Document:

exv10w4

Exhibit 10.4

MIDDLEBROOK PHARMACEUTICALS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made this 1st day of July,
2008 by and between Dave Becker, a resident of Denton County, Texas, (the “Employee”), and
MiddleBrook Pharmaceuticals, Inc., a corporation organized and existing under the laws of the State
of Delaware and formerly known as Advancis Pharmaceutical Corporation (the “Company”).

BACKGROUND

     WHEREAS, 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 oncological agents (as may be modified or expanded
by the Company during the term of this Agreement, collectively and individually, the
“Business”); and

     WHEREAS, concurrently with the execution of this Agreement, Equity Group Investments, LLC
(“EGI”) and the Company are entering into a Securities Purchase Agreement of even date
herewith (the “Purchase Agreement”), pursuant to which the parties thereto have agreed,
upon the terms and subject to the conditions set forth therein, that the Company will sell to EGI
(i) 30,303,030 shares of the authorized but unissued shares of common stock, $0.01 par value per
share, of the Company (the “Common Stock”) and (ii) a warrant to purchase an aggregate of
12,121,212 shares of Common Stock (such transaction known as the “Transaction”); and

     WHEREAS, the Company desires to employ the Employee and the Employee desires to be employed by
the Company, 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 employs the Employee and the Employee hereby
accepts employment with the Company, as Executive Vice President, Finance and Chief Financial
Officer (the “Position”), effective as of the Closing Date of the Transaction (the
“Commencement Date”), and contingent upon the Closing of the Transaction. The
“Closing” and the “Closing Date” shall have the definitions assigned to such terms
in the Purchase Agreement. Employee is 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 entire period of time during which the
Employee is employed by the Company is referred to herein as the “Term”).

 

 

     2. Duties. During the Term, the Employee shall serve the Company faithfully and to the best
of his/her ability and shall devote his/her 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 President and Chief Executive Officer, the Employee shall have the duties and responsibilities
customarily associated with the Position, including such duties and responsibilities as may be
assigned to him/her from time to time by the President and Chief Executive Officer. 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 Executive Vice President,
Finance and Chief Financial Officer shall report to the President and Chief Executive Officer.

     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/her 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
Four-Hundred Thousand USD ($400,000) (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. The Employee shall be eligible to be awarded an annual cash bonus (the
“Annual Bonus”), which bonus shall be determined by the President & Chief Executive Officer
and the Board of Directors of the Company (the “Board of Directors”) and shall be at a
target amount of Forty-Five percent (45%) of Salary paid during such applicable period, less Taxes,
provided that the Employee shall have achieved all of his/her performance objectives established
for such period. Such bonus shall be determined and paid no later than the 15th day of
the third month of such succeeding calendar year.

          4.3 Initial Option Award. Immediately following the Commencement Date, and contingent
upon the Closing of the Transaction, the Employee shall receive an option to purchase Common Stock
under the equity-based incentive compensation plans adopted by the Company for which senior
executives are generally eligible. The amount of Common Stock subject to such option shall equal
One and Seventy-Five Hundredths percent (1.75%) of all issued and outstanding common stock of the
Company plus issued and outstanding warrants

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calculated immediately following the Closing Date. The exercise price per share of Common
Stock shall equal the fair market value of the Common Stock on the date of grant. The option shall
vest over four years with Twenty-Five percent (25%) vesting at the first anniversary following
Commencement Date and then an additional Two and Eight Hundred Thirty-Three Ten Thousandths percent
(2.0833%) vesting at the end of each month thereafter for a period of 36 months.

          4.4 Annual Equity Awards. During the Term, the Employee shall be eligible to receive
awards under the equity-based incentive compensation plans adopted by the Company for which senior
executives are generally eligible. The specific amount, terms and conditions of any such award, if
any, shall be determined in the sole discretion of the Company, but with an annual target numbering
between Fifteen Hundredth percent (0.15%) and Twenty-Five Hundredth percent (0.25%) of the Common
Stock of the Company plus issued and outstanding warrants calculated at the time of the award.

          4.5 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.

