Document:

exv10w23

 

Exhibit 10.23

SECOND MODIFICATION AGREEMENT

     THIS
SECOND MODIFICATION AGREEMENT (this “Modification”),
dated as of this
28th of
December, 2005, by and among NEIGHBORHOODS CAPITAL, LLC, a Virginia limited liability company, the
limited liability companies identified above their executions hereof as Borrowers or Guarantors
(Capital and each of the Borrowers and Guarantors, individually, an “Obligor”, and collectively,
the “Obligors”); the parties identified above their executions hereof as Lenders and other Lenders
who may become a party to the Agreement (as hereinafter defined) (each, a “Lender” and,
collectively, the “Lenders”) and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, as a Lender, as Agent for the Lenders and as Issuing Lender.

RECITALS:

     WHEREAS, pursuant to a First Modified and Restated Loan Agreement dated November 15,
2004, as modified in a First Modification Agreement dated July 11, 2005, by and among the
Obligors, the Lenders and the Agent (the “Agreement”), the Lenders have made a Credit Facility in
the principal amount not to exceed at any time outstanding $150,000,000 available to the Obligors;

     WHEREAS, the Obligors, the Lenders and the Agent desire to modify, amend and confirm the
Agreement and the other Loan Documents (as hereinafter defined) as set forth in this Modification;
and

     WHEREAS, capitalized terms used but not defined in this Modification shall have the meanings
ascribed to them in the Agreement; the Obligors’ respective indebtedness, duties and obligations
under the Agreement and the other Loan Documents are hereinafter collectively called the
“Obligations”; and all liens, security interests, assignments, superior titles, rights, remedies,
powers, equities and priorities securing the Agreement and/or the other Loan Documents or
providing to Lenders recourse with respect thereto, are hereinafter collectively called the
“Liens.”

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Obligors, the Lenders and the Agent agree to modify the Agreement as more
specifically set forth below.

1. Incorporation of Recitals; Defined Terms.

     The Recitals to this Modification are hereby incorporated into this Modification and made a
part hereof.

2. Modification to Certain Provisions of Agreement.

     (a) The definition of “Revolving Credit Maturity Date” set forth in Section 1.1 of the
Agreement is hereby modified and restated as follows:

 

 

          “Revolving Credit Maturity Date” means December 1, 2008 or such later date to
which the Revolving Credit Maturity Date may be extended under Section 2.7 hereof (but, if any
such date shall not be a Business Day, the next Business Day thereafter), which date shall
constitute the last day of the Revolving Credit Term.

     (b) The parties confirm that in consideration of this Modification, an Extension Fee in the
amount of .125% of the Revolving Credit Commitment ($150 million) is due and payable to the
Agent, for the ratable benefit of the Lenders, as provided in Section 4.4(c) of the Agreement.
Other fees, charges and expenses shall continue to be due and payable as provided in the
Agreement.

3. Representations and Warranties.

     The Obligors, respectively, hereby reaffirm all of representations and warranties set forth
in the Agreement and the other Loan Documents, and further represent and warrant that (a) the
execution and delivery of this Modification do not contravene, result in a breach of, or
constitute a default under, any deed of trust, loan agreement, indenture or other contract or
agreement to which any Obligor is a party or by which any Obligor or any of its properties may be
bound (nor would such execution and delivery constitute such a default with the passage of time or
the giving of notice or both), and do not violate or contravene any law, order, decree, rule,
regulation or restriction to which any Obligor or any of its properties is subject; (c) this
Modification constitutes the legal, valid and binding obligation of each Obligor, enforceable in
accordance with its terms; (d) the execution and delivery of, and performance under, this
Modification are within each Obligor’s power and authority without the joinder or consent of any
other party and are not in contravention of any law and have been duly authorized by all requisite
action, and, are not in contravention of such Obligor’s certificate of organization, operating
agreement or other limited liability company organizational documents if the Obligor is a limited
liability company or such Obligor’s certificate of incorporation, by-laws or other corporate
organizational documents if the Obligor is a corporation; (e) there exists no default under the
Agreement or any other Loan Document; (f) there are no offsets, claims or defenses with respect to
the Obligations or the Agreement or any other Loan Document; and (g) each Obligor other than S-M
Financing is a duly organized and legally existing limited liability company in good standing
under the laws of the Commonwealth of Virginia or, in the case of S-M Communities, Delaware, each
Guarantor other than S-M Financing and S-M Communities is qualified to do business in the State of
Maryland and S-M Financing is a duly organized and legally existing corporation in good standing
under the laws of Delaware. Each Obligor further represents and warrants that, except as disclosed
in writing to the Agent, there is no suit, judicial or administrative action, claim,
investigation, inquiry, proceeding or demand pending (or, to such Obligor’s knowledge, threatened)
against (i) any Obligor, or (ii) which affects the Collateral or any Obligor’s title to the
Collateral purported to be owned by such Obligor, or (iii) which affects the validity,
enforceability or priority of the Agreement or any other Loan Document or any Lien. Each Obligor,
jointly and severally, agrees to indemnify and hold the Lenders harmless against any loss, claim,
damage, liability or expense (including, without limitation, reasonable attorneys’ fees) incurred
as a result of any representation or warranty made by any Obligor herein which

O-2

 

proves to be untrue or inaccurate in any material respect, and that, at Agent’s option, any
such occurrence shall constitute an Event of Default.

