Exhibit 10.23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of July 26, 2006 (the
"Effective Date"), by and among Xxxxxx X. Xxxxxxx, MD, who resides at 000
Xxxxxxxxx Xxxx, Xxxx, XX 00000 ("Xxxxxxx"), and Oncologix Corporation, a Nevada
corporation (the "Company"), which is the wholly owned subsidiary of BESC. The
parties have agreed as follows:
1. RECITALS
1.1 The Company
For the purposes of this Agreement, the term, "the Company" shall, where the
context indicates, include any present or future parent, subsidiary, or other
affiliate of the Company and any successor or assign of the Company.
1.2 Underlying Transaction
This Agreement has been executed and delivered pursuant to a certain Merger
Agreement dated July 26, 2006 among BestNet Communications Corp., a Nevada
corporation ("BESC"), JDA Medical Technologies, Inc., a Maryland corporation
("JDA"), the Company, Xxxxxxx and certain other parties. Xxxxxxx understands and
acknowledges that his entry into this Agreement and his performance hereunder
are material inducements to BESC and the Company to enter into and to perform
under the Merger Agreement. Simultaneously with the mutual execution and
delivery of this Employment Agreement, approximately thirty-two and forty-four
hundredths percent (32.44%) of the outstanding capital stock of JDA is being
acquired from Xxxxxxx by BESC through the Company, and Xxxxxxx is acquiring
approximately four and eighteen hundredths percent (4.18%) of the outstanding
capital stock of BESC.
1.3 Xxxxxxx'x Relationship and Expertise.
Xxxxxxx was a founder of JDA, has since its inception been a member of its Board
of Directors and its Chief Scientific and Medical Officer and was a primary
inventor of its technology. Xxxxxxx desires to continue in a substantially
similar policy-oriented capacity with the Company, under its new ownership. The
Company desires to engage Xxxxxxx to perform substantially similar services for
the Company, on the basis of his considerable familiarity with and expertise in
the Business (as defined herein), its application in the practice of medicine
and his knowledge and experience as a medical practitioner. In formulating the
provisions of this Agreement, the parties have understood and recognized that
the Company is engaged in the business of developing, testing and marketing
products and services in connection with radiation therapies for the treatment
of cancers, including without limitation, Microarterial Brachytherapy or the use
of radio-labeled microspheres in the treatment of soft tissue cancers
("Business") and that the market for any business of such nature is worldwide
and not limited to any particular geographical area.
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1.4 Xxxxxxx'x Prior Obligations.
The Company acknowledges that Xxxxxxx, prior to execution of this Agreement, has
taken on employment, management and other responsibilities with Wake Radiology
Oncology, PLLC ("Wake Radiology Oncology"). No obligation herein shall be
interpreted to limit in any way the ability of Xxxxxxx to carry out his current
or future responsibilities to Wake Radiology Oncology, as it currently exists or
as it may exist in the future, resulting, for example, from a merger or
acquisition of Wake Radiology Oncology.
1.5 Purpose of Agreement.
Xxxxxxx and the Company desire to provide for Xxxxxxx'x employment by the
Company upon the terms and conditions set forth in this Agreement.
2. TERMS OF EMPLOYMENT
2.1 Employment and Term.
The Company will employ Xxxxxxx, and Xxxxxxx hereby accepts employment with the
Company, for an initial term commencing on the Effective Date, and continuing
for a period of two (2) years following the Effective Date (the "Initial Term").
It is contemplated, however, that, unless written notice of the intention not to
renew is given by either party to the other at least sixty (60) days prior to
the end of the Initial Term or the applicable then-current term, this Agreement
will be renewed for successive periods ("Additional Term(s)," and together with
the Initial Term, the "Term") on the terms and conditions set forth herein or as
otherwise mutually agreed by the parties. Employment during the Term may be
earlier terminated as provided herein.
