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CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (“Agreement”) is made between Advanced Magnetics, Inc.
(the “Company”) and Dr. Brian J.G. Pereira (the “Consultant”), for the purpose
of setting forth the exclusive terms and conditions by which the Company desires
to acquire Consultant’s services on a temporary basis.

 

In consideration of the mutual obligations specified in this Agreement, the
parties, intending to be legally bound hereby, agree to the following:

 

1.

Services and Term:

 

(a)         Company hereby retains Consultant, and Consultant hereby agrees to
perform for Company, certain services assigned to Consultant by the Company in
the Company’s sole discretion, including, but not limited to, the services set
forth on Exhibit A hereto (the “Services”). These Services are to be performed
by Consultant only at the specific request of Company and are subject to the
limits specified.

 

(b)        The term of consultancy shall continue in force from July 12, 2005
through July 11, 2006 (the “Term”), provided, however, that the Term may be
extended for additional periods of up to one year each with the written consent
of Consultant and the Company.

 

2.

Compensation:

 

(a)        In exchange for the promise to perform satisfactory Services to the
Company hereunder and the transfer of any inventions to the Company in
accordance with Section 4 below, the Company will grant Consultant an option to
purchase 60,000 shares of the Company’s common stock at a per share purchase
price equal to the fair market value of a share of the Company’s Common Stock on
the date of grant. Such option shall be evidenced by a Non-Qualified Option
Agreement substantially in the form attached as Exhibit B attached hereto. The
Company shall also reimburse Consultant for reasonable out-of-pocket expenses
incurred in connection with provision of the Services; provided, however, at the
Company’s request Consultant shall provide documentation of such expenses as a
condition to reimbursement.

 

(b)         Consultant shall not be entitled to receive any other compensation
or any benefits from Company under this Agreement. Except as otherwise required
by law, Company shall not withhold any sums or payments made to Consultant for
social security or other federal, state or local tax liabilities or
contributions, and all withholdings, liabilities, and contributions shall be
solely Consultant’s responsibility. Further, Consultant understands and agrees
that the Services are not covered under the unemployment compensation laws and
are not intended to be covered by workers’ compensation laws.

 

3.

Nondisclosure:

 

(a)        Consultant understands that, in connection with his engagement by the
Company, he may receive, produce, or otherwise be exposed to Company’s
proprietary or confidential information, regardless of whether such information
is specifically designated as confidential and regardless of whether such
information is in written, oral, electronic or other form and all derivatives,
improvements and enhancements to any of the above (including those derivatives,
improvements and enhancements that were created or developed by Consultant under
this Agreement) in addition to all information Company receives from others
under an obligation of confidentiality (individually and collectively
“Confidential Information”). Confidential Information shall also include all
other information considered to be confidential by the Company and all
information which has not been made public.

 

(b)         Consultant acknowledges that the Confidential Information is the
sole, exclusive and extremely valuable property of Company. Accordingly,
Consultant agrees to segregate all Confidential Information from information of
other companies and agrees not to reproduce any Confidential Information without
Company’s prior written consent, not to use the Confidential Information except
in the performance of this Agreement, and not to divulge all or any part of the
Confidential Information in any form to any third party, either during or after
the Term of this Agreement. Upon termination or expiration of this Agreement for

 

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Advanced Magnetics, Inc.

 

any reason, Consultant agrees to cease using and to return to Company all whole
and partial copies and derivatives of the Confidential Information, whether in
Consultant’s possession or under Consultant’s direct or indirect control.

