Document:

Exhibit 10.1

 

FINAL

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
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RESEARCH
AGREEMENT

This
RESEARCH AGREEMENT (this “Agreement”) is entered into as of January 1, 2007
(the “Effective Date”) by and between Interleukin Genetics, Inc. a Delaware
corporation (“ILI”) and Access Business Group International LLC, having its
principal office at 7575 Fulton Street, East, Ada, Michigan 49355-0001 (“Access”).  Each of ILI and Access is sometimes referred
to individually herein as a “Party” and collectively as the “Parties.”

WHEREAS, Access, together with its Affiliates (defined
below), has expertise and experience in the development, commercialization and
marketing of nutritional supplements and personal care products and ILI has
expertise and experience in analyzing the effect of variations in genes related
to inflammation, including the effect of such variations on the risk for
osteoporosis and cardiovascular disease, and determining, through genetic
profiling, individuals who may benefit from specific interventions to promote
health;

WHEREAS, ILI also has expertise and experience in
seeking and analyzing scientific opportunities that would support development
of nutritional supplements and personal care products and determining the
credibility of such opportunities;

WHEREAS,
Access desires that ILI perform the Research Program (defined below) on the
terms and subject to the conditions set forth in this Agreement and the Parties
desire to obtain certain rights to inventions arising out of the Research
Program; and

WHEREAS,
ILI is willing to perform the Research Program and the Parties are willing to
grant each other such rights as described herein.

NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and for
other good and valuable consideration, the Parties hereby agree as follows:

1.     DEFINITIONS

Whenever used in this Agreement with an initial
capital letter, the terms defined in this Section 1 shall have the meanings specified.

1.1       “Affiliate”
means any corporation, firm, partnership or other entity that directly or
indirectly controls or is controlled by or is under common control with a Party
to this Agreement.  For purposes of this
definition, “control” means ownership, directly or through one or more
Affiliates, of fifty percent (50%)  or
more of the shares of stock entitled to vote for the election of directors, in
the case of a corporation, fifty percent (50%) or more of the equity interests
in the case of any other type of legal entity, status as a general partner in
any partnership, or any other arrangement whereby a Party controls or has the
right to control the Board of Directors or equivalent governing body of a
corporation or other entity.  For
purposes of this Agreement, Access, Alticor Inc. and subsidiaries of Alticor
Inc., on the one hand, and ILI, on the other hand, will not be deemed to be
Affiliates of each other.

1.2       “Access Patent Rights”
means any Patent Rights with respect to Access Technology.

 

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1.3       “Access Proprietary
Materials” means any Proprietary Materials of Access that are
used by Access, or provided by Access, for use in the Research Program.

1.4       “Access Technology”
means any Technology Controlled by Access as of the Effective Date and during
the Term that is used by Access, or provided by Access for use, in the Research
Program.

1.5       “Confidential Information”
means, as regards a Party (the “Receiving Party”), (i) all information produced
or discovered by either Party under the Research Program (including without
limitation, compilations, data, formulae, models, patent disclosures,
procedures, processes, projections, protocols, results of experimentation and
testing, specifications, strategies and techniques), and all tangible and
intangible embodiments thereof of any kind whatsoever (including, without
limitation, apparatus, biological or chemical materials, animals, cells, compositions,
documents, drawings, machinery, patent applications, records and reports) and
(ii) all other information (including but not limited to information about any
element of Technology or a Party’s business) which is disclosed, whether in
writing and marked as confidential at the time of disclosure to the Receiving
Party or customarily considered to be confidential information or by oral
disclosure reduced to a writing, by the other Party (the “Disclosing Party”) to
the Receiving Party or to any of its employees, consultants, Affiliates,
licensees and sublicensees hereunder, except to the extent that the
information described in this subsection (ii) (a) as of the date of disclosure
is demonstrably known to, or in the possession of, the Receiving Party or its
Affiliates, as shown by written documentation, other than by virtue of a prior
confidential disclosure by the Disclosing Party or its Affiliates; (b) as of
the date of disclosure is in, or subsequently enters, the public domain,
through no fault or omission of the Receiving Party or its Affiliates; (c) as
of the date of disclosure or thereafter is obtained by the Receiving Party or
its Affiliates from a Third Party free from any obligation of confidentiality
to the Disclosing Party and rightfully in possession of such information or (d)
is independently developed by or for the Receiving Party or its Affiliates
without reference to or in reliance upon any of the foregoing information as
demonstrated by competent written records.

1.6       “Control” or “Controlled” means (a) with
respect to Technology (other than Proprietary Materials) and/or Patent Rights,
the possession by a Party of the ability to grant a license or sublicense of
such Technology and/or Patent Rights as provided herein without violating the
terms of any agreement or arrangement between such Party and any third party
and (b) with respect to Proprietary Materials, the possession by a Party of the
ability to supply such Proprietary Materials to the other Party as provided
herein without violating the terms of any agreement or arrangement between such
Party and any third party.

1.7       “ILI
Patent Rights” means any Patent Rights with respect to ILI
Technology.

1.8       “ILI
Technology” means any Technology Controlled by ILI as of the
Effective Date and during the Term that is used by ILI, or provided by ILI, or
provided by ILI for use, in the Research Program.

1.9       “Joint
Science Committee” or “JSC” shall have the meaning set forth in
Section 5.1 hereof.

 

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1.10     “Patent
Rights” means the rights and interests in and to issued patents
and pending patent applications in any country, including all substitutions,
continuations, continuations-in-part, divisionals, supplementary
protection certificates, renewals, all letters patents granted thereon, and all
reissues, reexaminations, extensions, confirmations, revalidations,
registrations and patents of addition thereof.

1.11     “Party”
or “Parties” has the
meaning set forth in the first paragraph of this Agreement.

1.12     “Program Invention”
means any Technology, whether or not patentable, which is conceived and/or
first reduced to practice by employees of, or consultants to, either Party, or
jointly by both Parties, in the conduct of the Research Program.

1.13     “Program Patent Rights”
means all Patent Rights claiming any Program Invention.

1.14     “Program Product”
means any skin care product, or delivery system for a skin care product (i) the
manufacture, use or sale of which would, absent the license or ownership rights
granted to Access hereunder, infringe any claim included in the Program Patent
Rights or the ILI Patent Rights, or (ii) which makes a claim or claims of
efficacy or utility based upon the research conducted hereunder or upon the use
or results of a Program Test.

1.15     “Program Test”
means any nucleic acid test used to determine appropriate recipients of Program
Products (i) the manufacture, use or sale of which would, absent the license or
ownership rights granted to Access hereunder infringe any claim included in the
Program Patent Rights or the ILI Patent Rights, or (ii) which was developed,
modified or improved hereunder.

1.16     “Proprietary Materials”
means any tangible chemical, biological or physical research materials,
including but not limited to chemical compounds that are furnished by or on
behalf of one Party to the other Party, in connection with this Agreement, that
are proprietary to the transferring Party through patent protection, trade
secret, or other method of intellectual property protection, regardless of
whether such materials are specifically designated as proprietary by the
transferring Party.

1.17         “Research Program”
means the research program to be conducted by the Parties as described in this
Agreement and in Appendix A, as amended from time to time.

1.18         “Technology”
means and includes all inventions, discoveries, know-how, trade secrets,
improvements and Proprietary Materials, whether or not patentable, including
but not limited to, structural and functional information and other data,
formulations and techniques.

1.19         “Term” has
the meaning set forth in Section 7.1.

1.20         “Territory”
means worldwide.

 

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1.21         “Third Party”
means any entity other than ILI, Access or their respective Affiliates.

2.     RESEARCH PROGRAM

2.1       Implementation of Research Program.  The Research Program shall be conducted by
the Parties in accordance with this Agreement and in compliance with all
applicable laws and regulations.  ILI
shall use commercially reasonable efforts to perform the activities to be
performed by it under the Research Program.

2.2       Supply
of Proprietary Materials. 
From time to time during the Term of this Agreement, one Party may
supply the other Party with its Proprietary Materials for use in the Research
Program.  In connection therewith, the
recipient Party hereby agrees that (a) it shall not use Proprietary Materials
for any purpose other than conducting the Research Program pursuant to this
Agreement; (b) it shall use the Proprietary Materials only in compliance with
all applicable federal, state, and local laws and regulations; (c) it shall not
transfer any Proprietary Materials to any Third Party without the prior written
consent of the supplying Party, except as expressly permitted hereby; (d) the
supplying Party shall retain full ownership of all such Proprietary Materials;
and (e) upon the expiration or termination of this Agreement, the recipient
Party shall at the instruction of the transferring Party either destroy or
return any unused Proprietary Materials which are not the subject of the grant
of a continuing license hereunder.

2.3       Consideration.  In consideration of ILI conducting the
Research Program described herein, Access shall pay ILI, on the payment terms
set forth on Appendix B, $1,670,000 on a time and materials basis plus up to
$630,000 for external costs incurred by ILI in connection with the Research
Program, provided that Access has approved in advance such external costs.

3.     RESEARCH LICENSES

3.1       License
to ILI.  Subject to the
terms and conditions of this Agreement, Access hereby grants to ILI a
non-exclusive, worldwide, royalty-free license, under the Access Technology,
Access Patent Rights, Program Inventions and Program Patent Rights for the sole
purpose of performing its obligations under the Research Program.

3.2       License
to Access.  Subject to the
terms and conditions of this Agreement, ILI hereby grants to Access a
non-exclusive, worldwide, royalty-free license, under the ILI Technology, ILI
Patent Rights, and Program Inventions and Program Patent Rights relating to
Program Tests, for the sole purpose of performing its obligations under the
Research Program.

4.     TREATMENT OF CONFIDENTIAL
INFORMATION; PUBLICITY

4.1       Confidentiality.

4.1.1.       Confidentiality
Obligations.  Access and ILI each
recognize that the Confidential Information of the other Party constitutes
highly valuable and proprietary confidential information.  Access and ILI each agrees that during the
Term and for five (5) years thereafter, it will keep confidential, and will
cause its employees, consultants, Affiliates and sublicensees to keep
confidential, all of the Confidential Information of the other Party.  Neither

 

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Access nor ILI nor any of their
respective employees, consultants, Affiliates and sublicensees shall use the
Confidential Information of the other Party for any purpose except as expressly
permitted in this Agreement.

