Exhibit 10.4


 


[GRAPHIC]


 


OFFER LETTER


 


December 26, 2006


 


Dirk Lammerts, M.D.


 


Dear Dirk:


 


I am pleased to offer you a position with Expression Diagnostics, XDx,
Inc. (the “Company”) as Vice President, Corporate Development, reporting to
Vikram Jog, the Company’s CFO, beginning on January 8, 2007. This position is a
full-time, exempt position.


 


Effective upon commencement of your full-time employment at the Company
you will receive an initial base salary of $17,500.00 per month (equivalent to
$210,000.00 per year), paid on a semi-monthly basis on our regular paydays. In
addition, you will receive a sign-on bonus of $25,000.00. Deductions required
by law or authorized by you will be taken from each paycheck. As a Company
employee, you are also eligible to receive certain employee benefits pursuant
to the terms of Company benefit plans as they may exist from time to time.


 


Subject to the approval of the Board of Directors of the Company, you
will be granted an option to purchase 110,000 shares of the Company’s Common
Stock. This option shall vest, subject to your continued employment with the
Company, as to one fourth (1/4) of the shares on the one year anniversary of
your start date, and as to an additional one forty-eighth (l/48th) of the total
number of shares subject to the option at the end of each calendar month
thereafter. Details of the price of these options will be provided in your
stock option grant and determined by the board of directors.


 


You should be aware that your employment with the Company is for no
specified period and constitutes at will employment. As a result, you are free
to resign at any time, for any reason or for no reason. Similarly, the Company
is free to conclude its employment relationship with you at any time, with or
without cause.


 


For purposes of federal immigration law, you will be required to
provide to the Company documentary evidence of your identity and eligibility
for employment in the United States. Such documentation must be provided to us
within three (3) business days of your date of hire, or our employment
relationship with you may be terminated. Your employment also is subject to
successful verification of your professional references, and to our standard
pre-employment process, which includes completion of an employment application
and successful completion of a standard background check.


 


As a condition to your employment with the Company, you will be
required to sign the Company’s standard Arbitration Agreement and Employment,
Confidential Information, and Invention Assignment Agreement, a copy of which
is enclosed.


 


750 Gateway Boulevard   Suite
H   South San Francisco   California 94080   tel
650 624 0120    fax 650 624 0125   www.xdx.com


 

















 


We also ask that, if you have not already done so, you disclose to the
Company any and all agreements relating to your prior employment that may
affect your eligibility to be employed by the Company or limit the manner in
which you may be employed. It is the Company’s understanding that any such
agreements will not prevent you from performing the duties of your position and
you represent that such is the case. Moreover, you agree that, during the term
of your employment with the Company, you will not engage in any other
employment, occupation, consulting or other business activity directly related
to the business in which the Company is now involved or becomes involved during
the term of your employment, nor will you engage in any other activities that
conflict with your obligations to the Company. Similarly, you agree not to bring
any third party confidential information to the Company, including that of your
former employer, and that in performing your duties for the Company you will
not in any way utilize any such information.


 


In the event of any dispute or claim relating to or arising out of our
employment relationship, you and the Company agree that all such disputes shall
be fully and finally resolved by binding arbitration conducted by the American
Arbitration Association in San Mateo County, California.


 


To indicate your acceptance of the Company’s offer, please sign and
date this letter in the space provided below, sign the enclosed Arbitration
Agreement and Employment, Confidential Information, and Invention Assignment
Agreement, and return them to XDx in the enclosed envelope. A duplicate
original offer letter is enclosed for your records. This letter, along with the
Employment, Confidential Information, and Invention Assignment Agreement, set
forth the terms of your employment with the Company and supersede any prior representations
or agreements, whether written or oral. This letter may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. This letter may not be modified or
amended except by a written agreement, signed by the Company and by you. This
offer of employment will remain valid through January 2, 2007.


 


We look forward to working with you at Expression Diagnostics, Inc.


 


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  EXPRESSION
  DIAGNOSTICS, INC.

  
	
   

  	
   

  
	
   

  	
  /s/ Pierre Cassigneul

  	
   

  
	
   

  	
  Pierre Cassigneul

  President and CEO

  
	
   

  	
   

  
	
  ACCEPTED
  AND AGREED TO this

  	
   

  
	
  26 day of December,
  2006.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Dirk Lammerts

  	
   

  	
   

  
	
  Dirk
  Lammerts, M.D.

  	
   

  
				



 


2

















 


Expression Diagnostics, Inc.


