Exhibit 10.1

 

LOGO [g106332img1.jpg]

SCIENTIFIC ADVISOR AGREEMENT

THIS SCIENTIFIC ADVISOR AGREEMENT (this “Agreement”) is made and entered into as
of December 31, 2015 (the “Effective Date”), by and among Zosano Pharma
Corporation, a Delaware corporation having its principal place of business at
34790 Ardentech Court, Fremont, California 94555 (the “Parent”), ZP Opco, Inc.,
a Delaware corporation and wholly owned subsidiary of Parent (the “Company”),
and PETER DADDONA, an individual residing at 35 Anderson Way, Menlo Park,
California 94025 (the “Advisor”). The Parent, Company and Advisor may be
referred to herein individually as a “Party” or collectively as the “Parties.”

Recitals

WHEREAS, the Advisor is currently a director of the Parent, an employee of the
Company and the Chief Scientific Officer of both the Parent and the Company;

WHEREAS, the Advisor desires (i) to resign as an employee of the Company and as
an officer of the Parent and the Company, effective as of the Effective Date;
and (ii) commencing on January 1, 2016, to provide scientific advisory services
to the Company subject to the term and conditions set forth herein;

WHEREAS, the Company desires to retain Advisor to provide scientific advisory
services subject to the terms and conditions set forth herein;

WHEREAS, the Advisor desires to continue to serve as a director of the Parent in
accordance with the bylaws of the Parent;

NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants set forth below, the Parties hereby agree as follows:

 

  1. Scientific Advisory Services.

1.1 As further provided in Section 9.2, effective as of the Effective Date, the
Advisor hereby resigns as an employee and officer of the Company and as an
officer of the Parent.

1.2 Commencing on January 1, 2016 (the “Start Date”), the Company hereby retains
Advisor, and Advisor hereby agrees to perform such scientific advisory services
for the Company as set forth in Section 1 of Exhibit A (collectively, the
“Services”). Advisor shall report to the Parent’s Chief Executive Officer or, if
requested to do so by the Chief Executive Officer, report to the Parent’s Chief
Scientific Officer. The specific nature and amount of the Services shall be as
determined by the Company during the term of this Agreement; provided, however,
that Advisor agrees that during the Term (as defined in Section 9.1 below),
Advisor shall be available to provide Services, in person, for an average of two
days per week (the “Advisor Time Commitment”). Advisor agrees to perform the
Services, and provide the results thereof, with the highest degree of
professional skill and expertise. Advisor may use the assistance of other
individuals who are not employees of the Company only with the prior written
consent of the Company.

--------------------------------------------------------------------------------

1.3 For the avoidance of doubt, the Advisor acknowledges that he is currently a
director of the Parent and will continue to serve as a director of the Parent,
in accordance with the Parent’s bylaws, until the earliest of his death,
resignation (as a director), or removal. Advisor acknowledges that he will not
qualify as an “independent director” within the meaning of NASDAQ listing rule
5605(a)(2) and will not be eligible for any of the compensation that the Parent
pays to its independent directors.

 

  2. Compensation.

Section 2 of Exhibit A attached hereto sets forth the amount and timing of
payment for the Services and reimbursable expenses. The Company will reimburse
Advisor for expenses actually incurred by Advisor in performing the Services,
including but not limited to travel and accommodation expenses, so long as such
expenses are reasonable and necessary as determined by the Company and approved
in advance by Company. Advisor shall maintain adequate books and records
relating to any expenses to be reimbursed and shall submit requests for
reimbursement in a timely manner and form acceptable to the Company.

 

  3. Independent Contractor.

The Parties understand and agree that Advisor is an independent contractor and
not an agent or employee of the Company. Advisor has no authority to obligate
the Company by contract or otherwise. Advisor will not be eligible for any
employee benefits, nor will the Company make deductions from Advisor’s fees for
taxes or insurance (except as otherwise required by applicable law or
regulation). Any payroll and employment taxes, insurance, and benefits imposed
on Advisor due to activities performed hereunder will be the sole responsibility
of Advisor.

