Exhibit 10.4

Consulting Agreement

 

 

This Professional Services Agreement (this “Agreement”), dated January 9, 2020
(the “Effective Date”), is by and between Aravive, Inc. (“Company”), and Jay
Shepard (“Service Provider”).  

1.

Services.

Service Provider agrees to aid in the transition process following Service
Provider’s separation of employment from the Company. Service Provider agrees
that the Company will, from time to time, request Service Provider’s assistance
and cooperation in transferring Service Provider’s duties, responding to
questions relating to the business, operations, and files of the Company,
assisting in the analysis of business opportunities, financial decisions, and
business organization and Service Provider agrees to assist and cooperate with
respect to the foregoing. (the “Services”), In providing the Services, Service
Provider agrees to provide Service Provider’s own equipment and other materials
at Service Provider’s own expense; however, Company will make its facilities and
equipment available to Service Provider when necessary. Service Provider agrees
to exercise the highest degree of professionalism and utilize Service Provider’s
best efforts, expertise and creative talents in performing the
Services.  Service Provider’s compensation for the Services shall be limited to
the compensation set forth on Exhibit A hereto. Service Provider may not
subcontract or otherwise delegate its obligations under this Agreement without
Company’s prior written consent.  

2.

Relationship of Parties.  

Service Provider’s relationship with Company will be that of an independent
contractor, and nothing in this Agreement should be construed to create a
partnership, joint venture, or employer-employee relationship. Service Provider
is not the agent or representative of Company (except as specifically set forth
in this Agreement); is not authorized to make any representation, contract or
commitment on behalf of Company; will not be entitled to, and hereby elects not
to participate in (on either a prospective or retrospective basis), any of the
benefits that Company makes available to its employees, such as group insurance,
profit-sharing or retirement benefits (and waives the right to receive any such
benefits); and will be solely responsible for all tax returns and payments
required to be filed with or made to any U.S. federal, state, or local tax
authority with respect to Service Provider’s performance of Services and receipt
of fees under this Agreement. If applicable, Company will report amounts paid to
Service Provider by filing Form 1099-MISC with the Internal Revenue Service, as
required by law. Service Provider agrees to accept exclusive liability

for complying with all applicable state and federal laws, including laws
governing self-employed individuals, if applicable, such as laws related to
payment of taxes, social security, disability, and other contributions based on
fees paid to Service Provider under this Agreement. Company will not withhold or
make payments for taxes, social security, unemployment insurance or disability
insurance contributions, or obtain workers’ compensation insurance on Service
Provider’s behalf. Service Provider hereby agrees to indemnify and defend
Company against any and all such taxes or contributions, including penalties and
interest. Service Provider agrees to provide proof of payment of appropriate
taxes on any fees paid to Service Provider under this Agreement upon reasonable
request of Company.

3.

Payments.

3.1Compensation.  In consideration of the Services to be rendered pursuant,
Service Provider and provided that Service Provider has executed the Separation
Agreement annexed hereto as Exhibit B (the “Separation Agreement”) and has not
revoked it, Service Provider  shall be compensated as set forth on Exhibit A
hereto Unless otherwise agreed by the parties, payment for Services, if
reasonably satisfactory to Company, shall be due thirty (30) days after the end
of each month during the Consulting Period.  

3.2Expenses. Company shall reimburse Service Provider for reasonable travel and
other business expenses that are incurred by Service Provider in the performance
of the Services and are approved in advance by Company, in accordance with
Company’s general policies, as may be amended from time to time.  Service
Provider shall provide Company with an itemized list of all such expenses and
supporting receipts with each invoice therefor.  

4.

Confidential Information.  

4.1Nondisclosure; Recognition of Company’s Rights.  At all times during and
after Service Provider’s engagement, Service Provider will hold in confidence
and will not disclose, use, lecture upon, or publish any of Company’s
Confidential Information (defined below), except as may be required in
connection with Service Provider’s Services for Company, or as expressly
authorized by a duly authorized officer of Company (each an “Authorizing Person”
and collectively the “Authorizing Persons”). Service Provider hereby assigns to
Company any rights Service Provider may have or acquire in any and all
Confidential Information and recognizes that all Confidential Information shall
be the sole and exclusive property of Company and its assigns.  

 

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Notwithstanding the foregoing, pursuant to 18 U.S.C. Section 1833(b), Service
Provider shall not be held criminally or civilly liable under any Federal or
State trade secret law for the disclosure of a trade secret that: (1) is made in
confidence to a Federal, State, or local government official, either directly or
indirectly, or to an attorney, and solely for the purpose of reporting or
investigating a suspected violation of law; or (2) is made in a complaint or
other document filed in a lawsuit or other proceeding, if such filing is made
under seal.

