Exhibit 10.4

SEPARATION AND GENERAL RELEASE AGREEMENT

This Separation and General Release Agreement (this “Agreement”) is made by and
between Kensey Nash Corporation, a Delaware corporation (the “Company”) and
Wendy F. DiCicco (“Executive”) (the Company and Executive referred to together
as the “Parties”), effective as of November 15, 2008.

WHEREAS, the Parties entered into that certain employment agreement dated as of
May 11, 2006, which was renewed as of May 11, 2008 pursuant to a notice provided
to Executive on March 12, 2008 (the “Employment Agreement”);

WHEREAS, Executive desires to pursue other interests;

WHEREAS, Executive voluntarily resigned from her employment with the Company,
effective as of November 15, 2008 (the “Separation Date”) and is not entitled to
receive severance benefits under the Employment Agreement;

WHEREAS, the Parties desire to enter into this Agreement to provide for the
payment of certain severance benefits, which the Company agrees to provide
Executive in exchange for other rights and obligations provided for under this
Agreement, and to restate and reaffirm Executive’s obligations under the
restrictive covenant provisions contained in the Employment Agreement; and

WHEREAS, the Parties wish to avoid litigation and controversy and fully resolve
any and all past, present and future disputes they may have relating to
Executive’s employment with, or separation of employment from, the Company.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements set forth below, the receipt and sufficiency of which are hereby
acknowledged, Executive and the Company hereby agree as follows:

1. Termination. Effective as of the Separation Date, Executive’s employment with
the Company, as well as any and all positions she held with the Company or any
affiliates are terminated.

2. Accrued Obligations. In accordance with the Company’s normal mode of
executive salary payment, the Company shall pay Executive any accrued, but
unpaid, base salary as of the Separation Date. Executive acknowledges that with
such payments, as well as the payments set forth below, Executive will have
received all compensation owed to Executive by the Company. Except as
specifically provided below, Executive shall not be entitled to receive any
compensation from the Company following the Separation Date.

 

   1    Employee Initial  ___________________

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3. Severance. In consideration of Executive entering into this Agreement and
performing her obligations hereunder, and in lieu of any other termination,
severance or other payment or benefit of any kind whatsoever, the Company shall
provide Executive with the following:

 

  (a) Cash Severance Payments. A cash severance payment equal to $223,800, less
applicable withholdings, to be paid in semi-monthly installment payments of
$9,325 for a period of twelve (12) months. Such installment payments shall
commence on November 30, 2008 and shall be paid on the fifteenth and the last
day of each month for such twelve-month period in accordance with the Company’s
normal payroll procedures; provided, however, that the Company shall have no
obligation to make such cash severance payments unless Executive signs and
returns this Agreement to the Company and the applicable seven-day revocation
period expires without revocation by Executive prior to November 22, 2008.

 

  (b) Bonus Payment. A lump sum cash payment equal to $51,200 to be paid no
later than November 30, 2008.

 

  (c) Accelerated Vesting of Stock Options. All of Executive’s stock options to
purchase shares of the Company’s common stock (“Stock Options”) shall become
100% vested as of the Separation Date and shall remain exercisable for a period
of twelve (12) months immediately following the Separation Date, but in no event
later than the original term of the applicable Stock Option agreement. Any Stock
Options that remain unexercised at the end of such twelve-month period (or, if
sooner, at the expiration of the applicable Stock Option term) will immediately
be forfeited to the Company.

 

  (d) Continued Welfare Benefits. All of Executive’s health, dental and/or
vision insurance coverage will cease on the first day of the month following the
Separation Date; provided, however, that nothing herein will prevent Executive
from electing continuation coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (i.e., 4980B of the Internal Revenue Code
of 1986, as amended, and Section 601 et. seq. of the Employee Retirement Income
Security Act of 1974, as amended).

Executive acknowledges and agrees that payment and provision of all severance
benefits under this Paragraph 3 are conditioned upon Executive executing this
Agreement and not rescinding, materially breaching or threatening to materially
breach any of the terms of this Agreement (including, without limitation, the
release of all claims set forth in Paragraph 4 below).