 

  4. Recognition of Company’s Rights; Nondisclosure.

Advisor recognizes that the Company is engaged in a continuous program of
research and development respecting its present and future business activities.
Advisor agrees as follows:

4.1 At all times during the term of Advisor’s association with the Company and
thereafter, Advisor will hold in strictest confidence and will not disclose,
use, lecture upon or publish any of the Company’s Proprietary Information
(defined below), except to the extent such disclosure, use or publication may be
required in direct connection with Advisor’s performing requested Services for
the Company or is expressly authorized in writing by an officer of the Company.
It is understood that the Proprietary Information will remain the sole property
of the Company. Advisor further agrees to take all reasonable precautions to
prevent any unauthorized disclosure of the Proprietary Information including,
but not limited to, having each employee, agent or representative of Advisor, if
any, with access to any Proprietary Information execute a nondisclosure
agreement containing provisions in the Company’s favor substantially similar to
Sections 4 and 13 of this Agreement.

4.2 The term “Proprietary Information” shall mean any and all trade secrets,
confidential knowledge, know-how, data or other proprietary information or
materials of the Company, the Parent or any of their respective affiliates. By
way of illustration but not limitation, Proprietary Information includes:
(i) inventions, ideas, samples, prototypes, devices, hardware, software,
electronic components and materials, and procedures for producing any such

--------------------------------------------------------------------------------

items, as well as data, know-how, improvements, inventions, discoveries,
developments, designs and techniques; (ii) information regarding plans for
research, development, new products, marketing and selling activities, business
models, budgets and unpublished financial statements, licenses, prices and
costs, suppliers and customers; and (iii) information regarding the skills and
compensation of employees or consultants of the Company.

4.3 In addition, Advisor understands that the Company has received and in the
future will receive from third parties confidential or proprietary information
(“Third Party Information”) 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. During the term of Advisor’s association with the Company and
thereafter, Advisor will hold Third Party Information in the strictest
confidence and will not disclose or use Third Party Information, except in
connection with Advisor’s performing requested Services for the Company, or as
expressly authorized in writing by an officer of the Company.

 

  5. Intellectual Property Rights.

5.1 Advisor shall promptly and fully disclose to the Company any and all ideas,
inventions, technologies, discoveries, improvements, know-how and techniques
that the Advisor conceives, reduces to practice or develops during the term of
this Agreement, alone or in conjunction with others, and in any way related to
or arising from (i) the Company’s Field (as defined in Section 6.1), (ii) the
Services, or (iii) Proprietary Information (collectively, the “Inventions”).
Advisor agrees to keep and maintain adequate and current records (in the form of
notes, sketches, drawings or in any other form that may be required by the
Company) of all Services provided and results thereof and such records shall be
available to and remain the sole property of the Company at all times. Advisor
agrees that any and all Inventions, including any related patents, copyrights,
trade secrets and trademark rights, shall be the sole and exclusive property of
the Company.

5.2 Advisor hereby assigns to the Company his entire right, title and interest
in and to all Inventions. Advisor hereby designates the Company as his agent
for, and grants to the Company a power of attorney, which power of attorney
shall be deemed coupled with an interest, solely for the purpose of effecting
the foregoing assignment from the Advisor to the Company. Advisor will perform
other activities necessary to effect the intent of this Section 5.2.

5.3 Advisor further agrees to cooperate and provide reasonable assistance to the
Company to obtain and from time to time enforce United States and foreign
patents, copyrights, and other rights and protections claiming, covering or
relating to the Inventions in any and all countries.

5.4 Advisor agrees to submit to the Company any proposed publication that
contains any discussion relating to the Company, Proprietary Information,
Inventions or work performed by Advisor for the Company hereunder. Advisor
further agrees that no such publication shall be made without the prior written
consent of the Company, which consent shall not be unreasonably withheld.

--------------------------------------------------------------------------------

  6. Noncompetition and Nonsolicitation of Employees.

6.1 During the term of this Agreement, Advisor will not, without the prior
consent of the Company’s Board of Directors, engage in any commercial business
activity that competes in any way with any business then being conducted or
planned by the Company relating to the research, discovery, development,
manufacture or commercialization of transdermal drug delivery systems or patches
for administering pharmaceutical compounds to humans (the “Company’s Field”).

6.2 During the term of this Agreement and for one (1) year after its
termination, Advisor will not personally or through others recruit, solicit or
induce any employee of the Company to terminate his or her employment with the
Company.

6.3 If any restriction set forth in Sections 6.1 and 6.2 is found by any court
of competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

 

  7. No Conflicting Obligation.

7.1 Advisor represents that Advisor’s performance of all of the terms of this
Agreement and the performing of the Services for the Company do not and will not
breach or conflict with any agreement with a third party, including an agreement
to keep in confidence any proprietary information of another entity acquired by
Advisor in confidence or in trust prior to the date of this Agreement.

