Document:

Prepared by MerrillDirect

Exhibit 10.31

 

June 11, 2001

Ms. Sandra Wrobel

[address]

	 	Re:	Notification Under the Worker Adjustment and Retraining
  Notification Act (“WARN Act”) and Offer of Severance

Dear Sandy:

This is to inform you in advance that
IntraBiotics Pharmaceuticals, Inc. (the “Company”) is restructuring its
workforce at its facilities located at 2021
Stierlin Court, Mountain View, California and 1245 Terra Bella, Mountain
View, California.  This restructuring
constitutes a “mass layoff” under the WARN Act.

Due to this restructuring, you will be
laid off.  Your employment termination
is currently scheduled to occur on August 31, 2001 (the “Separation Date”),
sixty days from today.  Until the Separation
Date, you will remain an employee of the Company, and you will be paid your
current base salary (less all applicable deductions and withholdings) in
accordance with the Company’s normally scheduled payroll dates.  In addition, you will remain eligible for
those benefits provided under the Company’s ERISA benefit plans.

From now until the Separation Date, you
are neither expected nor required to report for work.  However, until the Separation Date, the Company reserves the
right to call you back to work either at your present position or at an
equivalent position.  If you refuse to
report for work after being notified, you will be subject to discipline up to
and including the termination of your employment and the cessation of any
further compensation or benefits.  There
are no bumping rights.  The layoff is
expected to be permanent.

Additionally, if on the Separation Date
you sign the general waiver and release of claims attached hereto as Exhibit A,
you will receive an amount equivalent to sixteen (16) weeks of your current
base salary, less all applicable deductions and withholdings plus a one-time
pre-tax payment equal to 10% of your annual salary or $23,500.  In addition, if you timely elect to continue
your health insurance benefits through COBRA coverage, the Company will pay for
COBRA coverage for September, October, November, and December 2001.  You will also receive acceleration of four
months vesting of your existing stock options. In other words, you will get the
benefit of any vesting that would have occurred through December 31, 2001.  All other terms of your options, including
any applicable exercise periods continue to be governed by the 2000 Equity
Incentive Plan and the terms of your option agreement thereunder.

If you have any questions, the name and
telephone number of the Company’s official to contact for further information
is:

Ray Mendonca

Director, Human Resources

IntraBiotics Pharmaceuticals, Inc.

(650) 567-6650

Pursuant to the Age Discrimination in Employment
Act, 29 U.S.C. Section 626(f)(1)(H), the Company provides disclosures
concerning the terms and eligibility for this termination program in
Exhibit B attached hereto.

I want to thank you personally for your
contributions to IntraBiotics Pharmaceuticals, Inc., and wish you luck in your
future endeavors.

Sincerely,

IntraBiotics Pharmaceuticals, Inc.

Kenneth Kelley, President & Chief Executive
Officer

Exhibit
A – General Waiver and Release Agreement

Exhibit B - Disclosure Under 29 U.S.C. § 626(f)(1)(H)Prepared by MerrillDirect

EXHIBIT 10.32

***
= Certain confidential information contained in this document, marked by
asterisks, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.

RELEASE AGREEMENT

This Release Agreement (“Agreement”),
dated and effective as of July 27, 2001 (the “Effective Date”), is by and
between IntraBiotics Pharmaceuticals, Inc., a Delaware corporation,
(“IntraBiotics”), and Diversa Corporation, a Delaware corporation (“Diversa,”
and, together with IntraBiotics, the “Parties”).  Defined terms used but not otherwise defined hereunder shall have
the meanings given them in that certain Drug Discovery, Development, and License
Agreement, dated as of January 6, 2001, between Diversa and IntraBiotics
(“License Agreement”).

RECITALS

             WHEREAS,
Diversa and IntraBiotics entered into the License Agreement as of January 6,
2001; and

             WHEREAS,
Diversa and IntraBiotics entered into that certain binding term sheet (the
“Term Sheet”) dated as of June 27, 2001 relating to the termination of the
License Agreement and the mutual release of the obligations of both
IntraBiotics and Diversa under such License Agreement; and

             WHEREAS,
the Term Sheet contemplated that the Parties would subsequently execute and
deliver a definitive termination agreement, containing the terms and conditions
set forth in the Term Sheet and other terms and conditions consistent the Term
Sheet, that would supersede the Term Sheet; and

             WHEREAS,
the Parties desire to set forth herein the terms governing such definitive
termination agreement.

