Sample Business Contracts


Employment Agreement - EpiCept Corp. and Robert W. Cook

Employment Forms

  • Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
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  • Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
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                              EMPLOYMENT AGREEMENT

         AGREEMENT, dated as of October 28, 2004 (the "Effective Date") by and
between EpiCept, a Delaware corporation (together with its successors and
assigns, the "Company"), and Robert W. Cook (the "Executive").

                                   WITNESSETH:

         WHEREAS, the Company desires to employ the Executive as its Chief
Financial Officer and to enter into an agreement embodying the terms of such
employment; and

         WHEREAS, the Executive desires to accept such employment with the
Company and serve on the Board, subject to the terms and provisions of this
Agreement;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (collectively, the
"Parties") agree as follows:

         1. DEFINITIONS. Capitalized terms not otherwise defined herein shall
have the meanings set forth in Exhibit A.

         2. TERM. The Company hereby employs the Executive under this Agreement,
and the Executive hereby accepts such employment, for the Term. The Term shall
commence as of the Effective Date and shall end on December 31, 2006; provided,
however, that the Term shall thereafter be automatically extended for unlimited
additional one-year periods unless, at least two (2) months prior to the
then-scheduled date of expiration of the Term, either (x) the Company gives
notice to the Executive that it is electing not to so extend the Term or (y) the
Executive gives notice to the Company that he is electing not to so extend the
Term. Notwithstanding the foregoing, the Term may be earlier terminated in
strict accordance with the provisions of Section 9, in which event the
Executive's employment hereunder shall expire.

         3. POSITIONS, DUTIES AND LOCATION.

            (a) During the Term, the Executive shall serve as the Chief
Financial Officer of the Company; shall have all authorities, duties and
responsibilities customarily exercised by an individual serving in those
positions at entities of the size and nature of the Company; shall be assigned
no duties or responsibilities that are materially inconsistent with, or that
materially impair his ability to discharge, the foregoing duties and
responsibilities; and shall report solely and directly to the Chief Executive
Officer, or his designee.

            (b) During the Term, the Executive shall devote substantially all of
his business time and efforts to the business and affairs of the Company.
However, nothing


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in this Agreement or elsewhere shall preclude the Executive from: (i) serving on
the boards of a reasonable number of business entities, trade associations and
charitable organizations; provided that prior to accepting appointment to any
board of a business entity or trade association, the Executive shall obtain the
approval of the Board, which approval shall not be unreasonably withheld, (ii)
engaging in charitable activities and community affairs, (iii) accepting and
fulfilling a reasonable number of speaking engagements, and (iv) managing his
personal investments and affairs; provided that such activities do not either
individually or in the aggregate materially interfere with the proper
performance of his duties and responsibilities hereunder, or in any way create
or present a conflict of interest. Exhibit B sets forth a list of boards of
business entities and trade associations on which the Executive serves as of the
Effective Date.

            (c) During the Term, the Executive's principal office, and principal
place of employment, shall be at the Company's headquarters.

         4. BASE SALARY. Commencing as of the Effective Date, the Executive
shall receive a Base Salary of $225,000; provided that the Base Salary shall be
increased to $250,000 upon the earlier of (i) an IPO or (ii) a Change in
Control. The Base Salary shall be payable in accordance with the regular payroll
practices applicable to senior executives of the Company generally, but no less
frequently than monthly. The Base Salary shall be reviewed no less frequently.
than annually during the Term for increase in the discretion of the Board (or
its compensation committee). The Base Salary shall not be decreased at any time,
or for any purpose, during the Term (including, without limitation, for the
purpose of determining benefits due under Section 9) without the prior written
consent of the Executive.

         5. ANNUAL INCENTIVE AWARDS.

            (a) The Executive shall be eligible for an annual incentive award in
respect of each calendar year during the Term. The Executive's annual target
incentive opportunity (the "Target"), shall equal 25% of his Base Salary, with
no maximum potential award.

            (b) The amount of the incentive award referred to in this Section 5,
which amount shall be determined by the Board or any compensation committee
thereof, is to be (i) determined and paid as promptly as reasonably practicable
following the close of the calendar year to which such award relates and (ii)
paid no later than the earlier of (x) the date that other senior executives of
the Company are paid corresponding awards and (y) 90 days after the close of the
calendar year to which it relates.

         6. INITIAL STOCK OPTION AWARD.

            (a) Upon the occurrence of an IPO, the Executive shall be granted a
ten-year Stock Option pursuant to a Stock Option Agreement in substantially the
form attached hereto as Exhibit C (the "Initial Stock Option Award").

         7. OTHER INCENTIVES.


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<PAGE>

            (a) ADDITIONAL LONG-TERM INCENTIVES. During the Term, the Executive
shall be eligible for additional long-term incentives (including, without
limitation, additional Stock Option grants), and for special awards, in the sole
discretion of the Board or its compensation committee. The Executive shall also
be eligible to receive an additional grant of .5% of the post-IPO fully diluted
shares of the Company's common stock within one year following the consummation
of an IPO, which grant shall be made at the ten current fair market value.

            (b) SUBSTITUTE INCENTIVES. In the event that (i) a Change in Control
occurs prior to an IPO, and prior to December 31, 2004, or (ii) neither a Change
in Control, nor an IPO, occurs prior to December 31, 2004, then in each case the
Company shall provide the Executive with an appropriate substitute for the
initial Stock Option Award.

         8. OTHER BENEFITS.

            (a) EMPLOYEE AND FRINGE BENEFITS. During the Term, the Executive
shall be entitled to participate in all employee benefit plans, programs and
arrangements, and all fringe benefits and perquisites, made available generally
to other senior executives of the Company. The Executive shall be entitled to
participate in all such plans, programs, arrangements, fringe benefits, and
perquisites at a level, and on terms and conditions, that are commensurate with
his positions and responsibilities at the Company and no less favorable to him
than to other senior executives of the Company generally. The Executive shall be
entitled to post-retirement welfare and other benefits on no less favorable a
basis than that applying generally to other senior executives of the Company.
Nothing in the preceding three sentences of this Section 8(a) shall be construed
to require the Company to establish or maintain any particular employee benefit
plan, program or arrangement, or any particular fringe benefit or perquisite,
except as expressly set forth elsewhere in this Agreement. The Executive also
shall be entitled, during the Term, to (i) receive such additional fringe
benefits and perquisites as the Company may, in its discretion, from time to
time provide; and (ii) no less than twenty (20) days' paid vacation per calendar
year (which, if not used, may be carried over from year to year, up to a maximum
of forty (40) accrued vacation days).

