Document:

Exhibit 10.1

EMPLOYMENT, CONFIDENTIALITY

AND NON-COMPETITION AGREEMENT

THIS EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the “Agreement”)
is made and entered into as of the 21st day of September, 2006 (the “Effective
Date”), by and between:

COMBINATORX, INCORPORATED, a
Delaware Corporation duly organized under law and having an usual place of
business at 245 First Street, Sixteenth Floor, Cambridge, Massachusetts 02142
(hereinafter referred to as the “COMPANY”)

and

DR. JAN LESSEM of 6 Davis Brook
Drive, Natick, Massachusetts 01760 (hereinafter referred to as the “EMPLOYEE”)

The Company wishes to employ the Employee to serve as
the Chief Medical Officer and Chairman of Medical Advisory Boards and, in
connection therewith, to provide specific medical and scientific expertise and
direction for the Company and the Employee desires to be so employed by the
Company on the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, accepted and agreed to the Company, and the Employee
hereby agree as follows:

1.    EMPLOYMENT.  The Company hereby employs the Employee as
Chief Medical Officer and Chairman of Medical Advisory Boards and the Employee
accepts such employment, as of September 1, 2006, for the compensation and on
the other terms and conditions set forth below.

2.    PERIOD
OF EMPLOYMENT; DUTIES.  The
employment of the Employee shall 

 

be for a fixed period commencing with the Effective
Date and ending on April 7, 2008 (the “Transition Date”), or earlier if the
employment is terminated pursuant to Section 4 below (the “Employment Period”).  The Employee shall be employed as the Chief
Medical Officer and Chairman of Medical Advisory Boards, and shall have the
title, duties and responsibilities normally and customarily associated with
said offices and positions.

As a member of the Senior Management Team, the
Employee shall report to and take direction from the Company’s President/CEO.

During the Employment Period, Employee shall devote
all of his business time, attention and loyalty to the Company; provided,
however, that the foregoing shall not prevent the Employee from serving
on the board of directors or similar body of corporations or entities approved
by the Board, of from entering into consulting arrangements mutually agreed to
by the President/CEO and the Employee. 
The Employee warrants and represents that he is under no contractual or
other restrictions or obligations which will in any way limit his activities on
behalf of or employment by the Company; and the entering into of this Agreement
does not violate any agreement, contract or confidentiality agreement that the
Employee may have entered into or that is binding upon the Employee.

3.    COMPENSATION

3.1         Annual
Base Salary.  Subject to the
provisions hereof, from the Effective Date through December 31, 2006, the
Company shall pay Employee, not less frequently than monthly in arrears, a base
salary at an annual rate of Three Hundred Twenty Thousand Dollars ($320,000.00)
(the “Base Salary”).  Thereafter,
annually during the Employment Period, the Base Salary shall be determined by
the Compensation Committee of the Company’s Board of 

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Directors (the “Compensation Committee”), and in no
event shall the Base Salary be less than the most recently negotiated and
accepted Base Salary.  All payments of
salary and other compensation to the Employee shall be made after deduction of
any taxes which are required to be withheld with respect thereto under
applicable federal and state laws.

3.2         Fringe
Benefits.  During the Employment
Period, the Employee shall be entitled to all rights and benefits for which he
shall be eligible under group insurance and other fringe benefits which may
from time to time be provided to the Company’s executive employees generally.

Further, the Company shall reimburse the Employee for
the out-of-pocket expenses incurred by the Employee in the fulfillment of his
duties and responsibilities hereunder. Reimbursement shall be in accordance
with the Company’s policies and procedures and in compliance with the
requirements of the Internal Revenue Code of 1986, as amended.  Reimbursement of travel expenses will be
consistent with the Company’s travel policies.

3.3         Vacation.
During the Employment Period, the Employee shall be entitled to (i) one (1)
week of vacation from the Effective Date until December 31, 2006, (ii)  eight (8) weeks of vacation for the calendar
year 2007, six (6) of which can be taken consecutively and (iii) one (1) week
of vacation from January 1, 2007 until the Transition Date.  Vacation time, after the year in which it is
earned, may not be carried forward to succeeding years.

3.4         Bonus
Payments.  In partial consideration
of the Employee entering into this Agreement, the Company shall provide the
following:

A) Performance Bonus. Upon the recommendation
of the President/CEO and based on the Company’s financial and cash position and
the Employee’s contribution to the Company’s achievement of its annual goals,
the Company may 

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for the 2006 and
2007 fiscal years, in its discretion, award an annual performance bonus to the
Employee.

B) Stock Option Awards.  The Compensation Committee may, on an annual
basis in its discretion, grant stock options or restricted stock awards to the
Employee based on: (i) the Employee’s performance and (ii) the Company progress
and attainment of its business goals and objectives.  The granting of the stock options and the
terms and conditions of the award (e.g. the number of shares granted and the
vesting schedule), shall be solely within the discretion of the Compensation
Committee.

