EXHIBIT 10.4
CONFIDENTIALITY, INTELLECTUAL PROPERTY
AND NON-COMPETITION AGREEMENT
THIS CONFIDENTIALITY, INTELLECTUAL PROPERTY AND NON-COMPETITION
AGREEMENT (this "Agreement") is made as of the 29th day of March, 2003 by and
between NEOSE TECHNOLOGIES, INC. (the "Company") and STEPHEN A. ROTH, Ph.D.
("Dr. Roth").
WHEREAS, Dr. Roth has served as a consultant to the Company and as
Chief Executive Officer and Chairman of the Board of the Company, positions of
substantial authority and responsibility in which he has had access to the
Company's customers, vendors, trade secrets, proprietary information, and
intellectual property;
WHEREAS, the Company desires to obtain certain assurances from Dr.
Roth that he will not harm the Company's business interests;
NOW THEREFORE, in consideration of these premises and intending to be
legally bound hereby, the parties agree as follows:
SECTION 1. Definitions. To the extent not defined in the preamble of this
Agreement, capitalized terms used herein will have the meanings provided below:
1.1. "Business" means research, development, manufacture, supply,
marketing, licensing, use and sale of biologic, pharmaceutical and therapeutic
materials and products and related process technology including, without
limitation, research, development, manufacture, supply, marketing, licensing,
use and sale or products and technology directed to (a) the enzymatic synthesis
of complex carbohydrates for use in food, cosmetic, therapeutic, consumer and
industrial applications, (b) enzymatic synthesis or modification of the
carbohydrate portion of proteins or lipids, and (c) carbohydrate-based
therapeutics.
1.2. "Board" means the Board of Directors of the Company.
1.3. "Effective Date" means March 29, 2003.
1.4. "Restricted Period" means the two-year period commencing on the
Effective Date.
1.5. "Restrictive Covenants" means the provisions contained in
Section 3 of this Agreement.
SECTION 2. Consideration. In consideration for the covenants described in
Section 3, subject to Section 5.2:
2.1. The Company will pay to Dr. Roth $39,622 on March 31, 2003 and
on the last day of each of the first 23 months thereafter;
2.2. Notwithstanding the terms of the Company's equity incentive
plans and any stock option award agreement between Dr. Roth and the Company,
solely for purposes of the vesting and expiration of the options to purchase
shares of the Company's common stock held by Dr. Roth as of the Effective Date,
Dr. Roth will be treated as continuing in the service of the Company until the
later of (a) the second anniversary of the Effective Date and (b) the end of Dr.
Roth's service as a member of the Board; and
2.3. In light of the compensation paid to Dr. Roth under this
Agreement, during the term of this Agreement, Dr. Roth will not be entitled to
any separate compensation for his service as a member of the Board of Directors
of the Company. Accordingly, Section 3.2 of the Separation and Consulting
Agreement made as of March 29, 2002 is hereby amended by deleting the second
sentence thereof.
SECTION 3. Restrictive Covenants. In consideration of all the payments and
benefits provided under this Agreement, Dr. Roth covenants that, during the
Restricted Period, he will not (except in his capacity as a consultant of the
Company) do any of the following, directly or indirectly, anywhere in the world:
3.1. engage or participate in any business competitive with the
Business (as defined below);
3.2. become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent or consultant) any person, firm,
corporation, association or other entity engaged in any business competitive
with the Business. Notwithstanding the foregoing, Dr. Roth may hold up to 4.9%
of the outstanding securities of any class of any publicly-traded securities of
any company;
3.3. engage in any business, or solicit or call on any customer,
supplier, licensor, licensee, contractor, agent, representative, advisor,
strategic partner, distributor or other person with whom the Company shall have
dealt or any prospective customer, supplier, licensor, licensee, contractor,
agent, representative, advisor, strategic partner, distributor or other person
that the Company shall have identified and solicited at any time during Dr.
Roth's employment or retention by the Company for a purpose competitive with the
Business;
3.4. influence or attempt to influence any employee, consultant,
customer, supplier, licensor, licensee, contractor, agent, representative,
advisor, strategic partner, distributor or other person to terminate or modify
any written or oral agreement, arrangement or course of dealing with the
Company; or
3.5. solicit for employment or employ or retain (or arrange to have
any other person or entity employ or retain) any person who has been employed or
retained by the Company within the 12 months preceding the application of this
provision to that person.
SECTION 4. Acknowledgements. Dr. Roth acknowledges that the Restrictive
Covenants are reasonable and necessary to protect the legitimate interests of
the Company and its affiliates and that the duration and geographic scope of the
Restrictive Covenants are reasonable given the nature of this Agreement and Dr.
Roth's relationship
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with the Company. Dr. Roth further acknowledges that the Restrictive Covenants
are included herein in order to induce the Company to make the payments provided
for herein and that the Company would not have entered into this Agreement in
the absence of the Restrictive Covenants.
SECTION 5. Remedies and Enforcement Upon Breach.
