SYNTHEMED, INC. CONSULTING AGREEMENT
This
Consulting Agreement (the "Agreement") is entered into effective October 1, 2008
(the “Effective Date”) by and between SyntheMed, Inc., a Delaware
corporation (the "Company"), and Xxxx X. xxXxxxxx, MD
("Consultant").
WHEREAS, Consultant has from
time to time rendered consulting and advisory services to the Company regarding
research and development activities, including pursuant to a consulting
agreement dated as of December 1, 1995, as the same has been amended (the
“Original Agreement”);
WHEREAS, the term of
Consultant’s retention under the Original Agreement expired on November 30,
2003;
WHEREAS, the Company desires
Consultant to render services to the Company in the capacity of Medical
Director, and Consultant desires to render services to the Company in such
capacity;
NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the Company and
Consultant agree as follows:
1. Consulting
Relationship. During the term of this Agreement,
Consultant will serve as Medical Director of the Company, and in that capacity
Consultant shall have the rights, powers, authority, functions, duties and
responsibilities as the President & CEO and/or Executive Chairman may
assign to Consultant from time to time that are commensurate with Consultant’s
status as Medical Director. Without limiting the foregoing,
Consultant will be actively engaged in, working with the President & CEO,
Executive Chairman and VP R&D/CSO, (i) development of new products, (ii)
design and implementation of pre-clinical and clinical studies and (iii)
regulatory activities including advice regarding US FDA regulatory
submissions. Consultant shall be responsible to and shall report to
the President & CEO. As needed and upon request, Consultant will participate
in meetings of the Board of Directors of the Company, as well as investor
presentations. Consultant shall devote such time and attention to the
business of the Company as is reasonably necessary to fulfill Consultant’s
responsibilities as Medical Director.
2. Compensation. As
full compensation for the services to be rendered by Consultant in all
capacities to the Company, the Company shall pay Consultant the compensation set
forth on Exhibit A
hereto.
3. Expense
Reimbursement. Consultant shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred by
Consultant in the performance of services rendered hereunder following
submission of written expense statements and other supporting documentation in
accordance with the policy and practice of the Company.
4. Term
and Termination. The term of this Agreement shall
commence on the Effective Date and shall continue until December 31, 2009,
subject to automatic extension for successive one-year periods unless
either party provides written notice to the other of its intention not to renew
at least ten days prior to the then scheduled expiration
date. Notwithstanding the foregoing, either party may terminate this
Agreement at any time prior to its then scheduled expiration date, upon thirty
(30) days' prior written notice to the other party if termination is
without cause and upon written notice to the other party if termination is as a
result of a breach by the non-terminating party. Upon termination of
this Agreement, neither Consultant nor the Company shall have any further
obligations under this Agreement, except that any liabilities accrued through
the date of termination (including under Sections 2 and 3) and Sections 5, 7 and
10 shall survive termination.
5. Independent
Contractor.
(a) Relationship. Consultant's
relationship with the Company will be that of an independent contractor and not
that of an employee.
(b) No
Benefits. Consultant acknowledges and agrees that
Consultant will not be eligible for any Company
employee
benefits and, to the extent Consultant otherwise would be eligible for any
Company employee benefits but for the express terms of this Agreement, Consultant hereby expressly declines to participate
in such Company employee benefits.
(c) Withholding;
Indemnification. Consultant shall have full
responsibility for applicable withholding taxes for all compensation paid to
Consultant under this Agreement. Consultant agrees to indemnify, defend and hold
the Company harmless from any liability for, or assessment of, any claims or
penalties with respect to such withholding taxes, including any liability for,
or assessment of, withholding taxes imposed on the Company by the relevant
taxing authorities with respect to any compensation paid to Consultant, as well
as reasonable attorneys’ fees incurred in connection therewith.
6. Other
Activities. The
parties acknowledge that Consultant has from time to time been engaged, and may
during the term of this Agreement continue to engage, in consulting activities
for third parties in the fields of adhesion prevention, cardiac drug
delivery and such other fields as the Company may, from time to time, pursue
(“Competing Fields”). On or before the Effective
Date, Consultant shall inform the Company in writing of each
such engagement pending as of such date, including the name of the
party for whom the services are performed and the general nature of the
engagement. During the term of this Agreement and the three-month
period thereafter, the Consultant shall inform the Company in writing of any
material changes to such engagements and, at least 30 days prior to the
commencement thereof, the commencement of any new such engagement. The
Company will honor Consultant’s requests for confidentiality regarding this
information.
