Independent Contractor Agreement - CytRx Corp. and Louis J. Ignarro
AGREEMENT
This Agreement (this "Agreement"), dated as of July 17, 2003, is entered into by
and between CytRx Corporation, a Delaware corporation (the "Company") and Dr.
Louis J. Ignarro ("Dr. Ignarro") with reference to the following facts:
A. The Company is engaged in the development and commercialization of
biopharmaceutical products in a variety of therapeutic categories.
B. Dr. Ignarro, in addition to being a Nobel Laureate in Physiology or
Medicine and a distinguished professor of pharmacology in the department of
molecular and medical pharmacology at the UCLA School of Medicine, is a member
of the Company's Board of Directors and Chairman of the Company's Scientific
Advisory Board (the "SAB").
C. The Company and Dr. Ignarro desire to expand Dr. Ignarro's role
within the Company and to enter into a relationship whereby Dr. Ignarro will
serve as the Company's Chief Scientific Spokesperson, pursuant to the terms and
provisions contained in this Agreement.
The parties agree as follows:
1. Description of Services. During the term of this Agreement, Dr. Ignarro
agrees to serve as the Company's Chief Scientific Spokesperson to the medical
and financial communities. In connection with his role as the Company's Chief
Scientific Spokesperson, Dr. Ignarro will provide the following services
("Services"):
(a) Attending scientific conferences and meetings of investment
bankers, financial analysts and other members of the financial community at
domestic or European locations to discuss the Company's scientific affairs and
products;
(b) Meeting with various media sources who are covering the
Company;
(c) Assisting the Company in preparing and making periodic public
statements regarding the Company and its products; and
(d) Providing such other services as a Chief Scientific Spokesman
that shall be reasonably requested by the Company.
2. Time Commitment. Subject to Dr. Ignarro's professional
responsibilities at the UCLA School of Medicine and other scheduled business
commitments, Dr. Ignarro agrees to make himself reasonably available to perform
the Services under this Agreement. The parties expect that Dr. Ignarro will
spend approximately three days per month serving as the Chief Scientific
Spokesman, in addition to time spent by Dr. Ignarro fulfilling his
responsibilities as a member of the Company's Board of Directors and Chairman of
the SAB. The parties agree that there will be no minimum number of days of work
per month required under this Agreement.
3. Term, Termination and Renewal. The term of this Agreement will
commence on the date of this Agreement and will continue for two years from the
date on which the option described in Section 4 is awarded to Dr. Ignarro by the
Company's Compensation Committee (the "Grant Date") unless terminated sooner as
provided herein. Either party may terminate this Agreement at any time upon 60
days written notice to the other party.
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4. Compensation. As payment in full for the Services, Dr. Ignarro will
be granted a non-qualified stock option on the Grant Date under the CytRx
Corporation 2000 Long-Tern Incentive Plan to purchase 350,000 registered shares
of the Company's common stock at an exercise price equal to the closing price
for the Company's common stock on Nasdaq on the Grant Date (the "Option"). The
Option will have a term of seven years and will vest monthly at the rate of
4,839 shares for each day of consulting services provided by Dr. Ignarro in that
month. Any unvested shares under the Option as of the date of termination of
this Agreement shall be cancelled.
Compensation paid under this Agreement shall be in addition to any
compensation payable to Dr. Ignarro as a director of the Company or Chairman of
the SAB.
5. Expenses. The Company shall reimburse Dr. Ignarro within 15 days
following receipt of appropriate documentation for all reasonable out-of-pocket
expenses actually incurred relating to Dr. Ignarro's provision of Services,
including without limitation, airfare, hotel and other travel expenses;
provided, however, that the Company shall approve in advance in writing any
expenditure in excess of $500.
6. Independent Contractor. Dr. Ignarro's relationship with the Company
will be that of an independent contractor and not that of an employee. Dr.
Ignarro shall have no authority to enter into contracts that bind the Company or
create obligations on the part of the Company unless otherwise first agreed by
the Company and Dr. Ignarro in writing. Dr. Ignarro shall have full
responsibility for applicable withholding taxes for all of his compensation
under this Agreement and for compliance with all applicable state and federal
regulations with respect to the his self-employment as a consultant.
