PRO-PHARMACEUTICALS, INC. AMENDED EMPLOYMENT AGREEMENT

Exhibit 10.1

PRO-PHARMACEUTICALS, INC.

This Amended Employment Agreement (“Agreement”) is entered into this 31st day of March 2011 (the “Effective Date”) by and between PRO-PHARMACEUTICALS, INC., a Nevada corporation, having its principal Employee office at 0 Xxxxx Xxxxxx, Xxxxx 00, Xxxxxx, Xxxxxxxxxxxxx 00000 (the “Company”), and XXXXXXX XXXXXXX, an individual residing at 00 Xxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the “Employee”).

WHEREAS, the Employee is currently the Chief Scientist of the Company under a certain written Employment Agreement effective as of January 3, 2006 (the “Prior Employment Agreement”);

WHEREAS, pursuant to said Prior Employment Agreement, the Employee was employed on an “at will” basis permitting the Company to terminate his employment with the Company with or without cause;

WHEREAS, the Employee and the Company desire ongoing employment of the Employee for a specific duration rather than on a strictly “at will” basis;

WHEREAS, the Company is not required to offer the Employee employment of a specific duration and the Employee is not required to accept an offer of employment for specific duration and either may terminate the Employee’s employment at any time with or without cause; and

WHEREAS, the Company and the Employee have come to an agreement for the Employee to be employed for specific duration, unless terminated earlier for reasons set forth herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration the receipt of which is hereby acknowledged, the parties mutually agree as follows:

Section 1. Term and Scope of Employment.

The Company Employer agrees to employ the Employee and the Employee agrees to be employed by Company with the title of Chief Scientist for a period of one (1) year, commencing on March 31, 2011 and ending at the close of business on March 31, 2012, unless terminated earlier by the Company for cause or by the Employee for good cause or without cause, as described and provided for in Section 5 below, whichever shall first occur. The Employee shall report directly to the Chief Executive Officer (“CEO”) of the Company.

Section 2. Devotion of Full Time and Effort.

The Employee agrees to devote his full time and effort to the business and affairs of the Company and that, to the best of the Employee’s ability and experience, the Employee will, at all times, conscientiously perform all of the duties and obligations as may be assigned to the Employee by the CEO of the Company. Employee represents and warrants, understanding such representation and warranty to be material to the Company’s agreement to enter into this Amended Employment Agreement, that he currently holds no other employment, consultancy, management or board positions with any other company and that there are no representations on any other company’s websites or literature that he is employed by or performs any work for any company but Pro-Pharmaceuticals, Inc. Employee hereby agrees not to accept the appointment to any employment, consultancy, management or board position with any other company without the prior approval of the CEO of the Company.

Section 3. Compensation.

(a) Salary. In consideration of all of the services rendered by the Employee under the terms of this Agreement, the Company shall pay to the Employee a base salary at the annualized rate of One Hundred Seventy Thousand Dollars ($170,000.00) per annum (“Base Salary”), less required withholdings, payable in equal amounts in accordance with the Company’s payroll practices in effect from time to time.

(b) Reimbursement of Expenses. The Company shall reimburse the Employee, in accordance with the Company’s policies and practices in effect from time to time, for all out-of-pocket expenses reasonably incurred by the Employee in performance of the Employee’s duties under this Agreement. The Employee is responsible for proper substantiation and reporting of all such expenses. Employee shall consult a tax advisor of his own choosing to determine the taxability of any reimbursements made hereunder and the record keeping requirements therefor.

Section 4. Benefits.

(a) The Employee will be entitled to participate in all incentive, retirement, profit-sharing, life, medical, disability and other benefit plans and programs (collectively “Benefit Plans”) as are from time to time generally available to other Employees of the Company with comparable responsibilities, subject to the provisions of those programs. Without limiting the generality of the foregoing, the Company will provide the Employee with basic health and medical benefits on the terms that such benefits are provided to other Employees of the Company with comparable responsibilities. The Employee will also be entitled to holidays, sick leave and vacation in accordance with the Company’s policies as they may be in effect from time

to time and which are subject to change at any time at the Company’s sole discretion. This notwithstanding, during the term of this Agreement, Employee shall accrue vacation time at the rate of 1 and 2/3 of a day per month (four weeks total should the Employee remain employed for the full year). Vacation leave shall accrue on the last day of each month.