4.1.2.       Limited Disclosure
of Confidential Information.  Access
and ILI each agree that any disclosure of the other Party’s Confidential
Information to any of its employees, consultants, Affiliates or sublicensees
shall be made only if and to the extent necessary to carry out its rights and
responsibilities under this Agreement, shall be limited to the maximum extent
possible consistent with such rights and responsibilities, and shall only be
made to persons who are bound by written confidentiality obligations to
maintain the confidentiality thereof and not to use such Confidential
Information except as expressly permitted by this Agreement.  Access and ILI each agree not to disclose the
other Party’s Confidential Information to any Third Party under any
circumstance without prior written approval from the other Party, except as
otherwise required by law, and except as otherwise expressly permitted by this
Agreement.  Each Party shall take such
action, and shall cause its Affiliates and sublicensees to take such action, to
preserve the confidentiality of the other Party’s Confidential Information as
it would customarily take to preserve the confidentiality of its own
confidential materials, which shall not, in any event, be less than reasonable
care.  Each Party, upon the other’s
request, will return all the other Party’s Confidential Information disclosed
to it by the other Party pursuant to this Agreement, including all copies and
extracts of documents, within sixty (60) days of the request following the
termination of this Agreement, provided  that, a Party may retain
Confidential Information of the other Party relating to any license or right to
use Technology which survives such termination and one copy of all other
Confidential Information may be retained in inactive archives solely for the
purpose of establishing the contents thereof.

4.2       Publicity.  Neither Party may publicly disclose the terms
of this Agreement or the status or content of the Research Program without the
prior written consent of the other Party; provided, however, that
either Party may make such a disclosure (a) to the extent required by law or by
the requirements of any nationally recognized securities exchange, quotation
system or over-the-counter market on which such Party has its securities listed
or traded or (b) to any actual or prospective acquirors, real estate or
equipment lessors, investors, lenders and other potential financing sources who
are obligated to keep such information confidential.  In the event that such disclosure is required
by the foregoing clause (a), the disclosing Party shall make reasonable efforts
to provide the other Party with notice beforehand and to coordinate with the
other Party to the maximum extent possible with respect to the wording and
timing of any such disclosure.  The
Parties shall mutually agree on a press release announcing the execution of
this Agreement to be issued immediately following the execution hereof.  If either Party wishes to issue any further
press release regarding the Research Program, it shall furnish a copy to the
other Party, which shall review such press release and provide any comments
within two (2) business days.  Once any
written statement is approved for public disclosure by both Parties, either
Party may make subsequent public disclosure of the contents of such statement
without the further approval of the other Party.

5.     JOINT SCIENCE COMMITTEE.

5.1           Formation.  Within thirty (30) days after the Effective
Date, the Parties will establish a Joint Science Committee (the “JSC”) to
oversee and coordinate the Parties’ conduct of

 

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the Research
Program and to consider mutually beneficial business opportunities pursuant to
the subject matter hereof.  The JSC shall
be composed of two (2) representatives of ILI and two (2) representatives of
Access and shall have the powers enumerated below in this Section 5.  Either party shall have the right to replace
any of its JSC representatives at any time in its sole discretion.

5.2           Functions and Powers of
the JSC.  During the Term,
the JSC will coordinate and oversee the activities of the Parties in the
conduct of the Research Program and will exchange information in anticipation
of developing mutually beneficial business opportunities pursuant to the
subject matter hereof.  The JSC shall
keep written minutes of its meetings and all actions taken or approved by the
JSC.  The members of the JSC designated
by each Party shall be responsible for keeping that Party informed as to the
progress of the Research Program.  The
JSC shall recommend to the Parties amendments and/or modifications to the
protocol, timeline and the scope of the Research Program and make
recommendations to the Parties as to the mutually beneficial prosecution of ILI
Patent Rights and Program Patent Rights. 
The JSC shall have no power to amend, modify or waive compliance with
this Agreement and shall have only such powers as are specifically delegated to
it hereunder.

5.3           JSC Governance.

5.3.1.       Membership.  The JSC representatives have initially been
designated by the Parties as follows:

ILI Representatives:

Timothy J. Richerson

Kenneth S. Kornman

Access Representatives:

Robin M. Dykhouse

David G. Groh

6.     INTELLECTUAL PROPERTY
RIGHTS

6.1           Ownership.

6.1.1.       Access
Intellectual Property Rights. 
Subject to ILI’s rights as described in Section 3 of this Agreement,
Access shall have sole and exclusive ownership of all right, title and interest
on a worldwide basis in and to all Access Technology and Access Patent Rights,
and all Program Inventions and Program Patent Rights relating to Program
Products, with full rights to license or sublicense.

6.1.2.       ILI Intellectual
Property Rights.  Subject to Access’s
rights as described in Section 3 of this Agreement, ILI shall have sole and
exclusive ownership of all right, title and interest on a worldwide basis in
and to all ILI Technology, ILI Patent Rights and

 

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all Program Inventions and Program
Patent Rights relating to Program Tests, with full rights to license or
sublicense.

6.2           Patent Filing, Prosecution and Maintenance.  During the Term with respect to any Patent
Rights arising hereunder:

6.2.1        Access shall bear the
cost associated with the filing, prosecution, issuance and maintenance of all
Program Patent Rights and shall control prosecution of all such Program Patent
Rights, including, but not limited to, having the right to choose the patent
attorney(s) or agent(s) who will prosecute the applications, having the right
to inspect, review and provide substantive comments to all correspondence with
any patent office or patent agent, and having the right to select the countries
in which or treaties under which the patent applications will be filed.

6.2.2        Should Access choose
not to prosecute certain Program Patent Rights relating either to Program
Products or Program Tests, then ILI may prosecute Program Patent Rights at ILI’s
sole expense.

6.3           Provisions
with Respect to 11 U.S.C. § 365(n).  With respect to each license granted by
either Party to the other Party hereunder, the Parties agree that, for purposes
of 11 U.S.C. § 365(n), this Agreement shall be deemed to be an executory
contract under which the Party granting such license is a “licensor” and the
Party to whom such license is granted is the “licensee”.  With respect to all other provisions of this
Agreement, the Parties agree that, for purposes of 11 U.S.C. § 365(n), this
Agreement shall be deemed to be an agreement supplementary to such executory
contract.

7.     TERM; TERMINATION

7.1       Term.  This Agreement shall commence on the
Effective Date and continue for a period of one
(1) year.  If the Research
Program has not been completed within the Term, through no fault of Access,
then Access may, by written notice, elect to extend the term hereof for
additional time necessary to complete the Research Program, up to a maximum of
an additional six (6) month term.

7.2       Termination.

7.2.1.       Termination for
Breach.  In the event that either
Party defaults or breaches any material term of this Agreement on its part to
be performed or observed, the other Party shall have the right to terminate
this Agreement (a) by giving thirty (30) days’ written notice to the defaulting
Party in the case of a breach of any payment term of this Agreement and (b) by
giving sixty (60) days’ written notice to the defaulting Party in the case of
any other breach; provided, however, that in the case of a
default or breach capable of being cured, if the said defaulting Party shall
cure the said default or breach within such notice period after the said notice
shall have been given, then the said notice shall not be effective.  If Access terminates this Agreement pursuant
to this Section 7.2.1, it shall pay ILI pro rata through the date of notice of
termination, for the parts of the Research Program completed by ILI, and for
external costs for

 

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which ILI has committed in connection
with the Research Program, as of the date of notice of termination.

7.2.2.       Termination for
Bankruptcy.  In the event that either
Party files for protection under bankruptcy laws, makes an assignment for the
benefit of creditors, appoints or suffers appointment of a receiver or trustee
over its property, files a petition under any bankruptcy or insolvency act or
has any such petition filed against it which is not discharged within sixty
(60) days of the filing thereof, then the other Party may terminate this
Agreement effective immediately upon written notice to such Party.

7.2.3.       Deliverables.  Upon termination of this Agreement, ILI shall
advise Access of the extent to which performance has been completed through the
termination notice date, or the end of the Term, as the case may be, and
collect and deliver to Access all deliverables under the Research Program,
including, without limitation, all work-in-progress through any
reasonable means specified by Access. 
ILI shall, to the extent not already transferred by virtue of this
Agreement or law, grant to Access all Access
Technology and Access Patent Rights, and all Program Inventions and Program
Patent Rights relating to Program Products, in the form in which they
exist on the date of termination, which form shall not materially differ from
the status described in the reports that ILI has submitted to Access.  All obligations in relation to such
intellectual property rights and obligations as set forth in Section 6 shall
apply to the intellectual property transferred upon termination hereof, if any.

7.3       Surviving
Provisions.  Termination
of this Agreement for any reason shall be without prejudice to rights which
expressly survive termination in accordance with the terms of this Agreement,
including without limitation, the rights and obligations of the Parties
provided in Sections 4, 6, 7.3, 8.2, 8.3 and 10, all of which shall survive
such termination.

8.     REPRESENTATIONS AND WARRANTIES

8.1       Mutual Representations.  Access and ILI each represents and warrants
to the other Party as follows:

8.1.1.       Organization.   Both Parties are corporations, duly
organized, validly existing and is in good standing under the laws of the
jurisdiction of organization, is qualified to do business and is in good
standing as a foreign entity in each jurisdiction in which the performance of
its obligations hereunder requires such qualification.

8.1.2.       Authorization.  The execution, delivery and performance by it
of this Agreement have been duly authorized by all necessary corporate action
and do not and will not violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to it or any provision of its charter documents.

8.1.3.       Binding Agreement.  This Agreement is a legal, valid and binding
obligation of it enforceable against it in accordance with its terms and
conditions.

8.1.4.       No Inconsistent
Obligation.  It is not under any
obligation to any person, or entity, contractual or otherwise, that is
conflicting or inconsistent in any respect with

 

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the terms of this Agreement or that
would impede the diligent and complete fulfillment of its obligations.

8.2       Warranty
Disclaimer.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
WARRANTY WITH RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER
SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF MERCHANT-
ABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH RESPECT TO
ANY AND ALL OF THE FOREGOING.

8.3       Limited Liability.  NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE, NEITHER ACCESS NOR ILI WILL BE LIABLE WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT
OF SUBSTITUTE GOODS OR TECHNOLOGY.

