3. **Other Business Activities**. Except with the prior written consent of the Company inits sole discretion, the Employee shall not engage, directly or indirectly, during the Term, in anyother business activities or pursuits whatsoever, except activities in connection with charitableor civic activities, personal investments and serving as an executor, trustee or in other similarfiduciary capacity; provided that any such activities do not interfere with the performance ofhis/her responsibilities and obligations pursuant to this Agreement.          4. **Compensation**. The Company shall pay the Employee, and the Employee hereby agreesto accept, as compensation for all services to be rendered to the Company and for the Employee’sintellectual property covenants and assignments and covenant not to compete, as provided inSections 6 and 7 hereof, the compensation set forth in this Section 4.               4.1 Salary. The Company shall pay the Employee a base salary at the annual rate ofTwo Hundred Forty Thousand Two Hundred Forty Dollars ($240,240.00) (as the same may hereafter beadjusted, the “Salary”) during the Term of this Agreement. The Salary shall be inclusiveof all applicable income, social security and other taxes and charges that are required by law tobe withheld by the Company (collectively, “Taxes”) and shall be paid and withheld inaccordance with the Company’s normal payroll practice for its executive employees from time to timein effect. The Salary shall be subject to increase at the option and in the sole discretion of theCompany based upon the demonstrated performance of the Employee.               4.2 Bonus. Upon the execution of this Agreement, the Employee shall be eligible to beawarded an annual cash bonus, which bonus shall be determined by the President & CEO and the Boardof Directors of the Company (the “Board of Directors”) and shall be at a target amount oftwenty-five percent (25%) of Salary paid during such applicable period, less Taxes, provided thatthe Employee shall have achieved all of his/her performance objectives established for such period.Such bonus shall be determined and paid no later than the 15th day of the third month of suchsucceeding calendar year.               4.3 Fringe Benefits. The Employee shall be entitled to participate in the followingprograms and receive the following benefits (collectively, the “Benefits”) in accordancewith the following provisions.                    (a) The Employee shall be entitled to participate in any retirement, health or dental programsgenerally made available to executive employees of the Company.                    (b) The Employee shall be entitled to participate in all vacation, life and disabilityinsurance and other fringe benefit programs of the Company to the extent and on the same terms andconditions as are accorded to other executive employees of the Company.               4.4 Reimbursement of Expenses. During the Term, the Employee shall be reimbursed foritems of travel, food and lodging and miscellaneous expenses reasonably incurred by him/her onbehalf of the Company, provided that such expenses are incurred, documented and submitted to theCompany, all in accordance with the reimbursement policies of
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the Company as in effect from time to time. For purposes of satisfying Section 409A of theInternal Revenue Code of 1986, as amended (the “Code”), the parties agree that the amountsreimbursed under this Section 4.4 for one calendar year shall not affect the amounts reimbursed forother calendar years, and reimbursement payments, if any, shall in all events be made no later thanthe 15th day of the third month of the calendar year following the calendar year in which theapplicable expense is incurred.          5. **Confidentiality**. The Employee recognizes and acknowledges that the ProprietaryInformation (as hereinafter defined) is a valuable, special and unique asset of the Company. As aresult, both during the Term and thereafter, the Employee shall not, without the prior writtenconsent of the Company, for any reason either directly or indirectly divulge to any third-party oruse for his/her own benefit, or for any purpose other than the exclusive benefit of the Company,any confidential, proprietary, business and technical information or trade secrets of the Companyor of any subsidiary or affiliate of the Company (the “Proprietary Information”) revealed,obtained or developed in the course of his/her employment with the Company. ProprietaryInformation shall include any confidential or proprietary information or trade secrets relating toany patents or other intellectual property assigned by the Employee to the Company. ProprietaryInformation also shall include, but shall not be limited to the intangible personal propertydescribed in Section 6(b) hereof and, in addition, technical information, including researchdesign, results, techniques and processes; apparatus and equipment design; computer software;technical management information, including project