Document:

Exhibit
10.40

 

 

 

October 5,
2007

 

Harry J. Leonhardt, Esq.

1176
Via Zamia

Encinitas, CA 92024-6446

 

Dear Harry:

 

This letter (the “Agreement”)
sets forth the terms of your resignation as an officer of, and your continuing
consulting relationship with, Senomyx, Inc. (the “Company”).

 

1.             Separation. 
You hereby resign from the position of Senior Vice President, General
Counsel & Corporate Secretary of the Company, Compliance Officer, and
all other positions with the Company, and the Company hereby accepts such
resignation, effective as of October 5, 2007 (the “Separation Date”).    You acknowledge your continuing obligations
under your Proprietary Information and Inventions Agreement, a copy of which is
attached hereto as Exhibit A.  You
agree that your Continuous Service (as defined in the Company’s Equity
Incentive Plan) will terminate on the Separation Date.

 

2.             Accrued Salary. 
On or prior to the Separation Date, the Company will pay to you all
accrued and unpaid salary earned through the Separation Date, less applicable
deductions and withholdings.

 

3.             New Consulting Agreement. 
You agree to serve as a consultant to the Company under the terms
specified below.

 

(a)           Consulting Period. 
Your service as a consultant hereunder shall commence concurrently with
the effectiveness of your resignation as an officer of the Company and end on October 5,
2009, unless earlier terminated as provided below (the “Consulting Period”).

 

(b)           Consulting Services. 
During the Consulting Period you agree to provide general business and
legal consulting to the Company (the “Consulting Services”).  Upon request by the Company, and at times
mutually agreed upon, you shall devote up to a maximum of ten (10) days
(as requested by the Company) annually to providing consulting services to the
Company pursuant to this Agreement.  You
agree to perform the Consulting Services at the 

 

 

 

 

Company’s principal place
of business or at other places upon mutual agreement of between you and an
authorized representative of the parties. You also agree to perform a
reasonable amount of informal consultation with the Company over the telephone
or otherwise.  You agree to exercise the
highest degree of professionalism and utilize your expertise and talents in performing
the Consulting Services.  The Company
acknowledges that during the Consulting Period you will be an employee of
Amylin Pharmaceuticals; that you will be subject to their respective policies,
as they may be revised from time to time, including, among others, policies
concerning consulting, conflicts of interest, and intellectual property.

 

(c)           Compensation; Expenses.  Your sole compensation for
performing the Consulting Services shall be as follows:  (a) an annual retainer for the first
year of Consulting Services in the amount of Twenty Five Thousand Dollars
($25,000), payable in advance on the Separation Date; and (b) a quarterly
retainer for the second year of Consulting Services in the amount of Six
Thousand Two Hundred and Fifty Dollars ($6,250.00), payable quarterly in
advance.  The Company will also reimburse you for all
pre-approved business expenses reasonably incurred on behalf of the Company
during the Consulting Period pursuant to its established expense reimbursement
policy.

 

(d)           Independent
Contractor Status.  You agree
that during the Consulting Period (i) you will be an independent
contractor to the Company and not an employee of the Company, and (ii) the
Company will not withhold or make payments for state or federal income tax or
social security, make unemployment insurance or disability insurance
contributions, or obtain workers’ compensation insurance on your behalf.  With respect to
the consulting fees, the Company will not make any withholdings or deductions,
and will issue you a form 1099.  You
shall be responsible for all taxes with respect to the Consulting
Services.  You understand that
except as provided in this Agreement, you will not be entitled to receive any
of the benefits the Company provides to its employees generally.  You will have no responsibilities or authority
as a consultant to the Company other than as provided in this Agreement.  You agree not to represent or purport to
represent the Company in any manner whatsoever to any third party unless
authorized in writing by an authorized officer of the Company to do so.

 

(e)           No Solicitation. 
During the Consulting Period, you will not personally or through others
recruit, solicit or induce any employee of the Company to terminate his or her
employment with the Company.

 

(f)            Termination of Consulting Services.  The term of this Agreement shall continue
until October 5, 2009, unless terminated earlier as follows:

 

(i)            Company may
terminate the Agreement in the event of your gross negligence, gross
misconduct, dishonesty or willful and material breach of the Agreement (“cause”),
provided that the Consultant has not remedied such breach within thirty (30)
days of receipt of written notice thereof by the non-breaching party.

 

(ii)           The Agreement will
automatically terminate upon dissolution or cessation of business of the
Company; or

 

(iii)          The Agreement will
automatically terminate thirty (30) days after your death or disability.  As used in this Agreement, the term “disability”
shall 

 

 

 

mean inability,
due to physical or mental disability, for a period of ninety (90) days, whether
or not consecutive, during any three hundred sixty (360) day period to perform
the services contemplated under this Agreement.

 

Termination or expiration of this Agreement shall not
affect: (i) the Company’s obligation to pay for services previously
performed by you or expenses reasonably incurred by you for which you are
entitled to reimbursement under Section 3(c); or (ii) your continuing
obligations to the Company under Sections 6-13 below.

 

4.             Other Compensation Or Benefits. 
You acknowledge that, except as expressly provided in this Agreement,
you will not receive any additional compensation, severance or benefits after
the Separation Date.

 

5.             Expense Reimbursements. 
You agree that within 30 days after the Separation Date, you will submit
your final documented expense reimbursement statement reflecting all business
expenses you incurred through the Separation Date, if any, for which you seek
reimbursement with respect to your Company employment.  The Company will reimburse you for these
expenses pursuant to its regular business practices.

 

6.             Return Of Company Property. 
You agree that, within 30 days after the Separation Date, you will
return to the Company all Company documents and other Company property in your
possession or control, including, but not limited to files, notes, memoranda,
correspondence, agreements, notebooks, records, reports, tangible property and
equipment; provided, however,
that during the Consulting Period only, the Company will permit you to retain,
receive, and/or use any documents, equipment and/or information reasonably
necessary to perform the Consulting Services, all of which documents, equipment
and information you must return to the Company within 30 days after the
termination or expiration of the Consulting Period.

