/s/ Richard Glickman R Glickman Enclosure /s/ Richard Jones 24 Oct 2006 R Jones Date CEO

1.

Term.  The terms and conditions of this Agreement shall have effect as of and from 1^st March, 2006 (the “Effective Date”) and your employment as Senior Vice President, Search, Discovery and Evaluation of the Corporation shall continue for a period of 4 years, renewable thereafter by mutual written agreement of the parties for successive one year terms, or until earlier terminated as provided in this Agreement.

2.

Base Salary.  The Corporation shall pay you a base salary at the rate of $290,000 CDN per year (the “Base Salary”), payable semi-monthly, subject to the withholding of all applicable statutory deductions from such Base Salary and including any taxable benefits received under this Agreement or in respect of your employment.

3.

Signing Bonus.  One month after joining the Corporation, upon both parties executing this Agreement, the Corporation shall pay to you a one-time signing bonus (the “Signing Bonus”) of $15,000 CDN, subject to the withholding of all applicable statutory deductions in respect of such Signing Bonus.  You shall be required to promptly repay the Signing Bonus to the Corporation if you terminate your employment pursuant to Section 15 (Termination by Executive) within 2 years following the Effective Date.  In addition, the Corporation shall have the right to set off the Signing Bonus against any amounts owed by the Corporation to you on the effective date of termination of your employment.

4.

Annual Review.  The compensation committee (the “Compensation Committee”) established by the Board of Directors (the “Board”) of the Corporation for the purposes of this Agreement shall review your Base Salary annually.  This review shall not result in a decrease of your Base Salary nor shall it necessarily result in an increase in your Base Salary and any increase shall be in the discretion of the Board.

5.

Performance Bonus.  The Corporation shall review the performance of your duties and functions under this Agreement annually and shall pay you a bonus of up to 30% of your Base Salary if the Board, in its sole discretion, determines that certain short-term and long-term business performance objectives of the Corporation and objectives related to your personal performance (together, the “Objectives”), respectively weighted 40% and 60%, have been achieved.  The Objectives will be established from time to time by the Board or the Compensation Committee after consultation with you. Payment of the performance bonus set out in this Section 5 shall be made to you within a reasonable time following the end of each fiscal year and shall be subject to the withholding of all applicable statutory deductions by the Corporation.

6.

Benefits.  The Corporation will arrange for you to be provided with health, medical, dental, accident and life insurance and such other benefits as are reasonable and appropriate for an executive level benefits plan, as determined by the Board from time to time, based on the recommendations of the Compensation Committee after consultation with you.  These benefits will be consistent with other Senior Vice Presidents and will be comparable to those set out below in Exhibit B. You may be required to provide information and undergo reasonable assessments of the applicable insurer in order to determine your eligibility for benefits coverage.  You acknowledge and agree that coverage under any benefit plan in effect from time to time is subject to availability and other requirements of the applicable insurer and the Corporation makes no promise about your eligibility for or entitlement to benefits and will have no liability or responsibility in the event you are denied coverage.  You further acknowledge and agree that the components of the benefits package may be amended, modified or terminated from time to time by the Corporation in its sole discretion, and this may include terminating or changing carriers.

7.

Vacation.  During your employment with the Corporation under this Agreement, you will be entitled to an annual paid vacation as determined by the Corporation from time to time, not less than 20 days per annum, plus up to three days company designated days and within policy guidelines up to 3 days paid parental leave.  The Corporation reserves the right, acting reasonably, to request that vacations be scheduled so as not to conflict with critical business operations.

8.

Relocation and Reimbursement.  You acknowledge and agree that the Corporation’s head office is located in the metropolitan area of Victoria, British Columbia and that the principal place of your employment is at such head office.  You shall relocate your principal residence from Bassersdorf, Zurich, to a new location in the metropolitan area of Victoria, British Columbia upon commencing employment with the Corporation under this Agreement.  In consideration of your agreement to relocate your principal residence, the Corporation shall reimburse you for the cost of one house-hunting trip to Victoria for you and your spouse and shall provide to you the following amounts (the “Relocation  Allowance”) associated with your move:

 

(a)

reasonable moving expenses to a maximum of $35,000 CDN incurred by you to relocate you and your spouse and family, plus personal possessions from Bassersdorf, Zurich to your new residence in the metropolitan area of Victoria, British Columbia, subject to receipt by the Corporation of the applicable invoice or invoices for such expenses; to be used over a period of no more than 2 years;

 

(b)

professional fees for the first three years related to tax advice provided by accountants of your choice to a maximum of $3,000 CDN in year 1, $2,000 CDN in year 2 and $1,000 CDN in year 3 and;

9.

