Exhibit 10.27

AGREEMENT AND GENERAL RELEASE

For good and valuable consideration, rendered to resolve and settle finally,
fully and completely all matters that now or may exist between them, the parties
below enter this Agreement and General Release.

1. Parties. The parties to this Agreement are Janet I. Swearson, her heirs,
representatives, successors and assigns (hereinafter referred to collectively as
“Ms. Swearson”) and Threshold Pharmaceuticals, Inc. and/or any of its
successors, subsidiaries, affiliates, parents, and related companies
(hereinafter referred to collectively as “Threshold”).

2. Termination of Employment. Ms. Swearson acknowledges and agrees that her
employment relationship with Threshold will end, effective August 31, 2006 (the
“Termination Date”). Ms. Swearson shall continue to receive her current salary
and benefits up to and including the Termination Date.

3. Severance Benefits. As consideration for the promises and covenants of
Ms. Swearson set forth in this Agreement, Threshold shall provide Ms. Swearson
with the following benefits (the “Severance Benefits”):

a. Severance Payment. Pursuant to the Change of Control Severance Agreement
Ms. Swearson (the “Severance Agreement”), Threshold shall provide Ms. Swearson
with a severance payment in the amount of $325,000, which is equivalent to
twelve (12) months of Ms. Swearson’s regular pay, less applicable withholding
taxes, in a lump sum (the “Severance Payment”). Said Severance Payment shall be
delivered to Ms. Swearson within fourteen (14) calendar days following
Threshold’s receipt of the signed and dated Agreement.

b. Continued Insurance. In addition to the severance payment to which
Ms. Swearson is entitled under the Severance Agreement, Threshold shall provide
Ms. Swearson with the following benefit. If Ms. Swearson makes a timely and
accurate election and is and remains eligible to continue her current group
medical, dental and vision insurance coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, (“COBRA”), Threshold will
pay the applicable premiums for Ms. Swearson and her eligible dependents to
provide coverage for the four month period following the Termination Date.

4. Consultant Services. As consideration for the promises and covenants set
forth in this Agreement, Ms. Swearson agrees to assist Threshold as a consultant
for the

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four month period following the Termination Date (the “Consulting Period”).
During the Consulting Period, Ms. Swearson agrees to provide assistance to
Threshold as an independent contractor and not as an agent or an employee of
Threshold. To the extent allowable under the applicable stock option plan, the
parties intend that Ms. Swearson’s unvested stock options will continue to vest
and the right of repurchase by the Company with respect to certain shares of the
Company’s common stock held by Ms. Swearson will continue to lapse, in
accordance with their respective terms during the Consulting Period.

5. No Other Payments Due. Ms. Swearson acknowledges and agrees that upon payment
of her salary due and unpaid for the month of August and accrued vacation in the
amount of $43,750 as of the Termination Date, she shall have received all
salary, accrued vacation, and bonuses, due to her resulting from her employment
with the Company, other than the Severance Benefits to be provided by Paragraph
3 of this Agreement.

6. Release of Claims by Ms. Swearson. In exchange for the promises contained in
this Agreement, Ms. Swearson hereby waives, releases and forever discharges, and
agrees that she will not in any manner institute, prosecute or pursue, any and
all complaints, claims, charges, or causes of action, whether in law or in
equity, which she asserts or could assert, at common law or under any statute,
rule, regulation, order or law, whether federal, state, or local, or on any
grounds whatsoever, including but not limited to, any claims under Title VII of
the 1964 Civil Rights Act, the Age Discrimination in Employment Act, the
California Fair Employment and Housing Act, Government Code §12900 et seq., the
California Labor Code, the Americans with Disabilities Act, the California
Family Leave Act, and the Employment Retirement Income Security Act of 1974,
against Threshold and any of its or their current or former, owners,
shareholders, agents, employee benefit plans, representatives, servants,
employees, attorneys, successors, predecessors, and assigns (collectively
referred to as “Released Parties”) with respect to any event, matter, claim,
damage or injury arising out of Ms. Swearson’s employment relationship with
Threshold, and the termination of such employment relationship, under or
relating to any other agreement, express or implied, and with respect to any
other claim, matter, or event arising prior to execution of this Agreement by
Ms. Swearson.

7. Civil Code § 1542 Waiver. As a further consideration and inducement for this
Agreement, Ms. Swearson hereby waives any and all rights under Section 1542 of
the California Civil Code or any other similar state, local, or federal law,
statute, rule, order or regulation she may have with respect to Threshold and
any of the Released Parties.

