Document:

exv10w56

 

EXHIBIT 10.56

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (the “Agreement”) is entered into as of
October 30, 2003 by and between Identix Incorporated, a Delaware corporation
(the “Company”), and           (“Indemnitee”).

BACKGROUND

     A.     The Company and Indemnitee recognize the increasing difficulty in
obtaining directors’ and officers’ liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance.

     B.     The Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting officers and directors to
expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited.

     C.     Indemnitee does not regard the current protection available under the
Company’s Certificate of Incorporation as adequate under the present
circumstances, and Indemnitee and other officers and directors of the Company
may not be willing to continue to serve as officers and directors without
additional protection against such risks of service to the Company.

     D.     The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as officers and directors
of the Company and to indemnify its officers and directors so as to provide
them with the maximum protection permitted by law.

     E.     The Certificate of Incorporation of the Company provides for the
indemnification of directors, officers, employees and other agents of the
Company in certain circumstances. This Agreement shall, with respect to
Indemnitee, supersede the indemnification provisions of the Company’s
Certificate of Incorporation to the extent they are inconsistent with the terms
set forth in this Agreement.

AGREEMENT

     NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

     1.     Indemnification.

          (a)     Third Party Proceedings. The Company shall indemnify Indemnitee, his
executors, administrators or assigns, if Indemnitee is or was a party or is
threatened to be made a party to any threatened, pending or completed action,
claim, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by
reason of the fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or any subsidiary of the Company, by reason
of any action or inaction on the part of Indemnitee while an officer or
director or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses,

 

 

including without limitation, attorney’s fees and
disbursements and costs of attachment or similar bonds, costs, damages,
judgments, investigations, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with such action or proceeding
if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe Indemnitee’s conduct was unlawful. The termination of any action or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
(i) Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, or (ii) with respect to any criminal action or proceeding, Indemnitee
had reasonable cause to believe that Indemnitee’s conduct was unlawful.

          (b)     Proceedings by or in the Right of the Company. The Company shall
indemnify Indemnitee, his executors, administrators or assigns if Indemnitee
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, claim, suit or proceeding by or in the right of
the Company or any subsidiary of the Company to procure a judgment in its favor
by reason of the fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or any subsidiary of the Company, by reason
of any action or inaction on the part of Indemnitee while an officer or
director or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or, agent or fiduciary
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including without limitation, attorney’s fees and
disbursements and costs of attachment or similar bonds, costs, damages,
judgments, investigations, fines and amounts paid in settlement, in each case
to the extent actually and reasonably incurred by Indemnitee in connection with
the defense or settlement of such action or proceeding if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company and its stockholders, except that
no indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Company in the
performance of Indemnitee’s duty to the Company and its stockholders unless and
only to the extent that the court in which such action or proceeding is or was
pending shall determine upon application that, in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for
expenses and then only to the extent that the court shall determine.

          (c)     Indemnification as a Witness. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee by reason of his position as a
director, officer, employee, agent or fiduciary of the Company, or a position
with another entity at the request of the Company, is a witness in any action,
suit or proceeding, Indemnitee shall be indemnified and held harmless against
all costs and expenses actually and reasonably incurred by Indemnitee on
Indemnitee’s behalf in connection therewith.

     2.     Expenses; Indemnification Procedure.

          (a)     Advancement of Expenses. The Company shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense,
settlement or appeal of any civil or criminal action or proceeding referenced
in Section 1(a) or 1(b) of this Agreement (but not

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amounts actually paid in
settlement of any such action or proceeding). Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that,
it shall ultimately be determined that Indemnitee is not entitled to be
indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to Indemnitee within 20 days after
delivery of a written request therefor by Indemnitee to the Company.

          (b)     Notice and Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to his or her right to be indemnified under this Agreement,
give the Company notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address set forth on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). Notice shall be deemed received three business days after the
date postmarked if sent by domestic certified or registered mail, properly
addressed; otherwise notice shall be deemed received upon actual receipt by the
Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee’s
power.

          (c)     Procedure. Any indemnification provided for in Section 1 shall be
made no later than 45 days after receipt of the written request of Indemnitee.
If a claim under this Agreement, under any statute, or under any provision of
the Company’s Certificate of Incorporation or Bylaws providing for
indemnification is not paid in full by the Company within 45 days after a
written request for payment thereof has been received by the Company,
Indemnitee may, at any time thereafter, bring an action against the Company to
recover the unpaid amount of the claim and, subject to Section 13 of this
Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including attorneys’ fees) of bringing such action. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in connection with any action or proceeding in advance of its final
disposition) that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for
the amount claimed, but the burden of proving such defense shall be on the
Company, and Indemnitee shall be entitled to receive interim payments of
expenses pursuant to Subsection 2(a) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists. It is the parties’ intention that if the Company contests
Indemnitee’s right to indemnification, the question of Indemnitee’s right to
indemnification shall be for the court to decide, and neither the failure of
the Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its stockholders) to have
made a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct
required by applicable law, nor an actual determination by the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its stockholders) that Indemnitee has
not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.

