Exhibit 10.1

 

AGREEMENT

 

SYNTHETIC BLOOD INTERNATIONAL, INC.

 

402 West Broadway Street, Suite 400

 

San Diego, California, 92101

 

THIS AGREEMENT is by and between Leland C. Clark, Jr., Ph.D., (hereinafter
referred to as “Clark”) and Synthetic Blood International, Inc. (hereinafter
referred to as “Synthetic”).

 

As used in this agreement the following terms shall have the following meaning:

 

Invention: All improvements and discoveries dealing with synthetic blond
substitutes, whether or not patented and whether or not reduced to practice,
made or conceived by Clark, whether made solely by Clark or jointly with others,
from the time of entering this Agreement with Synthetic until termination
thereof.

 

Confidential Information: All information, and data relating to the research,
and development of a commercial oxygen carrier that can be used as an artificial
blood substitute, owned by Synthetic.

 

Trade Secret: All confidential information that is treated as a secret by
Synthetic.

 

Abandonment: Any patents, patent applications, or disclosure fitLngs that are
developed as part of Clark’s work with Synthetic in the development of
artificial blood substitutes that are not pursued or exploited by Synthetic and
remain unexploited and not pursued for more than one (1) year.

 

Upon the mutual covenants, terms and conditions hereinafter.

 

Synthetic hereby agrees to employ Clark and Clark hereby agrees to accept such
employment as a member of the Board of Directors and Vice President in Charge of
Research

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and Development of Synthetic for a period of five years beginning October l,
1991. In this position Clark shall take responsibility for and direct the
Research and Development of the company’s proprietary line of artificial blood
substitute products. Clark shall be compensated at the initial rate of $120,000
per year, for full time effort. The actual payment for file first year, will. be
$84,000 based on 70% of Clark’s time being spent on the company’s business. The
amount will be increased annually based on the amount of time spent on the
project, but in any event no less than 70% of time, the success of the research,
and an inflation factor. At Clark’s request this compensation may be assigned to
Clark Biomedical Research, Inc. Clark shall also be compensated by the issuance
of 500,000 shares of common stock of Synthetic.

 

Clark hereby assigns to Synthetic all of his interest in intellectual,
properties that relate to synthetic or artificial blood substitutes that have
not been assigned or contractually obligated to be assigned to other persons or
organizations. In exchange for this assignment, Synthetic will issue 2, 000,000
shares of common stock of Synthetic to Clark. In addition Synthetic will cause
to be issued to Clark an additional 2,338,830 shares of common stock.

 

Synthetic represents that upon the issuance of the 4,838,830 shares of common
voting stock of Synthetic to Clark, there will. be 17,598,830 shares of common
voting stock Issued and outstanding and no other class of stock is authorized.

 

Clark here binds himself to communicate fully and promptly to Synthetic and
preserve as confidential, all inventions dealing with an artificial blood
substitute that result from the work performed by Clark for Synthetic, or that
relate, at the time of conception or reduction to practice, to the business of
Synthetic, regardless or not if such invention was developed on Clark’s own time
or substantially using Synthetic’s equipment, supplies, facilities or trade
secrets. It is understood that Clark shall assign to Synthetic any invention
which is developed at

 

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least in part on Synthetic’s time, or which related at the time of conception or
reduction to practice, to the business of or actual development by Synthetic.
Any inventions that do not fall within these provisions shall be released by
Synthetic to Clark so that Clark may freely exploit the inventions without
interference from Synthetic and Synthetic shall claim no right, title or
interest in such inventions.

 

Clark bind himself to execute, acknowledge, and deliver to Synthetic all paper
dealing with artificial blood substitutes including applications for patents and
assignments of inventions and patents on such inventions to be issued therefore
as Synthetic may doom necessary or desirable to obtain patents on such
inventions in any and all countries and/or to protect the interest or Synthetic
in such inventions and patents and to vest title thereto in Synthetic.