 

7.             Proprietary Information
Obligations; Consulting Services Work Product.

 

(a)           Company Information. During and after your consulting
relationship with the Company, you agree not to use or disclose any of the
Company’s confidential or proprietary information except as expressly
authorized by the Company.  During the
Consulting Period, you may receive and/or develop additional confidential and
proprietary information relating to the Company’s technology know-how, data,
inventions, developments, plans, business practices, strategies and products
(collectively, the “Information”).  Such Information may include but not be
limited to: (i) the Company’s marketing and customer support strategies,
financial information (including sales, costs, profits and pricing methods),
internal organization, employee information and customer lists; (ii) the
Company’s technology, including, but not limited to, discoveries, inventions,
research and development efforts, data, software, trade secrets, processes,
samples, formulas, methods, product and know-how and show-how; (iii) all
derivatives, improvements, additions, modifications, and enhancements to any of
the above, including any such information or material created or developed by
you under this Agreement; or (iv) information of third parties as to which
the Company has an obligation of confidentiality.  You acknowledge the confidential and secret
character of the Information, and agree that the Information is the sole,
exclusive and valuable property of the Company, and agree not to use, disclose
or reproduce any of the Information without the prior written consent of the
Company, except in the performance of your authorized Consulting Services, and
not to disclose all or any 

 

 

part of the Information
in any form to any third party, either during or after the Consulting
Period.  Upon the termination of the
Consulting Period or upon the Company’s earlier request, you agree to cease
using and to return to the Company all whole and partial copies, reproductions,
and derivatives of the Information, whether in your possession or under your
direct or indirect control.

 

(b)           Other Employer Information. 
You agree that you will not, during your engagement with the Company,
improperly use or disclose any proprietary information or trade secrets of your
former or concurrent employers or companies, if any, and that you will not
bring onto the premises of the Company any unpublished documents or any
property belonging to your former or concurrent employers or companies unless consented
to in writing by said employers or companies.

 

(c)           Third Party Information. 
You recognize that the Company has received and in the future will
receive from third parties their confidential or proprietary information
subject to a duty on the Company’s part to maintain the confidentiality of such
information and, in some cases, to use it only for certain limited
purposes.  You agree that you owe the
Company and such third parties, both during the term of your engagement and
thereafter, a duty to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation (except in a manner that is consistent with the Company’s agreement
with the third party) or use it for the benefit of anyone other than the
Company or such third party (consistent with the Company’s agreement with the
third party).

 

(d)           Disclosure of Inventions.  You shall promptly and fully disclose to the
Company any and all ideas, improvements, inventions, know-how, information,
techniques and works of authorship learned, conceived or developed by you
pursuant to your performance of the Consulting Services for the Company or of
tasks assigned to you by the Company hereunder (the “Work Product”).  You agree to keep and maintain adequate and
current records (in the form of notes, sketches, drawings or in any other form
that may be required by the Company) of all work performed relating to the
Consulting Services, including all proprietary information developed relating
thereto, and such records shall be available to and remain the sole property of
the Company at all times.

 

(e)           Inventions Assigned to the Company. 
You agree that any and all Work Product shall be the sole and exclusive
property of the Company.  You hereby assign
to the Company all of your right, title and interest in and to any and all Work
Product.  You explicitly acknowledge and
agree that all works of authorship contained in the Work Product are “works for
hire” under the copyright laws of the United States, and that the Company shall
own the copyright in all such works of authorship.  You further agree that  the
Company is and shall be vested with all rights, title and interests, including
patent, copyright, trade secret and trademark rights, in all of your Work
Product under this Agreement.

 

(f)            Obtaining Intellectual Property
Protection.  You agree to assist the Company in every
proper way to obtain and enforce United States and foreign proprietary rights
relating to the Work Product in any and all countries.  To that end, you agree to execute, verify and
deliver such documents and perform such other acts (including appearing as a
witness) as the Company may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such proprietary
rights and the assignment thereof.  In
addition, you 

 

 

agree to execute, verify
and deliver assignments of such proprietary rights to the Company or its
designee.  Your obligation to assist the
Company with respect to proprietary rights in any and all countries shall
continue beyond the termination of your engagement, but the Company shall
compensate you at a reasonable rate after such termination for the time
actually spent by you at the Company’s request on such assistance.  In the event the Company is unable for any
reason, after reasonable effort, to secure your signature on any document
needed in connection with the actions specified in the preceding paragraph, you
hereby irrevocably designate and appoint the Company and its duly authorized
officers and agents as your agent and attorney in fact, to act for and in your
behalf to execute, verify and file, with the same legal force and effect as if
executed by you, any such documents and to do all other lawfully permitted acts
to further the purposes of the preceding paragraph.  You hereby waive and quitclaim to the Company
any and all claims of any nature whatsoever which you now or may hereafter have
for infringement of any proprietary rights assigned to the Company.  During the Consulting Period and for one year
after its termination for any reason, you will promptly disclose to the Company
fully and in writing all patent applications filed by you or on your behalf.

 

8.             Confidentiality. 
The provisions of this Agreement will be held in strictest confidence by
you and the Company and will not be publicized or disclosed in any manner
whatsoever; provided, however, that: 
(a) you may disclose this Agreement in confidence to
your immediate family; (b) the
parties may disclose this Agreement in confidence to their respective
attorneys, accountants, auditors, tax preparers, and financial advisors; (c) the Company
may disclose this Agreement as necessary to fulfill Securities and Exchange
Commission or other standard or legally required corporate reporting or
disclosure requirements; (d) the
parties may disclose this Agreement insofar as such disclosure may be necessary
to enforce its terms or as otherwise required by law; and (e) you may
disclose this Agreement to Amylin Pharmaceuticals.

