationship
with the Company;
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(iv)
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the
business information and requirements of the Company’s
customers;
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(v)
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confidential,
proprietary or trade secret information submitted to the Company
by the
Company’s customers,
suppliers, employees, consultants or co-venturers;
and
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(vi)
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any
other information including, but not limited to, trade secrets or
confidential information
with respect
to
inventions, products, designs, methods, know-how, techniques,
systems, processes, software programs, works of authorship, customer
lists, projects, plans, pricing and
proposals;
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(c) Xx.
Xxxxxx will not at any time, whether during or after the termination of its
relationship, for any reason whatsoever, reveal to any person or entity (both
commercial and non-commercial) any of the trade secrets or Company Confidential
Information, without limitation, its research and development activities;
inventions, processes, formulae, data, chemical composition, chemical or natural
compounds now existing or under development, improvements, discoveries,
developments, product designs, prototypes and technical specifications;
algorithms, trade secrets or technical data; show-how and know-how; marketing
plans and strategies; pricing and costing policies; customer and supplier lists
and accounts; or nonpublic financial information of the Company so far as they
have come or may come to Xx. Xxxxxx’x knowledge, except as may be required in
the ordinary course of performing his duties as an employee or consultant of
the
Company. This restriction shall not
apply
to: (i) information that is in the public domain through no fault of Xx. Xxxxxx;
(ii) information received from a third party outside the Company that was
disclosed without a breach of any confidentiality obligation; (iii) information
approved for release by written authorization of the Company; or (iv)
information that may be required by law or an order of any court, agency or
proceeding to be disclosed. Xx. Xxxxxx shall keep secret all matters of such
nature entrusted to Xx. Xxxxxx and shall not use or disclose any such
information for the benefit of any third party in any manner which may injure
or
cause loss to the Company, whether directly or indirectly.
10. NONCOMPETITION
AND NONSOLICITATION.
During
the Services Term and for a period equal to twelve (12) months following
termination of this Agreement, however caused, Xx. Xxxxxx shall not, without
the
prior written consent of the Company,
which
consent will not be unreasonably withheld or delayed:
(a) For
himself or on behalf of any other person or entity, directly or indirectly,
either as principal, agent, stockholder, employee, consultant, representative
or
in any other capacity, own, manage, operate or control, or be connected or
employed by, or otherwise associate in any manner with, engage in or have a
financial interest in any business which is directly or indirectly competitive
with the Company’s Business (as defined below), or any of its affiliates, except
that nothing contained herein shall preclude Xx. Xxxxxx from (i) purchasing
or
owning stock in any such business if such stock is publicly traded
or (ii)
acting as a partner, principal, member, shareholder, officer, director or
employee of one or more venture capital or private equity funds(or its general
partner, managing member or management company) regardless of the investments
of
any such venture capital or private equity funds.
(b) Either
individually or on behalf of or through any third party, solicit, divert or
appropriate or attempt to solicit, divert or appropriate, for the purpose of
competing with the Company or any present or future parent, subsidiary or other
affiliate of the Company which is engaged in a similar business as the Company’s
Business, any customers or patrons of the Company, or any prospective customers
or patrons with respect to which the Company has developed or made a sales
presentation (or similar offering of services).
(c) Either
individually or on behalf of or through any third party, directly or indirectly,
solicit, entice or persuade or attempt to solicit, entice or persuade any other
employees of or consultants to the Company within the immediately preceding
twelve (12) month period or any affiliate of the Company to leave the services
of the Company or any affiliate for any reason.
(d) For
purposes of this Section 10,
the
Company’s business (“Business”) shall mean researching, developing or
commercializing therapeutic and diagnostic devices and drugs for the diagnosis
and treatment of nervous system injury and disease; provided,
however,
that the
term “Business” shall be deemed amended to reflect any change in the Company’s
Business after the date of this Agreement but prior to the termination of Xx.
Xxxxxx’x engagement with the Company. A business will be deemed to be
competitive with the Company if it is engaged in a business substantially
similar, in whole or in part, to the Company’s Business.
11. INDEMNIFICATION.
Xx.
Xxxxxx will indemnify and hold the Company harmless from all claims, losses,
expenses, fees (including, without limitation, attorneys’ fees), costs and
judgments that may be asserted against the Company as a result of any act or
omission of Xx. Xxxxxx in the performance by him of the Services under this
Agreement, unless said act or omission was authorized by the Company or resulted
directly or indirectly from any cause beyond the reasonable control of Xx.
Xxxxxx.
12. ASSIGNMENT/SUBCONTRACT.
Xx.
Xxxxxx may not assign or subcontract his obligations under this Agreement.
13. TERMINATION
(a) The
Company may terminate Xx. Xxxxxx’x service under this Agreement with Cause (as
defined below) at any time during the Services Term.
(b) For
purposes of this Agreement, the Company shall have Cause to terminate Xx.
Xxxxxx’x service under this Agreement if Xx. Xxxxxx:
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(i)
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is
convicted of any crime or offense;
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(ii)
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fails
or refuses to comply with the written policies or reasonable directives
of
the Company;
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(iii)
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commits
any act of willful disloyalty, dishonesty, or breach of fiduciary
duty
with respect to any aspect of the Company’s or any affiliate’s
business;
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(iv)
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is
guilty of misconduct in connection with his performance hereunder;
or
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(v)
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materially
breaches this Agreement.