4.2Confidential Information.  Service Provider understands that its work for
Company will involve access to and creation of confidential, proprietary and
trade secret information and materials of Company (or its affiliates, licensors,
suppliers, vendors or customers) (collectively, “Confidential
Information”).  Confidential Information includes, without limitation, any and
all confidential knowledge, data or information related to Company’s business or
its actual or demonstrably anticipated research or development, including
without limitation (a) trade secrets, inventions, ideas, processes, computer
source and object code, data, formulae, programs, other works of authorship,
know-how, improvements, discoveries, developments, designs, and techniques; (b)
information regarding products, services, plans for research and development,
marketing and business plans, budgets, financial statements, contracts, prices,
suppliers, and customers; (c) information regarding the skills and compensation
of Company’s employees, contractors, and any other service providers of Company;
or (d) the existence of any business discussions, negotiations, or agreements
between Company and any third party.  

4.3Third Party Information.  Service Provider understands that Company has
received and in the future will receive from third parties confidential or
proprietary information (“Third Party Information”), subject to a duty on
Company’s or its affiliates’ part to maintain the confidentiality of such
information and to use it only for certain limited purposes.  During and after
the term of Service Provider’s engagement, Service Provider will hold Third
Party Information in strict confidence and will not disclose to anyone (other
than Company personnel who need to know such information in connection with
their work for Company), or use Third Party Information, except in connection
with Service Provider’s Services for Company or unless expressly authorized by
an Authorizing Person in writing.

4.4No Improper Use of Information of Prior Employers.  Service Provider
represents that Service Provider’s engagement by Company does not and will not
breach any agreement with any former employer or other third party, including
any noncompete agreement or any agreement to keep in confidence or refrain from
using

information acquired by Service Provider prior to Service Provider’s engagement
by Company.  Service Provider further represents that Service Provider has not
entered into, and agrees that Service Provider will not enter into, any
agreement, either written or oral, in conflict with Service Provider’s
obligations under this Agreement or to the Company, unless expressly approved by
an Authorizing Person.  During Service Provider’s engagement by Company, Service
Provider will not improperly make use of, or disclose, any information or trade
secrets of any former employer or other third party, nor will Service Provider
bring onto the premises of Company or use any unpublished documents or any
property belonging to any former employer or other third party, in violation of
any lawful agreements with that former employer or third party.

5.Ownership. Service Provider acknowledges and agrees that any and all results
and proceeds of (including any deliverables resulting from) the Services,
whether tangible or intangible, including any and all ideas, concepts, works,
information, data, software and other materials supplied, conceived, originated,
prepared, generated or required to be delivered by Service Provider in
connection with furnishing Services hereunder, including all intermediate and
partial versions thereof (collectively, “Work Product”), is Confidential
Information (as defined above) and the property of Company.  All right, title
and interest in and to the Work Product will vest in Company.  To the extent
that title to any such Work Product may not otherwise vest in Company, Service
Provider hereby irrevocably assigns to Company all of Service Provider’s right,
title and interest therein.  All such Work Product will belong exclusively to
Company, with Company having the right to obtain and to hold in its own name,
copyright registrations, patents and such other intellectual property protection
as may be appropriate to the subject matter, and any extensions and renewals
thereof.  Service Provider agrees to give Company, and any person designated by
Company, reasonable assistance, at Company’s expense, in defending, perfecting
or evidencing the rights defined in this Section 5, including, without
limitation, by executing and delivering all documents reasonably requested by
Company for such purposes.  Unless otherwise directed by Company, upon
completion of the Services or upon the earlier termination of this Agreement (or
at any other time requested by the Company), Service Provider will immediately
turn over to Company all Work Product (including all copies thereof), including,
but not limited to, working papers, descriptions, reports, notes and data.  All
Work Product will bear Company’s copyright and trade secret notices, as
specified by Company.  No rights to the Work Product will remain with Service
Provider.

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6.

Term and Termination.

6.1This Agreement shall commence on the Effective Date and continue until the
earlier of (a) the six month anniversary of the Effective Date (b) termination
by either party in accordance with this Section 6, or (c) the date that Service
Provider revokes Service Provider’s acceptance of the Separation Agreement (the
“Consulting Period”).  This Agreement may be renewed by mutual written agreement
of the parties.  

