ex1036.htm


    Exhibit
      10.36

     

     

    SCHEDULE
      B

     

    ASPREVA
      PHARMACEUTICALS CORPORATION

     

    As
      of July 10, 2007

    J.
      William Freytag, Ph.D.

    1203-4464
      Markham Street

    Victoria,
      British Columbia

    Canada
      V8Z 7X8

    
       

      Dear
        Bill:

       

      Re:
        Change in Control Agreement 

    

     

    Aspreva
      Pharmaceuticals Corporation (the “Corporation”) considers it
      essential to the best interests of its members to foster the continuous
      employment of its senior executive officers. In this regard, the Board of
      Directors of the Corporation (the “Board”) has determined that
      it is in the best interests of the Corporation and its members that appropriate
      steps should be taken to reinforce and encourage management’s continued
      attention, dedication and availability to the Corporation in the event of a
      Potential Change in Control (as defined in Section 3), without being distracted
      by the uncertainties which can arise from any possible changes in control of
      the
      Corporation.

     

    In
      order to induce you to agree to remain in the employ of the Corporation, such
      agreement evidenced by the employment agreement entered into as of the date
      of
      this Agreement between you and the Corporation (the “Employment
      Agreement”) and in consideration of your agreement as set forth in
      Section 3 below, the Corporation agrees that you shall receive and you agree
      to
      accept the severance and other benefits set forth in this Agreement should
      your
      employment with the Corporation be terminated subsequent to a Change in Control
      (as defined in Section 2) in full satisfaction of any and all claims that now
      exist or then may exist for remuneration, fees, salary, bonuses or severance
      arising out of or in connection with your employment by the Corporation or
      the
      termination of your employment:

     

    
      	
              1.

            	
              Term
                of Agreement.

            


    

     

    This
      Agreement shall be in effect for a term commencing on the Effective Date of
      the
      Employment Agreement (as therein defined) and ending on the date of termination
      of the Employment Agreement.

     

    
      	
              2.

            	
              Definitions.

            


    

     

    
      	
               

            	
              (a)

            	
              “Affiliate”
                means a corporation that is an affiliate of the Corporation under
                the
                Securities Act (British Columbia), as amended from time to
                time.

            


    

     

    
      	
               

            	
              (b)

            	
              “Change
                in Control” of the Corporation shall be deemed to have
                occurred:

            


    

     

    
      	
               

            	
              (i)

            	
              if
                a merger, amalgamation, arrangement, consolidation, reorganization
                or
                transfer takes place in which Equity Securities of the Corporation
                possessing more than 50% of the total combined voting power of the
                Corporation’s outstanding Equity Securities are acquired by a person or
                persons different from the persons holding those Equity Securities
                immediately prior to such transaction, and the composition of the
                Board
                following such transaction is such that the directors of the Corporation
                prior to the transaction constitute less than 50% of the Board membership
                following the transaction, except that no Change in Control will
                be deemed
                to 

            


    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                 

              	
                occur
                  if such merger, amalgamation, arrangement, consolidation, reorganization
                  or transfer is with any subsidiary or subsidiaries of the
                  Corporation;

              


      

       

    

    
      	
               

            	
              (ii)

            	
              if
                any person, or any combination of persons (different from those person(s)
                holding Equity Securities prior to the date hereof) acting jointly
                or in
                concert by virtue of an agreement, arrangement, commitment or
                understanding shall acquire or hold, directly or indirectly, 50%
                or more
                of the voting rights attached to all outstanding Equity Securities;
                or

            


    

     

    
      	
               

            	
              (iii)

            	
              if
                any person, or any combination of persons (different from those person(s)
                holding Equity Securities prior to the date hereof) acting jointly
                or in
                concert by virtue of an agreement, arrangement, commitment or
                understanding shall acquire or hold, directly or indirectly, the
                right to
                appoint a majority of the directors of the Corporation;
                or

            


    

     

    
      	
               

            	
              (iv)

            	
              if
                the Corporation sells, transfers or otherwise disposes of all or
                substantially all of its assets, except that no Change of Control
                will be
                deemed to occur if such sale or disposition is made to a subsidiary
                or
                subsidiaries of the Corporation.