            (b) REIMBURSEMENT OF BUSINESS AND OTHER EXPENSES. The Executive
shall be promptly reimbursed for all expenses reasonably incurred by him in
connection with his service under this Agreement, subject to documentation in
accordance with reasonable policies previously communicated to him in writing.
The Executive shall also be promptly reimbursed for any and all expenses
(including, without limitation, attorneys' fees and other charges of counsel)
reasonably incurred by him in connection with the negotiation, documentation and
implementation of these employment arrangements.

         9. TERMINATION OF EMPLOYMENT.


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<PAGE>

            (a) TERMINATION DUE TO DEATH. In the event that the Executive's
employment hereunder is terminated due to his death, the Term shall expire and
his estate or his beneficiaries (as the case may be) shall be entitled to the
following:

               (i) an amount, payable in a lump sum promptly following the date
of his death, equal to (x) one fourth of his Base Salary times (y) a fraction,
the numerator of which is the number of days he is employed with the Company in
the calendar year of his death, and the denominator of which is the number of
days in such year.

               (ii) each outstanding Stock Option, to the extent that such Stock
Option is not then vested and exercisable, shall (x) become vested and
exercisable as of the date of death with respect to fifty percent (50%) of any
securities and other property subject to it for which it is not then vested and
exercisable; (y) become vested and exercisable with respect to the remainder of
such securities and other property ratably and quarterly over two (2) years
immediately following the date of death; and remain exercisable for all
securities and other property for which it is or becomes exercisable, through at
least the ninetieth (90th) day after it becomes fully vested and exercisable and
the first anniversary of the date of this death, but in no event beyond its
maximum stated term; and

               (iii) the benefits described in Section 9(i).

            (b) TERMINATION DUE TO DISABILITY. In the event that the Executive's
employment hereunder is terminated due to Disability, the Term shall expire and
he shall be entitled to the following:

               (i) an amount, payable in a lump sum promptly following the
Termination Date, equal to (x) one fourth of his Base Salary times (y) a
fraction, the numerator of which is the number of days he is employed with the
Company in the calendar year of the termination of his employment hereunder, and
the denominator of which is the number of days in such year;

               (ii) each outstanding Stock Option shall (x) become vested and
exercisable as of the Termination Date with respect to fifty percent (50%) of
any securities and other property subject to it for which it is not then vested
and exercisable; (x) become vested and exercisable with respect to the remainder
of any such securities and other property ratably and quarterly over the two (2)
years immediately following the Termination Date; and (z) remain exercisable for
all securities and other property for which it is or becomes exercisable,
through at least the later of the ninetieth (90th) day following the date upon
which the of such Stock Option becomes fully vested and exercisable and the
first anniversary of the Termination Date, but in no event beyond its maximum
stated term; and

               (iii) the benefits described in Section 9(i).

No termination of the Executive's employment hereunder for Disability shall be
effective unless (x) the Executive first gives fifteen (15) days' written notice
of such termination to


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<PAGE>

the Company or (y) the Company first gives fifteen (15) days' written notice of
such termination to the Executive.

            (c) TERMINATION FOR CAUSE. In the event that the Executive's
employment hereunder is terminated for Cause, the Term shall expire and he shall
be entitled to (x) the right to exercise each outstanding Stock Option, to the
extent that such Stock Option is vested or exercisable as of the Termination
Date, for at least the lesser of thirty (30) days following the Termination Date
and the remainder of its maximum stated term and (y) the benefits described in
Section 9(i).

            (d) TERMINATION WITHOUT CAUSE. In the event that the Executive's
employment hereunder is terminated by the Company other than (w) due to death in
accordance with Section 9(a); (x) for Disability in accordance with Section
9(b); (y) for Cause in accordance with Section 9(c)(i); or (z) by expiration of
the Term pursuant to notice of non-extension in accordance with Section 2, the
Term shall expire and he shall be entitled to:

               (i) an amount, payable in a lump sum promptly following the
Termination Date, equal to (w) one and one fourth times (x) his Base Salary
times (y) the number of whole and partial months remaining in the then-scheduled
Term (but not more than 12 or less than 6) divided by (z) 12;

               (ii) an amount, payable in a lump sum promptly following the
Termination Date, equal to (x) one fourth of his Base Salary times (y) a
fraction, the numerator of which is the number of days he is employed with the
Company in the calendar year of the termination of his employment hereunder, and
the denominator of which is the number of days in such year;

               (iii) each outstanding Stock Option shall (x) become vested and
exercisable as of the Termination Date with respect to fifty percent (50%) of
any securities and other property subject to it for which it is not then vested
or exercisable; (y) become vested and exercisable with respect to the remainder
of any such securities and other property over the two (2) years immediately
following the Termination Date; and (z) remain exercisable, for all securities
and other property for which it is or becomes exercisable, through at least the
later of the ninetieth (90th) day following the date upon which such Stock
Option becomes fully vested and exercisable and the first anniversary of the
Termination Date, but in no event beyond its maximum stated term; and

               (iv) the benefits described in Section 9(i).

            (e) CONSTRUCTIVE TERMINATION WITHOUT CAUSE. In the event that a
Constructive Termination Without Cause occurs, the Term shall expire and the
Executive shall have the same entitlements as provided under Section 9(d) in the
case of a termination without Cause.

            (f) VOLUNTARY TERMINATION. In the event that the Executive
terminates his employment hereunder prior to the then-scheduled expiration of
the Term on his own initiative, other than by death, for Disability or in a
Constructive Termination


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<PAGE>

Without Cause, the Term shall expire and he shall have the same entitlements as
provided in Section 9(c)(ii) in the case of a termination for Cause. A voluntary
termination under this Section 9(f) shall not be deemed a breach of this
Agreement.

            (g) CHANGE IN CONTROL AFTER AN IPO. In the event that the
Executive's employment hereunder (x) is terminated after an IPO and in
anticipation of, or within one year following, a Change in Control and (y) such
termination is governed by Section 9(d) or 9(e) (relating to terminations
without Cause), then the Executive shall, in lieu of the benefits described in
Sections 9(d)(i) and 9(d)(iii), be entitled to:

               (i) an amount, payable in a lump sum promptly following the
Termination Date, equal to (w) one and one fourth times (x) his Base Salary
times (y) the number of whole and partial months remaining in the then-scheduled
Term (but not more than 18 nor less than 12) divided by (z) 12; and

               (ii) have each outstanding Stock Option (x) become vested and
exercisable as of the Termination Date with respect to fifty percent (50%) of
any securities and other property subject to it for which it is not then vested
and exercisable; (y) become vested and exercisable with respect to the remainder
of any such securities and other property ratably and monthly over the year
immediately following the Termination Date; and (z) remain exercisable, for all
securities and other property for which it is or becomes exercisable, through at
least the later of the first anniversary of the Termination Date and the
ninetieth (90th) day following the date upon which it becomes fully vested and
exercisable, but in no event beyond its maximum stated term.