 

9.             Release of Claims.  In
exchange for the consideration under this Agreement to which you would not
otherwise be entitled, you hereby generally and completely release the Company
and its directors, officers, employees, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns from any and all claims, liabilities and obligations, both known
and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring at any time prior to and including the date you
sign this Agreement.  This general
release includes, but is not limited to: (a) all claims arising out of or
in any way related to your employment with and/or consulting services for the
Company or the termination of that employment/consultancy; (b) all claims
related to your compensation or benefits from the Company, including consulting
fees, salary, bonuses, commissions, vacation pay, expense reimbursements,
severance pay, fringe benefits, stock, stock options, or any other ownership
interests in the Company; (c) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing;
(d) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (e) all
federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967, as amended (“ADEA”), and the California Fair Employment
and Housing Act (as amended); provided, however, that nothing in this paragraph
10 shall release the Company from any obligations it may have pursuant to this
Agreement.

 

 

In exchange for the
consideration recited herein, the Company hereby generally and completely
releases you from any and all claims, liabilities and obligations, both known
and unknown, that arise out of or are in any way related to events, acts,
conduct or omissions occurring prior to your signing this Agreement arising out
of or in any way related to your employment with the Company.

 

10.          ADEA Waiver.  You acknowledge that you are knowingly and voluntarily
waiving and releasing any rights you may have under the ADEA (“ADEA Waiver”).  You also acknowledge that the consideration
given for the ADEA Waiver is in addition to anything of value to which you were
already entitled.  You further
acknowledge that you have been advised by this writing, as required by the
ADEA, that:  (a) your ADEA Waiver
does not apply to any rights or claims that arise after the date you sign this
Agreement; (b) you should consult with an attorney prior to signing this
Agreement; (c) you have 21 days to consider this Agreement (although you
may choose to voluntarily sign it sooner); (d) you have seven days
following the date you sign this Agreement to revoke the ADEA Waiver (in a
written revocation sent to me); and (e) the ADEA Waiver will not be
effective until the date upon which the revocation period has expired, which
will be the eighth day after you sign this Agreement; provided, however, that
notwithstanding any other provision of this Agreement, in the event you revoke
the ADEA Waiver during such 7 day period, the Consulting Period shall thereupon
terminate immediately, the Company will pay you only the compensation earned
hereunder and expenses incurred through and including the effective date of
such termination and the Company shall thereafter have no further obligations
to you under this Agreement. 
Nevertheless, your general release of claims, except for the ADEA
Waiver, is effective immediately and not revocable.

 

11.          Section 1542 Waiver. 
In granting the release herein, which includes claims which may be
unknown at present, the parties acknowledge that they have read and understand Section 1542
of the California Civil Code:  “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.” 
The parties hereby expressly waive and relinquish all rights and
benefits under that section and any law or legal principle of similar effect in
any jurisdiction with respect to the releases granted herein, including but not
limited to the release of unknown and unsuspected claims granted in this
Agreement.

 

12.          Dispute Resolution. 
To ensure rapid and economical resolution of any disputes regarding this
Agreement, the parties hereby agree that any and all claims, disputes or
controversies of any nature whatsoever arising out of, or relating to, this
Agreement, or its interpretation, enforcement, breach, performance or
execution, your employment with the Company, or the termination of such
employment, shall be resolved, to the fullest extent permitted by law, by
final, binding and confidential arbitration in San Diego, California conducted
before a single arbitrator by JAMS, Inc. (“JAMS”) or its successor, under
the then applicable JAMS arbitration rules. 
The parties each acknowledge that by agreeing to
this arbitration procedure, they waive the right to resolve any such dispute,
claim or demand through a trial by jury or judge or by administrative
proceeding.  You will have the
right to be represented by legal counsel at any arbitration proceeding.   The arbitrator
shall:  (i) have the authority to
compel adequate discovery for the resolution of the dispute and to award such
relief as would otherwise be available under applicable law in a court
proceeding; and (ii) issue a written statement signed by the arbitrator
regarding the disposition of each claim and the relief, if 

 

 

any, awarded as to each
claim, the reasons for the award, and the arbitrator’s essential findings and
conclusions on which the award is based. 
The arbitrator, and not a court, shall also be authorized to determine
whether the provisions of this paragraph apply to a dispute, controversy, or
claim sought to be resolved in accordance with these arbitration procedures.  Nothing in this Agreement is intended to
prevent either you or the Company from obtaining injunctive relief in court to
prevent irreparable harm pending the conclusion of any arbitration.

 

13.          Miscellaneous. 
This Agreement constitutes the complete, final and exclusive embodiment
of the entire agreement between you and the Company with regard to its subject
matter.  This Agreement is entered into
without reliance on any promise or representation, written or oral, other than
those expressly contained herein, and it supersedes any other such promises,
warranties or representations.  This
Agreement may not be modified or amended except in a writing signed by both you
and a duly authorized officer of the Company. 
This Agreement will bind the heirs, personal representatives, successors
and assigns of both you and the Company, and inure to the benefit of both you
and the Company, their heirs, successors and assigns.  If any provision of this Agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and the
provision in question will be modified so as to be rendered enforceable.  This Agreement will be deemed to have been
entered into and will be construed and enforced in accordance with the laws of
the State of California as applied to contracts made and to be performed
entirely within California.  Any
ambiguity in this Agreement shall not be construed against either party as the
drafter.  Any waiver of a breach of this
Agreement shall be in writing and shall not be deemed to be a waiver of any
successive breach.  This Agreement may be
executed in counterparts and facsimile signatures will suffice as original
signatures.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

 

If this Agreement
is acceptable to you, please sign below and return the original to me.

 

We wish you the
best in your future endeavors.

 

Sincerely,

 

SENOMYX,
INC.

 

	
  By: 

  	
  /S/ JOHN
  POYHONEN

  

 

Title:  SVP, CHIEF FINANCIAL AND
BUSINESS OFFICER

 

I HAVE READ, UNDERSTAND AND AGREE FULLY TO THE
FOREGOING AGREEMENT:

 

	
  /S/ HARRY J.
  LEONHARDT

  
	
  HARRY
  J. LEONHARDT, ESQ.

  

 

DATE: 10/5/07

 

 

Exhibit A

 

SENOMYX, INC.