3.5         Change
of Control.  Notwithstanding the
foregoing, it is agreed and understood that, in the event of a “Change of
Control” as hereinafter defined prior to the Transition Date, the Employee
shall be entitled to the following:  (i)
The Company shall pay the Employee his then Base Salary for a period of
eighteen (18) months, to be paid in the usual and customary manner pursuant  to the terms of this Agreement, and (ii) all
stock options granted by the Company to the Employee to the extent not
previously vested shall accelerate and be deemed fully vested. For purposes of
this Agreement, the term “Change of Control” shall mean: (a) a sale, merger or
consolidation in which securities possessing more than fifty (50%) percent of
the total combined voting power of the Company’s outstanding securities are
transferred to a person or a person different from the persons who held the
securities immediately prior to such transaction, but excluding any merger with
the subsidiary or parent company of the Company; or (b) the sale, transfer or
other disposition of all or substantially all of the Company’s assets to one or
more persons (other than a wholly owned subsidiary of the Company in a single
transaction or series of related transaction).

3.6         Housing
Stipend.  The Employee hereby
acknowledges the payment of a housing stipend of Twenty-five Thousand ($25,000)
Dollars, subject to usual and customary state and federal tax deductions on
September 15, 2006 as the final housing stipend payment made 

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under this Agreement and the Employee’s prior
Employment Agreement with the Company dated as of September 1, 2003.

4.           EARLY
TERMINATION OF PERIOD OF EMPLOYMENT.

4.1         Employee’s
Earlier Termination.  The Employee
may terminate his employment hereunder by giving the Company written notice
thereof not less than ninety (90) days prior to the date fixed for such
termination in such notice.  If the
Employee terminates his employment pursuant to Section 4.1 hereof, the Base
Salary, fringe benefits and vesting of stock options shall cease as of the date
of such termination of employment.

4.2         Company’s
Earlier Termination.  The Company
shall have the right to terminate Employee’s employment hereunder prior to the
Transition Date:  (i) without Cause,  upon ninety (90) days prior written notice to
the Employee and (ii) for Cause, immediately upon, or at any time after, giving
written notice of such termination.  In
the event that the Employee’s employment is terminated without Cause pursuant
to Section 4.2(i), then, subject to his prior execution and non-revocation of a
general release in favor of the Company, the Employee shall continue to receive
his Base Salary and fringe benefits for a period of twelve (12) months
following the date of termination.  In
the event that the Employee is terminated without Cause, the vesting of stock
options granted to the Employee shall be as follows: With respect to all
unvested options, the Employee shall be entitled to vest twenty five (25%)
percent of the then unvested options.

If the Company terminates the Employee’s employment
pursuant to Section 4.2 (ii) above for Cause, then Employee’s Base Salary,
fringe benefits and vesting of stock options shall cease and terminate as of
the date of termination of the Employee’s employment.  As used herein “for 

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Cause” shall mean the determination, in good faith, by
the Board, that any one of the following events has occurred:  (a) the conviction of Employee of any felony;
(b) the neglect or dereliction by the Employee of his duties and
responsibilities as set forth in Article 2 hereof, which neglect or dereliction
of duties and responsibilities continues, in the reasonable judgment of the Board,
after written notice given to the Employee by the Board; (c) breach by the
Employee of this Agreement in any material respect; (d) the Employee’s engaging
in any fraudulent conduct toward the Company. 
A determination that there is for Cause termination of the Employee’s
employment shall be made by the Board, after notice to Employee and providing
Employee an opportunity to be heard, and such determination shall require that
the Board find that there has occurred an event of the kind described in (a),
(b), (c), or (d) above.

4.3.  Termination
for Death or Disability.  The
Employee’s employment shall terminate automatically upon the Employee’s
death.  In the event that the Executive
becomes disabled as a result of any mental or physical illness or injury such
that he is unable to perform substantially all of his essential duties for 120
days in any 365 consecutive calendar days, with or without reasonable
accommodation, the Company may terminate the Employee’s employment by notice to
him.  In the event that any question
shall arise as to whether the Employee is so disabled as to be unable to
substantially perform all of his essential duties hereunder, the Employee shall
submit to a medical examination by a physician selected by the mutual agreement
of the parties (or by a physician selected jointly by physicians designated by
the company and the Employee if no such agreement can be reached)  to determine whether the Employee is so
disabled and, for purposes of this Agreement, the conclusions of that physician
shall be binding on the parties.  If the
Employee’s employment is terminated by reason of the Employee’s death or
disability in 

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accordance with Section 4.3, this Agreement shall
terminate without obligations to the Employee or his legal representatives under
this Agreement, other than for payments made by the Company to the Employee (or
his beneficiary or estate) equal to the sum of: (a) the Employee’s annual base
salary through the date of termination to the extent not theretofore paid, (b)
the reimbursable employment expenses, as provided herein, through the date of
termination to the extent not theretofore paid; and (c) any accrued vacation
pay to the extent not theretofore paid.