(b) In addition to any options or warrants currently held by the Employee, the Company hereby agrees to grant the Employee 200,000 options to purchase common stock of the Company under the Company’s 2009 Incentive Compensation Plan (“Plan”). The options shall be deemed issued as of the date of this Agreement, and shall be subject to all terms and conditions of the Plan. The options shall have the minimum exercise price permitted under the Plan for the Employee; a term of 7 years; and shall be subject to a one (1) year vesting period.

Section 5. Compliance with Company Policy.

During Employee’s employment with the Company, Employee shall observe all Company rules and policies in effect from time to time, including, without limitation, such policies as are contained in the Company policy and procedures manual, as may be amended or superseded from time to time.

Section 6. Termination of Employment.

Unless terminated earlier pursuant to the provisions of this Section 6, this Agreement and the Employee’s employment with the Company shall terminate at the close of business on March 31, 2012. At such time, the Employee shall be entitled to no further salary or benefits other than those earned or accrued but unpaid as of that date.

Employee’s employment with the Company may be terminated prior to the close of business on March 31, 2012 for the following reasons:

(a) By The Company For Cause. The Company shall have the right, upon written notice thereof to the Employee, to terminate Employee’s employment “For Cause” prior to the close of business on March 31, 2012 in the following circumstances:

(i) The Employee

(a) Fails or refuses in any material respect to perform any duties, consistent with his position, assigned to him by the President or CEO;

(b) Is grossly negligent in the performance of his duties hereunder;

(c) Commits of any act of fraud, misappropriation of funds, embezzlement or dishonesty with respect to the Company;

(d) Is convicted of a felony or other criminal violation, which, in the reasonable judgment of the Company, could materially impair the Company from substantially meeting its business objectives; or

(e) Engages in any other intentional misconduct adversely affecting the business or affairs of the Company in a material manner. The term “intentional misconduct adversely affecting the business or affairs of the Company” shall mean such misconduct that is detrimental to the business or the reputation of the Company as it is perceived both by the general public and the biotechnology industry.

(ii) With respect to matters referred to in (i)(a) and (b) above, should the Employee not cure the cause within (30) days of receipt of written notice thereof (the “Cure Period”), the Employee’s employment shall terminate at the close of business on the last day of the Cure Period. During said Cure Period, the Employee’s salary and benefits shall continue. Following termination, however, the Employee shall not be entitled to any further salary or benefits other than those previously accrued but unpaid through the date of termination. With respect to matters referred to in (i)(c-e) above, the Employee may be terminated immediately and shall not be entitled to payment of any further salary or benefits other than those previously accrued but unpaid through the date of termination.

(b) By The Employee For Good Reason.

The Employee may terminate his employment with the Company for “Good Reason” (as defined herein), if the Company shall have failed to cure an event or circumstance constituting “Good Reason” within thirty (30) days after receipt of written notice thereof from the Employee (which period may be extended by the parties) or within a reasonable time thereafter should it be impossible or impractical for the Company to cure within that time. For purposes of this paragraph, “Good Reason” shall mean the occurrence of any of the following without the Employee’s consent or approval:

(i) The assignment to the Employee of duties inconsistent with this Agreement;

(ii) Change in Employee’s title or significant and material change in Employee’s authority;

(iii) Material breach of the terms of this Agreement by the Company; or

(iv) Any failure of the company to obtain the assumption of this Agreement by any successor or assign of the Company during Employee’s employment with the Company.

In the event that Employee terminates his employment for Good Reason pursuant to the terms hereof, Employee shall be entitled to all salary and benefits through the end of the term of this Agreement, i.e., through March 31, 2012, but shall not be entitled to any other sums or any damages including, without limitation, any consequential damages.