7.2 Advisor hereby agrees not to enter into any agreement that conflicts with
this Agreement.

 

  8. No Improper Use of Materials.

Advisor agrees not to bring to the Company or to use in the performance of
Services for the Company any materials or documents of a present or former
employer of Advisor, or any materials or documents obtained by Advisor from a
third party under a binder of confidentiality, unless such materials or
documents are generally available to the public or Advisor has authorization
from such present or former employer or third party for the possession and
unrestricted use of such materials. Advisor understands that Advisor is not to
breach any obligation of confidentiality that Advisor has to present or former
employers or clients, and agrees to fulfill all such obligations during the term
of this Agreement.

 

  9. Term and Termination.

9.1 Advisor’s Services under this Agreement shall commence on the Effective Date
and shall continue for a term of one (1) year from and after the Effective Date
(the “Term”), unless earlier terminated as provided below in this Section 9.
Unless earlier terminated as provided below in this Section 9 or otherwise
agreed upon in writing by the Company and Advisor, this Agreement shall
automatically terminate upon the expiration of the Term (which, for the
avoidance of doubt, is January 1, 2017).

--------------------------------------------------------------------------------

9.2 Effective December 31, 2015 (the “Resignation Date”), Advisor hereby resigns
from his position as Chief Scientific Officer of the Company and Parent and from
any other positions (excluding director) Advisor may currently hold as a
fiduciary of the Company or of Parent. Advisor and the Company hereby
acknowledge and agree that the Resignation Date is the effective date of
termination of Advisor’s employment with the Company and its affiliates, and
that such resignation is a voluntary termination of employment by Advisor other
than for Good Reason pursuant to the last sentence of Section 4(b) of that
certain employment letter agreement dated May 11, 2012 among the Company and
Advisor, as amended by the letter amendments thereto dated January 6,
2014, January 16, 2014 and May 29, 2015 (as so amended, the “Employment
Agreement”). In connection with Advisor’s voluntary termination of employment,
(i) the Company (x) hereby waives the thirty (30)-day written notice period
described in the last sentence of Section 4(b) of the Employment Agreement and
(y) acknowledges its obligations under Section 5(d) of the Employment Agreement
to pay Advisor his accrued but unpaid base salary and any accrued but unpaid
vacation time, in each case earned by Advisor while an employee of the Company
through the Resignation Date (less applicable taxes and withholding); and
(ii) Advisor acknowledges that the Company shall have no obligation to Advisor
for any severance payments under the Employment Agreement and, except for any
right Advisor may have under the federal law known as “COBRA” to continue
participation in the Company’s group health and dental plans at Advisor’s cost,
Advisor’s benefits shall terminate in accordance with the terms of the
applicable benefit plans. In addition, Advisor acknowledges (i) his obligation,
in accordance with Section 5(f) of the Employment Agreement, to continue to
fully perform following the Resignation Date Advisor’s obligations under
Section 3 of the Employment Agreement and (ii) that the Advisor’s Incentive
Stock Option dated June 15, 2012 between the Company and Advisor (the “2012
Option”) will lose its status as an incentive stock option 90 days’ after the
Resignation Date and will be treated as a non-qualified stock option from that
point forward. For the avoidance of doubt, the 2012 Option will continue to vest
pursuant to the vesting schedule described therein for so long as the Advisor
continues to provide Services to the Company or Parent pursuant to this
Agreement.

9.3 Either Party may terminate this Agreement for any reason upon 30 days’
written notice provided to the other Party.

9.4 The Company will amend the 2012 Option to provide as follows:

(a) In the event that the Advisor provides Services for the entire Term then
Advisor may exercise the 2012 Option at any time prior to December 31, 2017;

(b) In the event that Company terminates this Agreement without cause (e.g., no
breach by Advisor) prior to the expiration of the Term then Advisor may exercise
the 2012 Option at any time prior to the first anniversary of the date of
termination; and

(c) In the event that Advisor terminates the Agreement, or if the Company
terminates it for cause (e.g., breach by Advisor), prior to the expiration of
the Term then Advisor may exercise the 2012 Option at any time within 90 days
after the date of termination.

9.5 The obligations set forth in Sections 4, 5, 6 and 9 through 16 will survive
any termination or expiration of this Agreement. Upon termination of this
Agreement, Advisor

--------------------------------------------------------------------------------

will cease work immediately after giving or receiving such notice of
termination, unless otherwise advised by the Company, and promptly deliver to
the Company all documents and other materials of any nature pertaining to the
Services, together with all documents and other items containing or pertaining
to any Proprietary Information.

