Exhibit 10.1

 

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SABBADINI-LPATH 2012 CONSULTANT AGREEMENT

 

THIS CONSULTANT AGREEMENT (“Agreement”) is entered into as of June 1, 2012
(“Effective Date”), by and between Roger Sabbadini, Ph.D. (“Consultant”), and
Lpath, Inc., a Nevada corporation (the “Company”).  In consideration of the
retention of Consultant as a scientific consultant and independent contractor to
the Company, and of the compensation received by Consultant from the Company,
the Company and Consultant hereby agree as follows:

 

1.             Description of Services.

 

(a)           Consultant will advise the Company as an independent contractor in
areas of science relevant to the Company’s business, including in the area of
bioactive lipids (as well as any component in bioactive-lipid signaling
pathways) as potential targets for drug discovery (the “Project”).

 

(b)           Exclusivity.  Unless as otherwise agreed to in writing, Consultant
will, during the term of this Agreement, work exclusively with the Company on
matters relating to (a) any composition of matter or method that is protected by
(i) any Company trade secret or (ii) any Company intellectual property that is
either issued, pending, or filed at the time of termination or (b) the use,
research, or development, for any therapeutic or diagnostic purpose, of (i) any
sphingolipid or sphingolipid metabolite, (ii) any lysophosphatidic acid or
lysophosphatidic acid metabolite, or (iii) any component of their respective
biosynthetic/metabolic pathways, as well as molecules that specifically interact
with any of these components (the “Field”).  Consultant agrees that he has not
entered into, and will not enter into, any written or oral agreement with any
entity, company, or person that is or may be (or has the potential to be) a
competitor of the Company in the Field.  Consultant understands that while he is
a Consultant to the Company, he is not to breach any obligation of
confidentiality that he has to others. Consultant agrees that the provision of
any requested consulting services performed hereunder will not be conducted on
time that is required to be devoted to any other third party.  Unless otherwise
agreed, Consultant agrees not use the funding, resources, and/or facilities of
any other third party to perform his obligations under this Agreement, and not
to perform his obligations under this Agreement in a manner that would give any
third party rights to any technology or intellectual property.

 

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2.             Time Commitment.  Consultant will devote more than half of the
normal workweek, as well as some time outside the normal workweek, to provide
scientific and intellectual property-related counsel to personnel working on
projects on behalf of the Company.

 

3.             Compensation.

 

(a)           Cash Compensation.  For all services rendered, the Consultant will
be paid the sum of $13,888.89 per month (“Direct Compensation).”  Such amount is
subject to change from time to time as mutually agreed to by the parties. 
Consultant understands that, while serving in his capacity as a consultant to
the Company under this Agreement, he is not a salaried employee, officer or
director of the Company, and that he is not entitled to receive any benefits
offered by the Company, unless otherwise agreed. Consultant is responsible for
reporting his activities to the relevant governmental agencies, and he
understands that the Company will not withhold from his compensation hereunder
any amount for payment of any federal, state, or local taxes that may be due as
a result of Consultant’s provision of services hereunder, and that the
Consultant has sole responsibility to pay such taxes, if any, and to file such
returns as may be required by applicable laws and regulations.

 

(b)           Contingent Compensation.  During the second quarter of each year,
the Company will pay Consultant two percent (2%) of any Non-Dilutive Awards (see
definition below) received by the Company during the prior year.  Such
compensation shall be limited to $100,000 per annum. A Non-Dilutive Award
includes government grants and awards (such as NIH SBIR grants), as well as
collaborator subsidies (such as a Department of Defense collaboration, whereby
the DoD pays for preclinical or clinical development of a Company drug
candidate), each of which must be agreed to in advance by Consultant and Company
as an objective.  In addition, at the Company’s discretion, Consultant will be
paid up to $20,000 in the second quarter of each year based on Consultant and
Company performance during the prior year.

 

(b)           Other Compensation.  At the Company’s discretion, it may recommend
to its Board of Directors that the Company grant Consultant additional
compensation in the form of stock options or Restricted Stock Units (RSUs).

 

(c)           Expense Reimbursement.  Reasonable out-of-pocket expenses incurred
by Consultant while providing services hereunder (including reasonable travel
expenses incurred in connection with providing such consulting services) will be
reimbursed promptly by the Company, subject to customary verification in a form
reasonably acceptable to the Company.