 

Clark binds himself to keep confidential, all Confidential Information, and not
to communicate or divulge to or use for the benefit of Clark or any other
person, firm, association, or corporation without the consent of Synthetic, any
information concerning any inventions, discoveries, improvement, processes,
formulas, apparatus, equipment methods, trade secrets, research, secret data,
costs, uses or purchases of Synthetic’s products or services or other
confidential matters possessed, owned or used by Synthetic. All records, files,
plans, documents, equipment and the like relating to the business of Synthetic
which Clark shall use or prepare or come in contact with shall remain the sole
property of Synthetic.

 

It is understood that all inventions that Clark made prior to joining in this
relationship with Synthetic are excluded from the scope of this Agreement,
except those relating to artificial blood that are specifically assigned to
Synthetic in consideration for the equity position with Synthetic.

 

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It is also understood that if an Abandonment by Synthetic occurs with reference
to an invention, patent, or other intellectual property developed by Clark
during his tenure with Synthetic, or an invention, patent or intellectual
property assigned by Clark to Synthetic as herein provided, said invention,
patent or intellectual property, at Clark’s request, shall be assigned to Clark
and Synthetic shall have no further right of ownership or interest in said
assigned invention, patents, or intellectual property. In the event of
Synthetic’s failure to assign these abandoned properties to Clark fowl request,
this document shah. serve as the assignment thereof.

 

Clark has invented and/or patented many inventions relating to artificial blood
in the past. Synthetic understands and acknowledges that most of these have been
assigned to other organizations. Synthetic agrees that if the use of any of
these assigned patents become important or necessary to the development of
Synthetic’s products, that Synthetic will use its best efforts to obtain the
right, through license or other agreement, to the use of said inventions so that
they could be used by Clark in developing Synthetic’s products.

 

Notwithstanding anything to the contrary herein, Clark shall have the right, in
his sole discretion, to terminate and rescind this Agreement by giving thirty
(30) days written notice to Synthetic at any time during its term in this event
o€ any o€ the following:

 

1. Synthetic’s dilution without Clark’s written consent, of Clark’s equity
interest in Synthetic’s common voting stock below ten percent (10%), or the
issuance of any other class of stock without Clark’s written consent;

 

2. Synthetic’s failure to permit Clark to control the direction and methodology
of research and development.

 

Clark shall have the right, upon thirty (30) days written notice to Synthetic,
in his sole discretion, to terminate this Agreement and his obligations
hereunder in the event that without

 

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his written approval a material portion of the assets of Synthetic are sold,
transferred or otherwise assigned, Synthetic is purchased or merged into another
company or a material change in the management of Synthetic occurs. In the event
Clark elects such termination, all of Clark’s right, title and interest to
Clark’s inventions, patents and other intellectual properties shall be
transferred to Clark and Clark shall be released from any confidentiality
covenants herein contained.

 

Clark shall have the right, upon thirty (30) days written notice to Synthetic,
in his sole discretion, to terminate his employment for health or retirement
reasons. In the event Clark elects such termination, Synthetic will retain all
right, title and interest in Clark’s work relating to artificial blood
substitutes and any other invention, patents or intellectual property that may
have been separately assigned to Synthetic by another document.

 

Synthetic hereby agrees that without Clark’s prior consent, it shall not sell,
transfer or assign any invention, confidential information or other intellectual
property. Any attempted transfer in derogation of this provision shall be null
and void.

 

It is expressly agreed and understood that nothing contained in this Agreement
shall preclude, restrict, or inhibit Clark from pursuing researching,
developing, and/or inventing individually or with any other separate and apart
from Synthetic any other matters not dealing with synthetic or artificial blood
substitutes. Any such inventions, patents or other intellectual property
developed by Clark shall be his sole and exclusive property and Synthetic shall
claim no right, title or other interest therein.

 

This shall be binding upon Clark’s and Synthetic’s heirs, executors,
administrators or other legal representatives, successors of assigns.

 

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The undersigned Clark hereby acknowledges reading and understanding all of the
above and agrees to promptly disclose to Synthetic any invention during the term
of this contractual relationship:

 

/s/

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/s/

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Witness

     

Leland C. Clark, Jr, Ph.D.

