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*however*, that the Company may from time to time reasonably require the Executive to traveltemporarily to other locations in connection with the Company’s business. **2.** **Loyal and Conscientious Performance; Noncompetition.**          **2.1 Loyalty**. During the Executive’s employment by the Company, the Executive shall devote theExecutive’s full business energies, interest, abilities and productive time to the proper andefficient performance of the Executive’s duties under this Agreement.          **2.2 Covenant not to Compete**. Except with the prior written consent of the Board or the CEO,which shall not be unreasonably withheld, the Executive will not, during the Executive’s employmentby the Company, engage in competition with the Company and/or any of its Affiliates, eitherdirectly or indirectly, in any manner or capacity, as adviser, principal, agent, affiliate,promoter, partner, officer, director, employee, stockholder, owner, co-owner, consultant, or memberof any association or otherwise, in any phase of the business of developing, manufacturing andmarketing of products or services which are in the same field of use or which otherwise competewith the products or services or proposed products or services of the Company and/or any of itsAffiliates. For purposes of this Agreement, ***“Affiliate”***means, with respect to any specificentity, any other entity that, directly or indirectly, through one or more intermediaries,controls, is controlled by or is under common control with such specified entity.          **2.3 Agreement not to Participate in Company’s Competitors**. During any period during which theExecutive is receiving any compensation or consideration from the Company, the Executive agrees notto acquire, assume or participate in, directly or indirectly, any position, investment or interestknown by the Executive to be adverse or antagonistic to the Company, its business or prospects,financial or otherwise or in any company, person or entity that is, directly or indirectly, incompetition with the business of the Company or any of its Affiliates. Notwithstanding theforegoing, ownership by the Executive, as a passive investment, of less than two percent (2%) ofthe outstanding shares of capital stock of any corporation with one or more classes of its capitalstock listed on a national securities exchange or publicly traded on the Nasdaq Stock Market or inthe over-the-counter market shall not constitute a breach of Section 2.2 or this Section 2.3. **3.** **Compensation of the Executive.**          **3.1 Base Salary.**The Company shall pay the Executive a base salary of Three Hundred TwentyThousand Dollars ($320,000) per year, less payroll deductions and all required withholdings payablein regular periodic payments in accordance with Company policy. Such base salary shall be proratedfor any partial year of employment on the basis of a 365-day fiscal year.          **3.2 Annual Performance Bonus.**In addition to the Executive’s base salary, the Executive shallbe eligible for an annual performance bonus based upon the Executive’s and the Company’sachievement of specified objectives established by the CEO and/or the Board during the firstquarter of each year, as evaluated by the CEO and/or Board in the exercise of good faith reasonablejudgment. The target bonus for achievement of all objectives shall be
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thirty-five percent (35%) of the Executive’s then-current base salary. Bonuses awards will bepro-rated based upon the number of months employed during the calendar year.          **3.3 Stock Option.**Upon the commencement of the Executive’s employment and subject to approvalof the Board and the terms of the Company’s 2004 Stock Equity Incentive Plan, (the ***“Plan”***), theExecutive will be granted a stock option under the Plan to purchase one hundred fifty thousand(150,000) shares of the Company’s Common Stock (the ***“Option”***). To the maximum extent possible, theOption shall be an Incentive Stock Option as such term is defined in Section 422 of the InternalRevenue Code of 1986, as amended. The Option will be governed by and granted pursuant to aseparate Stock Option Agreement and the Plan. The exercise price per share of the Option will beequal to the fair market value of the Common Stock established on the date of grant, subject toapproval by the Board. The Option will vest over four (4) years for so long as the Executivecontinues to be employed by the Company, as follows: twenty-five percent (25%) of the sharessubject to the Option shall vest on the first anniversary of the Executive’s first day ofemployment with the Company, and 1/48th of the shares subject to the Option shall veston the same calendar day of each month thereafter.          **3.4 Changes to Compensation.**The Executive’s compensation will be reviewed on a regular basisby the Company and may be increased from time to time as deemed appropriate.          **3.5 Employment Taxes**. All of the Executive’s compensation shall be subject to customarywithholding taxes and any other employment taxes as are commonly required to be collected orwithheld by the Company.          **3.6 Other Benefits.**The Executive shall also be eligible to receive all other benefitsnormally offered to full-time regular executive level employees, including, without limitation,medical insurance, dental insurance, life insurance, 401(k) plan and fifteen (15) working days paidtime off per year accruing on a bi-weekly basis, as outlined in the Company’s Employee Handbook. **4.** **Termination.**          **4.1**Termination by the Company. The Executive’s employment by the Company shall be at will.The Executive’s employment with the Company may be terminated by the Company at any time and forany reason or no reason. Subject to the terms of the Company’s Senior Executive Severance BenefitPlan, which is hereby incorporated into this Agreement, as it may be amended from time to time(provided that any amendment shall not result in a reduction of benefits as set forth in such planas of the date hereof), in the event the Company terminates the Executive’s employment, the Companyshall have no further obligation to the Executive, except for payment of earned wages and accruedand unused paid time off earned through the date of termination, at the rate in effect at the timeof termination, subject to standard deductions and withholdings, and such other benefits asrequired in such event by applicable law.          **4.2 Termination by Mutual Agreement of the Parties**. The Executive’s employment pursuant tothis Agreement may be terminated at any time upon mutual agreement