 

(d)           Sole Compensation.  The foregoing fees, other compensation, and
reimbursement of expenses are Consultant’s sole compensation for rendering
services to the Company pursuant to this Agreement.

 

4.             Independent Contractor.  Under this Agreement, Consultant’s
relationship with the Company shall at all times be that of an independent
contractor, and nothing in this Agreement shall be construed to create any
agency or employer-employee relationship between the Company and Consultant. 
Except as expressly provided herein or as may otherwise be authorized in advance
in writing by the Company, Consultant shall have no authority to act on behalf
of or to enter into any contract, incur any liability or obligation, or make any
representation on behalf of the Company, unless advance approval is obtained
from the Chief Executive Officer.  The Company agrees that during the term of
this Agreement, or any extension or renewal thereof, Consultant may be employed
by other persons, firms, or corporations; provided, however, that the provisions
of this Agreement will be strictly observed by Consultant with respect to such
other persons, firms, or corporations.

 

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Since Consultant will not be an employee of the Company, it is understood that
Consultant shall not be entitled to any of the benefits under the Company’s
retirement or group insurance plans or any other employee benefits.  Consultant
is solely responsible for all taxes, withholdings, and other similar local,
state, U.S., or international statutory obligations, including, without
limitation, workers compensation insurance, Social Security, federal, state, or
any other employee payroll taxes; and Consultant agrees to defend, indemnify,
and hold the Company harmless from any and all claims made by any entity on
account of an alleged failure by Consultant to satisfy any such tax or
withholding obligations.  In the performance of all services hereunder,
Consultant will comply with all applicable laws and regulations.

 

5.             Non-Competition and Non-Solicitation.  During the Term, and for a
period of one year following the expiration or termination of this Agreement,
Consultant agrees that he will not provide services as an owner, partner,
shareholder, joint venturer, corporate officer, director, employee, consultant,
principal, agent, trustee or licensor, or in any other similar capacity
whatsoever,  for any person, firm, partnership, association, corporation,
business organization, entity, or enterprise that is, or is about to become,
directly or indirectly, engaged in any business or program that competes
directly with or is substantially similar to any business or program that the
Company (or any subsidiary or affiliate of the Company) was involved in (or was
in the planning or development stage) during the 120-day period immediately
prior to Consultant’s ceasing to provide services to the Company or any
subsidiary or affiliate of the Company; such business or program shall include,
but not be limited to, those directly involved with or relating to the Field
(such involvement shall hereinafter be called “Competitive Activities”).

 

If, at any time during the period two years following the expiration or
termination of this Agreement, Consultant is involved in any Competitive
Activities, then Consultant shall immediately notify Company in writing of such
involvement, including the name of the Business and the nature of Consultant’s
involvement, and Consultant agrees to fully respond to reasonable questions by
the Company regarding such involvement and to provide such further assurances
reasonably requested by Company that Consultant is not and will not be in breach
of the Proprietary Information and Inventions Agreement attached hereto as
Exhibit A.

 

Consultant acknowledges and agrees that the Company’s employees and its staff
relationships with such employees are valuable assets.  Therefore, Consultant
further agrees that during the term of this Agreement and for a two-year period
following expiration or termination of this Agreement, he will not, as
principal, independent contractor, partner, member, employer, agent, consultant,
shareholder, investor, or in any other individual or representative capacity
whatsoever: directly or indirectly solicit, raid, entice, or induce any employee
or consultant of the Company to be employed by any person, firm, or corporation.

 

6.             No Conflict with Existing Agreements.  The Company hereby
acknowledges that it does not desire to acquire from Consultant any secret or
confidential know-how or information that Consultant may have acquired from
others.  Accordingly, Consultant represents and warrants that Consultant is free
to divulge to the Company, without any obligation to, or violation of any right
of others, any and all information, practice or techniques which Consultant will
describe, demonstrate, divulge or in any other manner make known to the Company
during Consultant’s performance of services hereunder.