 


EMPLOYMENT, CONFIDENTIAL INFORMATION AND 

INVENTION ASSIGNMENT AGREEMENT


 


As a condition of my employment with Expression Diagnostics, Inc., its
subsidiaries, affiliates, successors or assigns (together the “Company”), and
in consideration of my employment with the Company and my receipt of the
compensation now and hereafter paid to me by Company, I agree to the following:


 


1.        At-Will
Employment.  I understand
and acknowledge that my employment with the Company is for an unspecified
duration and constitutes “at-will” employment. I acknowledge that this
employment relationship may be terminated at any time, with or without good
cause or for any or no cause, at the option either of the Company or myself,
with or without notice. I understand and acknowledge that in the event that my
employment is terminated by me or by the Company for any reason that I will be
entitled to no continuation of salary, benefits, or stock or option vesting.


 


2.        Confidential Information.


 


(a)            Company
Information.  I agree at
all times during the term of my employment and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company, or to
disclose to any person, firm or corporation without written authorization of
the Board of Directors of the Company, any Confidential Information of the
Company. I understand that “Confidential Information” means any Company
proprietary information, technical data, trade secrets or know-how, including,
but not limited to, research, product plans, products, services, customer lists
and customers (including, but not limited to, customers of the Company on whom
I called or with whom I became acquainted during the term of my employment),
markets, software, developments, inventions, processes, formulas, technology,
designs, drawings, engineering, hardware configuration information, marketing,
finances or other business information disclosed to me by the Company either
directly or indirectly in writing, orally or by drawings or observation of
parts or equipment. I further understand that Confidential Information does not
include any of the foregoing items which has become publicly known and made
generally available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved.


 


(b)            Former
Employer Information.  I
agree that I will not, during my employment with the Company, improperly use or
disclose any proprietary information or trade secrets of any former or
concurrent employer or other person or entity and that I will not bring onto
the premises of the Company any unpublished document or proprietary information
belonging to any such employer, person or entity unless consented to in writing
by such employer, person or entity.


 


(c)            Third
Party Information.  I
recognize 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 it only for


 

















 


certain limited purposes. I agree to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it to
any person, firm or corporation or to use it except as necessary in carrying
out my work for the Company consistent with the Company’s agreement with such
third party.


 


3.        Inventions.


 


(a)            Inventions
Retained and Licensed.  I
have attached hereto, as Exhibit A, a list describing all inventions,
original works of authorship, developments, improvements, and trade secrets
which were made by me prior to my employment with the Company (collectively
referred to as “Prior Inventions”), which belong to me, which relate to the
Company’s proposed business, products or research and development, and which
are not assigned to the Company hereunder; or, if no such list is attached, I
represent that there are no such Prior Inventions. If in the course of my
employment with the Company, I incorporate into a Company product, process or
machine a Prior Invention owned by me or in which I have an interest, the
Company is hereby granted and shall have a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license to make, have made, modify, use and
sell such Prior Invention as part of or in connection with such product,
process or machine.


 


(b)            Assignment
of Inventions.  I agree
that I will promptly make full written disclosure to the Company, will hold in
trust for the sole right and benefit of the Company, and hereby assign to the
Company, or its designee, all my right, title, and interest in and to any and
all inventions, original works of authorship, developments, concepts,
improvements or trade secrets, whether or not patentable or registrable under
copyright or similar laws, which I may solely or jointly conceive or develop or
reduce to practice, or cause to be conceived or developed or reduced to
practice, during the period of time I am in the employ of the Company
(collectively referred to as “Inventions”), except as provided in Section 3(f)
below. I further acknowledge that all original works of authorship which are
made by me (solely or jointly with others) within the scope of and during the
period of my employment with the Company and which are protectible by copyright
are “works made for hire,” as that term is defined in the United States
Copyright Act.


 


(c)            Inventions
Assigned to the United States.  I agree to assign to the United States
government all my right, title, and interest in and to any and all Inventions
whenever such full title is required to be in the United States by a contract
between the Company and the United States or any of its agencies.


 


(d)            Maintenance
of Records.  I agree to
keep and maintain adequate and current written records of all Inventions made
by me (solely or jointly with others) during the term of my employment with the
Company. The records will be in the form of notes, sketches, drawings, and any
other format that may be specified by the Company. The records will be
available to and remain the sole property of the Company at all times.