            


    

     

    provided
      however, that a Change in Control shall not be deemed to have occurred if such
      Change in Control results solely from the issuance of Equity Securities in
      connection with a bona fide financing or series of financings by the
      Corporation.

     

    
      	
               

            	
              (c)

            	
              “Base
                Salary” shall mean the annual base salary, as referred to in Section 3
                (Base Salary), and as adjusted from time to time in accordance with
                Section 4 (Annual Review), of the Employment
                Agreement.

            


    

     

    
      	
               

            	
              (d)

            	
              “Bonus”
                shall mean the bonus referred to in Section 5 (Performance Bonus)
                of the
                Employment Agreement.

            


    

     

    
      	
               

            	
              (e)

            	
              “Cause”
                shall have the meaning set out in Section 19 (Termination by the
                Corporation for Cause) of the Employment
                Agreement.

            


    

     

    
      	
               

            	
              (f)

            	
              “Date
                of Termination” shall mean, if your employment is terminated, the date
                specified in the Notice of
                Termination.

            


    

     

    
      	
               

            	
              (g)

            	
              “Equity
                Security” in respect of a security of the Corporation, shall have the
                meaning ascribed thereto in Part II of the Securities Act
                (British Columbia), as it existed on the date of this Agreement,
                and also
                means any security carrying the right to convert such security into,
                exchange such security for, or entitling the holder to subscribe
                for, any
                equity security, or into or for any such convertible or exchangeable
                security or security carrying a subscription
                right.

            


    

     

    
      	
               

            	
              (h)

            	
              “Good
                Reason” shall mean the occurrence of one or more of the following events,
                without your express written consent, within 12 months of Change
                in
                Control:

            


    

     

    
      	
               

            	
              (i)

            	
              a
                material change in your status, position, authority or responsibilities
                that does not represent a promotion from or represents an adverse
                change
                from your status, position, authority or responsibilities in effect
                immediately prior to the Change in
                Control;

            


    

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (ii)

            	
              a
                material reduction by the Corporation, in the aggregate, in your
                Base
                Salary, or incentive, retirement, health benefits, bonus or other
                compensation plans provided to you immediately prior to the Change
                in
                Control, unless an equitable arrangement has been made with respect
                to
                such benefits in connection with a Change in
                Control;

            


    

     

    
      	
               

            	
              (iii)

            	
              a
                failure by the Corporation to continue in effect any other compensation
                plan in which you participated immediately prior to the Change in
                Control
                (except for reasons of non-insurability), including but not limited
                to,
                incentive, retirement and health benefits, unless an equitable arrangement
                has been made with respect to such benefits in connection with a
                Change in
                Control;

            


    

     

    
      	
               

            	
              (iv)

            	
              any
                request by the Corporation or any affiliate of the Corporation that
                you
                participate in an unlawful act; or

            


    

     

    
      	
               

            	
              (v)

            	
              any
                purported termination of your employment by the Corporation after
                a Change
                in Control which is not effected pursuant to a Notice of Termination
                satisfying the requirements of clause (i) below and for the purposes
                of this Agreement, no such purported termination shall be
                effective.

            


    

     

    
      	
               

            	
              (i)

            	
              “Notice
                of Termination” shall mean a notice, in writing, communicated to the other
                party in accordance with Section 6 below, which shall indicate the
                specific termination provision in this Agreement relied upon and
                shall set
                forth in reasonable detail the facts and circumstances claimed to
                provide
                a basis for termination of your employment under the provision so
                indicated.

            


    

     

    
      	
               

            	
              (j)

            	
              “Potential
                Change in Control” of the Corporation shall be deemed to have occurred
                if:

            


    

     

    
      	
               

            	
              (i)

            	
              the
                Corporation enters into an agreement, the consummation of which would
                result in the occurrence of a Change in
                Control;

            


    

     

    
      	
               

            	
              (ii)

            	
              any
                person (including the Corporation) publicly announces an intention
                to take
                or to consider taking actions which if consummated would constitute
                a
                Change in Control; or

            


    

     

    
      	
               

            	
              (iii)

            	
              the
                Board adopts a resolution to the effect that, for the purposes of
                this
                Agreement, a Potential Change in Control of the Corporation has
                occurred.