Reimbursement for Expenses.  During your employment under this Agreement, the Corporation shall reimburse you for reasonable travelling and other expenses actually and properly incurred by you in connection with the performance of your duties and functions, such reimbursement to be made in accordance with, and subject to, the policies of the Corporation from time to time.  For all such expenses you will be required to keep proper accounts and to furnish statements, vouchers, invoices and/or other supporting documents to the Corporation.

10.

Stock Options.  You will receive 100,000 stock options at an exercise price and on such other terms set forth in the Aspreva 2002 Incentive Stock Option Plan, subject to approval of the Board and applicable securities regulatory authorities and to execution and delivery by you of a stock option agreement in a form acceptable to the Corporation.  The stock options shall, vest and be exercisable in the following way:

 

(a)

No options will vest for the first year (12 months) following the grant;

 

(b)

options will begin to vest at the rate of 1/36^th of the grant, each month at the end of each month (for a period of 36 months).

 

(c)

All options from this grant will be vested at the end of the 36 months, following the initial 12 month waiting period.

 

(d)

on the date you provide the Corporation with written notice of your decision to resign your employment pursuant to Section 15 (Termination by Executive);

 

(e)

on the date the Corporation provides you with written notice of its decision to terminate your employment pursuant to Section 16 (Termination without Cause);

 

(f)

on the date the Corporation terminates your employment pursuant to Section 17 (Termination for Cause); or

 

(g)

otherwise on the date this Agreement is terminated or deemed terminated.

11.

Compliance with Insider Trading Guidelines and Restrictions.  As a result of your position as Senior Vice President, Search, Discovery and Evaluation, you are subject to insider trading regulations and restrictions and are required to file insider reports disclosing the grant of any options as well as the purchase and sale of any shares in the capital of the Corporation.  The Corporation may from time to time publish trading guidelines and restrictions for its employees, officers and directors as are considered by the Board, in its discretion, prudent and necessary for a publicly listed company.  It is a term of your employment as a senior officer of the Corporation that you comply with such guidelines and restrictions.

12.

Directors’ & Officers’ Liability Insurance.  The Corporation shall use commercially reasonable efforts to provide you with directors’ and officers’ liability insurance under the policies for such insurance arranged by the Corporation from time to time upon such terms and in such amounts as the Board may reasonably determine in its discretion.

13.

No Other Compensation or Benefits.  You expressly acknowledge and agree that unless otherwise expressly agreed in writing by the Corporation subsequent to execution of this Agreement by the parties hereto, you shall not be entitled by reason of your employment by the Corporation or by reason of any termination of such employment, to any remuneration, compensation or benefits other than as expressly set forth in this Agreement.

14.

Service to Employer.  During your employment under this Agreement you will:

 

(a)

well and faithfully serve the Corporation, at all times act in, and promote, the best interests of the Corporation, and devote substantially the whole of your working time, attention and energies to the business and affairs of the Corporation;

 

(b)

comply with all reasonable rules, regulations, policies and procedures of the Corporation; and

 

(c)

not, without the prior approval of the Board, to carry on or engage in any other business or occupation or become a director, officer, employee or agent of or hold any position or office with any other corporation, firm or person, except as a volunteer for a non-profit organization, for personal investments or a personal holding company, which may include members of your family as shareholders.

15.

 

(a)

Subject to Section 19 (Termination Following Change in Control), you may resign as Senior Vice President, Search, Discovery and Evaluation at any time, but only by giving the Corporation at least 3 months’ prior written notice of the effective date of your resignation.  On the giving of any such notice, the Corporation shall have the right to elect, in lieu of the notice period, to pay you a lump sum equal to 3 months’ Base Salary, as referred to in Section 2 (Base Salary) and as adjusted from time to time in accordance with Section 4 (Annual Review), plus other sums owed for arrears of salary, vacation pay and, if granted pursuant to Section 5 (Performance Bonus), bonus.

 

(b)

If the Corporation elects to pay you such lump sum in lieu of the 3 months’ notice period, the Corporation shall, subject to the terms and conditions of any benefit plans in effect from time to time, maintain the benefits and payments set out in Section 6 (Benefits) of this Agreement for 3 months after the date of your notice, but in all other respects, your resignation and the termination of your employment will be effective immediately upon your receipt of the lump sum.