(c) By Employee Without Cause.

In the event the Employee terminates his employment without Good Reason prior to the end of his then current term of employment, then Employee will have been considered to have terminated his employment Without Cause. In such case, the Employee shall be considered to have resigned effective immediately and shall be entitled to no further salary or benefits other than those previously accrued but unpaid through the date of termination.

Section 7. Survival of Obligations.

The obligations of the Employee as set forth in Sections 8 through 16 below shall survive the term of this Agreement and the termination of Employee’s employment hereunder regardless of the reason or cause therefor.

Section 8. Non-Competition and Conflicting Employment.

(a) During the term of this Agreement, the Employee shall not, directly or indirectly, either as an Employee, Employer, Employee, Consultant, Agent, Principal, Partner, Corporate Officer, Director, Shareholder, Member, Investor or in any other individual or representative capacity, engage or participate in any business or business related activity of any kind that is in competition in any manner whatever with the business of the Company or any business activity related to the business in which the Company is now involved or becomes involved during the Employee’s employment. For these purposes, the current business of the Company is biotechnology drug development and related business. The Employee also agrees that, during his employment with the Company, he will not engage in any other activities that conflict with his obligations to the Company.

(b) As a material inducement to the Company to continue the employment of the Employee, and in order to protect the Company’s Confidential Information and good will, the Employee agrees that:

(i) For a period of twelve (12) months following termination of the Employee’s employment with the Company or its affiliates for any reason, Employee will not directly or indirectly solicit or divert or accept business relating in any manner to Competing Products or to products, processes or services of the Company, from any of the customers or accounts of the Company with which the Employee had any contact as a result of Employee’s employment with the Company; and

(ii) For a period of six (6) months after termination of Employee’s employment with the Company or its affiliates for any reason, Employee will not (A) render services directly or indirectly, as an Employee, consultant or otherwise, to any Competing Organization in connection with research on or the acquisition, development, production, distribution, marketing or providing of any Competing Product, or (B) own any interest in any Competing Organization.

(c) For purposes of this Section:

(i) “Competing Product” means any product, process, or service of any person or organization other than the Company, in existence or under development (a) which is identical to, substantially the same as, or an adequate substitute for any product, process or service of the Company in existence or under development, based on any patent or patent application (provisional or otherwise) naming Employee as inventor thereunder and which Employee has assigned or licensed to the Company, or other intellectual property of the Company about which the Employee acquires Confidential Information, and (b) which is (or could reasonably be anticipated to be) marketed or distributed in such a manner and in such a geographic area as to actually compete with such product, process or service of the Company; and

(ii) “Competing Organization” means any person or organization, including the Employee, engaged in, or about to become engaged in, research on or the acquisition, development, production, distribution, marketing or providing of a Competing Product.

(d) The parties agree that the Company is entitled to protection of its interests in these areas. The parties further agree that the limitations as to time, geographical area, and scope of activity to be restrained do not impose a greater restraint upon Employee than is necessary to protect the goodwill or other business interest of the Company. The parties further agree that in the event of a violation of this Covenant Not To Compete, that the Company shall be entitled to the recovery of damages from Employee and injunctive relief against Employee for the breach or violation or continued breach or violation of this Covenant. The Employee agrees that if a court of competent jurisdiction determines that the length of time or any other restriction, or portion thereof, set forth in this Section 8 is overly restrictive and unenforceable, the court may reduce or modify such restrictions to those which it deems reasonable and enforceable under the circumstances, and as so reduced or modified, the parties hereto agree that the restrictions of this Section 8 shall remain in full force and effect. The Employee further agrees that if a court of competent jurisdiction determines that any provision of this Section 8 is invalid or against public policy, the remaining provisions of this Section 8 and the remainder of this Agreement shall not be affected thereby, and shall remain in full force and effect.

Section 9. Confidentiality.