proposals, research plans, status reports,performance objectives and criteria, and analyses of areas for business development; and businessinformation, including project, financial, accounting and personnel information, businessstrategies, plans and forecasts, customer lists, customer information and sales and marketingplans, efforts, information and data. In addition, “Proprietary Information” shall includeall information and materials received by the Company or Employee from a third party subject to anobligation of confidentiality and/or non-disclosure. Nothing contained herein shall restrict theEmployee’s ability to make such disclosures during the course of his/her employment as may benecessary or appropriate to the effective and efficient discharge of the duties required by orappropriate for the Position or as such disclosures may be required by law. Furthermore, nothingcontained herein shall restrict the Employee from divulging or using for his/her own benefit or forany other purpose any Proprietary Information that is readily available to the general public solong as such information did not become available to the general public as a direct or indirectresult of the Employee’s breach of this Section 5. Failure by the Company to mark any of theProprietary Information as confidential or proprietary shall not affect its status as ProprietaryInformation under the terms of this Agreement.          6. **Property**.               6.1 Removal and Distribution. All right, title and interest in and to ProprietaryInformation shall be and remain the sole and exclusive property of the Company. During the Term,the Employee shall not remove from the Company’s offices or premises any documents, records,notebooks, files, correspondence, reports, memoranda or similar materials of or containingProprietary Information, or other materials or property of any kind belonging to the Company,unless necessary or appropriate in accordance with the duties and responsibilities required by orappropriate for the Position and, in the event that such materials or property are
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removed, all of the foregoing shall be returned to their proper files or places of safekeeping aspromptly as possible after the removal shall serve its specific purpose. The Employee shall notmake, retain, remove and/or distribute any copies of any of the foregoing for any reasonwhatsoever, except as may be necessary in the discharge of the assigned duties and shall notdivulge to any third person the nature of and/or contents of any of the foregoing or of any otheroral or written information to which he may have access or with which for any reason he may becomefamiliar, except as disclosure shall be necessary in the performance of the duties; and upon thetermination of his/her employment with the Company, the Employee shall return to the Company alloriginals and copies of the foregoing then in his/her possession or under his/her control, whetherprepared by the Employee or by others.               6.2 Developments.                    (a) The Employee acknowledges that all right, title and interest in and to any and allwritings, documents, inventions, discoveries, ideas, developments, information, computer programsor instructions (whether in source code, object code, or any other form), algorithms, formulae,plans, memoranda, tests, research, designs, innovations, systems, analyses, specifications, models,data, diagrams, flow charts, and/or techniques (whether patentable or non-patentable or whetherreduced to written or electronic form or otherwise) that the Employee creates, makes, conceives,discovers or develops, either solely or jointly with any other person, at any time during the Term,whether during working hours or at the Company’s facility or at any other time or location, andwhether upon the request or suggestion of the Company or otherwise, (collectively,“Intellectual Work Product”) shall be the sole and exclusive property of the Company. TheEmployee shall promptly disclose to the Company all Intellectual Work Product, and the Employeeshall have no claim for additional compensation for the Intellectual Work Product, except for anyexcluded Intellectual Work Product that is wholly unrelated to the pharmaceutical industry, in thebroadest sense, provided that such Intellectual Work Product is not conceived, discovered ordeveloped, either solely or jointly with any other person during working hours or at the Company’sfacility or using any other Company resource.                    (b) The Employee acknowledges that all the Intellectual Work Product that is copyrightableshall be considered a work made for hire under United States Copyright Law. To the extent that anycopyrightable Intellectual Work Product may not be considered a work made for hire under theapplicable provisions of the United States Copyright Law, or to the extent that, notwithstandingthe foregoing provisions, the Employee may retain an interest in any Intellectual Work Product, theEmployee hereby irrevocably assigns and transfers to the Company any and all right, title, orinterest that the Employee may have in the Intellectual Work Product under copyright, patent, tradesecret and trademark law, in perpetuity or for the longest period otherwise permitted by law,without the necessity of further consideration. The Company shall be entitled to obtain and holdin its own name all copyrights, patents, trade secrets, and trademarks with respect thereto.                    (c) The Employee shall reveal promptly all information relating to any such IntellectualProperty to the Board of Directors, and, at the Company’s expense, shall cooperate with the Companyand execute such documents as may be necessary or