6.1Termination.  Company may terminate this Agreement without Cause (as defined
in the Company’s 2019 Equity Incentive Plan) at any time upon thirty (30) days’
prior written notice to Service Provider.  Service Provider may terminate this
Agreement without Cause at any time upon thirty (30) days’ prior written notice
to Company.  Either party may terminate this Agreement immediately in the event
that the other party has materially breached the Agreement.  

6.2Effect of Termination.  Upon termination of this Agreement, Service Provider
shall immediately cease performing the Services. If this Agreement is terminated
by Service Provider or by the Company for Cause (as defined in the Company’s
2019 Equity Incentive Plan), Company agrees to pay Service Provider the
compensation due for the period up to the date of termination, the reimbursement
of COBRA expenses and consulting-related expenses approved and incurred through
the effective date of such termination and will terminate the vesting of Service
Provider’s outstanding equity awards as of such termination date.  In the event
the Company decides to terminate this Agreement before the six month anniversary
of the Effective Date other than for Cause, then Service Provider will continue
to be: (i) paid the Service Fees set forth in Section 3.A of Exhibit A annexed
hereto on a monthly basis until the six month anniversary of the Effective Date,
(ii) reimbursed for any COBRA payments made by Service Provider for the benefits
continuation until the six month anniversary of the Effective Date, and (iii)
Service Provider’s outstanding equity awards vesting will be accelerated such
that Service Provider will be considered to have vested in such equity awards
through the six month anniversary of the Effective Date, effective as
immediately prior to the termination date.  Sections 4–11 shall survive
termination of this Agreement.   

6.3Return of Company Property.  Upon termination of this Agreement, or at any
time Company so requests, Service Provider shall deliver immediately to Company
all property belonging to Company, whether given to Service Provider by Company
or prepared by Service Provider in the course of rendering the Services,
including all Services then in progress and all material in Service Provider’s
possession containing Confidential Information and any copies thereof, whether
prepared by Service Provider or others.  Following termination, Service Provider
shall not retain any written or other tangible (including machine-readable)
material containing any Confidential Information.  

7.

Arbitration of All Disputes.

7.1Agreement to Arbitrate.  To ensure the timely and economical resolution of
disputes that may arise between Service Provider and Company, both Service
Provider and Company mutually agree that pursuant to the Federal Arbitration
Act, 9 U.S.C. §1-16, and to the fullest extent permitted by applicable law, they
will submit solely to final, binding and confidential arbitration any and all
disputes, claims, or causes of action arising from or relating to:  (i)  the
negotiation, execution, interpretation, performance, breach or enforcement of
this Agreement; or (ii) the relationship between Company and Service Provider;
or (iii) the termination of that relationship; provided, however, that this
Section 7 shall not apply to any claim or cause of action that cannot be subject
to arbitration as a matter of law.  BY AGREEING TO THIS ARBITRATION PROCEDURE,
BOTH SERVICE PROVIDER AND COMPANY WAIVE THE RIGHT TO RESOLVE ANY SUCH DISPUTES
THROUGH A TRIAL BY JURY OR JUDGE OR THROUGH AN ADMINISTRATIVE PROCEEDING.

7.2Arbitrator Authority.   The Arbitrator shall have the sole and exclusive
authority to determine whether a dispute, claim or cause of action is subject to
arbitration under this Section 7 and to determine any procedural questions which
grow out of such disputes, claims or causes of action and bear on their final
disposition.  

7.3Individual Capacity Only.  All claims, disputes, or causes of action under
this Section 13, whether by Service Provider or Company, must be brought solely
in an individual capacity, and shall not be brought as a plaintiff (or claimant)
or class member in any purported class or representative proceeding, nor joined
or consolidated with the claims of any other person or entity.   The Arbitrator
may not consolidate the claims of more than one person or entity, and may not
preside over any form of representative or class proceeding.  To the extent that
the preceding sentences in this Section 7.3 are found to violate applicable law
or are otherwise found unenforceable, any claim(s) alleged or brought on behalf
of a class shall proceed in a court of law rather than by arbitration.  

7.4Arbitration Process.  Any arbitration proceeding under this Section 7 shall
be presided over by a single arbitrator and conducted by JAMS, Inc. (“JAMS”) in
Houston, Texas under the then applicable JAMS streamlined rules for the
resolution of disputes (available upon request and also currently available
at  http://www.jamsadr.com/rules-streamlined-arbitration/).  Service Provider
and Company both have the right to be represented by legal counsel at any
arbitration proceeding, at each party’s own expense.  The Arbitrator shall: (i)
have the authority to compel adequate discovery for the resolution of the
dispute; (ii) issue a written arbitration

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decision, to include the arbitrator’s essential findings and conclusions and a
statement of the award; and (iii) be authorized to award any or all remedies
that Service Provider or Company would be entitled to seek in a court of law.
Company shall pay all JAMS arbitration fees in excess of the amount of court
fees that would be required of Service Provider if the dispute were decided in a
court of law.  