          4.6 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/her 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. For purposes of satisfying Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), the parties agree that the amounts reimbursed under this Section 4.6 for one calendar
year shall not affect the amounts reimbursed for other calendar years, and reimbursement payments,
if any, shall in all events be made no later than the 15th day of the third month of the calendar
year following the calendar year in which the applicable expense is incurred.

     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/her
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/her employment with the Company. Proprietary Information shall
include any confidential or proprietary information or trade secrets

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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 6.2(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/her 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/her 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/her
employment with the Company, the Employee shall return to the Company all originals and copies of
the foregoing then in his/her possession or under his/her 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,

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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, 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

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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 8.7 hereof,
if applicable, the Employee shall not, during the Term and for a period of one (1) year 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

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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 Acknowledgement. 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/her 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 8.7 to justify such restrictions, which restrictions the Employee does
not believe would prevent him/her from earning a living in the 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.
The word “termination” as used throughout the Agreement with respect to the Employee’s employment
hereby refers to a “separation from service” by the Employee from the Company, as defined by
Treasury Regulation §1.409A-1(h).

          8.1 Automatic Termination. This Agreement shall be effective on the Commencement
Date. Upon the termination of the Purchase Agreement pursuant to Section 7 thereof, this Agreement
shall automatically terminate and become void.

          8.2 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
8.2(a)(i), the Employee will be entitled to receive all accrued and unpaid (as of the date of such
termination) Salary and applicable Benefits; and, provided that the Employee has complied with all
of his/her obligations under this Agreement and continues to comply with all of his/her surviving
obligations hereunder listed in Section 10, a pro-rata Annual Bonus for the portion of the year
prior to the date of termination during which the Employee was employed by the Company (the
“Pro Rata Bonus”). All of the foregoing payments shall be paid within thirty (30) days
following the termination date. Except as specifically set forth in this Section 8.1(a)(ii) or as
provided by applicable law, the Company

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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 Salary, applicable Benefits and Pro Rata Bonus. All the foregoing payments shall be paid
within thirty (30) days following the termination date. Except as specifically set forth in this
Section 8.2(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/her by reason of or subsequent to the Employee’s
death.

          8.3 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 Company) (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
Company; (c) conduct adverse to the business interests, or reputation of the Company; (d) material
breach of any terms hereof or of any agreement between the Company 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
8.3(a), the Employee shall be entitled to receive all accrued but unpaid (as of the effective date
of such termination) Salary and Benefits. All the foregoing payments shall be paid within thirty
(30) days following the termination date. 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 8.3, the Company shall have no liability or obligation hereunder by reason of or
subsequent to such termination.

          8.4 Termination by the Company Without Cause. Notwithstanding anything to the
contrary set forth herein, the Company shall have the right to terminate the Employee’s employment
hereunder at any time before or after a Change in Control (as defined below), for any reason or no
reason, with or without cause, effective upon the date designated by the Company upon written
notice to the Employee.

          8.5 Termination for Good Reason Following a Change in Control.

               (a) The Employee shall have the right to terminate the Employee’s employment hereunder at any
time for Good Reason within twelve (12) months following a Change in Control.

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               (b) “Good Reason” means the occurrence of any one of the following without the Employee’s
consent:

                    (i) any requirement that the Employee relocate, by more than thirty-five (35) miles, from the
principal location where the Employee performs services for the Company, provided that such
relocation constitutes a material change to the Employee’s employment;

                    (ii) any material diminution in the Employee’s authority, duties or responsibilities (other
than a change due to a Disability); or

                    (iii) any material reduction in the Employee’s Salary or Annual Bonus.

Notwithstanding the foregoing, an event that is or would constitute grounds for a resignation for a
Good Reason shall not constitute such grounds for a resignation for Good Reason if: (A) Employee
does not send a notice of termination to the Company within thirty (30) days after the event
occurs; or (B) the Company reverses the action or cures the default that would give rise to a
termination for a Good Reason within thirty (30) days after the delivery of the notice of
termination.