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appropriate (i) in the event that the Company desires to seek copyright, patent or trademarkprotection, or other analogous protection, thereafter relating to the Intellectual Work Product,and when such protection is obtained, renew and restore the same, or (ii) to defend any oppositionproceedings in respect of obtaining and maintaining such copyright, patent or trademark protection,or other analogous protection.                    (d) In the event the Company is unable after reasonable effort to secure the Employee’ssignature on any of the documents referenced in Section 6.2 (c) hereof, whether because of theEmployee’s physical or mental incapacity or for any other reason whatsoever, the Employee herebyirrevocably designates and appoints the Company and its duly authorized officers and agents as theEmployee’s agent and attorney-in-fact, to act for and on the behalf and stead to execute and fileany such documents and to do all other lawfully permitted acts to further the prosecution andissuance of any such copyright, patent or trademark protection, or other analogous protection, withthe same legal force and effect as if executed by the Employee.                    (e) The Employee represents that the innovations, designs, systems, analyses, ideas, and allcopyrights, patents, trademarks and trade names, or similar intangible personal property(collectively, the “Pre-existing Property”) identified on Schedule I hereofcomprise all of the innovations, designs, systems, analyses, ideas and all copyrights, patents,trademarks and trade names, or similar intangible personal property that the Employee has made orconceived of prior to the date hereof, and same are excluded from the operation of the otherprovisions of this Section 6.2. In the event that the Employee learns of any Pre-existing Propertythat he inadvertently failed to include in Schedule I, and the circumstances surrounding thefailure of such inclusion are reasonably satisfactory to the Company, the Employee and the Companyshall jointly amend Schedule I to include such property.          7. **Covenant not to Compete**.               7.1 Restrictions. Provided that the Company is in compliance with Section 8.6 hereof,if applicable, the Employee shall not, during the Term and for a period of one (1) year thereafter(the “Restricted Period”), except as an employee of the Company and in order to carry outthe Employee’s duties hereunder, do any of the following directly or indirectly without the priorwritten consent of the Company in its sole discretion:                    (a) engage or participate, directly or indirectly, in any business activity competitive withthe Business or the business of the Company or any of the Company’s subsidiaries or affiliates asconducted during the Term;                    (b) become interested (as owner, stockholder, lender, partner, co-venturer, director, officer,employee, agent, consultant or otherwise) in any person, firm, corporation, association or otherentity engaged in any business that is competitive with the Business or of the business of theCompany or any subsidiary or affiliate of the Company as conducted during the Term, or becomeinterested in (as owner, stockholder, lender, partner, co-venturer, director, officer, employee,agent, consultant or otherwise) any portion of the business of any person, firm, corporation,association or other entity where such portion of such
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business is competitive with the Business of the Company or the business of any subsidiary oraffiliate of the Company as conducted during the Term (notwithstanding the foregoing, the Employeemay hold not more than one percent (1%) of the outstanding securities of any class of anypublicly-traded securities of a company that is engaged in activities referenced in this Section7.1.                    (c) solicit, call on or transact or engage in any business activity with, either directly orindirectly, any (i) customer with whom the Company shall have dealt at any time during the one (1)year period immediately preceding the termination of the Employee’s employment hereunder, or (ii)corporate partner, collaborator, independent contractor or supplier with whom the Company shallhave dealt at any time during the one (1) year period immediately preceding the termination of theEmployee’s employment hereunder;                    (d) influence or attempt to influence any then current or prospective supplier, customer,corporate partner, collaborator, or independent contractor of the Company to terminate or modifyany written or oral agreement or course of dealing with the Company; or                    (e) influence or attempt to influence any person either (i) to terminate or modify anemployment, consulting, agency, distributorship or other arrangement with the Company, or (ii) toemploy or retain, or arrange to have any other person or entity employ or retain, any person whohas been employed or retained by the Company as an employee, consultant, agent or distributor ofthe Company at any time during the one (1) year period immediately preceding the termination of theEmployee’s employment hereunder.               7.2 Acknowledgment. The Employee acknowledges that he has carefully read andconsidered the provisions of this Section 7. The Employee acknowledges that the foregoingrestrictions will limit his/her ability to earn a livelihood in a business competitive with theBusiness, but he nevertheless believes that he has received and will receive sufficientconsideration and other benefits in connection with the payment by the Company of the compensationset forth in Sections 4 and 8.6 to justify such restrictions, which restrictions the Employee doesnot believe would prevent him/her from earning a living in businesses that are not competitive withthe Business and without otherwise violating the restrictions set forth herein.          8. **Early Termination**. The Employee’s employment hereunder may be terminated duringthe Term upon the occurrence of any one of the events described in this Section 8. Upontermination, the Employee shall be entitled only to such compensation and benefits as described inthis Section 8. The word “termination” as used throughout the Agreement with respect to theEmployee’s employment hereby refers to a “separation from service” by the Employee from theCompany, as defined by Treasury Regulation §1.409A-1(h).
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               8.1 Involuntary Termination.                    (a) Termination for Disability.                         (i) In the event of the disability of the Employee such that the Employee is unable to performthe duties and responsibilities hereunder to the full extent required by this Agreement by reasonsof illness, injury or incapacity for a period of more than one hundred eighty (180) consecutivedays or more than one hundred eighty (180) days, in the aggregate, during any three hundredsixty-five (365) day period (“Disability”), the Company shall have the right to terminateEmployee’s employment hereunder by written notice to the Employee.                         (ii) In the event of a termination of the Employee’s employment hereunder pursuant to Section8.1(a)(i), the Employee will be entitled to receive all accrued and unpaid (as of the date of suchtermination) Salary and applicable Benefits; provided that the Employee has complied with all ofhis/her obligations under this Agreement and continues to comply with all of his/her survivingobligations hereunder listed in Section 10 and a pro-rata percentage of the bonus (provided inSection 4.2) for the last fiscal year of the Company prior to the date of Employee’s termination.All the foregoing payments shall be paid within thirty (30) days following the termination date.Except as specifically set forth in this Section 8.1(a)(ii) or as provided by applicable law, theCompany shall have no liability or obligation to the Employee for compensation or benefitshereunder by reason of, or subsequent to, such termination.                    (b) Termination by Death. In the event that the Employee dies during the Term, theEmployee’s employment hereunder shall be terminated thereby and the Company shall pay to theEmployee’s executors, legal representatives or administrators an amount equal to the accrued andunpaid portion of the Salary for the month in which he dies and a pro-rata percentage of the bonus(provided in Section 4.2) for the last fiscal year of the Company prior to the date of Employee’stermination. All the foregoing payments shall be paid within thirty (30) days following thetermination date. Except as specifically set forth in this Section 8.1(b) or as provided byapplicable law, the Company shall have no liability or obligation hereunder to the Employee’sexecutors, legal representatives, administrators, heirs or assigns or any other person claimingunder or through him/her by reason of or subsequent to the Employee’s death.               8.2 Termination for Cause.                    (a) The Company shall have the right to terminate the Employee’s employment hereunder at anytime for “cause” upon written notice to the Employee. For purposes of this Agreement, “cause”shall mean the Employee’s (including, if the Employee is not a natural person, any employee of orcontractor to the Employee who is involved, directly or indirectly, in the provision of services tothe Company) (a) dishonesty, embezzlement, theft or fraudulent misconduct; (b) abuse of acontrolled substance that materially impairs the performance of the Employee’s duties to theCompany; (c) conduct adverse to the business,
