Exhibit 10.1
CONSULTING AGREEMENT
     This Consulting Agreement (“Agreement”) is made and entered into as of the
26th day of August, 2008, by and between Vermillion, Inc. (the “Company”), and
Richard G. Taylor (“Consultant”). The Company desires to retain Consultant as an
independent contractor to perform consulting services for the Company, and
Consultant is willing to perform such services, on terms set forth more fully
below. In consideration of the mutual promises contained herein, the parties
hereto (the “Parties”) agree as follows:
     1. SERVICES AND COMPENSATION
          (a) Consultant agrees to perform for the Company the services
(“Services”) described in Exhibit A, attached hereto.
          (b) The Company agrees to pay Consultant the compensation set forth in
Exhibit A for the performance of the Services.
     2. CONFIDENTIALITY
          (a) Definition. “Confidential Information” means any information,
technical data, trade secrets or know-how that Consultant knows or should know
to be considered to be proprietary by the Company, including, but not limited
to, research, product plans, products, services, suppliers, customer lists and
customers, prices and costs, markets, software, developments, inventions,
laboratory notebooks, processes, formulas, technology, designs, drawings,
engineering, hardware configuration information, marketing, licenses, finances,
compensation packages, budgets or other business information disclosed by the
Company either directly or indirectly in writing, orally or by drawings or
through Consultant’s allowed observation of parts or equipment, or through
creation by Consultant in the course of providing the Services during the term
of this Agreement. Consultant also understands that Confidential Information
includes, but is not limited to, information pertaining to any aspects of the
Company’s business that is either information not known by actual or potential
competitors of the Company or is proprietary information of the Company or its
customers or suppliers, whether of a technical nature or otherwise. Further,
Confidential Information, as defined herein, may include, but is not limited to,
information disclosed to Consultant prior to the formal incorporation of the
Company and information disclosed to the Company by third parties. Confidential
Information does not include information that Consultant can establish (i) was
publicly known and made generally available in the public domain prior to the
time of disclosure to Consultant by the Company; (ii) becomes publicly known and
made generally available after disclosure to Consultant by the Company through
no wrongful action or inaction of Consultant; (iii) is in the possession of
Consultant, without confidentiality restrictions, at the time of disclosure to
Consultant by the Company as shown by Consultant’s files and records immediately
prior to the time of disclosure; or (iv) has been approved for release by the
Company’s prior written authorization.
          (b) Non-Use and Non-Disclosure. Consultant will not, during or
subsequent to the term of this Agreement, use the Company’s Confidential
Information for any purpose whatsoever other than the performance of the
Services on behalf of the Company. Consultant will not, during or subsequent to
the term of this Agreement, disclose the Company’s Confidential Information to
any third party. Consultant shall not reverse engineer, disassemble or decompile
any prototypes, software or other tangible objects, that embody the Company’s
Confidential Information. Consultant further agrees to take all reasonable
precautions to prevent any unauthorized disclosure of such Confidential
Information including, but not limited to, having each employee of Consultant,
if any, with access to any Confidential Information, execute a nondisclosure
agreement containing provisions no less favorable to the Company and protective
of Confidential Information than those contained in this Agreement.

 