4. Executive Release of Rights and Agreement Not to Sue. Executive (defined for
purposes of this Paragraph 4 as Executive and Executive’s agents,
representatives, attorneys, assigns, heirs, executors, and administrators) fully
and unconditionally releases the Company, its subsidiaries and affiliates, and
any of their past or present employees, agents, insurers, attorneys,
administrators, officers, directors, shareholders, divisions, predecessors,
successors, employee benefit plans, and the sponsors, fiduciaries, or
administrators of such employee benefit plans (collectively, the “Released
Parties”) from, and agrees not to bring any action, proceeding or suit against
any of the Released Parties regarding, any and all liability, claims, demands,
actions, causes of action, suits, grievances, debts, sums of money, agreements,
promises, damages, back and front pay, costs, expenses, attorneys’ fees, and
remedies of any type, including without limitation those arising or that may
have arisen out

 

   2    Employee Initial  ___________________

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of or in connection with Executive’s employment with or termination of
employment from the Company, including, but not limited to, claims, actions or
liability under: (a) Title VII of the Civil Rights Act of 1964, the Civil Rights
Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment
Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the
Family and Medical Leave Act, the Workers Adjustment and Retraining Notification
Act, the Employee Retirement Income Security Act of 1974, the Pennsylvania Human
Relations Act, and the Pennsylvania Wage Payment and Collection Law, in each
case as such act may be amended; (b) any other federal, state or local statute,
ordinance, or regulation regarding employment, termination of employment, or
discrimination in employment; and (c) the common law of any state relating to
employment contracts, wrongful discharge, defamation, wages or any other matter;
provided, however, that said release and agreement not to sue shall not prohibit
Executive from bringing an action, proceeding or suit arising out of the
Company’s breach of any representation, warranty, or obligation set forth in
this Agreement.

5. Revocation Period. Executive has the right to revoke her release of claims
under the Age Discrimination in Employment Act described in Paragraph 4 (the
“ADEA Release”) for up to seven days after Executive signs it. In order to do
so, Executive must sign and send a written notice of her revocation decision to
the Company with a copy to Katten Muchin Rosenman LLP at the addresses provided
in Paragraph 16, and such written notice must be received by the Company no
later than the eighth day after Executive signs this Agreement. If Executive
revokes the ADEA Release, Executive will not be entitled to any payments or
benefits from the Company described in Paragraph 3 above.

6. Inventions. Executive agrees, on behalf of herself, her heirs and personal
representatives, that she will promptly communicate, disclose and transfer to
the Company free of all encumbrances and restrictions (and will execute and
deliver any papers and take any action at any time deemed necessary by the
Company to further establish such transfer) all inventions and improvements
relating to the Company’s business originated or developed by Executive solely
or jointly with others during the term of her employment with the Company. Such
inventions and improvements shall belong to the Company whether or not they are
patentable and whether or not patent applications are filed thereon. Such
transfer shall include all patent rights (if any) to such inventions or
improvements in the United States and in all foreign countries. Executive
further agrees, at the request of Company, to execute and deliver, at any time
after the effective date of this Agreement, all assignments and other lawful
papers (which will be prepared at the Company’s expense) relating to any aspect
of the prosecution of such patent applications and rights in the United States
and foreign countries.

7. Confidentiality of Proprietary Information.

(a) Executive acknowledges and agrees that during the course of her employment
by Company, she was in continuous contact with customers, suppliers and others
doing business with the Company throughout the world. Executive further
acknowledges that the performance of her duties exposed her to data and
information concerning the business and affairs of the Company (including any of
its subsidiaries and affiliates), including but not limited to, information
relative to the Company’s proprietary rights and technology, patents, financial
statements, sales programs, pricing programs, profitability analyses and profit
margin information, customer buying patterns, needs and inventory levels,
supplier identities and other related matters, and that all of such data and
information (collectively “Proprietary Information”) is vital, sensitive,
confidential and proprietary to the Company.

 

   3    Employee Initial  ___________________

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(b) Executive acknowledges that Proprietary Information constitutes a
protectible business interest of the Company, and covenants and agrees that upon
the effective date of this Agreement, she shall not, directly or indirectly,
whether individually, as a director, stockholder, owner, partner, employee or
agent of any business, or in any other capacity, make known, disclose, furnish,
make available or utilize any Proprietary Information. Executive’s obligations
under this Paragraph 7 with respect to particular Proprietary Information shall
terminate only at such time (if any) as the Proprietary Information in question
becomes generally known to the public other than through a breach of Executive’s
obligations hereunder.