            


    

     

    
      	
              3.

            	
              Potential
                Change in Control.

            


    

     

    You
      agree that, in the event of a Potential Change in Control of the Corporation
      occurring after the Effective Date, and until 12 months after a Change in
      Control, subject to your right to terminate your employment by issuing and
      delivering a Notice of Termination for Good Reason, you will continue to
      diligently carry out your duties and obligations, on the terms set out in the
      Employment Agreement.

     

    
      	
              4.

            	
              Compensation
                Upon Termination Following Change in
                Control

            


    

     

    Subject
      to compliance by you with Section 3, upon your employment terminating pursuant
      to a Notice of Termination within 12 months after a Change in Control, the
      Corporation agrees that you shall receive and you agree to accept, subject
      to
      your prior resignation as a director of the Corporation at the request of the
      Board, the following payments in full satisfaction of any and all claims you
      may
      have or then may 

     

    
      
        
        

      

      
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          3
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    have
      against the Corporation, for remuneration, fees, salary, benefits, bonuses
      or
      severance, arising out of or in connection with your employment by the
      Corporation or the termination of your employment:

     

    
      	
               

            	
              (a)

            	
              If
                your employment shall be terminated by the Corporation for Cause
                or by you
                other than for Good Reason, the terms of the Employment Agreement
                shall
                govern and the Corporation shall have no further obligations to you
                under
                this Agreement.

            


    

     

    
      	
               

            	
              (b)

            	
              If
                your employment by the Corporation shall be terminated by you for
                Good
                Reason or by the Corporation other than for Cause, then, subject
                to your
                execution of an effective release of claims against the Corporation,
                you
                shall be entitled to the payments and benefits provided
                below:

            


    

     

    
      	
               

            	
              (i)

            	
              subject
                to the withholding of all applicable statutory deductions, the Corporation
                shall pay you, within 7 days after the effective date of your executed
                release of all claims against the Corporation, but in no case later
                than
                March 15 of the year following the year in which the termination
                occurs, a
                lump sum equal to 18 months’ Base Salary, as referred to in Section 3
                (Base Salary) and as adjusted from time to time in accordance with
                Section
                4 (Annual Review) of the Employment Agreement, plus any guaranteed
                portion
                of any Bonus;

            


    

     

    
      	
               

            	
              (ii)

            	
              to
                the extent permitted by law and subject to the terms and conditions
                of any
                benefit plans in effect from time to time, the Corporation shall
                maintain,
                at no cost to you,(or reimburse you for the cost of continuing) the
                health, medical and dental benefits set out in Section 6 (Benefits)
                of the
                Employment Agreement during the 18 month period (or
                such shorter period of time until you become eligible for comparable
                benefits from a subsequent employer) and will reimburse you for income
                taxes that you may be required to pay with respect to such continued
                group
                benefit coverage to the extent that such coverage is considered a
                taxable
                benefit.  Such reimbursement for taxes will be made in four lump
                sum payments as follows:  as to the taxes relating to up to the
                first 3 months of continued health coverage, payment shall be made
                on the
                date that is two months after the termination date; as to the taxes
                relating to up to the next 4 months of continued health coverage,
                payment
                shall be made on the date that is 7 months after the termination
                date; as to the taxes relating to up to the next 7 months of continued
                health coverage, payment shall be made on the date that is 13 months
                after
                the termination date; and as to the taxes relating to up to the remaining
                4 months of continued health coverage, payment shall be made on the
                date
                that is 17 months after the termination
                date.;

            


    

     

    
      	
               

            	
              (iii)

            	
              the
                Corporation shall arrange for you to be provided with such outplacement
                career counselling services as are reasonable and appropriate, to
                assist
                you in seeking new executive level employment;
                and

            


    

     

    
      	
               

            	
              (iv)

            	
              all
                incentive stock options and trust shares granted to you by the Corporation
                under any stock option and/or trust share agreement that is entered
                into
                between you and the Corporation and is outstanding at the time of
                termination of your employment, which stock options and or trust
                shares
                have not yet vested, shall immediately vest upon the termination
                of your
                employment and shall be fully exercisable by you in accordance with
                the
                terms of the agreement or agreements under which such options were
                granted.