2.2 Duties.
(a) Xxxxxxx shall initially serve in the capacity of Chief Scientific and
Medical Officer, reporting to the Board of Directors of the Company. more
particularly with respect to the Initial Term, he will be expected to work with
other members of the Company's management to refine the animal trials that will
be performed in support of the IDE submission, to design or participate in the
design, implementation and analysis of all cellular, animal and eventually human
testing and to have an oversight role in the feasibility study of the spheres,
and continual refinement of the product specifications to optimize the final
microsphere with dual tags of a gamma and beta isotope. He will also be expected
to develop the scientific and medical rationale in the application to the Food
and Drug Administration ("FDA") for permission to infuse JDA spheres in humans,
e.g. the IDE and to revise the initial pilot and pivotal human trials for FDA
approval. This will include recruitment of medical centers to carry out the
trials, training them, and overseeing their performance. He will be expected to
complete the official protocols after FDA meetings and input. He will be working
closely with Company management and any consultants to develop the infusion kit,
training manual, web site, company public relations and marketing as they relate
to the Company's product and physicians, and train an experienced group of
physician proctors and sales persons; a key responsibility being the development
of a core group of physician users is to ensure the highest safety, efficacy and
patient outcomes with JDA spheres.
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(b) Xxxxxxx agrees to devote approximately sixty-four (64) hours each month to
the performance of the Business, and Xxxxxxx shall not, except with respect to
Wake Radiology Oncology as set forth in Section 1.4 herein, directly or
indirectly, alone or as a member of any partnership or other organization, or as
an officer, director or employee of any other corporation, partnership, or other
organization, be actively engaged in or concerned with any other duties or
pursuits which interfere with the performance of his duties hereunder. The
Company acknowledges that Xxxxxxx has business interests and ventures outside
the Business of the Company and agrees that Xxxxxxx can independently pursue
these business interests and ventures as long as they do not interfere with him
fulfilling his obligations under this Agreement.
(c) Xxxxxxx further agrees to accept election and to serve during all or any
part of the Term as a director of the Company without any compensation therefor
other than that specified in this Agreement, if elected to such position by the
stockholders of the Company. For purposes of clarity, Xxxxxxx'x service as a
director of the Company shall be considered as a part of the time devoted to the
performance of the Business as set forth in Section 2.2(b) herein. The Company
shall use its best efforts to cause Xxxxxxx to be elected as a director and
shall include him in the management slate for election as a director at every
stockholders' meeting at which his term as a director would otherwise expire.
2.3 Compensation.
(a) The Company shall pay Xxxxxxx, and Xxxxxxx shall accept, as full
compensation for all services rendered hereunder, a base salary (the "Base
Salary") and the other compensation and benefits provided hereunder. Xxxxxxx'x
Base Salary shall be at an annual rate of Two Hundred Forty Thousand Dollars
($240,000), payable in approximately equal installments at such intervals as are
consistent with the Company's pay periods for salaried executives. The Base
Salary shall be subject to annual review by the Company for increases, based on
Xxxxxxx'x performance of the duties assigned to him hereunder, the financial
condition of the Company and the applicable policies and review standards of the
Company in effect from time to time. In addition to the Base Salary, Xxxxxxx
shall be eligible to receive an annual discretionary bonus as determined by the
Company, at its sole discretion (the "Bonus"). Notwithstanding anything herein
to the contrary, all payments required to be made hereunder by the Company to
Xxxxxxx, or his estate or beneficiaries, shall be subject to the withholding of
such amounts as the Company may reasonably determine it should withhold pursuant
to any applicable law or regulation.
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(b) Xxxxxxx shall be eligible to participate in retirement, pension, group
insurance, medical, health, dental, vacation and any other plans or programs of
substantially similar character as are made generally available to executive
employees of the Company. All such benefits are to be provided by the Company,
subject to the terms of any welfare or pension plan sponsored by the Company.
(c) The Company shall reimburse Xxxxxxx for all reasonable expenses incurred by
him in the performance of his duties pursuant to this Agreement in accordance
with the Company's policies concerning the reimbursement of expenses.
2.4 Termination of Employment.
(a) Death. Xxxxxxx'x employment hereunder shall terminate in the event of his
death. Except for any Salary, Bonus and other benefits accrued, vested and
unpaid as of the end of the month in which any such termination occurred, the
Company shall be under no further obligation hereunder to Xxxxxxx or his heirs
or personal representatives, and Xxxxxxx or his heirs and personal
representatives no longer shall be entitled to receive any payments or any other
rights or benefits under this Agreement.