7. Relationship to Other Commercial Entities. The Company acknowledges
that Dr. Ignarro may serve on the Board of Directors or the Scientific Advisory
Boards of other companies and may serve as a consultant to other companies on
scientific or FDA matters. However, Dr. Ignarro agrees that during the term of
this Agreement he will not serve as the Chief Scientific Spokesman for any other
company that is involved in the fields of RNAi, ALS, diabetes II/obesity, cancer
or HIV vaccine technology.
8. Recognition of University Affiliation. The Company acknowledges that
Dr. Ignarro is an employee of UCLA and is subject to the UCLA's policies,
including policies concerning consulting, conflicts of interest and intellectual
property. If Dr. Ignarro is required by the University, pursuant to applicable
guidelines and policies, to make any disclosure or take any action that
conflicts with the Services provided by Dr. Ignarro hereunder or that is
contrary to the terms of this Agreement, Dr. Ignarro agrees to promptly notify
the Company of such obligation, specifying the nature of such disclosure or
action and identifying the applicable guideline or policy under which disclosure
or action is required, prior to making such disclosure or taking such action.
9. Provisions Under SAB Agreement. Notwithstanding any other provision
in this Agreement, Dr. Ignarro acknowledges that he continues to be bound by the
SAB Agreement by and between the Company and Dr. Ignarro, dated ______________
(the "SAB Agreement"), including Sections 4, 5 and 7, which address,
respectively, Confidential Information, Non-compete/Nonsolicitation, and License
and Assignment of Rights.
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10. Use of name, picture, quotations. The Company may use and publish
Dr. Ignarro's name or picture in all media and types of advertising, promotion
and press releases in connection with the Company's business and the Services.
The Company may quote and publish in any medium Dr. Ignarro's statements in
connection with the Company, its activities or products. Any press release or
other publication made by the Company that quotes Dr. Ignarro or uses his name
shall be subject to his prior approval (which will not be unreasonably withheld
or delayed), except for any disclosures that the Company's counsel determines
are required by law.
11. No Conflict. Dr. Ignarro represents that his performance of all the
terms of this Agreement and that his appointment as a Chief Scientific Spokesman
of the Company do not and will not breach any agreement that he has with any
other party.
12. Miscellaneous.
(a) Amendments and Waivers. This Agreement may only be amended by
a writing executed by both parties.
(b) Entire Agreement. Except for the SAB Agreement, this Agreement
constitutes the entire agreement between the parties and supersedes all oral
negotiations and prior writings with respect to the subject matter hereof. The
parties agree that any rule of law or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement against the party
that drafted it has no application and is expressly waived.
(c) Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without giving
effect to principles of conflict of laws.
(d) Dispute Resolution. Any dispute arising under or in connection
with any matter related to this Agreement or any other related agreement shall
be resolved exclusively by binding arbitration. The arbitration will be
conducted in conformity with the rules and procedures of the American
Arbitration Association. The parties agree to be subject to the jurisdiction and
venue of the arbitration in Los Angeles, California. The ruling of the
arbitrator shall be final and binding on the parties with respect to the
dispute. This provision will survive termination of this Agreement.
(e) Attorneys' Fees. If any arbitration or other legal proceeding
is brought to enforce or interpret the provisions of this Agreement or as to the
rights or obligations of any party to this Agreement, the prevailing party in
such action shall be entitled to recover its reasonable attorneys' fees and
costs.
(f) Severability. If any or several provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, such
provision shall be severed and the remaining provisions shall continue in full
force and effect.
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(g) No Assignment. Neither party may delegate or assign, as
applicable, its rights and obligations under this Agreement without the other
party's prior written consent, except that the Company may assign its rights and
obligations under this Agreement in connection with a merger of the Company or
the sale of all or substantially all of its assets.
13. Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS
AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT
LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF
THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY
REASON OF THE DRAFTING OR PREPARATION THEREOF.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CYTRX CORPORATION
By: /s/ Steven A. Kriegsman
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Steven A. Kriegsman, Chief Executive Officer
/s/ Louis J. Ignarro
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Dr. Louis J. Ignarro