            (h) EXPIRATION OF THE TERM. In the event that the Executive's
employment hereunder terminates by expiration of the Term pursuant to notice of
non-extension in accordance with Section 2, the Executive shall be entitled:

               (i) to have any Stock Option that is, or becomes, vested or
exercisable as of the Termination Date (including, without limitation, pursuant
to Section 9(h)(ii) below) remain exercisable for at least the lesser of ninety
(90) days following such date and the remainder of its maximum stated term;

               (ii) the benefits described in Section 9(i).

            (i) MISCELLANEOUS.

               (i) On any termination of the Executive's employment hereunder,
he shall be entitled to:

                  (A) Base Salary through the Termination Date;

                  (B) the balance of any annual, long-term, or other incentive
award earned in respect to any period ending on or prior to the Termination
Date, or payable (but not yet paid) on or prior to the Termination Date;


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<PAGE>

                  (C) a lump-sum payment in respect of accrued but unused
vacation days at his Base Salary rate in effect as of the Termination Date;
provided that no payment shall be made in respect of more than forty (40)
accrued but unused vacation days;

                  (D) other or additional benefits in accordance with the terms
of the applicable plans, programs and arrangements of the Company and its
Affiliates (including, without limitation, Sections 6, 7, 8, 10 and 11 and any
Stock Option agreement); and

                  (E) payment, promptly when due, of all amounts due in
connection with the termination.

               (ii) In the event of any termination of his employment hereunder,
the Executive shall be under no obligation to seek other employment or otherwise
mitigate the obligations of the Company under this Agreement or otherwise, and
there shall be no offset against amounts or benefits due to the Executive under
this Agreement or otherwise on account of any remuneration or other benefit
earned or received by the Executive after such termination. Any amounts due
under this Section 9 are considered to be reasonable by the Company and are not
in the nature of a penalty.

         10. CHANGE IN CONTROL.

            (a) In the event that a Change in Control occurs while the Executive
is employed by the Company, each outstanding Stock Option shall (i) become
vested and exercisable as of the date of the Change in Control with respect to
fifty percent (50%) of any securities and other property subject to it for which
it is not then vested and exercisable; (ii) become vested and exercisable with
respect to the remainder of such securities and other property ratably and
quarterly over the two (2) years immediately following the Change in Control;
and (iii) remain exercisable through at least the later of the first anniversary
of the Change in Control and the ninetieth (90th) day after it becomes fully
vested and exercisable, but in no event after its maximum stated term.

            (b) If (I) the aggregate of all amounts and benefits due to the
Executive, under this Agreement or under any other plan, program, agreement or
arrangement of the Company or of any of its Affiliates, would, if received by
the Executive in full arid valued under Section 280G of the Code, constitute
"parachute payments" as such term is defined in and under Section 280G of the
Code (collectively, "280G Benefits"), and if (II) such aggregate would, if
reduced by all federal, state and local taxes applicable thereto, including the
excise tax imposed pursuant to Section 4999 of the Code, be less than the amount
the Executive would receive, after all taxes, if the Executive received
aggregate 280G Benefits equal (as valued under Section 280G of the Code) to only
three (3) times the Executive's "base amount," as defined in and under Section
280G of the Code, less $1.00, then (III) such cash 280G Benefits as the
Executive shall select shall (to the extent that the reduction of such cash 280G
Benefits can achieve the intended result) be reduced or eliminated to the extent
necessary so that the 280G Benefits received by the Executive will not
constitute parachute payments. The


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<PAGE>

determinations with respect to this Section 10(b) shall be made by an
independent auditor (the "Auditor") paid by the Company. The Auditor shall be
the Company's regular independent auditor unless the Executive reasonably
objects to the use of that firm, in which event the Auditor will be a nationally
recognized United States public accounting firm chosen by the Parties.

            (c) It is possible that after the determinations and selections made
pursuant to Section 10(b) the Executive will receive 280G Benefits that are, in
the aggregate, either more or less than the amount provided under Section 10(b)
(hereafter referred to as an "Excess Payment" or "Underpayment", respectively).
If it is established, pursuant to a final determination of a court or an
Internal Revenue Service proceeding that has been finally and conclusively
resolved, that an Excess Payment has been made, then the Executive shall
promptly repay the Excess Payment to the Company, together with interest on the
Excess Payment at the applicable federal rate (as defined in and under Section
1274(d) of the Code) from the date of the Executive's receipt of such Excess
Payment until the date of such repayment. In the event that it is determined (x)
by arbitration pursuant to Section 15, (y) by a court or (z) by the Auditor upon
request by any of the Parties, that an Underpayment has occurred, the Company
shall promptly pay an amount equal to the Underpayment to the Executive,
together with interest on such amount at the applicable federal rate from the
date such amount would have been paid to the Executive had the provisions of
Section 10(b) not been applied until the date of payment.

         11. INDEMNIFICATION.

            (a) If the Executive is made a party, is threatened to be made a
party, or reasonably anticipates being made a party, to any Proceeding by reason
of the fact that he is or was a director, officer, member, employee, agent,
manager, trustee, consultant or representative of the Company or any of its
Affiliates or is or was serving at the request of the Company or any of its
Affiliates, or in connection with his service hereunder, as a director, officer,
member, employee, agent, manager, trustee, consultant or representative of
another Person, or if any Claim is made, is threatened to be made, or is
reasonably anticipated to be made, that arises out of or relates to the
Executive's service in any of the foregoing capacities, then the Executive shall
promptly be indemnified and held harmless, to the extent then permitted or
authorized with respect to any other director or officer of the Company, against
any and all costs, expenses, liabilities and losses (including, without
limitation, attorneys' and other professional fees and charges, judgments,
interest, expenses of investigation, penalties, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement, incurred or suffered by
the Executive in connection therewith or in connection with seeking to enforce
his rights under this Section 11(a), and such indemnification shall continue as
to the Executive even if he has ceased to be a director, officer, member,
employee, agent, manager, trustee, consultant or representative of the Company
or other Person and shall inure to the benefit of his heirs, executors and
administrators. The Executive shall be entitled to prompt advancement of any and
all costs and expenses (including, without limitation, attorneys' and other
professional fees and charges) incurred by him personally in connection with any
such Proceeding or Claim, or in connection with seeking to enforce his rights
under


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<PAGE>

this Section 11(a), to the extent then permitted or authorized with respect to
any other director or officer of the Company, any such advancement to be made
within fifteen (15) days after the Executive gives written notice, supported by
reasonable documentation, requesting such advancement. Such notice shall include
an undertaking by the Executive to repay the amount advanced if he is ultimately
determined not to be entitled to indemnification against such costs and
expenses. Nothing in this Agreement shall operate to limit or extinguish any
right to indemnification, advancement of expenses, or contribution that the
Executive would otherwise have (including, without limitation, by agreement or
under applicable law).

