Document:

exv10w2

 

Exhibit 10.2 

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

FIRST AMENDMENT TO MANUFACTURING

SERVICES AGREEMENT

     This First Amendment to the Manufacturing Services Agreement (the “First Amendment”) between
Patheon Pharmaceuticals Inc., (“Patheon”) and Critical Therapeutics, Inc., (“Client”) shall be
effective November 5, 2007 (the “Effective Date:”).

BACKGROUND

     Patheon and Client entered into a Manufacturing Services Agreement dated May 9, 2007
(the “Agreement”). The parties desire to amend the Agreement to restate Schedules B and C in their
entirety.

AGREEMENT

     NOW THEREFORE, in consideration of the mutual covenants contained herein, Patheon
and Client agree as follows:

	 	(1)	 	Schedule B is deleted in its entirety and is replaced with a new Schedule B as
attached hereto;
	 
	 	(2)	 	Schedule C is deleted in its entirety and is replaced with a new Schedule C as
attached hereto; and
	 
	 	(3)	 	The terms and conditions of the Agreement shall continue in full force and
effect except as modified by this First Amendment.

     IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this
First Amendment to the Manufacturing Services Agreement as of the Effective Date.

	 	 	 
	PATHEON PHARMACEUTICALS INC.

	 	CRITICAL THERAPEUTICS, INC.

	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Francis P. McCune 
	 	 
	 	By:
	 	/s/ Trevor Phillips 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	     Francis P. McCune 
	 	 	 	Name:
	 	     Trevor Phillips 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	     Secretary 
	 	 	 	Title:
	 	     COO 
	 

	 	 
	 	 	 	 	 	 

 

 

SCHEDULE B

MINIMUM RUN QUANTITY, MINIMUM ANNUAL VOLUME AND FEES

Pricing Tables

48” Coating Pan

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Zyflo XR Tablets — 20’s Bottles
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Aug 07 — Feb 09 Volume (bottles)

	 	 	 	 	 	 	 	 	 	 	 	[**]	 	 	 	 	 	 	 	 	 	 
	 	Furnished Batch Size

(tablet cores)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Run Quantity

(bottles)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Mfg Run Quantity (batches)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Pkg Run Quantity (batches)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Price per 20’s Bottle

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	 [**]	 
	 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Zyflo XR Tablets — 120’s Bottles
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Aug 07 — Feb 09 Volume (bottles)

	 	 	 	 	 	 	 	 	 	 	 	[**]	 	 	 	 	 	 	 	 	 	 
	 	Furnished Batch Size

(tablet cores)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Run Quantity

(bottles)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Mfg Run Quantity (batches)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Pkg Run Quantity (batches)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Price per 120’s Bottle

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	 [**]	 
	 

The packaging run quantity combinations of 20’s and 120’s bottles must equal to the manufacturing
run quantity proposed for each price option.

-1-

 

[**]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Zyflo XR Tablets — 20’s Bottles
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Aug 07 — Feb 09 Volume (bottles)

	 	 	 	 	 	 	 	 	 	 	 	[**]	 	 	 	 	 	 	 	 	 	 
	 	Furnished Batch Size

(tablet cores)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Run Quantity

(bottles)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Mfg Run Quantity (batches)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Pkg Run Quantity (batches)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Price per 20’s Bottle

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	 [**]	 
	 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Zyflo XR Tablets — 120’s Bottles
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Aug 07 — Feb 09 Volume (bottles)

	 	 	 	 	 	 	 	 	 	 	 	[**]	 	 	 	 	 	 	 	 	 	 
	 	Furnished Batch Size

(tablet cores)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Run Quantity

(bottles)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Mfg Run Quantity (batches)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Pkg Run Quantity (batches)

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 	Price per 120’s Bottle

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	 [**]	 
	 

-2-

 

Manufacturing Assumptions

	 	1.	 	The coating process at Patheon will closely follow the process information provided by
Critical Therapeutics and the experience to-date at the site.
	 
	 	2.	 	The API, Zileuton, has been evaluated as a Toxicity Category 2 compound and can be
handled safely using existing equipment and facility at this site.
	 
	 	3.	 	The following manufacturing equipment train will be used:

	 	•	 	48” or [**] Accela Cota

	 	4.	 	Only one strength at 600 mg is assumed.
	 
	 	5.	 	Tablet cores are assumed to be furnished by Critical Therapeutics (through Skye Pharma)
at a theoretical batch size of [**] tablet cores, with a core weight of 1129.3 mg.
However, actual batch size will most likely come in [**]% of the theoretical as per
Critical Therapeutics. So far the actual batch sizes received to-date have ranged from
[**]% to [**]% of the theoretical batch size.
	 
	 	6.	 	Coating will be completed in the 48” or [**] Accela-Cota, in [**] and [**] pan loads
per batch respectively, assuming [**]% or [**]% of the theoretical batch size will be
received.
	 
	 	7.	 	Coating will be completed in the 48” or [**] Accela-Cota, in [**] and [**] pan loads
per batch respectively, for the lower furnished batch size option ([**]% of the theoretical
batch size).
	 
	 	8.	 	Dedicated hoses and change parts are required for the [**] coating pan option (Refer to
the Capital Requirements section). No capital is required for the 48” coating pan option.
	 