The sum of the
amounts described in clauses (a), (b) and (c) shall be hereinafter referred to
as the “Accrued Obligations”, which shall be paid to the Employee or his
beneficiary designated in writing or his estate, as applicable, in a lump sum
in cash within 30 days of the date of termination or such earlier date as
required by law.  The rights of the
Employee or his beneficiaries or estate under any of the welfare and retirement
plans of the Company shall be governed by the terms of those plans, including
without limitation those terms applicable to the bringing and processing of
claims, and the provisions of the Employee Retirement Income Security Act (“ERISA”),
as amended from time to time.

4.4.  Non-renewal
on the Transition Date.  If the Agreement
is not renewed by the Company prior to the Transition Date, the Company may elect,
upon the payment of $18,000 to Employee and upon the Employee executing a
mutually acceptable general release of claims, to enter into a consulting
agreement with the Employee on substantially the terms provided in Exhibit A.  In that event, no compensation is due to the
Employee under this Agreement, other than payment of the Accrued Obligations.

5.           NON-COMPETITION.

5.1         Non-Competition
Period.  Employee shall not, directly
or indirectly (including, 

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without limitation, either alone or as a partner, officer,
director, employee, joint venturer or stockholder of, or as a consultant or
other independent contractor to or agent or representative for, any company,
business, individual or other entity), engage in any business activity which is
directly or indirectly in competition with the Company’s Business, as
hereinafter defined, at any time during the Employment Period and for a period
of two (2) years after the termination for any reason of the Employment Period
(the “Post-Employment Period”) (collectively, the Employment Period and
the Post-Employment Period are herein referred to as the “Non-Competition
Period”); provided, however, that nothing in this Agreement shall prevent
or restrict the Employee from owning, directly or indirectly, not more than five
percent (5%) of the securities of any publicly traded company for the sole
purpose of a passive investment.  For
purposes of this Agreement, the Company’s Business shall be defined as: (a)
researching and developing a discovery platform that identifies novel,
non-obvious combinations of active molecules that will then become
patent-protected therapeutics, utilizing an automated, high-throughput process
to search combinatorial space and using multiple such automated systems in
parallel screening efforts to search combinatorial space using disease-specific
assays and (b) developing, formulating, manufacturing and commercializing
pharmaceutical products that consist of combinations of approved drugs.

5.2           Restricted Business Activities:  During the Non-Competition Period, Employee
will not, directly or indirectly:

(a)                                  solicit or
request any other employee of or consultant to the Company to join the employ
of, or begin consulting for, any individual or entity that researches,
develops, markets or sells products that compete with those of the Company;

(b)                                 solicit
or request any individual or entity that 

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                                                researches,
develops, markets or sells products that compete with those of the Company, to
employ or retain as a consultant any employee or consultant of the Company;

(c)                                  divert,
directly or indirectly, to any competitor of the Company, any customer of the
Company; or

(d)                                 induce
or attempt to induce any supplier or vendor of the Company to terminate or
breach any written or oral agreement or understanding with the Company.

6.           PROPRIETARY
RIGHTS.

6.1         Definitions.  For the purposes of this Section 6, the terms
set forth below shall have the following meanings:

              6.1.1        Concepts and Ideas.  Those concepts and ideas known to the
Employee at any time during the Employee’s employment by the Company which
relate to the Company’s present, past or prospective activities, services and
products, all of which shall remain the sole and exclusive property of the
Company.  The Employee shall have no
publication or other Intellectual Property rights to any concepts and ideas
and/or Confidential Information, and all of the same shall belong exclusively
to the Company.

              6.1.2        Confidential Information.  Confidential Information is that secret or
proprietary information of whatever kind or nature disclosed to Employee or
known by Employee (whether or not invented, discovered or developed by
Employee), at any time during Employee’s establishment of or employment by the
Company as a consequence of or through such establishment or employment.  Such secret or proprietary information shall
include (unless such information is generally known in the industry through no
action or fault of Employee), information relating to the design, trade
secrets, manufacture, application, know-how, research 

 9
 

 

and development relating to the Company’s products,
materials, operating and other cost data, price lists and data relating to
pricing of the Company’s products.  Such
secret or proprietary information shall specifically include, without
limitation, all information contained in the Company’s manuals, memoranda,
plans, drawings and designs, specifications, supply sources, customer lists and
records legended or otherwise identified by the Company or the Board as
Confidential Information.

6.2         Non-Disclosure
to Third Parties.  Except as required
by Employee’s duties in the course of his employment by the Company, Employee
shall not, at any time during or following the Employment Period, directly or
indirectly, use, publish, disseminate or otherwise disclose any Confidential
Information, Concepts or Ideas relating to the present, past or prospective
business of the Company to any third party without the prior written consent of
the Board which consent may be denied in each instance and all of the same,
together with publication rights, shall belong exclusively to the Company.