(b) Disability. The Company may terminate Xxxxxxx'x employment hereunder for
"Disability," upon sixty (60) days' prior written notice to Xxxxxxx, if an
independent physician (who shall be board certified in the specialty most
closely related to the nature of incapacity or disability alleged to exist)
mutually selected by Xxxxxxx or his representative and the Board of Directors or
its designee has determined that Xxxxxxx is unable to perform the essential
functions of his job for a continuous period of six (6) months, with or without
accommodation, as contemplated by this Agreement, by reason of a physical or
mental illness. In the event of such Disability, Xxxxxxx shall be entitled to
receive any Salary, Bonus and other benefits accrued, vested and unpaid as of
the date of any such termination, and the Company shall be under no further
obligation hereunder to Xxxxxxx, and Xxxxxxx no longer shall be entitled to
receive any other payments, rights or benefits under this Agreement.
(c) Termination by the Company for Cause. The Company may terminate Xxxxxxx'x
employment hereunder for "Cause", which for the purposes of this Agreement shall
mean: (i) the willful or material breach by Xxxxxxx of any of the terms of this
Agreement; (ii) Xxxxxxx'x conviction of (or plea of guilty with respect to) any
theft, fraud or crime involving moral turpitude or crime or offense involving
money or other property of the Company or any affiliate of the Company or which
constitutes a felony in the jurisdiction involved; (iii) the engaging by Xxxxxxx
in willful misconduct which is injurious to the Company or its affiliates,
monetarily or otherwise, including without limitation any act or acts that in
the reasonable opinion of the Company's Board of Directors, give rise to a
material risk of liability for discrimination or sexual or other forms of
harassment or other similar liabilities to subordinate employees; (iv) gross
negligence by Xxxxxxx with respect to his services to the Company which has
continued for fifteen (15) days after written notice to Xxxxxxx; (v) continued
and repeated substantive violations of reasonable, specific written directions
of the Company's Board of Directors, which directions are consistent with this
Agreement and Xxxxxxx'x position as an officer or continued and repeated failure
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to perform duties assigned by or pursuant to this Agreement or in accordance
with the policies of the Company and which have continued for fifteen (15) days
after written notice to Xxxxxxx; (vi) any material breach by Xxxxxxx of any
other agreement between the Company and Xxxxxxx which has continued for fifteen
(15) days after written notice to Xxxxxxx; and (vii) any material breach by
Xxxxxxx of his fiduciary duty to the Company, including any misappropriation of
a corporate opportunity. In the event of termination for Cause, Xxxxxxx shall be
entitled to receive any Salary, Bonus and other benefits accrued, vested and
unpaid as of the date of any such termination, and the Company shall be under no
further obligation hereunder to Xxxxxxx, and Xxxxxxx no longer shall be entitled
to receive any other payments, rights or benefits under this Agreement.
Following any termination for Cause, the Company shall have such rights and
remedies as may be available to it for any breach of this Agreement or
otherwise.
(d) Termination by the Company other than for Cause. The Company may terminate
Xxxxxxx'x employment hereunder at any time for any reason other than for Cause;
provided that the Company has given Xxxxxxx ninety (90) days' written notice of
termination, which termination shall be effective upon expiration of the notice
period. In the event of such termination, (i) Xxxxxxx shall be entitled to
receive a severance benefit equal to his Base Salary at the rate in effect at
the time of termination for the remainder of the then current Term or for three
(3) months, whichever is less, and shall also be entitled to receive any Base
Salary, Bonus or other compensation vested and unpaid as of the date of any such
termination and any benefits to which Xxxxxxx may be entitled under and in
accordance with the terms of any Xxxxxxx benefit plan, policy or program
maintained by the Company. Upon Xxxxxxx'x receipt of such severance benefit,
salary and benefits, the Company shall be under no further obligation hereunder
to Xxxxxxx, and Xxxxxxx no longer shall be entitled to receive any payments or
any other rights or benefits under this Agreement or otherwise, and the
provisions of Section 3.2 shall terminate upon such termination of this
Agreement.