	 	9.	 	No pre- or post-coating inspection of tablets is assumed.
	 
	 	10.	 	After coating, the tablets will be packed with a desiccant gel bag prior to packaging
into bottles.
	 
	 	11.	 	Patheon assumes that the current cleaning procedure is adequate and full cleaning
occurs after each campaign.
	 
	 	12.	 	The manufacturing run campaign scenarios presented in the Pricing Tables are proposed
by Patheon.

-3-

 

Packaging Assumptions

	 	1.	 	The packaging equipment train will consist of the following equipment (or equivalent):

	 	 	 	 	 	 
	 	20’s Bottles — Line 4

	 	 	120’s Bottles — Line 17	 
	 	•     Omega Bottle Blower 

       (for hand fed bottles)

•     Cremer Tablet Filler 

•     Lakso Cottoner

•     NEM Capper/Retorquer

•     Lepel Induction Sealer

•     Sancoa Labeller

•     Thiele Outserter

	 	 	•     Omega Bottle Unscrambler/Blower

•     Cremer Tablet Filler

•     Lakso Cottoner

•     Resina Capper

•     Lepel Induction Sealer

•     Resina Retorquer

•     Sancoa Labeller

•     Thiele Outserter	 
	 

	 	2.	 	The packaging configuration will be as follows:

	 	 	 	 	 	 
	 	20’s Bottles

	 	 	120’s Bottles	 
	 	•     20 tablets per bottle

•     1 cap, with induction seal, per bottle

•     1 desiccant per bottle, with cotton

•     1 label per bottle

•     1 outsert per bottle

•     24 bottles per shipper

•     1 shipper label per shipper

	 	 	•     120 tablets per bottle

•     1 cap, with induction seal, per bottle

•     1 desiccant per bottle, with cotton

•     1 label per bottle

•     1 outsert per bottle

•     12 bottles per shipper

•     1 shipper label per shipper	 
	 

	 	3.	 	As per Critical Therapeutics’ request, packaging run campaign tiers for 48” coating pan
option is presented in the Pricing Tables. The packaging run quantity combinations of 20’s
and 120’s bottles must equal to the manufacturing run quantity proposed for each price
option.
	 
	 	4.	 	The packaging run campaign scenarios for [**] coating pan option presented in the
Pricing Tables are proposed by Patheon.
	 
	 	5.	 	An overall manufacturing and packaging yield of [**]% is assumed.

-4-

 

Testing Assumptions

	 	1.	 	Testing for coating materials and finished product (including microbiology) are based
on the given specifications and methods established at the site.
	 
	 	2.	 	Analytical finished tablet release testing will follow USP standards and includes
assay, related substances, residual ethanol, ID (HPLC, IR), content uniformity,
dissolution, description/appearance, moisture content, hardness and friability.
	 
	 	3.	 	Testing on incoming tablet cores will be performed by Patheon.
	 
	 	4.	 	Testing labor may be subject to change, in case of any change in testing specifications
and requirements.

-5-

 

SCHEDULE C

POST-APPROVAL ANNUAL STABILITY PROTOCOL 

ZYFLO CRTM (ZILEUTON) EXTENDED-RELEASE TABLETS

Type of Batch: Post-Approval Commercial Production Batches

Package Format:

20 count — 60cc HDPE bottle (50004850); 2 g. desiccant (70011856); cotton (70011128); 38-mm CRC
(70011680).

120 count — 250cc HDPE bottle (70012891); 2 g. desiccant (70011856); cotton (70011128); 45-mm CRC
(70011681).

Storage Condition: 25°C + 2°C / 60% RH + 5% RH

Test Intervals: : Initial*, 3, 6, 9, 12*, 18, 24* and 36* months.

[* Micro testing at these intervals only.]

Tests Performed at each Test Interval:

	 	 	 	 	 	 
	 	Test

	 	 	Method	 
	 	Appearance

	 	 	P141XX	 
	 	Assay (zileuton)

	 	 	8229XX	 
	 	Moisture

	 	 	1346XX	 
	 	Related Substances

   a.    A-66795

   b.    A-66193

   c.    A-68418

   d.    A-65813

   e.    A-74242

   f.     Each Ind. Unknown Related Substance

   g.    Total Unknown Related Substances

	 	 	8230XX	 
	 	Dissolution

   a.   1 hour

   b.   6 hours

   c.   12 hours

	 	 	8232XX	 
	 

-1-

 

	 	 	 	 	 	 
	 	Test

	 	 	Method	 
	 	Micro

   a.    Total Aerobic Microbial Count

   b.    Total Combined Mold and Yeast Count

   c.    Escherichia coli

   d.    Salmonella species

   e.    Pseudomonas aeruginosa

   f.     Staphylococcus aureus

   g.    Presence of Enterobacteriaceae

	 	 	B8242XX	 
	 

XX — indicates the current version of the stated test method.

The acceptance criteria, for each test, are per the current approved protocol.

Sample Frequency: Additional batches shall be added to the annual stability monitoring program
according to cGMP regulations (normally not less than one batch manufactured per year in all
marketed package formats).