7.5Injunctive Relief and Final Orders. Nothing in this Section 7 is intended to
prevent either Service Provider or Company from obtaining injunctive relief in
court to prevent irreparable harm pending the conclusion of any such
arbitration. Any final award in any arbitration proceeding hereunder may be
entered as a judgment in the federal and state courts of any competent
jurisdiction and enforced accordingly

Business Relationships.  

Service Provider acknowledges that Company’s relationships with its employees,
customers, and vendors are valuable business assets.  Service Provider agrees
that, during the term of this Agreement and for one (1) year thereafter, Service
Provider shall not, (a) either directly or indirectly, solicit or attempt to
solicit any employee of the Company to terminate his, her, or its relationship
with Company to become an employee, consultant, or independent contractor to or
for any other person or entity, or (b) directly or indirectly, through or on
behalf of any other individual or entity, use any information that constitutes a
“trade secret” within the meaning of the Uniform Trade Secrets Act (“UTSA”) to
solicit, entice, or induce any business from any of Company’s clients (including
actively sought prospective clients) or vendors.

Limitation of Liability.  

To the extent permitted by applicable law: (a) in no event shall Company be
liable under any legal theory for any special, indirect, consequential,
exemplary or incidental damages, however caused, arising out of or relating to
this Agreement, even if Company has been advised of the possibility of such
damages; and (b) in no event shall Company’s aggregate liability arising out of
or relating to this Agreement (regardless of the form of action giving rise to
such liability, whether in contract, tort or otherwise) exceed the fees payable
by Company hereunder.

10.Indemnification.  Service Provider will indemnify and hold harmless Company
and its affiliates, employees, and agents from and against any and all
liabilities, losses, damages, costs, and other expenses (including attorneys’
and expert witnesses’ costs and fees) arising from or relating to any breach of
any representation, warranty, covenant, or obligation of Service Provider in
this Agreement or any intentional misconduct or negligence by Service Provider
or any of Service Provider’s agents or subcontractors in performing the
Services.  In the event of any third-party claim,

demand, suit, or action (a “Claim”) for which Company (or any of its affiliates,
employees, or agents) is or may be entitled to indemnification hereunder,
Company may, at its option, require Service Provider to defend such Claim at
Service Provider’s sole expense.  Service Provider may not agree to settle any
such Claim without Company’s express prior written consent.

11.Notification of New Employer or Any Third Party.  Upon termination of Service
Provider’s engagement, Service Provider consents to the notification of Service
Provider’s subsequent employer or any third party of Service Provider’s rights
and obligations under this Agreement, by Company providing a copy of this
Agreement or otherwise.

12.

Miscellaneous.  

12.1Assignment.  Neither party shall assign, sell, transfer, delegate or
otherwise dispose of, by operation of law or otherwise, this Agreement or any or
its rights or obligations under this Agreement; provided, however Company may
assign, sell, transfer, delegate or otherwise dispose of this Agreement or any
of its rights and obligations hereunder as part of a merger, consolidation,
corporate reorganization, sale of all or substantially all of Company’s assets
of the business to which Service Provider’s Services relate, sale of stock,
change of name or like event.  Any purported assignment, sale, transfer,
delegation or other disposition, except as permitted herein, shall be null and
void.  Subject to the foregoing, this Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and
permitted assigns.  

12.2Notices.  Any notice, request, demand or other communication required or
permitted hereunder shall be in writing, shall reference this Agreement and
shall be deemed to be properly given: (a) when delivered personally; (b) when
sent by facsimile, with written confirmation of receipt by the sending facsimile
machine; (c) five (5) business days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) two (2)
business days after deposit with an express courier, with written confirmation
of receipt.  All notices shall be sent to the address set forth on the signature
page of this Agreement and to the notice of the person executing this Agreement
(or to such other address or person as may be designated by a party by giving
written notice to the other party).

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12.3Severability.  If any provision of this Agreement is, for any reason, held
to be invalid or unenforceable, the other provisions of this Agreement will
remain enforceable and the invalid or unenforceable provision will be deemed
modified so that it is valid and enforceable to the maximum extent permitted by
law.  