 

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7.             Consultant Inventions.  Consultant will promptly disclose and
assign to the Company, or any persons designated by it, all improvements,
inventions, formulae, processes, techniques, know-how and data, whether or not
patentable, made or conceived or reduced to practice or learned by Consultant,
either alone or jointly with others, during the period of his retention by the
Company as an Consultant that (a) arises from or while providing services under
this Agreement and which are related to or useful in the business of the
Company, or (b) result from tasks assigned Consultant by the Company, or (c) are
funded by the Company, or (d) result from use of equipment or premises owned,
leased, or contracted for by the Company (all said improvements, inventions,
formulae, processes, techniques, know-how and data shall be collectively
hereinafter called “Inventions”).  Such obligation to disclose Inventions shall
continue for one year after expiration or termination of this Agreement with
respect to anything that would be an Invention if made, conceived, reduced to
practice, or learned during the term hereof.

 

Consultant further agrees, as to all Inventions, to assist the Company at any
time, and not just during the term of this Agreement, in any and all countries
in connection with securing, enforcing, defending, and maintaining such
intellectual property protection as the Company deems reasonable, which
assistance shall include the execution of documents, including those to
acknowledge assignments to the Company or persons designated by it, of
Consultant’s entire worldwide right, title, and interest therein.  In the event
that the Company is unable for any reason whatsoever to secure Consultant’s
signature to any lawful and necessary document required to apply for or execute
any patent application with respect to an invention(s) (including reissues,
renewals, extensions, continuations, divisions or continuations in part
thereof), Consultant hereby irrevocably designates and appoints the Company and
its duly authorized officers and agents, as Consultant’s agents and
attorneys-in-fact to act for and in Consultant’s behalf and instead of
Consultant, to execute and file any such application and to do all other lawful
acts to further the prosecution and issuance of patents thereon with the same
legal force and effect as if executed by Consultant.

 

8.             Non-Disclosure and Non-Use.  The parties acknowledge that the
Company possesses and will possess information that has been created, discovered
or developed by, or has otherwise become known to, the Company (including
without limitation, information created, discovered, developed, invented, or
made known by or to Consultant arising specifically out of his retention as an
Consultant by the Company), and/or in which property rights have been assigned
or otherwise conveyed or disclosed to the Company, which information has
commercial value in the business in which the Company is engaged or intends to
engage.  All of the aforementioned information is hereinafter called
“Proprietary Information.”  By way of illustration, but not limitation,
Proprietary Information includes Inventions, trade secrets, research results,
processes, formulae, data and know-how, improvements, inventions, techniques,
marketing plans, strategies, forecasts and customer lists.  Proprietary
Information also includes any information which the Company has received from a
third party which the Company is obligated to treat as confidential or
proprietary.

 

All Proprietary Information shall be the sole property of the Company and its
assigns, and the Company and its assigns shall be the sole owner of all patents
and other rights in connection therewith.  Consultant hereby assigns to the
Company any and all worldwide rights, title, and interest Consultant may have or
acquire in all Proprietary Information.  At all times during his retention as an
Consultant by the Company and at all times after expiration or termination of
this Agreement, Consultant will keep in confidence and trust all Proprietary
Information and will not disclose, sell, use, lecture upon, publish, or
otherwise disseminate any bona fide or potential Proprietary Information without
the written consent of the Company.

 

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9.             Company Materials.  All documents, data, records, apparatus,
equipment, chemicals, molecules, organisms and other physical property, whether
or not pertaining to Proprietary Information, furnished to Consultant by the
Company or a third party or produced by Consultant or others in the course of
performance under this Agreement shall be and remain the sole property of the
Company and shall be returned promptly to the Company, along with any copy,
duplicate, or reproduction thereof,  as and when requested by the Company. 
Should the Company not so request, Consultant shall return and deliver all such
property upon expiration or termination of this Agreement for any reason, and
Consultant will not take with him any such property or any reproduction of such
property upon such expiration or termination.

 

10.           Company Property.  All Proprietary Information and all title,
patents, patent rights, copyrights, mask work rights, trade secret rights, and
other intellectual property and rights anywhere in the world (collectively
“Rights”) in connection therewith shall be the sole property of the Company. 
Consultant hereby assigns to the Company any Rights Consultant may have or
acquire in such Proprietary Information.  At all times, both during the term of
this Agreement and after its expiration or termination, Consultant will keep in
confidence and trust and will not use or disclose any Proprietary Information
without the prior written consent of an officer of the Company.