 

(c)    Consultant shall not disclose or otherwise make available to Company in
any manner any confidential and proprietary information received by Consultant
from third parties. Consultant warrants that his performance of all the terms of
this Agreement does not and will not breach any agreement entered into by
Consultant with any other party, and Consultant agrees not to enter into any
agreement, oral or written, in conflict herewith. In addition, Consultant
recognizes that the Company has received and in the future will receive from
third parties their confidential or proprietary information subject to a duty on
the Company’s part to maintain the confidentiality of such information and to
use such information only for certain limited purposes. Consultant agrees that
he owes the Company and such third parties, during the Term of the Consultant’s
relationship with the Company and thereafter, regardless of the reason for the
termination of the relationship, a duty to hold all such confidential or
proprietary information in the strictest of confidence and not to disclose such
information to any person, firm or corporation (except as necessary in carrying
out its work for the Company consistent with the Company’s agreement with such
third party) or to use such information for the benefit of anyone other than for
the Company or such third party (consistent with the Company’s agreement with
such third party).

 

4.    Assignment of Inventions and Intellectual Property Rights: Consultant
agrees to disclose promptly and fully to the Company and to no one else: all
inventions, ideas, improvements, discoveries and works ("inventions") made or
conceived by Consultant, solely or jointly with others, arising out of
information gained or Services performed under this Agreement, during the period
of Consultant’s consulting relationship with the Company. Consultant also agrees
to disclose any invention made using the Company's time, materials or
facilities, even if such invention does not arise out of information gained or
services performed under this Agreement. Consultant hereby assigns to the
Company all of his right, title and interest, including tangible and intangible
rights such as patent rights, trademarks and copyrights, in and to all of the
foregoing inventions, and agrees promptly to execute any further specific
assignments related to such inventions and rights at the request of the Company.
Consultant also hereby assigns to the Company, or waives if not assignable, all
“moral rights” in and to all inventions, and agrees promptly to execute any
further specific assignments or waivers related to moral rights at the request
of the Company. The assignments will survive the termination of the consulting
relationship. Consultant agrees to assist the Company without charge and for as
long as may be necessary (but at the Company's expense): (1) to obtain for the
Company's benefit, patents, mask works, trademarks, copyrights and other
protection for such inventions in all countries, and (2) in any controversy or
legal proceeding relating to inventions.

 

5.    Remedies: Consultant agrees that any breach of Sections 3 and/or 4 hereof
by Consultant will cause irreparable harm to Company and that in the event of
such breach or threatened breach, Company shall have, in addition to any and all
remedies of law and those remedies stated in this Agreement, the right to an
injunction, specific performance or other equitable relief to prevent the
violation of Consultant’s obligations hereunder.

 

6.    Termination: The parties may terminate the Agreement by providing thirty
(30) days written notice of termination. In the event of termination by either
party, Consultant shall, upon request, perform such work as may be requested to
transfer work in process to the Company or to a party designated by the Company.
The parties further agree that any termination of this Agreement will not
release nor discharge Consultant from its obligations as specified in Sections
3, 4, 5, 6, 7 or 8.

 

7.

Independent Contractor:

 

(a)    Company and Consultant expressly agree and understand that Consultant is
an independent contractor and nothing in this Agreement nor the services
rendered hereunder is meant, or shall be construed in any way or manner, to
create between them a relationship of employer and employee, principal and
agent, partners or any other relationship other than that of independent parties
contracting with each other solely for the purpose of carrying out the
provisions of the Agreement. Accordingly, Consultant acknowledges and agrees
that Consultant shall not be entitled to any benefits provided by the Company to
its employees. In addition, Consultant shall have sole and exclusive
responsibility for the payment of all

 

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Advanced Magnetics, Inc.

 

federal, state and local income taxes, for all employment and disability
insurance and for Social Security and other similar taxes with respect to any
compensation provided by the Company hereunder. Consultant further agrees that
if the Company pays or becomes liable for such taxes or related civil penalties
or interest as a result of the Consultant’s failure to pay taxes or report same,
or due to the Company’s failure to withhold taxes, Consultant shall indemnify
and hold the Company harmless for any such liability. Consultant shall assume
and accept all responsibilities which are imposed on consultants or independent
contractors by any statute, regulation, rule of law, or otherwise. Consultant is
not the agent of Company and is not authorized and shall not have the power or
authority to bind Company or incur any liability or obligation, or act on behalf
of Company. At no time shall Consultant represent that it is an agent of the
Company, or that any of the views, advice, statements and/or information that
may be provided while performing the Services are those of the Company.