ANNUAL STABILITY COST

STABILITY — 20 ct & 120 ct

	 	 	 
	ACTIVITY
	 	 
	 
	 	 
	Number of Lots

	 	[**]
	Total Samples

	 	[**]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Pullpoint Month

	 	 	T=1
	 	 	T=2
	 	 	T=3
	 	 	T=6
	 	 	T=9
	 	 	T=12
	 	 	T=18
	 	 	T=24
	 	 	T=36
	 	 	TOTAL	 
	 	25C / 60% RH

	 	 	 	 	 	 	 	 	X
	 	 	X
	 	 	X
	 	 	X
	 	 	X
	 	 	X
	 	 	X	 	 	 	 
	 	Samples per pullpoint

	 	 	 	 	 	 	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 	 	 	 
	 	Microbiology

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	X
	 	 	 	 	 	X
	 	 	X	 	 	 	 
	 	Cost Per Pullpoint

	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]
	 	 	[**]	 
	 

-2-

 

	 	 	 	 	 
	 	 	Cost per Sample	 
	Microbiology
	 	$	[**]	 
	Analytical Support ([**] Sample per pullpoint)
	 	$	[**]	 
	Analytical Support ([**] Sample per pullpoint)
	 	$	[**]	 
	Analytical Support ([**] Sample per pullpoint)
	 	$	[**]	 
	Analytical Support ([**] Sample per pullpoint)
	 	$	[**]	 
	Analytical Support ([**] Sample per pullpoint)
	 	$	[**]	 
	Analytical Support ([**] Sample per pullpoint)
	 	$	[**]	 
	Analytical Support ([**] Sample per pullpoint)
	 	$	[**]	 

-3-exv10w4

 

Exhibit 10.4

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is entered into as of November 5,
2007 (the “Effective Date”) by and between Critical Therapeutics, Inc., a Delaware corporation with
its principal place of business at 60 Westview Street, Lexington, MA 02421 (the “Company”), and
Frank E. Thomas, an individual residing at 57 Mary Catherine Lane, Sudbury, MA 01776 (the
“Executive”).

WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed by
the Company.

WHEREAS, the Company and the Executive each desire to amend and restate the employment agreement by
and between the Company and the Executive dated December 21, 2004.

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 the Effective Date (the “Commencement Date”) and ending on December
31, 2009 (the “Initial Term”) unless renewed or sooner terminated in accordance with the provisions
of this Section 1 or Section 4 respectively. Upon each subsequent anniversary of the Commencement
Date, the term of this Agreement shall automatically extend for an additional year (such period,
including the Initial Term and as it may be extended, the “Employment Period”) unless (i) either
the Company or the Executive gives at least ninety (90) days notice of non-renewal prior to such
anniversary or (ii) the Agreement is terminated in accordance with the provisions of Section 4.

     2. Title; Capacity. The Executive shall serve as President and Chief Executive
Officer. The Executive shall be based at the Company’s office in Lexington, MA. The Executive
shall be subject to the supervision of, and shall have such authority as is delegated to him by the
Board of Directors (the “Board”).

     The Executive hereby accepts such employment and agrees to undertake the duties and
responsibilities inherent in such position and such other duties and responsibilities as the Board
or its designee shall from time to time reasonably assign to him. The Executive agrees to devote
his entire business time, attention and energies to the business and interests of the Company
during the Employment Period; provided, however, that the Executive may serve as a
consultant or a member of an advisory board or a board of directors with the prior consent of the
Board. The Executive agrees to abide by any rules, regulations, instructions, personnel practices
and policies of the Company that are applicable to him and any changes therein that may be adopted
from time to time by the Company.

 

 

     3. Compensation and Benefits.

          3.1. Salary. The Company shall pay the Executive a base salary in semi-monthly
installments at an annualized rate of $345,000 (equal to $14,375 per semi-monthly pay period), less
lawful deductions. Such salary shall be subject to adjustment thereafter as determined by the
Board.

          3.2. Annual Target Cash Bonus. The Executive shall be eligible to receive an annual
target cash bonus of up to forty (40) percent of his then annual base salary (“Target Cash Bonus”).
The Compensation Committee of the Board shall determine the amount of the actual award, if any,
based on overall corporate performance and individual performance. Actual awards may be greater
than or less than the Executive’s Target Cash Bonus, depending in part upon the extent to which
actual performance exceeds or falls below the performance goals provided, however, the actual award
for the year ended December 31, 2007 will be not less than the Executive’s Target Cash Bonus if the
Executive remains an employee in good standing with the Company from the Commencement Date through
December 31, 2007. Any bonus shall be paid in a single lump sum, subject to lawful deductions, at
such time as bonuses are regularly paid to senior executives of the Company, but in any event such
bonus shall be paid on or before March 15 of the year following the year to which the bonus
relates. Each cash bonus award that may become payable shall be paid solely from the general
assets of the Company.

          3.3. Special Bonus. The Company will pay to the Executive a one-time cash bonus of
$625,000 (“Special Bonus”) if the Executive remains an employee in good standing with the Company
from the Commencement Date through January 31, 2008. The Special Bonus will be paid no later than
February 10, 2008 and is considered to be independent of any other bonuses or compensation due
under this employment agreement. In the event that the Executive’s employment is terminated
pursuant to Sections 4.3, 4.4, 4.5 or 4.7 from the period beginning on the Effective Date and
expiring on January 31, 2008, the Executive will be entitled to receive the Executive’s Target Cash
Bonus for 2007 plus the Special Bonus within thirty (30) days of such event. The payment of the
Special Bonus shall be made in lieu of the cash compensation and benefits described under Sections
5.4 (i), (ii) and (iii) and Sections 5.5 (i), (ii) and (iii) of this Agreement if Executive’s
employment is terminated at any time during the period beginning with the Effective Date through
July 31, 2008. The Special Bonus, if payable pursuant to this Section 3.3, shall be paid only once
and shall be paid solely from the general assets of the Company.