(e) Termination by Xxxxxxx for Good Reason. Notwithstanding anything herein to
the contrary, Xxxxxxx shall be entitled to terminate his employment hereunder
for "Good Reason" without breach of this Agreement. As used herein, "Good
Reason" shall mean: (i) the Company becomes insolvent, as evidenced by its
inability to meet its obligations in the ordinary course of business; (ii) any
reduction in Xxxxxxx'x Base Salary (other than a proportional reduction
affecting executive employees of the Company generally); (iii) removal of
Xxxxxxx from a senior position with the Company; or (iv) the Company's
requirement that he perform his duties hereunder on a regular basis from a
location more than thirty (30) miles from his current office or then-current
office, as applicable; provided however, that it is understood that as a part of
his duties he is expected to periodically attend scientific and professional
conferences throughout the world. In the event of such termination by Xxxxxxx,
Xxxxxxx shall nonetheless be entitled to receive a severance benefit equal to a
Base Salary at the rate in effect at the time of termination for the remainder
of the then current Term or for three (3) months, whichever is less. Except for
such severance benefit and except for any Base Salary, Bonus and benefits
accrued, vested and unpaid as of the date of such termination, Xxxxxxx no longer
shall be entitled to receive any payments or any other rights or benefits under
this Agreement, and the Company shall have no further obligation hereunder or
otherwise to Xxxxxxx following any such termination.
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3. PROPRIETARY INFORMATION AND INVENTIONS; COVENANT NOT TO COMPETE
3.1 Company Ownership of Intellectual Property.
Xxxxxxx agrees that all processes, discoveries, formulas, improvements,
technologies, designs and inventions ("Inventions"), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made solely by Xxxxxxx, or jointly with
others, during the Term, within the scope of his employment and related to the
Business, shall belong to the Company or its affiliates. Xxxxxxx shall further:
(a) promptly disclose such Inventions to the Company; (b) assign to the Company,
without additional compensation, all patent and other rights to such Inventions,
whether patentable or unpatentable, including all substitute,
continuation-in-part and reissue applications, patents of addition and
confirmation relative thereto, for the United States of America and foreign
countries; (c) sign all papers necessary to carry out the foregoing; and, (d)
give testimony in support of inventorship. The Company agrees that Xxxxxxx owns
all right, title and interest in and to any Invention made during his employment
by JDA or the Company that was made outside normal working hours and outside his
scope of employment with JDA or the Company.
3.2 Covenant Not to Compete.
(a) Xxxxxxx acknowledges that his duties under this Agreement and the services
he will provide to the Company are of a special, unique, unusual and
extraordinary character, which gives this Agreement particular value to the
Company, and that it would be difficult to employ any individual or individuals
to replace Xxxxxxx in the performance of such duties and services. Therefore, in
consideration of this Agreement and of the Merger Agreement and his receipt of
BESC capital stock as recited above, subject to the provisions of Section 1.4
herein, Xxxxxxx agrees that during his employment by the Company, and for a
period of two (2) years after termination of this Agreement for any reason,
including expiration of the Term of this Agreement, Xxxxxxx shall not, directly
or indirectly, as owner, partner, joint venturer, stockholder, employee, broker,
agent, principal, trustee, corporate officer, director, or in any capacity
whatsoever engage in, become financially interested in, be employed by, render
any consultation or business advice with respect to, or have any connection
with, any business similar to the Business or which is otherwise competitive
with products or services with respect to the Business, in any geographic area
where, at the time of the termination of his employment, the Business was being
conducted or was proposed to be conducted; provided, however, that Xxxxxxx may
own any securities of any corporation which is engaged in such business and is
publicly owned and traded but in an amount not to exceed at any one time five
percent (5%) of any class of stock or securities of such corporation.
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(b) Xxxxxxx acknowledges that the Company intends to conduct business on a
world-wide basis, that its sales and marketing prospects are for continued
expansion into world markets and that, therefore, the territorial and time
limitations set forth in Section 3.2(a) are reasonable and properly required for
the adequate protection of the Business. In the event any such territorial or
time limitation is deemed to be unreasonable by a court of competent
jurisdiction, Xxxxxxx agrees to the reduction of the territorial or time
limitation to the area or period which such court deems reasonable.