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in writing of the Parties. Any such termination of employment shall have the consequencesspecified in such agreement.          **4.3 Termination by the Executive.**The Executive’s employment by the Company shall be at will.The Executive shall have the right to resign or terminate the Executive’s employment at any timeand for any reason or no reason. Subject to the terms of the Company’s Senior Executive SeveranceBenefit Plan, as it may be amended from time to time (provided that any amendment shall not resultin a reduction of benefits as set forth in such plan as of the date hereof), in the event theExecutive resigns or terminates his employment, the Company shall have no further obligation to theExecutive, except for payment of earned wages and accrued and unused paid time off earned throughthe date of resignation or termination, at the rate in effect at the time of resignation ortermination, subject to standard deductions and withholdings, and such other benefits as requiredin such event by applicable law.          **4.4 Change in Control.**The provisions of Article Two, Section IVB(i) and (ii) of the Planproviding for acceleration of vesting of outstanding stock options in the event of a ***“Change inControl”***(as defined in the Appendix, Section C, of the Plan) and an ***“Involuntary Termination”***thereafter (as defined in the Plan) are hereby incorporated into this Agreement and shall apply infull. **5.** **Confidential and Proprietary Information; Nonsolicitation**.          As a condition of employment, the Executive agrees to execute and abide by the ProprietaryInformation and Inventions Agreement attached hereto as Exhibit A. **6.** **Assignment and Binding Effect.**          This Agreement shall be binding upon and inure to the benefit of the Executive and theExecutive’s heirs, executors, personal representatives, assigns, administrators and legalrepresentatives. Because of the unique and personal nature of the Executive’s duties under thisAgreement, neither this Agreement nor any rights or obligations under this Agreement shall beassignable by the Executive. This Agreement shall be binding upon and insure to the benefit of theCompany and its successors, assigns and legal representatives. **7.** **Choice of Law.**          This Agreement is made in California. This Agreement shall be governed by and construed andinterpreted in accordance with the laws of the State of California. **8.** **Integration.**          This Agreement, the Company’s Proprietary Information and Inventions Agreement attached asExhibit A hereto, the Company’s Senior Executive Severance Benefit Plan and the Plan contain thecomplete, final and exclusive agreement of the Parties relating to the terms and conditions of theExecutive’s employment and the termination of Executive’s employment, and supersedes all prior andcontemporaneous oral and written employment agreements or arrangements between the Parties. To theextent this Agreement conflicts with the Proprietary Information and Inventions Agreement attachedas Exhibit A hereto, the Proprietary
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Information and Inventions Agreement shall control. To the extent this Agreement conflictswith the terms of the Employee Handbook, the Company’s Senior Executive Severance Benefit Plan orthe Plan, this Agreement shall control. **9.** **Amendment.**          This Agreement cannot be amended or modified, except by a written agreement signed by theExecutive and the Company. **10.** **Waiver.**          No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived,except with the written consent of the Party against whom the waiver is claimed, and any waiver ofany such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding orsucceeding breach of the same or any other term, covenant, condition or breach. **11.** **Severability.**          The finding by a court of competent jurisdiction of the unenforceability, invalidity orillegality of any provision of this Agreement shall not render any other provision of thisAgreement unenforceable, invalid or illegal. Such court shall have the authority to modify orreplace the invalid or unenforceable term or provision with a valid and enforceable term orprovision which most accurately represents the Parties’ intention with respect to the invalid orunenforceable term or provision. **12.** **Interpretation; Construction.**          The headings set forth in this Agreement are for convenience of reference only and shall notbe used in interpreting this Agreement. This Agreement has been drafted by legal counselrepresenting the Company, but the Executive has been encouraged to consult with the Executive’s ownindependent counsel and tax advisors with respect to the terms of this Agreement. The Partiesacknowledge that each Party has reviewed and revised, or had an opportunity to review and revise,this Agreement, and the normal rule of construction to the effect that any ambiguities are to beresolved against the drafting party shall not be employed in the interpretation of this Agreement. **13.** **Representations and Warranties.**          The Executive represents and warrants that the Executive is not restricted or prohibited,contractually or otherwise, from entering into and performing each of the terms and covenantscontained in this Agreement, and that the Executive’s execution and performance of this Agreementwill not violate or breach any other agreements between the Executive and any other person orentity.