4.
Renewal; Lien Continuation; No Novation.

     The Obligors, respectively, hereby renew the Obligations for which they are responsible under
the Agreement, as modified by this Modification, and under the other Loan Documents and promise to
pay and perform all Obligations for which they are responsible under the Agreement, as modified by
this Modification, and the other Loan Documents. The Obligors, respectively, ratify and confirm the
Liens as valid, subsisting and continuing to secure the Obligations, as modified by this
Modification. This Modification shall not in any manner diminish, impair, release, waive or
extinguish the Obligations or the Liens. The execution and delivery of this Modification shall not
constitute a novation of the debt evidenced and secured by the Agreement and the other Loan
Documents.

5. Miscellaneous.

     Unless specifically modified in this Modification, all terms of the Agreement and the other
Loan Documents shall remain in full force and effect. To the extent of any direct conflict between
the Agreement and the other Loan Documents and this Modification, this Modification shall control.
This Modification (a) shall bind and benefit the parties hereto and their respective successors and
assigns; (b) shall be governed by the laws of the Commonwealth of Virginia and United States
federal law; and (c) may be executed in several counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when executed and delivered, shall constitute an original
agreement enforceable against all who signed it without production of or accounting for any other
counterpart, and all separate counterparts shall constitute the same agreement.

6. Reaffirmation of Guaranty.

     Without limiting the other provisions of this Modification, each Guarantor hereby consents to
and joins in this Modification and hereby declares to and agrees with the Lenders that the
Guaranty is and shall continue in full force and effect for the benefit of Lenders with respect to
the Obligations, as modified by this Modification, that there are no offsets, claims or defenses
of Guarantor with respect to the Guaranty or the Obligations, that the Guaranty is not diminished
or impaired, released, waived or extinguished in any way by this Modification or the transactions
contemplated hereby, and that the Guaranty is hereby ratified and confirmed in all respects. Each
Guarantor further hereby reaffirms all of the representations and warranties set forth in the
Guaranty. Each Guarantor acknowledges that the Lenders would not execute this Modification or
otherwise consent to its terms without the foregoing agreements.

[Executions Begin on the Following Page]

O-3

 

     WITNESS THE FOLLOWING EXECUTIONS AND SEALS.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	OBLIGORS:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	BORROWERS:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	NEIGHBORHOODS CAPITAL, LLC	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Martin K. Alloy	 	(SEAL)	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Martin K. Alloy	 	 	 	 
	 	 	 	 	Title: Chairman	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	BRAM NEIGHBORHOODS, LLC,	 	 	 	 
	 	 	GLENKIRK NEIGHBORHOODS, LLC,	 	 	 	 
	 	 	GLYNN TARRA ESTATES, LLC,	 	 	 	 
	 	 	NEIGHBORHOODS I, L.L.C.,	 	 	 	 
	 	 	NEIGHBORHOODS II, LLC,	 	 	 	 
	 	 	NEIGHBORHOODS III, LLC,	 	 	 	 
	 	 	NEIGHBORHOODS IV, LLC,	 	 	 	 
	 	 	COLES RUN NEIGHBORHOODS, LLC,	 	 	 	 
	 	 	ZION NEIGHBORHOODS, LLC,	 	 	 	 
	 	 	WALL NEIGHBORHOODS, LLC,	 	 	 	 
	 	 	MARUMSCO NEIGHBORHOODS, LLC,	 	 	 	 
	 	 	NEIGHBORHOODS VI, LLC,	 	 	 	 
	 	 	BEECH GROVE NEIGHBORHOODS, LLC,	 	 	 	 
	 	 	NEIGHBORHOODS V, LLC,	 	 	 	 
	 	 	LANDMARK NEIGHBORHOODS, LLC,	 	 	 	 
	 	 	BRAM III NEIGHBORHOODS, LLC	 	 	 	 
	 	 	OLD DOMINION NEIGHBORHOODS, LLC, and	 	 	 	 
	 	 	SPRING PARK NEIGHBORHOODS, LLC	 	 	 	 
	 	 	FAIR OAKS NEIGHBORHOODS, LLC	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	NEIGHBORHOODS CAPITAL, LLC,	 	 	 	 
	 	 	 	 	   its Sole Member	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Martin K. Alloy
	 	(SEAL)	 	 
	 

	 	 	 	 	 	 

Name: Martin K. Alloy
	 	 	 	 
	 

	 	 	 	 	 	Title: Chairman	 	 	 	 

[Executions Continue on the Following Page)

O-4

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	STANLEY-MARTIN COMMUNITIES, LLC	 	 	 	 
	 	 	   a Delaware limited liability company	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Steven B. Alloy	 	(SEAL)	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Steven B. Alloy	 	 	 	 
	 	 	 	 	Title: President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	STANLEY-MARTIN FINANCING CORP.,	 	 	 	 
	 	 	   a Delaware corporation	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Steven B. Alloy	 	(SEAL)	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Steven B. Alloy	 	 	 	 
	 	 	 	 	Title: President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	KF NEIGHBORHOODS, L.L.C.,	 	 	 	 
	 	 	KF II NEIGHBORHOODS, LLC and	 	 	 	 
	 	 	WILDEWOOD NEIGHBORHOODS, LLC	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	NEIGHBORHOODS CAPITAL, LLC,	 	 	 	 
	 	 	 	 	   its Sole Member	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Martin K. Alloy
	 	(SEAL)	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Martin K. Alloy	 	 	 	 
	 

	 	 	 	 	 	Title: Chairman	 	 	 	 

[Executions Continue on the Following Page]

O-5

 

	 	 	 	 	 	 	 	 	 
	 	 	AGENT AND LENDER:	 	 
	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
	 	 	  as Agent and Lender, including as successor
	 	 	  in merger to SouthTrust Bank
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kevin M. Cole
	 	(SEAL)	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name: KEVIN M. COLE	 	 	 	 
	 