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Consultant shall not make any copies of Confidential Information unless
Consultant has received prior written approval for such action from the Company;
and in such event, Consultant shall reproduce on any such approved copies, any
of Company’s proprietary rights and confidentiality notices in the same manner
in which such notices were set forth in or on the original. Consultant shall
immediately notify the Company in the event of any unauthorized use or
disclosure of Confidential Information.
          (c) Former Employer’s Confidential Information. Consultant agrees that
Consultant will not, during the term of this Agreement, improperly use,
disclose, or induce the Company to use any proprietary information or trade
secrets of any former or concurrent employer or other person or entity, and that
Consultant will not bring onto the premises of the Company any unpublished
document or proprietary information belonging to any such employer, person or
entity unless consented to in writing by such employer, person or entity.
Consultant will indemnify the Company and hold it harmless from and against all
claims, liabilities, damages and expenses, including reasonable attorneys fees
and costs of suit, arising out of or in connection with any violation or claimed
violation of a third party’s rights resulting in whole or in part from the
Company’s use of the work product of Consultant under this Agreement.
          (d) Third Party Confidential Information. Consultant recognizes that
the Company has received and in the future will receive confidential or
proprietary information of third parties subject to a duty on the Company’s part
to maintain the confidentiality of such information and to use it only for
certain limited purposes. Consultant agrees that Consultant owes the Company and
such third parties, during the term of this Agreement and thereafter, a duty to
hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm, corporation or other
entity or to use it except as necessary in carrying out the Services for the
Company consistent with the Company’s agreement with such third party.
          (e) Return of Materials. All documents and other tangible objects
containing or representing Confidential Information and all copies thereof that
are in the possession of Consultant shall be and remain the property of the
Company, and Consultant shall promptly return such Confidential Information and
all copies thereof to the Company upon termination of this Agreement or upon the
Company’s earlier request.
     3. OWNERSHIP
          (a) Assignment. Consultant agrees that all copyrightable material,
notes, records, drawings, designs, inventions, improvements, developments,
discoveries and trade secrets (collectively, “Inventions”) conceived, made or
discovered by Consultant, solely or in collaboration with others, during the
period of this Agreement that relate in any manner to the business of the
Company that Consultant may be directed to undertake, investigate or experiment
with, or that Consultant may become associated with in work, investigation or
experimentation in the line of business of Company in performing the Services
hereunder, are the sole property of the Company. In addition, any Inventions
made by Consultant that constitute copyrightable subject matter shall be
considered “works made for hire” as that term is defined in the United States
Copyright Act. Consultant hereby assigns fully (and agrees to further assign or
cause to be assigned, as necessary to effect such full assignment) to the
Company all Inventions and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto.
          (b) Further Assurances. Consultant agrees to assist Company, or its
designee, at the Company’s expense, in every proper way to secure the Company’s
rights in the Inventions and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all countries,
including in the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments that the Company shall deem necessary in
order to apply for and obtain such rights and in order to assign and convey to
the Company, its successors, assigns and nominees the sole and exclusive right,
title and interest in and to such Inventions, and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto. Consultant
further agrees that Consultant’s obligation to execute or cause to be executed
any such instrument or papers, when it is in Consultant’s power to do so, shall
continue after the termination of this Agreement.
          (c) Pre-Existing Materials. Consultant agrees that if in the course of
performing the Services, Consultant incorporates into any Invention developed
hereunder any invention, improvement,

 

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development, concept, discovery or other proprietary information owned by
Consultant or in which Consultant has an interest, (i) Consultant shall inform
Company, in writing before incorporating such invention, improvement,
development, concept, discovery or other proprietary information into any
Invention; and (ii) the Company is hereby granted and shall have a nonexclusive,
royalty-free, perpetual, irrevocable, worldwide license to make, have made,
modify, use and sell such item as part of or in connection with such Invention.
In addition, Consultant agrees that Consultant will promptly make full written
disclosure to the Company, will hold in trust for the sole right and benefit of
the Company, and hereby assign to the Company, or its designees, all
Consultant’s right, title, and interest in and to any Inventions created within
three years after the termination of this Agreement that are based upon or
derived from Confidential Information, and Consultant agrees that such
Inventions are and shall be the sole and exclusive property of the Company.
Nothing in the preceding sentence shall be construed to limit Consultant’s
obligations under Section 2 (“Confidentiality”) of this Agreement. Consultant
understands and agrees that the decision whether or not to commercialize or
market any Invention is within the Company’s sole discretion and for the
Company’s sole benefit and that no royalty will be due to Consultant as a result
of the Company’s efforts to commercialize or market any Invention. Consultant
shall not incorporate any invention, improvement, development, concept,
discovery or other proprietary information owned by any third party into any
Invention without Company’s prior written permission.
          (d) Attorney in Fact. Consultant agrees that if the Company is unable
because of Consultant’s unavailability, dissolution, mental or physical
incapacity, or for any other reason, to secure Consultant’s signature to apply
for or to pursue any application for any United States or foreign jurisdiction’s
patents or mask work or copyright registrations covering the Inventions assigned
to the Company above, then Consultant hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents as Consultant’s agent
and attorney in fact, to act for and in Consultant’s behalf and stead to execute
and file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of patents, copyright and mask work
registrations thereon with the same legal force and effect as if executed by
Consultant.
     4. CONFLICTING OBLIGATIONS
     Consultant certifies that Consultant has no outstanding agreement or
obligation that is in conflict with any of the provisions of this Agreement, or
that would preclude Consultant from complying with the provisions hereof, and
further certifies that Consultant will not enter into any such conflicting
agreement.
     5. TERM AND TERMINATION
          (a) Term. This Agreement will commence on the date first written above
and will continue until the earlier of (i) 90 days from initial commencement of
Services or (ii) termination as provided below. The all terms and conditions of
this Agreement may be extended for additional 90 periods by written mutual
consent of both parties.
          (b) Termination. Either Party may terminate this Agreement for any
reason or no reason upon giving thirty (30) days prior written notice thereof to
the other Party. Any such notice shall be addressed to the other Party at the
address shown below and shall be deemed given upon delivery if personally
delivered, or forty-eight (48) hours after deposited in the United States mail,
postage prepaid, registered or certified mail, return receipt requested. Either
Party may terminate immediately and without prior notice if the other Party is
in breach of any material provision of this Agreement, but such termination
shall not preclude any other legal or equitable remedy available to the
terminating Party.
          (c) Survival. Upon such termination of this Agreement, all rights and
duties of the Parties toward each other shall cease except that:
               (i) the Company shall be obliged to pay, within thirty (30) days
of the effective date of termination, all amounts owing to Consultant for
Services completed and accepted by the Company prior to the termination date and
related expenses, if any, in accordance with the provisions of Section 1
(“Services and Compensation”) hereof; and