7. Non-Solicitation,
Confidentiality and Proprietary Rights
Provisions. In further consideration for the
compensation payable by the Company hereunder and as a condition to the
Company’s obligations hereunder, Consultant agrees to be bound by the provisions
set forth on Exhibit B
hereto.
8. Compliance
with Law. Consultant represents and warrants to the Company
that Consultant will render the services to be performed by Consultant hereunder
in compliance with all applicable laws and regulations.
9. Conflicts
with this Agreement. Consultant represents and
warrants that Consultant is not presently under any contractual or other
restriction or obligation which conflicts with, or would be materially breached
by Consultant’s execution and delivery of, this Agreement or the performance of
the services to be rendered by Consultant hereunder, and during the term of this
Agreement, Consultant will not become subject to any such contractual
restriction or obligation, whether written or oral.
10. Miscellaneous.
(a) Amendments
and Waivers. Any term of this Agreement may be
amended or waived only with the written consent of the parties.
(b) Sole
Agreement. This Agreement, including the Exhibits
hereto, constitutes the sole agreement of the parties and supersedes all oral
negotiations and prior writings with respect to the subject matter
hereof. The parties acknowledge the expiration of the Consultant’s
retention under the Original Agreement and that this Agreement exclusively sets
forth the terms under which Consultant shall render services to the Company
hereunder and the compensation therefor.
(c) Notices. Any
notice required or permitted by this Agreement shall be in writing and shall be
deemed sufficient upon receipt, when delivered personally or by courier,
overnight delivery service or confirmed facsimile, or 48 hours after being
deposited in the regular mail as certified or registered mail (airmail if sent
internationally) with postage prepaid, if such notice is addressed, in the case
of the Company, to the address or facsimile number of its corporate headquarters
(attention: President & CEO) with a copy to Xxxxxxxxx Xxxxxx & Xxxx LLP,
00 X 00xx Xxxxxx,
XX, XX 00000, and in the case of Consultant, to Consultant’s address or
facsimile number as currently on file with the Company, or as subsequently
modified by written notice.
(d) Choice of
Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
New Jersey, without giving effect to the principles of conflict of
laws.
(e) Severability. If
one or more provisions of this Agreement are held by a court of competent
jurisdiction to be
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unenforceable
under applicable law, then (i) such provision shall be excluded from this
Agreement, (ii) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of the Agreement
shall be enforceable in accordance with its terms.
(f) Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument.
(g) Arbitration;
Consent to Jurisdiction. Any dispute or claim
arising out of or in connection with any provision of this Agreement shall be
exclusively and finally settled by binding arbitration in Middlesex County, New
Jersey, in accordance with the rules of the American Arbitration Association by
one arbitrator appointed in accordance with said rules. The arbitrator shall
apply New York law, without reference to rules of conflicts of law or rules of
statutory arbitration, to the resolution of any dispute. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, the parties may apply to any court of
competent jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph, without breach of this
arbitration provision. This Section 10(g) shall not apply to the
Confidentiality Agreement. To the extent that any court action is permitted
consistent with or to enforce this Section 10(g), the parties hereby consent to
the jurisdiction of the state and federal courts located in Middlesex County,
New Jersey. Accordingly, with respect to any such court action, the
Consultant (i) submits to the personal jurisdiction of such courts;
(ii) consents to service of process; and (iii) waives any other
requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process.
(h) Assignment. Consultant
agrees that Consultant may not assign this Agreement, as it is personal to
Consultant. The Company may assign this Agreement upon notice to
Consultant.
(i) Advice of
Counsel. EACH PARTY ACKNOWLEDGES THAT, IN
EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE
OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OFTHE TERMS AND
PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY
PARTYBY REASON OF THE DRAFTING OR PREPARATION HEREOF.
The
parties have executed this Consulting Agreement on the respective dates set
forth below.
By: s/Xxxxxx X.
Xxxxxx
Name/Title: R
X. Xxxxxx/Pres. & CEO
Date: 9/30/08
XXXX X.
XXXXXXXX, MD
s/ Xxxx X.
xxXxxxxx
Date: 10/1/08
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COMPENSATION
Cash Fee: $75,000
per annum, payable monthly in arrears.
Stock Options: Non-qualified
stock options to purchase 200,000 shares of common stock, exercisable as to
100,000 shares at $.40/share (or such higher price as is equal to fair market
value on the date of grant) and as to the remaining 100,000 shares at
$.60/share, the lower priced options vesting in full on the first anniversary of
the date of grant and the higher priced options vesting in full on the second
anniversary of the date of grant, and expiring on the tenth anniversary of the
date of grant. The options shall be granted on the Effective Date or
as soon thereafter as is reasonably practicable.