	 	 	 	Title: ASSISTANT VICE PRESIDENT	 	 	 	 

[Executions Continue on the Following Page]

O-6

 

	 	 	 	 	 	 	 	 	 
	 	 	OTHER LENDERS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BRANCH BANKING AND TRUST COMPANY
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gregg E. Dougherty
	 	(SEAL)	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name: GREGG E. DOUGHERTY	 	 	 	 
	 

	 	 	 	Title     S V P	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David S. [ILLEGIBLE]
	 	(SEAL)	 	 
	 

	 	 	 	 

	 	 	 	 
	 

	 	 	 	Name: DAVID S. [ILLEGIBLE]	 	 	 	 
	 

	 	 	 	Title    S V P	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	FIRST HORIZON HOME LOAN CORPORATION
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Alan Drewer
	 	(SEAL)	 	 
	 

	 	 	 	 

	 	 	 	 
	 

	 	 	 	Name: ALAN DREWER	 	 	 	 
	 

	 	 	 	Title    S V P	 	 	 	 

O-7exv10w6

 

EXHIBIT 10.6

ADVANCIS PHARMACEUTICAL CORPORATION

EXECUTIVE EMPLOYMENT AGREEMENT

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made this 1st day of November 2005
by and between Robert C. Low, a resident of Vienna, Virginia (the “Employee”), and Advancis
Pharmaceutical Corporation, a corporation organized and existing under the laws of the State of
Delaware (the “Company”).

BACKGROUND

     The Company is engaged in the business of developing, improving and promoting antibiotic
therapies and the delivery and dosage of antibacterials, as well as extending the market and patent
life of important anti-infectives and oncology (as may be modified or expanded by the Company
during the term of this Agreement, collectively and individually, the “Business”).

     The Company desires to promote the Employee and the Employee desires to be promoted and
continue to be employed by the Company in an executive position, upon the terms and conditions set
forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and
intending to be legally bound, the parties, subject to the terms and conditions set forth herein,
agree as follows:

     1. Employment and Term. The Company hereby continues to employ the Employee and the
Employee hereby accepts continued employment with the Company, as Vice President, Finance and
Acting Chief Financial Officer (the “Position”) with the promotion to commence on November 1, 2005
(the “Commencement Date”). Employee shall continue to be employed by the Company on an at will
basis. The Employee shall be entitled to terminate this Agreement at any time upon ninety (90)
days prior written notice to the Company. The Company shall be entitled to terminate this
Agreement at any time subject to the provisions of Section 8 hereof. (The period of time during
which the Employee is employed by the Company subject to the terms of this Agreement is referred to
herein as the “Term”). For purposes of interpretation of this Agreement, the date of promotion
shall be the commencement date rather that the date of initial employment with the Company.

     2. Duties. During the Term, the Employee shall serve the Company faithfully and to
the best of his ability and shall devote his full time, attention, skill and efforts to the
performance of the duties required by or appropriate for the Position. Subject to the oversight of
the Chairman, President & CEO, the Employee shall (i) have responsibility for the financial
management systems of the organization, and (ii) such duties and responsibilities as may be
assigned to him from time to time by the Chairman, President & CEO. The Employee shall perform
such duties and responsibilities at the Company’s facility located in Germantown, Maryland or at
such other location as may be mutually agreed upon by the Company and the Employee in accordance
with the business needs of the Company. The Employee, as Vice

 

 

President of Finance and Acting Chief Financial Officer shall report to the Chairman, President &
CEO.

     3. Other Business Activities. Except with the prior written consent of the Company in
its sole discretion, the Employee shall not engage, directly or indirectly, during the Term, in any
other business activities or pursuits whatsoever, except activities in connection with charitable
or civic activities, personal investments and serving as an executor, trustee or in other similar
fiduciary capacity; provided that any such activities do not interfere with the performance of his
responsibilities and obligations pursuant to this Agreement.

     4. Compensation. The Company shall pay the Employee, and the Employee hereby agrees
to accept, as compensation for all services to be rendered to the Company and for the Employee’s
intellectual property covenants and assignments and covenant not to compete, as provided in
Sections 6 and 7 hereof, the compensation set forth in this Section 4.

          4.1 Salary. The Company shall pay the Employee a base salary at the annual rate of
Two Hundred Twenty Thousand Dollars ($220,000.00) (as the same may hereafter be adjusted, the
“Salary”) during the Term of this Agreement. The Salary shall be inclusive of all applicable
income, social security and other taxes and charges that are required by law to be withheld by the
Company (collectively, “Taxes”) and shall be paid and withheld in accordance with the Company’s
normal payroll practice for its executive employees from time to time in effect. The Salary shall
be subject to increase at the option and in the sole discretion of the Company based upon the
demonstrated performance of the Employee.

          4.2 Bonus. Upon the execution of this Agreement, the Employee shall be eligible to be
awarded an annual cash bonus, which bonus shall be determined by the Chairman, President & CEO and
the Board of Directors and shall be in a target amount of Twenty-Five percent (25%) of Salary paid
during such applicable period, less Taxes, provided that the Employee shall have achieved all of
his performance objectives established for such period. Such bonus shall be determined and paid
within ninety (90) days after the conclusion of such year.

          4.3 Fringe Benefits. The Employee shall be entitled to participate in the following
programs and receive the following benefits (collectively, the “Benefits”) in accordance with the
following provisions.

               (a) The Employee shall be entitled to participate in any retirement, health or dental programs
generally made available to executive employees of the Company.

               (b) The Employee shall be entitled to participate in all vacation, life and disability
insurance and other fringe benefit programs of the Company to the extent and on the same terms and
conditions as are accorded to other executive employees of the Company.