6.3         Documents,
etc.  All documents, procedural,
manuals, guides, specifications, plans, drawings, designs and similar
materials, lists of present, past or prospective customers, customer proposals,
invitations to submit proposals, price lists and data relating to the pricing
of the Company’s products and services, records, notebooks and similar
repositories of or containing Confidential Information (including all copies
thereof) that come into the Employee’s possession or control by reason of
Employee’s establishment of or employment by the Company, whether prepared by
Employee or others:  (a) are the property
of the Company, (b) will not be used by Employee in any way adverse to the
Company (c) will not be removed from the Company’s premises (except as Employee’s
duties require) and (d) at the termination (for 

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whatever reason) of Employee’s employment by the
Company, will be left with, or forthwith returned by Employee to the Company.

6.4         Assignment
of Inventions.  The Employee hereby
agrees that he will promptly make full written disclosure to the Company, and
will hold in trust for the sole right and benefit of the Company, and agrees to
assign to the Company or its designee all of his right, title and interest in
and to any and all of the inventions, original works of authorship,
developments, concepts, improvements or trade secrets, whether or not
patentable or registerable under patent, copyright or similar laws, that the
Employee may, solely or jointly, make, develop, conceive or reduce to practice,
or cause to be made, developed, conceived or reduced to practice, during the
Employment Period (collectively, referred to as the “Inventions”).  Employee further agrees that all original
works of authorship that are made by the Employee (solely or jointly with
others), within the scope of and during the Employment Period that are
protectable by copyright are “works made for hire”, as that term is defined in
the United States Copyright Act.

Employee hereby agrees to assist the Company or its
designee at the Company’s expense, in every way to secure the Company’s rights
in the Inventions and any copyrights, patents, or other intellectual property
rights relating thereto in any and all countries, including, disclosing to the
Company all pertinent information with respect thereto, and executing all
applications, specifications, oaths, assignments and all other instruments that
the Company shall deem necessary in order to apply for and obtain such rights
and in order to secure and convey to the Company and its successors and
assigns, the sole and exclusive rights, title and interests in and to such
Inventions, and any copyrights, patents or other intellectual property rights
relating thereto.  The Employee agrees
that his obligations to execute or cause to be executed, when it is in his 

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power to do so, any such instruments or papers will
continue after the termination of this Agreement.  If the Employee is unwilling or refuses, for
any reason, to execute and deliver all such documents needed to complete such
applications in the United States of America or foreign patents or any
copyright registrations covering inventions or original works of authorship
assigned to the Company as above, then the Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as the Employee’s agent and attorney-in- fact, coupled with an interest, to act
for an in the Employee’s behalf and stead to execute and file any such applications,
at the Company’s expense, and to do all other lawfully permitted acts to
further the prosecution in issuance of letters patent or copyright registration
thereon with the same legal force and effect as if executed by the Employee.

7.           EQUITABLE
RELIEF.  Employee agrees that any
breach of Sections 5 and 6 above by Employee would cause irreparable damage to
the Company and that, in the event of such breach, the Company shall have, in
addition to any and all remedies of law, the right to an injunction, specific
performance or other equitable relief (without having to post bond) to prevent
the violation or threatened violation of Employee’s obligations hereunder.

8.           WAIVER.  Any waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach of the same or any other
provision hereof by such other party. 
All waivers shall be in writing.

9.           SEVERABILITY;
REFORMATION.  In case any one or more
of the provisions or parts of a provision contained in this Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not 

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affect any other provision or part of a provision of
this Agreement; and this Agreement shall, to the fullest extent lawful, be
reformed and construed as if such invalid or illegal or unenforceable
provision, or part of a provision, had never been contained herein, and such
provision or part shall be reformed so that it would be valid, legal and
enforceable to the maximum extent possible. Without limiting the foregoing, if
any provision (or part of a provision) contained in this Agreement shall for
any reason be held to be excessively broad as to duration, activity or subject,
it shall be construed by limiting and reducing it, so as to be enforceable to
the fullest extent compatible with then existing and applicable law.

 10.        ASSIGNMENT.  The Company shall have the right to assign
its rights and obligations under this Agreement to a party which assumes the
Company’s obligations hereunder.  This
Agreement is personal to the Employee and accordingly, the Employee shall not
have the right to assign his rights or obligations under this Agreement.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

11.         HEADINGS.  Headings and sub-headings are for
convenience only and shall not be deemed to be a part of this Agreement.

12.         AMENDMENTS.  This Agreement may be amended or modified, in
whole or in part, only by an instrument in writing signed by all parties
hereto.  Any amendment, consent,
decision, waiver or other action to be made, taken or given by the Company with
respect to the Agreement shall be made, taken or given on behalf of the Company
only by authority of the Board.

13.         NOTICES.  Any notices or other communications required
hereunder shall be in 

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writing and shall be deemed given when delivered in
person or when mailed, by certified or registered first-class mail,
postage prepaid, return receipt requested, or by faxed transmission where the
date and time of the transmission are clearly stated, addressed, if to the
Company, at  245 First Street, Sixteenth
Floor, Cambridge, MA 02142, or, if to the Employee, at  6 Davis Brook Drive, Natick, MA 01760 or to
such other addresses of which a party shall have notified the other in
accordance with the provisions of this Section 13.