            (b) A directors' and officers' liability insurance policy (or
policies) shall be kept in place, during the Term and thereafter until at least
the sixth anniversary of the Termination Date, providing coverage to the
Executive that is no less favorable to him in any respect (including, without
limitation, with respect to scope, exclusions, amounts, and deductibles) than
the coverage then being provided to any other present or former officer or
director of the Company.

         12. RESTRICTIVE COVENANTS.

            (a) During the Term and at all times thereafter, the Executive shall
not, without the prior written consent of the Company, divulge, disclose or make
accessible to any other Person any Confidential Information except (v) to the
Company and its Affiliates, or to any authorized (or apparently authorized)
agent or representative of any of them, (w) in connection with performing his
duties hereunder, (x) when required to do so by law or by a court, governmental
agency, legislative body, arbitrator or other Person with apparent jurisdiction
to order him to divulge, disclose or make accessible such information, (y) in
the course of any Proceeding under Section 12(c) or 15 or (z) in confidence to
an attorney or other professional advisor for the purpose of securing
professional advice. In the event that the Executive is required to disclose any
Confidential Information pursuant to clause (x) or (y) of the immediately
preceding sentence, he shall (A) promptly give the Company notice that such
disclosure is or may be made and (B) cooperate with the Company, at its
reasonable request and sole expense, in seeking to protect the confidentiality
of the Confidential Information.

            (b) The Executive shall not, for his own benefit or the benefit of
any other Person, without the prior written consent of the Company and other
than in connection with his services hereunder:

               (i) during the Term, and in the event of any termination of the
Executive's employment hereunder, for the remainder of the then-scheduled Term,
provided that such period shall be no less than twelve (12) months and shall not
exceed eighteen (18) months (such period, the "Restricted Period"), perform
material services for, or otherwise have material involvement with (whether as
an officer, director, partner, consultant, security holder, owner, employee,
independent contractor or otherwise), any Person that competes materially
(whether directly or indirectly) with the Company in the Business in the United
States; provided further that the Executive may in any event (x) own up to a
five percent (5%) passive ownership interest in any public or private entity


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and (y) be employed by, or otherwise have material association with, any
business that competes materially with the Company in the Business if his
employment or association does not involve competing with the Company in the
Business.

               (ii) during the Restricted Period, personally solicit, aid in the
solicitation of, induce or otherwise encourage (whether directly or indirectly)
any individual who is, at the time of such encouragement, employed as an
executive, highly-compensated employee, or managerial/supervisory employee of
the Company, to cease such employment; or

               (iii) during the Restricted Period, personally solicit, aid in
the solicitation of, induce, or otherwise encourage (whether directly or
indirectly) any Person that was a customer of the Company at any time during the
Term for the purpose of (a) selling services or products to such Person in
competition with the Company in the Business or (b) inducing such Person to
cancel, transfer or cease doing Business in whole or in part with the Company.

            (c) The Executive acknowledges and agrees that the Company's
Business and the services it provides are highly competitive, and that the
restrictions contained in this Section 12 are reasonable and necessary to
protect the Company's legitimate business interests. The Executive further
acknowledges that any actual or prospective breach may irreparably cause damage
to the Company for which money damages may not be adequate. Therefore, in the
event of any actual or threatened breach by the Executive of any of the
provisions of Section 12(a) or 12(b) above, the Company shall each be entitled
to seek, through arbitration in accordance with Section 15 or from any court
with jurisdiction over the matter and the Executive, temporary, preliminary and
permanent equitable/injunctive relief restraining the Executive from violating
such provision and to seek, in addition, but solely through arbitration in
accordance with Section 15, money damages, together with any and all other
remedies available under applicable law.

         13. ASSIGNABILITY; BINDING NATURE.

            (a) This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors, heirs (in the case of the
Executive) and assigns.

            (b) No rights or obligations of the Company under this Agreement may
be assigned or transferred by it except that such rights and obligations may be
assigned or transferred pursuant to a merger, consolidation or other combination
in which the Company is not the continuing entity, or a sale or liquidation of
all or substantially all of the business and assets of the Company, provided
that the assignee or transferee is the successor to all or substantially all of
the business and assets of the Company and such assignee or transferee expressly
assumes the liabilities, obligations and duties of the Company as set forth in
this Agreement. In the event of any merger, consolidation, other combination,
sale of business and assets, or liquidation as described in the preceding
sentence, the Company shall use its best reasonable efforts to cause such
assignee or


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<PAGE>

transferee to promptly and expressly assume the liabilities, obligations and
duties of the Company hereunder.

            (c) No rights or obligations of the Executive under this Agreement
may be assigned or transferred by the Executive other than his rights to
compensation and benefits, which may be transferred only by will or by operation
of law, except to the extent otherwise provided in Section 17(e).

         14. REPRESENTATIONS.

            (a) The Company represents and warrants that (i) it is fully
authorized by action of its Board (and of any other Person or body whose action
is required) to enter into this Agreement and to perform its obligations under
it, (ii) the execution, delivery and performance of this Agreement by it does
not violate any applicable law, regulation, order, judgment or decree or any
agreement, arrangement, plan or corporate governance document of the Company or
any of its Affiliates, (collectively, "Company Arrangements") and (iii) upon the
execution and delivery of this Agreement by the Parties, this Agreement shall be
its valid and binding obligation, enforceable against it in accordance with its
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.

            (b) The Executive represents and warrants that (i) to the best of
his knowledge and belief, delivery and performance of this Agreement by him does
not violate any law or regulation applicable to the Executive, (ii) delivery and
performance of this Agreement by him does not violate any applicable order,
judgment or decree or any agreement to which the Executive is a party or by
which he is bound and (iii) upon the execution and delivery of this Agreement by
the Parties, this Agreement shall be a valid and binding obligation of the
Executive, enforceable against him in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights generally.