16.

Termination by the Corporation Without Cause.

 

(a)

The Corporation may terminate your employment as Senior Vice President, Search, Discovery and Evaluation at any time without Cause (as defined below) by giving you written notice of such termination and in all respects, except as set out below, the termination of your employment will be effective immediately upon your receipt of such notice.  If you are a director of the Corporation you will be deemed to have resigned as a director, effective upon your receipt of the notice of termination without any further action on your part.

 

(b)

If your employment is terminated by the Corporation pursuant to this Section 16, the Corporation shall pay to you as a lump sum the number of months of Base Salary, as referred to in Section 2 (Base Salary) and as adjusted from time to time in accordance with Section 4 (Annual Review) set out in the table below depending upon the year of employment in which you are terminated, plus such other sums owed for arrears of salary, vacation pay and, if granted pursuant to Section 5 (Performance Bonus), bonus:

 

(c)

To the extent permitted by law and subject to the terms and conditions of any benefit plans in effect from time to time, the Corporation shall maintain the benefits and payments set out in Section 6 (Benefits) of this Agreement (the “Maintenance Payments”) during a period of 6 months following termination.

 

(d)

The payments of Base Salary and benefits set out in this Section 16 shall be in lieu of any applicable notice period.

 

(e)

To the extent permitted by law, these terms will remain in effect, until or unless any more favourable terms have or will be offered to you or other senior officers of the company, at which point  those more favourable terms will be deemed to form part of this agreement.

17.

Termination by the Corporation for Cause.  Notwithstanding Section 15 (Termination by Executive), Section 16 (Termination by the Corporation Without Cause), or Section 19 (Termination Following Change of Control), the Corporation may terminate your employment as Senior Vice President, Search, Discovery and Evaluation for Cause upon written notice of such termination at any time without any notice or severance. In this Agreement, “Cause” shall include, but not be limited to, the following:

 

(a)

the commission of theft, embezzlement, fraud, obtaining funds or property under false pretences or similar acts of misconduct with respect to the property of the Corporation or its employees or the Corporation’s customers or suppliers;

 

(b)

your entering of a guilty plea or conviction for any crime involving fraud, misrepresentation or breach of trust, or for any serious criminal offence that impacts adversely on the Corporation; or

 

(c)

any other matter constituting just cause at common law.

18.

Termination Following Change in Control.  Concurrently with execution and delivery of this Agreement, you and the Corporation shall enter into a “Change of Control Agreement” in the form attached hereto as Schedule B setting out the compensation provisions to be applicable in the event of the termination of your employment as Senior Vice President, Search, Discovery and Evaluation of the Corporation in certain circumstances following a “Change in Control” of the Corporation (as defined in the Change of Control Agreement), and will remain the same as the treatment of all other senior officers.

19.

No Additional Compensation upon Termination.  It is agreed that neither you nor the Corporation shall, as a result of the termination of your employment, be entitled to any notice, fee, salary, bonus, severance or other payments, benefits or damages arising by virtue of, or in any way relating to, your employment or any other relationship with the Corporation (including termination of such employment or relationship) in excess of what is specified or provided for in Section 15 (Termination by Executive), Section 16 (Termination by the Corporation Without Cause), Section 17 (Termination by the Corporation for Cause), or Section 19 (Termination Following Chance in Control), whichever is applicable.  Payment of any amount whatsoever pursuant to Section 15 (Termination by Executive), Section 16 (Termination by the Corporation Without Cause), Section 17 (Termination by the Corporation for Cause), or Section 19 (Termination Following Change in Control) shall be subject to the withholding of all applicable statutory deductions by the Corporation.

20.

Confidentiality and Assignment of Inventions.  Concurrently with execution and delivery of this Agreement and in consideration of your employment by the Corporation, you and the Corporation will enter into a “Confidentiality Agreement and Assignment of Inventions” in the form attached hereto as Schedule C.

21.