14.         COUNTERPARTS.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original and all of which shall
be deemed a single agreement.

15.         SURVIVAL.  The provisions of this Agreement shall
survive the termination of the Employee’s employment hereunder in accordance
with their terms.

16.         ARBITRATION.  In the event of any dispute or disagreement
arising out of or related to this Agreement, the dispute or disagreement shall
be first negotiated by the parties, in good faith, and the parties shall use
their best efforts to reach a resolution. In the event that the parties are,
for whatever reason, unable to reach a resolution, then, in that event, either
party may refer the matter to the American Arbitration Association for
resolution in accordance with the then applicable rules and regulations of the
American Arbitration Association.  The
arbitration shall be held in Boston, Massachusetts before a single arbitrator
and the decision of the arbitrator shall be final and binding upon the parties
and the award may be entered in any court of competent jurisdiction. The cost
of the arbitration filing fee and the arbitrator’s fee shall be divided equally
between the parties and otherwise, each party shall be responsible for its own
costs and expenses, including attorneys’ fees and disbursements.  Notwithstanding the foregoing, 

 14
 

 

it is agreed that the Company may enforce its rights
under Section 5, 6, and 7 hereof by means of a civil action in court.

17.         GOVERNING
LAW.  This Agreement shall be
construed in accordance with and governed for all purposes by the laws of the
Commonwealth of Massachusetts applicable to contracts executed and wholly
performed within such jurisdiction.  In
enforcing such governing laws, any arbitrator or court of competent jurisdiction
shall afford all relief which a Massachusetts court would afford under the
circumstances.

EXECUTED
as an instrument, under seal, as of the date first above written.

	
  

  	
  COMBINATORX, INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alexis Borisy

  
	
   

  	
  Alexis Borisy,
  President/CEO

  
	
   

  	
  Hereunto Duly
  Authorized

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
  /s/ Jan Lessem

  
	
   

  	
  Dr. Jan Lessem

  

 

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Exhibit A

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (the “Agreement”)
is made and entered into this 8th day of April, 2008 (the “Effective Date”) by
and between CombinatoRx, Incorporated, a
Delaware corporation duly organized under law and having a usual place of
business at 245 First Street, Sixteenth Floor, Cambridge, MA 02142 (hereinafter
referred to as the “Company”) and  Dr. Jan Lessem having a place of
business at 6 Davis Brook Drive, Natick, MA 
01760 (hereinafter referred to as the “Consultant”).

WHEREAS, the Company wishes to engage the
Consultant to provide the services described herein and Consultant agrees to
provide the services for the compensation provided under and otherwise in
accordance with the terms and conditions contained in this Agreement;

NOW THEREFORE, in consideration of the
foregoing, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, accepted and agreed to, the
Company and the Consultant, intending to be legally bound, agree to the terms
set forth below.

1.             TERM.  Commencing as of the Effective Date, and
continuing until September 1, 2009 (the “Term”), unless earlier terminated
pursuant to Article 4 hereof, the Consultant agrees that he will serve as a
consultant to the Company.  This
Agreement may be renewed or extended for any period as may be agreed by the
parties.

2.                                      DUTIES
AND SERVICES.

(a)           Consultant’s
duties and responsibilities shall as described in Exhibit “A” be annexed hereto
and made a part hereof (collectively, the “Duties” or “Services”).

(b)           The
Consultant represents and warrants to the Company that s/he is under no
contractual or other restrictions or obligations which are inconsistent with
the execution of this Agreement, or which will interfere with the performance
of his Duties.  Consultant represents and
warrants that the execution and performance of this Agreement will not violate
any policies or procedures of any other person or entity for which he performs
Services concurrently with those performed herein.  Consultant understands and agrees that s/he
will not bring to the Company or use in the performance of Consultant’s duties
at the Company any materials or documents rightfully belonging to any other
party which are not generally available to the public. Consultant may bring
such materials and documents to the Company only if the Consultant has obtained
written authorization from such other party for their possession and use.  Further, Consultant agrees that he will not
enter into any agreement (either written or oral) which would put Consultant in
conflict with this Agreement and/or require that s/he disclose Confidential
Information.

 

 

(c)           Compliance with Policies and Regulations.  In performing the Services, Consultant shall
comply, to the best of his knowledge, with all business conduct and regulatory
and health and safety guidelines established by the Company for any
governmental authority with respect to the Company’s business.

(d)           Consultant
represents that he has not been disbarred and, to the best of his/her
knowledge, is not under consideration for disbarment by the Food and Drug
Administration from working in or providing services to any pharmaceutical or
biotechnology company under the Generic Drug Enforcement Act of 1992.

3.             CONSULTING
FEE AND OTHER COMPENSATION.

(a)           Subject
to the provisions hereof, the Company shall pay Consultant a consulting fee as
described in Appendix A.  The Consultant
shall submit monthly, on the Company’s standard reporting form, a listing of
his/her hours, the Duties performed and a summary of his activities.  The Consulting Fee shall be paid within
thirty (30) days of the Company’s receipt of the report and invoice.