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 **14.** **Counterparts.**          This Agreement may be executed in two counterparts, each of which shall be deemed an original,all of which together shall constitute one and the same instrument. Delivery of an executedcounterpart of a signature page to this Agreement by facsimile or by email of a scanned copy willbe effective as delivery of an original executed counterpart of this Agreement. **15.** **Arbitration.**          To ensure the rapid and economical resolution of disputes that may arise in connection withthe Executive’s employment with the Company, the Executive and the Company agree that any and alldisputes, claims or causes of action, in law or equity, arising from or relating to the Executive’semployment, or the termination of that employment, will be resolved pursuant to the FederalArbitration Act and to the fullest extent permitted by law, by final, binding and confidentialarbitration in San Diego, California conducted by the Judicial Arbitration and Mediation Services(***“JAMS”***), or its successors, under the then current rules of JAMS for employment disputes;*provided, however*, that the arbitrator shall: (a) have the authority to compel adequate discoveryfor the resolution of the dispute and to award such relief as would otherwise be permitted by law;and (b) issue a written arbitration decision, including the arbitrator’s essential findings andconclusions and a statement of the award. Both the Executive and the Company shall be entitled toall rights and remedies that either the Executive or the Company would be entitled to pursue in acourt of law. The Company shall pay all fees, including the arbitrator’s fee. Nothing in thisAgreement is intended to prevent either the Executive or the Company from obtaining injunctiverelief in court to prevent irreparable harm pending the conclusion of any such arbitration. **16.** **Trade Secrets Of Others.**          It is the understanding of both the Company and the Executive that the Executive shall notdivulge to the Company and/or its Affiliates any confidential information or trade secretsbelonging to others, including the Executive’s former employers, nor shall the Company and/or itsAffiliates seek to elicit from the Executive any such information. Consistent with the foregoing,the Executive shall not provide to the Company and/or its Affiliates, and the Company and/or itsAffiliates shall not request, any documents or copies of documents containing such information. **17.** **Advertising Waiver****.**          The Executive agrees to permit the Company and/or its Affiliates, and persons or otherorganizations authorized by the Company and/or its Affiliates, to use, publish and distributeadvertising or sales promotional literature concerning the products and/or services of the Companyand/or its Affiliates, or the machinery and equipment used in the provision thereof, in which theExecutive’s name and/or pictures of the Executive taken in the course of the Executive’s provisionof services to the Company and/or its Affiliates, appear. The Executive hereby waives and releasesany claim or right the Executive may otherwise have arising out of such use, publication ordistribution.