               (c) “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
thirty-three percent (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 fifty percent (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 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
twenty-four (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 twenty-four (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 one hundred
percent (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,

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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 of the Company in a registered
public offering.

          8.6 Termination for Good Reason In the Event of
a Potential Change in Control.

               (a) The Employee shall have the right to terminate the Employee’s employment hereunder at any
time following a Potential Change in Control if after a Potential Change in Control (and prior to
the occurrence or abandonment of a Change in Control) there is a Good Reason event and such Good
Reason event was the result of a request or direction given by a Person seeking to effectuate a
Change in Control.

               (b) “Potential Change in Control” means (i) the Company enters into a definitive
agreement, the consummation of which would result in the occurrence of a Change in Control; or (ii)
any Person publicly announces an intention to take actions which, if consummated, would constitute
a Change in Control.

          8.7 Severance Benefits. In the event of a termination of the Employee’s employment
hereunder without cause before or after a Change in Control pursuant to Section 8.4 or for Good
Reason within twelve (12) months following a Change in Control pursuant to Section 8.5(a), the
Employee shall be entitled to receive the following.

               (a) All accrued but unpaid (as of the effective date of such termination) Salary and Benefits
and, provided that the Employee has complied with all of his/her obligations under this Agreement
and continues to comply with all of his/her surviving obligations hereunder listed in Section 10, a
Pro Rata Bonus. All the foregoing payments shall be paid within thirty (30) days following the
termination date, and Benefits shall be paid or provided pursuant to the terms of the applicable
Benefit plan. All Salary shall cease at the time of such termination, except as required under
applicable law or as provided herein. Except as specifically set forth in this Section 8, the
Company shall have no liability or obligation hereunder by reason of or subsequent to such
termination.

               (b) Provided that the Employee has complied with all of his/her obligations under this
Agreement and continues to comply with all of his/her surviving obligations hereunder listed in
Section 10, severance pay in the form of a lump sum payment within sixty (60) days of such
termination (subject to the provisions of Section 8.7(e)), in an amount equal to the Salary that
the Employee would have earned if the Employee had continued working for the Company during the
eighteen (18) month period immediately following the Employee’s date of termination. Such payment
shall be subject to all Taxes.

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               (c) Provided that the Employee has complied with all of his/her obligations under this
Agreement and continues to comply with all of his/her surviving obligations hereunder listed in
Section 10, continued Benefits as in effect on the date preceding his/her termination for a period
of eighteen (18) months following termination, made in accordance with any terms applicable to such
Benefits. All reimbursements and in-kind benefits provided under this Section 8.7(c), shall be
made or provided in accordance with the requirements of Section 409A of the Code, including, where
applicable, the requirement that (i) any reimbursement shall be for expenses incurred during the
Employee’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year
may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the
last day of the calendar year following the year in which the expense is incurred (or such earlier
date if specified in this Agreement), and (iv) the right to reimbursement or in-kind benefits is
not subject to liquidation or exchange for another benefit.

               (d) Except as provided in subsections (a), (b) and (c) 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.

               (e) Notwithstanding anything in this Agreement to the contrary, the intent of the parties is
that payments and benefits under this Agreement comply with Section 409A of the Code and,
accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in
compliance therewith. Each amount to be paid or benefit to be provided under this Agreement shall
be construed as a separate identified payment for purposes of Section 409A, and any payments
described in this Agreement that are due within the “short term deferral period” as defined in
Section 409A shall not be treated as deferred compensation unless applicable law requires
otherwise. If required to avoid the application of an accelerated or additional tax under Section
409A of the Internal Revenue Code, amounts that would otherwise be payable and benefits that would
otherwise be provided pursuant to this Agreement during the six-month period immediately following
the Employee’s termination of employment shall instead be paid on the first business day after the
date that is six months following the Employee’s termination of employment (or upon the Employee’s
death, if earlier).

     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

11

 

               (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/her 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. The parties each confirm, warrant
and stipulate that Dave Becker has in good faith fully disclosed his Separation and Independent
Consulting Agreement with Adams Respiratory Therapeutics, Inc., attached hereto as Exhibit A, and
said agreement does not constitute a breach of this agreement in part or in total.