Disclosure of Conflicts of Interest.  During your employment with the Corporation, you will promptly, fully and frankly disclose to the Corporation in writing:

 

(a)

the nature and extent of any interest you or your Associates (as hereinafter defined) have or may have, directly or indirectly, in any contract or transaction or proposed contract or transaction of or with the Corporation or any subsidiary or affiliate of the Corporation;

 

(b)

every office you may hold or acquire, and every property you or your Associates may possess or acquire, whereby directly or indirectly a duty or interest might be created in conflict with the interests of the Corporation or your duties and obligations under this Agreement; and

 

(c)

the nature and extent of any conflict referred to in subsection (b) above.

22.

Avoidance of Conflicts of Interest.  You acknowledge that it is the policy of the Corporation that all interests and conflicts of the sort described in Section 21 (Disclosure of Conflicts of Interest) be avoided, and you agree to comply with all policies and directives of the Board from time to time regulating, restricting or prohibiting circumstances giving rise to interests or conflicts of the sort described in Section 21 (Disclosure of Conflicts of Interest).  During your employment with the Corporation, without Board approval, in its sole discretion, you shall not enter into any agreement, arrangement or understanding with any other person or entity that would in any way conflict or interfere with this Agreement or your duties or obligations under this Agreement or that would otherwise prevent you from performing your obligations hereunder, and you represent and warrant that you or your Associates have not entered into any such agreement, arrangement or understanding, provided however you will be permitted to accept teaching or academic activities appointments as long as such activities related to such appointments do not conflict or hinder the performance of your duties.

23.

Provisions Reasonable.  It is acknowledged and agreed that:

 

(a)

both before and since the Effective Date the Corporation has operated and competed and will operate and compete in a global market, with respect to the business of the Corporation set out in Schedule D attached hereto (the “Business”);

 

(b)

competitors of the Corporation and the Business are located in countries around the world;

 

(c)

in order to protect the Corporation adequately, any enjoinder of competition would have to apply world wide;

 

(d)

during the course of your employment by the Corporation, both before and after the Effective Date, on behalf of the Corporation, you have acquired and will acquire knowledge of, and you have come into contact with, initiated and established relationships with and will come into contact with, initiate and establish relationships with, both existing and new clients, customers, suppliers, principals, contacts and prospects of the Corporation, and that in some circumstances you have been or may well become the senior or sole representative of the Corporation dealing with such persons; and

 

(e)

in light of the foregoing, the provisions of Section 24 (Restrictive Covenant)  below are reasonable and necessary for the proper protection of the business, property and goodwill of the Corporation and the Business.

24.

Restrictive Covenant.  Subject to the exceptions set out in Schedule E attached hereto, you agree that you will not, either alone or in partnership or in conjunction with any person, firm, company, corporation, syndicate, association or any other entity or group, whether as principal, agent, employee, director, officer, shareholder, consultant or in any capacity or manner whatsoever, whether directly or indirectly, for the Term of Employment and continuing for a period of 6 months from the lawful termination of your employment, regardless of the reason for such termination:

 

(a)

carry on or be engaged in, concerned with or interested in, or advise, invest in or give financial assistance to, any business, enterprise or undertaking that:

 

(i)

is involved in the Business or in the sale, distribution, development or supply of any product or service that is competitive with the Business or any product or service of the Business; or

 

(ii)

competes with the Corporation with respect to any aspect of the Business;

 

(b)

solicit, agree to be employed by, or agree to provide services to any person, firm, corporation or other entity that was a client, customer, supplier, principal, shareholder, investor, collaborator, strategic partner, licensee, contact or prospect of the Corporation during the time of your employment with the Corporation, whether before or after the Effective Date, for any business purpose that is competitive with the Business or any product or service of the Business; or

 

(c)

divert, entice or take away from the Corporation or attempt to do so or solicit for the purpose of doing so, any business of the Corporation, or any person, firm, corporation or other entity that was an employee, client, customer, supplier, principal, shareholder, investor, collaborator, strategic partner, licensee, contact or prospect of the Corporation during the time of your employment with the Corporation, whether before or after the Effective Date.

25.

Remedies.  You acknowledge and agree that any breach or threatened breach of any of the provisions of Section 11 (Compliance with Insider Trading Guidelines and Restrictions), Section 14 (Service to Employer), Section 20 (Confidentiality and Assignment of Inventions), Section 21 (Disclosure of Conflicts of Interest), Section 22 (Avoidance of Conflicts of Interest) or Section 24 (Restrictive Covenant) could cause irreparable damage to the Corporation or its partners, subsidiaries or affiliates, that such harm could not be adequately compensated by the Corporation’s recovery of monetary damages, and that in the event of a breach or threatened breach thereof, the Corporation shall have the right to seek an injunction, specific performance or other equitable relief as well as any equitable accounting of all your profits or benefits arising out of any such breach. It is further acknowledged and agreed that the remedies of the Corporation specified in this Section 25 are in addition to and not in substitution for any rights or remedies of the Corporation at law or in equity and that all such rights and remedies are cumulative and not alternative and that the Corporation may have recourse to any one or more of its available rights or remedies as it shall see fit.