EXHIBIT
B
NON-SOLICITATION,
CONFIDENTIALITY AND
PROPRIETARY
RIGHTS PROVISIONS
Capitalized terms used but not defined
in this Exhibit B shall have the meanings ascribed thereto in the Consulting
Agreement to which this Exhibit B is attached.
1. Non-Solicitation.
During the term of the Agreement and for 12 months thereafter (the
“Restricted Period”), Consultant shall not, directly or indirectly, induce,
solicit, endeavor to entice or attempt to induce (i) any employee, consultant or
independent contractor of the Company to cease employment with or retention by
SyntheMed, or to work for, render services or provide advice to, or supply
Confidential Information of SyntheMed to, any third person or entity, or to in
any way adversely interfere with the relationship between any such employee,
consultant or independent contractor and SyntheMed (ii) any customer, vendor,
licensee, licensor or other business relation of SyntheMed to cease doing
business with SyntheMed, or in any way interfere with the relationship between
any such customer, vendor, licensee, licensor or other business relation and
SyntheMed, including without limitation, offering to sell to or selling to any
such customer any product sold or being developed by SyntheMed or that competes
with a product sold or being developed by SyntheMed. “Customer" shall
include any entity that purchased any product or service from the Company or its
distributors during the term of this Agreement or within twelve months of the
termination of Consultant's retention hereunder, without regard to the reason
for such termination. "Customer" also includes any former customer or
potential customer of the Company which the Company has solicited during the
term of this Agreement or within twelve months of the termination of
Consultant's retention hereunder.
2.
Confidential Information.
(a) Existence of Confidential
Information. The Company owns and has developed and compiled, and
will develop and compile, certain proprietary technology, know-how and
confidential information which have great value to its business (referred to,
collectively, as “Confidential Information”). Confidential Information includes
not only information disclosed by the Company to Consultant, but also
information developed or learned by Consultant during the course or as a result
of retention by the Company, which information shall be the property of the
Company. By way of example and without limitation, Confidential Information
includes all information that has or could have commercial value or other
utility in the business in which the Company is engaged or contemplates
engaging, and all information of which the unauthorized disclosure could be
detrimental to the interests of the Company, whether or not such information is
specifically labeled as Confidential Information. By way of example and without
limitation, Confidential Information includes any and all information developed,
obtained, licensed by or to or owned by the Company concerning trade secrets,
techniques, know-how (including research data, designs, plans, procedures,
merchandising, marketing, distribution and warehousing know-how, processes, and
research records), software, computer programs, and any other intellectual
property created, used or sold (through a license or otherwise) by the Company,
product know-how and processes, innovations, discoveries, improvements,
research, development, test results, reports, specifications, data, formats,
marketing data and plans, business plans, strategies, forecasts, unpublished
financial information, orders, agreements and other forms of documents, price
and cost information, merchandising opportunities, expansion plans, budgets,
projections, customer, supplier, licensee, licensor and subcontractor
identities, characteristics, agreements and operating procedures, and salary,
staffing and employment information.
(b) Protection of Confidential
Information. Consultant acknowledges and agrees that in the
performance of duties hereunder Consultant develops and acquires, and the
Company discloses to and entrusts Consultant with, Confidential Information
which is the exclusive property of the Company and which Consultant may possess
or use only in the performance of duties for the Company. Consultant also
acknowledges that Consultant is aware that the unauthorized disclosure of
Confidential Information, among other things, may be prejudicial to the
Company's interests, an invasion of privacy and an improper disclosure of trade
secrets. Consultant shall not, directly of indirectly, use, make available,
sell, disclose or otherwise communicate to any corporation, partnership,
individual or other third party, other than in the course of Consultant's
assigned duties and for the benefit of the Company, any Confidential
Information, either during the term of the Agreement or thereafter. In the event
Consultant desires to publish the results of Consultant's work
for or
experiences with the Company through literature, interviews or speeches,
Consultant will submit requests for such interviews or such literature or
speeches to the Board of Directors of the Company at least fourteen (14) days
before any anticipated dissemination of such information for a determination of
whether such disclosure is in the best interests of the Company, including
whether such disclosure may impair trade secret status or constitute an invasion
of privacy. Consultant agrees not to publish, disclose or otherwise disseminate
such information without the prior written approval of the Board of Directors of
the Company.