          (d)     Notice to Insurers. If, at the time of the receipt of a notice of a
claim pursuant to Section 2(b) of this Agreement, the Company has directors’
and officers’ liability insurance in effect, the Company shall give prompt
notice of the commencement of such proceeding to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable

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action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of such policies.

          (e)     Selection of Counsel. In the event the Company shall be obligated
under Section 2(a) hereof to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld, upon the delivery to Indemnitee of written
notice of its election so to do. After delivery of such notice, approval of
such counsel by Indemnitee and the retention of such counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement for any fees
of counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that (i) Indemnitee shall have the right to employ his
counsel in any such proceeding at Indemnitee’s expense; and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense or (C) the Company shall not, in fact, have employed counsel to
assume the defense of such proceeding, then the fees and expenses of
Indemnitee’s counsel shall be borne by the Company.

     3.     Additional Indemnification Rights; Nonexclusivity.

          (a)     Scope. Notwithstanding any other provision of this Agreement, the
Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company’s Certificate
of Incorporation, the Company’s Bylaws or by statute. In the event of any
change after the date of this Agreement in any applicable law, statute or rule
which expands the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, such changes shall be, ipso facto, within the
purview of Indemnitee’s rights and the Company’s obligations under this
Agreement. In the event of any change in any applicable law, statute or rule
which narrows the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement shall
have no effect on this Agreement or the parties’ rights and obligations
hereunder.

          (b)     Nonexclusivity. The indemnification provided by this Agreement shall
not be deemed exclusive of any rights to which Indemnitee may be entitled under
the Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote
of stockholders or disinterested directors, the Delaware General Corporation
Law, or otherwise, both as to action in Indemnitee’s official capacity and as
to action in another capacity while holding such office. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though he may
have ceased to serve in such capacity at the time of any action or other
covered proceeding.

     4.     Partial Indemnification. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s position
as a director, officer, employee, agent or fiduciary of the Company, or a
position with another entity at the request of the Company, is a party to and
is successful, on the merits or otherwise, in any action, claim, suit or
proceeding, Indemnitee shall be indemnified against all expenses actually and
reasonably incurred by Indemnitee Indemnitee’s behalf in connection therewith.
If Indemnitee is not wholly successful in any such action, claim, suit or
proceeding but is successful, on the merits or

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otherwise, as to one or more but less than all claims, issues or matters
in any such action, claim, suit or proceeding, the Company shall indemnify
Indemnitee against all expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section and without limitation, the termination
of any claim, issue or matter in such an action, claim, suit or proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result
as to such claim.

     5.     Mutual Acknowledgement. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this Agreement
or otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities
and Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company’s right under public
policy to indemnify Indemnitee.

     6.     Directors’ and Officers’ Liability Insurance. The Company shall obtain
and maintain a policy or policies of insurance with reputable insurance
companies providing the officers and directors of the Company with coverage for
losses from wrongful acts, and to ensure the Company’s performance of its
indemnification obligations under this Agreement. Among other considerations,
the Company will weigh the costs of obtaining such insurance coverage against
the protection afforded by such coverage. In all policies of directors’ and
officers’ liability insurance, Indemnitee shall be named as an insured in such
a manner as to provide Indemnitee the same rights and benefits as are accorded
to the most favorably insured of the Company’s directors, if Indemnitee is a
director; or of the Company’s officers, if Indemnitee is not a director of the
Company but is an officer; or of the Company’s key employees, if Indemnitee is
not an officer or director but is a key employee. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided
by such insurance is limited by exclusions so as to provide an insufficient
benefit, or if Indemnitee is covered by similar insurance maintained by a
subsidiary or parent of the Company but, in that event, shall immediately
notify Indemnitee of such decision in advance of its implementation such that
Indemnitee does not take further actions in his capacity as a director or
officer without knowledge that insurance will not be provided or will be
reduced in the future period in question.

     7.     Severability. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company’s inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach
of this Agreement. The provisions of this Agreement shall be severable as
provided in this Section. If this Agreement or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify Indemnitee to the full extent permitted by
any applicable portion of this Agreement that shall not have been invalidated
(including without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable), and the balance of this
Agreement not so invalidated shall be construed so as to give effect to the
intent manifested by
the provision held invalid, illegal and shall be enforceable in accordance
with its terms.

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     8.     Exceptions. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

          (a)     Excluded Acts. To indemnify Indemnitee for any acts or omissions or
transactions from which a director may not be relieved of liability under the
Delaware General Corporation Law; or

          (b)     Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required, under
Delaware General Corporation Law, but such indemnification or advancement of
expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit; or

          (c)     Lack of Good Faith. To indemnify Indemnitee for any expenses incurred
by the Indemnitee with respect to any proceeding instituted by Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in such
proceeding was not made in good faith or was frivolous; or

          (d)     Insured Claims. To indemnify Indemnitee for expenses or liabilities
of any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties, and amounts paid in settlement) which have been paid
directly to Indemnitee by an insurance carrier under a policy of directors’ and
officers’ liability insurance maintained by the Company; or

          (e)     Claims Under Section 16(b). To indemnify Indemnitee for expenses and
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of
1934, as amended, or any similar successor statute.