 

11.           Term and Termination.  This Agreement expires December 31, 2015,
but is terminable prior to that date by either party at any time, with or
without advance notice, and with or without “Cause” (see definition below).

 

“Cause” is defined to mean:   (i) conduct that in the good faith judgment of the
Company constitutes a material breach of Consultant’s duty, (ii) a non-trivial
performance issue that does not get resolved (within a reasonable period of
time, but not to exceed thirty days in any case) after one or more requests in
writing by the Company to Consultant to resolve the issue, or (iii) Consultant’s
inability for any reason to provide consulting services for a period exceeding
90 days.  If the Company hires Consultant as an employee and terminates this
contract in the process, this would be considered Cause.

 

If the Company terminates the agreement without Cause, the Company will pay to
Consultant $12,000 per month for twelve months, and any stock options or RSUs
that would have vested had it not been for the application of a “cliff” waiting
period will vest immediately.

 

In the event the Company undergoes a change of control (i.e., if the Company is
acquired or merges with another corporation whereby the Company is NOT the
surviving entity and whereby the shareholders of the Company end up with less
than 50% ownership of the merged entity), after which the Agreement is
terminated without Cause (by the Company or its successors), the Company will,
in lieu of the amounts described above, pay to Consultant an additional twelve
months of Direct Compensation.  In addition, if such termination occurs within
24 months following the change of control, any unvested stock options and RSUs
previously granted to Consultant will accelerate-vest by an additional 24
months, and Consultant will have up to 12 months to exercise any or all of his
then-vested stock options and RSUs. A condition precedent to the Company’s
obligation to fulfill the payment and vesting obligations in this Section 11
shall be Consultant’s execution of a full and complete release of all claims
against the Company, its Board, officers, agents, and affiliates in reasonable
form as provided by the Company.

 

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Compensation for activities beyond the scope and timeframe of this Agreement
will be negotiated as deemed necessary.  Upon expiration or notice of
termination of this Agreement, the Company’s obligation to pay any compensation,
except for services or expenses already accrued or incurred under Section 2,
will immediately cease and terminate.

 

Sections 4, 5, 7, 8, 9, 10, 11, 12, 15, 16, and 20 shall survive expiration or
termination of this Agreement.

 

12.           Responsibility of Consultant.  The Company agrees not to hold
Consultant responsible for any inaccuracies, errors, or omissions in the
information or advice given, or for loss or damage resulting for the use of such
information or advice given.

 

13.           Remedies.  Consultant acknowledges and agrees that a breach of
this Agreement will result in immediate, irreparable, and continuing damage to
the Company for which there will be no adequate remedy at law; and agrees that
in the event of any such breach or violation or any threatened or intended
breach or violation of this Agreement, the Company and its successors and
assigns will be entitled to temporary, preliminary and permanent injunctive
relief and/or restraining orders enjoining and restraining such breach or
violation or such threatened or intended breach or violation and/or other
equitable relief (without needing to post any bond or other security) in
addition to such other and further relief as may be proper.

 

14.           Amendments; Waivers; Notices.  This Agreement may be modified,
amended, or supplemented only by a written instrument duly executed by
Consultant and the President of the Company.  No term or condition or the breach
thereof will be deemed waived, unless it is waived in writing and signed by the
party against whom the waiver is claimed.  Any waiver or breach of any term or
condition will not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other term or condition.  The failure of any party to
insist upon strict performance of any term or condition hereunder will not
constitute a waiver of such party’s right to demand strict compliance therewith
in the future. Any notice given by one party to the other pursuant to this
Agreement shall be in writing and shall be deemed to have been effectively given
(i) upon receipt when delivered personally, (ii) one (1) day after sending when
sent overnight by a nationally recognized overnight courier (e.g., FedEx), or
(iii) five (5) days after mailing when sent by certified U.S. mail, postage
prepaid, to the following address:

 

If to the Company:

Lpath, Inc.

 

ATTN: Scott Pancoast or Gary Atkinson

 

4025 Sorrento Valley Blvd.

 

San Diego, CA 92121

 

If to Consultant, the address set forth below his/her signature.