(a) Employee recognizes and acknowledges that he will have access to certain information of members of the Company Group (as defined below) and that such information is confidential and constitutes valuable, special and unique property of such members of the Company Group. The parties agree that the Company has a legitimate interest in protecting the Confidential Information, as defined below. The parties agree that the Company is entitled to protection of its interests in the Confidential Information. The Employee shall not at any time, either during or subsequent to his employment with the Company, disclose to others, use, copy or permit to be copied, except in pursuance of his duties for an on behalf of the Company, its successors, assigns or nominees, any Confidential Information of any member of the Company Group (regardless of whether developed by the Employee) without the prior written consent of the Company. Employee acknowledges that the use or disclosure of the Confidential Information to anyone or any third party could cause monetary loss and damages to the Company as well as irreparable harm. The parties further agree that in the event of a violation of this covenant against non-use and non-disclosure of Confidential Information, that the Company shall be entitled to a recovery of damages from Employee and/or to obtain an injunction against Employee for the breach or violation, continued breach, threatened breach or violation of this covenant.

(b) As used herein, “Company Group” means the Company, and any entity that directly or indirectly controls, is controlled by, or is under common control with, the Company, and for purposes of this definition “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise.

(c) As used herein, the term “Confidential Information” with respect to any person means any secret or confidential information or know-how and shall include, but shall not be limited to, plans, financial and operating information, customers, supplier arrangements, contracts, costs, prices, uses, and applications of products and services, results of investigations, studies or experiments owned or used by such person, and all apparatus, products, processes, compositions, samples, formulas, computer programs, computer hardware designs, computer firmware designs, and servicing, marketing or manufacturing methods and techniques at any time used, developed, investigated, made or sold by such person, before or during the term of this Agreement, that are not readily available to the public or that are maintained as confidential by such person. The Employee shall maintain in confidence any Confidential Information of third parties received as a result of his employment with the Company in accordance with the Company’s obligations to such third parties and the policies established by the Company.

(d) As used herein, “Confidential Information” with respect to the Company means any Company proprietary information, technical data, trade secrets, know-how or other business information disclosed to the Employee by the Company either directly or indirectly in writing, orally or by drawings or inspection or unintended view of parts, equipment, data, documents or the like, including, without limitation:

(i)

Medical and drug research and testing results and information, research and development techniques, processes, methods, formulas, trade secrets, patents,

patent applications, computer programs, software, electronic codes, mask works, inventions, machines, improvements, data, formats, projects and research projects;

(ii)

Information about costs, profits, markets, sales, pricing, contracts and lists of customers, distributors and/or vendors and business, marketing and/or strategic plans;

(iii)

Forecasts, unpublished financial information, budgets, projections, and customer identities, characteristics and agreements as well as all business opportunities, conceived, designed, devised, developed, perfected or made by the Employee whether alone or in conjunction with others, and related in any manner to the actual or anticipated business of the Company or to actual or anticipated areas of research and development; and

(iv)

Employee personnel files and compensation information.

(e) Employee further understands that Confidential Information does not include any of the foregoing items which (a) has become publicly known or made generally available to the public through no wrongful act of Employee; (b) has been disclosed to Employee by a third party having no duty to keep Company matter confidential; (c) has been developed by Employee independently of employment with the company; (d) has been disclosed by the Company to a third party without restriction on disclosure; or (e) has been disclosed with the Company’s written consent.

(f) Employee hereby acknowledges and agrees that all Confidential Information shall at all times remain the property of the Company.

(g) Employee agrees that she will not improperly use or disclose any Confidential Information, proprietary information or trade secrets of any former employer or other person or entity or entity with which Employee has an agreement or duty to keep in confidence information acquired by Employee and that Employee will not bring onto Company premises any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

(h) Employee recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees to hold all such confidential or proprietary information in the strictest of confidence and not to disclose it to any person, firm or entity or to use it except as necessary in carrying out Employee’s work for the Company consistent with Company’s agreement with such third party.

(i) Employee represents and warrants that from the time of the Employee’s first contact with the Company, Employee has held in strict confidence all Confidential Information and has not disclosed any Confidential Information directly or indirectly to anyone outside the Company, or used, copied, published or summarized any Confidential Information, except to the extent otherwise permitted under the terms of this Agreement.