     9.     Effectiveness of Agreement. This Agreement shall be effective as of
the date set forth on the first page and may apply to acts or omissions of
Indemnitee which occurred prior to such date if Indemnitee was an officer,
director, employee, agent or fiduciary of the Company, or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, at
the time such act or omission occurred.

     10.     Construction of Certain Phrases.

          (a)     For purposes of this Agreement, references to the “Company” shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or

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other enterprise, Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

          (b)     For purposes of this Agreement, references to “other enterprises”
shall include employee benefit plans or administrative committees thereof;
references to “fines” shall include any excise taxes assessed on Indemnitee
with respect to an employee benefit plan; and references to “serving at the
request of the Company” shall include any service as a director, officer,
employee or, agent or trustee of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants, or beneficiaries.

     11.     Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

     12.     Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee’s estate, heirs, legal representatives and assigns.

     13.     Attorneys’ Fees. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms
hereof, Indemnitee shall be entitled to be paid all court costs and expenses,
including attorneys’ fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an
action instituted by or in the name of the Company under this Agreement or to
enforce or interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be paid all court costs and expenses, including attorneys’ fees,
incurred by Indemnitee in defense of such action (including with respect to
Indemnitee’s counterclaims and cross claims made in such action), unless as a
part of such action the court determines that each of Indemnitee’s material
defenses to such action were made in bad faith or were frivolous.

     14.     Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand, on the date of receipt, or (ii) if mailed by domestic
certified or registered mail properly addressed and with postage prepaid, on
the third business day after the date postmarked. Addresses for notice to
either party are as set forth on the signature page of this Agreement, or as
subsequently modified by written notice.

     15.     Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out
of or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Delaware.

     16.     Choice of Law. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the State of Delaware as
applied to contracts between Delaware residents entered into and to be
performed entirely within Delaware.

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     17.     Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
no similar) nor shall such wavier constitute a continuing waiver.

     IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.

	 	 	 	 
	THE COMPANY:	Identix Incorporated
	 	
5600 Rowland Rd.
	 	
Minnetonka, MN 55343
	 	 	 	 
	 	 	 	 
	 	By	 	 
	 	 	

	 	 	
Name:
	 	 	
Title:
	 	 	 	 
	INDEMNITEE:	 	 	 
	 	By	 	 
	 	 	

	 	 	
Name:
	 	 	
Title:
	 	 	 	 
	 	
Address:
	 	 	 	

	 	 	 	

8<PAGE>

                                                                   EXHIBIT 10.18

                      MASTER CONSULTING SERVICES AGREEMENT

         THIS MASTER CONSULTING SERVICES AGREEMENT (the "AGREEMENT") is made and
entered into as of February 9, 2004 but is effective as of September 1, 2003
(the "EFFECTIVE DATE") by and between PENINSULA PHARMACEUTICALS, INC., a
Delaware corporation located at 1751 Harbor Bay Parkway, Alameda, CA 94502
("PENINSULA"), and INCLIN, INC., a corporation with an address at 5150 El Camino
Real, Suite A-33, Los Altos, CA 94022 ("CONSULTANT").

         WHEREAS, Consultant has been performing project management consulting
services for Peninsula pursuant to a Consulting Agreement between Peninsula and
Consultant dated April 1, 2002 (the "APRIL 2002 AGREEMENT"); and

         WHEREAS, the parties desire to terminate the April 2002 Agreement and
enter into this Agreement in order to expand the scope of the consulting
services that Consultant will perform for Peninsula, modify the terms on which
Consultant will perform such services, and to provide a mechanism to expand the
scope of consulting services performed by Consultant for Peninsula in the future
if the parties so desire by attaching work orders covering such additional
services to this Agreement.

         NOW THEREFORE, in consideration of the mutual obligations set forth
below, the parties hereby agree as follows:

1.       WORK ORDERS. From time to time, the parties may agree that Consultant
shall perform certain clinical development services, including project
management, clinical trial site and study management, and essential document
management relating to Peninsula's products and clinical programs (the
"SERVICES") under one or more Work Orders. Each Work Order shall be agreed upon
by the parties on a project-by-project basis, and shall set forth with
specificity the following: (a) the specific Services to be performed by
Consultant for such project; (b) the specific individuals who will be performing
such Services on behalf of Consultant; (c) Consultant's fees for such Services;
(e) the terms on which the Services covered by such Work Order may be
terminated; and (f) all other matters pertinent to the completion of the
Services. The Work Order for each project will be attached hereto and
incorporated herein as a new "Work Order No. _____" as part of Schedule A. Each
Work Order shall expressly reference this Agreement and shall not be effective
until it has been signed by both parties. To the extent that any terms set forth
in a Work Order conflict with the terms of this Agreement, the terms of this
Agreement shall control unless the Work Order specifically references this
Agreement and indicates that the terms of the Work Order shall control. There
shall be no minimum or maximum number of Work Orders that may be attached and
incorporated herein. If Peninsula requests any changes with respect to a
particular Work Order, Consultant will prepare an amended Work Order reflecting
such changes. Upon Peninsula's written approval of the revised Work Order, such
Work Order shall be deemed amended and incorporated herein as part of Schedule
A, and Consultant shall perform the Services for the applicable project in
accordance with such amended Work Order.

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<PAGE>

2.       PERFORMANCE OF SERVICES. Consultant shall perform the Services for each
project in accordance with the applicable Work Order, Peninsula's instructions,
and the terms and conditions of this Agreement. The specific nature and amount
of the Services to be performed shall be determined by Peninsula during the term
of this Agreement, subject to the minimum hours of Services required (if any) as
set forth in a particular Work Order. Consultant shall perform the Services at
such times as may be mutually agreed upon by Consultant and Peninsula.
Consultant shall provide its own equipment, tools, and other materials required
to perform the Services at its own expense. Consultant shall perform the
Services at its principal place of business, Peninsula's principal place of
business, another Company location, or at other places upon mutual agreement of
the parties. Peninsula will make its facilities and equipment available to
Consultant when necessary. Consultant shall perform the Services in a timely and
professional manner consistent with industry standards, and shall comply with
all applicable laws and regulations in performing the Services.

3.       COMPENSATION. Each Work Order shall include the fees for the Services
to be performed by Consultant under such Work Order. Peninsula shall pay
Consultant fees for Services performed under a Work Order based upon the
particular individual performing the Services in accordance with the rates
specified in such Work Order. Unless otherwise agreed by the parties, Consultant
shall provide to Peninsula, on a monthly basis, itemized invoices detailing the
amount and type of Services performed by Consultant under each Work Order during
the applicable month. Each invoice shall be consistent with the fee schedule and
payment terms set forth in the applicable Work Order. Peninsula shall pay each
such invoice within thirty (30) days of receipt unless the parties mutually
agree in writing to different payment terms. Peninsula shall also reimburse
Consultant for out-of-pocket expenses incurred by Consultant in performing the
Services that were pre-approved by Peninsula, provided that such expenses are
supported by written receipts. Peninsula shall not be obligated to pay
Consultant any amounts for the performance of the Services with respect to a
particular project other than the fees set forth in the applicable Work Order
unless the parties otherwise agree. The parties acknowledge and agree that
Peninsula has paid Consultant for all Services performed by Consultant under
Work Order No. 1 attached hereto and incorporated herein during the period
commencing on the Effective Date up through October 31, 2003.

4.       NO DEBARRED PERSONNEL. Consultant represents and warrants that it shall
not employ, contract with, or retain any person directly or indirectly to
perform any Services under this Agreement if such a person is under
investigation by the FDA for debarment or is presently debarred by the FDA
pursuant to 21 U.S.C. Section 335a. If, during the term of this Agreement,
Consultant or any person employed or retained by it to perform the Services (i)
comes under investigation by the FDA for a debarment action or disqualification,
(ii) is debarred or disqualified, or (iii) engages in any conduct or activity
that could lead to any of the above-mentioned disqualification or debarment
actions, Consultant shall immediately notify Peninsula of same.

5.       NO SOLICITATION. During the term of this Agreement and for one (1) year
after its termination, Consultant will not, whether for its own account or for
the account of any other

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<PAGE>

individual, partnership, firm, corporation, or other entity, personally or
through others endeavor to entice away from Peninsula, recruit, solicit for
employment or the performance of services, or otherwise interfere with
Peninsula's relationship with, any person or entity who is, or was within the
immediately preceding one (1) year period, employed by Peninsula.

6.       MAINTAINING CONFIDENTIAL INFORMATION.

         6.1      CONFIDENTIAL INFORMATION. During the term of this Agreement
and in the course of Consultant's performance hereunder, all information that is
(a) "Confidential Information" (as such term is defined under the April 2002
Agreement), (b) disclosed by or on behalf of Peninsula to Consultant regarding
the Services, or (c) developed or generated by Consultant in the course of
performing Services under a Work Order shall be deemed to be "CONFIDENTIAL
INFORMATION". Confidential Information may include, without limitation, the
following: (i) business or technical information concerning research,
development, technology, commercial plans and strategies, experimental work,
design details and specifications, business operations and systems, marketing
techniques, marketing plans, material pricing policies, financial information,
procurement requirements, purchasing, manufacturing, customer lists, investors,
employees, business and contractual relationships, business forecasts, sales and
merchandising, customers, licensees, vendors, clinical development strategies,
and scientific evaluations, and (ii) any patent, patent application, trade
secret, invention, idea, know-how, procedure, formulation, process, formula,
chemical compound, biological material, assay, or data.