 

  10. Assignment.

The rights and liabilities of the Parties hereto shall bind and inure to the
benefit of their respective successors, heirs, executors and administrators, as
the case may be; provided that, as the Company has specifically contracted for
Advisor’s Services, Advisor may not assign or delegate Advisor’s obligations
under this Agreement either in whole or in part without the prior written
consent of the Company. The Company may assign its rights and obligations
hereunder to any person or entity that succeeds to all or substantially all of
the Company’s business. Any assignment not in accordance with this Section 10
shall be void.

 

  11. Legal and Equitable Remedies.

Because Advisor’s Services are personal and unique and because Advisor may have
access to and become acquainted with the Proprietary Information of the Company,
the Company shall have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief without
prejudice to any other rights and remedies that the Company may have for a
breach of this Agreement.

 

  12. Compliance with Applicable Laws and Obligations.

Advisor will perform the Services in compliance with all applicable laws.

 

  13. Governing Law; Severability.

This Agreement shall be governed by and construed according to the laws of the
State of Delaware, without regards to conflicts of laws rules. If any provision
of this Agreement is found by a court of competent jurisdiction to be
unenforceable, that provision shall be severed and the remainder of this
Agreement shall continue in full force and effect.

 

  14. Complete Understanding; Modification.

This Agreement, including the Exhibits mentioned herein, and the Employment
Agreement constitute the final, exclusive and complete understanding and
agreement of the Parties hereto and supersede all prior understandings and
agreements with respect to the subject matter hereof. Any waiver, modification
or amendment of any provision of this Agreement shall be effective only if in
writing and signed by the Parties hereto.

 

  15. Notices.

Any notices required or permitted hereunder shall be given to the appropriate
Party at the address listed on the first page of this Agreement, or such other
address as the Party shall specify in writing pursuant to this notice provision.
Such notice shall be deemed given upon personal delivery to the appropriate
address or three days after the date of mailing if sent by certified or
registered mail.

--------------------------------------------------------------------------------

  16. Counterparts.

This Agreement may be executed in one or more counterparts each of which will be
deemed an original, but all of which together shall constitute one and the same
instrument.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties hereto have executed this Scientific Advisor
Agreement as of the date first written above.

 

ZOSANO PHARMA CORPORATION     ADVISOR By:  

/s/ Vikram Lamba

   

/s/ Peter Daddona

Name:   Vikram Lamba     Peter Daddona Title:   Chief Executive Officer     ZP
OPCO, INC.     By:  

/s/ Vikram Lamba

    Name:   Vikram Lamba     Title:   Chief Executive Officer    

--------------------------------------------------------------------------------

EXHIBIT A

SCOPE AND COMPENSATION

1. Services: Advisor shall perform scientific advisory services as requested by
the Company, including without limitation:

 

  •   Support senior executives of the Company in connection with the management
of the Company research and development operations;

 

  •   Support senior executives of the Company in connection with developing,
acquiring, protecting, licensing and enforcing intellectual property rights;

 

  •   Support senior executives of the Company in connection with strategy and
tactics for obtaining from regulators, inside and outside of the U.S.,
permission to conduct clinical trials of Company products and to commercialize
products;

 

  •   Provide advice regarding the Company’s research and development and
intellectual property strategies;

 

  •   Provide scientific advice and services; and

 

  •   Provide advice to the CEO and CSO regarding the selection of, and
performance of, members of the Company’s scientific advisory board and the
Company’s research and development personnel.

2. Consideration: The Company will compensate Advisor at the rate of $12,667 per
month, payable in arrears, for all Services performed and invoiced under this
Agreement. On a monthly basis, Advisor shall submit to the Company a written
invoice for services performed under this Agreement, which lists the dates that
such services were performed. The Company will pay such invoices promptly
following receipt, subject to the approval of an authorized representative of
the Company.

3. Expenses that will be reimbursed: The Company shall reimburse Advisor for
business expenses that are reasonable and necessary for Advisor to perform, and
were incurred by Advisor in the course of the performance of Advisor’s duties
pursuant to this Agreement and in accordance with the Company’s general
policies. Such expenses shall be reimbursed upon Advisor’s submission of
vouchers and an expense report in such form as may be required by the Company
consistent with the Company’s policies in place from time-to-time.