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 **18.** **Indemnification****.**          The Executive shall have no liability to the Company for any loss suffered by the Company thatarises out of any action or inaction of the Executive if the Executive in good faith determinedthat such course of conduct was in the best interest of the Company, and such course of conduct didnot constitute gross negligence or willful misconduct of the Executive. The Executive shall beindemnified by the Company against losses, judgments, liabilities, expenses and amounts paid insettlement of any claims sustained by him in connection with the Company, provided that the samewere not the result of gross negligence or willful misconduct on the part of the Executive.     **In Witness Whereof**, the Parties have executed this Agreement as of the EffectiveDate.**Ardea Biosciences, Inc.**     /s/ Barry D. Quart   Barry D. Quart   Chief Executive Officer   **Executive**     /s/ David T. Hagerty   David T. Hagerty, MD      
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     **EXHIBIT A****PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT**     In consideration of my employment or continued employment by Ardea Biosciences,Inc. (*“****Company****”*), and the compensation paid to me now and during my employment with theCompany, I agree to the terms of this Agreement as follows:**1.****Confidential Information Protections****.**     **1.1 Nondisclosure; Recognition of Company’s Rights**. At all times during and after myemployment, I will hold in confidence and will not disclose, use, lecture upon or publish any ofCompany’s Confidential Information (defined below), except as may be required in connection with mywork for Company, or as expressly authorized by the Chief Executive Officer (the “**CEO**”) of Company.I will obtain the CEO’s written approval before publishing or submitting for publication anymaterial (written, oral or otherwise) that relates to my work at Company and/or incorporates anyConfidential Information. I hereby assign to Company any rights I may have or acquire in any andall Confidential Information and recognize that all Confidential Information shall be the sole andexclusive property of Company and its assigns.     **1.2 Confidential Information.**The term “**Confidential Information**” shall mean any and allconfidential knowledge, data or information related to Company’s business or its actual ordemonstrably anticipated research or development activities, including, without limitation, (a)trade secrets, inventions, ideas, processes, computer source and object code, data, formulae,programs, other works of authorship, know-how, improvements, discoveries, developments, designs,and techniques; (b) information regarding products, services, plans for research and development,marketing and business plans, budgets, financial statements, contracts, prices, suppliers andcustomers; (c) information regarding the skills and compensation of Company’s employees,contractors, and any other service providers of Company; and (d) the existence of any businessdiscussions, negotiations or agreements between Company and any third party.     **1.3 Third Party Information.**I understand that Company has received and in the future willreceive from third parties confidential or proprietary information (**“Third Party Information”**)subject to a duty on Company’s part to maintain the confidentiality of such information and to useit only for certain limited purposes. During and after the term of my employment, I will holdThird Party Information in strict confidence and will not disclose to anyone (other than Companypersonnel who need to know such information in connection with their work for Company) or use ThirdParty Information, except in connection with my work for Company or unless expressly authorized byan officer of Company in writing.     **1.4 No Improper Use of Information of Prior Employers and Others.**I represent that myemployment by Company does not and will not breach any agreement with any former employer,including any non-compete agreement or any agreement to keep in confidence or refrain from usinginformation acquired by me prior to my employment by Company. I further represent that I have notentered into, and will not enter into, any agreement, either written or oral, in conflict with myobligations under this Agreement. During my employment by Company, I will not improperly make useof or disclose any information or trade secrets of any former employer or other third party, norwill I bring onto the premises of Company or use any unpublished documents or any propertybelonging to any former employer or other third party, in violation of any lawful agreements withthat former employer or third party. I will use in the performance of my duties only informationthat is generally known and used by persons with training and experience comparable to my own, iscommon knowledge in the industry or otherwise legally in the public domain, or is otherwiseprovided or developed by Company.**2.****Inventions.**     **2.1 Inventions and Intellectual Property Rights.**As used in this Agreement, the term**“Invention”**means any ideas, concepts, information, materials, processes, data, programs, know-how,improvements, discoveries, developments, designs, artwork, formulae, other copyrightable works, andtechniques and all Intellectual Property Rights in any of the items listed above. The term**“Intellectual Property Rights”**means all trade secrets, copyrights, trademarks, mask work rights,patents and other intellectual property rights recognized by the laws of any jurisdiction orcountry.     **2.2 Prior Inventions.**I have disclosed on **Exhibit A**a complete list of all Inventions that(a) I have, or I have caused to be, alone or jointly with others, conceived, developed or reducedto practice prior to the commencement of my employment by Company; (b) in which I have an ownershipinterest or which I have a license to use; (c) and that I wish to have excluded from the scope ofthis Agreement (collectively referred to as “**Prior Inventions**”). If no Prior Inventions are listedin **Exhibit A**, I warrant that there are no Prior Inventions. I agree that I will not incorporate,or permit to be incorporated, Prior Inventions in any Company Inventions (defined below) withoutCompany’s prior written consent. If, in the course of my employment with Company, I incorporate aPrior Invention into a Company process, machine or other work, I hereby grant Company anon-exclusive, perpetual,