9.             Status of Research Program.

9.1           Monthly Reports.  On a monthly basis during the Term, ILI shall
provide to Access written reports setting forth:  (a) steps taken, work completed and progress
made by ILI in performing the Research Program under this Agreement during the
preceding one (1) month period; (b) projected work for the next one (1) month
period; and (c) any changes recommended by ILI with respect to remaining
portions of the Research Program, which changes shall not be deemed adopted
unless and until approved in writing by Access.

9.2           Quarterly Meetings.  On a quarterly basis during the Term,
designated representatives from ILI and Access will meet in person to review
the overall status of the Research Program and to reconcile the parts of the
Research Program performed by ILI with the payments made to date by Access.

9.3           Final Reconciliation.  The Parties agree that the maximum
consideration payable hereunder is $2,300,000.  
At the end of the Term, the Parties shall, within sixty (60) days
thereof, work in good faith to reconcile the total consideration paid by Access
with the work performed by ILI under this Agreement.  If any parts of the Research Program have not
been performed by ILI hereunder, the Parties shall arrange for reimbursement of
applicable amounts allocable to such work as set forth in Appendix A or any
amendment thereto.

9.4           Amendments to Appendix A.  Pursuant to Section 10.7, the Parties may,
from time to time, revise Appendix A to reflect the Parties’ agreement as to
allocation of the consideration paid hereunder to the projects that comprise
the Research Program and the timing and priority of deliverables.  ILI shall prepare and deliver to Access a
change order setting forth the Parties’ agreement with respect to these
matters, which shall become effective as an amendment to Appendix A upon
execution by both ILI and Access.

 

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10.          MISCELLANEOUS

10.1         Dispute Resolution.  The Parties recognize that disputes may from
time to time arise between the Parties during the term of this Agreement.  It is the objective of the Parties to
establish procedures to facilitate the resolution of disputes arising under
this Agreement, including, without limitation, disputes concerning the
definitions of terms used in this Agreement, in an expedient manner by mutual
cooperation and without resort to litigation. 
To accomplish this objective, the Parties agree to follow the procedures
set forth in this Section 10.1 to resolve any dispute arising under this
Agreement.  In the event of such a
dispute between the Parties, either Party, by written notice to the other
Party, shall have such dispute referred to the Parties’ respective executive
officers designated below or their successors, for attempted resolution by good
faith negotiations within thirty (30) days after such notice is received.  Said designated officers are as follows:

For ILI:                   Chief
Executive Officer

For Access:                           Vice President, Research &
Development

In the event the designated executive officers are not able to resolve such
dispute after such thirty (30) day period, then the Parties shall resolve such
dispute by arbitration under the Commercial Rules of the American Arbitration
Association (the “AAA”).  Three
arbitrators shall be selected.  ILI and
Access shall each select one arbitrator and the two chosen arbitrators shall
select the third arbitrator, or failing agreement on the selection of the third
arbitrator, the AAA shall select the third arbitrator.  Unless otherwise agreed by ILI and Access,
arbitration will take place in Grand Rapids, Michigan.

10.2         Notices.  All notices shall be in writing mailed via
certified mail, return receipt requested or courier providing evidence of
delivery, addressed as follows, or to such other address as may be designated
from time to time:

	
  If to ILI:

  	
   

  	
  If to Access:

  
	
   

  	
   

  	
   

  
	
  135
  Beaver Street
 Waltham, MA 02452
 Attention: Adam McNulty

  	
   

  	
  

  7575 Fulton St. East
 Ada, MI 49355-0001
 Attention: Robin M. Dykhouse

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

   

  Mintz,
  Levin, Cohn, Ferris
 Glovsky and Popeo, P.C.
 One Financial Center
 Boston, MA 02111
 Attn: John Cheney

  	
   

  	
  

  

  7575 Fulton St. East.
 Ada, MI 49355-0001
 Attention: General Counsel

  

 

 

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10.3         Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan, without regard
to the application of principles of conflicts of law.

10.4         Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective legal representatives,
successors and permitted assigns.

10.5         Headings.  Section and subsection headings are inserted
for convenience of reference only and do not form a part of this Agreement.

10.6         Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original.

10.7         Amendment; Waiver.  This Agreement, including the Exhibits
attached hereto, may be amended, modified, superseded or canceled, and any of
the terms may be waived, only by a written instrument executed by each Party or,
in the case of waiver, by the Party or Parties waiving compliance.  The delay or failure of any Party at any time
or times to require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. 
No waiver by any Party of any condition or of the breach of any term
contained in this Agreement, whether by conduct, or otherwise, in any one or
more instances, shall be deemed to be, or considered as, a further or
continuing waiver of any such condition or of the breach of such term or any
other term of this Agreement.

10.8         No Agency or Partnership.  Nothing contained in this Agreement shall
give either Party the right to bind the other, or be deemed to constitute the
Parties as agents for the other or as partners with each other or any Third
Party.

10.9         Assignment and Successors.  This Agreement may not be assigned by either
Party without the written consent of the other which shall not be unreasonably
withheld, except that each Party may assign this Agreement and the rights,
obligations and interests of such Party to any purchaser of all or
substantially all of its assets or to any successor corporation resulting from
any merger or consolidation of such Party with or into such corporation.

10.10       Force Majeure.  Neither ILI nor Access shall be liable for
failure of or delay in performing obligations set forth in this Agreement, and
neither shall be deemed in breach of its obligations, if such failure or delay
is due to natural disasters or any causes beyond the reasonable control of ILI
or Access.  In event of such force
majeure, the Party affected thereby shall use reasonable efforts to cure or
overcome the same and resume performance of its obligations hereunder.

10.11       Interpretation.  The Parties hereto acknowledge and agree
that:  (i) each Party reviewed and
negotiated the terms and provisions of this Agreement and have contributed to
its revision; (ii) the rule of construction to the effect that any ambiguities
are resolved against the drafting Party shall not be employed in the
interpretation of this Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to all Parties hereto and not in a favor
of or against any Party, regardless of which Party was generally responsible
for the preparation of this Agreement.

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

 

10.12       Integration; Severability.  This Agreement is the sole agreement with
respect to the subject matter hereof and supersedes all other agreements and
understandings between the Parties with respect to same.  If any provision of this Agreement is or
becomes invalid or is ruled invalid by any court of competent jurisdiction or
is deemed unenforceable, it is the intention of the Parties that the remainder
of the Agreement shall not be affected.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives.

	
  

  	
  INTERLEUKIN GENETICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Timothy J. Richardson

  
	
   

  	
   

  	
   

  	
  Timothy J. Richerson

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ACCESS BUSINESS GROUP

  
	
   

  	
   INTERNATIONAL LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Robin M. Dykhouse

  
	
   

  	
   

  	
   

  	
  Robin M. Dykhouse

  
	
   

  	
   

  	
   

  	
  Vice President — Research & Development

  

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

 

INSERT APPENDIX A [2 PAGES]

[***]

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

 

APPENDIX B

PAYMENT SCHEDULE

Aggregate
Consideration:  Est. $2,300,000

(1)           $1,670,000 (time and materials).   Access shall pay ILI $417,500 on the last
business day of March, June, September and December, 2007.

(2)           $630,000 (representing estimated
external costs to be incurred by ILI in connection with the Research Program)
shall be paid on terms to be agreed upon.Exhibit
10.1

EMPLOYMENT
AGREEMENT

THIS
EMPLOYMENT AGREEMENT (the “Agreement”), made this 1st day of March 2007, is
entered into by Sepracor Inc., a Delaware corporation with its principal place
of business at 84 Waterford Drive, Marlborough, Massachusetts 01752-7231(the
“Company”), and Adrian Adams, residing at                                         (the
“Executive”).

The Company
desires to employ the Executive and the Executive desires to be employed by the
Company.  In consideration of the mutual
covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties agree as follows:

1.                                       Term of Employment. 
The Company hereby agrees to employ the Executive and the Executive
hereby accepts employment with the Company, upon the terms set forth in this
Agreement, for the period commencing on March 1, 2007 (the “Commencement Date”)  and ending on March 1, 2012 (the “Term”).  Notwithstanding
the foregoing, the Term shall be extended automatically without further action
by either party by one (1) additional year (added to the end of the Term) on
each succeeding anniversary of March 1, 2012, unless either party shall have
served written notice upon the other party at least sixty (60) days preceding
the date upon which such Term would end (such period, as it may be extended,
the “Employment Period”), unless sooner terminated in accordance with the
provisions of Section 4.

2.                                       Title and Capacity. 
The Executive shall initially serve as President and Chief Operating
Officer of the Company and in that capacity Executive shall report directly to
the Chief Executive Officer of the Company and shall, except as permitted

hereby, devote all of his business
time and services to the business and affairs of the Company.  The Company acknowledges that it is the
present expectation of the Board and the parties hereto that Executive will be
elected to the position of Chief Executive Officer within six months of the
Commencement Date.  At such time as the
Executive is elected to the position of Chief Executive Officer, he shall
report directly to the Board and shall assume the duties and responsibilities
inherent in such position and such other duties and responsibilities as the
Board shall from time to time reasonably assign to him.

Executive
shall also perform such other duties consistent with his position at such time
as may be reasonably assigned by the Chief Executive Officer (if Executive does
not then hold such position) and/or the Board of Directors of the Company (the
“Board”) from time to time.  Executive
shall serve on the Board and may also serve as a director or officer of any of
the Company’s operating subsidiaries if the Executive shall be elected to such
position, for no additional compensation or benefits.  The Executive hereby accepts such service and
agrees to undertake the duties and responsibilities inherent in such positions.  The Executive agrees to abide by the rules,
regulations, instructions, personnel practices and policies of the Company and
any changes therein that may be adopted from time to time by the Company.

Notwithstanding
anything herein to the contrary, Executive shall be entitled to engage in (a)
service on the board of directors of a no more than three other companies,
businesses or trade organizations, provided, that, the Executive
shall provide the Company prior written notice of his intention to join any
such board and provided  further that he shall not serve on the
board of any entity that competes with the Company, (b) service on the board of
directors of not-for-profit or charitable organizations, (c) other

 2
 

charitable activities and community
affairs and (d) managing his personal investments and affairs, in each case to
the extent such activities do not materially interfere with the performance of
his duties and responsibilities to the Company.