26.

Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the Corporation and its successors and assigns. Your rights and obligations contained in this Agreement are personal and such rights, benefits and obligations shall not be voluntarily or involuntarily assigned, alienated or transferred, whether by operation of law or otherwise, without the prior written consent of the Corporation. This Agreement shall otherwise be binding upon and inure to the benefit of your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted assigns.

27.

Agreement Confidential.   Both parties shall keep the terms and conditions of this Agreement confidential except as may be required to enforce any provision of this Agreement or as may otherwise be required by any law, regulation or other regulatory requirement.

28.

Governing Law.  This Agreement shall be governed by and interpreted in accordance with the laws of the Province of British Columbia and applicable laws of Canada and the parties hereto attorn to the exclusive jurisdiction of the provincial and federal courts of such province.

29.

Exercise of Functions.  The rights of the Corporation as provided in this Agreement may be exercised on behalf of the Corporation only by the Board.

30.

Entire Agreement.  The terms and conditions of this Agreement are in addition to and not in substitution for the obligations, duties and responsibilities imposed by law on employers and employees of corporations generally, and you and the Corporation agree to comply with such obligations, duties and responsibilities. Except as otherwise provided in this Agreement, this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, and may only be varied by further written agreement signed by you and the Corporation. This Agreement supersedes any previous communications, understandings and agreements between you and the Corporation regarding your employment. It is acknowledged and agreed that this Agreement is mutually beneficial and is entered into for fresh and valuable consideration with the intent that it shall constitute a legally binding agreement.

31.

Further Assurances.  The parties will execute and deliver to each other such further instruments and assurances and do such further acts as may be required to give effect to this Agreement.

32.

Surviving Obligations.  Your obligations and covenants under Section 20 (Confidentiality and Assignment of Inventions), Section 24 (Restrictive Covenant) and Section 25 (Remedies) shall survive the termination of this Agreement.

33.

Independent Legal Advice.  You hereby acknowledge that you have obtained or have had an opportunity to obtain independent legal advice in connection with this Agreement, and further acknowledge that you have read, understand, and agree to be bound by all of the terms and conditions contained herein.

34.

Notice.  All notices and other communications that are required or permitted by this Agreement must be in writing and shall be hand delivered or sent by express delivery service or certified or registered mail, postage prepaid, or by facsimile transmission (with written confirmation copy by registered mail) to the parties at the addresses indicated below.

35.

Severability.  If any provision of this Agreement or any part thereof shall for any reason be held to be invalid or unenforceable in any respect, then such invalid or unenforceable provision or part shall be severable and severed from this Agreement and the other provisions of this Agreement shall remain in effect and be construed as if such invalid or unenforceable provision or part had never been contained herein.

36.

Waiver.  Any waiver of any breach or default under this Agreement shall only be effective if in writing signed by the party against whom the waiver is sought to be enforced, and no waiver shall be implied by any other act or conduct or by any indulgence, delay or omission.  Any waiver shall only apply to the specific matter waived and only in the specific instance in which it is waived.

37.

Counterparts.  This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts will together constitute but one Agreement.

Richard Jones

 

•

To lead and guide the pre-selection, initial evaluation (including proof of concept and Phase 2 trials) and early discussion of potential licensing opportunities.

 

•

To undertake early due diligence work in regard to the target compound.

 

•

To champion prospective target compounds and gain appropriate internal approvals to allow colleagues in Business Development to start engaging a prospective partner.

 

•

To maintain a close interest in potential alliances/deals, after passing the leads to the BD group which is responsible for full commercial evaluation, negotiation and alliance management.

 

•

To establish an extensive global network with an array of discoverers/developers including pharma companies, venture capitalists, biotechs, investment banks, universities, and other research centers in order to stay abreast of developments in the academia and the drug industry and to position Aspreva as the partner of choice in appropriate potential deals.