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fully-paid and royalty-free, irrevocable and worldwide license, with rights to sublicensethrough multiple levels of sublicensees, to reproduce, make derivative works of, distribute,publicly perform and publicly display in any form or medium, whether now known or later developed,make, have made, use, sell, import, offer for sale, and exercise any and all present or futurerights in, such Prior Invention.     **2.3 Assignment of Company Inventions.**Inventions assigned to the Company or to a third partyas directed by the Company pursuant to the section titled “Government or Third Party” are referredto in this Agreement as “**Company Inventions**.” Subject to the section titled “Government or ThirdParty” and except for Inventions that I can prove qualify fully under the provisions of CaliforniaLabor Code section 2870 and I have set forth in **Exhibit A**, I hereby assign and agree to assign inthe future (when any such Inventions or Intellectual Property Rights are first reduced to practiceor first fixed in a tangible medium, as applicable) to Company all my right, title, and interest inand to any and all Inventions (and all Intellectual Property Rights with respect thereto) made,conceived, reduced to practice or learned by me, either alone or with others, during the period ofmy employment by Company.     **2.4 Obligation to Keep Company Informed.**During the period of my employment and for one (1)year after my employment ends, I will promptly and fully disclose to Company in writing (a) allInventions authored, conceived or reduced to practice by me, either alone or with others, includingany that might be covered under California Labor Code section 2870, and (b) all patent applicationsfiled by me or in which I am named as an inventor or co-inventor.     **2.5 Government or Third Party**. I agree that, as directed by the Company, I will assign to athird party, including, without limitation, the United States, all my right, title and interest inand to any particular Company Invention.     **2.6 Enforcement of Intellectual Property Rights and Assistance.**During and after the periodof my employment, I will assist Company in every proper way to obtain and enforce United States andforeign Intellectual Property Rights relating to Company Inventions in all countries. If theCompany is unable to secure my signature on any document needed in connection with such purposes, Ihereby irrevocably designate and appoint Company and its duly authorized officers and agents as myagent and attorney in fact, which appointment is coupled with an interest, to act on my behalf toexecute and file any such documents and to do all other lawfully permitted acts to further suchpurposes with the same legal force and effect as if executed by me.     **2.7 Incorporation of Software Code.**I agree that I will not incorporate into any Companysoftware or otherwise deliver to Company any software code licensed under the GNU General PublicLicense or Lesser General Public License or any other license that, by its terms, requires orconditions the use or distribution of such code on the disclosure, licensing or distribution of anysource code owned or licensed by Company.**3.****Records.** I agree to keep and maintain adequate and current records (in the form ofnotes, sketches, drawings and in any other form that is required by the Company) of all Inventionsmade by me during the period of my employment by the Company, which records shall be available to,and remain the sole property of, the Company at all times.**4.****Additional Activities****.**I agree that (a) during the term of my employment by Company, Iwill not, without Company’s express written consent, engage in any employment or business activitythat is competitive with, or would otherwise conflict with my employment by, Company, and (b) forthe period of my employment by Company and for one (l) year thereafter, I will not, either directlyor indirectly, solicit or attempt to solicit any employee, independent contractor or consultant ofCompany to terminate his, her or its relationship with Company in order to become an employee,consultant or independent contractor to or for any other person or entity.**5.****Return of Company Property.** Upon termination of my employment or upon Company’srequest at any other time, I will deliver to Company all of Company’s property, equipment anddocuments, together with all copies thereof, and any other material containing or disclosing anyInventions, Third Party Information or Confidential Information and certify in writing that I havefully complied with the foregoing obligation. I agree that I will not copy, delete or alter anyinformation contained upon my Company computer or Company equipment before I return it to Company.In addition, if I have used any personal computer, server or e-mail system to receive, store,review, prepare or transmit any Company information, including, but not limited to, ConfidentialInformation, I agree to provide the Company with a computer-useable copy of all such ConfidentialInformation and then permanently delete and expunge such Confidential Information from thosesystems. I agree to provide the Company access to my system as reasonably requested to verify thatthe necessary copying and/or deletion is completed. I further agree that any property situated onCompany’s premises and owned by Company is subject to inspection by Company’s personnel at any timewith or without notice. Prior to the termination of my employment or promptly after termination ofmy employment, I will cooperate with Company in attending an exit interview and certify in writingthat I have complied with the requirements of this section.**6.****Notification Of New Employer****.**If I leave the employ of Company, I consent to thenotification of my new employer of my rights and obligations under this Agreement, by Companyproviding a copy of this Agreement or otherwise.**7.****General Provisions.**     **7.1 Governing Law and Venue.**This Agreement and any action related thereto will be governedand interpreted by and under the laws of the State of California,