(b)           Consultant shall be entitled to prompt reimbursement for
all pre-approved expenses incurred in the performance of his Duties, upon
submission and approval of written statements and receipts in accordance with
the then regular procedures of the Company. 
Pre-approval is required for expenses in excess of $500.00.

(c)           Subject
to the Consultant and his qualified beneficiaries exercising their right to
continue participation in the Company’s health and dental plans under COBRA as
of the Effective Date, the Company will continue to contribute the employer’s
share to the premium cost of their coverage under those plans until the earlier
of the end of the Term or when the Consultant’ employment is terminated in
accordance with this Agreement.

(d)           During
the Term, the restricted stock and options to purchase common stock of the
Company which were granted you prior to the Effective Date shall continue to
vest in accordance with the applicable stock option agreements, certificates
and plans, as in effect from time to time. 
In addition, the Consultant will not be required to exercise any of such
stock options within 90 days of April 7, 2008, but only within 90 days of the
termination of this Agreement.  The
Consultant will not be eligible to receive additional stock option or
restricted stock grants during the Term or thereafter.

(e)           The
Consultant agrees that all Services will be rendered by him as an independent
contractor, and that this Agreement does not create an employer-employee
relationship between the Consultant and the Company.  The Consultant shall have no right to receive
any employee benefits, including, but not limited to, health and accident
insurance, life insurance, sick leave and/or vacation. Consultant agrees to pay
all taxes, including self-employment taxes due in respect of the Consulting Fee
and to indemnify and hold harmless the Company in the event the Company is
required to pay any such taxes on behalf of Consultant.

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4.                                      EARLY
TERMINATION OF THE TERM.

(a)           If
the Consultant voluntarily ceases performing his/her Duties, becomes physically
or mentally unable to perform his/her Duties, or is terminated for cause, then,
in each instance, the Consulting Fee shall cease and terminate as of such date.

(b)           This
Agreement may be terminated without cause by either party upon not less than
thirty (30) days prior written notice by either party to the other.

(c)           Upon
termination under Sections 4(a) or 4(b), neither party shall have any further
obligations under this Agreement, except for the obligations which by their
terms survive this termination as noted in Section 16 hereof.  Upon termination, and in any case upon the
Company’s request, Consultant shall return immediately to the Company all
Confidential Information and copies thereof.

5.             RESTRICTED
ACTIVITIES.  For the
period beginning on the Effective Date and continuing until September 1, 2009
(the “Restricted Period”), Consultant will not, directly or indirectly:

(i)            engage in any
business activity (including, without limitation, either alone or as a partner,
officer, director, employee, joint venturer or stockholder of, or as a
consultant or other independent contractor to or agent or representative for,
any company, business, individual or other             entity),
which is directly or indirectly in competition with the Company’s Business, as
hereinafter defined, at any time during the Restricted Period and for a period
of one (1) year after the termination this Agreement; provided, however,
that nothing in this Agreement shall prevent or restrict the Consultant from
owning, directly or indirectly, not more than five percent (5%) of the
securities of any publicly traded company for the sole purpose of a passive
investment.  For purposes of this
Agreement, the Company’s Business shall be defined as: (a) researching and
developing a discovery platform that identifies novel, non-obvious combinations
of active molecules that will then become patent-protected therapeutics,
utilizing an automated, high-throughput process to search combinatorial space
and using multiple such automated systems in parallel screening efforts to
search combinatorial space using disease-specific assays and (b) developing,
formulating, manufacturing and commercializing pharmaceutical products that
consist of combinations of approved drugs; or

(ii)           solicit or request
any employee of or consultant to the Company to leave the employ of or cease consulting
for the Company; or

(iii)          solicit or request
any employee of or consultant to the Company to join the employ of, or begin
consulting for, any individual or entity that researches, develops, markets or
sells products that compete with those of the Company; or

(iv)          solicit or request
any individual or entity that researches, develops, markets or sells products
that compete with those of the Company, to employ or retain as a consultant any
employee or consultant of the Company; or

 3
 

 

 

(v)           induce or attempt to
induce any supplier or vendor of the Company to terminate or breach any written
or oral agreement or understanding with the Company.

6.             PROPRIETARY
RIGHTS.

(a)           Definitions.  For the purposes of this Article 6, the terms
set forth below shall have the following meanings:

              (i)            Concept and Ideas.  Those concepts and ideas disclosed by the
Company to Consultant or which are first developed by Consultant during the
course of the performance of Services hereunder and which relate to the Company’s
present, past or prospective business activities, services, and products, all
of which shall remain the sole and exclusive property of the Company.  The Consultant shall have no publication or
other intellectual property rights, and all of the same shall belong exclusively
to the Company.