 

EMPLOYEE PROPRIETARY INFORMATION

 

AND INVENTIONS AGREEMENT

 

In consideration
of my employment or continued employment by SENOMYX, INC. (the “Company”), and
the compensation now and hereafter paid to me, I hereby agree as follows:

 

1.             NONDISCLOSURE

 

1.1   Recognition of Company’s Rights;
Nondisclosure.  At all times during my employment and
thereafter, I will hold in strictest confidence and will not disclose, use,
lecture upon or publish any of the Company’s Proprietary Information (defined
below), except as such disclosure, use or publication may be required in
connection with my work for the Company, or unless an officer of the Company
expressly authorizes such in writing.  I
will obtain Company’s written approval before publishing or submitting for
publication any material (written, verbal, or otherwise) that relates to my
work at Company and/or incorporates any Proprietary Information.  I hereby assign to the Company any rights I
may have or acquire in such Proprietary Information and recognize that all
Proprietary Information shall be the sole property of the Company and its
assigns.

 

1.2   Proprietary
Information.  The term “Proprietary
Information” shall mean any and all confidential and/or proprietary
knowledge, data or information of the Company. 
By way of illustration but not limitation, “Proprietary
Information” includes (a) trade secrets, inventions, mask
works, ideas, processes, formulas, source and object codes, data, programs,
other works of authorship, know-how, improvements, discoveries, developments,
designs and techniques (hereinafter collectively referred to as “Inventions”); and (b) information regarding plans for
research, development, new products, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers; and (c) information regarding the skills and
compensation of other employees of the Company. 
Notwithstanding the foregoing, it is understood that, at all such times,
I am free to use information which is generally known in the trade or industry,
which is not gained as result of a breach of this Agreement, and my own, skill,
knowledge, know-how and experience to whatever extent and in whichever way I
wish.

 

1.3   Third Party Information.  I
understand, in addition, that the Company has received and in the future will
receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s
part to maintain the confidentiality of such information and to use it only for
certain limited purposes.  During the
term of my employment and thereafter, I will hold Third Party Information in
the strictest confidence and will not disclose to anyone (other than Company
personnel who need to know such information in connection with their work for
the Company) or use, except in connection with my work for the Company, Third
Party Information unless expressly authorized by an officer of the Company in
writing.

 

1.4   No
Improper Use of Information of Prior Employers and Others. 
During my employment by the Company I will not improperly use or
disclose any confidential information or trade secrets, if any, of any former
employer or any other person to whom I have an obligation of confidentiality,
and I will not bring onto the premises of the Company any unpublished documents
or any property belonging to any former employer or any other person to whom I
have an obligation of confidentiality unless consented to in writing by that
former employer or person.  I will use in
the performance of my duties only information which is generally known and used
by persons with training and experience comparable to my own, which is common
knowledge in the industry or otherwise legally in the public domain, or which
is otherwise provided or developed by the Company.

 

2.                                ASSIGNMENT OF INVENTIONS.

 

2.1   Proprietary Rights. 
The term “Proprietary Rights” shall mean all
trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.

 

 

2.2   Prior
Inventions.  Inventions, if any, patented or unpatented,
which I made prior to the commencement of my employment with the Company are
excluded from the scope of this Agreement. 
To preclude any possible uncertainty, I have set forth on Exhibit B (Previous Inventions) attached hereto a
complete list of all Inventions that I have, alone or jointly with others,
conceived, developed or reduced to practice or caused to be conceived,
developed or reduced to practice prior to the commencement of my employment
with the Company, that I consider to be my property or the property of third
parties and that I wish to have excluded from the scope of this Agreement
(collectively referred to as “Prior Inventions”).  If disclosure of any such Prior Invention would
cause me to violate any prior confidentiality agreement, I understand that I am
not to list such Prior Inventions in Exhibit B
but am only to disclose a cursory name for each such invention, a listing of
the party(ies) to whom it belongs and the fact that full disclosure as to such
inventions has not been made for that reason. A space is provided on Exhibit B for such purpose.  If no such disclosure is attached, I
represent that there are no Prior Inventions. 
If, in the course of my employment with the Company, I incorporate a
Prior Invention into a Company product, process or machine, the Company is
hereby granted and shall have a nonexclusive, royalty-free, irrevocable,
perpetual, worldwide license (with rights to sublicense through multiple tiers
of sublicensees) to make, have made, modify, use and sell such Prior
Invention.  Notwithstanding the
foregoing, I agree that I will not incorporate, or permit to be incorporated,
Prior Inventions in any Company Inventions without the Company’s prior written
consent.

 

2.3   Assignment
of Inventions.  Subject to Sections 2.4, and 2.6, I hereby
assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and
to any and all Inventions (and all Proprietary Rights with respect thereto)
whether or not patentable or registrable under copyright or similar statutes,
made or conceived or reduced to practice or learned by me, either alone or
jointly with others, during the period of my employment with the Company.  Inventions assigned to the Company, or to a
third party as directed by the Company pursuant to this Section 2, are
hereinafter referred to as “Company Inventions.”

 

2.4   Nonassignable Inventions. 
This Agreement does not apply to an Invention which qualifies fully as a
nonassignable Invention under Section 2870 of the California Labor Code
(hereinafter “Section 2870”).  I have reviewed the notification on Exhibit A (Limited Exclusion Notification) and agree
that my signature acknowledges receipt of the notification.

 

2.5   Obligation to Keep Company Informed. 
During the period of my employment and for six (6) months after
termination of my employment with the Company, I will promptly disclose to the
Company fully and in writing all Inventions authored, conceived or reduced to
practice by me, either alone or jointly with others.  In addition, I will promptly disclose to the
Company all patent applications filed by me or on my behalf within a year after
termination of employment.  At the time
of each such disclosure, I will advise the Company in writing of any Inventions
that I believe fully qualify for protection under Section 2870; and I will
at that time provide to the Company in writing all evidence necessary to
substantiate that belief.  The Company
will keep in confidence and will not use for any purpose or disclose to third
parties without my consent any confidential information disclosed in writing to
the Company pursuant to this Agreement relating to Inventions that qualify
fully for protection under the provisions of Section 2870.  I will preserve the confidentiality of any
Invention that does not fully qualify for protection under Section 2870.