 


(e)            Patent
and Copyright Registrations.  I agree to assist the Company, or its
designee, at the Company’s expense, in every proper way to secure the Company’s
rights in the Inventions and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information


 

















 


and data with respect thereto, the execution of all applications,
specifications, oaths, assignments and all other instruments which the Company
shall deem necessary in order to apply for and obtain such rights and in order
to assign and convey to the Company, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and
any copyrights, patents, mask work rights or other intellectual property rights
relating thereto. I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue after the termination of this Agreement. If the Company is unable
because of my mental or physical incapacity or for any other reason to secure
my signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions or original
works of authorship assigned to the Company as above, then I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents
as my agent and attorney in fact, to act for and in my behalf and stead to
execute and file any such applications and to do all other lawfully permitted
acts to further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by
me.


 


(f)             Exception
to Assignments.  I understand
that the provisions of this Agreement requiring assignment of Inventions to the
Company do not apply to any invention which qualifies fully under the
provisions of California Labor Code Section 2870 (attached hereto as Exhibit
B). I will advise the Company promptly in writing of any inventions that I
believe meet the criteria in California Labor Code Section 2870 and not
otherwise disclosed on Exhibit A.


 


4.        Conflicting
Employment.


 


(a)   I agree that, during the term of my employment with
the Company, I will not engage in any other employment, occupation, consulting
or other business activity directly related to the business in which the
Company is now involved or becomes involved during the term of my employment,
nor will I engage in any other activities that conflict with my obligations to
the Company.


 


(b)   I agree that, during the term of my employment with
the Company, I will not accept or perform any outside consulting work without
first reporting the nature of and proposed time commitment to any such proposed
outside consulting work.


 


5.        Returning
Company Documents.  I
agree that, at the time of leaving the employ of the Company, I will deliver to
the Company (and will not keep in my possession, recreate or deliver to anyone
else) any and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items developed by me pursuant to my employment with the Company or otherwise
belonging to the Company, its successors or assigns. In the event of the
termination of my employment, I agree to sign and deliver the “Termination
Certification” attached hereto as Exhibit C.


 

















 


6.        Notification
of New Employer.  In the
event that I leave the employ of the Company, I hereby grant consent to
notification by the Company to my new employer about my rights and obligations
under this Agreement.


 


7.        Solicitation
of Employees and Business.  I
agree that for a period of twelve (12) months immediately following the
termination of my relationship with the Company for any reason, whether with or
without cause, I shall not either directly or indirectly solicit, induce,
recruit or encourage any of the Company’s employees to leave their employment,
or take away such employees, or attempt to solicit, induce, recruit, encourage
or take away employees of the Company, either for myself or for any other
person or entity.


 


8.        Conflict
of Interest Guidelines.  I
agree to diligently adhere to the Conflict of Interest Guidelines attached as Exhibit
D hereto.


 


9.        Representations.
 I agree to execute any proper oath
or verify any proper document required to carry out the terms of this
Agreement. I represent that my performance of all the terms of this Agreement
will not breach any agreement to keep in confidence proprietary information
acquired by me in confidence or in trust prior to my employment by the Company.
I have not entered into, and I agree I will not enter into, any oral or written
agreement in conflict herewith.


 


10.      Arbitration and Equitable
Relief.


 


(a)            Arbitration.
 In consideration of my employment
with the Company, its promise to arbitrate all employment-related disputes and
my receipt of the compensation, pay raises and other benefits paid to me by the
Company, at present and in the future, I agree that any and all controversies,
claims, or disputes with anyone (including the company and any employee,
officer, director, shareholder or benefit plan of the company in their capacity
as such or otherwise) arising out of, relating to, or resulting from my
employment with the company or the termination of my employment with the
Company, including any breach of this Agreement, shall be subject to binding
arbitration under the arbitration rules set forth in California Code of Civil
Procedure section 1280 through 1294.2, including section 1283.05 (the “Rules”)
and pursuant to California law. Disputes which I agree to arbitrate, and
thereby agree to waive any right to a trial by jury, include any statutory
claims under state or federal law, including, but not limited to, claims under
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act
of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act, the California Fair Employment and Housing Act, the
California Labor Code, claims of harassment, discrimination or wrongful
termination and any statutory claims. I further understand that this agreement
to arbitrate also applies to any disputes mat the Company may have with me.