8. Restriction Against Competition and Employing or Soliciting Company
Employees, Customers or Suppliers. Executive covenants and agrees that for the
twelve month period immediately following the Separation Date (the “Restricted
Period”), she shall not, directly or indirectly, on her own behalf or for any
other person or entity: (i) engage in a business substantially similar to that
which is conducted by the Company; (ii) engage in a business with any of the
Company’s existing partners or customers; (iii) solicit any party who is or was
a customer or supplier of the Company on the Separation Date, or at any time
during the six month period immediately prior thereto, for the sale or purchase
of any type or quantity of products sold by or used in the business of the
Company on the Separation Date or at any time within such six month period; or
(iv) solicit for employment any person who was or is an employee of the Company
on the Separation Date or at any time during the twelve (12) month period
immediately prior thereto.

9. Cooperation with Company. During the Restricted Period, Executive shall
cooperate with the Company in any reasonable manner as the Company may request,
including, but not limited to, furnishing information to and otherwise
consulting with the Company regarding the Company’s audit and other business
matters; assisting the Company in any litigation or potential litigation or
other legal matters; meeting with and fully answering, to the best of her
ability, the questions of the Company or its representatives or agents; and
testifying and preparing to testify at any deposition or trial. The Company
shall schedule any required activity at a time and place reasonably acceptable
to Executive, and shall reimburse Executive for any reasonable out-of-pocket
expenses incurred as a result of such cooperation.

10. Remedies.

(a) Executive acknowledges that the agreements and covenants contained in
Paragraphs 7 and 8 of this Agreement (“Restrictive Covenants”) are essential to
protect the Company and are a condition precedent to entering into this
Agreement. Should Executive breach any part of these Restrictive Covenants, then
among other available remedies, the duration of the covenant shall be extended
by the period of any such breach. Executive agrees that irreparable harm would
result from Executive’s breach or threat to breach any provision of the
Restricted Covenants, and that monetary damages, alone, would not provide
adequate relief to the Company for the harm incurred. Executive agrees that in
addition to money damages, the Company shall be entitled to seek and obtain
temporary, preliminary, and permanent injunctive relief restraining Executive
from committing or continuing any breach, without need for the Company to post a
bond. Executive further agrees that Executive shall be liable for the amount of
reasonable attorneys’ fees incurred by the Company if Executive is found by a
court of competent jurisdiction to have breached any provision of the
Restrictive Covenants. Without limiting the foregoing, upon a breach by
Executive of any of the Restrictive Covenants, any outstanding severance
payments and

 

   4    Employee Initial  ___________________

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benefits under this Agreement shall cease and be forfeited, and Executive shall
reimburse the Company for the gross amount of any severance benefits previously
paid pursuant to Paragraph 3 of this Agreement. In addition, upon any such
breach, Executive shall pay to the Company an amount equal to the aggregate
“spread” on all Stock Options exercised on or after the Separation Date (for
this purpose “spread” in respect of any Stock Option shall mean the product of
the number of shares as to which such Stock Option has been exercised on or
after the Separation Date multiplied by the difference between the closing price
of the Company’s common stock on the exercise date (or if such common stock did
not trade on the NASDAQ Global Select Market on the exercise date, the most
recent date on which such common stock did so trade) and the option price of the
Stock Option).

(b) If any court of competent jurisdiction shall deem any provision of the
Restrictive Covenants too restrictive, the other provisions shall stand, and the
court shall modify the unduly restrictive provision to the point of greatest
restriction permissible by law.

11. Return of Company Materials Upon Termination. Executive acknowledges that
all price lists, sales manuals, catalogs, binders, customer lists and other
customer information, supplier lists, financial information, and other records
or documents containing Proprietary Information prepared by Executive or coming
into her possession by virtue of her employment by the Company was and shall
remain the property of the Company. No later than the Separation Date, Executive
shall return to the Company all such items in her possession, together with all
copies thereof, as well as all other Company property in her possession,
including without limitation, all keys, computer hardware and software, cellular
phones, materials, papers, books, files, documents, records, policies, database
information and lists, mailing lists, notes, and data.

12. No Reinstatement or Reemployment. Executive waives any rights to
reinstatement or reemployment by the Company, its subsidiaries or any of their
affiliates.

13. No Disparagement or Encouragement of Claims. Except as required by lawful
subpoena or other legal obligation, Executive agrees not to make any oral or
written statement that disparages or places the Company and its affiliates
(including any of their past or present officers, employees, products or
services) in a false or negative light, or to encourage or assist any person or
entity who may or who has filed a lawsuit, claim or complaint against the
Released Parties (as defined in Paragraph 4 above). If Executive receives any
subpoena or becomes subject to any legal obligation that implicates this
Paragraph 13, Executive will provide prompt written notice of that fact to the
Company with a copy to Katten Muchin Rosenman LLP, and will enclose a copy of
the subpoena and any other documents describing the legal obligation.