            


    

     

    
      
        
        

      

      
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          4
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    It
      is intended that (1) each installment of the payments provided under this
      Section 4 is a separate “payment” for purposes of Section 409A of the United
      States Internal Revenue Code of 1986 (the “Code”), (2) that the payments
      satisfy, to the greatest extent possible, the exemptions from the application
      of
      Section 409A provided under of Treasury Regulation 1.409A-1(b)(4),
      1.409A-1(b)(5), 1.409A-1(b)(9)(iii), and
      1.409A-1(b)(9)(v).  Notwithstanding the foregoing, if the Corporation
      (or, if applicable, the successor entity thereto) determines that the payments
      provided under this Agreement constitute “deferred compensation” under Section
      409A of the Code (together, with any international, state or local law of
      similar effect, “Section 409A”) and you are a
“specified employee” of the Corporation or any successor entity thereto
      at the
      relevant date, as such term is defined in Section 409A(a)(2)(B)(i) (a
“Specified Employee”), then, solely to the extent
      necessary to avoid the incurrence of the adverse personal tax consequences
      under
      Section 409A, the timing of the payments shall be delayed as
      follows:  on the earliest to occur of (i) the date that is six months
      and one day after the termination date or (ii) the date of your death (such
      earliest date, the “Delayed Initial Payment Date”),
      the Corporation (or the successor entity thereto, as applicable) shall (A)
      pay
      you a lump sum amount equal to the sum of the payments that you would otherwise
      have received through the Delayed Initial Payment Date if the commencement
      of
      the payment of the payments had not been delayed pursuant to this Section 4
      and
      (B) commence paying the balance of the payments in accordance with the
      applicable payment schedules set forth above.  

    


     

    If
      any payment, distribution or benefit you would receive pursuant to a Change
      in
      Control from the Corporation or otherwise, but determined without regard to
      any
      additional payment required under this Section 4 (the
“Payment”) would (i) constitute a “parachute payment”
within the meaning of Section 280G of the Internal Revenue
      Code of 1986, as
      amended (the “Code”), and (ii) be subject to the excise
      tax imposed by Section 4999 of the Code or any interest or penalties payable
      with respect to such excise tax (such excise tax, together with any such
      interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then you shall be entitled to receive from the
      Corporation an additional payment (the “Gross-Up Payment”) in
      an amount that shall fund the payment by you of any Excise Tax on the Payment
      as
      well as all income and employment taxes imposed on the Gross-Up Payment, any
      Excise Tax imposed on the Gross-Up Payment and any interest or penalties imposed
      with respect to income and employment taxes imposed on the Gross-Up
      Payment.

     

    The
      accounting firm engaged by the Corporation for general audit purposes as of
      the
      day prior to the effective date of Change in Control shall perform the foregoing
      calculations.  If the accounting firm so engaged by the Corporation is
      serving as accountant or auditor for the individual, entity or group effecting
      the Change in Control, the Corporation shall appoint a nationally recognized
      accounting firm to make the determinations required hereunder.  The
      Corporation shall bear all expenses with respect to the determinations by such
      accounting firm required to be made hereunder.

     

    The
      accounting firm engaged to make the determinations hereunder shall provide
      its
      calculations, together with detailed supporting documentation, to the
      Corporation and you within fifteen calendar days after the date on which your
      right to a Payment is triggered (if requested at that time by the Corporation
      or
      you) or such other time as requested by the Corporation or you.  If
      the accounting firm determines that no Excise Tax is payable with respect to
      a
      Payment, it shall furnish the Corporation and you with an opinion reasonably
      acceptable to you that no Excise Tax will be imposed with respect to such
      Payment.  If the accounting firm determines that an Excise Tax is
      payable, it shall furnish the Corporation and you with an opinion setting forth
      the amount of the Excise Tax due and the amount of the Gross-Up Payment due,
      and
      such Gross-Up Payment shall be paid to you on the later of (i) the date that
      is
      six months and one day after the termination date and (ii) the date that is
      four
      months after the date on which the accounting firm makes its determination
      that
      the Excise Tax is due.  Any good faith determinations of the
      accounting firm made hereunder shall be final, binding and conclusive upon
      the
      Corporation and you.