 

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               (ii) Sections 2 (“Confidentiality”), 3 (“Ownership”) and 7
(“Independent Contractors”), Section 9 (“Arbitration and Equitable Relief”) and
such other provisions that by their terms extend shall survive termination of
this Agreement.
     6. ASSIGNMENT
     Neither this Agreement nor any right hereunder or interest herein may be
assigned or transferred by Consultant without the express written consent of the
Company.
     7. INDEPENDENT CONTRACTOR
     The express intention of the Parties is that Consultant is an independent
contractor to the Company hereunder. Nothing in this Agreement shall in any way
be construed to constitute Consultant as an agent, employee or representative of
the Company, but Consultant shall perform the Services hereunder as an
independent contractor. Consultant agrees to furnish (or reimburse the Company
for) all tools and materials necessary to accomplish this contract, and shall
incur all expenses associated with performance without reimbursement from the
Company, except as expressly provided on Exhibit A of this Agreement. Consultant
acknowledges and agrees that Consultant is obligated to report as income to all
applicable taxing authorities all compensation received by Consultant pursuant
to this Agreement, and Consultant agrees to and acknowledges the obligation to
pay all self-employment and other taxes thereon. Consultant further agrees to
indemnify and hold harmless the Company and its directors, officers, and
employees from and against all taxes, losses, damages, liabilities, costs and
expenses, including attorney’s fees and other legal expenses, arising directly
or indirectly from (i) any negligent, reckless or intentionally wrongful act of
Consultant or Consultant’s assistants, employees or agents, (ii) a determination
by a court or agency that the Consultant is not an independent contractor, or
(iii) any breach by the Consultant or Consultant’s assistants, employees or
agents of any of the covenants contained in this Agreement.
     8. BENEFITS
     Consultant acknowledges and agrees and the Parties’ intent hereunder is
that Consultant receive no Company-sponsored benefits from the Company either as
a Consultant or an employee. Such benefits include, but are not limited to, paid
vacation, sick leave, medical insurance, and 401(k) participation. If Consultant
is reclassified by a state or federal agency or court as an employee, the
Company may elect to have Consultant become a reclassified employee, receiving
no benefits except those mandated by state or federal law, even if by the terms
of the Company’s standard benefit plans in effect at the time of such
reclassification Consultant would otherwise be eligible for such benefits.
     9. ARBITRATION AND EQUITABLE RELIEF
          (a) Disputes. Except as provided in Section 9(d) below, the Company
and Consultant agree that any dispute or controversy arising out of, relating to
or in connection with the interpretation, validity, construction, performance,
breach or termination of this Agreement shall be settled by binding arbitration
to be held in Fremont, California in accordance with the Commercial Arbitration
Rules, supplemented by the Supplemental Procedures for Large Complex Disputes,
of the American Arbitration Association as then in effect (the “Rules”). The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator shall be final, conclusive and binding on the
Parties to the arbitration. Judgment may be entered on the arbitrator’s decision
in any court of competent jurisdiction.
          (b) Consent to Personal Jurisdiction. The arbitrator(s) shall apply
California law to the merits of any dispute or claim, without reference to
conflicts of law rules. Consultant hereby consents to the personal jurisdiction
of the state and federal courts located in California for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the Parties are participants.
          (c) Equitable Relief. The Parties may apply to any court of competent
jurisdiction for a temporary restraining order, preliminary injunction, or other
interim or conservatory relief, as necessary, without breach of this arbitration
provision and without abridgment of the powers of the arbitrator. Consultant
further agrees, for the purposes of this Section (9)(c) and Section 9(a) of this
Agreement, that any breach of the covenants