 

•

To maintain links with appropriate Key Opinion Leaders and research centers in order to access latest medical thinking as well as have access to the best places for clinical studies.

 

•

To develop and maintain knowledge of the latest scientific and medical thinking in order to pro-actively identify potential deal targets.

 

•

To build a team of individuals to support the Vice President of Search, Discovery & Evaluation in his or her endeavours; to mentor and develop the team, and to encourage innovation and commitment.

 

•

To work closely with the senior management team to keep them appraised on potential leads being identified.

 

•

To manage the departmental budget and meet required goals.

•

Strong scientific and medical background with a thorough grounding in drug development.  An MD is essential, preferably an internist.

•

The necessary strategic skills to identify potential label expansions and the persuasive and logical manner necessary to champion a potential partnership or product.

•

An intelligent, creative and articulate individual who can relate to people at all levels of an organization and possesses excellent communication skills

•

Innovation

•

Leadership skills - A progressive track record of managing employees at many levels

•

Passion for medicine and drug development

•

Relationship building skills

•

Strong analytical ability

•

Commitment and tenacity

•

Excellent presentation skills

•

Persuasive style

•

Imagination and passion

 

(a)

“Affiliate” means a corporation that is an affiliate of the Corporation under the Securities Act (British Columbia), as amended from time to time.

 

(b)

“Change in Control” of the Corporation shall be deemed to have occurred:

 

(i)

if a merger, amalgamation, arrangement, consolidation, reorganization or transfer takes place in which Equity Securities of the Corporation possessing more than 50% of the total combined voting power of the Corporation’s outstanding Equity Securities are acquired by a person or persons different from the persons holding those Equity Securities immediately prior to such transaction, and the composition of the Board following such transaction is such that the directors of the Corporation prior to the transaction constitute less than 50% of the Board membership following the transaction, except that no Change in Control will be deemed to occur if such merger, amalgamation, arrangement, consolidation, reorganization or transfer is with any subsidiary or subsidiaries of the Corporation;

 

(ii)

if any person, or any combination of persons (different from those person(s) holding Equity Securities prior to the date hereof) acting jointly or in concert by virtue of an agreement, arrangement, commitment or understanding shall acquire or hold, directly or indirectly, 50% or more of the voting rights attached to all outstanding Equity Securities; or

 

(iii)

if any person, or any combination of persons (different from those person(s) holding Equity Securities prior to the date hereof) acting jointly or in concert by virtue of an agreement, arrangement, commitment or understanding shall acquire or hold, directly or indirectly, the right to appoint a majority of the directors of the Corporation; or

 

(iv)

if the Corporation sells, transfers or otherwise disposes of all or substantially all of its assets, except that no Change of Control will be deemed to occur if such sale or disposition is made to a subsidiary or subsidiaries of the Corporation.

 

(c)

“Base Salary” shall mean the annual base salary, as referred to in Section 2 (Base Salary), and as adjusted from time to time in accordance with Section 4 (Annual Review), of the Employment Agreement.

 

(d)

“Bonus” shall mean the bonus referred to in Section 5 (Performance Bonus) of the Employment Agreement.

 

(e)

“Cause” shall have the meaning set out in Section 17 (Termination by the Corporation for Cause) of the Employment Agreement.

 

(f)

“Date of Termination” shall mean, if your employment is terminated, the date specified in the Notice of Termination.

 

(g)

“Equity Security” in respect of a security of the Corporation, shall have the meaning ascribed thereto in Part II of the Securities Act (British Columbia), as it existed on the date of this Agreement, and also means any security carrying the right to convert such security into, exchange such security for, or entitling the holder to subscribe for, any equity security, or into or for any such convertible or exchangeable security or security carrying a subscription right.

 

(h)

“Good Reason” shall mean the occurrence of one or more of the following events, without your express written consent, within 12 months of Change in Control:

 

(i)

a material change in your status, position, authority or responsibilities that does not represent a promotion from or represents an adverse change from your status, position, authority or responsibilities in effect immediately prior to the Change in Control;

 

(ii)

a material reduction by the Corporation, in the aggregate, in your Base Salary, or incentive, retirement, health benefits, bonus or other compensation plans provided to you immediately prior to the Change in Control, unless an equitable arrangement has been made with respect to such benefits in connection with a Change in Control;

 

(iii)

a failure by the Corporation to continue in effect any other compensation plan in which you participated immediately prior to the Change in Control (except for reasons of non-insurability), including but not limited to, incentive, retirement and health benefits, unless an equitable arrangement has been made with respect to such benefits in connection with a Change in Control;

 

(iv)

any request by the Corporation or any affiliate of the Corporation that you participate in an unlawful act; or

 

(v)

any purported termination of your employment by the Corporation after a Change in Control which is not effected pursuant to a Notice of Termination satisfying the requirements of clause (i) below and for the purposes of this Agreement, no such purported termination shall be effective.