3.                                       Compensation and Benefits.

3.1                                 Salary.  During the term of this Agreement, the
Company agrees to pay to the Executive a base salary at the annualized rate of
$800,000 (“Base Salary”) commencing on the Commencement Date.  The Base Salary shall be subject to annual
review by the Board but shall not be reduced below $800,000 per annum.  Such salary shall be payable to Executive in
bi-weekly installments and in accordance with the Company’s normal payroll
procedures.

3.2                                 Bonus.  The Executive shall be eligible for a
performance-based annual bonus for each fiscal year of the Term (the “Annual
Bonus”).  The Annual Bonus shall be based
upon annual quantitative and qualitative performance targets as established by
the Board in its sole discretion in accordance with the Company’s bonus plan; provided,
that the Executive’s annual bonus level target shall be set at one hundred
percent (100%) of Base Salary.  For
fiscal year 2007, the Executive shall be entitled to a pro rata guaranteed
bonus based on an Annual Bonus of one hundred percent (100%) of his Base
Salary.  The Annual
Bonus is not earned until the close of business on the last business day of the
Company’s fiscal year.  Any Annual Bonus
payable hereunder shall be payable, if at all, after the date of the delivery
of the audited financial statements for the applicable fiscal year.

3.3                                 Stock and
Option Grant.  At the first
meeting of the Compensation Committee of the Board of Directors following the
Executive’s first day of employment,

 3
 

the
Company shall grant to the Executive, under the Company’s 2000 Stock Incentive
Plan (the “Stock Plan”), 125,000 shares of restricted stock and an option to
purchase 500,000 shares of Company stock (the “Initial Grant”).  The terms and conditions of the Initial Grant
(other than the exercise price per share, which shall be equal to the closing
price of the Company’s stock on the grant date) shall be set forth in the award
agreements attached hereto as Schedules A and B.  The stock option portion of the Initial Grant
shall vest in five equal installments on each of the first five anniversaries
of the grant date, and the restricted stock award portion of the Initial Grant
shall vest in three equal installments on each of the first three anniversaries
of the grant date.  The Board, in its
sole discretion, may grant further incentive compensation awards to the
Executive from time to time.  The Company
represents and warrants to Executive that the Company has full power and
authority, subject to Compensation Committee approval, and shares available
under the Stock Plan to make the Initial Grant.

3.4                                 Benefits.  The Executive shall be entitled to
participate in all bonus and benefit programs that the Company establishes and
makes available to its employees, to the extent that the Executive is eligible
under (and subject to the provisions of) the plan documents governing those
programs.  The Executive shall be
entitled to four (4) weeks paid vacation per year, accruing at a rate of 1.67
days per month during the Employment Period and to be taken at such times as
may be reasonably determined by Executive consistent with his duties.

3.5                                 Reimbursement
of Expenses.  The Company
shall reimburse the Executive for all reasonable travel (which shall be deemed
to include first class airfare or reimbursement or equivalent to a first class
airfare ticket in the event Executive uses his

 4
 

personal
time-share aircraft), entertainment and other expenses incurred or paid by the
Executive in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement or in connection with
Executive’s commuting to and from his personal residence in the Philadelphia
area and the Company’s offices, upon presentation by the Executive of
documentation, expense statements, vouchers and/or such other supporting
information as the Company may request.

3.6                                 Housing
Expenses.  The Company
understands that the Executive intends to maintain his primary residence
outside the Massachusetts area.  The
Company agrees to provide the Executive with a housing allowance for reasonable
housing and living expenses of $5,600 per month, related to the rental or
purchase of a home, within suitable distance to the Company’s headquarters,
which payment shall be made on a fully tax grossed-up basis.  The Company also will reimburse the Executive
for (i) reasonable travel, meals and lodging expenses incurred by him for up to
two trips for the purpose of securing such house or apartment within a suitable
distance to the Company’s headquarters and (ii) reasonable moving expenses in
relocating his belongings from his residence in Florida to such house or apartment.

3.7                                 Executive’s
Legal Fees.  The Company
agrees to pay the Executive’s reasonable legal costs and expenses in connection
with negotiating and drafting this Agreement up to a maximum of $15,000.

3.8                                 Automobile.  The Company agrees to provide the Executive
with an automobile allowance or a leased automobile with a retail value of up
to $75,000, which payments shall be made on a fully tax grossed-up basis.  In addition, the Company

 5
 

agrees to
pay all insurance, maintenance, fuel and other customary costs associated with
operating the automobile.

3.9                                 Withholding.  All salary, bonus and other compensation
payable to the Executive shall be subject to applicable withholding taxes.

4.                                       Employment Termination. 
This Agreement and the employment of the Executive under this Agreement
shall terminate upon the occurrence of any of the following:

4.1                                 At the
election of the Executive if the Company fails to name him Chief Executive
Officer of the Company within six (6) months from the Commencement Date, on the
date of such election.

4.2                                 On the
expiration date of the Employment Period.

4.3                                 At the
election of the Company, for Cause (as defined below), immediately upon written
notice by the Company to the Executive, which notice shall identify the Cause
upon which termination is based.  For the
purposes of this Section 4.3, Cause for termination shall mean:  (a) the Executive’s willful and continued
failure to substantially perform his reasonable assigned duties (other than any
such failure resulting from incapacity due to physical or mental illness or any
failure after the Executive gives notice of termination for Good Reason and
Good Reason exists), which failure is not cured within 30 days after a written
demand for substantial performance is received by the Executive from the Board
of Directors of the Company which specifically identifies the manner in which
the Board of Directors believes the Executive has not substantially performed
the Executive’s duties; (b) the Executive’s willful engagement in illegal
conduct or gross misconduct which is materially and demonstrably injurious to
the

 6
 

Company;
or (c) a material breach of Section 6 or 7 this Agreement by the
Executive.  For purposes of this Section
4.3, no act or failure to act by the Executive shall be considered “willful”
unless it is done, or omitted to be done, in bad faith and without reasonable
belief that the Executive’s action or omission was in the best interests of the
Company.

4.4                                 Upon the
death or disability of the Executive.  As
used in this Agreement, the term “disability” shall mean the Executive’s
absence from the full-time performance of the Executive’s duties with the
Company for one hundred eighty (180) consecutive calendar days as a result of
incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative.

4.5                                 At the
election of the Executive for Good Reason as defined herein.  The Executive may terminate his employment
for Good Reason at any time, following 30-days prior written notice of such
termination to the Company.  Such notice
shall provide factual details of the basis behind such termination and the
Company shall have a thirty (30) day period thereafter to cure such
matter.  As used herein, the term “Good
Reason” shall mean:  (a) a material
breach by the Company of the terms of this Agreement, including the failure to pay
Base Salary or any Annual Bonus when due; or (b) any material adverse change by
the Company in Executive’s titles, authorities, duties, responsibilities or
lines of reporting inconsistent with the terms hereof or the assignment to
Executive by the Company of titles, authorities, duties, responsibilities or
lines of reporting inconsistent with the terms hereof, or (c) a relocation of
the principal offices of

 7
 

the
Company to an area more than forty (40) miles from the location of such offices
as of the date hereof.

4.6                                 At the
election of the Executive without Good Reason, upon not less than sixty (60)
calendar days prior written notice of termination by the Executive to the
Company; provided, however, that the Company may, in its sole
discretion, determine that the termination of the Executive shall become
effective immediately and in which case the termination shall still be
considered at the election of the Executive without Good Reason.

4.7                                 At the
election of the Company, without Cause, upon not less than sixty (60) days
written notice to Executive.

4.8                                 At the
election of the Company or the Executive in connection with a Change in Control
of the Company as set forth in the Executive Retention Agreement between the
Company and the Executive (the “ERA”), dated as of the date hereof.  For purposes of this Agreement, “Change in
Control” shall have the meaning set forth in the ERA.

5.                                       Effect of Termination.

5.1                                 Termination
For Failing To Name Executive CEO.  In the event the Company fails to name
Executive to the position of Chief Executive Officer of the Company within six
(6) months from the Commencement Date, and he elects to terminate his
employment, provided the Executive executes and does not revoke a Separation
Agreement and Release of Claims for the benefit of the Company substantially in
the form set forth on Schedule C hereto (the “Separation Agreement”), the
Company shall pay or cause to be paid to Executive, within thirty (30) days of
the

 8
 

date of
his termination: (1) a lump-sum payment of two million dollars ($2,000,000);
and (2) the amount of any accrued but unpaid Base Salary, unused vacation and
unreimbursed business, housing and automobile expenses and the Company
thereafter shall have no further obligation to Executive under this Agreement,
other than for payment of any other amounts or benefits accrued and vested
under any applicable benefit plan or otherwise in accordance with applicable
law.

5.2                                 Non-Renewal,
Termination Without Good Reason By the Executive or Termination For Cause By
the Company.  In the event
the Executive’s employment is terminated by non-renewal pursuant to Section
4.2, for Cause by the Company pursuant to Section 4.3, or at the election of
the Executive pursuant to Section 4.6, the Company shall pay to the Executive
the compensation and benefits otherwise payable to him under Section 3 through
the last calendar day of his actual employment by the Company.

5.3                                 Termination
for Death or Disability.  In the event the Executive’s employment is
terminated by death or because of disability pursuant to Section 4.4, the
Company shall pay to the estate of the Executive or to the Executive, as the
case may be, (A) within thirty (30) days of the date of the Executive’s death
or determination of disability, the compensation which would otherwise be
payable to the Executive up to the end of the month in which the termination of
his employment because of death or disability occurs; and (B) an annual bonus
in an amount equal to the total bonus he would be paid for such year, if any,
multiplied by a fraction, the numerator of which is the number of days in the
year that have elapsed since January 1 and the denominator of which is 365,
payable when bonuses are paid for that year (a “Pro Rata Bonus”).  In

 9
 

addition,
the Company shall permit Executive or Executive’s estate or representative to
exercise the vested stock option portion of the Initial Grant for a period of
no less than one year after any such termination of employment.