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interests, or reputation of the Company; (d) material breach of any of the terms hereof or of anyagreement between the Company and the Employee, (including, but not limited to, terms relating tonon-disclosure, non-competition and invention assignment) which, if curable, remains uncured thirty(30) days after the Employee receives written notice of such breach; or (e) commission of a felony.                    (b) In the event of a termination of the Employee’s employment hereunder pursuant to Section8.2(a), the Employee shall be entitled to receive all accrued but unpaid (as of the effective dateof such termination) Salary and Benefits. All the foregoing payments shall be paid within thirty(30) days following the termination date. All Salary and Benefits shall cease at the time of suchtermination, subject to the requirements of applicable law. Except as specifically set forth inthis Section 8.2, the Company shall have no liability or obligation hereunder by reason of orsubsequent to such termination.               8.3 Termination by the Company Without Cause. Notwithstanding anything to thecontrary set forth herein, the Company shall have the right to terminate the Employee’s employmenthereunder at any time before or after a Change in Control (as defined below), for any reason or noreason, with or without cause, effective upon the date designated by the Company upon writtennotice to the Employee.               8.4 Termination for Good Reason Following a Change in Control.                    (a) The Employee shall have the right to terminate the Employee’s employment hereunder at anytime for Good Reason within twelve (12) months following a Change in Control.                    (b) “Good Reason” means the occurrence of any one of the following without the Employee’sconsent:          (i) any requirement that the Employee relocate, by more than thirty-five (35)miles, from the principal location where the Employee performs services for theCompany;          (ii) any material diminution in the Employee’s authority, duties orresponsibilities (other than a change due to a Disability); or          (iii) any material reduction in the Employee’s Salary or bonus.Notwithstanding the forgoing, an event that is or would constitute grounds for aresignation for a Good Reason shall not constitute such grounds for a resignation forGood Reason if: (A) Employee does not send a notice of termination to the Companywithin thirty (30) days after the event occurs; or (B) the Company reverses the actionor cures the default that would give rise to a termination for a Good Reason withinthirty (30) days after the delivery of the notice of termination.
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                    (c) “Change in Control” means: (i) the acquisition (other than from the Company) inone or more transactions by any Person, as defined below, of the beneficial ownership (within themeaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) ofthirty-three percent (33%) or more of (A) the then outstanding shares of the securities of theCompany, or (B) the combined voting power of the then outstanding securities of the Companyentitled to vote generally in the election of directors (the “Company Voting Stock”); (ii)the closing of a sale or other conveyance of assets representing fifty percent (50%) or more of thefair market value of the Company’s consolidated assets (in a single transaction or in a series ofrelated transactions); (iii) the dissolution or liquidation of the Company; (iv) a change in thecomposition of the Board of Directors, as a result of which, fewer than one-half of the incumbentdirectors after such change are directors who either (A) had been directors of the Companytwenty-four (24) months prior to such change or (B) were elected, or nominated for election, to theBoard of Directors with the approval of at least a majority of the directors who had been theCompany’s directors twenty-four (24) months prior to such change and who were still in office atthe time of the election or nomination; or (v) the effective time of any merger, share exchange,consolidation, or other business combination involving the Company if immediately after suchtransaction persons who hold a majority of the outstanding voting securities entitled to votegenerally in the election of directors of the surviving entity (or the entity owning one hundredpercent (100%) of such surviving entity) are not persons who, immediately prior to suchtransaction, held a majority of the Company Voting Stock; provided, however, that a Change inControl shall not include (X) a public offering of capital stock of the Company; (Y) anydistribution of capital stock of the Company by a partnership or limited liability company to apartner of