          3.4. Annual Equity Awards. The Executive shall be eligible to receive annual equity
awards. The Compensation Committee of the Board shall determine the amount of the actual equity
award, if any, based on overall corporate performance and individual performance.

          3.5. Fringe Benefits. The Executive shall be entitled to participate in all bonus
and benefit programs that the Company establishes and makes available to its employees or
executives, if any, to the extent that the Executive’s position, tenure, salary, age, health and
other qualifications make him eligible to participate; provided, however, the
Executive shall not be eligible to participate in the Company’s Cash Bonus Program for Employees
(Other than Executive Officers). The Executive shall be entitled to three (3) weeks of paid
vacation per year,

- 2 -

 

accrued at a rate of 1.25 days per month until the Executive has completed four (4) years of
service at which time vacation shall accrue at 1.67 days per month (four (4) weeks per year), and,
if requested in writing by the Board, such vacation time shall be taken at such times as may be
approved by the Board.

          3.6. Reimbursement of Expenses. The Company shall reimburse the Executive for all
reasonable travel, 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, upon presentation by the Executive of documentation, expense statements, vouchers and/or
such other supporting information as the Company may request, provided, however,
that the amount available for such travel, entertainment and other expenses may be fixed in advance
by the Board. Notwithstanding the foregoing, (i) the expenses eligible for reimbursement in any
particular taxable year may not affect the expenses eligible for reimbursement in any other taxable
year, (ii) such reimbursement must be made on or before the last day of the year following the year
in which the expense was incurred, and (iii) the right to reimbursement is not subject to
liquidation or exchange for another benefit.

     4. Employment Termination. The employment of the Executive by the Company pursuant to
this Agreement shall terminate upon the occurrence of any of the following:

          4.1. Expiration of the Employment Period in accordance with Section 1;

          4.2. At the election of the Company, for Cause (as defined in Section 21), immediately upon
written notice by the Company to the Executive;

          4.3. At the election of the Executive, for Good Reason (as defined in Section 21), upon
written notice by the Executive to the Company;

          4.4. At the election of the Company without Cause during a Change of Control Period (as
defined in Section 21) or at the election of the Executive for Good Reason during a Change of
Control Period;

          4.5. Thirty (30) days after the death or Disability (as defined in Section 21) of the
Executive;

          4.6. At the election of the Executive by providing written notice to the Company; and

          4.7. At the election of the Company, without Cause, by providing written notice to the
Executive.

     5. Effect of Termination.

          5.1. Termination for Cause. In the event the Executive’s employment is terminated for
Cause pursuant to Section 4.2, the Company shall pay to the Executive the compensation and benefits
otherwise payable to him under Section 3 through the last day of his

- 3 -

 

actual employment by the Company.

          5.2. Termination at the Election of the Executive. In the event the Executive elects
to terminate his employment pursuant to Section 4.6, the Company shall pay the Executive the
compensation and benefits otherwise payable to him under Section 3 through the last day of his
actual employment by the Company. If the Executive provides ninety (90) days prior written notice,
the Executive shall receive an amount equal to a pro rata payment (as defined in Section 21) of the
annual cash bonus, if any, paid to the Executive in the year prior to his resignation, subject to
the Executive’s execution of a severance agreement and release drafted by and satisfactory to
counsel for the Company (such signed agreement, the “Release”). Such payment shall be paid in a
lump sum within 30 days following the Executive’s termination of employment. No other benefits are
payable upon the Executive’s voluntary resignation unless for Good Reason.

          5.3. Termination for Death or Disability. If the Executive’s employment is terminated
by death or because of Disability pursuant to Section 4.5, the Company shall pay to the estate of
the Executive or to the Executive, as the case may be, the compensation that 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. In addition, if the Executive’s employment terminates by
death or because of a Disability, the vesting of his outstanding unvested stock options and
restricted stock shall accelerate by one year. If the Executive’s employment terminates as a
result of his death, the Executive’s estate shall also receive an amount equal to a pro rata
payment of the annual cash bonus, if any, paid to the Executive in the year prior to his death,
subject to the Executive’s estate’s execution of a release drafted by and satisfactory to counsel
for the Company. Such payment shall be paid in a lump sum within 30 days following the Executive’s
termination of employment.