5.4                                 Termination
By the Executive With Good Reason or By the Company Without “Cause”.  In the event the Executive’s employment is
terminated by the Executive with Good Reason pursuant to Section 4.5 or by the
Company without Cause pursuant to Section 4.7, the Company shall pay to the
Executive the compensation and benefits otherwise payable to him under Section
3 through the last calendar day of his actual employment by the Company.  In addition, provided the Executive executes
and does not revoke the Separation Agreement, the Company shall: (1) continue
to pay the Executive the Base Salary for twenty-four (24) months in accordance
with the Company’s regular payroll practices; (2) pay the Executive a Pro Rata
Bonus; (3) pay the Executive, in bi-weekly installments, over a twenty-four
month period, an amount equal in the aggregate to two (2) times the average
Annual Bonus earned for the two years prior to the date of his termination (in
the event Executive has not been employed for a sufficient period to earn two
such bonuses, such calculation shall be made assuming Executive earned a bonus
for any such year at a target level of performance (taking into account any
minimum bonus amount)); (4) provide to the Executive for two (2) years
following the date of his termination, payment of COBRA premiums for medical,
dental, and vision benefits pursuant to plans maintained by the Company under
which Executive and/or Executive’s family is eligible to receive benefits;
provided, however, that, notwithstanding the foregoing, the benefits described
in this subsection may be discontinued prior the end of the period, but only to
the extent, that Executive receives

 10
 

substantially
similar benefits from a subsequent employer; and (5) permit Executive to
exercise the stock option portion of the Initial Grant for a period of no less
than six months after the date of termination.

5.5                                 Termination Following a Change in Control.  In
the event the Executive’s employment is terminated pursuant to Section 4.8 by
the Company or by the Executive within 24 months following the Change in
Control Date, as defined in the ERA, the Executive will be entitled to the
benefits set forth in the ERA in accordance with the terms of the ERA.  

5.6                                 Six Month
Delay.  If any payment,
compensation or other benefit provided to the Executive in connection with his
employment termination is determined, in whole or in part, to constitute
“nonqualified deferred compensation” within the meaning of Section 409A and the
Executive is a specified employee as defined in Section 409A(a)(2)(B)(i), no
part of such payments shall be paid before the day that is six (6) months plus
one (1) day after the date of his termination (the “New Payment Date”).  In the case of welfare benefit continuation,
the Company shall use its best efforts to enable Executive to obtain such
benefits at Executive’s expense prior to the New Payment Date.  The aggregate of any payments that otherwise
would have been paid to the Executive (or on Executive’s behalf) during the
period between the date of his termination and the New Payment Date shall be
paid to the Executive in a lump sum on such New Payment Date.  Thereafter, any payments that remain
outstanding as of the day immediately following the New Payment Date shall be
paid without delay over the time period originally scheduled, in accordance
with the terms of this Agreement.

 11
 

6.                                       Non-Competition and Non-Solicitation.

(a)                                  While the
Executive is employed by the Company and for a period of twelve (12) months
following the Executive’s termination or cessation of such employment for any
reason, the Executive will not directly or indirectly:

(i)                                     Engage in
any business or enterprise (whether as an owner, partner, officer, employee,
director, investor, lender, consultant, independent contractor or otherwise,
except as the holder of not more than 5% of the combined voting power of the
outstanding stock of a publicly held company) that (A) is competitive with
the Company’s business and (B) develops, designs, produces, markets, sells
or renders any product or service competitive with any product or service
developed, produced, marketed, sold or rendered by the Company while the
Executive was employed by the Company;

(ii)                                  Either alone or in association with others, recruit or solicit any
person who was employed by the Company at any time during the period of the
Executive’s employment with the Company, except for an individual whose
employment with the Company has been terminated for a period of six months or
longer; and

(iii)                               Either alone or in association with others, solicit, divert or take
away, or attempt to divert or take away, the business or patronage of any of
the clients, customers or accounts, or prospective clients, customers or
accounts, of the Company which were contacted, solicited or served by the
Executive while he was employed by the Company.

 12
 

(b)                                 If any restriction set forth in this Section 6 is found by any court of competent jurisdiction
to be unenforceable because it extends for too long a period of time or over
too great a range of activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range of activities
or geographic area as to which it may be enforceable.

(c)                                  The Executive acknowledges that the restrictions contained in this Agreement are necessary for the
protection of the business and goodwill of the Company and are considered by
the Executive to be reasonable for such purpose.  The Executive agrees that any material breach
of this Agreement will cause the Company substantial and irrevocable damage and
therefore, in the event of any such material breach, in addition to such other
remedies which may be available, the Company shall have the right to seek
specific performance and injunctive relief without posting a bond.

(d)                                 The geographic scope of this Section shall extend to anywhere the
Company or any of its subsidiaries is doing business during the Term or has
plans, during the Term, to do business.

(e)                                  The Executive agrees to provide a copy of
this Agreement to all person and Entities with whom the Executive seeks to be hired or do business before accepting
employment or engagement with any of them.

(f)                                    If the Executive violates the provisions of this Section, the Executive shall continue
to be held by the restrictions set forth in this Section, until a period equal
to the period of restriction has expired without any violation.

 13
 

7.                                       Proprietary Information and
Developments.

7.1                                 Proprietary
Information.

(a)                                  The
Executive agrees that all information, whether or not in writing, of a private,
secret or confidential nature concerning the Company’s business, business
relationships or financial affairs (collectively, “Proprietary Information”) is
and shall be the exclusive property of the Company.  By way of illustration, but not limitation,
Proprietary Information may include discoveries, inventions, products, product
improvements, product enhancements, processes, methods, techniques, formulas,
compositions, compounds, negotiation strategies and positions, projects,
developments, plans (including business and marketing plans), research data,
clinical data, financial data (including sales, costs, profits and pricing
methods), personnel data, computer programs (including software used pursuant
to a license agreement), customer and supplier lists, and contacts at or
knowledge of customers or prospective customers of the Company.  Except as required by applicable law, the
Executive will not disclose any Proprietary Information to any person or entity
other than employees of the Company or use the same for any purposes (other
than in the performance of his duties as an employee of the Company) without
prior written approval from the Board of Directors or a designee of the Board
of Directors, either during or after his employment with the Company, unless
and until such Proprietary Information has become public knowledge without
fault by the Executive.

(b)                                 The
Executive agrees that all files, documents, letters, memoranda, reports,
records, data, sketches, drawings, methods, laboratory notebooks, program
listings, computer equipment or devices, computer programs or other written,

 14
 

photographic,
or other tangible material containing Proprietary Information, whether created
by the Executive or others, which shall come into his custody or possession,
shall be and are the exclusive property of the Company and are to be used by
the Executive only in the performance of his duties for the Company.  All such materials or copies thereof and all
tangible property of the Company in the custody or possession of the Executive
shall be delivered to the Company upon the earlier of (i) a request by the
Company or (ii) termination of his employment.  After such delivery, the Executive shall not
retain any such materials or copies thereof or any such tangible property.

(c)                                  The
Executive agrees that his obligation not to disclose or to use information and
materials of the types set forth in subsections (a) and (b) above, and his
obligation to return materials and tangible property set forth in subsection
(b) above, also extends to such types of information, materials and tangible
property of customers of the Company or suppliers to the Company or other third
parties who may have disclosed or entrusted the same to the Company or to the
Executive.

7.2                                 Developments.

(a)                                  The Executive will
make full and prompt disclosure to the Company of all inventions, creations,
improvements, discoveries, trade secrets, secret processes, technology,
know-how, copyrightable materials, methods, developments, software, and works
of authorship or other creative works, whether patentable or not, which are
created, made, conceived or reduced to practice by him or under his direction
or jointly with others during his employment by the Company, whether or not
during normal working hours or on the premises of the Company (all of which are
collectively referred to in this Agreement as “Developments”).

 15

(b)                                 The Executive agrees to assign and does
hereby assign to the Company (or any person or entity designated by the
Company) all his right, title and interest in and to all Developments and all
related patents, patent applications, copyrights and copyright
applications.   However, this subsection
(b) shall not apply to Developments that do not relate to any business or
research and development conducted or planned to be conducted by the Company at
the time such Development is created, made, conceived or reduced to practice
and that are made and conceived by the Executive not during normal working
hours, not on the Company’s premises and not using the Company’s tools,
devices, equipment or Proprietary Information. 
The Executive understands that, to the extent this Agreement shall be
construed in accordance with the laws of any state that precludes a requirement
in an employee agreement to assign certain classes of inventions made by an
employee, this subsection (b) shall be interpreted not to apply to any invention
that a court rules and/or the Company agrees falls within such classes.  The Executive also hereby waives all claims
to moral rights in any Developments.

(c)                                  The Executive agrees to cooperate fully with
the Company and to take such further actions as may be necessary or desirable,
both during and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of copyrights, patents and other
intellectual property rights (both in the United States and foreign countries)
relating to Developments.  The Executive
shall sign all papers, including, without limitation, copyright applications,
patent applications, declarations, oaths, formal assignments, assignments of
priority rights and powers of attorney, that the Company may deem necessary or
desirable in order to protect its rights

 16
 

and
interests in any Development.  The
Executive further agrees that if the Company is unable, after reasonable
effort, to secure the signature of the Executive on any such papers, the Executive
Vice President of Research and Development or the General Counsel of the
Company shall be entitled to execute any such papers as the agent and the
attorney-in-fact of the Executive, and the Executive hereby irrevocably
designates and appoints the Executive Vice President of Research and
Development or the General Counsel of the Company as his agent and
attorney-in-fact to execute any such papers on his behalf and to take any and
all actions as the Company may deem necessary or desirable in order to protect
its rights and interests in any Development under the conditions described in
this sentence.

7.3                                 United States Government Obligations.  The
Executive acknowledges that the Company from time to time may have agreements
with other parties or with the United States Government, or agencies thereof,
which impose obligations or restrictions on the Company regarding inventions
made during the course of work under such agreements or regarding the
confidential nature of such work.  The
Executive agrees to be bound by all such obligations and restrictions that are
made known to the Executive and to take all action necessary to discharge the
obligations of the Company under such agreements.

7.4                                 Other Agreements.  The
Executive hereby represents that, other than documents filed with the
Securities and Exchange Commission, he is not bound by the terms of any
agreement with any previous employer or other party to refrain from competing,
directly or indirectly, with the business of such previous employer or any
other party.  The Executive further
represents that his performance of all the terms of this

 17
 

Agreement
and the performance of his duties as an employee of the Company does not and
will not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him in confidence or in trust prior to his
employment with the Company and that the Executive will not disclose to the
Company or induce the Company to use any confidential or proprietary
information, knowledge or material belonging to any previous employer or
others.  The Executive further represents
that his performance of all the terms of this Agreement and the performance of
his duties as an employee of the Company does not and will not breach any
agreement to refrain from (i) competing, directly or indirectly, with the
business of any former employer or others or (ii) from soliciting employees,
customers or suppliers of any former employer or others.

