CONSULTING AGREEMENT
This Consulting Agreement is made and entered into as of the 1st day
of January, 1998, by and between Aronex Pharmaceuticals, Inc., a Delaware
corporation (hereinafter referred to as "Company") and Gabriel Lopez-Berestein
(hereinafter referred to as a "Consultant").
WHEREAS, Consultant desires to provide special expertise and knowledge
to Company in the area of biochemistry and/or drug development and to consult
with Company on such specific research projects in the area as may be agreed
upon from time to time in writing between the Company and Consultant, which
written agreement(s) shall be incorporated herein by reference and made a part
hereof (hereinafter "Consulting Subjects"); and
WHEREAS, Company desires to retain Consultant as an independent
contractor upon the terms and conditions hereinafter set forth to provide
consulting and advisory services to Company based on 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,
Company and Consultant agree as follows:
1. Expertise of Consultant.
1.1 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 Company in connection with
such area or areas.
1.2 Consultant hereby represents and warrants to Company that
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
Consultant from performing such services for Company, except for those
agreements, if any, identified on Exhibit A hereto and approved by the Company.
2. Independent Contractor.
2.1 Consultant hereby agrees to perform for Company or any affiliate,
parent or subsidiary of Company and to provide to Company or any affiliate,
parent or subsidiary of 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, 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
Consultant will perform consulting and advisory or other services in the areas
designated by Company. Consultant will in no way be considered to be an agent,
employee or servant of Company. Consultant shall have no authority to bind
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,
Consultant shall owe to Company fiduciary duties of the utmost loyalty and
fidelity.
3. General Duties and Compensation.
3.1 During the term of this Agreement, Consultant shall, at such times
and locations as are reasonably requested by Company and at either the Company,
The University of Texas System Cancer Center and M.D. Anderson Hospital and
Tumor Institute or such other location agreed upon between Consultant and
Company, provide personal consultation and advisory services as may from time to
time be agreed upon between the Company and Consultant, perform and supervise
the performance by others of research with respect to (a) Consulting Subjects,
and (b) any other areas of interest upon which Consultant and Company shall
mutually agree. Consultant shall be so available during the term of this
Agreement for such periods as may be agreed upon from time to time between
Company and Consultant, as and when specific research projects are agreed upon.
3.2 For the performance of his obligations under this Agreement,
Company shall pay the Consultant a fee at the rate of $156,000.00 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. 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 calendar
year during the term of this Agreement shall be payable on January 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 calendar year, subject to
forfeiture of the then unvested portion of such shares upon the expiration of
the term or other termination of this Agreement prior to the end of such
calendar 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
January 1st of the year in which such grant is made, which shall be (i) $4.25
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 January 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, Company shall reimburse Consultant for reasonable
and necessary expenses which are incurred in connection with his providing of
consulting services and with respect to which Consultant promptly provides to
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 Consultant shall himself pay, and 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 Consultant or any of his
agents, employees or servants who are not employed by the Company arising out of
the performance by 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,
Consultant shall faithfully perform and provide the services contemplated by
this Agreement for Company, and Consultant shall not perform the same or similar
services for any other entity.
4.2 In addition to the other obligations agreed to by Consultant in
this Agreement, 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 technique(s) (i)
possessed, acquired or developed by Company at any time, irrespective of their
subject or nature, or (ii) conceived, made, developed or acquired by Consultant
or disclosed or made known to Consultant, individually or jointly with others,
in connection with or as a result of Consultant's performance under this
Agreement that relate to the business, products or services of 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, Consultant shall promptly
disclose in writing to Company all Proprietary Information conceived, developed,
made or acquired by Consultant, either individually or jointly with others,
whether patentable or not, and whether or not reduced to practice, irrespective
of whether Consultant utilized Company's time, data, facilities or material and
irrespective of whether such Proprietary Information is conceived, developed,
discovered or acquired by Consultant on the job, at home, or elsewhere.
(b) Consultant hereby specifically agrees to sell, assign and transfer
to Company or its nominee, and by the execution of this Agreement does hereby
sell, assign and transfer to Company or its nominee, all of his world-wide
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, Consultant agrees to at any time assist Company and/or its nominee
in the protection of such Proprietary Information assigned herein to 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 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, Consultant shall be paid by Company at a reasonable rate
(taking into consideration the services performed by Consultant as well as
Consultant's normal and customary rates) for any time actually spent so
assisting Company or its nominee.
5.4 Consultant recognizes that the protection of the Proprietary
Information of Company against unauthorized disclosure and use is of critical
importance to Company, and therefore Consultant agrees to use his best efforts
and exercise utmost diligence to protect and safeguard the Proprietary
Information of Company and its affiliates, if any, and, except as may be
expressly required by Company in connection with Consultant's performance of his
obligations to Company under this Agreement, 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 Upon termination of this Agreement, or at any other time upon
request, Consultant shall immediately deliver to Company all documents embodying
any of Company's Proprietary Information, including all test data.
5.6 If during the term of this Agreement, Consultant creates any work
of authorship fixed in any tangible medium of expression that is the subject
matter of copyright and that relates to Company's (or its affiliate's, if any)
business, products, or services, Company shall be deemed the author of such work
if the work is prepared by 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 Consultant within the scope of his or her employment or consultancy but was
specially ordered by 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 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, Consultant agrees to, and does hereby, assign to Company
all worldwide right, title and interest in and to such works. Both during the
term of this Agreement and thereafter, Consultant agrees to assist Company and
its nominee, at any time, in the protection of 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 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 upon the request of Consultant, provided that any such
publications (i) shall be limited to scientific publications, (ii) shall
identify clearly the relationship of 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 patentabl 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 Consultant is currently, and will be throughout the
term of this Agreement, an employee of The University of Texas System Cancer
Center, M. D. Anderson Hospital and Tumor Institute ("Anderson"), and that
nothing herein shall interfere or conflict with any existing employment
agreements or relationships between Consultant and Anderson. 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 Consultant,
individually or jointly, conceives, makes, develops or acquires, or which is
disclosed or made known to Consultant, while Consultant is working under the
Research and Development Contract between the Company and Anderson, or on any
other sponsored research and development agreement applicable to Anderson, 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 Consultant, while Consultant is engaged in
performing services to 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 three years from the effective date of this Agreement. Upon
expiration of the Initial Term (and upon 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 Termination of this Agreement shall not affect Company's
obligation to pay for services previously performed by Consultant and shall not
affect Consultant's continuing obligations to Company in Sections 3.3, 4.2, and
5.1 through 5.6 above, whether such termination is made voluntarily or
involuntarily, by Company or 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 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 (the "Act"), Consultant agrees that the shares of Common Stock which
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. 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,
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 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. 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, options or stocks. 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 upon
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, Harris County,
Texas shall have personal jurisdiction over 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 Company or the Consultant is
not able to effect service of process upon 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 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. 8707 Technology Forest Place The Woodlands,
Texas 77381
8.4 This Agreement replaces all previous agreements and discussions
relating to the subject matters hereof and constitutes the entire agreement
between Company and Consultant with respect to the subject matters of this
Agreement. Without limiting the foregoing, this Agreement supersedes and
terminates, effective January 1, 1998, the Consulting Agreement dated July 1,
1988 between the Company and Consultant, as amended by the first, second and
third amendments thereto. This Agreement may not be modified in any respect by
any verbal statement, representation or agreement made by any employee, officer
or representative of Company, or by any written document unless it is signed by
an officer of 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 Consultant and 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.
Gabriel Lopez-Berestein Geoffrey Cox
Chairman of the Board and
Chief Executive Officer