         6.2      NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION. All
Confidential Information is the sole and exclusive property of Peninsula.
Accordingly, Consultant agrees not to reproduce any Confidential Information
without the prior written consent of Peninsula, not to use Confidential
Information except in the performance of the Services, and not to disclose all
or any part of the Confidential Information in any form to any third party
without Peninsula's prior written consent except as required to perform the
Services, either during or after the term of this Agreement. In particular,
Consultant shall not file any patent application containing any claim the
subject matter of which is derived from Confidential Information.

         6.3      EXCEPTIONS TO CONFIDENTIAL INFORMATION. Confidential
Information shall not be deemed to include information which: (a) is now, or
hereafter becomes, through no act or failure to act on the part of Consultant,
generally known or available; (b) is known by Consultant at the time of
receiving such information as evidenced by its written records; (c) is hereafter
furnished to Consultant by a third party, as a matter of right and without
restriction on disclosure, and outside the scope of Consultant's performance of
Services for Peninsula; or (d) is the subject of a written permission to
disclose provided by Peninsula.

         6.4      THIRD PARTY INFORMATION. During the term of this Agreement,
Consultant agrees to properly protect any proprietary information or trade
secrets of Consultant's former or concurrent employers or companies, if any, and
agrees not to bring onto the premises of Peninsula any unpublished documents or
any property belonging to Consultant's former or concurrent employers or
companies unless consented to in writing by said employers or

                                       3
<PAGE>

companies. Consultant further recognizes that Peninsula has received, and in the
future will receive, from third parties their confidential or proprietary
information subject to a duty on Peninsula's part to maintain the
confidentiality of such information and, in some cases, to use it only for
certain limited purposes. Consultant agrees, both during the term of
Consultant's engagement and thereafter, to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it to
any third party unless Peninsula has given written permission to do so or use it
for the benefit of anyone other than Peninsula.

7.       INTELLECTUAL PROPERTY.

         7.1      DISCLOSURE OF INVENTIONS. Consultant shall promptly and fully
disclose to Peninsula all ideas, improvements, inventions, know-how, techniques,
and works of authorship, in each case that relate to the composition of matter,
method of using or method of administering Peninsula's products, that are
learned, conceived, or developed by Consultant, either alone or jointly with
others, pursuant to the performance of the Services under this Agreement or the
performance of consulting services under the April 2002 Agreement (the
"INVENTIONS"). Consultant agrees to keep and maintain adequate and current
records (in the form of books, records, notes, sketches, drawings or in any
other form that may be required by Peninsula) of all work performed relating to
the Services, including all proprietary information developed relating thereto,
and such records shall be available to and remain the sole property of Peninsula
at all times.

         7.2      OWNERSHIP OF INVENTIONS. Consultant agrees that any and all
Inventions shall be the sole and exclusive property of Peninsula. Consultant
hereby irrevocably assigns to Peninsula all right, title, and interest worldwide
in and to all Inventions and all applicable intellectual property rights related
to the Inventions including, without limitation, copyrights, trademarks, trade
secrets, patent rights, and moral rights. Consultant retains no rights to use
the Inventions and agrees not to challenge the validity of Peninsula's ownership
in the Inventions. If Consultant has any rights to the Inventions that cannot be
assigned to Peninsula, Consultant unconditionally and irrevocably waives the
enforcement of such rights, and all claims and causes of action of any kind
against Peninsula with respect to such rights, and agrees, at Peninsula's
request and expense, to consent to and join in any action to enforce such
rights. If Consultant has any rights to the Inventions that cannot be assigned
to Peninsula or waived by Consultant, Consultant unconditionally and irrevocably
grants to Peninsula during the term of such rights, an exclusive, irrevocable,
perpetual, worldwide, fully-paid, royalty-free license, with rights to
sublicense through multiple tiers of sublicensees, to reproduce, create
derivative works of, distribute, publicly perform and publicly display by all
means now known or later developed, such rights.

         7.3      PERFECTING PROPRIETARY RIGHTS. Consultant agrees to assist
Peninsula in every proper way to obtain and enforce United States and foreign
proprietary rights relating to the Inventions in any and all countries. To that
end, Consultant agrees to execute, verify and deliver such documents and perform
such other acts (including appearing as a witness) as Peninsula may reasonably
request for use in applying for, obtaining, perfecting, evidencing, sustaining,
and enforcing such proprietary rights and the assignment thereof. In addition,
Consultant agrees to

                                       4
<PAGE>

execute, verify, and deliver assignments of such proprietary rights to Peninsula
or its designee. Consultant's obligation to assist Peninsula with respect to
proprietary rights in any and all countries shall continue beyond the
termination of this Agreement, but Peninsula shall compensate Consultant at a
reasonable rate after such termination for the time actually spent by Consultant
at Peninsula's request on such assistance.