(j) Employee will not disclose to the Company or use on its behalf any confidential information belonging to others and Employee will not bring onto the premises of the Company any confidential information belonging to any such party unless consented to in writing by such party.

Section 10. Inventions.

(a) Attached hereto as Exhibit A is a list describing all ideas, processes, trademarks, service marks, inventions, designs, technologies, computer hardware or software, original works of authorship, formulas, discoveries, patents, copyrights, copyrightable works, products, marketing and business ideas, and all improvements, know-how, data rights, and claims related to the foregoing, whether or not patentable, registrable or copyrightable, which were conceived, developed or created by Employee prior to Employee’s employment or first contact with Company (collectively referred to herein as “Prior Inventions”), (A) which belong to Employee, (B) which relate to the Company’s current or contemplated business, products or research and development, and (C) which are not assigned to the Company hereunder. If there is no Exhibit A or no items thereon, the Employee represents that there are no such Prior Inventions. If in the course of Employee’s employment with the Company, the Employee incorporates or embodies into a Company product, service or process a Prior Invention owned by the Employee or in which the Employee has an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, world-wide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, service or process.

(b) Employee agrees that Employee will promptly make full, written disclosure to the Company and will hold in trust for the sole right and benefit of the Company, and the Employee hereby assigns to the Company, or its designee, all of the Employee’s right, title and interest in and to any and all ideas, process, trademarks, service marks, inventions, designs, technologies, computer hardware or software, original works of authorship, formulas, discoveries, patents, copyrights, copyrightable works, products, marketing and business ideas, and all improvements, know-how, data, rights and claims related to the foregoing, whether or not patentable, registrable or copyrightable, which Employee may, on or after the Effective Date of this Agreement, solely or jointly with others conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time the Employee is in the employ of the Company (collectively referred to herein as “Intellectual Property items”); and the Employee further agrees that the foregoing shall also apply to Intellectual Property Items which relate to the business of the Company or to the Company’s anticipated business as of the end of the Employee’s employment and which are conceived, developed or reduced to practice during a period of one year after the end of such employment. Without limiting the foregoing, the

Employee further acknowledges that all original works of authorship which are made by Employee (solely or jointly with others) within the scope of Employee’ employment and which are protectable by copyright are works made for hire as that term is defined in the United Stated Copyright Act.

(c) Employee agrees to keep and maintain adequate and current written records of all Intellectual Property Items made by Employee (solely or jointly with others) during the term of Employee’s employment with the Company. The records will be in the form of notes, sketches, drawings and any other format that may be specified by the Company. The records will be available to, and remain the sole property of, the Company at all times.

(d) Employee shall not at any time use the Company’s name or any of the Company trademark(s) or trade name(s) in any advertising or publicity without the prior written consent of the Company.

Section 11. Return of Company Property.

Employee agrees that, at any time upon request of the Company, and, in any event, at the time of leaving the Company’s employ, Employee will deliver to the Company (and will not keep originals or copies in Employee’s possession or deliver them to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, material, equipment or other documents or property, or reproduction of any of the aforementioned items, containing Confidential Information or otherwise belonging to the Company, its successors or assigns, whether prepared by the Employee or supplied to the Employee by the Company.

Section 12. Non-Solicitation.

Employee agrees that he shall not, during his employment or other involvement with the Company and for a period of twelve (12) months immediately following the termination of the Employee’s employment with the Company, for any reason, whether with or without cause, (i) either directly or indirectly solicit or take away, or attempt to solicit or take away Employees of the Company, either for the Employee’s own business or for any other person or entity and/or (ii) either directly or indirectly recruit, solicit or otherwise induce or influence any investor, lessor, supplier, customer, agent, representative or any other person which has a business relationship with the Company to discontinue, reduce or modify such employment, agency or business relationship with the Company.

Section 13. Publications.