              (ii)           Confidential Information. For
the purposes of this Agreement, Confidential Information shall mean and
collectively include all information relating to the business, plans and/or
technology of the Company including, but not limited to technical information,
including inventions, methods, plans, processes, specifications,
characteristics, assays, raw data, scientific preclinical or clinical data,
records, databases, formulations, clinical protocols, equipment design,
know-how, experience, and trade secrets; developmental, marketing, sales,
customer, supplier, consulting relationship information, operating,
performance, and cost information; computer programming techniques; microscopy
technology and signal identification strategy whether in tangible or intangible
form, and all record bearing media containing or disclosing the foregoing
information and techniques, including written business plans, patents and
patent applications, grant applications, notes, and memoranda, whether in writing
or presented, stored or maintained in or by electronic, magnetic, or other
means.

Notwithstanding the foregoing, the term “Confidential
Information” shall not include any information which: (a) can be demonstrated
to have been in the public domain or was publicly known or available prior to
the date of the disclosure to Consultant; (b) can be demonstrated in writing to
have been rightfully in the possession of Consultant prior to the disclosure of
such information to Consultant by the Company; (c) becomes part of the public
domain or publicly known or available by publication or otherwise, not due to
any unauthorized act or omission on the part of Consultant; or (d) is supplied
to Consultant by a third party without binder of secrecy, provided, however,
that such third party has no obligation to the Company or any of its affiliated
companies to maintain such information in confidence.

(b)           Non-Disclosure
to Third Parties.  Except as required
by Consultant’s Duties, Consultant shall not, at any time now or in the future,
directly or indirectly, use, publish, disseminate or otherwise disclose any
Confidential Information, Concepts, or Ideas to any third party without the
prior written consent of the Company which consent may be denied in each
instance and all of the same, together with publication rights, shall belong
exclusively to the Company.

 4
 

 

 

(c)           Documents,
etc.  All documents, diskettes,
tapes, procedural manuals, guides, specifications, plans, drawings, designs and
similar materials, lists of present, past or prospective customers, customer
proposals, invitations to submit proposals, price lists and data relating to
the pricing of the Company’s products and services, records, notebooks and all
other materials containing Confidential Information or information about
Concepts or Ideas (including all copies and reproductions thereof) that come
into Consultant’s possession or control by reason of Consultant’s performance
of the relationship, whether prepared by Consultant or others: (a) are the
property of the Company, (b) will not be used by Consultant in any way other
than in connection with the performance of his Duties, (c) will not be provided
or shown to any third party by Consultant, (d) will not be removed from the
Company’s or Consultant’s premises (except as Consultant’s Duties require), and
(e) at the termination (for whatever reason), of Consultant’s relationship with
the Company, will be left with, or forthwith returned by Consultant to the
Company.

(d)           Patents,
etc.  The Consultant agrees that the
Company is and shall remain the exclusive owner of the Confidential Information
and Concepts and Ideas.  Any interest in
patents, patent applications, inventions, technological innovations, trade
names, trademarks, service marks, copyrights, copyrightable works,
developments, discoveries, designs, processes, formulas, know-how, data and
analysis, whether registrable or not (“Developments”), which Consultant, as a
result of rendering Services to the Company under this Agreement, may conceive
or develop, shall: (i) forthwith be brought to the attention of the Company by
Consultant and (ii) belong exclusively to the Company.  No license or conveyance of any such rights
to the Consultant is granted or implied under this Agreement.

(e)           Assignment.  The Consultant hereby assigns and, to the
extent any such assignment cannot be made at present, hereby agrees to assign
to the Company, without further compensation, all of his right, title and
interest in and to all Concepts, Ideas, and Developments. The Consultant will
execute all documents and perform all lawful acts which the Company considers
necessary or advisable to secure its rights hereunder and to carry out the
intent of this Agreement.

7.             EQUITABLE
RELIEF.  Consultant
agrees that any breach of Articles 5 and 6 above by him would cause irreparable
damage to the Company and that, in the event of such breach or threatened
breach, the Company shall have, in addition to any and all remedies of law, the
right to an injunction, specific performance or other equitable relief (without
having to post a bond) to prevent the violation or threatened violation of
Consultant’s obligations hereunder.

8.             WAIVER.  Any waiver by the Company of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach of the same or any other provision hereof.  All waivers by the Company shall be in
writing.

9.             SEVERABILITY;
REFORMATION.  In case
any one or more of the provisions or parts of a provision contained in this
Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement;
and this Agreement shall, to the fullest extent lawful, be reformed and
construed as if such invalid or illegal or unenforceable 

 5
 

 

provision, or part of a provision, had never been
contained herein, and such provision or part shall be reformed so that it would
be valid, legal and enforceable to the maximum extent possible. Without
limiting the foregoing, if any provision (or part of a provision) contained in
this Agreement shall for any reason be held to be excessively broad as to
duration, activity or subject, it shall be construed by limiting and reducing
it, so as to be enforceable to the fullest extent compatible with then existing
applicable law.