          5.4. Termination Without Cause or for Good Reason and not during a Change in Control
Period. If the Executive’s employment is terminated without Cause pursuant to Section 4.7, or
for Good Reason pursuant to Section 4.3 and such termination does not occur during a Change of
Control Period, the Company shall:

	 	(i)	 	pay the Executive a lump sum payment equal to one (1) times his annualized base
salary, less lawful deductions, payable within thirty (30) days following the
Executive’s termination of employment;
	 
	 	(ii)	 	pay the Executive, in accordance with the Company’s regular payroll practices,
on a monthly basis an amount equal to (a) one hundred (100) percent of the Executive’s
monthly health and dental COBRA premiums for the Executive and his dependents, if any,
if the Executive properly elects to continue health and dental insurance under COBRA
and (b) one hundred (100) percent of the cost of the monthly premiums paid by the
Company to the insurance companies for life insurance and disability insurance for the
Executive in the month preceding the Executive’s termination of employment, such
payments under subsections (a) and (b) to continue until the earlier of twelve (12)
months after the termination of the Executive’s employment or until the last day of the
first month that the Executive

- 4 -

 

	 	 	 	is eligible for other employer-sponsored health coverage. Notwithstanding the
foregoing, to the extent such payments are reimbursement to the Executive of medical
expenses incurred by the Executive as described in Reg. § 1.409A-1(b)(9)(v)(B),
reimbursements may not be made beyond the period of time during which the Executive
would be entitled (or would, but for such arrangement, be entitled) to COBRA
continuation coverage under a group health plan of the Company;
	 
	 	(iii)	 	pay the Executive, a lump sum payment in an amount equal to a pro rata payment
of the Target Cash Bonus for which he was eligible, less lawful deductions. Such
payment shall be paid in a lump sum within 30 days following the Executive’s
termination of employment; and
	 
	 	(iv)	 	accelerate vesting of fifty (50) percent of all of the Executive’s outstanding
unvested stock options and restricted stock;

	 	 	all such payments subject to the Executive’s execution of a severance agreement and release
drafted by and satisfactory to counsel for the Company.

          5.5. Termination Without Cause or for Good Reason during a Change in Control Period.
If the Executive’s employment is terminated without Cause pursuant to Section 4.4, or for Good
Reason pursuant to Section 4.4 and such termination occurs during a Change of Control Period, the
Company shall:

	 	(i)	 	pay the Executive a lump sum payment equal to one (1) times his annualized base
salary, less lawful deductions, payable within thirty (30) days following the
Executive’s termination of employment;
	 
	 	(ii)	 	pay the Executive, in accordance with the Company’s regular payroll practices,
on a monthly basis an amount equal to (a) one hundred (100) percent of the Executive’s
monthly health and dental COBRA premiums for the Executive and his dependents, if any,
if the Executive properly elects to continue health and dental insurance under COBRA
and (b) one hundred (100) percent of the cost of the monthly premiums paid by the
Company to the insurance companies for life insurance and disability insurance for the
Executive in the month preceding the Executive’s termination of employment, such
payments under subsections (a) and (b) to continue until the earlier of twelve (12)
months after the termination of the Executive’s employment or until the last day of the
first month that the Executive is eligible for other employer-sponsored health
coverage. Notwithstanding the foregoing, to the extent such payments are reimbursement
to the Executive of medical expenses incurred by the Executive as described in Reg. §
1.409A-1(b)(9)(v)(B), reimbursements may not be made beyond the period of time during
which the Executive would be entitled (or would, but for such arrangement, be entitled)
to COBRA continuation coverage under a group health plan of the Company;

- 5 -

 

	 	(iii)	 	pay the Executive a lump sum payment in an amount equal to a pro rata payment
of the Target Cash Bonus for which he was eligible, less lawful deductions; such
payment shall be paid in a lump sum within 30 days following the receipt of the
Release;
	 
	 	(iv)	 	accelerate vesting of one hundred (100) percent of all of the Executive’s
outstanding unvested stock options and restricted stock; and
	 
	 	(v)	 	provide the Executive with up to three (3) months of outplacement services as
arranged for by the Company;

	 	 	all such payments subject to the Executive’s execution of a severance agreement and release
drafted by and satisfactory to counsel for the Company.

     5.6 Payments to the Executive under this Section 5 shall be bifurcated into two portions,
consisting of a portion that does not constitute “nonqualified deferred compensation” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the
guidance issued thereunder (“Section 409A”), and a portion that does constitute nonqualified
deferred compensation. Payments hereunder shall first be made from the portion that does not
consist of nonqualified deferred compensation until it is exhausted and then shall be made from the
portion that does constitute nonqualified deferred compensation. Notwithstanding the foregoing,
because the Executive is a “specified employee” as defined in Section 409A(a)(3)(B)(i) of the Code,
the commencement of the delivery of any such payments that constitute nonqualified deferred
compensation will be delayed to the date that is 6 months and one day after the Executive’s
termination of employment (the “Earliest Payment Date”) unless payable upon the Executive’s death.
Any payments that are delayed pursuant to the preceding sentence shall be paid on the Earliest
Payment Date. The determination of whether, and the extent to which, any of the payments to be
made to the Executive hereunder are nonqualified deferred compensation shall be made after the
application of all applicable exclusions under Treasury Reg. § 1.409A-1(b)(9). Any payments that
are intended to qualify for the exclusion for separation pay due to involuntary separation from
service set forth in Reg. § 1.409A-1(b)(9)(iii) must be paid no later than the last day of the
second taxable year of the Executive following the taxable year of the Executive in which the
Executive’s termination of employment occurs.

     6. Vesting of Stock Upon a Change of Control. Fifty (50) percent of the Executive’s
outstanding unvested stock options and restricted stock will vest on a Change of Control (as
defined in Section 21).