 


(b)            Procedure.  I agree that any arbitration will be
administered by the American Arbitration Association (“AAA”) and that the
neutral arbitrator will be selected in a manner consistent with its national rules
for the resolution of employment disputes. I agree that the arbitrator shall
have the power to decide any motions brought by any party to the arbitration,
including motions for summary judgment and/or adjudication and motions to
dismiss and demurrers, prior to any arbitration hearing. I also agree that the
arbitrator shall have the power to award any remedies,


 

















 


including attorneys’ fees and costs, available under applicable law. I
understand the company will pay for any administrative or hearing fees charged
by the arbitrator or AAA except that I shall pay the first $125.00 of any
filing fees associated with any arbitration I initiate. I agree that the
arbitrator shall administer and conduct any arbitration in a manner consistent
with the Rules and that to the extent that the AAA’s national rules for the
resolution of employment disputes conflict with the rules, the Rules shall take
precedence. I agree that the decision of the arbitrator shall be in writing.


 


(c)            Remedy.  Except as provided by the Rules and
this Agreement, arbitration shall be the sole, exclusive and final remedy for
any dispute between me and the Company. Accordingly, except as provided for by
the Rules and this Agreement, neither I nor the Company will be permitted to
pursue court action regarding claims that are subject to arbitration.
Notwithstanding, the arbitrator will not have the authority to disregard or
refuse to enforce any lawful company policy, and the arbitrator shall not order
or require the Company to adopt a policy not otherwise required by law which
the Company has not adopted.


 


(d)            Equitable
Remedies.  In accordance
to the right under the Rules to petition the court for provisional relief, I
agree that any party may petition the court for injunctive relief where either
party alleges or claims a violation of the Employment, Confidential
Information, Invention Assignment Agreement between me and the Company or any
other agreement regarding trade secrets, confidential information,
nonsolicitation or labor code §2870. I understand that any breach or threatened
breach of such an agreement will cause irreparable injury and that money
damages will not provide an adequate remedy therefor and both parties hereby
consent to the issuance of an injunction. In the event either party seeks
injunctive relief, the prevailing party shall be entitled to recover reasonable
costs and attorneys fees.


 


(e)            Administrative
Relief.  I understand that
this agreement does not prohibit me from pursuing an administrative claim with
a local, state or federal administrative body such as the Department of Fair
Employment and Housing, the Equal Employment Opportunity Commission or the
Workers’ Compensation board. This agreement does, however, preclude me from
pursuing court action regarding any such claim.


 


11.      General
Provisions.


 


(a)            Governing
Law; Consent to Personal Jurisdiction.  This Agreement will be governed by the
laws of the State of California. I hereby expressly consent to the personal
jurisdiction of the state and federal courts located in California for any
lawsuit filed there against me by the Company arising from or relating to this
Agreement.


 


(b)            Assignment.
 This Agreement may not be assigned
by any party hereto, except that the Company may assign this Agreement in
connection with (1) a merger or consolidation of the Company, (2) a sale or
assignment of substantially all its assets, or (3) any other transaction which
results in another entity or person owning substantially all of the assets of
the Company; provided that the entity or person receiving or succeeding to the
assets of the Company assumes the Company’s obligations.


 

















 


(c)            Entire
Agreement.  This Agreement
sets forth the entire agreement and understanding between the Company and me
relating to the subject matter herein and supersedes any prior agreements or
arrangements between the Company and me with respect to the subject matter
hereof. No modification of or amendment to this Agreement, nor any waiver of
any rights under this agreement, will be effective unless in writing signed by
the party to be charged. Any subsequent change or changes in my duties, salary
or compensation will not affect the validity or scope of this Agreement.


 


(d)            Successors
and Assigns.  This
Agreement will be binding upon my heirs, executors, administrators and other
legal representatives and will be for the benefit of the Company, its
successors, and its assigns.


 


(e)            Severability.
 If one or more of the provisions in
this Agreement are deemed void by law, then the remaining provisions will
continue in full force and effect.


 


 


	
  Date:

  	
  12/26/2006

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Dirk Lammerts

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dirk Lammerts

  	
   

  
	
   

  	
   

  	
  Name
  of Employee (typed or printed)



  
	
   

  	
   

  	
   

  
	
  /s/ Pierre G.
  Cassigneul

  	
   

  	
   

  
	
  Signed on behalf of XDx



  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PIERRE G. CASSIGNEUL

  	
   

  	
   

  
	
  Printed
  Name

  	
   

  	
   

  



 


 


[This Space Intentionally Left Blank]


 

















 


EXHIBIT A


 


LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP


 


	
  Title

  	
   

  	
  Date

  	
   

  	
  Identifying Number

  or Brief Description

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


x No inventions or
improvements


 


o Additional Sheets
Attached


 


 


	
  Signature of Employee:

  	
  /s/ Dirk Lammerts

  	
   

  
	
  Print Name of Employee:

  	
  Dirk Lammerts

  	
   

  
	
  Date:

  	
  12/26/2006

  	
   

  
						



 

















 


EXHIBIT B


 


CALIFORNIA LABOR CODE SECTION 2870

EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS


 


“(a)     Any provision in an employment agreement which
provides that an employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to an invention
that the employee developed entirely on his or her own time without using the
employer’s equipment, supplies, facilities, or trade secret information except
for those inventions that either:


 


(1)            Relate at the time of conception or
reduction to practice of the invention to the employer’s business, or actual or
demonstrably anticipated research or development of the employer.


 


(2)            Result from any work performed by the
employee for the employer.


 


(b)      To the extent a provision in an employment
agreement purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under subdivision (a), the
provision is against the public policy of this state and is unenforceable.”


 

















 


EXHIBIT C


 


Expression Diagnostics, Inc.

TERMINATION CERTIFICATION


 


This is to certify that I do not have in my possession, nor have I
failed to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items belonging to Expression Diagnostics, Inc., its subsidiaries, affiliates,
successors or assigns (together, the “Company”).


 


I further certify that I have complied with all the terms of the
Company’s Employment Confidential Information and Invention Assignment
Agreement signed by me, including the reporting of any inventions and original
works of authorship (as defined therein), conceived or made by me (solely or
jointly with others) covered by that agreement.


 


I further agree that, in compliance with the Employment, Confidential
Information and Invention Assignment Agreement, I will preserve as confidential
all trade secrets, confidential knowledge, data or other proprietary
information relating to products, processes, know-how, designs, formulas,
developmental or experimental work, computer programs, data bases, other
original works of authorship, customer lists, business plans, financial
information or other subject matter pertaining to any business of the Company
or any of its employees, clients, consultants or licensees.


 


I further agree that for twelve (12) months from this date, I will not
hire any employees of the Company and I will not solicit, induce, recruit or
encourage any of the Company’s employees to leave their employment.


 


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Employee’s
  Signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Type/Print
  Employee’s Name)

  



 

















 


EXHIBIT D


 


Expression Diagnostics, Inc.

CONFLICT OF INTEREST GUIDELINES


 


It is the policy of Expression Diagnostics, Inc. to conduct its affairs
in strict compliance with the letter and spirit of the law and to adhere to the
highest principles of business ethics. Accordingly, all officers, employees and
independent contractors must avoid activities which are in conflict, or give
the appearance of being in conflict, with these principles and with the
interests of the Company. The following are potentially compromising situations
which must be avoided. Any exceptions must be reported to the President and
written approval for continuation must be obtained.


 


1.        Revealing confidential information to outsiders
or misusing confidential information. Unauthorized divulging of information is
a violation of this policy whether or not for personal gain and whether or not
harm to the Company is intended. (The Employment, Confidential Information and
Invention Assignment Agreement elaborates on this principle and is a binding
agreement.)


 


2.        Accepting or offering substantial gifts,
excessive entertainment, favors or payments which may be deemed to constitute
undue influence or otherwise be improper or embarrassing to the Company.


 


3.        Participating in civic or professional
organizations that might involve divulging confidential information of the
Company.


 


4.        Initiating or approving personnel actions
affecting reward or punishment of employees or applicants where there is a
family relationship or is or appears to be a personal or social involvement.


 


5.        Initiating or approving any form of personal or
social harassment of employees.


 


6.        Investing or holding outside directorship in
suppliers, customers, or competing companies, including financial speculations,
where such investment or directorship might influence in any manner a decision
or course of action of the Company.


 


7.        Borrowing from or lending to employees,
customers or suppliers.


 


8.        Acquiring real estate of interest to the
Company.


 


9.        Improperly using or disclosing to the Company
any proprietary information or trade secrets of any former or concurrent
employer or other person or entity with whom obligations of confidentiality
exist.


 


10.      Unlawfully discussing prices, costs, customers,
sales or markets with competing companies or their employees.


 

















 


11.      Making any unlawful agreement with distributors
with respect to prices.


 


12.      Improperly using or authorizing the use of any
inventions which are the subject of patent claims of any other person or entity.


 


13.      Engaging
in any conduct which is not in the best interest of the Company.


 


Each officer, employee and independent contractor must take every
necessary action to ensure compliance with these guidelines and to bring
problem areas to the attention of higher management for review. Violations of
this conflict of interest policy may result in discharge without warning.