5.1. Specific Enforcement. Dr. Roth acknowledges that any breach by
him, willfully or otherwise, of the Restrictive Covenants will cause continuing
and irreparable injury to the Company for which monetary damages would not be an
adequate remedy. Dr. Roth will not, in any action or proceeding to enforce any
of the provisions of this Agreement, assert the claim or defense that such an
adequate remedy at law exists. In the event of any such breach by Dr. Roth, the
Company will have the right to enforce the Restrictive Covenants by seeking
injunctive or other relief in any court, without any requirement that a bond or
other security be posted, and this Agreement will not in any way limit remedies
of law or in equity otherwise available to the Company.
5.2. Termination of Payments and Vesting Service. If Dr. Roth
breaches Section 3 in any respect, then (a) he will not be entitled to any
further payments under this Agreement, (b) he will immediately cease to treated
as continuing in the service of the Company for purposes of vesting and
expiration of his Company stock options, and (c) all of his entitlements under
this Agreement will cease.
5.3. Extension of Restricted Period. If Dr. Roth breaches Section 3
in any respect, the Restricted Period will be extended for a period equal to the
period that Dr. Roth was in breach.
5.4. Accounting. If Dr. Roth breaches any of the Restrictive
Covenants, the Company will have the right and remedy to require Dr. Roth to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits derived or received by Dr. Roth as the
result of such breach. This right and remedy will be in addition to, and not in
lieu of, any other rights and remedies available to the Company under law or in
equity.
5.5. Judicial Modification. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court will have the power
to modify such provision and, in its modified form, such provision will then be
enforceable.
5.6. Enforceability. If any court holds the Restrictive Covenants
unenforceable by reason of their breadth or scope or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the right of the Company to the relief provided above in the courts of
any other jurisdiction within the geographic scope of such Restrictive
Covenants.
5.7. Disclosure of Restrictive Covenants. Dr. Roth agrees to
disclose the existence and terms of the Restrictive Covenants to any entity to
whom Dr. Roth provides services during the Restricted Period.
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SECTION 6. Miscellaneous.
6.1. Claims Against Officers or Directors. Dr. Roth hereby (a)
waives any right to claim payment of amounts owed to him, now or in the future,
pursuant to this Agreement from directors or officers of the Company in the
event the Company becomes insolvent, and (b) fully and forever releases and
discharges the Company's officers and directors from any and all claims,
demands, liens, actions, suits, causes of action or judgments arising out of any
present or future claim for such amounts.
6.2. Successors and Assigns. This Agreement will inure to the
benefit of and be binding upon the Company and Dr. Roth and their respective
successors, executors, administrators, heirs. The Company may assign this
Agreement to any successor to all or substantially all of its assets and
business by means of liquidation, dissolution, merger, consolidation, transfer
of assets, or otherwise. Dr. Roth may not assign his rights or obligations under
this Agreement.
6.3. Notice. Any notice or communication required or permitted under
this Agreement will be made in writing and (a) sent by overnight courier, (b)
mailed by certified or registered mail, return receipt requested or (c) sent by
telecopier, addressed as follows:
If to Dr. Roth:
Stephen A. Roth, Ph.D.
1105 Rose Glen Road
Gladwyne, PA 19035
with a copy to:
Steven L. Gershman, Esq.
407 East Lancaster Avenue
Wayne, PA 19087
Fax: 610-971-2660
If to Company:
Neose Technologies, Inc.
102 Witmer Road
Horsham PA 19044
Attn: General Counsel
Fax: 215-441-5896
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with a copy to:
Pepper Hamilton LLP
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103
Attn: Barry M. Abelson, Esquire
Fax: 215-981-4750
or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above.
6.4. Entire Agreement; Amendments. This Agreement contains the
entire agreement and understanding of the parties hereto relating to the subject
matter hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature relating to the
subject matter hereof. This Agreement may not be changed or modified, except by
an agreement in writing signed by each of the parties hereto.
6.5. Waiver. Any waiver by either party of any breach of any term or
condition in this Agreement will not operate as a waiver of any other breach of
such term or condition or of any other term or condition, nor will any failure
to enforce any provision hereof operate as a waiver of such provision or of any
other provision hereof or constitute or be deemed a waiver or release of any
other rights, in law or in equity.
6.6. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
6.7. Governing Law. This Agreement will be governed by, and enforced
in accordance with, the laws of the Commonwealth of Pennsylvania, without regard
to the application of the principles of conflicts of laws.
6.8. Enforcement. Any legal proceeding arising out of or relating to
this Agreement will be instituted in the United States District Court for the
Eastern District of Pennsylvania, or if that court does not have or will not
accept jurisdiction, in any court of general jurisdiction in the Commonwealth of
Pennsylvania, and Dr. Roth and the Company hereby consent to the personal and
exclusive jurisdiction of such court(s) and hereby waive any objection(s) that
they may have to personal jurisdiction, the laying of venue of any such
proceeding and any claim or defense of inconvenient forum.
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6.9. Section Headings. The section headings in this Agreement are
for convenience only; they form no part of this Agreement and will not affect
its interpretation.
6.10. Counterparts and Facsimiles. This Agreement may be executed,
including execution by facsimile signature, in one or more counterparts, each of
which will be deemed an original, and all of which together will be deemed to be
one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Dr. Roth has executed this
Agreement, in each case as of the date first above written.
NEOSE TECHNOLOGIES, INC.
By: /s/ C. Boyd Clarke
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C. Boyd Clarke
President & Chief Executive Officer
STEPHEN A. ROTH, Ph.D.
/s/ Stephen A. Roth
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