 

 

          4.4 Reimbursement of Expenses. During the Term, the Employee shall be reimbursed for
items of travel, food and lodging and miscellaneous expenses reasonably incurred by him on behalf
of the Company, provided that such expenses are incurred, documented and submitted to the Company,
all in accordance with the reimbursement policies of the Company as in effect from time to time.

     5. Confidentiality. The Employee recognizes and acknowledges that the Proprietary
Information (as hereinafter defined) is a valuable, special and unique asset of the Company. As a
result, both during the Term and thereafter, the Employee shall not, without the prior written
consent of the Company, for any reason either directly or indirectly divulge to any third-party or
use for his own benefit, or for any purpose other than the exclusive benefit of the Company, any
confidential, proprietary, business and technical information or trade secrets of the Company or of
any subsidiary or affiliate of the Company (the “Proprietary Information”) revealed, obtained or
developed in the course of his employment with the Company. Proprietary Information shall include
any confidential or proprietary information or trade secrets relating to any patents or other
intellectual property assigned by the Employee to the Company. Proprietary Information also shall
include, but shall not be limited to the intangible personal property described in Section 6(b)
hereof and, in addition, technical information, including research design, results, techniques and
processes; apparatus and equipment design; computer software; technical management information,
including project proposals, research plans, status reports, performance objectives and criteria,
and analyses of areas for business development; and business information, including project,
financial, accounting and personnel information, business strategies, plans and forecasts, customer
lists, customer information and sales and marketing plans, efforts, information and data. In
addition, “Proprietary Information” shall include all information and materials received by the
Company or Employee from a third party subject to an obligation of confidentiality and/or
non-disclosure. Nothing contained herein shall restrict the Employee’s ability to make such
disclosures during the course of his employment as may be necessary or appropriate to the effective
and efficient discharge of the duties required by or appropriate for the Position or as such
disclosures may be required by law. Furthermore, nothing contained herein shall restrict the
Employee from divulging or using for his own benefit or for any other purpose any Proprietary
Information that is readily available to the general public so long as such information did not
become available to the general public as a direct or indirect result of the Employee’s breach of
this Section 5. Failure by the Company to mark any of the Proprietary Information as confidential
or proprietary shall not affect its status as Proprietary Information under the terms of this
Agreement.

     6. Property.

          6.1 Removal and Distribution. All right, title and interest in and to Proprietary
Information shall be and remain the sole and exclusive property of the Company. During the Term,
the Employee shall not remove from the Company’s offices or premises any documents, records,
notebooks, files, correspondence, reports, memoranda or similar materials of or containing
Proprietary Information, or other materials or property of any kind belonging to the Company,
unless necessary or appropriate in accordance with the duties and responsibilities

 

 

required by or appropriate for the Position and, in the event that such materials or property are
removed, all of the foregoing shall be returned to their proper files or places of safekeeping as
promptly as possible after the removal shall serve its specific purpose. The Employee shall not
make, retain, remove and/or distribute any copies of any of the foregoing for any reason
whatsoever, except as may be necessary in the discharge of the assigned duties and shall not
divulge to any third person the nature of and/or contents of any of the foregoing or of any other
oral or written information to which he may have access or with which for any reason he may become
familiar, except as disclosure shall be necessary in the performance of the duties; and upon the
termination of his employment with the Company, the Employee shall return to the Company all
originals and copies of the foregoing then in his possession or under his control, whether prepared
by the Employee or by others.

          6.2 Developments.

               (a) The Employee acknowledges that all right, title and interest in and to any and all
writings, documents, inventions, discoveries, ideas, developments, information, computer programs
or instructions (whether in source code, object code, or any other form), algorithms, formulae,
plans, memoranda, tests, research, designs, innovations, systems, analyses, specifications, models,
data, diagrams, flow charts, and/or techniques (whether patentable or non-patentable or whether
reduced to written or electronic form or otherwise) that the Employee creates, makes, conceives,
discovers or develops, either solely or jointly with any other person, at any time during the Term,
whether during working hours or at the Company’s facility or at any other time or location, and
whether upon the request or suggestion of the Company or otherwise, (collectively, “Intellectual
Work Product”) shall be the sole and exclusive property of the Company. The Employee shall
promptly disclose to the Company all Intellectual Work Product, and the Employee shall have no
claim for additional compensation for the Intellectual Work Product, except for any excluded
Intellectual Work Product that is wholly unrelated to the pharmaceutical industry, in the broadest
sense, provided that such Intellectual Work Product is not conceived, discovered or developed,
either solely or jointly with any other person during working hours or at the Company’s facility or
using any other Company resource.

               (b) The Employee acknowledges that all the Intellectual Work Product that is copyrightable
shall be considered a work made for hire under United States Copyright Law. To the extent that any
copyrightable Intellectual Work Product may not be considered a work made for hire under the
applicable provisions of the United States Copyright Law, or to the extent that, notwithstanding
the foregoing provisions, the Employee may retain an interest in any Intellectual Work Product, the
Employee hereby irrevocably assigns and transfers to the Company any and all right, title, or
interest that the Employee may have in the Intellectual Work Product under copyright, patent, trade
secret and trademark law, in perpetuity or for the longest period otherwise permitted by law,
without the necessity of further consideration. The Company shall be entitled to obtain and hold
in its own name all copyrights, patents, trade secrets, and trademarks with respect thereto.