 

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Section 1542 provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

Ms. Swearson expressly agrees that this Agreement shall extend and apply to all
unknown, unsuspected and unanticipated injuries and damages as well as those
that are now disclosed.

8. Outstanding Claims. As further consideration and inducement for this
Agreement, Ms. Swearson represents that she has not filed or otherwise pursued
any charges, complaints or claims of any nature which are in any way pending
against Threshold or any of the Released Parties, with any local, state or
federal government agency or court with respect to any matter covered by this
Agreement and, to the extent permitted by law, she will do so in the future. If
any government agency or court assumes jurisdiction of any charge, complaint,
cause of action or claim covered by this Agreement against Threshold or any of
the Released Parties, on behalf of or related to Ms. Swearson, Ms. Swearson will
withdraw from and/or dismiss the matter with prejudice, as to any claims she
might have Ms. Swearson agrees that she will not participate or cooperate in
such matter(s) except as required by law.

9. Confidentiality of Agreement. Ms. Swearson agrees to maintain in confidence
the terms of this Agreement and to discuss them only with her attorneys, tax
advisors, and family members who have a reasonable need to know of such terms.

10. Non-Disparagement. Ms. Swearson agrees to refrain from making any
disparaging comments about Threshold or any of the Released Parties. For
purposes of this Agreement, a disparaging comment is one that would likely cause
material damage or harm to the interests or reputation of Threshold or any of
the Released Parties.

11. No Admission of Liability. By entering into this Agreement, Threshold and
all Released Parties do not admit any liability whatsoever to Ms. Swearson or to
any other person arising out of any claims heretofore or hereafter asserted by
Ms. Swearson, and Threshold, for itself and all Released Parties, expressly
denies any and all such liability.

12. Joint Participation in Preparation of Agreement. The parties hereto
participated jointly in the negotiation and preparation of this Agreement, and
each party has had the opportunity to obtain the advice of legal counsel and to
review, comment upon, and redraft this Agreement. Accordingly, it is agreed that
no rule of construction shall apply against any party or in favor of any party.
This Agreement shall be construed as if the parties jointly prepared this
Agreement, and any uncertainty or ambiguity shall not be interpreted against any
one party and in favor of the other.

 

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13. Section Headings. Section headings in this Agreement are included for
convenience of reference only and shall not be considered a part of this
Agreement for any other purpose.

14. Scope of Agreement. Ms. Swearson hereby affirms and acknowledges that she
has read the foregoing Agreement, that she has had sufficient time and
opportunity to review or discuss it with the counsel of her choice, and that she
fully understands and appreciates the meaning of each of its terms, and that it
is a voluntary, full and final compromise, release and settlement of all claims,
known or unknown, with respect to the claims identified and referred to herein.
The parties to this Agreement represent that this Agreement may be used as
evidence in any subsequent proceeding in which any of the parties alleges a
breach of this Agreement or seeks to enforce its terms, provisions or
obligations.

15. Review and Revocation. Ms. Swearson expressly states that she has been given
a period of at least 21 days within which to consider this Agreement.
Ms. Swearson is advised to consult with an attorney prior to signing this
Agreement. This Agreement does not become effective until 7 days have passed
after its execution by Ms. Swearson. Ms. Swearson understands that she may
revoke this Agreement at any time during the 7 days following its execution by
her. It is agreed that any such revocation must be in writing and received by
Threshold within said 7 day period in order to be effective.

16. Entire Agreement. This Agreement constitutes the complete understanding
between Ms. Swearson and Threshold and supersedes any and all prior agreements,
promises, representations, or inducements, no matter its or their form,
concerning its subject matter, with the exception of any confidentiality,
proprietary information or trade secret agreement signed by Ms. Swearson, which
remains in full force and effect to the extent not inconsistent with this
Agreement. No promises or agreements made subsequent to the execution of this
Agreement by these parties shall be binding unless reduced to writing and signed
by authorized representatives of these parties. Should any of the provisions of
this Agreement be rendered invalid by a court or government agency of competent
jurisdiction, the remainder of this Agreement shall, to the fullest extent
permitted by applicable law, remain in full force and effect.

Dated: August 9, 2006

 

/s/ Janet I. Swearson

 

Janet I. Swearson

Dated: August 9, 2006

 

Threshold Pharmaceuticals, Inc. By:  

/s/ Harold E. Selick

 

 

Harold E. Selick

  Chief Executive Officer

 

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