 

2.6   Government
or Third Party.  I also agree to assign all my right, title
and interest in and to any particular Company Invention to a third party,
including without limitation the United States, as directed by the Company.

 

2.7   Works
for Hire.  I acknowledge that all original works of
authorship which are made by me (solely or jointly with others) within the
scope of my employment and which are protectable by copyright are “works made
for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101).

 

2.8   Enforcement
of Proprietary Rights.  I will assist the Company in
every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to Company Inventions in any and all
countries.  To that end I will execute,
verify and deliver such documents and perform such other acts (including
appearances as a witness) as the Company may reasonably request for use in
applying for, obtaining, perfecting, evidencing, sustaining and enforcing such
Proprietary Rights and the assignment thereof. 
In addition, I will execute, verify and deliver assignments of such
Proprietary Rights to the Company or its designee.  My obligation to assist the Company with
respect to Proprietary Rights relating to such Company Inventions in any 

 

10

 

and all countries shall
continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after my termination for the time actually
spent by me at the Company’s request on such assistance.

 

In the event the Company is unable for any reason,
after reasonable effort, to secure my signature on any document needed in
connection with the actions specified in the preceding paragraph, I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agent and attorney in fact, which appointment is coupled with
an interest, to act for and in my behalf to execute, verify and file any such
documents and to do all other lawfully permitted acts to further the purposes
of the preceding paragraph with the same legal force and effect as if executed
by me.  I hereby waive and quitclaim to
the Company any and all claims, of any nature whatsoever, which I now or may
hereafter have for infringement of any Proprietary Rights assigned hereunder to
the Company.

 

3.           RECORDS.  I agree to keep and maintain adequate and
current records (in the form of notes, sketches, drawings and in any other form
that may be required by the Company) of all Proprietary Information developed
by me and all Inventions made by me during the period of my employment at 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 during the period of my employment by the Company I will not,
without the Company’s express written consent, engage in any employment or
business activity which is competitive with, or would otherwise conflict with,
my employment by the Company.  I agree
further that for the period of my employment by the Company and for one (l) year
after the date of termination of my employment by the Company I will not induce
any employee of the Company to leave the employ of the Company.

 

5.         NO CONFLICTING OBLIGATION.  I
represent that my performance of all the terms of this Agreement and as an
employee of the Company does not and will not breach any agreement to keep in
confidence information acquired by me in confidence or in trust prior to my
employment by the Company.  I have not
entered into, and I agree I will not enter into, any agreement either written
or oral in conflict herewith.

 

6.         RETURN OF COMPANY DOCUMENTS. 
When I leave the employ of the Company, I will deliver to the Company
any and all drawings, notes, memoranda, specifications, devices, formulas, and
documents, together with all copies thereof, and any other material containing
or disclosing any Company Inventions, Third Party Information or Proprietary
Information of the Company.  I further
agree that any property situated on the Company’s premises and owned by the
Company, including disks and other storage media, filing cabinets or other work
areas, is subject to inspection by Company personnel at any time with or
without notice.  Prior to leaving, I will
cooperate with the Company in completing and signing the Company’s termination
statement.

 

7.         LEGAL AND EQUITABLE REMEDIES. 
Because my services are personal and unique and because I may have
access to and become acquainted with the Proprietary Information of the
Company, the Company shall have the right to enforce this Agreement and any of
its provisions by injunction, specific performance or other equitable relief,
without bond and without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.

 

8.         NOTICES.  Any notices
required or permitted hereunder shall be given to the appropriate party at the
address specified below or at such other address as the party shall specify in
writing.  Such notice shall be deemed
given upon personal delivery to the appropriate address or if sent by certified
or registered mail, three (3) days after the date of mailing.

 

9.         NOTIFICATION OF NEW EMPLOYER. 
In the event that I leave the employ of the Company, I hereby consent to
the notification of my new employer of my rights and obligations under this
Agreement.

 

10.       GENERAL PROVISIONS.

 

10.1   Governing
Law; Consent to Personal Jurisdiction.  This Agreement
will be governed by and construed according to the laws of the State of
California, as such laws are applied to agreements entered into and to be
performed entirely within California between California residents.  I hereby expressly consent to the personal
jurisdiction of the state and federal courts located in San Diego County,
California for any lawsuit filed there against me by Company arising from or
related to this Agreement.

 

10.2   Severability. 
In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect the
other provisions of this Agreement, and this Agreement 

 

11

 

shall be construed
as if such invalid, illegal or unenforceable provision had never been contained
herein.  If moreover, any one or more of
the provisions contained in this Agreement shall for any reason be held to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be enforceable to the
extent compatible with the applicable law as it shall then appear.

 

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

 

10.4   Survival. 
The provisions of this Agreement shall survive the termination of my
employment and the assignment of this Agreement by the Company to any successor
in interest or other assignee.

 

10.5  Employment.  I agree and
understand that nothing in this Agreement shall confer any right with respect
to continuation of employment by the Company, nor shall it interfere in any way
with my right or the Company’s right to terminate my employment at any time,
with or without cause.

 

10.6   Waiver.  No waiver by
the Company of any breach of this Agreement shall be a waiver of any preceding
or succeeding breach.  No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right.  The Company shall not be
required to give notice to enforce strict adherence to all terms of this
Agreement.

 

10.7   Entire
Agreement.  The obligations pursuant to Sections 1 and 2
of this Agreement shall apply to any time during which I was previously
employed, or am in the future employed, by the Company as a consultant if no
other agreement governs nondisclosure and assignment of inventions during such
period.  This Agreement is the final, complete
and exclusive agreement of the parties with respect to the subject matter
hereof and supersedes and merges all prior discussions between us.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the party to be charged.  Any subsequent change or changes in my
duties, salary or compensation will not affect the validity or scope of this
Agreement.