         15. RESOLUTION OF DISPUTES. Any Claim arising out of or relating to
this Agreement, any other agreement between the Executive and the Company or its
Affiliates, the Executive's employment with the Company, or any termination
thereof (collectively, "Covered Claims") shall (except to the extent otherwise
provided in Section 12(c) with respect to certain requests for injunctive
relief) be resolved by binding confidential arbitration, to be held in the
Borough of Manhattan in New York City, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect and
this Section 15. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The arbitrator(s) are
authorized to award, to the party that prevails with respect to any Covered
Claim, all costs and expenses (including, without limitation, reasonable
attorneys fees) reasonably incurred by such a party in resolving such Covered
Claims. Pending the resolution of any Covered Claim, the Executive (and his
beneficiaries) shall continue to receive all payments and benefits due under
this Agreement or otherwise, except to the extent that the arbitrators otherwise
provide.


                                       11
<PAGE>

         16. NOTICES. Any notice, consent, demand, request, or other
communication given to a Person in connection with this Agreement shall be in
writing and shall be deemed to have been given to such Person (x) when delivered
personally to such Person or (y), provided that a written acknowledgment of
receipt is obtained, five (5) days after being sent by prepaid certified or
registered mail, or two (2) days after being sent by a nationally recognized
overnight courier, to the address (if any) specified below for such Person (or
to such other address as such Person shall have specified by ten (10) days'
advance notice given in accordance with this Section 16) or (z), in the case of
the Company only, on the first business day after it is sent by facsimile to the
facsimile number set forth below (or to such other facsimile number as shall
have specified by ten (10) days' advance notice given in accordance with this
Section 16), with a confirmatory copy sent by certified or registered mail or by
overnight courier in accordance with this Section 16.


                                        
         If to the Company:                 EpiCept Corporation
                                            270 Sylvan Avenue
                                            Englewood Cliffs, NJ 07632
                                            Attn: Chief Executive Officer
                                            Fax #: (201) 837-0200

         If to the Executive:                        The address of his principal residence as it
                                            appears in the Company's records, with a copy to
                                            him (during the Term) at his principal office at the
                                            Company:

If to a beneficiary                         The address most recently specified by the
of the Executive:                           Executive or beneficiary.


         17. MISCELLANEOUS.

            (a) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement among the Parties concerning the specific subject
matter hereof and supersedes in its entirety, as of the Effective Date, any
prior employment agreement between the Executive and the Company, provided,
however, that nothing herein shall limit or reduce any right or benefit that
shall have accrued to the Executive as of the Effective Date under any prior
employment agreement or otherwise.

            (b) AMENDMENT OR WAIVER. No provision in this Agreement may be
amended unless such amendment is set forth in a writing .that expressly refers
to the provision of this Agreement that is being amended and that is signed by
the Executive and by an authorized (or apparently authorized) officer of the
Company. No waiver by any Person of any breach of any condition or provision
contained in this Agreement shall be deemed a waiver of any similar or
dissimilar condition or provision at the same or any prior or subsequent time.
To be effective, any waiver must be set forth in a writing signed by the waiving
Person and must specifically refer to the condition(s) or provision(s) of this
Agreement being waived.


                                       12
<PAGE>

            (c) CONFLICTS. In the event of any conflict between any provision of
this Agreement and any provision of any other Company Arrangement, the
provisions of this Agreement shall control unless the Executive otherwise agrees
in a writing that expressly refers to the provision of this Agreement whose
control he is waiving. There shall be no contractual or similar restrictions on
his right to terminate his employment with the Company, or on his
post-employment activities, other than restrictions expressly set forth in this
Agreement and restrictions enforceable solely through loss of benefits to which
he might otherwise be entitled.

            (d) HEADINGS. The headings of the Sections and sub-sections
contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this
Agreement.

            (e) BENEFICIARIES/REFERENCES. The Executive shall be entitled, to
the extent permitted under applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit hereunder following the
Executive's death by giving written notice thereof. In the event of the
Executive's death or a judicial determination of his incompetence, references in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.

            (f) SURVIVORSHIP. Except as otherwise set forth in this Agreement,
the respective rights and obligations of the Parties hereunder shall survive any
termination of the Executive's employment.

            (g) SEVERABILITY. To the extent that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement shall
remain in full force and effect so as to achieve the intentions of the Parties,
as set forth in this Agreement, to the maximum extent possible.

            (h) WITHHOLDING TAXES. The Company may withhold from any amount or
benefit payable under this Agreement taxes that it is required to withhold
pursuant to any applicable law or regulation.

            (i) GOVERNING LAW. This Agreement shall be governed, construed,
performed and enforced in accordance with its express terms, and otherwise in
accordance with the laws of the State of New Jersey, without reference to
principles of conflict of laws.

            (j) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed to be one and the same instrument. Signatures delivered
by facsimile shall be effective for all purposes.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.


                                       13
<PAGE>

                                                     EPICEPT CORPORATION

                                                     By:/s/ JOHN V. TALLEY, JR.
                                                        ------------------------
                                                     Name: John V. Talley, Jr.
                                                     Title: CEO

                                                     THE EXECUTIVE

                                                     /s/ Robert W. Cook
                                                     ---------------------------
                                                     Robert W. Cook


                                       14
<PAGE>

                                                                       EXHIBIT A

                                   DEFINITIONS

         a. "Affiliate" of a Person shall mean any Person that directly or
indirectly controls, is controlled by, or is under common control with, such
Person.

         b. "Agreement" shall mean this Employment Agreement, which includes for
all purposes its Exhibits.

         c. "Base Salary" shall mean the Executive's annualized base salary, as
in effect from time to time.

         d. "Board" shall mean the board of directors of the Company.

         e. "Business" shall mean any and all material businesses conducted by
the Company during the Term.

         f. "Cause" shall mean:

                  i. the Executive is convicted of, or pleads guilty or nolo
contendere to, a felony; or

                  ii. in carrying out his duties hereunder, the Executive
engages in conduct that constitutes willful gross neglect or willful gross
misconduct.