10.          ASSIGNMENT.  The Company shall have the right to assign
its rights and obligations under this Agreement to a party which assumes the
Company’s obligations hereunder. 
Consultant shall not have the right to assign his/her rights or
obligations under this Agreement without the prior written consent of the
Company.

11.          HEADINGS.  Headings and subheadings are for convenience
only and shall not be deemed to be a part of this Agreement.

12.          AMENDMENTS.  This Agreement may be amended or modified, in
whole or in part, only by an instrument in writing signed by all parties
hereto.

13.          NOTICES.  Any notices or other communications required
hereunder shall be in writing and shall be deemed given when delivered in
person or when mailed, by certified or registered first class mail, postage
prepaid, return receipt requested, addressed to the parties at their addresses
specified in the preamble to this Agreement or to such other addresses of which
a party shall have notified the other in accordance with the provisions of this
Section 13.

14.          COUNTERPARTS.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original and all of which shall
be deemed a single agreement.

15.          GOVERNING
LAW.  This Agreement
shall be construed in accordance with and governed for all purposes by the laws
of the Commonwealth of Massachusetts applicable to contracts executed and
wholly performed within such jurisdiction. Any dispute arising hereunder shall
be referred to and heard in only a court located in Massachusetts, to whose
jurisdiction each party hereby assents.

16.          SURVIVAL.  The provisions of Sections 5 to 9 and 15 to
16 of this Agreement shall survive the expiration of the Term or the
termination of this Agreement.  This
Agreement supersedes all prior agreements, written or oral, between the Company
and the Consultant relating to the subject matter of this Agreement.

EXECUTED, under seal, effective as of the Effective
Date.

	
  COMBINATORX, INCORPORATED

  	
   

  	
  CONSULTANT

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Alexis Borisy

  	
   

  	
  Jan Lessem

  
	
  President and
  Chief Executive Officer

  	
   

  	
   

  
				

 6
 

 

 

Appendix “A”

(A) Duties and
Responsibilities:

The Consultant has
knowledge and experience of the Company such that he is uniquely qualified to
provide business and management advice to Company’s senior executives.  Therefore, it is agreed that, during the
Term, the Consultant shall make himself reasonably available during normal
business hours to provide advice and other consulting services to the Company
and those designated by it.  Consulting
services shall include advice relating to Consultant’s prior duties for the
Company and, consistent with his knowledge and experience of the Company and
its industry, advice with respect to clinical matters, medical advisory boards,
key business relationships, strategic planning and the like.  Consulting services during the Term may only
be requested by the Company’s President/Chief Executive Officer, or any Vice
President of the Company and all work must be authorized in advance.  Services may be provided by telephone, by
traveling to meet with individuals as requested by the Company, or at the
Company’s offices, as the Company and the Consultant may agree from time to
time, provided, however, that any performance at the Company’s offices shall be
by mutual agreement.  The Company agrees
to coordinate with the Consultant to reasonably accommodate any periods of the
Consultant’s unavailability due to vacations, illness and similar absences.

(B)  Fee
Schedules and Payment Dates:

CombinatoRx agrees
to pay the Consultant a fee of $600.00 per hour for consulting to a maximum of
$200,000 per year.  Invoices for hours of service should be sent monthly
to Accounts Payable at CombinatoRx, Incorporated, to
ensure that they are paid within 30 days of receipt.

 7Exhibit
10.1

AMENDMENT NO. 2

TO

CHRISTOPHER & BANKS
CORPORATION

2005
STOCK INCENTIVE PLAN

This Amendment No.
2 to the Christopher & Banks Corporation 2005 Stock Incentive Plan (the “Plan”)
is hereby approved by the Christopher & Banks Corporation Board of Directors
(the “Board”) to be effective on September 21, 2006.

WHEREAS,
the Plan was approved by the Board on April 7, 2005 and by the shareholders of
the Company on July 27, 2005 and first amended effective July 26, 2006; and

WHEREAS,
pursuant to Section 13.2 of the Plan which provides that the Board may at any
time and from time to time and in any respect, amend or modify the Plan, the
Board desires to amend the plan to permit grants to key officers of the Company
that exceed the individual participant limitations set forth in Section 4.2.

NOW,
THEREFORE, BE IT RESOLVED, that Section 4.2 of the Plan is
hereby amended and restated in its entirety to read as follows:

4.2           Individual
Participant Limitations (Code § 162(m)). 
The maximum number of shares of Common Stock with respect to
which Stock Options and Stock Appreciation Rights in the aggregate may be
granted to any one Participant during any calendar year shall be 98,700
shares.  The maximum number of shares of
Common Stock with respect to which Awards of Restricted Stock may be granted to
any one Participant during any calendar year shall be 49,300 shares, except
that during calendar year 2006 a Restricted Stock Award of up to 200,000 shares
of Common Stock may be granted to Matthew Dillon and a Restricted Stock Award
of up to 70,000 shares may be granted to Monica Dahl.

FURTHER
RESOLVED, that all other terms of the Plan shall remain in
full force and effect, except to the extent inconsistent with the restated
Section 4.2 set forth above.

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