 

(i)

“Notice of Termination” shall mean a notice, in writing, communicated to the other party in accordance with Section 42 below, which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated.

 

(j)

“Potential Change in Control” of the Corporation shall be deemed to have occurred if:

 

(i)

the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

(ii)

any person (including the Corporation) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

 

(iii)

the Board adopts a resolution to the effect that, for the purposes of this Agreement, a Potential Change in Control of the Corporation has occurred.

 

(a)

If your employment shall be terminated by the Corporation for Cause or by you other than for Good Reason, the terms of the Employment Agreement shall govern and the Corporation shall have no further obligations to you under this Agreement.

 

(b)

If your employment by the Corporation shall be terminated by you for Good Reason or by the Corporation other than for Cause, then you shall be entitled to the payments and benefits provided below:

 

(i)

subject to the withholding of all applicable statutory deductions, the Corporation shall pay you a lump sum equal to 12 months’ Base Salary, as referred to in Section 2 (Base Salary) and as adjusted from time to time in accordance with Section 4 (Annual Review) of the Employment Agreement, plus other sums owed for arrears of salary, vacation pay and, if awarded, Bonus;

 

(ii)

to the extent permitted by law and subject to the terms and conditions of any benefit plans in effect from time to time, the Corporation shall maintain the benefits and payments set out in Section 6 (Benefits) of the Employment Agreement during the 12 month period;

 

(iii)

the Corporation shall arrange for you to be provided with such outplacement career counselling services as are reasonable and appropriate, to assist you in seeking new executive level employment; and

 

(iv)

all incentive stock options and trust shares granted to you by the Corporation under any stock option and/or trust share agreement that is entered into between you and the Corporation and is outstanding at the time of termination of your employment, which incentive stock options and or trust shares have not yet vested, shall immediately vest upon the termination of your employment and shall be fully exercisable by you in accordance with the terms of the agreement or agreements under which such options were granted.

 

(a)

“Confidential Information”, subject to the exemptions set out in Section 2.8, shall mean any information relating to Aspreva’s Business (as hereinafter defined), whether or not conceived, originated, discovered, or developed in whole or in part by you, that is not generally known to the public or to other persons who are not bound by obligations of confidentiality and:

 

(i)

from which Aspreva derives economic value, actual or potential, from the information not being generally known; or

 

(ii)

in respect of which Aspreva otherwise has a legitimate interest in maintaining secrecy;

 

(iii)

all proprietary information licensed to, acquired, used or developed by Aspreva in its search and development activities including but not restricted to the development and commercialization of drugs for rare diseases and conditions and orphan drugs as defined by the U.S. Orphan Drug Act, other scientific strategies and concepts, designs, know-how, information, material, formulas, processes, research data and proprietary rights in the nature of copyrights, patents, trademarks, licenses and industrial designs;

 

(iv)

all information relating to Aspreva’s Business, and to all other aspects of Aspreva’s structure, personnel, and operations, including financial, clinical, regulatory, marketing, advertising and commercial information and strategies, customer lists, compilations, agreements and contractual records and correspondence; programs, devices, concepts, inventions, designs, methods, processes, data, know-how, unique combinations of separate items that is not generally known and items provided or disclosed to Aspreva by third parties subject to restrictions on use or disclosure;

 

(v)

all know-how relating to Aspreva’s Business including, all biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, safety, manufacturing and quality control data and information, and all applications, registrations, licenses, authorizations, approvals and correspondence submitted to regulatory authorities;

 

(vi)

all information relating to the businesses of competitors of Aspreva including information relating to competitors’ research and development, intellectual property, operations, financial, clinical, regulatory, marketing, advertising and commercial strategies, that is not generally known;

 

(vii)

all information provided by Aspreva’s agents, consultants, lawyers, contractors, licensors or licensees to Aspreva and relating to Aspreva’s Business; and

 

(viii)

all information relating to your compensation and benefits, including your salary, vacation, stock options, rights to continuing education, perquisites, severance notice, rights on termination and all other compensation and benefits, except that you shall be entitled to disclose such information to your bankers, advisors, agents, consultants and other third parties who have a duty of confidence to you and who have a need to know such information in order to provide advice, products or services to you.