 

 

               (c) The Employee shall reveal promptly all information relating to any such Intellectual
Property to the Board of Directors of the Company, and, at the Company’s expense, shall cooperate
with the Company and execute such documents as may be necessary or appropriate (i) in the event
that the Company desires to seek copyright, patent or trademark protection, or other analogous
protection, thereafter relating to the Intellectual Work Product, and when such protection is
obtained, renew and restore the same, or (ii) to defend any opposition proceedings in respect of
obtaining and maintaining such copyright, patent or trademark protection, or other analogous
protection.

               (d) In the event the Company is unable after reasonable effort to secure the Employee’s
signature on any of the documents referenced in Section 6.2 (c) hereof, whether because of the
Employee’s physical or mental incapacity or for any other reason whatsoever, 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, to act for and on the behalf and stead to execute and file
any such documents and to do all other lawfully permitted acts to further the prosecution and
issuance of any such copyright, patent or trademark protection, or other analogous protection, with
the same legal force and effect as if executed by the Employee.

               (e) The Employee represents that the innovations, designs, systems, analyses, ideas, and all
copyrights, patents, trademarks and trade names, or similar intangible personal property
(collectively, the “Pre-existing Property”) identified on Schedule I hereof comprise all of
the innovations, designs, systems, analyses, ideas and all copyrights, patents, trademarks and
trade names, or similar intangible personal property that the Employee has made or conceived of
prior to the date hereof, and same are excluded from the operation of the other provisions of this
Section 6.2. In the event that the Employee learns of any Pre-existing Property that he
inadvertently failed to include in Schedule I, and the circumstances surrounding the failure of
such inclusion are reasonably satisfactory to the Company, the Employee and the Company shall
jointly amend Schedule I to include such property.

     7. Covenant not to Compete.

          7.1 Restrictions. Provided that the Company is in compliance with Section 8.5 hereof,
if applicable, the Employee shall not, during the Term and for a period of two (2) years thereafter
(the “Restricted Period”), except as an employee of the Company and in order to carry out the
Employee’s duties hereunder, do any of the following directly or indirectly without the prior
written consent of the Company in its sole discretion:

               (a) engage or participate, directly or indirectly, in any business activity competitive with
the Business or the business of the Company or any of the Company’s subsidiaries or affiliates as
conducted during the Term;

               (b) become interested (as owner, stockholder, lender, partner, co-venturer, director, officer,
employee, agent, consultant or otherwise) in any person, firm, corporation, association or other
entity engaged in any business that is competitive with the

 

 

Business or of the business of the Company or any subsidiary or affiliate of the Company as
conducted during the Term, or become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any portion of the
business of any person, firm, corporation, association or other entity where such portion of such
business is competitive with the Business of the Company or the business of any subsidiary or
affiliate of the Company as conducted during the Term (notwithstanding the foregoing, the Employee
may hold not more than one percent (1%) of the outstanding securities of any class of any
publicly-traded securities of a company that is engaged in activities referenced in this Section
7.1.

               (c) solicit, call on or transact or engage in any business activity with, either directly or
indirectly, any (i) customer with whom the Company shall have dealt at any time during the one (1)
year period immediately preceding the termination of the Employee’s employment hereunder, or (ii)
corporate partner, collaborator, independent contractor or supplier with whom the Company shall
have dealt at any time during the one (1) year period immediately preceding the termination of the
Employee’s employment hereunder;

               (d) influence or attempt to influence any then current or prospective supplier, customer,
corporate partner, collaborator, or independent contractor of the Company to terminate or modify
any written or oral agreement or course of dealing with the Company; or

               (e) influence or attempt to influence any person either (i) to terminate or modify an
employment, consulting, agency, distributorship or other arrangement with the Company, or (ii) to
employ or retain, or arrange to have any other person or entity employ or retain, any person who
has been employed or retained by the Company as an employee, consultant, agent or distributor of
the Company at any time during the one (1) year period immediately preceding the termination of the
Employee’s employment hereunder.

          7.2 Acknowledgment. The Employee acknowledges that he has carefully read and
considered the provisions of this Section 7. The Employee acknowledges that the foregoing
restrictions will limit his ability to earn a livelihood in a business competitive with the
Business, but he nevertheless believes that he has received and will receive sufficient
consideration and other benefits in connection with the payment by the Company of the compensation
set forth in Sections 4 and 8.5 to justify such restrictions, which restrictions the Employee does
not believe would prevent him from earning a living in businesses that are not competitive with the
Business and without otherwise violating the restrictions set forth herein.

     8. Early Termination. The Employee’s employment hereunder may be terminated during
the Term upon the occurrence of any one of the events described in this Section 8. Upon
termination, the Employee shall be entitled only to such compensation and benefits as described in
this Section 8.

 

 

          8.1 Involuntary Termination.

               (a) Termination for Disability.

                    (i) In the event of the disability of the Employee such that the Employee is unable to perform
the duties and responsibilities hereunder to the full extent required by this Agreement by reasons
of illness, injury or incapacity for a period of more than one hundred eighty (180) consecutive
days or more than one hundred eighty (180) days, in the aggregate, during any three hundred
sixty-five (365) day period (“Disability”), the Company shall have the right to terminate
Employee’s employment hereunder by written notice to the Employee.

                    (ii) In the event of a termination of the Employee’s employment hereunder pursuant to Section
8.1(a)(i), the Employee will be entitled to receive all accrued and unpaid (as of the date of such
termination) Salary and applicable Benefits; provided that the Employee has complied with all of
his obligations under this Agreement and continues to comply with all of his surviving obligations
hereunder listed in Section 10 and a pro-rata percentage of the bonus (provided in Section 4.2) for
the last fiscal year of the Company prior to the date of Employee’s termination. Except as
specifically set forth in this Section 8.1(a)(ii) or as provided by applicable law, the Company
shall have no liability or obligation to the Employee for compensation or benefits hereunder by
reason of, or subsequent to, such termination.