         7.4      DESIGNATION OF ATTORNEY IN FACT. In the event Peninsula is
unable for any reason, after reasonable effort, to secure Consultant's signature
on any document needed in connection with the actions specified in Section 7.3,
Consultant hereby irrevocably designates and appoints Peninsula and its duly
authorized officers and agents as Consultant's agent and attorney in fact to
execute, verify and file, with the same legal force and effect as if executed by
Consultant, any such documents and to do all other lawfully permitted acts to
further the purposes of the preceding paragraph. Consultant hereby waives and
quitclaims to Peninsula any and all claims of any nature whatsoever which
Consultant now or may hereafter have for infringement of any proprietary rights
assigned to Peninsula.

         7.5      PERSONNEL. Consultant shall ensure that each of its employees,
agents, personnel, and any subcontractors performing any part of the Services
shall have a contractual obligation to assign all inventions and intellectual
property rights therein created, discovered, or generated by such personnel as a
result of performing the Services during the term of this Agreement to
Consultant so that Consultant can comply with its obligations under this Section
7, and Consultant shall promptly obtain such assignments.

         7.6      LICENSE. Consultant hereby grants to Peninsula a worldwide,
non-exclusive license to use all know-how, processes, standard operating
procedures, data management processes, spreadsheets, tracking forms, and
analytical methods used by Consultant in the performance of the Services solely
for the purpose of Peninsula's drug development programs.

8.       NO CONFLICTS. Consultant represents and warrants that it is not a party
to any existing agreement that will be breached by Consultant's performance of
the Services or that conflicts with the terms of this Agreement.

9.       TERM AND TERMINATION.

         9.1      TERM. This Agreement shall commence on the Effective Date and
shall continue in full force and effect until terminated in accordance with this
Section 9.

         9.2      TERMINATION BY PENINSULA. Unless otherwise specified in a
particular Work Order, Peninsula may terminate this Agreement or any individual
Work Order for any reason upon written notice to Consultant. In the event of
such termination by Peninsula, Consultant shall be entitled to full payment for
Services performed up through the date of Consultant's receipt of notice of
termination of an individual Work Order and/or the Agreement as calculated in
accordance with the provisions of this Agreement and/or the applicable Work
Order including, without limitation, all earned fees and other non-cancelable
out-of-pocket expenses of Consultant for such Services; provided, however, that
InClin has used commercially reasonable efforts to

                                       5
<PAGE>

cancel or otherwise limit such out-of-pocket expenses as of the date on which it
receives notice of termination. Termination of this Agreement shall terminate
all Work Orders, and termination of a Work Order shall terminate the
corresponding Services covered by such Work Order.

         9.3      TERMINATION OF AGREEMENT FOR MATERIAL BREACH. Each party may
terminate this Agreement, an individual Work Order, and/or all Services then in
progress if the other party materially breaches this Agreement and such
breaching party fails to cure the breach within thirty (30) days after receipt
of written notice from the non-breaching party specifying in detail the nature
of such breach. Termination of this Agreement shall terminate all Work Orders,
and termination of a Work Order shall terminate the corresponding Services
covered by such Work Order.

         9.4      TERMINATION BY CONSULTANT. Unless otherwise specified in a
particular Work Order, Consultant may terminate this Agreement or an individual
Work Order for any reason upon ninety (90) days' written notice to Peninsula.

         9.5      EFFECTS OF TERMINATION. Promptly after the termination or
expiration of a particular Work Order or this Agreement, Consultant shall return
to Peninsula all whole and partial copies and derivatives of Confidential
Information, Inventions, other materials belonging to Peninsula, and all books,
records, documents, drawings and other items of whatever nature developed by
Consultant in the performance of the Services under such Work Order or under all
Work Orders covered by this Agreement, as applicable, that are in Consultant's
possession or under Consultant's direct or indirect control. Sections 5, 6, 7,
9, 12, 13, and 14 of this Agreement shall survive the termination or expiration
of this Agreement.

10.      ASSIGNMENT. Consultant shall not assign or delegate its obligations
under this Agreement, either in whole or in part, without the prior written
consent of Peninsula. The parties' rights and obligations under this Agreement
will inure to the benefit of their respective successors and permitted assigns.
Any attempted assignment of Consultant's obligations or of this Agreement not in
compliance with this Section 10 shall be null and void.

11.      INDEPENDENT CONTRACTOR. It is understood and agreed that Consultant is
an independent contractor and not an agent or employee of Peninsula, and is not
authorized to act on behalf of Peninsula. Consultant agrees not to hold itself
out as, or give any person any reason to believe that it is an employee, agent,
joint-venture partner, or other partner of Peninsula. Consultant will not be
eligible for any employee benefits, nor will Peninsula make deductions from any
amounts payable to Consultant for taxes. Consultant acknowledges and agrees
that: (a) Consultant will be solely responsible for and will file, on a timely
basis, tax returns and payments required to be filed with or made to any
relevant tax authorities with respect to Consultant's performance of Services;
and (b) Consultant is responsible for payment of all applicable workers'
compensation insurance, payroll and employment taxes, disability benefits and
unemployment insurance with respect to Consultant and Consultant's employees.