8.                                       Indemnification.  The Company shall indemnify the Executive in
accordance with its Certificate of Incorporation and By-Laws.

9.                                       Survival.  The provisions of Sections 6, 7 and 8 shall
survive the termination of this Agreement for any reason.

10.                                 Notices.  Any notices delivered under this Agreement
shall be deemed duly delivered three (3) business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, or one
(1) business day after it is sent for next-business day delivery via a
reputable nationwide overnight courier service, in each case to the address of
the recipient set forth in the introductory paragraph hereto.  Either party may change the address to which
notices are to be delivered by giving notice of such change to the other party
in the manner set forth in this Section 10.

11.                                 Compliance
with Code Section 409A.  It is
intended that this Agreement comply with or be exempt from the requirements of
Sections 409A(a)(2) through (4) of

 18
 

the Internal Revenue Code
of 1986, as amended, and all regulations issued thereunder.  The Agreement shall be interpreted and
administered for all purposes in accordance with this intent and may be amended
by the Company, following consultation with Executive and Executive’s legal and
tax advisors, at any time if such amendment is deemed necessary to satisfy this
intent.

12.                                 Pronouns.  Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.

13.                                 Entire
Agreement.  This Agreement, together
with the ERA, constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement.

14.                                 Amendment.  This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Executive.

15.                                 Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts (without reference to the conflict of laws provisions
thereof).  Any action, suit or other
legal proceeding arising under or relating to any provision of this Agreement
shall be commenced only in a court of the Commonwealth of Massachusetts (or, if
appropriate, a federal court located within the Commonwealth of Massachusetts),
and the Company and the Executive each consents to the jurisdiction of such a
court.  The Company and the Executive
each hereby irrevocably waive any right to a trial by jury in any action, suit
or other legal proceeding arising under or relating to any provision of this
Agreement or any other dealing between

 19
 

them relating to the
subject matter of this transaction and the relationship that is being
established.

16.                                 Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of both parties and their respective
successors and assigns, including any corporation with which or into which the
Company may be merged or which may succeed to its assets or business; provided,
however, that the obligations of the Executive are personal and shall
not be assigned by him.

17.                                 Acknowledgment.  The Executive states and represents that he
has had an opportunity to fully discuss and review the terms of this Agreement
with an attorney.  The Executive further
states and represents that he has carefully read this Agreement, understands
the contents herein, freely and voluntarily assents to all of the terms and
conditions hereof, and signs his name of his own free act.

18.                                 Miscellaneous.

18.1                           No delay or omission by the Company in
exercising any right under this Agreement shall operate as a waiver of that or
any other right.  A waiver or consent
given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar to or waiver of any right on any
other occasion.

18.2                           The captions of the sections of this
Agreement are for convenience of reference only and in no way define, limit or
affect the scope or substance of any section of this Agreement.

 20
 

18.3                           In case any provision of this Agreement shall
be invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
set forth above.

	
  

  	
  Sepracor Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Timothy
  J. Barberich

  	
   

  
	
   

  	
  Title:

  	
   Chairman and
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Adrian Adams

  	
   

  
	
   

  	
  Adrian Adams

  	
   

  

 

 21

SCHEDULE
A

FORM OF RESTRICTED STOCK AGREEMENT

SEE
ATTACHED AGREEMENT

 

SEPRACOR
INC. 

Restricted
Stock Agreement 

 

	
  Name of Recipient: 

  	
   

  
	
   

  	
   

  
	
  Number of shares of restricted common 

  stock awarded: 

  	
   

  
	
   

  	
   

  
	
  Grant Date: 

  	
   

  

 

                Sepracor Inc. (the “Company”) has selected you to
receive the restricted stock award described above, which is subject to the
provisions of the Company’s 2000 Stock Incentive Plan (the “Plan”) and the
terms and conditions contained in this Restricted Stock Agreement.  Please confirm your acceptance of this
restricted stock award and of the terms and conditions of this Agreement by
signing a copy of this Agreement where indicated below. 

	
  

  	
  SEPRACOR INC. 

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  [insert name and
  title] 

  
	
   

  	
   

  
	
  Accepted and Agreed: 

  	
   

  
	
   

  	
   

  
	
   

  	
    

  	
   

  
	
  [insert name of recipient] 

  	
   

  
	
   

  	
   

  
				

 

SEPRACOR
INC. 

Restricted
Stock Agreement 

                The terms and conditions of the award of shares of
restricted common stock of the Company (the “Restricted Shares”) made to the
Recipient, as set forth on the cover page of this Agreement, are as follows: 

1.             Issuance of
Restricted Shares. 

(a)           The Restricted Shares are issued to
the Recipient, effective as of the Grant Date (as set forth on the cover page
of this Agreement), in consideration of employment services rendered and to be
rendered by the Recipient to the Company. 

(b)           The Restricted Shares will initially
be issued by the Company in book entry form only, in the name of the
Recipient.  Following the vesting of any
Restricted Shares pursuant to Section 2 below, the Company shall, if requested
by the Recipient, issue and deliver to the Recipient a certificate representing
the vested Restricted Shares.   The
Recipient agrees that the Restricted Shares shall be subject to the forfeiture
provisions set forth in Section 3 of this Agreement and the restrictions on
transfer set forth in Section 4 of this Agreement. 

2.             Vesting. 

(a)           Vesting Schedule.  Unless otherwise provided in this Agreement
or the Plan, the Restricted Shares shall vest in accordance with the following
vesting schedule:  [     %
of the total number of Restricted Shares shall vest on the first anniversary of
the Grant Date and      % of the total number of
Restricted Shares shall vest on each successive anniversary thereafter, through
and including the       anniversary of the Grant
Date].  Any fractional number of
Restricted Shares resulting from the application of the foregoing percentages
shall be rounded down to the nearest whole number of Restricted Shares. 

(b)           Acceleration of Vesting.  Notwithstanding the foregoing vesting
schedule, as provided in the Plan, all unvested Restricted Shares shall vest
effective immediately prior to a Change in Control Event (as defined in the
Plan).   

3.             Forfeiture of
Unvested Restricted Shares Upon Employment Termination. 

                In the event that the Recipient ceases to be employed
by, a director of, or a consultant or advisor to, the Company for any reason or
no reason, with or without cause all of the Restricted Shares that are unvested
as of the time of such employment termination shall be forfeited immediately
and automatically to the Company, without the payment of any consideration to
the Recipient, effective as of such termination of employment.  The Recipient shall have no further rights
with respect to any Restricted Shares that are so forfeited.  If the Recipient is employed by a subsidiary
of the Company, any references in this Agreement to employment with the Company
shall instead be deemed to refer to employment with such subsidiary. 

4.             Restrictions on
Transfer. 

                The Recipient shall not sell, assign, transfer,
pledge, hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively “transfer”) any Restricted Shares, or any interest therein, until
such Restricted Shares have vested, except that the Recipient may transfer such
Restricted Shares as part of the sale of all or substantially all of the shares
of capital stock of the Company (including pursuant to a merger or
consolidation).  The Company shall not be
required (i) to transfer on its books any of the Restricted Shares which have
been transferred in violation of any of the provisions of this Agreement or
(ii) to treat as owner of such Restricted Shares or to pay dividends to any
transferee to whom such Restricted Shares have been transferred in violation of
any of the provisions of this Agreement. 

5.             Restrictive
Legends.  

                The book entry account reflecting the issuance of the
Restricted Shares in the name of the Recipient shall bear a legend or other
notation upon substantially the following terms: 

                “These shares of stock are subject to forfeiture
provisions and restrictions on transfer set forth in a certain Restricted Stock
Agreement between the corporation and the registered owner of these shares (or
his or her predecessor in interest), and such Agreement is available for
inspection without charge at the office of the Secretary of the corporation.”  

6.             Rights as a
Shareholder. 

                Except as otherwise provided in this Agreement, for
so long as the Recipient is the registered owner of the Restricted Shares, the
Recipient shall have all rights as a shareholder with respect to the Restricted
Shares, whether vested or unvested, including, without limitation, any rights
to receive dividends and distributions with respect to the Restricted Shares
and to vote the Restricted Shares and act in respect of the Restricted Shares
at any meeting of shareholders. 

7.             Provisions of
the Plan. 

                This Agreement is subject to the provisions of the
Plan, a copy of which is furnished to the Recipient with this Agreement.  As provided in the Plan, upon the occurrence
of a Reorganization Event (as defined in the Plan), the rights of the Company
hereunder (including the right to receive forfeited Restricted Shares) shall inure
to the benefit of the Company’s successor and, unless the Board determines
otherwise, shall apply to the cash, securities or other property which the
Restricted Shares were converted into or exchanged for pursuant to such
Reorganization Event in the same manner and to the same extent as they applied
to the Restricted Shares under this Agreement.  

8.             Tax Matters.

(a)            Acknowledgments; Section 83(b)
Election.  The Recipient acknowledges
that he or she is responsible for obtaining the advice of the Recipient’s own
tax advisors with respect to the acquisition of the Restricted Shares and the
Recipient is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents with respect to the tax
consequences relating to the Restricted Shares. 
The Recipient understands that the Recipient (and not the Company) shall
be responsible for the Recipient’s tax liability that may arise in connection
with the acquisition, vesting and/or disposition of the Restricted Shares. 

The Recipient
acknowledges that he or she has been informed of the availability of making an
election under Section 83(b) of the Internal Revenue Code, as amended, with
respect to the issuance of the Restricted Shares and that the Recipient has
decided not to file a Section 83(b) election. 

(b)           Withholding. The Recipient
acknowledges and agrees that the Company has the right to deduct from payments
of any kind otherwise due to the Recipient any federal, state, local or other
taxes of any kind required by law to be withheld with respect to the vesting of
the Restricted Shares.  On each date on
which Restricted Shares vest, the Company shall deliver written notice to the
Recipient of the amount of withholding taxes due with respect to the vesting of
the Restricted Shares that vest on such date; provided, however, that the total
tax withholding cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal and state
tax purposes, including payroll taxes, that are applicable to such supplemental
taxable income).  The Recipient shall
satisfy such tax withholding obligations by making a cash payment to the
Company on the date of vesting of the Restricted Shares, in the amount of the
Company’s withholding obligation in connection with the vesting of such
Restricted Shares. 