         g. "Change in Control" shall mean the occurrence of any of the
following events:

                  i. any "person", as such term is used as of the Effective Date
in Section 13(d) of the 1934 Act, or group of persons, becomes (directly or
indirectly) a "beneficial owner", as such term is used as of the Effective Date
in Rule 13d-3 promulgated under that Act, of fifty percent (50%) or more of the
Voting Securities of the Company (measured either by number of Voting Securities
or by voting power);

                  ii. a majority of the Board consists of individuals other than
"Incumbent Directors," which term means the members of the Board on the
Effective Date; provided that any individual becoming a director subsequent to
such date whose election or nomination for election was supported (other than in
connection with any actual or threatened proxy contest) by two-thirds of the
directors who then comprised the incumbent Directors shall be considered to be
an Incumbent Director; or

                  iii. (x) the Company combines with another entity and is the
surviving entity, or (y) all or substantially all of the assets or business of
the Company is disposed of pursuant to a sale, merger, consolidation,
liquidation, dissolution or other transaction or series of transactions
(collectively, a "Triggering Event") unless the holders of Voting Securities of
the Company immediately prior such Triggering Event beneficially own,


                                       1
<PAGE>

directly or indirectly, by reason of their ownership of Voting Securities of
such Company immediately prior to such Triggering Event, more than fifty percent
(50%) of the Voting Securities (measured both by number of Voting Securities and
by voting power) of (q) in the case of a combination in which such Company is
the surviving entity and (r) in any other case, the entity (if any) that
succeeds to substantially all of such Company's business and assets.

                  h. "Claim" shall include, without limitation, any claim,
demand, request, investigation, dispute, controversy, threat, discovery request,
or request for testimony or information.

                  i. "Code" shall mean the Internal Revenue Code of 1986, as
amended. Any reference to a particular section of the Code shall include any
provision that modifies, replaces or supersedes such section.

                  j. "Common Stock" shall mean Common Stock, par value $.000l,
of the Company.

                  k. "Confidential Information" shall mean all confidential or
proprietary information developed or used by the Company or its Affiliates
relating to their business, operations, employees, customers, suppliers or
distributors including, but not limited to: confidential or proprietary customer
lists, purchase orders, financial data, pricing information and price lists;
confidential or proprietary business plans and market strategies and
arrangements; confidential or proprietary books, records, manuals, advertising
materials, catalogues, correspondence, mailing lists, production data, sales
materials, sales records, purchasing materials, purchasing records, personnel
records and quality control records; confidential or proprietary trademarks,
copyrights and patents, and applications therefor; trade secrets; confidential
or proprietary inventions, processes, procedures, research records, market
surveys and marketing know-how; and confidential or proprietary technical
papers, software, computer programs, data bases and documentation thereof,
including but not limited to source codes, algorithms, processes, formulae and
flow charts. The term "Confidential Information" shall not include any document,
record, data compilation, or other information that is known or generally
available to the public, or within any trade or industry of the Company or any
of its Affiliates, other than as a result of the Executive's breach of Section
12(a).

                  l. "Constructive Termination Without Cause" shall mean a
termination by the Executive of his employment hereunder on thirty (30) days'
written notice given by him to the Company following the occurrence of any of
the following events without his express prior written consent, unless all
grounds for such termination shall have been fully cured within thirty (30) days
after the Executive gives notice to the Company requesting cure:

                  i. any failure to continue the Executive as President and
Chief Executive Officer;


                                       2
<PAGE>

                  ii. any material diminution in the Executive's
responsibilities or authorities; the assignment to him of duties that are
materially inconsistent with, or materially impair his ability to perform, the
duties then assigned to him; or any adverse change in the Executive's reporting
structure;

                  iii. any relocation of the Executive's principal office, or
principal place of employment, to a location that is more than fifty (50) miles
from (x) its location in Englewood Cliffs, New Jersey, as of the Effective Date
or (y) the Executive's residence in Connecticut as of the Effective Date;

                  iv. any material breach by the Company or any of its
Affiliates of any of their material obligations to the Executive;

                  v. any failure of the Company to obtain the assumption in
writing of its obligations under this Agreement by any successor to all or
substantially all of its business or assets within fifteen (15) days after any
reconstruction, amalgamation, combination, merger, consolidation, sale,
liquidation, dissolution or similar transaction; or

                  vi. any failure by the Parties (except for failure
attributable to failure by the Executive to negotiate reasonably and in good
faith) to promptly agree upon a substitute award in accordance with Section
7(b).

                  In addition, any termination by the Executive of his
employment hereunder, on at least thirty (30) days notice to the Company, during
the thirty (30) day period that immediately follows the one hundred eightieth
(180th) day after a Change in Control occurs, shall be deemed to be a
"Constructive Termination Without Cause".

            m. "Disability" shall mean the Executive's inability, with or
without reasonable accommodation and due to physical or mental incapacity, to
substantially perform his duties and responsibilities hereunder, or for an
aggregate of 180 days in any 365 day period.

            n. "Executive" shall have the meaning set forth in the preamble to
this Agreement, as modified by Section 17(e).

            o. "Fair Market Value", when used in respect of a security as of a
specified date, shall mean (x) the closing price of the security on the
principal national securities exchange or national market system on which such
security is then listed or traded, in each case as of the close of normal
trading on such date, or if such date is not a trading day or such security is
not traded on such date, on the most recent day preceding such date on which
such security was traded, and (y) if such security is not so listed or traded,
then the value as promptly agreed by the Company and the Executive, or, in
absence of such prompt agreement, fair market value as determined on a
going-forward basis without discount for lack of liquidity, minority status,
lack of control, contractual restrictions, or similar factors.

            p. "IPO" shall mean any public offering of equity securities of the
Company.


                                       3
<PAGE>
            q. "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.

            r. "1933 Act" shall mean the Securities Act of 1933, as amended.

            s. "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, estate, board, committee,
agency, body, employee benefit plan, or other person or entity.

            t. "Proceeding" shall include, without limitation, any actual,
threatened or reasonably anticipated action, suit or proceeding, whether civil,
criminal, administrative, investigative, appellate, formal, informal or other.

            u. "Stock Option" shall mean any compensatory option or warrant to
acquire securities of the Company or any of its Affiliates; any compensatory
stock appreciation right, phantom stock option or analogous right granted by or
on behalf of the Company or any o fits Affiliates; and any option or right
received in respect of any of the foregoing options or rights.

            v. "Termination Date" shall mean the date on which the Executive's
employment hereunder terminates in accordance with this Agreement.

            w. "Voting Securities" shall mean issued and outstanding securities
of any class or classes having general voting power, under ordinary
circumstances in the absence of contingencies, to elect, the members of the
board of directors, or other governing body, of the issuer.