                                       6
<PAGE>

12.      REMEDIES. Consultant hereby acknowledges and agrees that in the event
of any breach of this Agreement by Consultant, including, without limitation,
the actual or threatened disclosure of Confidential Information or Inventions
without the prior express written consent of Peninsula, Peninsula will suffer an
irreparable injury, such that no remedy at law will afford it adequate
protection against, or appropriate compensation for, such injury. Accordingly,
Consultant hereby agrees that Peninsula shall be entitled to seek equitable and
such other further relief as may be granted by a court of competent
jurisdiction. The prevailing party in any action to enforce this Agreement shall
be entitled to recover legal costs and attorneys' fees incurred by such party in
enforcing this Agreement.

13.      GOVERNING LAW; SEVERABILITY. Any claim, dispute, or controversy of
whatever nature arising out of or relating to this Agreement shall be governed
by and construed under the laws of the State of California without giving effect
to any choice of law principles that would require the application of the laws
of a different jurisdiction. Any claim, dispute, or controversy of whatever
nature arising out of or relating to this Agreement shall be brought exclusively
in a court of competent jurisdiction, federal or state, in the State of
California, and each party hereby consents to personal jurisdiction and venue
in, and agrees to accept service of process issued or authorized by, such court.
Notwithstanding the foregoing, either party may seek injunctive relief in any
court in any state where appropriate. If any provision of this Agreement is held
to be invalid or unenforceable by any court of competent jurisdiction from which
no appeal can be or is taken, such provision shall be considered severed from
this Agreement and shall not serve to invalidate any remaining provisions
hereof. The parties shall make a good faith effort to replace any invalid or
unenforceable provision with a valid and enforceable one such that the
objectives contemplated by the parties when entering this Agreement may be
realized.

14.      ENTIRE AGREEMENT. This Agreement constitutes the final, exclusive, and
complete understanding and agreement of Peninsula and Consultant with respect to
the subject matter hereof. The parties hereby acknowledge and agree that this
Agreement, as of the Effective Date, terminates and supersedes in its entirety
the April 2002 Agreement. As indicated in Section 6.1, all "Confidential
Information" (as such term is defined in the April 2002 Agreement) shall be
deemed Confidential Information subject to the obligations of confidentiality
set forth in Section 6 of this Agreement. Any waiver, modification, or amendment
of any provision of this Agreement shall be effective only if in writing and
signed by all parties hereto.

15.      NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this Agreement, and
shall be addressed to the appropriate party at the address specified below or
such other address as may be specified by such party in writing in accordance
with this Section 15, and shall be deemed to have been given for all purposes
(a) when received, if hand-delivered or sent by a reputable overnight delivery
service, or (b) three (3) business days after mailing, if mailed by first class
certified or registered mail, postage prepaid, return receipt requested.

                                       7
<PAGE>

         If to Peninsula:  Peninsula Pharmaceuticals, Inc.
                           1751 Harbor Bay Parkway
                           Alameda, CA 94502
                           Attention: Vice President, Alliances & Project
                                      Management
                           Tel: (510) 747-3921
                           Fax: (510) 747-3940

         If to Consultant: InClin, Inc.
                           5150 El Camino Real, Suite A-33
                           Los Altos, CA 94022
                           Attention: President & CEO
                           Tel: (650) 961-3424
                           Fax: (650) 961-3447

16.      COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.

PENINSULA PHARMACEUTICALS, INC.             INCLIN, INC.

By: /s/ Paul F. Truex                       By: /s/ Taylor Kilfoil
   __________________________________           ________________________________
Printed Name: Paul F. Truex                 Printed Name:  Taylor Kilfoil
Title: President & CEO                      Title:  President & CEO

                                       8
<PAGE>

                                   SCHEDULE A

All Work Orders executed by both parties and attached to this Schedule A are
incorporated into the Agreement.

                                       9
<PAGE>

                                  WORK ORDER #1

1.       SERVICES. Consultant shall provide the Services described in this Work
Order and in the Master Consulting Services Agreement effective September 1,
2003 between the parties (the "Master Agreement"). Unless otherwise defined
herein, all initially capitalized terms used herein shall have the meaning set
forth in the Master Agreement. The Services covered under this Work Order
consist of project management of Peninsula's intravenous and inhaled doripenem
and TAK-599 programs, including project management of Peninsula's intravenous
doripenem Phase 3 clinical trials, inhaled doripenem Phase I clinical trials,
and TAK-599 Phase I clinical trials. The parties agree that Taylor Kilfoil, Marc
Perry, Georgina Kilfoil, George Faurot, Gary Eiger, and Michele Sayre shall be
the individuals performing the Services on behalf of Consultant under this Work
Order.