             NOW,
THEREFORE, in consideration of
the mutual covenants set forth in this Agreement, the receipt and sufficiency
of which the Parties hereby acknowledge, the Parties hereby agree as follows:

             1.          Payments by IntraBiotics to Diversa.  On     
***    , IntraBiotics paid
Diversa the non-refundable, non-creditable sum of                            ***     
            ***      .  On                  ***          , IntraBiotics shall
pay Diversa the non-refundable, non-creditable sum of                            ***                    via
wire transfer in immediately available funds in accordance with the following
information:

	Bank
  of America
	***
	***
	450
  B Street
	San
  Diego, CA 92101

             2.          Issuance of Warrants to Diversa.  On the date hereof, IntraBiotics shall issue
to Diversa warrants to purchase 700,000 shares of common stock of IntraBiotics
of (collectively, the “Warrants”) pursuant to the form of Warrant attached as
Exhibit A hereto.  The shares of
IntraBiotics’s common stock into which the Warrants are exercisable are subject
to a Registration Rights Agreement between IntraBiotics and Diversa in the form
attached as Exhibit B hereto.

             3.          Ownership of R&D Program Data & Materials.  Diversa shall solely own all of the data and
materials generated by the research activities performed by employees and
consultants of Diversa pursuant to the R&D Program.

             4.          Assignment of IntraBiotics’s Assays to Diversa.  Diversa shall solely own each and every
primary, secondary, and tertiary assay used or discussed in the Work Plan,
which assays are described in Exhibit C hereto (the “Assays”).  To that end, IntraBiotics hereby assigns to
Diversa such right, title in interest in and to the Assays as IntraBiotics may
have.

             5.          Mutual Releases.

                           a.          Diversa Release.  In consideration of the obligations,
warranties and representations of Diversa contained hereunder and contingent
upon the timely performance by IntraBiotics of its obligations hereunder,
Diversa hereby releases, acquits, and forever discharges IntraBiotics, its
parents and subsidiaries, and their officers, directors, agents, servants,
employees, attorneys, shareholders, partners, successors, assigns, affiliates,
customers, and clients of and from any and all claims liabilities, demands,
causes of action, costs, expenses, attorneys’ fees, damages, indemnities and
obligations of every kind and nature, in law, equity, or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, arising out of
or in any way related to agreements, acts or conduct at any time prior to the
date of this Term Sheet, including, but not limited to: all such claims and
demands directly or indirectly arising out of or in any way connected with the
License Agreement; and claims pursuant to any federal, state or local law or
cause of action including, but not limited to, tort law; contract law; fraud;
defamation; and breach of the implied covenant of good faith and fair
dealing.  In giving this release, which
includes claims which may be unknown to Diversa at present, Diversa hereby
acknowledges that it has read and understands Section 1542 of the Civil Code of
the State of California which reads as follows:

                           “A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

                           Diversa
hereby expressly waives and relinquishes all rights and benefits under Section
1542 of the Civil Code of the State of California and any law or legal principle
of similar effect in any jurisdiction with respect to claims released hereby.

                           b.          IntraBiotics Release.  In consideration of the obligations,
warranties and representations of IntraBiotics contained hereunder,
IntraBiotics hereby releases, acquits, and forever discharges Diversa, its
parents and subsidiaries, and their officers, directors, agents, servants,
employees, attorneys, shareholders, partners, successors, assigns, affiliates,
customers, and clients of and from any and all claims liabilities, demands,
causes of action, costs, expenses, attorneys’ fees, damages, indemnities and
obligations of every kind and nature, in law, equity, or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, arising out of
or in any way related to agreements, acts or conduct at any time prior to the
date of this Term Sheet, including, but not limited to: all such claims and
demands directly or indirectly arising out of or in any way connected with the
License Agreement; and claims pursuant to any federal, state or local law or
cause of action including, but not limited to, tort law; contract law; fraud;
defamation; and breach of the implied covenant of good faith and fair
dealing.  In giving this release, which
includes claims which may be unknown to IntraBiotics at present, IntraBiotics
hereby acknowledges that it has read and understands Section 1542 of the Civil
Code of the State of California which reads as follows:

                           “A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

                           IntraBiotics  hereby expressly waives and relinquishes all
rights and benefits under Section 1542 of the Civil Code of the State of
California and any law or legal principle of similar effect in any jurisdiction
with respect to claims released hereby.