                                       4
<PAGE>

                                                                       EXHIBIT B

                         SERVICE ON BOARDS OF DIRECTORS



                                      None.


                                       5
<PAGE>

                                                                       EXHIBIT C

                             STOCK OPTION AGREEMENT


         1. GRANT OF OPTION. EpiCept Corporation, a Delaware corporation
(together with its successors and assigns, the "Company"), hereby grants to
Robert W. Cook (the "Optionee"), effective as of [insert the date of the IPO]
(the "Grant Date"), an option to purchase an aggregate of [insert number that,
inclusive of shares currently under option but not to bridge warrants, equals
6.67% of the post-IPO fully diluted shares] shares of its Common Stock at a
price of $[INSERT A DOLLAR AMOUNT EQUAL TO 100% OF THE IPO PRICE] per share,
exercisable as set forth in, and subject to the terms and conditions of, this
Stock Option Agreement and the Employment Agreement dated as of October 28, 2004
between the Company and the Optionee (the "Employment Agreement").

         2. EXERCISABILITY OF OPTION.

                  (a) This option shall vest and become exercisable over a
48-month period (1/48 per month) on the last day of each month (beginning with
the month in which the Grant Date falls), and as of 12:01 a.m. on each such day,
and shall become fully exercisable as to all such shares no later that the last
day of the 48th month from the Grant Date.

                  (b) In the event that the Term of Employment is terminated in
a termination governed by Section 9(a), 9(b), 9(d) or 9(e) of the Employment
Agreement (relating to death, Disability, and without Cause terminations), this
option shall (x) become vested and exercisable as of the Termination Date with
respect to fifty percent (50%) of any securities and other property for which it
is not then vested and exercisable; (y) become vested and exercisable with
respect to the remainder of such securities and other property ratably and
quarterly over the two (2) years immediately following the Termination Date; and
(z) remain exercisable, for all securities and other property for which it is or
becomes exercisable, through the later of the ninetieth (90th) day following the
date upon which it becomes fully vested and exercisable and the first
anniversary of the Termination Date, but in no event beyond the tenth
anniversary of the Grant Date.

                  (c) In the event that the Term of Employment is terminated in
accordance with Section 9(c) or 9(f) of the Employment Agreement (relating to
Cause and voluntary terminations), this option, to the extent that it is or
becomes exercisable as of the Termination Date, shall remain fully exercisable
through the earlier of the thirtieth (30th) day following such date, and the
tenth anniversary of the Grant Date, at which time it shall expire to the extent
that it has not yet been exercised.

                  (d) In the event that the Term of Employment is terminated,
subsequent to an IPO and in anticipation of (or within one year following) a
Change in Control, in a termination that is governed by Section 9(d) or 9(e) of
the Employment Agreement (relating to terminations without Cause), Section 2(b)
above shall not apply and this option shall (x) become vested and exercisable as
of the Termination Date with respect to fifty percent (50%) of any securities
and other property for which it is not then vested and


                                       6
<PAGE>

exercisable; (y) become vested and exercisable with respect to the remainder of
such securities and other property ratably and monthly over the year immediately
following the Termination Date; and (z) remain exercisable, for all securities
and other property for which it is or becomes exercisable, through the later of
the ninetieth (90th) day following the date upon which it becomes fully vested
and exercisable and the first anniversary of the Termination Date, but in no
event beyond the tenth anniversary of the Grant Date.

                  (e) In the event that the Term of Employment terminates in a
termination governed by Section 9(h)(i) of the Employment Agreement (relating to
non-extension of the Term of Employment), this option shall, to the extent then
vested or exercisable (including, without limitation, pursuant to Section 3(f)
below), be and remain exercisable through the earlier of: the ninetieth (90th)
day following the Termination Date and the tenth anniversary of the Grant Date,
at which time it shall expire to the extent that it has not yet been exercised.

                  (f) In the event that the Term of Employment terminates in a
termination governed by Section 9(h)(ii) of the Employment Agreement, this
option shall become vested and exercisable as of the Termination Date to the
extent that it is then scheduled to become vested or exercisable on or before
the first anniversary of such date (had the Optionee's employment continued
indefinitely).

                  (g) Anything elsewhere to the contrary notwithstanding, upon
the occurrence of any Change in Control while the Optionee is employed with the
Company, this option (x) shall become vested and exercisable as of the date of
the Change in Control with respect to fifty percent (50%) of any securities and
other property for which it is not then vested and exercisable; (y) shall become
vested and exercisable with respect to the remainder of such securities and
other property ratably and monthly over the year immediately following the
Change in Control; and (z) shall remain exercisable, for all securities and
other property for which it is or becomes exercisable, through the later of the
first anniversary of the Change in Control and the ninetieth (90th) day after it
becomes fully vested and exercisable, but in no event beyond the tenth
anniversary of the Grant Date.

                  (h) Anything elsewhere to the contrary notwithstanding, this
option shall, to the extent that it has not then yet been exercised, expire at
11:59 p.m. on the tenth anniversary of the Grant Date.

         3. EXERCISE OF OPTION.

                  (a) METHOD OF EXERCISE. Subject to the conditions set forth in
this Stock Option Agreement, this option may, to the extent permitted by
applicable law, be exercised from time to time by delivery of written notice of
exercise to the Company from the Optionee. Such notice shall specify the total
number of shares to be purchased and shall be accompanied by payment in full (or
an arrangement for payment in full) in accordance with Section 3(b) below. Such
exercise shall be effective upon delivery to the Company of such written notice
together with the required payment (or arrangement for payment). This option may
be exercised for less than the full number of shares for which


                                       7
<PAGE>

the option is then exercisable, provided that no such exercise may be for any
fractional share.

                  (b) METHOD OF PAYMENT. Payment of the purchase price for
shares purchased upon an exercise of this option may, to the extent permitted by
applicable law, be made (i) by delivery to the Company of cash, a wire transfer
of available funds, or a check payable to the order of the Company in an amount
equal to the purchase price of such shares; (ii) by delivery to the Company of
shares of Common Stock then owned by the Optionee for at least six (6) months
having an aggregate Fair Market Value as of the date of delivery equal to the
purchase price of such shares; (iii) through reasonable cashless exercise
procedures that are from time to time established by the Company and that afford
the Optionee the opportunity to sell immediately some or all of the shares
underlying the exercised portion of this option in order to generate sufficient
cash to pay the option purchase price; or (iv) by any combination of (i), (ii),
or (iii). Statutory minimum tax obligations may be paid by "net exercise" (i.e.,
the Optionee's directing the Company to apply a portion of the option shares,
valued at Fair Market Value on the date if the exercise, against the taxes
resulting from exercise and/or exercise price).