 

(b)

“Inventions” shall mean any and all discoveries, developments, enhancements, improvements, concepts, formulas, processes, ideas, writings, whether or not reduced to practice, industrial and other designs, patents, patent applications, provisional patent applications, continuations, continuations-in-part, substitutions, divisionals, reissues, renewals, re-examinations, extensions, supplementary protection certificates or the like, trade secrets or utility models, copyrights and other forms of intellectual property including all applications, registrations and related foreign applications filed and registrations granted thereon.

 

(c)

“Work Product” shall mean any and all Inventions and possible Inventions relating to Aspreva’s Business resulting from any work performed by you for Aspreva that you may invent or co-invent during your involvement in any capacity with Aspreva, except those Inventions invented by you entirely on your own time that do not relate to Aspreva’s Business or do not derive from any equipment, supplies, facilities, Confidential Information or other information, gained, directly or indirectly, by you from or through your involvement in any capacity with Aspreva.

 

(d)

“Aspreva’s Business” shall mean the businesses actually carried on by Aspreva, directly or indirectly, whether under an agreement with or in collaboration with, any other party including but not exclusively, the development and commercialization of drugs for rare diseases and conditions and orphan drugs as defined by the U.S. Orphan Drug Act.

 

(a)

use or copy Confidential Information or your recollections thereof;

 

(b)

publish or disclose Confidential Information or your recollections thereof to any person other than to employees of Aspreva who have a need to know such Confidential Information for their work for Aspreva;

 

(c)

permit or cause any Confidential Information to be used, copied, published, disclosed, translated or adapted except as otherwise expressly permitted by this Agreement;

 

(d)

permit or cause any Confidential Information to be stored off the premises of Aspreva, including permitting or causing such Information to be stored in electronic format on personal computers, except in accordance with written procedures of Aspreva, as amended from time to time in writing; or

 

(e)

communicate the Confidential Information or your recollections thereof to another employee of Aspreva in a public place or using methods of communication that are capable of being intercepted (such as unencrypted messages using the internet or cellular phones) or overheard, without the written permission of Aspreva.

 

(a)

information that is already known to you, though not due to a prior disclosure by Aspreva or by a person who obtained knowledge of the information, directly or indirectly, from Aspreva;

 

(b)

information disclosed to you by another person who is not obliged to maintain the confidentiality of that information and who did not obtain knowledge of the information, directly or indirectly, from Aspreva;

 

(c)

information that is developed by you independently of Confidential Information received from Aspreva and such independent development can be documented by you;

 

(d)

other particular information or material which Aspreva expressly exempts by written instrument signed by Aspreva;

 

(e)

information or material that is in the public domain through no fault of your own; and

 

(f)

information or material that you are obligated by law to disclose, to the extent of such obligation, provided that:

 

(i)

in the event that you are required to disclose such information or material, then, as soon as you become aware of this obligation to disclose, you will provide Aspreva with prompt written notice so that Aspreva may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement;

 

(ii)

if Aspreva agrees that the disclosure is required by law, it will give you written authorization to disclose the information for the required purposes only;

 

(iii)

if Aspreva does not agree that the disclosure is required by law, this Agreement will continue to apply, except to the extent that a Court of competent jurisdiction orders otherwise; and

 

(iv)

if a protective order or other remedy is not obtained or if compliance with this Agreement is waived, you will furnish only that portion of the Confidential Information that is legally required and will exercise all reasonable efforts to obtain confidential treatment of such Confidential Information.

 

(a)

making patent applications for your Work Product, including instructions to lawyers and/or patent agents as to the characteristics of your Work Product in sufficient detail to enable the preparation of a suitable patent specification, to execute all formal documentation incidental to an application for letters patent and to execute assignment documents in favour of Aspreva for such applications;

 

(b)

making applications for all other forms of intellectual property registration relating to your Work Product;

 

(c)

prosecuting and maintaining the patent applications and other intellectual property relating to your Work Product; and

 

(d)

registering, maintaining and enforcing the patents and other intellectual property registrations relating to your Work Product.

The terms will be specified in detail in your employee benefit booklet. The broad terms are outlined below