3.3. Confidentiality.
Xxxxxxx agrees, while employed by the Company and for a two (2) year period
thereafter, directly or indirectly, not to disclose or use to the detriment of
the Company or any of its affiliates (the term "affiliates" as used in this
Agreement is understood to mean subsidiaries, and parent and brother/sister
corporations of the Company) or for the benefit of any other person or firm, any
confidential information or trade secrets which are not readily available in the
public domain (including, but not limited to, the identity and particular needs
of any customer of the Company or any of its affiliates, the methods and
techniques of the business of the Company or any of its affiliates, the
marketing plans and objectives of the Company or any of its affiliates, the
formula of any product of the Company or any of its affiliates) of the Company
or any of its affiliates. Such confidential information or trade secrets shall
not include information that (i) became known to Xxxxxxx prior to disclosure by
the Company; (ii) is or subsequently becomes generally available to the public
without Xxxxxxx'x breach of this Agreement; (iii) is obtained by Xxxxxxx from a
third party having a right to disclose such information; or (iv) except as
limited below, is required by law, governmental order or decree to be disclosed
by Xxxxxxx. Furthermore, Xxxxxxx shall deliver promptly to the Company upon
termination of employment, or at any time the Company may so request, all
memoranda, notes, records, reports, manuals, drawings, blueprints, formulas, and
other documents (and all copies thereof) relating to the Business and all
property associated therewith, then possessed or under the control of Xxxxxxx.
3.4 Remedies for Breach.
Xxxxxxx acknowledges that the legal remedies for breach of the covenants
contained in this Article 3 are inadequate, and therefore agrees that, in
addition to any or all other remedies available to the Company and its
affiliates in the event of a breach or a threatened breach of any covenant
contained therein, the Company of any of its affiliates may:
(a) Obtain preliminary and permanent injunctions against any and all such
actions, and
(b) Seek to recover from Xxxxxxx monetary damages to the Company or its
affiliates arising from such breach or threatened breach and all costs and
expenses (including attorneys' fees) incurred by the Company or any of its
affiliates in enforcement of such covenants.
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3.5 Survival.
This Article 3 shall survive any termination of Xxxxxxx'x employment hereunder
unless otherwise provided herein.
4. GENERAL AND MISCELLANEOUS
4.1. Notices.
All notices, requests, consents and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly
given if sent by private overnight mail service (delivery confirmed by such
service), registered or certified mail (return receipt requested and received),
or delivered personally, in each case to the following addresses, or such other
address as either party may from time to time specify by notice given to the
other party in the manner specified herein. Any notice to be given by the
Company hereunder to Xxxxxxx shall be in proper form if signed by an officer or
director (excluding Xxxxxxx) of the Company giving notice. Any such notices
shall be deemed to be given on the date delivered in the manner provided above
(including the receipt of confirmation as provided above). Until one party shall
advise the other in writing to the contrary, notices shall be deemed delivered:
(a) To the Company if delivered to a director or the highest-ranking officer
(excluding Xxxxxxx) of the Company, or, if mailed, certified or registered mail,
postage prepaid to: the Company at its principal place of business at 0000
Xxxxxxxxxx Xxx., Xxxxx X, Xxxxx Xxxxxx, Xxxxxxxx 00000, with a copy to Xxxxxxx
X. Meadow, Esq., Firetag, Xxxxx & Xxxxxxx, P.C., 0000 Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxx. Arizona. 8020
(b) To Xxxxxxx if to the address set forth at the head of this Agreement, with a
copy to Xxxxx X. Xxxxxx, Esq., HODES, ULMAN, XXXXXX & XXXX, P.A., 000 Xxxxxxx
Xxxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxxxxxx 00000.
4.2. Benefit.
This Agreement shall bind and inure to the benefit of Xxxxxxx and his heirs and
personal representatives, and the Company, and its parent, subsidiaries,
affiliates, successors and assigns; provided that any transferee, assignee or
successor shall be bound by the obligations of the Company hereunder. No party
may assign any rights or delegate any obligations hereunder without the prior
written consent of the other party; provided however, that the Company may
assign its rights and obligations hereunder upon the consummation of a merger or
sale of substantially all of the stock or assets of the Company.