                  (c) DELIVERY OF SHARES TENDERED IN PAYMENT OF PURCHASE PRICE.
Payment by delivery of shares may be effected by delivering one or more stock
certificates or by otherwise delivering shares to the Company's reasonable
satisfaction (including, without limitation, through an "attestation" procedure
that is reasonably acceptable to the Company), in each case accompanied by such
endorsements, stock powers, signature guarantees or other documents or
assurances as may reasonably be required by the Company. If a certificate or
certificates or other documentation representing shares in excess of the amount
required are delivered, a certificate (or other satisfactory evidence of
ownership) representing the excess number of shares shall promptly be returned
by the Company.

                  (d) DELIVERY OF OPTION SHARES. The Company shall, upon payment
in accordance with Section 3(a) above of the aggregate purchase price for the
number of shares purchased, make prompt delivery of such shares to the Optionee
and pay all original issue and transfer taxes and all other fees and expenses
incident to such delivery. All shares delivered upon any exercise of this option
shall, when delivered, be (i) duly authorized, validly issued, fully paid and
nonassessable, (ii) registered for sale, and for resale, under U.S. state and
federal securities laws to the extent that other shares of the same class are
then so registered or qualified and (iii) listed, or otherwise qualified, for
trading on any securities exchange or securities market on which shares of the
same class are then listed or qualified. To the extent that shares are not
promptly delivered to the Optionee when due, the Company shall promptly make the
Optionee whole for any resulting expense or loss of benefit. The Company shall
deliver cash in lieu of any fractional share.

         4. NONTRANSFERABILITY OF OPTION. This option is personal and no rights
granted hereunder may be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) nor shall any such rights be
subject to execution, attachment or similar process, except that this option may
be transferred in


                                       8
<PAGE>

whole or in part by will or the laws of descent and distribution. Any Person to
whom this option has been transferred in whole or in part in accordance with the
first sentence of this Section 4 shall, to the extent of the transfer, succeed
to the rights, and assume the obligations, of the Optionee under Sections 2, 3,
4 through 6 and 9 of this Stock Option Agreement.

         5. ADJUSTMENT PROVISIONS. In the event that, at any time after the
Grant Date, any merger, consolidation, reorganization, recapitalization,
spin-off, split-up, combination, modification of securities, exchange of
securities, liquidation, dissolution, share split, share dividend, other
distribution of securities or other property in respect of shares or other
securities (other than ordinary recurring cash dividends), or other change in
corporate structure or capitalization affecting the rights or value of
securities of any class then subject to this option occurs, appropriate
adjustment(s) shall promptly be made in the number and/or kind of securities
subject to this option and/or in the exercise price and/or in other terms and
conditions of this option, and/or appropriate provision(s) shall promptly be
made for supplemental distributions of cash, securities and/or other property,
so as to avoid dilution or enlargement of the rights of the Optionee and the
value represented by this option. If an event occurs that may require an
adjustment (or other action) pursuant to this Section 5, the Company shall
promptly deliver to the Optionee a certificate, signed by an officer of the
Company, setting forth in reasonable detail (x) the event in question and (y)
either the adjustment (or other action) being implemented and the method by
which such adjustment (or other action) was calculated or determined or the
reasons why the Company believes no adjustment (or other action) is needed.

         6. CHANGE IN CONTROL. In the event that holders of securities of any
class that is then subject to this option receive cash, securities or other
property in respect of such securities in connection with a Change in Control
transaction, the Company shall take such steps as are necessary to enable the
Optionee (if he so elects) to exercise this option at a time and in a fashion
that will entitle him to receive in exchange for any securities thus acquired
the same consideration as is received in such Change in Control transaction by
other holders of securities of that class.

         7. TAX WITHHOLDING. The Company's obligation to deliver shares upon the
exercise of this option shall be subject to the Optionee's satisfaction of all
applicable Federal, state and local income, excise, employment and other tax
withholding requirements ("tax obligations"). The Optionee may satisfy any such
tax obligations in any of the manners provided in Section 3(b) above for payment
of the purchase price.

         8. THE COMPANY'S REPRESENTATIONS. The Company represents and warrants
that (a) it is fully authorized by action of its Board (and of any Person or
body whose action is required) to enter into this Stock Option Agreement and to
perform its obligations under it; (b) the execution, delivery and performance of
this Stock Option Agreement by the Company does not violate any applicable law,
regulation, order, judgment or decree or any agreement, plan or corporate
governance document (x) to which it (or, to the best of its knowledge and
belief, any of its security holders or creditors) is a party or (y) by which it
(or, to the best of its knowledge and belief, any of its security holders or
creditors) is bound; and (c) upon the execution and delivery of this


                                       9
<PAGE>

Stock Option Agreement by the Company and the Optionee, this Stock Option
Agreement shall be the valid and binding obligation of the Company, enforceable
in accordance with its terms, except to the extent enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.

         9. MISCELLANEOUS.

                  (a) Any Claim arising out of or relating to this Stock Option
Agreement shall be resolved by binding arbitration in accordance with Section 15
of the Employment Agreement.

                  (b) All notices and other communications relating to this
Stock Option Agreement shall be given as provided in Section 16 of the
Employment Agreement.

                  (c) Sections 17(b), 17(c), 17(d), 17(e) (second sentence
only), 17(f), 17(g), 17(i) and 17(j) of the Employment Agreement (relating,
respectively, to amendment and waiver, inconsistencies, headings, references,
survivorship, severability, governing law and counterparts) shall be deemed
incorporated herein in full, with the references to the "Agreement" in such
Sections being treated as references to this Stock Option Agreement, the
references to the "Executive" in such Sections being treated as references to
the original Optionee.

                  (d) All capitalized terms not defined in this Stock Option
Agreement shall have the meanings set forth in the Employment Agreement. "Term
of Employment" shall mean the "Term" as defined in the Employment Agreement.

                  (e) Nothing contained in this Stock Option Agreement shall be
construed or deemed by any Person under any circumstances to bind the Company to
continue the employment of the Optionee for any particular period of time.

                                                     EPICEPT CORPORATION


                                                     By: /s/ John V. Talley, Jr.
                                                         -----------------------

                                                     Name:  John V. Talley, Jr.

                                                     Title: CEO

ACCEPTED

OPTIONEE

/s/ Robert W. Cook
------------------------------------
Robert W. Cook


                                       10

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