     7. Non-Compete.

          (a) During the Employment Period and for a period of one (1) year after the termination or
expiration of the Executive’s employment for any reason or after a Change in Control, the Executive
will not directly or indirectly:

- 6 -

 

               (
i) as an individual proprietor, partner, stockholder, officer, employee, director, joint
venturer, investor, lender, or in any other capacity whatsoever (other than as the holder of not
more than one percent (1%) of the total outstanding stock of a publicly held company), engage in
the business of providing services or developing, producing, marketing or selling products
competitive with the services provided or products being developed, produced, marketed or sold by
the Company while the Executive was employed by the Company; or

               (ii) either alone or in association with others, recruit, solicit, induce, hire or engage as
an independent contractor or attempt to recruit, solicit, induce, hire or engage as an independent
contractor, any person who then is or was employed by the Company except for an individual whose
employment with the Company has been terminated (X) by the employee for any reason other than Good
Reason for a period of six (6) months or longer, (Y) by the Company for any reason, or (Z) by the
employee for Good Reason; or

               (iii) either alone or in association with others, solicit, divert or take away, or attempt to
solicit, 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 employed by the Company.

          (b) The Executive agrees that, if requested by the Company in writing, he will give notice to
the Company of each new business activity he plans to undertake during the non-competition period,
at least ten (10) business days prior to beginning any such activity. The notice shall state the
name and address of the individual, corporation, association or other entity or organization
(“Entity”) for whom such activity is undertaken and the name of the Executive’s business
relationship or position with the entity. The Executive further agrees to provide the Company with
other pertinent information concerning such business activity as the Company may reasonably request
in order to determine the Executive’s continued compliance with his obligations under this
Agreement. The Executive agrees that, if requested by the Company in writing, he will provide a
copy of Section 7 and 8 of this Agreement to all persons and Entities with whom he seeks to be
hired or do business before accepting employment or engagement with any of them.

          (c) If any restriction set forth in this Section 7 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.

          (d) The geographic scope of subsection 7(a) above shall extend to anywhere the Company or any
of its subsidiaries does business.

          (e) The Executive acknowledges that the restrictions contained in this Section are necessary
for the protection of the business and goodwill of the Company and in light of, among other things,
the highly competitive market in which the Company operates. The Executive agrees that any breach
of this Section will cause the Company substantial and irrevocable damage and therefore, in the
event of any such breach, in addition to such other remedies which

- 7 -

 

may be available, the Company shall have the right to seek specific performance and injunctive
relief without posting a bond.

          (f) If the Executive violates the provisions of this Section, he 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.

     8. Proprietary Information and Developments.

          8.1. Proprietary Information.

          (a) The Executive agrees that all information and know-how, whether or not in writing, of a
private, secret or confidential nature concerning the Company’s business 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 inventions,
products, processes, methods, techniques, formulas, compositions, compounds, projects,
developments, plans, research data, clinical data, financial data, personnel data, computer
programs, and customer and supplier lists. Executive will not disclose any Proprietary Information
to others outside the Company or use the same for any unauthorized purposes without written
approval by an officer of the Company, either during or after his employment, unless and until such
Proprietary Information has become public knowledge without fault by the Executive.

          (b) The Executive agrees that all files, letters, memoranda, reports, records, data, sketches,
drawings, laboratory notebooks, program listings, or other written, 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
to be used by the Executive only in the performance of his duties for the Company.

          (c) The Executive agrees that his obligation not to disclose or use information, know-how and
records of the types set forth in paragraphs (a) and (b) above, also extends to such types of
information, know-how, records 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 in the course of the Company’s business.

          8.2. Developments.

          (a) The Executive will make full and prompt disclosure to the Company of all inventions,
improvements, discoveries, methods, developments, software, and works of authorship, whether
patentable or not, which are created, made, conceived or reduced to practice by the Executive 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”).

- 8 -

 

          (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.

          (c) The Executive agrees to cooperate fully with the Company, both during and after his
employment with the Company, with respect to the prosecution, procurement, maintenance and
enforcement and/or defense of patents, trademarks, copyrights, trade secrets and other means for
protection of proprietary information (both in the United States and foreign countries) relating to
Developments. Executive shall sign all papers, including, without limitation, copyright
applications, patent applications, declarations, oaths, formal assignments, assignment of priority
rights, and powers of attorney, which the Company may deem necessary or desirable in order to
protect its rights and interests in any Development. The Executive shall further execute and
deliver all such instruments and take all other actions as in the opinion of the Company and its
counsel shall be appropriate to vest in the Company (or in such person as the Company may specify)
all right, title and interest in said patents, trademarks, copyrights, trade secrets and other
means of protecting proprietary information in any Development.

          (d) Whenever requested to do so by the Company, both during and after his employment with the
Company, and at the expense of the Company, the Executive shall cooperate fully and assist in the
Company in the defense or prosecution of any claims or actions now in existence or which may be
brought in the future in connection with (i) any litigation commenced by the Company against third
parties, (ii) any litigation commenced by a third party against the Company and (iii) any
administrative hearing or administrative proceeding involving the Company. The Executive’s full
cooperation in connection with any claims, actions or administrative proceedings shall include, but
not be limited to, his being available to meet with the Company’s counsel to prepare for trial,
discovery or an administrative hearing and to act as a witness when requested by the Company at
reasonable times designated by the Company.

          (e) The Executive hereby irrevocably appoints the Company to be his attorney in fact and, in
his name and on his behalf, to execute all such instruments and take all other actions and
generally to use his name for the purpose of providing to the Company the full benefit of the
provisions of this Section 8 of the Agreement.