 

(b)    While Company is entitled to provide Consultant with general guidance to
assist Consultant in completing the scope of work to Company’s satisfaction,
Consultant is ultimately responsible for directing and controlling the
performance of the task and the scope of work, in accordance with the terms and
conditions of this Agreement. Consultant shall use his best efforts, energy and
skill in his own name and in such manner as he sees fit.

 

8.

General:

 

(a)    This Agreement does not create an obligation on Company to continue to
retain Consultant beyond its Term. This Agreement may not be changed unless
mutually agreed upon in writing by both Consultant and Company. Sections 3, 4,
5, 6, 7 and 8 shall survive the termination of this Agreement regardless of the
manner of such termination. Any waiver of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of such provision or any other provision hereof.

 

(b)    Consultant hereby agrees that each provision herein shall be treated as a
separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses herein.
Moreover, if one or more of the provisions contained in this Agreement shall for
any reason be held to be excessively broad as to scope, activity, subject or
otherwise so as to be unenforceable at law, such provision or provisions shall
be construed by the appropriate judicial body by limiting or reducing it or
them, so as to be enforceable to the maximum extent compatible with the
applicable law as it shall then appear.

 

(c)    Company shall have the right to assign this Agreement to its successors
and assigns and this Agreement shall inure to the benefit of and be enforceable
by said successors or assigns. Consultant may not assign this Agreement or any
rights or obligations hereunder without the prior written consent of Company and
this Agreement shall be binding upon Consultant’s heirs, executors,
administrators and legal representatives. This Agreement and all aspects of the
relationship between the parties hereto shall be construed and enforced in
accordance with and governed by the internal laws of the Commonwealth of
Massachusetts without regard to its conflict of laws provisions.

 

(d)    This Agreement contains the entire agreement between the parties hereto
with respect to the transactions contemplated herein. All other negotiations and
agreements (written or oral) between the parties are superseded by this
Agreement and there are no representations, warranties, understandings or
agreements other than those expressly set forth herein. Provided, however, that
nothing in this Agreement shall amend, diminish, supplement or otherwise affect
any previous agreements, if any, between the parties with respect to the
disclosure or use of information covered by such agreement, which shall remain
in full force and effect in accordance with its terms.

 

(e)    All notices provided for in this Agreement shall be given in writing and
shall be effective when either served by hand delivery, electronic mail, return
receipt requested, facsimile transmission, express overnight courier service, or
by registered or certified mail, return receipt requested, addressed to the
parties at their respective addresses as set forth at the beginning of this
Agreement, or to such other address or addresses as either party may later
specify by written notice to the other.

 

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Advanced Magnetics, Inc.

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement
under seal.

 

CONSULTANT:

ADVANCED MAGNETICS, INC.:

 

/s/ Dr. Brian J.G. Pereira           

By: /s/ Jerome Goldstein          

Signature

 

 

Dr. Brian J.G. Pereira          

Title: President / CEO          

Print Name

 

July 12, 2005          

July 12, 2005          

Date:

Date:

 

 

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Advanced Magnetics, Inc.

 

 

EXHIBIT A

 

Services

 

The Services shall include advice and consultation 8 to 10 hours per week in the
areas of business development, product marketing, medical affairs, DSMB and SAB
recruitment, and such other areas as may be requested from time to time by the
Company.

 

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Advanced Magnetics, Inc.

 

 

EXHIBIT B

 

Non-Qualified Option Agreement

 

[Form of Option Agreement is incorporated herein by reference to Exhibit 10.24
to the Company's Annual Report on Form 10-K for the fiscal year ended September
30, 2004, File No. 0-14732.]

 

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