such partnership or member of such limited liability company in respect of the interestof such partner or member and without the payment of additional consideration; or (Z) anytransaction pursuant to which shares of capital stock of the Company are transferred or issued toany trust, charitable organization, foundation, family partnership or other entity controlleddirectly or indirectly by, or established for the benefit of any of the current or former executiveofficers of the Company or their immediate family members (including spouses, children,grandchildren, parents, and siblings, in each case to include adoptive relations), or transferredto any such immediate family members. For purposes of this definition of Change in Control, a“Person” means any individual, entity or group within the meaning of Section 13(d)(3) or14(d)(2) of the Securities Exchange Act of 1934, as amended, other than: employee benefit planssponsored or maintained by the Company or by affiliates controlled by the Company, or anunderwriter of the common stock of the Company in a registered public offering.               8.5 Termination for Good Reason In the Event of a Potential Change in Control.                    (a) The Employee shall have the right to terminate the Employee’s employment hereunder at anytime following a Potential Change in Control if after a Potential Change in Control there is a GoodReason event and such Good Reason event was the result of a request or direction given by a Personseeking to effectuate a Change in Control.                    (b) “Potential Change in Control” means (i) the Company enters into a definitiveagreement, the consummation of which would result in the occurrence of
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a Change in Control; or (ii) any Person publicly announces an intention to take actions which,if consummated, would constitute a Change in Control.               8.6 Severance Benefits. In the event of a termination of the Employee’s employmenthereunder without cause before or after a Change in Control pursuant to Section 8.3 or for GoodReason within twelve (12) months following a Change in Control pursuant to Section 8.4(a) orfollowing a Potential Change in Control pursuant to Section 8.5, the Employee shall be entitled toreceive the following:                    (a) All accrued but unpaid (as of the effective date of such termination) Salary and apro-rata percentage of the bonus (provided in Section 4.2) for the last fiscal year of the Companyprior to the date of the Employee’s termination provided that the Employee has complied with all ofhis/her obligations under this Agreement and continues to comply with all of his/her survivingobligations hereunder listed in Section 10. All the foregoing payments shall be paid withinthirty (30) days following the termination date. All Salary shall cease at the time of suchtermination, except as required under applicable law. Except as specifically set forth in thisSection 8, the Company shall have no liability or obligation hereunder by reason of or subsequentto such termination.                    (b) Severance pay in the form of a lump sum payment within sixty (60) days of suchtermination, in an amount equal to the present value of the Salary that the Employee would haveearned if the Employee had continued working for the Company during the twelve (12) month periodimmediately following the Employee’s date of termination, where such present value is to bedetermined using a discount rate equal to the applicable short-term federal rate prescribed underSection 1274(d) of the Code in effect for the month prior to the month in which the Employee’stermination of employment under Sections 8.3 or 8.4 occurs. Such payment shall be subject to allTaxes.                    (c) All Benefits to which he was entitled on the date preceding his/her termination for aperiod of twelve (12) additional months following termination, made in accordance with any termsapplicable to such Benefits. All reimbursements and in-kind benefits provided under this Section8.6(c), shall be made or provided in accordance with the requirements of Section 409A of the Code,including, where applicable, the requirement that (i) any reimbursement shall be for expensesincurred during the Employee’s lifetime (or during a shorter period of time specified in thisAgreement), (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided,during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefitsto be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will bemade on or before the last day of the calendar year following the year in which the expense isincurred (or such earlier date if specified in this Agreement), and (iv) the right to reimbursementor in-kind benefits is not subject to liquidation or exchange for another benefit.                    (d) Except as provided in subsections (a), (b) and (c) above, the Company shall have noliability or obligation by reason of or subsequent to the termination of the employmentrelationship between the Company and the Employee.