          (f) The Executive hereby waives and quitclaims to the Company any and all claims, of any
nature, which the Executive now or may hereafter have for infringement of any Development assigned
hereunder to the Company.

          (g) The Executive acknowledges and agrees that all original works of authorship which are made
by the Executive (solely or jointly with others) within the scope of Executive’s employment and
which are protectable by copyright are “works made for hire,” as that term is defined in the United
States Copyright Act (17 U.S.C. Section 101).

          8.3. Other Agreements. Other than as previously disclosed to the Company by the
Executive in writing, the Executive hereby represents that he is not bound by the terms of any
agreement with any previous employer or other party to refrain from using or disclosing any trade
secret or confidential or proprietary information in the course of his employment with the

- 9 -

 

Company or 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 Agreement and as an Executive 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.

     9. Other Severance Arrangements. The benefits under this Agreement will be provided
in lieu of benefits under any severance plan of the Company or under the Executive’s offer letter.
The Executive acknowledges and agrees that the acceleration of vesting of stock options and
restricted stock under this Agreement is in lieu of any acceleration of vesting of stock options
and restricted stock upon a change of control under the Company’s current and any future stock
option plans, including but not limited to, the Company’s 2000 Equity Incentive Plan, 2003 Stock
Incentive Plan and 2004 Stock Incentive Plan, each as amended from time to time.

     10. Mitigation. The Executive has no obligation to mitigate amounts payable under the
Agreement by seeking other employment.

     11. Notices. All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon deposit in the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the other party at the
address shown above, or at such other address or addresses as either party shall designate to the
other in accordance with this Section 11.

     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 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 construed as a sealed instrument and
interpreted and enforced in accordance with the laws of the Commonwealth of Massachusetts without
regard to conflict of laws provisions. Any action, suit, or other legal proceeding which is
commenced to resolve any matter 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.

     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

- 10 -

 

business, provided, however, that the obligations of the Executive are personal and shall not
be assigned by the Executive.

     17. Legal Fees. The Company will reimburse the Executive for all reasonable legal
fees incurred in enforcing or contesting the Agreement if the Executive prevails on such claim or
claims.

     18. Dispute Resolution. Any claim or controversy arising out of or relating to this
Agreement, or any breach thereof, or otherwise arising out of or relating to the Executive’s
employment, compensation and benefits with the Company or the termination thereof including any
claim for discrimination under any local, state or federal employment discrimination law, except as
specifically excluded herein, shall be settled by arbitration in the Commonwealth of Massachusetts,
administered by the American Arbitration Association under its National Rules for the Resolution of
Employment Disputes. Any claim or controversy not submitted to arbitration in accordance with this
Section shall be waived, and thereafter, no arbitration panel or tribunal or court shall have the
power to rule or make any award on any such claim or controversy. The award rendered in any
arbitration proceeding held under this Section 18 shall be final and binding, and judgment upon the
award may be entered in any court having jurisdiction thereof. Claims for workers’ compensation or
unemployment compensation benefits are not covered by this Section. Also not covered by this
Section are claims by the Company or by the Executive for temporary restraining orders or
preliminary injunctions (“temporary equitable relief”) in cases in which such temporary equitable
relief would be otherwise authorized by law, including but not limited to claims for equitable
relief arising out of a breach of Sections 7 and/or 8 of this Agreement. Both the Company and the
Executive expressly waive any right that any party either has or may have to a jury trial of any
dispute arising out of or in any way related to the Executive’s employment with or termination from
the Company. The Executive expressly acknowledges and agrees that he hereby waives any right to
claim or recover punitive damages.

     19. Acknowledgment. THE EXECUTIVE STATES THAT HE HAS HAD A REASONABLE PERIOD
SUFFICIENT TO STUDY, UNDERSTAND AND CONSIDER THIS AGREEMENT, THAT HE HAS HAD AN OPPORTUNITY TO
CONSULT WITH LEGAL COUNSEL OF HIS CHOICE, THAT HE HAS READ THIS AGREEMENT AND UNDERSTANDS ALL OF
ITS TERMS, THAT HE IS ENTERING INTO AND SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, AND THAT
IN DOING SO HE IS NOT RELYING UPON ANY STATEMENTS OR REPRESENTATIONS BY THE COMPANY OR ITS AGENTS.

     20. Miscellaneous.

          20.1. 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 or waiver
of any right on any other occasion.

- 11 -

 

          20.2. 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.

          20.3. 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.

          20.4. Nothing in this Agreement should be construed to create a trust or to establish or
evidence Executive’s claim of any right to payment other than as an unsecured general creditor with
respect to any payment to which Executive may be entitled.

          20.5. The provisions of Sections 7 and 8 shall survive the termination of this Agreement.

          20.6. The Executive agrees, upon termination of his employment, promptly to deliver to the
Company all files, books, documents, notes, lab books, memoranda, specifications, cells, storage
media, including software, computer disks or tapes, computer printouts, together will all copies
thereof, and other property prepared by or on behalf of the Company or purchased with Company funds
and to refrain from making, retaining or distributing copies thereof.