 

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set forth in Sections 2 (“Confidentiality”) and 3 (“Ownership”) of this
Agreement would cause the Company irreparable injury for which it would not have
an adequate remedy at law. Accordingly, Consultant agrees that if Consultant
breaches Sections 2 (“Confidentiality”) and 3 (“Ownership”) of this Agreement,
the Company will be entitled, in addition to any other right or remedy
available, to temporary or preliminary equitable relief (including, but not
limited to, a temporary restraining order or a preliminary injunction) from a
court of competent jurisdiction restraining such breach or threatened breach and
final and permanent equitable relief (including, but not limited to, the
granting of a permanent injunction and the ordering of specific performance)
from the arbitrator restraining such breach or threatened breach.
          (d) Acknowledgment. CONSULTANT HAS READ AND UNDERSTANDS SECTION 9
(“ARBITRATION AND EQUITABLE RELIEF”), WHICH DISCUSSES ARBITRATION. CONSULTANT
UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, CONSULTANT AGREES TO SUBMIT ANY
CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF, TO BINDING ARBITRATION, EXCEPT AS PROVIDED IN SECTION 9 (c), AND THAT
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF CONSULTANT’S RIGHT TO A JURY
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF
THE RELATIONSHIP BETWEEN THE PARTIES.
     10. GOVERNING LAW
     This Agreement shall be governed by the internal substantive laws, but not
the choice of law rules, of the state of California.
     11. ENTIRE AGREEMENT
     This Agreement is the entire agreement of the Parties and supersedes any
prior agreements between them, whether written or oral, with respect to the
subject matter hereof. No waiver, alteration, or modification of any of the
provisions of this Agreement shall be binding unless in writing and signed by
duly authorized representatives of the Parties hereto.
     12. ATTORNEY’S FEES
     In any court action at law or equity that is brought by one of the Parties
to enforce or interpret the provisions of this Agreement, the prevailing party
will be entitled to reasonable attorney’s fees, in addition to any other relief
to which that party may be entitled.
     13. SEVERABILITY
     If one or more of the provisions in this Agreement are deemed void by law,
then the remaining provisions will continue in full force and effect.
     14. TITLES AND SUBTITLES
     The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.

 

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     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the day and year first above written.

                  VERMILLION, INC.             6611 Dumbarton Circle            
Fremont, CA 94555            
 
               
By:
  /s/ Gail Page       By:   /s/ Richard G. Taylor
 
               
 
  Name: Gail Page           Name: Richard G. Taylor
 
  Title: President & Chief Executive Officer           Date: 6/26/08
 
                Date: ____________________            

 

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EXHIBIT A
SERVICES AND COMPENSATION
     1. SERVICES — Senior Finance Consultant/Interim Chief Financial Officer:
responsible for managing/overseeing all financial activities and contributing to
strategic organizational initiatives of the Company. The CFO provides leadership
and coordination in the administrative, accounting and budgeting efforts of the
company, including external financial reporting and compliance requirements.
     2. COMPENSATION
          (a) $1,000.00 per day (for work in excess of 5 hours per day) for
services performed. $125.00 per hour for work less than 5 hours per day. $62.50
per hour for travel time.
          (b) The Company shall reimburse Consultant for all reasonable travel
and living expenses incurred by Consultant in performing Services pursuant to
this Agreement, provided Consultant receives written consent from an authorized
officer of the Company prior to incurring any such expenses exceeding $2,500.
          (c) Consultant shall submit all statements for Services and expenses
in a form prescribed by the Company every two weeks and such statement shall be
approved by the Company.
          (d) Consultant invoices will be paid by the Company within ten
(10) days of receipt of each invoice.