Employee agrees that he will, in advance of publication, provide the Company with copies of all writings and materials which Employee proposes to publish during the term of Employee’s employment and for two years thereafter. Employee also agrees that Employee will, at the Company’s request and sole discretion, cause to be deleted from such writings and

materials any information the Company believes discloses or will disclose Confidential Information. The Company’s good faith judgment in these matters will be final. The Employee will also, at the Company’ request and in its sole discretion, cause to be deleted any reference whatsoever to the Company from such writings and materials.

Section 14. Equitable Remedies.

Employee agrees that any damages awarded the Company for any breach of this Agreement by Employee would be inadequate. Accordingly, in addition to any damages and other rights or remedies available to the Company, the Company shall be entitled to obtain injunctive relief from a court of competent jurisdiction temporarily, preliminarily and permanently restraining and enjoining any such breach or threatened breach and to specific performance of any such provision of this Agreement, and, if it prevails in such proceeding, the Company shall be entitled to recover from the Employee all costs and expenses incurred to enforce the terms of this Agreement and/or recover from Employee for any breach(es) thereof, including reasonable attorneys’ fees.

Section 15. Representations and Warranties of Employee.

Employee represents and warrants as follows: (i) Employee has no obligations, legal or otherwise, inconsistent with the terms of this Agreement or with the Employee’s undertaking a relationship with the Company; and (ii) that Employee has not entered into, nor will Employee enter into, any agreement (whether oral or written) in conflict with this Agreement.

Section 16. Miscellaneous.

(a) Entire Agreement. This Agreement and the exhibit attached hereto contain the entire understanding of the parties and supersede all previous contracts, arrangements or understandings, express or implied, between the Employee and the Company with respect to the subject matter hereof, including, without limitation, the Prior Employment Agreement. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement or in the attached exhibit.

(b) Section Headings. The section headings herein are for the purpose of convenience only and are not intended to define or limit the contents of any section.

(c) Severability. If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, the remainder of this Agreement shall be amended to provide the parties with the equivalent of the same rights and obligations as provided in the original provisions of this Agreement.

(d) No Oral Modification, Waiver Or Discharge. No provisions of this Agreement may be modified, waived or discharged orally, but only by a waiver, modification or discharge in

writing signed by the Employee and such officer as may be designated by the Board of Directors of the Company to execute such a waiver, modification or discharge. No waiver by either party hereto at any time of any breach by the other party hereto of, or failure to be in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time.

(e) Invalid Provisions. Should any portion of this Agreement be adjudged or held to be invalid, unenforceable or void, such holding shall not have the effect of invalidating or voiding the remainder of this Agreement and the parties hereby agree that the portion so held invalid, unenforceable or void shall, if possible, be deemed amended or reduced in scope, or otherwise be stricken from this Agreement to the extent required for the purposes of validity and enforcement thereof.

(f) Execution In Counterparts. The parties may sign this Agreement in counterparts, all of which shall be considered one and the same instrument.

(g) Governing Law And Performance. This Agreement shall be governed by the laws of the Commonwealth of Massachusetts without giving effect to its principles on conflicts of laws.

(h) Successor and Assigns. This Agreement shall be binding on and inure to the benefit of the successors in interest of the parties, including, in the case of the Employee, the Employee’s heirs, executors and estate. The Employee may not assign Employee’s obligations under this Agreement.

(i) Notices. Any notices or other communications provided for hereunder may be made by hand, fax, email, first class mail or express courier services provided that the same are addressed to the party required to be notified at its address first written above, or such other address as may hereafter be established by a party by written notice to the other party. Notice shall be considered accomplished on the date delivered, faxed, emailed, first class mailed or express couriered.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement under seal as of the date and year first above written.


Company,			Employee,
Pro-Pharmaceuticals, Inc.,

By:	/s/ Xxxxx X. Xxxxxx		/s/ Xxxxxxx Xxxxxxx
	Name:	Xxxxx X. Xxxxxx, M.D.	Xxxxxxx Xxxxxxx, X.Xx.
	Title:	President and Chief Executive Officer

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PRO-PHARMACEUTICALS, INC. AMENDED EMPLOYMENT AGREEMENT

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