4.3. Governing Law.
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Arizona, without regard to its conflicts of laws
principles. The parties consent to the exclusive jurisdiction of the federal
and/or state courts sitting in the State of Arizona.
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4.4. Severability.
The provisions of Paragraphs 3.2 and 3.4 of this Agreement are severable and the
invalidity of any one or more of such provisions does not affect or limit the
enforceability of the remaining provisions or paragraphs of this Agreement.
Furthermore, should any court of last resort determine that any of the
provisions of Paragraph 3.2 are unenforceable because unreasonable as to time
and geographical area, such provisions shall be interpreted as though such
provisions had originally been within the limits that such court finds to be
reasonable.
4.5. Headings.
The Headings in this Agreement are solely for convenience of reference and shall
not affect its interpretation.
4.6. No Waiver.
No failure on the part of any party hereto at any time to require the
performance by any other party of any term of this Agreement shall be taken or
held to be a waiver of such term or in any way affect such party's right to
enforce such term, and no waiver on the part of either party of any term of this
Agreement shall be taken or held to be a waiver of any other term hereof or the
breach thereof.
4.7. Entire Agreement; Written Modifications.
This instrument contains the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior arrangements or
understandings concerning Xxxxxxx'x employment by the Company; all
representations, promises and prior or contemporaneous understandings relating
to Xxxxxxx'x employment by the Company are merged into and expressed in this
instrument. This Agreement shall not be amended, modified or supplemented
without the written agreement of the parties at the time of such amendment,
modification or supplement.
4.8 Counterparts.
This Agreement may be executed in separate counterparts, each of which when so
executed shall be an original but all of such counterparts shall together
constitute but one and the same instrument.
4.9 Disputes.
Any dispute, disagreement, claim or controversy arising out of or relating to
this Agreement, any document or instrument delivered pursuant to, in connection
with, or simultaneously with this Agreement, or any breach of this Agreement
("Dispute") shall be subject to the negotiation, mediation and arbitration
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provisions contained herein. Each party to a Dispute shall make every reasonable
effort to meet in person and confer for the purpose of resolving the Dispute by
good faith negotiation before resorting to any legal proceedings or any other
dispute resolution procedure. If the Dispute cannot be settled through
negotiation, the parties shall make every reasonable effort to settle the
Dispute by mediation by a single mediator qualified to consider the matter in
dispute before resorting to any legal proceedings or any other dispute
resolution procedure. If a Dispute cannot be settled through mediation, the
Dispute shall be finally settled by arbitration to be held in Phoenix, Arizona,
under the Rules of Commercial Arbitration of the American Arbitration
Association by a panel of three (3) arbitrators qualified to consider the matter
in dispute. The arbitrators may grant injunctions or other relief in such
dispute or controversy. The decision of a majority of the arbitrators shall be
final, conclusive and binding upon the parties to the arbitration; and any party
shall be entitled to cause judgment on the decision or award of the arbitrators
to be entered in any court of competent jurisdiction. Any party may initiate a
mediation or an arbitration by providing written notice of the mediation or
arbitration, as the case may be (the "Dispute Notice"), to the other parties,
which Dispute Notice shall state the name of initiating party, briefly state the
matter to be mediated or arbitrated, and, if applicable, name a person whom such
party has nominated to act as mediator. If, within thirty (30) days after the
date of the Dispute Notice, the parties have not agreed among themselves as to
the identity of the mediator, then any party may immediately refer this matter
for resolution by the American Arbitration Association. The parties shall each
pay their pro rata share (according to the number of parties involved in the
Dispute) of the costs, deposits and expenses of the mediator. The party
initiating the arbitration shall pay the costs, deposits and expenses of such
arbitration and the prevailing party shall be awarded its attorneys' fees and
expenses in addition to all other relief awarded by the arbitrators, provided
that if the arbitrators determine that a party has initiated an arbitration
without a reasonable basis for doing so, then the arbitrators shall assess
against that party all costs relating to the arbitration, including the
attorneys' fees and expenses of the other parties.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the day and year first above written.
Oncologix Corporation
By: ______________________________
Its: _____________________________
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Xxxxxx X. Xxxxxxx, MD
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