12.4Waiver.  The waiver by either party of a breach of or a default under any
provision of this Agreement shall not be construed as a waiver of any subsequent
breach of or default under the same or any other provision of this Agreement,
nor shall any delay or omission on the part of either party to exercise or avail
itself of any right or remedy that it has or may have hereunder operate as a
waiver of any such right or remedy.  

12.5Governing Law and Venue.  This Agreement and any action related thereto will
be governed and interpreted by and under the laws of the State of Texas, without
giving effect to any conflicts of laws principles that require the application
of the law of a different state.  Service Provider hereby expressly consents to
personal jurisdiction and venue in the state and federal courts for the county
in which Company’s principal place of business is located for any lawsuit filed
which arises from or relates to this Agreement.

12.6Headings.  The headings used in this Agreement are for convenience only and
shall not be considered in construing or interpreting this Agreement.

12.7Entire Agreement.  This Agreement (including the Exhibits attached hereto,
which are incorporated herein by reference) is the final, complete and exclusive
agreement of the parties with respect to the subject matter hereof and
supersedes and merges all prior or contemporaneous proposals, discussions,
negotiations, understandings, promises, representations, conditions,
communications and agreements, whether written or oral, between the parties with
respect to such subject matter and all past courses of dealing or industry
custom.  The terms of this Agreement will govern all services undertaken by
Service Provider for Company; provided, however, that in the event of any
conflict between the terms of this Agreement and the Statement of Work, the
terms of the Statement of Work will control.  This Agreement may only be changed
or amended by mutual agreement of authorized representatives of the parties in
writing.  This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument. Counterparts may be delivered via facsimile, electronic
mail (including pdf or any electronic signature complying with the U.S. federal
ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law)
or other transmission method and any counterpart so delivered will be deemed to
have been duly and validly delivered and be valid and effective for all
purposes.

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In witness whereof, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the Effective Date.

 

Company:

 

Service Provider:

 

 

 

Aravive, Inc.

 

 

 

 

 

 

 

 

By:

/s/ vinay shah

 

/s/ jay p. shepard

 

 

 

 

 

Name:

vinay shah

 

Name:

Jay p. shepard

 

 

 

 

 

Title:

chief financial officer

 

 

 

 

 

 

 

 

Address:

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A

SERVICES AND COMPENSATION

1.Contact. Service Provider’s principal Company contact:

 

Name:

 

Title:

 

Email:

 

Phone:

 

 

2.Services. The Services will include, but will not be limited to, those listed
in Section 1 of the Agreement.

3.Compensation.

A.A cash payment of $150,000.00 payable pro-rata on a monthly basis during the
Consulting Period (as defined in Section 6.1 of the Consulting Period)
(“Services Fees”).

B.Reimbursement of all COBRA payments made by Service Provider for the benefits
continuation during the Consulting Period

C.In accordance with the terms of the Company’s equity incentive plans, all
equity awards granted shall continue to vest while you serve as a consultant
and/or director of the Company.

D.The Company will reimburse Service Provider, in accordance with Company
policy, for all reasonable expenses incurred by Service Provider in performing
the Services pursuant to this Agreement, if Service Provider receives written
consent from an authorized agent of the Company prior to incurring such expenses
and submits receipts for such expenses to the Company in accordance with Company
policy.

E.Every month, Service Provider shall submit to the Company a written invoice
for COBRA and expenses, and such statement shall be subject to the approval of
the contact person listed above or other designated agent of the Company.  The
Company will remit payment for properly submitted and approved invoices within
thirty (30) days following invoice submission. In order to help prevent adverse
tax consequences to Service Provider under Section 409A (as defined below), in
no event will any payment under Section 3.A. of this Exhibit be made later than
the later of (1) March 15th of the calendar year following the calendar year in
which such payment was earned, or (2) the 15th day of the third (3rd) month
following the end of the Company’s fiscal year in which such payment was earned.

F.All payments and benefits provided for under this Agreement are intended to be
exempt from or otherwise comply with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations and guidance
thereunder (together, “Section 409A”), so that none of the payments and benefits
to be provided hereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities or ambiguous terms herein will be interpreted
to be exempt or so comply. Each payment and benefit payable under this Agreement
is intended to constitute a separate payment for purposes of Section
1.409A-2(b)(2) of the Treasury Regulations. In no event will the Company
reimburse Service Provider for any taxes that may be imposed on Service Provider
as a result of Section 409A.

 

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Company

 

Service Provider

 

 

 

Signed:

 

 

Signed:

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

Dated:

 

 

Dated:

 

 

 

 

 

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Exhibit B

Separation agreement

(SEE EXHIBIT 10.3)