               (b) Termination by Death. In the event that the Employee dies during the Term, the
Employee’s employment hereunder shall be terminated thereby and the Company shall pay to the
Employee’s executors, legal representatives or administrators an amount equal to the accrued and
unpaid portion of the Salary for the month in which he dies and a pro-rata percentage of the bonus
(provided in Section 4.2) for the last fiscal year of the Company prior to the date of Employee’s
termination. Except as specifically set forth in this Section 8.1(b) or as provided by applicable
law, the Company shall have no liability or obligation hereunder to the Employee’s executors, legal
representatives, administrators, heirs or assigns or any other person claiming under or through him
by reason of or subsequent to the Employee’s death.

          8.2 Termination for Cause.

               (a) The Company shall have the right to terminate the Employee’s employment hereunder at any
time for “cause” upon written notice to the Employee. For purposes of this Agreement, “cause”
shall mean the Employee’s (including, if the Employee is not a natural person, any employee of or
contractor to the Employee who is involved, directly or indirectly, in the provision of services to
the Corporation) (a) dishonesty, embezzlement, theft or fraudulent misconduct; (b) abuse of a
controlled substance that materially impairs the performance of the Employee’s duties to the
Corporation; (c) conduct adverse to the business, interests, or reputation of the Corporation; (d)
material breach of any of the terms hereof or of any agreement between the Corporation and the
Employee, (including, but not limited to, terms relating to non-disclosure, non-competition and
invention assignment) which, if curable, remains

 

 

uncured thirty (30) days after the Employee receives written notice of such breach; or (e)
commission of a felony.

               (b) In the event of a termination of the Employee’s employment hereunder pursuant to Section
8.2(a), the Employee shall be entitled to receive all accrued but unpaid (as of the effective date
of such termination) Salary and Benefits. All Salary and Benefits shall cease at the time of such
termination, subject to the requirements of applicable law. Except as specifically set forth in
this Section 8.2, the Company shall have no liability or obligation hereunder by reason of or
subsequent to such termination. Without limiting the generality of the foregoing sentence, Employee
shall not be entitled to receive severance pay in the event of a termination under this section 8.2
or any other compensation or benefits.

          8.3 Termination by the Company Without Cause.

               (a) Notwithstanding anything to the contrary set forth herein, the Company shall have the
right to terminate the Employee’s employment hereunder at any time, for any reason or no reason,
with or without cause, effective upon the date designated by the Company upon written notice to the
Employee.

               (b) In the event of a termination of the Employee’s employment hereunder pursuant to Section
8.3(a) other than for cause, the Employee shall be entitled to receive all accrued but unpaid (as
of the effective date of such termination) Salary; a pro-rata percentage of the bonus (provided in
Section 4.2) for the last fiscal year of the Company prior to the date of the Employee’s
termination; and the severance payments and Benefits in the manner set forth in Section 8.5;
provided that the Employee has complied with all of his obligations under this Agreement and
continues to comply with all of his surviving obligations hereunder listed in Section 10. All
Salary shall cease at the time of such termination, except as required under applicable law.
Except as specifically set forth in this Section 8.3, the Company shall have no liability or
obligation hereunder by reason of or subsequent to such termination.

          8.4 Termination following Change in Control

               (a) In the event of a termination of the Employee’s employment, other than for cause in
accordance with Section 8.2, as defined above, within 12 months after a Change in Control, as
defined in Section 8.4(b), the Employee shall be entitled to receive all accrued but unpaid (as of
the effective date of such termination) Salary; a pro-rata percentage of the bonus (provided in
Section 4.2) for the last fiscal year of the Company prior to the date of the Employee’s
termination; and the severance payments and Benefits in the manner set forth in Section 8.5;
provided that the Employee has complied with all of his obligations under this Agreement and
continues to comply with all of his surviving obligations hereunder listed in Section 10. All
Salary shall cease at the time of such termination, except as required under applicable law.
Except as specifically set forth in this Section 8.4, the Company shall have no liability or
obligation hereunder by reason of or subsequent to such termination.

 

 

               (b) As used in this letter, “Change in Control” means: (i) the acquisition (other than from
the Company) in one or more transactions by any Person, as defined below, of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934,
as amended) of 33% or more of (A) the then outstanding shares of the securities of the Company, or
(B) the combined voting power of the then outstanding securities of the Company entitled to vote
generally in the election of directors (the “Company Voting Stock”); (ii) the closing of a sale or
other conveyance of assets representing 50% or more of the fair market value of the Company’s
consolidated assets (in a single transaction or in a series of related transactions); (iii) the
dissolution or liquidation of the Company; (iv) a change in the composition of the Company’s Board
of Directors, as a result of which, fewer than one-half of the incumbent directors after such
change are directors who either (A) had been directors of the Company 24 months prior to such
change or (B) were elected, or nominated for election, to the Board of Directors with the approval
of at least a majority of the directors who had been the Company’s directors 24 months prior to
such change and who were still in office at the time of the election or nomination; or (v) the
effective time of any merger, share exchange, consolidation, or other business combination
involving the Company if immediately after such transaction persons who hold a majority of the
outstanding voting securities entitled to vote generally in the election of directors of the
surviving entity (or the entity owning 100% of such surviving entity) are not persons who,
immediately prior to such transaction, held a majority of the Company Voting Stock;
provided, however, that a Change in Control shall not include (X) a public offering
of capital stock of the Company; (Y) any distribution of capital stock of the Company by a
partnership or limited liability company to a partner of such partnership or member of such limited
liability company in respect of the interest of such partner or member and without the payment of
additional consideration; or (Z) any transaction pursuant to which shares of capital stock of the
Company are transferred or issued to any trust, charitable organization, foundation, family
partnership or other entity controlled directly or indirectly by, or established for the benefit of
any of the current or former executive officers of the Company or their immediate family members
(including spouses, children, grandchildren, parents, and siblings, in each case to include
adoptive relations), or transferred to any such immediate family members. For purposes of this
definition of Change in Control, a “Person” means any individual, entity or group within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other
than: employee benefit plans sponsored or maintained by the Company or by affiliates controlled by
the Company, or an underwriter of the Common Stock in a registered public offering.