9.             Miscellaneous.

(a)           No Right to Continued Employment.  The Recipient acknowledges and agrees that,
notwithstanding the fact that the vesting of the Restricted Shares is
contingent upon his or her continued employment by the Company, this Agreement
does not constitute an express or implied promise of continued employment or
confer upon the Recipient any rights with respect to continued employment by
the Company. 

(b)           Governing Law.  This Agreement shall be construed, interpreted
and enforced in accordance with the internal laws of the State of Delaware
without regard to any applicable conflicts of laws provisions. 

SCHEDULE
B

FORM OF STOCK OPTION AGREEMENTS

SEE
ATTACHED AGREEMENT

 

SEPRACOR INC. 

Form of Incentive Stock
Option Agreement 

Granted Under 2000
Stock Incentive Plan 

1.             Grant of Option.

 

                This agreement
evidences the grant by Sepracor Inc., a Delaware corporation (the “Company”),
on the Grant Date indicated on the preceding Certificate of Stock Option Grant
(the “Certificate”) to an employee, consultant, or director of the Company (the
“Participant”), of an option to purchase, in whole or in part, on the terms
provided herein and in the Company’s 2000 Stock Incentive Plan (the “Plan”),
the number of shares (the “Shares”) of common stock, $.10 par value per
share,  of the Company (“Common
Stock”),indicated on the certificate at the price  per Share indicated on the Certificate.
Unless earlier terminated, this option shall expire on the Grant Expiration
Date indicated on the Certificate (“Grant Expiration Date”). 

 

                It is intended
that the option evidenced by this agreement shall not be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”).  Except as otherwise indicated by the context,
the term “Participant”, as used in this option, shall be deemed to include any
person who acquires the right to exercise this option validly under its terms. 

 

2.             Vesting Schedule.

 

                This option will
become exercisable (“vest”) pursuant to the Vesting Schedule indicated on the
Certificate (“Vesting Schedule”). 

 

                The right of
exercise shall be cumulative so that to the extent the option is not exercised
in any period to the maximum extent permissible it shall continue to be
exercisable, in whole or in part, with respect to all shares for which it is
vested until the earlier of the Grant Expiration Date or the termination of
this option under Section 3 hereof or the Plan. 

 

3.             Exercise of
Option. 

 

(a)            Form of Exercise. Each
election to exercise this option shall be in writing, signed by the
Participant, and received by the Company at its principal office, accompanied
by this agreement, and payment in full in the manner provided in the Plan. The
Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional
share. 

 

(b)           Continuous Relationship with the
Company Required.  Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the Grant Date, an [employee or officer of], or consultant
or advisor to, the Company or any parent or subsidiary of the Company as
defined in Section 424(e) or (f) of the Code (an “Eligible Participant”). 

 

    
 

(c)            Termination of Relationship with
the Company. If the Participant ceases to be an Eligible Participant for any
reason, then, except as provided in paragraphs (d) and (e) below, the right to
exercise this option shall terminate three months after such cessation (but in
no event after the Grant Expiration Date), provided that this option shall be
exercisable only to the extent that the Participant was entitled to exercise
this option on the date of such cessation. 
Notwithstanding the foregoing, if, following the time the Participant
has ceased to be an Eligible Participant, but prior to the Grant Expiration
Date, the Participant materially breaches Section 6 or 7 of the Employment
Agreement between the Participant and the Company dated March 1, 2007 (the
“Employment Agreement”), the right to exercise this option shall terminate
immediately upon written notice to the Participant from the Company describing
such violation. 

 

(d)           Exercise Period Upon Death or
Disability.  If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Grant Expiration Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for “cause” as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the
Participant (or in the case of death by an authorized transferee), provided
that this option shall be exercisable only to the extent that this option was
exercisable by the Participant on the date of his or her death or disability,
and further provided that this option shall not be exercisable after the Grant
Expiration Date. 

 

(e)            Discharge for Cause.  If the Participant, prior to the Grant
Expiration Date, is discharged by the Company for “cause” (as defined below),
the right to exercise this option shall terminate immediately upon the
effective date of such discharge. 
“Cause” shall have the meaning set forth in the Employment
Agreement.   

 

4.             Withholding.

 

                No Shares will be
issued pursuant to the exercise of this option unless and until the Participant
pays to the Company, or makes provision satisfactory to the Company for payment
of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option. 

 

5.             Nontransferability
of Option. 

 

                This option may
not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the lifetime of the Participant,
this option shall be exercisable only by the Participant. 

 

6.             Disqualifying
Disposition. 

 

                If the Participant
diposes of Shares acquired upon exercise of this option within two years from
the Grant Date or one year after such Shares were acquired pursuant to exercise
of this option, the Participant shall notify the Company in writing of such
disposition. 

7.             Provisions of
the Plan. 

 

                This option is
subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option. 

 

 

IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer.  This option shall take effect as a sealed
instrument. 

 

	
   

  	
  SEPRACOR INC. 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  

 

PARTICIPANT’S ACCEPTANCE 

 

                The Participant hereby accepts
the foregoing option and agrees to the terms and conditions thereof.  The 
Participant hereby acknowledges receipt of a copy of the Company’s 2000
Stock Incentive Plan. 

	
   

  	
  

  
	
   

  	
  Name:

  
	
   

  	
   

  	
   

  

 

SEPRACOR INC.

Nonstatutory Stock
Option Agreement

Granted Under 2000 Stock Incentive Plan

1.             Grant of Option.

This agreement
evidences the grant by Sepracor Inc., a Delaware corporation (the “Company”),
on the Grant Date indicated on the preceding Certificate of Stock Option Grant
(the “Certificate”) to  an employee,
consultant, or director of the Company (the “Participant”), of an option to
purchase, in whole or in part, on the terms provided herein and in the Company’s
2000 Stock Incentive Plan (the “Plan”), the number of shares (the “Shares”) of
common stock, $.10  par value per
share,  of the Company (“Common Stock”),indicated
on the certificate at the price  per
Share indicated on the Certificate. Unless earlier terminated, this option
shall expire on the Grant Expiration Date indicated on the Certificate (“Grant
Expiration Date”).

It is intended
that the option evidenced by this agreement shall not be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”).  Except as otherwise indicated by the context,
the term “Participant”, as used in this option, shall be deemed to include any
person who acquires the right to exercise this option validly under its terms.

2.             Vesting Schedule.

This option will
become exercisable (“vest”) pursuant to the Vesting Schedule indicated on the
Certificate (“Vesting Schedule”).

The right of
exercise shall be cumulative so that to the extent the option is not exercised
in any period to the maximum extent permissible it shall continue to be
exercisable, in whole or in part, with respect to all shares for which it is
vested until the earlier of the Grant Expiration Date or the termination of
this option under Section 3 hereof or the Plan.

3.             Exercise of Option.

(a)           Form of Exercise. Each
election to exercise this option shall be in writing, signed by the
Participant, and received by the Company at its principal office, accompanied
by this agreement, and payment in full in the manner provided in the Plan. The
Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional
share.

(b)           Continuous Relationship with the
Company Required.  Except as
otherwise provided in this Section 3, this option may not be exercised
unless the Participant, at the time he or she exercises this option, is, and
has been at all times since the Grant Date, an [employee or officer of], or
consultant or advisor to, the Company or any parent or subsidiary of the
Company as defined in Section 424(e) or (f) of the Code (an “Eligible
Participant”).

 

(c)           Termination of Relationship with
the Company. If the Participant ceases to be an Eligible Participant for
any reason, then, except as provided in paragraphs (d) and (e) below, the
right to exercise this option shall terminate  three
months after such cessation (but in no event after the Grant Expiration Date), provided
that this option shall be exercisable only to the extent that the Participant
was entitled to exercise this option on the date of such cessation.  Notwithstanding the foregoing, if, following
the time the Participant has ceased to be an Eligible Participant, but prior to
the Grant Expiration Date, the Participant materially breaches Section 6 or 7
of the Employment Agreement between the Participant and the Company dated March
1, 2007 (the “Employment Agreement”), the right to exercise this option shall
terminate immediately upon written notice to the Participant from the Company
describing  such violation.

(d)           Exercise Period Upon Death or
Disability.  If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
prior to the Grant Expiration Date while he or she is an Eligible Participant
and the Company has not terminated such relationship for “cause” as specified
in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the
Participant (or in the case of death by an authorized transferee), provided
that this option shall be exercisable only to the extent that this
option was exercisable by the Participant on the date of his or her death or
disability, and further provided that this option shall not be exercisable
after the Grant Expiration Date.

(e)           Discharge for Cause.  If the Participant, prior to the Grant
Expiration Date, is discharged by the Company for “cause” (as defined below),
the right to exercise this option shall terminate immediately upon the
effective date of such discharge.  “Cause”
shall have the meaning set forth in the Employment Agreement.

4.             Withholding.

No Shares will be
issued pursuant to the exercise of this option unless and until the Participant
pays to the Company, or makes provision satisfactory to the Company for payment
of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.

5.             Nontransferability of Option.

This option may
not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the lifetime of the Participant,
this option shall be exercisable only by the Participant.

6.             Provisions of the Plan.

This option is
subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.

 

IN WITNESS WHEREOF, the
Company has caused this option to be executed under its corporate seal by its
duly authorized officer.  This option
shall take effect as a sealed instrument.

	
   

  	
  SEPRACOR INC. 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  

 

PARTICIPANT’S
ACCEPTANCE

The
Participant hereby accepts the foregoing option and agrees to the terms and
conditions thereof.  The  Participant hereby acknowledges receipt of a
copy of the Company’s 2000 Stock Incentive Plan.

	
   

  	
  

  
	
   

  	
  Name:

  
	
   

  	
   

  	
   

  

 

SCHEDULE
C

FORM OF SEPARATION AGREEMENT AND RELEASE OF CLAIMS

SEE
ATTACHED FORM

FORM OF
SEPARATION AGREEMENT AND RELEASE OF CLAIMS

In connection with your
employment separation from Sepracor, Inc. (the “Company”) on [INSERT TERMINATION DATE], and in order to receive the
benefits as set forth in Section 5 of the Employment agreement, this agreement
must become binding between you and the Company.  By signing and returning this agreement, you
will be entering into a binding agreement with the Company and will be agreeing
to the terms and conditions set forth in the numbered paragraphs below,
including the release of claims set forth in paragraph 1.  Therefore, you are advised to consult with an
attorney before signing this agreement and you have been given more than
twenty-one (21) days to do so.  If you
sign this agreement, you may change your mind and revoke your agreement during
the seven (7) day period after you have signed it.  If you do not so revoke, this agreement will
become a binding agreement between you and the Company upon the expiration of
the seven (7) day revocation period.