 

This Agreement
shall be effective as of the first day of my employment with the Company,
namely:  September 8, 2003.

 

I HAVE
READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE COMPLETELY FILLED OUT EXHIBIT A
TO THIS AGREEMENT.

 

	
  Dated:

  	
  9/8/03

  	
   

  
	
   

  	
   

  
	
  /S/ HARRY J.
  LEONHARDT

  	
   

  
	
  (Signature)

  	
   

  
	
   

  	
   

  
	
  HARRY J. LEONHARDT

  	
   

  
	
  (Printed
  Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED
  AND AGREED TO:

  	
   

  
	
   

  	
   

  
	
  SENOMYX,
  INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
  /S/ KENT SNYDER

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
  PRESIDENT AND
  CEO

  	
   

  
	
   

  	
   

  
	
  11099 N. TORREY
  PINES RD.

  	
   

  
	
  (Address)

  	
   

  
	
   

  	
   

  
	
  LA JOLLA, CA
  92037

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
  9/8/03

  	
   

  
	
   

  	
   

  
						

12

 

 

Exhibit A

 

LIMITED EXCLUSION NOTIFICATION

 

THIS IS
TO NOTIFY you in
accordance with Section 2872 of the California Labor Code that the
foregoing Agreement between you and the Company does not require you to assign
or offer to assign to the Company any invention that you developed entirely on
your own time without using the Company’s equipment, supplies, facilities or
trade secret information except for those inventions that either:

 

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

 

2.                Result from any work performed by you for the
Company.

 

                                To the extent a
provision in the foregoing Agreement purports to require you to assign an
invention otherwise excluded from the preceding paragraph, the provision is
against the public policy of this state and is unenforceable.

 

                                This limited
exclusion does not apply to any patent or invention covered by a contract
between the Company and the United States or any of its agencies requiring full
title to such patent or invention to be in the United States.

 

                I ACKNOWLEDGE RECEIPT of a copy of this notification.

 

	
   

  	
  By: /S/ HARRY J.
  LEONHARDT

  	
   

  
	
   

  	
  (PRINTED
  NAME OF EMPLOYEE)

  
	
   

  	
   

  
	
   

  	
  Date: SEPTEMBER
  8, 2003

  

 

WITNESSED
BY:

 

HOLLY WORKMAN

(PRINTED
NAME OF REPRESENTATIVE)

 

 

EXHIBIT B

 

	
  TO:

  	
   

  	
  SENOMYX,
  INC.

  
	
   

  	
   

  	
   

  
	
  FROM:

  	
   

  	
  HARRY
  J. LEONHARDT

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
  SEPTEMBER
  8, 2003

  
	
   

  	
   

  	
   

  
	
  SUBJECT:

  	
   

  	
  Previous
  Inventions

  

 

                1.             Except as listed in Section 2
below, the following is a complete list of all inventions or improvements
relevant to the subject matter of my employment by SENOMYX,
INC. (the “Company”) that
have been made or conceived or first reduced to practice by me alone or jointly
with others prior to my engagement by the Company:

 

             x        No inventions or improvements.

 

             o         See below:

 

o                          Additional sheets attached.

 

2.             Due
to a prior confidentiality agreement, I cannot complete the disclosure under Section 1
above with respect to inventions or improvements generally listed below, the
proprietary rights and duty of confidentiality with respect to which I owe to
the following party(ies):

 

	
   

  	
   

  	
  Invention
  or Improvement

  	
   

  	
  Party(ies)

  	
   

  	
  Relationship

  

 

1.

 

2.

 

3.

 

o                          Additional sheets attached.Exhibit 4.1

 

EXECUTION COPY

 

FORBEARANCE AND CONSENT AGREEMENT

 

This
FORBEARANCE AND CONSENT AGREEMENT (this “Agreement”), is entered into as
of January 31, 2008, by and among ARTISTdirect, Inc., a Delaware
corporation and its subsidiaries and affiliates (collectively, the “Company”),
U.S. Bank National Association, as Collateral Agent under the Note and Warrant
Purchase Agreement (as defined below) (in such capacity, “Collateral Agent”)
and the senior lenders signatories hereto (“Initial Purchasers”).

 

Recitals

 

A.            The Company, Initial Purchasers and
Collateral Agent are parties to that certain Note and Warrant Purchase
Agreement, dated as of July 28, 2005 (the “Senior Financial Agreement”),
among Company, the investors party thereto, as Initial Purchasers, and
Collateral Agent. The Senior Financing Agreement, together with the other
Transaction Documents (as defined in the Senior Financing Agreement) as such
documents have been amended from time to time, are collectively referred to
herein as the “Senior Financing Documents.”

 

B.            The Company is in default under
certain provisions of the Senior Financing Documents.

 

C.            The Existing Senior Defaults (as
defined herein) constitute “Events of Default” for purposes hereof that
entitle Collateral Agent and Initial Purchasers to enforce their rights and
remedies under the Senior Financing Documents.

 

D.            The parties hereto entered into a
Forbearance and Consent Agreement, dated as of April 17, 2007, as extended
pursuant to the Notice of Extension of Forbearance Period dated May 31,
2007, as amended pursuant to Amendment No. 1, dated June 25, 2007,
and as further amended pursuant to Amendment No. 2 as of November 30,
2007, pursuant to which the Collateral Agent and Initial Purchasers agreed to
forbear from the exercise of their rights and remedies relating to the Existing
Senior Defaults and any other additional Events of Default for the purpose of
affording a period of time for Company to obtain funds to pay the obligations
under the Senior Financing Documents or to restructure its capital structure
(the “Prior Forbearance Agreement”)

 

E.             The Company entered into the Waiver
and Forbearance Agreement, dated as of August 3, 2007, with the holders of
the Company’s Convertible Subordinated Notes, dated July 28 ,2005 (the “Subordinated
Note Holders”) (the “Subordinated Forbearance Agreement”), pursuant
to which the   Subordinated Note Holders
agreed to waive their right to charge the Default interest Rate (as defined
therein) and forbear the exercise of their rights and remedies relating to the
Existing Subordinated Defaults (as defined therein) during the Waiver Period
(as defined therein) to allow the Subordinated Note Holders to consider a
restructuring of the Company’s capital structure. 