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                    (e) Notwithstanding anything in this Agreement to the contrary, in no event shall the Companybe obligated to pay or distribute to Employee any amount that constitutes nonqualified deferredcompensation within the meaning of Section 409A of the Code earlier than the earliest permissibledate under Section 409A of the Code that such amount could be paid without additional taxes orinterest being imposed under Section 409A of the Code.          9. **Representations, Warranties and Covenants of the Employee**.               9.1 Restrictions. The Employee represents and warrants to the Company that:                    (a) There are no restrictions, agreements or understandings whatsoever to which the Employeeis a party which would prevent or make unlawful the Employee’s execution of this Agreement or theEmployee’s employment hereunder, or which is or would be inconsistent or in conflict with thisAgreement or the Employee’s employment hereunder, or, except as set forth in any agreementspreviously provided to the Company, would prevent, limit or impair in any way the performance bythe Employee of the obligations hereunder; and                    (b) The Employee has disclosed to the Company all restraints, confidentiality commitments orother employment restrictions that he has with any other employer, person or entity.               9.2 Obligations to Former Employers. The Employee covenants that in connection withhis/her provision of services to the Company, he shall not breach any obligation (legal, statutory,contractual or otherwise) to any former employer or other person, including, but not limited toobligations relating to confidentiality and proprietary rights.               9.3 Obligations Upon Termination. Upon and after his/her termination or cessation ofemployment with the Company and until such time as no obligations of the Employee to the Companyhereunder exist, the Employee (i) shall provide a complete copy of this Agreement to anyprospective employer or other person, entity or association engaged in the Business, with whom orwhich the Employee proposes to be employed, affiliated, engaged, associated or to establish anybusiness or remunerative relationship prior to the commencement thereof and (ii) shall notify theCompany of the name and address of any such person, entity or association prior to his/heremployment, affiliation, engagement, association or the establishment of any business orremunerative relationship.          10. **Survival of Provisions**. The provisions of this Agreement set forth in Sections 5,6, 7, 8, 9, 10, 19 and 20 hereof shall survive the termination of the Employee’s employmenthereunder.          11. **Successors and Assigns**. This Agreement shall inure to the benefit of and bebinding upon the Company and the Employee and their respective successors, executors,administrators, heirs and/or assigns; provided that neither party shall make any assignment of
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this Agreement or any interest herein, by operation of law or otherwise, without the prior writtenconsent of the other party.          12. **Notice**. Any notice hereunder by either party shall be given by personal deliveryor by sending such notice by certified mail, return-receipt requested, or telecopied, addressed ortelecopied, as the case may be, to the other party at its address set forth below or at such otheraddress designated by notice in the manner provided in this section. Such notice shall be deemedto have been received upon the date of actual delivery if personally delivered or, in the case ofmailing, two (2) days after deposit with the U.S. mail, or, in the case of facsimiletransmission, when confirmed by the facsimile machine report. (a) if to the Company, to:    MiddleBrook Pharmaceuticals, Inc.20425 Seneca Meadows ParkwayGermantown, Maryland 20876Attention: Human ResourcesFacsimile: (301) 944-6700  (b) if to the Employee, to:    Susan P. Clausen, Ph.D.11204 Jeffro CourtIjamsville, Maryland 21754          13. **Entire Agreement; Amendments**. This Agreement contains the entire agreement andunderstanding of the parties hereto relating to the subject matter hereof, and merges andsupersedes all prior and contemporaneous discussions, agreements, amendments and understandings ofevery nature between the parties hereto relating to the employment of the Employee with theCompany. This Agreement may not be changed or modified, except by an agreement in writing signedby each of the parties hereto.          14. **Waiver**. The waiver of the breach of any term or provision of this Agreement shallnot operate as or be construed to be a waiver of any other or subsequent breach of this Agreement.          15. **Governing Law**. This Agreement shall be construed and enforced in accordance withthe laws of the State of Delaware, without regard to the principles of conflicts of laws of anyjurisdiction.          16. **Invalidity**. If any provision of this Agreement shall be determined to be void,invalid, unenforceable or illegal for any reason, the validity and enforceability of all of theremaining provisions hereof shall not be affected thereby. If any particular provision of thisAgreement shall be adjudicated to be invalid or unenforceable, such provision shall be deemedamended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, suchamendment to apply only to the operation of such provision in the particular jurisdiction in