          8.5 Severance.

               (a) In the event of the termination of the Employee’s employment under Section 8.3, the
Employee shall be entitled to severance pay as follows:

                    (i) if terminated within the first six (6) months of the date of this Agreement, in an amount
equal to three (3) months of Salary,

 

 

                    (ii) if terminated after the first six (6) months of the date of this Agreement but less than
twelve (12) months in the Position, in an amount equal to six (6) months of Salary;

                    (iii) if terminated after twelve (12) months of the date of this Agreement, in an amount equal
to twelve (12) months of Salary;

               (b) In the event of the termination of the Employee’s employment under Section 8.4, the
Employee shall be entitled to twelve (12) months of Salary.

               (c) In the event of the termination of the Employee’s employment under Section 8.3 or 8.4, the
Employee shall be reimbursed the cost of benefits continuation under the Consolidated Omnibus
Benefits Reconciliation Act (“COBRA”) for the period of time during which he is entitled to receive
severance pay if benefits continuation is so elected by the Employee.

               (d) If Employee is previously receiving severance pursuant to Section 8.3, the Employee shall
not be entitled to receive additional severance pursuant to 8.4 for a change of control occurring
after Employee’s termination. Employee shall not be entitled to receive severance pursuant to both
Sections 8.3 and 8.4.

               (e) All payments under this Section 8.5 are conditioned upon the Employee honoring the
covenants contained in the Confidentiality, Non-Competition and Invention Assignment Agreements
and executing a release of all claims arising from Employee’s employment with Advancis, in such
form as may then be used by the Company respecting termination of employees.

               (f) All payments under this Section 8.5 shall be subject to all withholding obligations,
calculated on the basis of the Salary in effect at the date of termination and paid in the same
manner as Salary was then paid hereunder.

               (g) Except as provided in subsections (a) and (b) above, the Company shall have no liability
or obligation by reason of or subsequent to the termination of the employment relationship between
the Company and the Employee.

               (h) Notwithstanding anything in this Agreement to the contrary, in no event shall the Company
be obligated to pay or distribute to Employee any amount that constitutes nonqualified deferred
compensation within the meaning of Internal Revenue Code section 409A (“Code section 409A”) earlier
than the earliest permissible date under Code section 409A that such amount could be paid without
additional taxes or interest being imposed under Code section 409A.

 

 

9. Representations, Warranties and Covenants of the Employee.

          9.1 Restrictions. The Employee represents and warrants to the Company that:

               (a) There are no restrictions, agreements or understandings whatsoever to which the Employee
is a party which would prevent or make unlawful the Employee’s execution of this Agreement or the
Employee’s employment hereunder, or which is or would be inconsistent or in conflict with this
Agreement or the Employee’s employment hereunder, or, except as set forth in any agreements
previously provided to the Company, would prevent, limit or impair in any way the performance by
the Employee of the obligations hereunder; and

               (b) The Employee has disclosed to the Company all restraints, confidentiality commitments or
other employment restrictions that he has with any other employer, person or entity.

          9.2 Obligations to Former Employers. The Employee covenants that in connection with
his provision of services to the Company, he shall not breach any obligation (legal, statutory,
contractual or otherwise) to any former employer or other person, including, but not limited to
obligations relating to confidentiality and proprietary rights.

          9.3 Obligations Upon Termination. Upon and after his termination or cessation of
employment with the Company and until such time as no obligations of the Employee to the Company
hereunder exist, the Employee (i) shall provide a complete copy of this Agreement to any
prospective employer or other person, entity or association engaged in the Business, with whom or
which the Employee proposes to be employed, affiliated, engaged, associated or to establish any
business or remunerative relationship prior to the commencement thereof and (ii) shall notify the
Company of the name and address of any such person, entity or association prior to his employment,
affiliation, engagement, association or the establishment of any business or remunerative
relationship.

     10. Survival of Provisions. The provisions of this Agreement set forth in Sections 5,
6, 7, 8, 9, 10, 19 and 20 hereof shall survive the termination of the Employee’s employment
hereunder.

     11. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and the Employee and their respective successors, executors,
administrators, heirs and/or assigns; provided that neither party shall make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the prior written
consent of the other party.

     12. Notice. Any notice hereunder by either party shall be given by personal delivery
or by sending such notice by certified mail, return-receipt requested, or telecopied, addressed or
telecopied, as the case may be, to the other party at its address set forth below or at such other
address designated by notice in the manner provided in this section. Such notice shall be deemed
to have been received upon the date of actual delivery if personally delivered or, in the case of

 

 

mailing, two (2) days after deposit with the U.S. mail, or, in the case of facsimile
transmission, when confirmed by the facsimile machine report.