 

F.             The Prior Forbearance Agreement
will expire on January 31, 2008 and the Forbearance Period (as defined in
the Prior Forbearance Agreement) will expire on January 31, 2008.

 

G.            Company has requested, subject to
the conditions contained herein, that Collateral Agent and Initial Purchasers
forbear from the exercise of their rights and remedies relating to the Existing
Senior Defaults and any other additional Events of Default for the purpose of
affording an additional period of time for Company to obtain funds to pay the
obligations under the Senior Financing Documents or to restructure its capital
Structure pursuant to this Agreement.

 

1

 

H.            Subject to the terms contained
herein, Collateral Agent and Initial Purchasers are willing to agree to forbear
from the exercise of their rights and remedies relating to the Existing Senior
Defaults and any other additional Events of Default.

 

Agreement

 

For
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

 

1.             Definitions.  Capitalized terms used herein but not defined
herein shall have the meanings ascribed to them in the Senior Financing
Agreement. The following terms as used in this Agreement shall have the
meanings set forth below:

 

“Existing
Senior Defaults” means the existing Senior Events of Default described on
Schedule I hereto, together with any other Senior Events of Default under the
Senior Financing Documents which are in existence as of the date hereof of
which the Initial Purchasers have knowledge.

 

“Forbearance
Period” means the period commencing on the date hereof and ending on the
earliest to occur of the following: (i) February 20, 2008 (as such
date may be extended pursuant to the terms of this Agreement); or (ii) any
material representation or warranty made by Company in this Agreement proves to
be materially false as of the date when made.

 

“Senior
Event of Default” means an Event of Default under the Senior Financing
Agreement.

 

2.             Agreement to Forbear.

 

(a)           Subject to the
conditions set forth in Section 3 below, during the Forbearance Period,
and subject to the terms hereof, Collateral Agent and Initial Purchasers hereby
agree to forbear from exercising any of their rights and remedies under the
Senior Financing Documents or the Prior Forbearance Agreement ‘existing during
the Forbearance Period.

 

(b)           Nothing in this Section 2
shall be construed to be a waiver of or acquiescence in any Existing Senior
Default, and all such Existing Senior Defaults shall continue in existence,
subject only to the written agreement of Collateral Agent and Initial
Purchasers, as Set forth herein, to forbear during the Forbearance Period from
exercising any of their rights and remedies under the Senior Financing
Documents or the Prior Forbearance Agreement. Collateral Agent and Initial
Purchasers expressly reserve all of their rights and remedies under the Senior
Financing Documents and under applicable law with respect to such Existing
Senior Defaults, except as expressly limited in this Agreement. Nothing in this
Section 2 shall act as a waiver of the accrual of any default interest due
under section 2(b) of the Senior Financing Agreement during the
Forbearance Period.

 

(c)           Upon expiration of
the Forbearance Period, Collateral Agent and Initial Purchasers shall have all
the rights and remedies available to them under the Senior Financing Documents,
applicable law and otherwise.

 

(d)           Collateral Agent may
assume without inquiry that the Forbearance Period expires on February 2C’,
2008, unless it receives from the Initial Purchasers a certificate specifying
another date and setting forth the provisions of this Agreement pursuant to
which alternative Forbearance Period termination date was established.

 

(e)           The parties
acknowledge and agree that the Prior Forbearance Agreement shall be deemed to
have expired and terminated, shall no longer be in full force and effect, and
that the matters governed therein shall be governed pursuant to this Agreement.

 

2

 

3.             Conditions to Effectiveness.  The Initial Purchasers’ agreement to forbear
for the Forbearance Period shall be subject to the following conditions being
fully satisfied:

 

(a)           The execution and
delivery to Collateral Agent of a counterpart of this Agreement by Collateral
Agent, each Initial Purchaser and Company.

 

(b)           All representations
and warranties set forth in this Agreement shall be true and correct as of the
date hereof in all material respects.

 

(c)           Company agrees :o
pay to the initial Purchasers on a pro rata basis concurrent with the full
execution of this Agreement, the sum of Four Hundred Ninety Four Thousand Four
Hundred and Forty Six Dollars ($494,446.00) which shall be applied in full
against amounts owned to the Initial Purchasers under the Senior Financing
Documents, and other obligations thereunder.

 

(d)           Company (i) shall
comply with its obligations under the Subordination Agreement and (ii) shall
not declare or pay any dividends or make any other payments not required or allowed
under the Senior Financing ‘Documents or the Securities Purchase Documents on
account of any equity interests in the Company.

 

4.             Termination.  Initial Purchasers’ agreement to so forbear
shall automatically terminate, without further act or instrument, upon the
occurrence of any of the following events:

 

(a)           Bankruptcy.

 

(i)            The Company or any
of its Subsidiaries pursuant to or under or within the meaning of any
Bankruptcy Code:

 

(1)           commences
a voluntary case or proceeding;

 

(2)           consents
to the entry of an order for relief against it in an involuntary ease or
proceeding;

 

(3)           consents
to the appointment of a Custodian of it or for all or substantially all of its
property; or

 

(4)           makes
a general assignment for the benefit of its creditors; or

 

 

(ii)           A court of
competent jurisdiction enters an order or decree under any Bankruptcy Code
that:

 

(1)           is
for relief against the Company or any of its Subsidiaries in an involuntary
case or proceeding;

 

(2)           appoints
a Custodian of the Company or any of its Subsidiaries for all or substantially
all of their properties taken as a whole; or

 

(3)           orders
the liquidation of the Company or any of its Subsidiaries; and in each case the
order or decree remains unstayed and in effect for 60 days.

 

(b)           Company repudiates, or
asserts a defense to, any obligation or liability under the Senior Financing
Documents or this Agreement or makes ‘or pursues a claim against the Initial
Purchasers.

