EXHIBIT 10.6
Letter of Credit
Agreement
This Letter of Credit Agreement
(“Letter of Credit Agreement”) dated as of
April __, 2009 is entered into by and between Cell Genesys,
Inc., a Delaware corporation (“Company”) and
[ ]
(“Employee”).
WHEREAS, in order to provide
additional incentive to Employee to continue providing services to
Company, Company desires to enter into a letter agreement (the
“Retention Payment Agreement”) with Employee whereunder
Employee is entitled to receive a payment under the circumstances
set forth therein; and
WHEREAS, Employee is willing to
enter into the Retention Payment Agreement with Company provided
that Company provides security for its obligations thereunder in
the form of a irrevocable standby letter of credit.
NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
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1.
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Company shall
use commercially reasonable efforts to cause to be delivered to
Employee an irrevocable, standby letter of credit issued in favor
of Employee by Wells Fargo Bank, N.A. (the “Bank”)
substantially in the form attached hereto as Exhibit A (the
“Letter of Credit”); provided, however, that in the
event Bank does not issue such Letter of Credit or substantially in
such form, Company shall use commercially reasonable efforts to
cause to be issued a standby letter of credit agreement with such
bank and in such form as Company and Employee shall reasonably
agree (in such cases references to “Bank” and
“Letter of Credit” in this Letter of Credit Agreement
shall hereinafter refer to such replacement bank or letter of
credit). The Letter of Credit shall serve as security for any and
all of Company’s obligations to Employee, which may arise
under the terms of the aforementioned Retention Payment Agreement.
Unless otherwise defined herein or the context otherwise requires,
each defined term used herein shall have the meaning ascribed to it
in the Retention Payment Agreement, including Exhibit A
thereto.
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2.
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Company shall
at all times maintain the Letter of Credit until all obligations of
Company have been satisfied in full by payment of the applicable
payment amount accrued to Employee under one of the three
circumstances set forth in the Retention Payment Agreement (the
“Accrued Payment”) or until such time as Employee is no
longer eligible to receive any Accrued Payment under the Retention
Payment Agreement.
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3.
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Provided that
Company complies with paragraph 4 of this Letter of Credit
Agreement, Employee shall, on and after the thirtieth (30th) day
following the Entitlement Date (as such term is defined below in
Section 4) be entitled to draw on the Letter of Credit as follows:
(1) if the Company has not paid Employee the full amount of
the Net Entitlement (as defined below) and has not provided
Employee reasonable documentation that any withholding obligations
related to the Accrued Payment have been satisfied, Employee shall
be entitled to draw on the Letter of Credit up to the amount of the
Accrued Payment (to the extent not theretofore paid by Company to
the Employee) that Employee is entitled to receive pursuant to the
Retention Payment Agreement (“Gross Entitlement”); or
(2) if the Company has not paid Employee the Net Entitlement
but has remitted the withholding taxes related to the Accrued
Payment to the related taxing authorities, Employee shall be
entitled to draw on the Letter of Credit up to the Gross
Entitlement (to the extent not theretofore paid by Company to
Employee) net of
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