The following
numbered paragraphs set forth the terms and conditions which will apply if you
timely sign and return this agreement and do not revoke it within the seven (7)
day revocation period:

1.                                       Mutual Releases - In consideration
of the payment of the severance benefits, which you acknowledge you would not
otherwise be entitled to receive, you hereby fully, forever, irrevocably and
unconditionally release, remise and discharge the Company, its officers,
directors, stockholders, corporate affiliates, subsidiaries, parent companies,
successors and assigns, agents and employees (each in their individual and
corporate capacities) (hereinafter, the “Released Parties”) from any and all
claims, charges, complaints, demands, actions, causes of action, suits, rights,
debts, sums of money, costs, accounts, reckonings, covenants, contracts,
agreements, promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys’ fees and costs), of every kind
and nature which you ever had or now have against the Released Parties,
including, but not limited to, those claims arising out of your employment with
and/or separation from the Company, including, but not limited to, all claims
under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.,
the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the
Americans With Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the
Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Worker
Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq.,
Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, 18
U.S.C. § 1514(A), the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq.,
Executive Order 11246, Executive Order 11141, the Fair Credit Reporting Act, 15
U.S.C. § 1681 et seq., the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001 et seq., the Massachusetts Fair
Employment Practices Act., M.G.L. c. 151B, § 1 et seq., the
Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts
Equal Rights Act, M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C, the
Massachusetts Labor and Industries Act, M.G.L. c. 149, § 1 et seq., the
Massachusetts Privacy Act, M.G.L. c. 214, § 1B, and the Massachusetts Maternity
Leave Act, M.G.L. c. 149, § 105D, all as amended; all common law claims
including, but not limited to, actions in tort, defamation and breach of
contract; all claims to any non-vested ownership interest in the Company,
contractual or otherwise, including, but not limited to, claims to stock or
stock options; and any claim or damage arising out of your employment with or 

separation from the
Company (including a claim for retaliation) under any common law theory or any
federal, state or local statute or ordinance not expressly referenced above;
provided, however, that nothing in this Agreement prevents you from filing,
cooperating with, or participating in any proceeding before the EEOC or a state
Fair Employment Practices Agency (except that you acknowledge that you may not
be able to recover any monetary benefits in connection with any such claim,
charge or proceeding).  Notwithstanding
the foregoing, the release set forth in this Section 1 shall not apply to (a)
any claim to severance benefits under the Employment Agreement or your rights
under this agreement or (b) any vested equity interest in the Company,
including vested stock options.

The Company hereby fully, forever, irrevocably and
unconditionally releases, remises and discharges you from any and all claims,
charges, complaints, demands, actions, causes of action, suits, rights, debts,
sums of money, costs, accounts, reckonings, covenants, contracts, agreements,
promises, doings, omissions, damages, executions, obligations, liabilities and
expenses (including attorney’s fees and costs), of every kind and nature that
the Company ever had or now has against you as of the date of this agreement.

2.                                       Non-Disclosure, Non-Competition and
Non-Solicitation Obligations – You acknowledge and reaffirm your
obligation to keep confidential and not to disclose any and all non-public
information concerning the Company which you acquired during the course of your
employment with the Company, including, but not limited to, any non-public
information concerning the Company’s business affairs, business prospects and
financial condition, as is stated more fully in the [Name of the
Non-Disclosure Agreement] you executed at the inception of your
employment, which remains in full force and effect.  You further acknowledge and reaffirm your
obligations under the [Name of the
Non-Competition and/or Non-Solicitation Agreement(s)] you previously
executed for the benefit of the Company at the inception of your employment,
which also remain(s) in full force and effect.

3.                                       Return of Company Property - You
confirm that you have returned to the Company all keys, files, records (and
copies thereof), equipment (including, but not limited to, computer hardware,
software and printers, wireless handheld devices, cellular phones, pagers,
etc.), Company identification, Company vehicles and any other Company-owned
property in your possession or control and have left intact all electronic
Company documents, including but not limited to, those that you developed or
helped develop during your employment. 
You further confirm that you have cancelled all accounts for your
benefit, if any, in the Company’s name, including but not limited to, credit
cards, telephone charge cards, cellular phone and/or pager accounts and
computer accounts.

4.                                       Business Expenses and Compensation
- You acknowledge that you have been reimbursed by the Company for all business
expenses incurred in conjunction with the performance of your employment and
that no other reimbursements are owed to you. 
You further acknowledge that you have received payment in full for all
services rendered in conjunction with your employment by the Company and that
no other compensation is owed to you except as provided herein.

5.                                       Non-Disparagement - You understand
and agree that, as a condition for payment to you of the consideration herein
described, you shall not make any false, disparaging or derogatory statements
to any media outlet, industry group, financial institution or current or former
employee, consultant, client or customer of the Company regarding the Company
or any of its directors, officers, employees, agents or representatives or
about the Company’s business affairs and financial condition; provided, however,
that nothing herein shall prevent you from making truthful disclosures to any
governmental entity or in any litigation or arbitration.

6.                                       Amendment - This agreement shall be
binding upon the parties and may not be modified in any manner, except by an
instrument in writing of concurrent or subsequent date signed by duly
authorized representatives of the parties hereto.  This agreement is binding upon and shall
inure to the benefit of the parties and their respective agents, assigns,
heirs, executors, successors and administrators.

7.                                       Waiver of Rights - No delay or
omission by the Company in exercising any right under this agreement shall
operate as a waiver of that or any other right. 
A waiver or consent given by the Company on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver
of any right on any other occasion.

8.                                       Validity - Should any provision of
this agreement be declared or be determined by any court of competent
jurisdiction to be illegal or invalid, the validity of the remaining parts,
terms or provisions shall not be affected thereby and said illegal or invalid
part, term or provision shall be deemed not to be a part of this agreement.

9.                                       Cooperation – You agree to
cooperate with the Company in the investigation, defense or prosecution of any
claims or actions now in existence or which may be brought in the future
against or on behalf of the Company. 
Your cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with the Company’s
counsel to prepare for discovery or any mediation, arbitration, trial,
administrative hearing or other proceeding or to act as a witness when
reasonably requested by the Company at mutually agreeable times and at
locations mutually convenient to you and the Company.  You also agree to cooperate with the Company
in the transitioning of your work, and will be available to the Company for
this purpose or any other purpose reasonably requested by the Company.

10.                                 Tax Provision – In connection with
the severance benefits provided to you pursuant to this agreement, the Company
shall withhold and remit to the tax authorities the amounts required under
applicable law, and you shall be responsible for all applicable taxes with
respect to such severance benefits under applicable law.  You acknowledge that you are not relying upon
advice or representation of the Company with respect to the tax treatment of
any of the severance benefits.

11.                                 Section 409A - No payments that may
be made pursuant to this agreement that constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Internal Revenue Code
and the guidance issued thereunder (“Section 409A”) may be accelerated or
deferred by the Company or by you. 
Notwithstanding anything else to the 

contrary in this
agreement, to the extent that any of the payments that may be made hereunder
constitute “nonqualified deferred compensation”, within the meaning of Section
409A and you are a “specified employee” upon your separation (as defined under
Section 409A), any such payment shall be delayed following your separation date
if, absent such delay, such payment would otherwise be subject to penalty under
Section 409A.  In any event, the Company
makes no representation or warranty and shall have no liability to you or to
any other person if any provisions of this agreement are determined to
constitute “nonqualified deferred compensation” subject to Section 409A but do
not satisfy the requirements of that section. 

12.                                 Nature of Agreement - You
understand and agree that this agreement is a severance agreement and does not
constitute an admission of liability or wrongdoing on the part of the Company.

13.                                 Acknowledgments - You acknowledge
that you have been given at least twenty-one (21) days to consider this
agreement and that the Company advised you to consult with an attorney of your
own choosing prior to signing this agreement. 
You understand that you may revoke this agreement for a period of seven
(7) days after you sign this agreement, and the agreement shall not be effective
or enforceable until the expiration of this seven (7) day revocation
period.  You
understand and agree that by entering into this agreement you are waiving any
and all rights or claims you might have under The Age Discrimination in
Employment Act, as amended by The Older Workers Benefit Protection Act, and
that you have received consideration beyond that to which you were previously
entitled.

14.                                 Voluntary Assent - You affirm that
no other promises or agreements of any kind have been made to or with you by
any person or entity whatsoever to cause you to sign this agreement, and that
you fully understand the meaning and intent of this agreement.  You state and represent that you have had an
opportunity to fully discuss and review the terms of this agreement with an
attorney.  You further state and
represent that you have carefully read this agreement, understand the contents
herein, freely and voluntarily assent to all of the terms and conditions
hereof, and sign your name of your own free act.

15.                                 Applicable Law  - This agreement shall be interpreted and
construed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.  You hereby
irrevocably submit to and acknowledge and recognize the jurisdiction of the
courts of the Commonwealth of Massachusetts, or if appropriate, a federal court
located in Massachusetts (which courts, for purposes of this agreement, are the
only courts of competent jurisdiction), over any suit, action or other
proceeding arising out of, under or in connection with this agreement or the
subject matter hereof.

16.                                 Entire Agreement - This agreement
contains and constitutes the entire understanding and agreement between the
parties hereto with respect to your severance benefits and the settlement of
claims against the Company and cancels all previous oral and written
negotiations, agreements, commitments and writings in connection therewith.
Nothing in this paragraph, however, shall modify, cancel or supersede your
obligations set forth in paragraph 2 herein.

 

 

	
  

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

I hereby agree to the
terms and conditions set forth above.  I
have been given at least twenty-one (21) days to consider this agreement and I
have chosen to execute this on the date below. 
I intend that this agreement become a binding agreement between me and
the Company if I do not revoke my acceptance in seven (7) days by notifying
                                              
in writing.

 

	
  

  	
   

  	
  Date

  	
   

  
	
  Employee Name:

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