 

3

 

(c)           Company fails to
timely perform any of the other material covenants, agreements and obligations
set forth in this Agreement.

 

5.             Representations and Warranties.  In consideration of the agreement of
Collateral Agent and Initial Purchasers to forbear from the exercise of their
rights and remedies as set forth in this Agreement, Company hereby represents
and warrants to Collateral Agent and Initial Purchasers as of the date hereof
that:

 

(a)           Company has full
power, authority and legal right to enter into this Agreement.

 

(b)           The Senior Financing
Documents constitute the legal, valid and binding obligations of Company and
are enforceable against Company in accordance with their terms, except (i) as
may be limited by applicable bankruptcy., insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors’
rights and subject to general equitable principles and (ii) as may be
specifically limited by the terms of this Agreement.

 

(c)           This Agreement
constitutes the legal, valid and binding obligation of Company and is
enforceable against Company in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
other similar laws affecting the enforcement of creditors’ rights and subject
to general equitable principles.

 

6.             Amendments.  This Agreement may be amended after the date
hereof only by a written amendment, fully executed and delivered by the
parties.

 

7.             Senior Financing Documents Still
in Force.  Notwithstanding anything
to the contrary in this Agreement, the Senior Financing Documents are in full
force and effect in accordance with their respective terms, remain valid and
binding obligations of Company, and are hereby reaffirmed and ratified by the
parties. The Senior Financing Documents shall remain unmodified unless and
until otherwise expressly modified in accordance with the terms of the
respective Senior Financing Document.

 

8.             No Waiver of Rights Under Senior
Financing Documents.  Neither the
failure nor delay by the Initial Purchasers to exercise its rights and remedies
nor the acceptance of any partial performance (whether any of the foregoing is
before or after the date of this Agreement) nor any provision of this Agreement
shall amend, modify, supplement, extend, delay, renew, terminate, waive,
release or otherwise limit or prejudice Initial Purchasers’ rights and remedies
or Company’s obligations under the Senior Financing Documents (including, but
not limited to, the Initial Purchaser’s right to receive full payment of
principal and interest as well as late charges, delinquent interest, attorney’s
fees and expenses, and other charges to the extent provided in the Senior
Financing Documents) except as specifically provided in a written agreement
between the parties that is fully executed and delivered in accordance with the
terms of the respective Senior Financing Document (and except that, without
modifying or amending the Senior Financing Documents, the Initial Purchasers
agree to forbear to the extent specifically provided in Section 2 hereof),
nor shall it affect the relative priority of the Initial Purchasers’ security
interest in the Collateral.

 

In
particular, Company understands that nothing referred to above shall operate to
prohibit, restrict or otherwise inhibit the Initial Purchasers from exercising
any right or remedy it may have under the Senior Financing Documents (except
that the Initial Purchasers agree to forbear to the extent specifically
provided in Section 2 hereof) or constitute a cure of any existing default
and, without limitation, shall not extend arty applicable reinstatement or
redemption period.

 

9.             Voluntary Agreement.  Each party to this Agreement represents and
warrants to each other party that it is represented by legal counsel of its
choice, that it has consulted with counsel regarding this Agreement, that it is
fully aware of the terms contained herein and that it has voluntarily and
without coercion or duress of any kind entered into this Agreement.

 

4

 

10.           Effect on and Ratification of the
Senior Financing Documents.  Company
acknowledges, confirms and agrees (without limiting or modifying the provisions
of the Senior Financing Documents or the rights and remedies otherwise
available to Collateral Agent and Initial Purchasers) that Collateral Agent and
Initial Purchasers (x) have not made any representations, promises or
agreements, and shall have no obligation, to extend the Forbearance Period
(except as provided for in this Agreement), or otherwise to grant Company any
extension, delay, deferral or other indulgence (other than those contemplated
by this Agreement), and (y) after expiration of the Forbearance Period,
may proceed immediately to enforce all rights and remedies available to them
under the Senior Financing Documents for collection, foreclosure or otherwise.

 

11.           Miscellaneous.

 

(a)           Counterparts.
This Agreement may be signed in multiple counterparts, each of which shall
constitute an original and all of which, taken together, shall constitute one
and the same instrument. One or more counterparts of this Agreement may be
delivered by facsimile, with the intention that they shall have the same effect
as an original counterpart thereof and shall be binding on the person
delivering the same.

 

(b)           All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough of Manhattan,
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper.

 

Each
party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof by registered or certified mail, return receipt requested to such party
at the address for such notices to it under’ the Senior Financing Agreement and
agrees that such service shall constitute good and sufficient service of
process arid notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATE!) HEREBY.

 

12.           Initial Purchasers’ Direction to
Collateral Agent. Initial Purchasers represent and warrant to Collateral
Agent that, together with Collateral Agent, they are the sole holders and
beneficial owners of Company’s obligations under the Senior Financing Documents.
Having the power under the Senior Financing Documents to do so, Initial
Purchasers (i) direct Collateral Agent to enter into and perform its
obligations under this Agreement and (ii) confirm their indemnity
obligations to Collateral Agent as and to the extent set forth in the Senior
Financing Documents.

 

[Signatures
on following page]

 

5

 

IN
WITNESS WHEREOF, each of the parties hereto has caused this Forbearance and
Consent Agreement to be duly executed and delivered by its duly authorized
officer as of the date first above written.

 

	
   

  	
  ARTISTDIRECT,
  INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Collateral Agent under the Note and Warrant Purchase

  
	
   

  	
  Agreement

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JMG
  TRITON OFFSHORE FUND, LTD.,

  
	
   

  	
  as
  Initial Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JMG
  CAPITAL PARTNERS, L.P.,

  
	
   

  	
  as
  Initial Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JMB CAPITAL PARTNERS, L.P.,

  
	
   

  	
  as Initial Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

6

 

	
   

  	
  CCM
  MASTER QUALIFIED FUND, LTD.

  
	
   

  	
  as
  Initial Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

7

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