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(c) If
this
Agreement is terminated by the Company for Cause, then (i) the Company shall
have no further obligations hereunder accruing from and after the effective
date
of termination and shall have all other rights and remedies available under
this
or any other agreement and at law or in equity; and (ii) any unvested options
held by Xx. Xxxxxx shall immediately expire and any restricted stock held (for
which all restrictions have not lapsed) by Xx. Xxxxxx shall be repurchased
by
the Company at par value. Notwithstanding the foregoing, the Company shall
promptly pay to the Xx. Xxxxxx on the effective termination date any and all
amounts then owed to Xx. Xxxxxx pursuant to this Agreement. In addition, Xx.
Xxxxxx shall also be entitled to reimbursement of any reimbursable business
expenses which were incurred by Xx. Xxxxxx through and including the date of
termination, which shall be paid by the Company in accordance with the Company’s
expense reimbursement policy. The Executive shall be entitled to convert the
Life Insurance into an individual policy.
(d) This
Agreement will terminate automatically on the occurrence of the death
or
disability of Xx. Xxxxxx.
(e) Upon
termination of this Agreement, Xx. Xxxxxx will immediately deliver to the
Company all records, notes, data, memoranda, work product and equipment in
his
possession that are the property of the Company, including any documentation
relating to the Services.
14. ENTIRE
AGREEMENT. This
Agreement constitutes the entire understanding between the parties hereto with
reference to the subject matter of this Agreement and shall not be changed
or
modified except by a written instrument signed by both parties. This Agreement
may be executed in any number of counterparts which together shall constitute
one instrument.
15. SEVERABILITY.
If
any
provision in this Agreement is found by a court of competent jurisdiction to
be
invalid or unenforceable, the remaining provisions in this Agreement shall
continue in full force and effect.
16. EQUITABLE
REMEDIES.
Xx.
Xxxxxx acknowledges that the Services are personal and unique to Xx. Xxxxxx
and
that any breach of this agreement by Xx. Xxxxxx will cause irreparable harm
to
the Company. Accordingly, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction or other equitable relief,
without bond and without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.
17. INTERPRETATION. Captions
of the sections of this Agreement are for reference purpose only and do not
constitute terms or conditions hereof. The parties acknowledge that they have
thoroughly reviewed this Agreement and bargained over its terms. Accordingly,
neither party shall be considered responsible for the preparation of this
Agreement, which shall be deemed to have been prepared jointly by both parties.
The provisions of the Agreement allocate the risks between the parties. The
terms and conditions included herein reflect this allocation of risk, and each
provision herein is part of the bargained-for consideration of this
Agreement.
18. WAIVER.
No waiver of any provision hereof shall be effective unless made in writing
and
signed by the waiving party. The failure of either party to require the
performance of any term or obligation of this Agreement, or the waiver by either
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
19. NOTICES.
Any and all notices, requests, demands and other communications provided for
by
this Agreement shall be in writing and shall be effective when delivered in
person or deposited in the United States mail, postage prepaid, registered
or
certified, and addressed to Xx. Xxxxxx at his last known address on the records
of the Company or, in the case of the Company, at the Company's principal place
of business, to the attention of the Chief Executive Officer, or to such other
address as either party may specify by notice to the other actually
received.
20. AMENDMENT.
This Agreement may be amended or modified only by a written instrument signed
by
Xx. Xxxxxx and by an expressly authorized representative of the
Company.
21. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
22. GOVERNING
LAW / CONSENT TO
JURISDCTION. This Agreement shall be governed by and construed under the laws
of
the Commonwealth
of Massachusetts without regard to the conflicts of laws principles
thereof.
Each
party hereto irrevocably and unconditionally consents to submit to the
jurisdiction and venue of the state and federal courts of Norfolk
County Massachusetts
with
respect to any litigation arising out of, or related to, this agreement and
the
transactions contemplated hereby, and agrees not to commence any litigation
relating thereto except in the state and federal courts of Norfolk
County,
Massachusetts,
and
further agrees that service of any process, summons, notice or document by
U.S.
mail, first-class, postage prepaid, shall be effective service of process for
any litigation brought against it in said court. Each of the parties hereby
irrevocably and unconditionally waives any objection to the laying of venue
of
any litigation arising out of this agreement or the transactions contemplated
hereby, in the state and federal courts of Norfolk
County,
Massachusetts,
and
hereby further irrevocably and unconditionally waives and agrees not to plead
or
claim in any such court that any such litigation brought in any such court
has
been brought in an inconvenient forum.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
| CYBERKINETICS NEUROTECHNOLOGY SYSTEMS, INC. | ||
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| By: | /s/ Xxxxxxx X. Xxxxxxxx | |
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Name: Xxxxxxx X. Xxxxxxxx |
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| Its: President and Chief Executive Officer | ||
| /s/ Xxxx X. Xxxxxx | |||
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Name: Xxxx X. Xxxxxx |