          9.3 Obligations Upon Termination. Upon and after his/her 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/her
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.

12

 

          (a) If to the Company, to:

MiddleBrook Pharmaceuticals, Inc.

20425 Seneca Meadows Parkway

Germantown, Maryland 20876

Attn.: Edward M. Rudnic, Ph.D.

          President and Chief Executive Officer

Fax: 301-944-6700

with a copy to (which shall not constitute notice):

Dewey & LeBoeuf LLP

1301 Avenue of the Americas

New York, New York 10019

Attention: Frederick W. Kanner, Esq.

Fax: 212-259-6333

          (b) If to the Employee, to:

Mr. Dave Becker

ATTN: Joe A. England II

1333 Corporate Drive, Suite 209

Irving, Texas 75038

Facsimile:  (972) 719 -0905

     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, amendments 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.

13

 

     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/her 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 Section 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.

14

 

     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 authorizing the execution of this
Agreement on behalf of the Company.

[SIGNATURES ON FOLLOWING PAGE]

15

 

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

	 	 	 	 	 
	 	MIDDLEBROOK PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ Wayne T. Hockmeyer
 	 
	 	Name:	 	Wayne T. Hockmeyer 	 
	 	Title:	 	Chairman, Compensation Committee 	 

	 	 	 	 	 
	 	               /s/ Dave Becker
 	 
	 	Dave Becker 	 
	 	 	 
	 

 

 

Schedule I

Preexisting Property:

17exv10w5

Exhibit 10.5

CONSULTING AGREEMENT

     This agreement dated this 1st day of July, 2008 (the “Effective Date”), is executed by and
between MiddleBrook Pharmaceuticals, Inc., a Delaware corporation (the “Company”), located at 20425
Seneca Meadows Parkway, Germantown, MD 20876, and John S. Thievon (the “Consultant”), located in
Denton County, Texas (the “Agreement”).

     WHEREAS, Equity Group Investments, LLC (“EGI”) and the Company have entered into a
Securities Purchase Agreement of even date herewith (the “Purchase Agreement”) pursuant to which
the parties thereto have agreed, upon the terms and subject to the conditions set forth therein,
that the Company will sell to EGI (i) 30,303,030 shares of the authorized but unissued shares of
common stock, $0.01 par value per share, of the Company (the “Common Stock”) and (ii) a warrant to
purchase an aggregate of 12,121,212 shares of Common Stock (such transaction known as the
“Transaction”);

     WHEREAS, the Consultant and the Company have entered into an employment agreement (the
“Employment Agreement”) of even date herewith contingent upon the Closing (as defined in the
Purchase Agreement) of the Transaction, and effective as of the Closing Date (as defined in the
Purchase Agreement) of the Transaction (such effective date of the Employment Agreement referred to
herein as the “Commencement Date”);

     WHEREAS, the Company desires to obtain consulting services from Consultant commencing on the
Effective Date, which the parties intend to be provided pursuant to such terms and conditions as
are set forth in this Agreement; and

     WHEREAS, based on the nature of the relationship that the parties intend to establish, the
Company hereby engages the Consultant as an independent contractor and the Consultant shall hereby
provide consulting services on the terms and conditions provided and described in this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and covenants of the parties as herein
contained, the parties hereto agree and contract as follows:

	1)	 	The term of this Agreement (the “Term”) shall commence on the Effective Date and shall
automatically terminate immediately and become null and void upon the earlier to occur of (i)
the Commencement Date, (ii) the termination of the Purchase Agreement pursuant to Section 7
thereof, (iii) the Consultant’s cessation of services to the Company provided hereunder, or
(iv) a termination of this Agreement pursuant to Paragraph 11.

	2)	 	Commencing on the Effective Date, the Consultant shall provide such consulting services with
respect to the business of the Company as the Company reasonably requests. The consulting
services that may be requested of Consultant shall be of a nature that reflects and is
consistent with Consultant’s skills, experience, expertise and services. The Consultant

 

 

	 	 	shall perform such services in a thorough, efficient, and workmanlike manner, promptly and with
due diligence and care, and in accordance with that standard of care and skill ordinarily
exercised by members of the profession performing similar services. In addition, Consultant
shall comply with all applicable federal, state and local statutes, ordinances and regulations
in the course of performing such objectives.