2.       RATE. The following individuals will perform the Services requested by
Peninsula at the following rates:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
                                                                 RATE PER
     JOB TITLE/ROLE:                 CONSULTANT:                CONSULTANT:
-------------------------------------------------------------------------------
<S>                              <C>                          <C>
Project Manager (3x)             1) Taylor Kilfoil            $20,833.33 / Month
                                 2) Marc Perry
                                 3) Georgina Kilfoil*
                                 4) George Faurot*
-------------------------------------------------------------------------------
Clinical/Regulatory Document     Gary Eiger                   $75.00 / HR
Administrator
-------------------------------------------------------------------------------
Senior Clinical Research         Michele Sayre                $80.00 / HR
Associate
-------------------------------------------------------------------------------
</TABLE>

Project management Services performed by Taylor Kilfoil and Marc Perry shall
each be billed at the monthly rate specified above until the later of the date
on which (a) all intravenous doripenem Phase 3 clinical trials have been
completed, (b) inhaled doripenem Phase I clinical trials have been completed,
and (c) TAK-599 Phase I clinical trials have been completed.

*Project management Services performed by Georgina Kilfoil shall be billed at
the monthly rate specified above until December 31, 2003. The parties
acknowledge that as of January 1, 2004, Georgina Kilfoil has become an employee
of Peninsula and as of that date, she shall no longer be performing Services
under this Agreement. Accordingly, Peninsula shall have no obligation to pay
Consultant for services performed by Georgina Kilfoil after December 31, 2003.
Commencing in January 2004 up through March 1, 2004, George Faurot shall perform
project management Services for Peninsula at an hourly rate of $100 per hour.
Thereafter, project management Services performed by George Faurot shall be
billed at the monthly rate specified above.

                                       10
<PAGE>

The rate of $20,833.33 per month ($250,000.00 per year) for project management
Services set forth under this Section 2 is based upon each Project Manager
performing 40 hours of Services per work week, with an annual total of 1936
hours worked. This allows for each Project Manager to have ten unpaid vacation
days and eight unpaid public holidays during the course of each calendar year in
which Services are performed. On a quarterly basis, the parties shall review the
actual number of hours worked by each Project Manager to determine if both
parties are adhering to the terms of this Agreement and whether the monthly rate
for Services performed by Project Managers should be adjusted going forward to
reflect the actual number of hours of Services performed by the Project
Managers.

3.       TERM OF WORK ORDER. This Work Order shall be effective as of September
1, 2003 and, unless earlier terminated as permitted herein, shall expire on the
later of the date on which (a) all intravenous doripenem Phase 3 clinical trials
have been completed, (b) inhaled doripenem Phase I clinical trials have been
completed, and (c) TAK-599 Phase I clinical trials have been completed

4.       TERMINATION OF WORK ORDER BY PENINSULA. This Section 4, rather than
Section 9.2 of the Master Agreement, shall govern the terms on which Peninsula
may terminate this Work Order. Prior to the completion of the intravenous
doripenem Phase III clinical trials, Peninsula may terminate this Work Order for
any reason upon ninety (90) days' written notice to Consultant. However,
Peninsula may terminate this Work Order effective upon Consultant's receipt of
written notice if there are significant or unexpected delays in the intravenous
doripenem Phase III clinical trials and/or if Peninsula's intravenous doripenem
program is terminated in its entirety. At any time after the completion of the
intravenous doripenem Phase III clinical trials, Peninsula may terminate this
Work Order effective upon Consultant's receipt of written notice. At any time
during the term of this Work Order, Peninsula shall have a right to terminate
this Work Order for an uncured material breach in accordance with the provisions
of Section 9.3 of the Master Agreement.

5.       TERMINATION OF WORK ORDER BY CONSULTANT. This Section 5, rather than
Section 9.4 of the Master Agreement, shall govern the terms on which Consultant
may terminate this Work Order. Consultant shall only have a right to terminate
this Work Order for an uncured material breach in accordance with the provisions
of Section 9.3 of the Master Agreement.

6.       PAYMENT. Payments shall be sent to Consultant at:

                  InClin, Inc.
                  5150 El Camino Real, Suite A33
                  Los Altos, CA 94022
                  FEIN No.: 94-3302268

                                       11
<PAGE>

The Parties have read this Work Order and the Master Agreement, and agree to and
accept the terms of this Work Order effective as of September 1, 2003:

PENINSULA PHARMACEUTICALS, INC.             INCLIN, INC.

By:  /s/ Paul F. Truex                      By:  /s/ Taylor Kilfoil
   ---------------------------------           ---------------------------------

Name: Paul F. Truex                         Name: Taylor Kilfoil

Date: February 10, 2004                     Date: February 9, 2004

Title: President & CEO                      Title: President & CEO

                                       12

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