     21. Definitions.

          21.1. For the purposes of this Agreement, “Cause” for termination shall be deemed to exist
upon (a) willful failure by the Executive, which failure is not cured within thirty (30) days of
written notice to the Executive from the Company, to perform his material responsibilities to the
Company; (b) willful misconduct by the Executive that is materially injurious to the Company; (c) a
determination by the Company within thirty (30) days of the Executive’s resignation that discharge
under clause “B” of the definition of Cause was warranted; or (d) a material breach of Section 7 or
8 of this Agreement by the Executive.

          21.2. For purposes of this Agreement, a “Change of Control” shall mean:

          (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act (as defined below)) (a “Person”) of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of the combined voting power
of the then-outstanding securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute a Change in
Control Event: (A) any acquisition directly from the Company or (B) any acquisition by any
corporation pursuant to a Business Combination (as defined below) which complies with clauses (x)
and (y) of subsection (c) of this definition; or

          (b) such time as the Continuing Directors (as defined below) do not constitute a majority of
the Board (or, if applicable, the Board of Directors of a successor corporation to the

- 12 -

 

Company), where the term “Continuing Director” means at any date a member of the Board (x)
who was a member of the Board on the date of the initial adoption of the Employment Agreement by
the Board or (y) who was nominated or elected subsequent to such date by at least a majority of the
directors who were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election; provided, however, that there
shall be excluded from this clause (y) any individual whose initial assumption of office occurred
as a result of an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a
person other than the Board; or

          (c) the consummation of a merger, consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors, respectively, of the resulting or acquiring corporation in
such Business Combination (which shall include, without limitation, a corporation which as a result
of such transaction owns the Company or substantially all of the Company’s assets either directly
or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein
as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the
Outstanding Company Voting Securities immediately prior to such Business Combination and (y) no
Person (excluding any Executive benefit plan (or related trust) maintained or sponsored by the
Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of
the combined voting power of the then-outstanding securities of such corporation entitled to vote
generally in the election of directors (except to the extent that such ownership existed prior to
the Business Combination); or

          (d) the liquidation or dissolution of the Company.

          21.3. For purposes of this Agreement, a “Change of Control Period” shall consist of the period
from three (3) months before until one (1) year after the date on which a Change of Control occurs.

          21.4. As used in this Agreement, the term “Disability” means, with respect to the Executive,
that the Executive is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months, or is, by reason of any
medically determinable physical or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an accident and health plan
covering employees of the Company. A determination of Disability shall be agreed upon by a
physician satisfactory to the Executive and a physician selected by the Company, provided
that if these physicians do not agree, the Executive and the Company shall

- 13 -

 

each select a physician and these two together shall select a third physician, whose
determination as to Disability shall be binding on all parties.

          21.5. As used in this Agreement, the term “Exchange Act” shall mean the Securities Exchange
Act of 1934, as amended.

          21.6. For purposes of this Agreement, “Good Reason” shall be deemed to exist upon (a) any
material reduction in the annual base compensation payable to the Executive (but exclusive of any
Target Cash Bonus, annual equity award or other similar cash bonus or equity plans for this
purpose); (b) the relocation of the place of business at which the Executive is principally located
to a location that is greater than thirty (30) miles from its current location; (c) the failure of
the Company to comply with a material term of this Agreement; or (d) significant reduction in the
Executive’s duties, responsibilities or position so long as notice of the Good Reason condition is
given within 90 days of the condition’s initial existence, the Company is given thirty (30) days to
remedy the condition, and the termination from employment occurs within two (2) years following the
initial existence of one or more Good Reason conditions.

          21.7. For purposes of this Agreement, “pro rata payment” shall be deemed to mean the
calculation of a payment by the Company based on the proportion of the calendar year completed,
based on the nearest whole number of months of Executive’s employment (for illustrative purposes
only, if Executive was terminated without Cause by the Company on April 13th of a given
year, Executive would be entitled to 1/4 of his Target Cash Bonus for such year under Section
5.4(iii)).

     22. Non-Disparagement. The Executive understands and agrees that as a condition to
him of the monetary consideration provided in connection with this Agreement, during the term of
the Agreement and for a period of two (2) years after the termination of his employment with the
Company for any reason, he shall not make any false, disparaging or derogatory statements in public
or private to any person or media outlet regarding the Company or any of its directors, officers,
employees, agents, or representatives or the Company’s business affairs and financial condition.

     23. Section 409A.

     23.1 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 the Executive is a “specified employee” upon his separation (as
defined under Section 409A), the timing of any such payment following the separation date shall be
modified if, absent such modification, such payment would otherwise be subject to penalty under
Section 409A. No payments to be made hereunder that constitute “nonqualified deferred
compensation” within the meaning of Section 409A may be accelerated or deferred by either the
Company or the Executive except as specifically permitted or required by Section 409A. In any
event, the Company makes no representation or warranty and shall have no liability to the Executive
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.

- 14 -

 

     23.2 This Agreement is intended to comply with the provisions of Section 409A and shall be
construed consistently therewith.

[Remainder of this page is intentionally left blank]

- 15 -

 

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

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

	 	 	 	 	 
	 	CRITICAL THERAPEUTICS, INC.

 	 
	 	By:  	/s/ Trevor Phillips
 	 
	 	 	Name:  	Trevor Phillips, Ph.D. 	 
	 	 	Title:  	Chief Operating Officer and Senior
Vice President of Operations 	 
	 

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	/s/ Frank E. Thomas
 	 
	 	Name:  	Frank E. Thomas 	 
	 	 	 
	 

- 16 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}]]