	3)	 	Consistent with the parties’ intent that the relationship created by this Agreement be that
of service recipient and independent contractor, Consultant shall retain the exclusive right
to control and direct all details of the services that Consultant performs hereunder,
including where, when and how the services are to be performed. Consultant’s failure to
accomplish the services by the applicable deadline, however, shall constitute a material
breach of this Agreement, unless the Company agrees to an extended deadline.

	4)	 	During the Term, Consultant shall not be eligible to participate in any benefit programs that
the Company now or hereafter maintains for its employees with respect to services performed
hereunder, and Consultant hereby waives any such right to participate in the programs. This
waiver of any right to participate in Company-sponsored employee benefit programs represents a
material component of the terms of compensation agreed to by these parties and is not in any
way conditioned on any representation or assumption concerning status of Consultant with
respect to the Company as an employee or independent contractor.

	5)	 	For all purposes, including but not limited to the Federal Insurance Contributions Act, the
Social Security Act, the Federal Unemployment Tax Act, income tax withholding and any and all
other federal, state and local laws, rules and regulations, Consultant shall be treated as an
independent contractor and not as an employee with respect to the Company.

	6)	 	Consultant acknowledges and agrees that Consultant shall be responsible (as a self-employed
individual) for filing all tax returns, tax declarations and tax schedules, and for the
payment of all taxes required, when due, with respect to any and all compensation earned by
Consultant under this Agreement. The Company will neither pay nor withhold any employment
taxes with respect to the compensation it pays Consultant. Rather, the Company will report
the amounts it pays Consultant on IRS Forms 1099, to the extent required to do so under
applicable Internal Revenue Code provisions.

	7)	 	Consultant’s fees for services provided under this Agreement shall annually be Five Hundred
Thousand USD ($500,000) pro-rated and paid on a monthly basis for the full and partial months
during the Term, plus reasonable expenses as approved in accordance with Company policies.
The Company will not reimburse Consultant for any other expenses incurred in connection with
the performance of services hereunder unless otherwise agreed by the Company. For purposes of
satisfying Section 409A of the Internal Revenue Code of 1986, as amended, the parties agree
that any amount reimbursed hereunder for one calendar year shall not affect the amounts
reimbursed for other calendar years, and all reimbursement payments, if any, shall in all
events be made no later than the end of the calendar year following the calendar year in which
the applicable expense is incurred.

2

 

	8)	 	The Consultant reserves the right to, and intends to, perform services for others, so long as
the performance of such services does not interfere with the performance of services
hereunder.
	 
	9)	 	The Consultant 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 Consultant 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 during the Term of the Agreement. Proprietary Information shall include
any confidential or proprietary information or trade secrets relating to any patents or other
intellectual property assigned by the Consultant to the Company. Proprietary Information also
shall include, but shall not be limited to the intangible personal property described in
Paragraph 10 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 Consultant from a third party
subject to an obligation of confidentiality and/or non-disclosure. Nothing contained herein
shall restrict Consultant’s ability to make such disclosures during the Term of the Agreement
as may be necessary or appropriate to the effective and efficient discharge of the duties
required by the Agreement or as such disclosures may be required by law. Furthermore, nothing
contained herein shall restrict Consultant from divulging or using for his/her 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 Consultant’s breach of this Paragraph 10. 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. The obligations of this
Paragraph 10 shall survive the termination of this Agreement.
	 
	10)	 	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, Consultant 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
for the performance of Consultant’s duties under this Agreement 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

3

 

	 	 	purpose. Consultant 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 expiration of the Term of this Agreement, Consultant
shall return to the Company all originals and copies of the foregoing then in his/her possession
or under his/her control, whether prepared by Consultant or by others.

	 	 	The Consultant 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 Consultant 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. Consultant shall promptly disclose to the Company all Intellectual Work Product, and
Consultant 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.