	 	(a)	 	if to the Company, to:
	 
	 	 	 	Advancis Pharmaceutical Corporation

20425 Seneca Meadows Parkway

Germantown, Maryland 20876

Attention: Human Resources

Facsimile: (301) 944-6701
	 
	 	(b)	 	if to the Employee, to:
	 
	 	 	 	Robert C. Low

10114 Garrett Street

Vienna, Virginia 22181

     13. Entire Agreement; Amendments. This Agreement contains the entire agreement and
understanding of the parties hereto relating to the subject matter hereof, and merges and
supersedes all prior and contemporaneous discussions, agreements and understandings of every nature
between the parties hereto relating to the employment of the Employee with the Company. This
Agreement may not be changed or modified, except by an agreement in writing signed by each of the
parties hereto.

     14. Waiver. The waiver of the breach of any term or provision of this Agreement shall
not operate as or be construed to be a waiver of any other or subsequent breach of this Agreement.

     15. Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware, without regard to the principles of conflicts of laws of any
jurisdiction.

     16. Invalidity. If any provision of this Agreement shall be determined to be void,
invalid, unenforceable or illegal for any reason, the validity and enforceability of all of the
remaining provisions hereof shall not be affected thereby. If any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, such
amendment to apply only to the operation of such provision in the particular jurisdiction in which
such adjudication is made; provided that, if any provision contained in this Agreement shall be
adjudicated to be invalid or unenforceable because such provision is held to be excessively broad
as to duration, geographic scope, activity or subject, such provision shall be deemed amended by
limiting and reducing it so as to be valid and enforceable to the maximum extent compatible with
the applicable laws of such jurisdiction, such amendment only to apply with respect to the
operation of such provision in the applicable jurisdiction in which the adjudication is made.

 

 

     17. Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its interpretation.

     18. Number of Days. In computing the number of days for purposes of this Agreement,
all days shall be counted, including Saturdays, Sundays and legal holidays; provided that, if the
final day of any time period falls on a Saturday, Sunday or day which is a legal holiday in
Delaware or Maryland, then such final day shall be deemed to be the next day which is not a
Saturday, Sunday or legal holiday.

     19. Specific Enforcement The Employee acknowledges that the restrictions contained in
Sections 5, 6, and 7 hereof are reasonable and necessary to protect the legitimate interests of the
Company and its affiliates and that the Company would not have entered into this Agreement in the
absence of such restrictions. The Employee also acknowledges that any breach by him of Sections 5,
6, or 7 hereof will cause continuing and irreparable injury to the Company for which monetary
damages would not be an adequate remedy. The Employee shall not, in any action or proceeding to
enforce any of the provisions of this Agreement, assert the claim or defense that an adequate
remedy at law exists. In the event of such breach by the Employee, the Company shall have the
right to enforce the provisions of Sections 5, 6, and 7 of this Agreement by seeking injunctive or
other relief in any court, and this Agreement shall not in any way limit remedies of law or in
equity otherwise available to the Company.

     20. Consent to Suit. Subject to the provisions of Section 21 hereof, any legal
proceeding arising out of or relating to this Agreement shall be instituted in the Court of
Chancery of New Castle County, or if such court does not have jurisdiction or will not accept
jurisdiction, in any state or federal court of general jurisdiction in the State of Delaware, and
each of the Company and the Employee hereby consents to the personal and exclusive jurisdiction of
such court and hereby waives any objection that either party may have to the laying of venue of any
such proceeding and any claim or defense of inconvenient forum. If an action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover, in addition to any other relief, reasonable attorneys’ fees, costs and
disbursements.

     21. Arbitration. Subject to the last sentence of this Section 21, if any dispute
arises over the terms of this Agreement between the parties to this Agreement, either Employee or
Company may submit the dispute to binding arbitration within thirty (30) days after such dispute
arises, to be governed by the evidentiary and procedural rules of the American Arbitration
Association (Commercial Arbitration). Employee and Company shall mutually select one (1)
arbitrator within ten (10) days after a dispute is submitted to arbitration. In the event that the
parties do not agree on the identity of the arbitrator within such period, the arbitrator shall be
selected by the American Arbitration Association. The arbitrator shall hold a hearing on the
dispute in Wilmington, Delaware within thirty (30) days after having been selected and shall issue
a written opinion within fifteen (15) days after the hearing. The arbitrator shall also decide on
the allocation of the costs of the arbitration to the respective parties, but Employee and Company
shall each be responsible for paying the fees of their own legal counsel, if legal counsel

 

 

is obtained. Either Employee or Company, or both parties, may file the decision of the arbitrator
as a final, binding and unappealable judgment in a court of appropriate jurisdiction.
Notwithstanding the foregoing provisions of this Section 21 to the contrary, matters in which an
equitable remedy or injunctive relief is sought by a party, including but not limited to the
remedies referred to in Section 19 hereof, shall not be required to be submitted to arbitration, if
the party seeking such remedy or relief objects thereto, but shall instead be subject to the
provisions of Sections 19 and 20 hereof.

     22. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which together shall be deemed to be one and the same
instrument.

     23. Authorization. In connection with the execution of this Agreement, the Employee
shall be provided with a copy of the resolutions of the Board of Directors of the Company
authorizing the execution of this Agreement on behalf of the Company.

[SIGNATURES ON FOLLOWING PAGE]

 

 

     IN WITNESS WHEREOF, the parties have caused this Executive Employment Agreement to be executed
the day and year first written above.

	 	 	 	 	 
	 	ADVANCIS PHARMACEUTICAL CORPORATION

 	 
	 	By:  	/S/ EDWARD M. RUDNIC, PH.D.
 	 
	 	 	Edward M. Rudnic, Ph.D. 	 
	 	 	Chairman, President & CEO 	 
	 
	 	
/S/ ROBERT C. LOW
	 	Robert C. Low

 

 

Schedule I

Preexisting Property:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}]]