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which such adjudication is made; provided that, if any provision contained in this Agreement shallbe adjudicated to be invalid or unenforceable because such provision is held to be excessivelybroad as to duration, geographic scope, activity or subject, such provision shall be deemed amendedby limiting and reducing it so as to be valid and enforceable to the maximum extent compatible withthe applicable laws of such jurisdiction, such amendment only to apply with respect to theoperation of such provision in the applicable jurisdiction in which the adjudication is made.          17. **Section Headings**. The section headings in this Agreement are for convenienceonly; they form no part of this Agreement and shall not affect its interpretation.          18. **Number of Days**. In computing the number of days for purposes of this Agreement,all days shall be counted, including Saturdays, Sundays and legal holidays; provided that, if thefinal day of any time period falls on a Saturday, Sunday or day which is a legal holiday inDelaware or Maryland, then such final day shall be deemed to be the next day which is not aSaturday, Sunday or legal holiday.          19. **Specific Enforcement**. The Employee acknowledges that the restrictions containedin Sections 5, 6, and 7 hereof are reasonable and necessary to protect the legitimate interests ofthe Company and its affiliates and that the Company would not have entered into this Agreement inthe absence of such restrictions. The Employee also acknowledges that any breach by him/her ofSections 5, 6, or 7 hereof will cause continuing and irreparable injury to the Company for whichmonetary damages would not be an adequate remedy. The Employee shall not, in any action orproceeding to enforce any of the provisions of this Agreement, assert the claim or defense that anadequate remedy at law exists. In the event of such breach by the Employee, the Company shall havethe right to enforce the provisions of Sections 5, 6, and 7 of this Agreement by seeking injunctiveor other relief in any court, and this Agreement shall not in any way limit remedies of law or inequity otherwise available to the Company.          20. **Consent to Suit**. Subject to the provisions of Section 21 hereof, any legalproceeding arising out of or relating to this Agreement shall be instituted in the Court ofChancery of New Castle County, or if such court does not have jurisdiction or will not acceptjurisdiction, in any state or federal court of general jurisdiction in the State of Delaware, andeach of the Company and the Employee hereby consents to the personal and exclusive jurisdiction ofsuch court and hereby waives any objection that either party may have to the laying of venue of anysuch proceeding and any claim or defense of inconvenient forum. If an action at law or in equityis necessary to enforce or interpret the terms of this Agreement, the prevailing party shall beentitled to recover, in addition to any other relief, reasonable attorneys’ fees, costs anddisbursements.          21. **Arbitration**. Subject to the last sentence of this Section 21, if any disputearises over the terms of this Agreement between the parties to this Agreement, either Employee orCompany may submit the dispute to binding arbitration within thirty (30) days after such disputearises, to be governed by the evidentiary and procedural rules of the American ArbitrationAssociation (Commercial Arbitration). Employee and Company shall mutually select one (1)arbitrator within ten (10) days after a dispute is submitted to arbitration. In the
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event that the parties do not agree on the identity of the arbitrator within such period, thearbitrator shall be selected by the American Arbitration Association. The arbitrator shall hold ahearing on the dispute in Wilmington, Delaware within thirty (30) days after having been selectedand shall issue a written opinion within fifteen (15) days after the hearing. The arbitrator shallalso decide on the allocation of the costs of the arbitration to the respective parties, butEmployee and Company shall each be responsible for paying the fees of their own legal counsel, iflegal counsel is obtained. Either Employee or Company, or both parties, may file the decision ofthe arbitrator as a final, binding and unappealable judgment in a court of appropriatejurisdiction. Notwithstanding the foregoing provisions of this Section 21 to the contrary, mattersin which an equitable remedy or injunctive relief is sought by a party, including but not limitedto the remedies referred to in Section 19 hereof, shall not be required to be submitted toarbitration, if the party seeking such remedy or relief objects thereto, but shall instead besubject to the provisions of Sections 19 and 20 hereof.          22. **Counterparts**. This Agreement may be executed in one or more counterparts, each ofwhich shall be deemed an original, and all of which together shall be deemed to be one and the sameinstrument.          23. **Authorization**. In connection with the execution of this Agreement, the Employeeshall be provided with a copy of the resolutions of the Board of Directors authorizing theexecution of this Agreement on behalf of the Company.***[SIGNATURES ON FOLLOWING PAGE]***
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          IN WITNESS WHEREOF, the parties have caused this Executive Employment Agreement to be executedthe day and year first written above.      MIDDLEBROOK PHARMACEUTICALS, INC.