	 	 	The Consultant 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, Consultant may retain an interest in any Intellectual Work Product,
Consultant hereby irrevocably assigns and transfers to the Company any and all right, title, or
interest that Consultant 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. Consultant 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

4

 

	 	 	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.
	 
	 	 	In the event the Company is unable after reasonable effort to secure Consultant’s signature on
any of the documents referenced in this Paragraph 13, whether because of Consultant’s physical
or mental incapacity or for any other reason whatsoever, Consultant hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents as Consultant’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 Consultant.
	 
	 	 	Consultant 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 Consultant has made or conceived
of prior to the date hereof, and same are excluded from the operation of the other provisions of
this Paragraph 13. In the event that Consultant 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, Consultant and the Company shall
jointly amend Schedule I to include such property. The obligations of this Paragraph 12 shall
survive the termination of this Agreement.
	 
	11)	 	This Agreement may be terminated (i) by one party hereto upon a material breach of the
Agreement by the other party hereto (the “Breaching Party”) and notice of such breach given by
the first party to the Breaching Party, in which case the termination shall be effective on
the date the notice is received by the Breaching Party, or (ii) upon mutual written agreement
of the parties hereto.
	 
	12)	 	This Agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware. Any and all disputes arising out of, relating to the performance of
services contracted for under, this Agreement, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association, or any
successor thereto then prevailing. Such arbitration shall be final and binding upon the
parties, and shall be the sole and exclusive remedy of the parties with respect to any dispute
arising out of, relating to, or resulting from the interpretation of the terms of this
Agreement, or any breach thereof. The costs of such arbitration shall be borne equally by the
parties. Notwithstanding the foregoing provisions of this Paragraph 12 to the contrary,
matters in which an equitable remedy or injunctive relief is sought by a party, shall not be
required to be submitted to arbitration, if the party seeking such remedy or relief objects
thereto, but instead shall be submitted to a court of law having appropriate jurisdiction.
This Paragraph 12 shall survive the termination of this Agreement.

5

 

	13)	 	This Agreement shall constitute the entire written agreement between the parties, and shall
supersede any and all agreements or understandings in effect between the parties hereto;
provided, however, that this Agreement shall not affect in any way the rights and obligations
of the Company and Consultant under the Employment Agreement. This Agreement may not be
modified except by written agreement executed by the parties hereto.

	14)	 	Each provision of this Agreement shall be treated as a separate and independent clause, and
the unenforceability of any one clause shall in no way impair the enforceability of any of the
other clauses herein. Moreover, if one or more of the provisions contained in this Agreement
shall for any reason be held to be excessively broad as to scope, activity, subject or
otherwise so as to be unenforceable at law, such provision or provisions shall be construed by
the appropriate judicial body by limiting or reducing such provision or provisions, so as to
be enforceable to the maximum extent comparable with the applicable law as such law shall then
be.

	15)	 	No breach of any provision hereof can be waived unless in writing. Waiver of any breach of
any provision hereof shall not be deemed to be a waiver of any other breach of the same, or
any other provision.

	16)	 	Any notice required or permitted under this Agreement shall be in writing and shall be deemed
given upon the earlier of (a) when it is personally delivered, (b) three (3) days after having
been mailed by certified mail, postage prepaid, return receipt requested or (c) two (2) days
after having been sent by recognized overnight delivery service, in all cases sent to the
address first set forth above, or to such other address as the person to whom notice is to be
given may have previously furnished to the other in writing in the manner set forth herein.

[signatures on following page]

6

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first
above written.

	 	 	 	 	 	 	 	 	 	 	 
	MIDDLEBROOK PHARMACEUTICALS, INC.	 	 	 	CONSULTANT	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/
Edward M. Rudnic	 	 	 	/s/ John S. Thievon	 	 
	 	 	 	 	 	 	 	 	 
	Name:

	 	Edward M. Rudnic, Ph.D.
	 	 	 	Name:
	 	John S. Thievon	 	 
	Title:

	 	President & Chief Executive
Officer
	 	 	 	TIN:

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