3.
Invention and Patents.
(a) Consultant will
promptly and fully disclose to the Company any and all inventions, discoveries,
trade secrets and improvements, whether or not patentable or whether or not they
are made, conceived or reduced to practice during working hours or using the
Company's data or facilities, which Consultant shall develop, make, conceive or
reduce to practice during Consultant's retention by the Company, either solely
or jointly with others (collectively, "Developments"). To the maximum extent
permitted by law, all such Developments related to anti-adhesion products or
otherwise related to any work performed by, or Confidential Information
disclosed or made known to, Consultant in connection with Consultant’s
activities hereunder (collectively, “Other SyntheMed Work”), shall be
the sole property of the Company, and Consultant hereby assigns to the Company,
without further compensation, all his right, title and interest in and to such
Developments and any and all related patents, patent applications, copyrights,
copyright applications, trademarks and trade names in the United States and
elsewhere.
(b) Consultant shall keep and maintain
adequate and current written records of all Developments (in the form of notes,
sketches, drawings and as may be specified by the Company), which records shall
be available to and, to the extent related to anti-adhesion products or Other
SyntheMed Work, remain the sole property of the Company at all
times.
(c) Consultant shall assist the Company
in obtaining and enforcing patent, copyright and other forms of legal protection
for the Developments related to anti-adhesion products or Other SyntheMed Work
in any country. Upon request, Consultant shall sign all applications,
assignments, instruments and papers and perform all acts necessary or desired by
the Company and to enable the Company its successors, assigns and nominees, to
secure and enjoy the full exclusive benefits and advantages
thereof.
(d) Consultant understands that
Consultant’s obligations under this Section 3 will continue after the
termination of his retention with the Company and that Consultant shall perform
such obligations without further compensation, except (i) for reimbursement of
expenses incurred at the request of the Company and (ii) that after the
termination of Consultant’s retention with the Company and notwithstanding
anything in this Section 3 to the contrary, Consultant shall not be required to
provide assistance to the Company in accordance with this Section 3 for more
than 50 hours during any twelve-month period. If the Company desires assistance
beyond such 50-hour limitation, such assistance shall be subject to Consultant’s
consent, not to be unreasonably withheld, and the Company will compensate
Consultant on a per diem basis at a per diem rate that is determined by dividing
the Consultant’s annual retention fee in effect when the term of the Agreement
terminated or expired by 250 days.
(e) The provisions of this Section 3 do
not apply to any Development of Consultant if it (a) (i) was developed entirely
on Consultant’s own time; (ii) was not made with the use of Confidential
Information or any equipment, supplies, or facilities of SyntheMed; (iii) is
unrelated, directly or indirectly, to the business of SyntheMed or to
SyntheMed’s actual or demonstrably anticipated research or development; and (iv)
did not result from any work performed by Consultant for SyntheMed or (b)
otherwise qualifies fully under Section 2870 of the California Labor Code, if
applicable.
4. Injunction. Consultant
agrees that the restrictions and agreements contained in this Exhibit B are
reasonable and necessary to protect the legitimate interests of the Company, and
that any violation of these provisions will cause substantial and irreparable
harm to the Company that would not be quantifiable and for which no adequate
remedy would exist at law. Consultant further acknowledges that
Consultant has requested, or has had the opportunity to request, that legal
counsel review this Exhibit B and the Agreement, and having exhausted such
right, agrees to the terms herein without reservation. Accordingly,
Consultant authorizes the issuance of injunctive relief by any court of
appropriate jurisdiction, without the requirement of posting bond, for any
actual or threatened violation of the provisions of this Exhibit
B.
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5. Severability;
Construction. Whenever possible, each provision of this
Exhibit B shall be interpreted in such a manner as to be effective and valid
under applicable law but if any provision of this Exhibit B is held to be
invalid, illegal or unenforceable under any applicable law or rule, the
validity, legality and enforceability of the other provisions of this Exhibit B
will not be affected or impaired thereby. In furtherance and not in
limitation of the foregoing, should the duration or geographical extent of, or
business activities covered by, any provision of this Exhibit B be in excess of
that which is valid and enforceable under applicable law, then such provision
shall be construed to cover only that duration, extent or activities that are
valid and enforceable. Consultant acknowledges the uncertainty of the
law in this respect and expressly stipulates that this Exhibit B be given the
construction that renders its provisions valid and enforceable to the maximum
extent (not exceeding its express terms) possible under applicable
law.
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