 

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15.           Governing Law; Jurisdiction and Venue.  This Agreement will be
governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law. Except as
otherwise expressly provided in this Agreement, the parties agree that any
dispute regarding the interpretation or validity of this Agreement will be
subject to the exclusive jurisdiction of the state and federal courts in and for
the County of San Diego, California, and each party hereby agrees to submit to
the personal and exclusive jurisdiction and venue of such courts.

 

16.           Arbitration.  Except as otherwise expressly provided in this
Agreement, Consultant and the Company hereby agree to submit to final and
binding arbitration relating to: (i) any and all disputes arising out of or
relating to this Agreement its interpretation, enforcement, breach, or
performance hereunder, including the provision of services rendered under its
terms, or (ii) termination of Consultant’s consulting services hereunder.  Any
arbitration shall be conducted in San Diego, California and shall be before a
single, neutral arbitrator selected by the parties, in accordance with the
rules of the American Arbitration Association (the “AAA”) for Employment
Disputes.  If the parties are to be unable to agree on a single neutral
arbitrator, the arbitrator shall be selected pursuant to the AAA rules.  The
arbitrator shall have the power to enter any award that could be entered by a
judge of a trial court of the State of California, and only such power, and
shall follow the law.  The parties agree to abide by and perform any award
rendered by the arbitrator.  The arbitrator shall issue the award in writing and
therein state the essential findings and conclusions on which the award is
based.  Judgment on the award may be entered in any court having jurisdiction
thereof.  In no event shall the demand for arbitration be made after the date
when institution of legal or equitable proceedings based on such claim, dispute,
or other matter in question would be barred by the applicable statute of
limitations.  This agreement to arbitrate shall be specifically enforceable
under the prevailing arbitration law, and shall be in accordance with the
procedures established for arbitration in the California Code of Civil
Procedure.  Both Consultant and the Company understand that by agreeing to
arbitrate their disputes, they are giving up their right to have their disputes
heard in a court of law and, if applicable, by a jury.  The Company shall bear
the costs of the arbitrator, the forum, and any filing fees.  Each of the
Consultant and the Company would bear its own respective attorney’s fees and all
other costs, unless otherwise required or allowed by law and awarded by the
arbitrator. This provision will survive termination of this Agreement.

 

17.           Counterparts.  This Agreement may be executed in multiple copies,
each of which will be deemed an original and all of which will constitute a
single agreement binding on all parties.

 

18.           Entire Agreement.  This Agreement (together with documents and
agreements entered into herewith) constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings.  Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements have been made by any party, or any one acting on behalf of any
party, that are not embodied in this Agreement with respect to the subject
matter hereof.

 

19.           Representation.  By executing this Agreement, Consultant
acknowledges that he/she understands and agrees that he/she has been encouraged,
and had the opportunity to, consult with his/her own personal attorney in
connection with this Agreement.

 

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20.           Assignment.  Due to the personal nature of the consulting services
to be rendered by Consultant hereunder, Consultant may not assign this
Agreement, in whole in part, or any of his rights or obligations hereunder,
except that Consultant may assign his right to receive compensation hereunder
for purposes of estate planning.  The Company may assign its rights and
obligations hereunder without restriction.  Subject to the foregoing, this
Agreement will inure to the benefit of and be binding upon each of the heirs,
assigns, and successors of the respective parties.

 

21.           Severability.  If any provision of this Agreement shall be
declared invalid, illegal, or unenforceable, such provision shall be modified to
the extent necessary to render it compliant with applicable law, and, to the
extent it cannot be so modified, such provision shall be severed from this
Agreement and the remaining provisions shall continue in full force and effect.

 

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

 

CONSULTANT

 

THE COMPANY

 

 

 

/s/ Roger Sabbadini

 

LPATH, INC.

(Signature)

 

a Nevada corporation

 

 

 

Roger Sabbadini, Ph.D.

 

By:

/s/ Scott Pancoast

(Printed Name)

 

 

(Signature)

 

 

 

 

 

Scott Pancoast, President & C.E.O.

 

 

(Printed Name and Title)

 

 

 

Consultant’s Address:

 

 

12509 Del Sol Rd

 

 

Lakeside, CA 92040

 

 

 

[SIGNATURE PAGE TO CONSULTANT AGREEMENT]

 

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