             6.          Termination;
Survival of Obligations. 
Except as set forth herein, the License Agreement is terminated.  Only the confidentiality provisions of
Sections 7.1, 7.2, and 7.3 of the License Agreement (and any applicable
provisions of the Confidential Disclosure Agreement between Diversa and
IntraBiotics executed on July 17, 2000 that do not contradict the terms of
Sections 7.1, 7.2 or 7.3 of the License Agreement) shall survive for a period
of ten (10) years.

             7.          No
Admission of Liability. 
Diversa and IntraBiotics hereby acknowledge that this is a compromise
settlement of various matters, and that the payments in consideration of this
Agreement shall not be construed to be an admission of any liability or
obligation by either party to the other party or to any other person
whomsoever.

             8.          Publicity;
Regulatory Filings. 
Diversa and IntraBiotics each acknowledge and agree that neither the
Term Sheet or this Agreement nor the terms contained therein or herein shall be
considered ether confidential or “Confidential Information” as such term is
defined in the License Agreement; provided, however, that information
regarding the Assays shall be considered Confidential Information under the
terms of the License Agreement and, notwithstanding the exception in Section
7.3.3 of the License Agreement, IntraBiotics shall have the obligations of a
Receiving Party with respect to information regarding the Assays and Diversa
shall be considered a Disclosing Party with respect to information regarding
the Assays as such terms are defined in the License Agreement.  Accordingly, each of Diversa and
IntraBiotics shall be permitted to disclose the existence of the Term Sheet or
this Agreement and the terms thereof or hereof, except disclosures by
IntraBiotics with respect to the Assays, in such communications as such party
shall determine in its sole discretion, including, without limitation (i) in
one or more press releases and (ii) in one or more filings with the Securities
and Exchange Commission (or any other governmental agency, such as the Federal
Trade Commission, with which the License Agreement, Term Sheet, and/or
Agreement is required to be provided or filed by Diversa and/or IntraBiotics);
provided, however, that IntraBiotics shall not issue any press release
regarding the Term Sheet, this Agreement, or the termination of the License
Agreement without the express written consent of Diversa to the content of such
press release.

             9.          General
Terms.  This Agreement
shall be governed by and construed in accordance with the laws of the State of
California without regard to provisions governing conflicts of law.  This Agreement is not assignable in part or
in whole by any party without the prior written consent of the other party;
provided, however, that either party may assign this Agreement to its
affiliates or to a successor by merger or sale of all or substantially all of
its business to which this Agreement relates. 
The terms of this Agreement shall inure to the benefit of and be binding
upon the parties and their respective successors and assigns.  The terms and conditions of this Agreement
constitute the entire agreement between Diversa and IntraBiotics and supersede
all previous negotiations or agreements, either oral or written, between the
parties with respect to the subject matter of this Agreement, including,
without limitation, the Term Sheet and the License Agreement.  This Agreement shall not be amended,
supplemented or abrogated other than by a written instrument signed by the
authorized representative of each Party. 
The failure of either Party to enforce at any time any of the provisions
of this Agreement, or any rights in respect of it, or to exercise any election
provided in it, shall in no way be considered to be a waiver of such
provisions, rights or elections, and shall in no way affect the validity of
this Agreement.  If any action at law or
in equity is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys’ fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.  In the event that any
provision of this Agreement is, for any reason, held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision hereof, and the parties shall negotiate in good
faith to modify this Agreement to preserve (to the extent possible) their
original intent.  Each party warrants
that it has the authority to enter into this Agreement on the basis of the
terms and conditions herein and that it has not made any other agreement
inconsistent with its obligations under this Agreement.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.

(signature
page follows)

 

IN WITNESS
WHEREOF, the undersigned have duly executed and delivered this Agreement effective
as of the date first above written.

	 	DIVERSA
  CORPORATION
	 	 
	 	By:	/s/  KARIN EASTHAM
	 	 	

	 	 
	 	Name:	Karin
  Eastham
	 	 	

	 	 
	 	Title:	Senior Vice President, Finance and

  Chief Financial Officer
	 	 	

	 	 
	 	INTRABIOTICS
  PHARMACEUTICALS, INC.
	 	 
	 	By:	/s/  KENNETH J. KELLEY
	 	 	

	 	 
	 	Name:	Kenneth J. Kelley
	 	 	

	 	 
	 	Title:	President and Chief Executive Officer
	 	 	

Exhibit A

Warrant

Exhibit
B

Registration
Rights Agreement

Exhibit C

Assays
Assigned to Diversa

 

***

***

***

***
= Certain confidential information contained in this document, marked by
asterisks, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.

Document
Number:  386048

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