14. Non-Admission/Inadmissibility. This Agreement does not constitute an
admission by the Company that any action it took with respect to Executive was
wrongful, unlawful or in violation of any local, state, or federal act, statute,
or constitution, or susceptible of inflicting any damages or injury on
Executive, and the Company specifically denies any such wrongdoing or violation.
This Agreement is entered into solely to resolve fully all matters related to or
arising out of Executive’s employment with and termination from the Company, and
its execution and implementation may not be used as evidence and shall not be
admissible in a subsequent proceeding of any kind, except a proceeding alleging
a breach of this Agreement.

 

   5    Employee Initial  ___________________

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15. Violation of Agreement. If Executive or the Company prevails in a legal or
equitable action claiming that the other party has breached this Agreement, the
prevailing party shall be entitled to recover from the other party the
reasonable attorneys’ fees and costs incurred by the prevailing party in
connection with such action.

16. Notice. Any notice required or permitted pursuant to the provisions of this
Agreement shall be deemed to have been properly given if in writing and when
sent by United States mail, certified or registered, postage prepaid, when sent
by facsimile or when personally delivered, addressed as follows:

If to Company:

Kensey Nash Corporation

735 Pennsylvania Drive

Exton, PA 19341

Attention: Joseph W. Kaufmann

With a copy to:

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, IL 60661-3693

Attention: David R. Shevitz, Esq.

If to Executive:

Wendy F. DiCicco

948 Drovers Lane

Chester Springs, PA 19425

Each party shall be entitled to specify a different address for the receipt of
subsequent notices by giving written notice thereof to the other party in
accordance with this Paragraph 16.

17. Severability; Waiver. The provisions of this Agreement shall be severable
and the invalidity of any provision shall not affect the validity of the other
provisions; provided, however, that upon a finding by a court of competent
jurisdiction that any release or agreement in Paragraph 4 is illegal, void or
unenforceable, Executive agrees to promptly execute a release, waiver and/or
covenant that is legal and enforceable to the extent permitted by law. No
provision of this Agreement may be waived except by a writing executed and
delivered by the party against whom waiver is sought. Any such written waiver
shall be effective only with respect to the event or circumstance described
therein and not with respect to any other event or circumstance, unless such
waiver expressly provides to the contrary.

18. Governing Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws and judicial decisions of the Commonwealth
of Pennsylvania, without regard to its principles of conflicts of laws. For the
purposes of any suit, action, or other proceeding arising out of this Agreement
or with respect to Executive’s employment generally, the parties: (i)

 

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agree to submit to the jurisdiction of the federal or state courts located in
Pennsylvania, (ii) waive any objection to personal jurisdiction or venue in such
jurisdiction, and agree not to plead or claim forum non conveniens; and
(iii) waive their respective rights to a jury trial of any claims and causes of
action, and agree to have any matter heard and decided solely by the court.

19. Voluntary Execution of Agreement. Executive acknowledges that:

 

  (a) Executive has carefully read this Agreement and fully understands its
meaning;

 

  (b) Executive had the opportunity to take up to twenty-one (21) days after
receiving this Agreement to decide whether to sign it;

 

  (c) Executive understands that the Company is herein advising her, in writing,
to consult with an attorney before signing it;

 

  (d) Executive is signing this Agreement, knowingly, voluntarily and without
any coercion or duress; and

 

  (e) all consideration Executive is receiving in exchange for signing this
Agreement is described herein, and no other promises or representations have
been made to induce Executive to sign this Agreement.

20. Entire Agreement. This Agreement contains the entire agreement and
understanding between Executive and the Company concerning the matters described
herein, and supersedes all prior agreements, discussions, negotiations and
understandings between the Company and Executive. The terms of this Agreement
cannot be changed except in a subsequent document signed by Executive and an
authorized representative of the Company.

 

Kensey Nash Corporation By:   /S/ Joseph W. Kaufmann   Joseph W. Kaufmann Dated:
October 24, 2008 /S/ Wendy F. DiCicco Wendy F. DiCicco Dated: October 23, 2008

 

   7    Employee Initial  ___________________