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without giving effect to any conflicts of laws principles that require the application of thelaw of a different state. I expressly consent to personal jurisdiction and venue in the state andfederal courts for the county in which Company’s principal place of business is located for anylawsuit filed there against me by Company arising from or related to this Agreement.     **7.2 Severability.**If any provision of this Agreement is, for any reason, held to be invalidor unenforceable, the other provisions of this Agreement will remain enforceable and the invalid orunenforceable provision will be deemed modified so that it is valid and enforceable to the maximumextent permitted by law.     **7.3 Survival.**This Agreement shall survive the termination of my employment and theassignment of this Agreement by Company to any successor or other assignee and be binding upon myheirs and legal representatives.     **7.4 Employment**. I agree and understand that nothing in this Agreement shall give me any rightto continued employment by Company, and it will not interfere in any way with my right or Company’sright to terminate my employment at any time, with or without cause and with or without advancenotice.     **7.5 Notices.**Each party must deliver all notices or other communications required orpermitted under this Agreement in writing to the other party at the address listed on the signaturepage, by courier, by certified or registered mail (postage prepaid and return receipt requested),or by a nationally-recognized express mail service. Notice will be effective upon receipt orrefusal of delivery. If delivered by certified or registered mail, notice will be considered tohave been given five (5) business days after it was mailed, as evidenced by the postmark. Ifdelivered by courier or express mail service, notice will be considered to have been given on thedelivery date reflected by the courier or express mail service receipt. Each party may change itsaddress for receipt of notice by giving notice of the change to the other party.     **7.6 Injunctive Relief**. I acknowledge that, because my services are personal and unique andbecause I will have access to the Confidential Information of Company, any breach of this Agreementby me may cause irreparable injury to Company for which monetary damages would not be an adequateremedy and, therefore, will entitle Company to seek injunctive relief (including specificperformance). The rights and remedies provided to each party in this Agreement are cumulative andin addition to any other rights and remedies available to such party at law or in equity.     **7.7 Waiver.**Any waiver or failure to enforce any provision of this Agreement on one occasionwill not be deemed a waiver of that provision or any other provision on any other occasion.     **7.8 Export**. I agree not to export, directly or indirectly, any U.S. technical data acquiredfrom Company or any products utilizing such data, to countries outside the United States, becausesuch export could be in violation of the United States export laws or regulations.     **7.9 Entire Agreement.**If no other agreement governs nondisclosure and assignment ofinventions during any period in which I was previously employed or am in the future employed byCompany as an independent contractor, the obligations pursuant to sections of this Agreement titled“Confidential Information Protections” and “Inventions” shall apply. This Agreement is the final,complete and exclusive agreement of the parties with respect to the subject matter hereof andsupersedes and merges all prior communications between us with respect to such matters. Nomodification of or amendment to this Agreement, or any waiver of any rights under this Agreement,will be effective unless in writing and signed by me and the CEO of Company. Any subsequent changeor changes in my duties, salary or compensation will not affect the validity or scope of thisAgreement.
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     This Agreement shall be effective as of the first day of my employment with Company.               **David T. Hagerty, MD** **Ardea Biosciences, Inc.**                 **I have read, understand,and accept this Agreement andhave been given theopportunity to review it withindependent legalcounsel****:** **Accepted and agreed:**               By: /s/ David T. Hagerty By: /s/ Barry D. Quart              Barry D. Quart              Chief Executive Officer                       Address:  Address: 4939 Directors Place                      San Diego, CA  92121                                      
 

 
**EXHIBIT A****INVENTIONS****1. Prior Inventions Disclosure.**The following is a complete list of all Prior Inventions (asprovided in Section 2.2 of the attached Employee Confidential Information and Inventions AssignmentAgreement, defined herein as the “Agreement”): o None  o See immediately below:      **2. Limited Exclusion Notification.**     **This is to notify**you in accordance with Section 2872 of the California Labor Codethat the foregoing Agreement between you and Company does not require you to assign or offer toassign to Company any Invention that you develop entirely on your own time without using Company’sequipment, supplies, facilities or trade secret information, except for those Inventions thateither:     **a. **Relate at the time of conception or reduction to practice to Company’s business, or actualor demonstrably anticipated research or development; or     **b. **Result from any work performed by you for Company.     To the extent a provision in the foregoing Agreement purports to require you to assign anInvention otherwise excluded from the preceding paragraph, the provision is against the publicpolicy of this state and is unenforceable.     This limited exclusion does not apply to any patent or Invention covered by a contract betweenCompany and the United States or any of its agencies requiring full title to such patent orInvention to be in the United States.