     

    
      
        
        

      

      
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          5
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    If
      requested by the Board, upon your employment terminating pursuant to a Notice
      of
      Termination within 12 months after a Change in Control, you agree to resign
      as a
      director of the Corporation.  You shall not be required to mitigate
      the amount of any payment provided for in this Section 4 by seeking other
      employment or otherwise, nor will any sums actually received be
      deducted.

     

    
      	
              5.

            	
              Binding
                Agreement.

            


    

     

    This
      Agreement shall enure to the benefit of and be enforceable by your personal
      or
      legal representatives, executors, administrators, successors, heirs,
      distributees, devisees and legatees. If you die while any amount would still
      be
      payable to you under this Agreement if you had continued to live, that amount
      shall be paid in accordance with the terms of this Agreement to your devisee,
      legatee or other designee or, if there is no such designee, to your
      estate.

     

    
      	
              6.

            	
              Notices.

            


    

     

    All
      notices and other communications that are required or permitted by this
      Agreement must be in writing and shall be hand delivered or sent by express
      delivery service or certified or registered mail, postage prepaid, or by
      facsimile transmission (with written confirmation copy by registered mail)
      to
      the parties at the addresses indicated below.

     

    If
      to Aspreva:

    Aspreva
      Pharmaceuticals Corporation

    c/o
      Farris Vaughan Wills & Murphy LLP

    2500-700
      West Georgia Street

    Vancouver,
      British Columbia

    Canada  V7Y
      1B3 
      Attention:
        R. Hector MacKay-Dunn, Q.C. 

    

     

    If
      to Dr. J. William Freytag:

    J.
      William Freytag, Ph.D.

    1203-4464
      Markham Street

    Victoria,
      British Columbia

    Canada
      V8Z 7X8

     

    Any
      such notice shall be deemed to have been received on the earlier of the date
      actually received or the date five (5) days after the same was posted or
      sent.  Either party may change its address or its facsimile number by
      giving the other party written notice, delivered in accordance with this
      Section.

     

    
      	
              7.

            	
              Modification:
                Amendments: Entire
                Agreement.

            


    

     

    This
      Agreement may not be modified, waived or discharged unless such waiver,
      modification or discharge is agreed to in writing and signed by you and such
      officer as may be specifically designated by the Board. No waiver by either
      party at any time of any breach by the other party of, or compliance with,
      any
      condition or provision of this Agreement to be performed by such other party
      will be deemed a waiver of similar or dissimilar provisions or conditions at
      the
      same or at any prior or subsequent time. Except as set forth in your Employment
      Agreement, no agreements or representations, oral or otherwise, express or
      implied, with respect to the subject matter hereof have been made by either
      party which are not expressly set forth in this Agreement.

     

    
      
        
        

      

      
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          6
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              8.

            	
              Governing
                Law.

            


    

     

    This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the Province of British Columbia and applicable laws of Canada and the parties
      hereto attorn to the exclusive jurisdiction of the provincial and federal courts
      of such province.

     

    
      	
              9.

            	
              Validity.

            


    

     

    The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this Agreement,
      which shall remain in full force and effect.

     

    
      	
              10.

            	
              No
                Employment or Service
                Contract

            


    

     

    Nothing
      in this Agreement shall confer upon you any right to continue in the employment
      of the Corporation for any period of specific duration or interfere with or
      otherwise restrict in any way the rights of the Corporation or you, which rights
      are hereby expressly reserved by each, to terminate your employment at any
      time
      for any reason whatsoever, with or without cause.

     

    If
      the foregoing sets forth our agreement on this matter, kindly sign and return
      to
      the Corporation a copy of this letter.

    
       

      
        	 	 
                
                Yours
                  truly, 

              
	 	 
	 	ASPREVA
                PHARMACEUTICALS CORPORATION 
	 	By:           	/s/
                Ron Hunt
	 	 	
                Ron
                  Hunt, Chair, Compensation Committee

              


      

       

      Accepted
        and agreed to by J. William Freytag as of July 10, 2007

                                                      


       

      
        	/s/
                J. William Freytag
	
                J.
                  William Freytag, Ph.D.

              


      

      


      
        
          
          

        

        
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