   

Date:

 

11/20/92

   

Synthetic Blood International, Inc.

/s/

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By:

 

/s/ Robert Larson

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Witness

 

Date:

 

11/20/92

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SYNTHETIC BLOOD INTERNATIONAL, INC.

402 West Broadway Street, Suite 400

San Diego, California 92101

 

January 16, 1993

 

Leland C. Clark, Jr., Ph.D.

111 South Walnut Street

Yellow Springs, Ohio 45387

 

Dear Dr. Clark:

 

Reference is made to the Employment Agreement between Clark and Synthetic. This
Amendment No 1. to the Employment Agreement (the “Amendment No. 1”) is entered
into to amend and clarify certain provisions of the Employment Agreement, which
Clark and Synthetic desire to do. Accordingly, the Employment Agreement is
hereby amended and clarified as follows:

 

(1) Synthetic and Clark hereby acknowledge and agree that the Employment
Agreement supersedes in its entirety the Employment Agreement, dated October 1,
1991 (as amended on October 15, 1992), between Clark and Synthetic (the
“original Employment Agreement”), which Original Employment Agreement is deemed
to be, and is, null and void and of no further force and effect effective as of
November 20, 1992, the date of the Employment Agreement.

 

(2) The second full paragraph on Page 5 of the Employment Agreement (which
begins “Notwithstanding anything to the contrary herein” and ends with “2.
Synthetic’s failure to permit Clark to control the direction and methodology of
research and development”) and the carryover paragraph beginning at the bottom
of page 5 of the Employment Agreement and continuing on page b (which begins
“Clark shall have the right” and ends with “confidentiality covenants herein
contained”) are hereby deleted in their entirety and replaced with the
following:

 

“Notwithstanding anything to the contrary herein, Clark shall have the right in
his sole discretion, to terminate his employment under the Agreement by giving
thirty (30) days written notice to Synthetic at any time during its term in the
event of Synthetic’s failure to permit Clark to control the direction and
methodology of research and development of Synthetic far reasons other than
Clark’s physical or mental disability (as defined below). In the event Clark
elects such termination, all of Clark’s right, title and interest. to Clark’s
inventions, patents and other intellectual properties shall be transferred to
Clark and Clark shall be released from any confidentiality covenants herein
contained.

 

For purposes of this agreement, “physical or mental disability” shall mean
Clark’s inability, due to health reasons, to discharge properly his duties of
employment for Synthetic for a period of either (i) any 45 consecutive days or
(ii) any 180 days in any 365 day period, in each case during the term of this
agreement and supported by the opinion of a physician reasonably satisfactory to
both Clark (or Clark’s representative) and Synthetic.

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Clark hereby agrees that in the event of (i) Synthetic’s dilution of Clark’s
equity investment in Synthetic’s common voting stock, (ii) Synthetic’s failure
to permit Clark to control the direction and methodology of research and
development due to the physical or mental disability of Clark (as defined
above), or (iii) a sale, transfer car other assignment of a material portion of
the assets of Synthetic, or if Synthetic is purchased or merged into another
company or a material change in the management of Synthetic occurs then., in any
of these events which are set forth on pages 5 & 6 of the Employment Agreement,
Synthetic will retain all right, title and interest in Clark’s work relating to
artificial blood substitutes. and any other invention, patents or intellectual
property that way have been separately assigned to Synthetic by Clark pursuant
to the terms and conditions of another document, and Clark shall also remain
subject to, and bound by, all of the confidentiality covenants, agreement and
other conditions set forth in the Employment Agreement.”

 

(3) Clark hereby acknowledges and consent to (a) the execution by Synthetic of a
Security Agreement, dated November 20, 1992 (the “Security Agreement”), in favor
of Cato Portfolio AG and certain Switzerland banks (collectively, the “Secured
Parties”) granting the Secured Parties a security interest all the assets of
Synthetic described in said Security Agreement, and (b) the execration of all of
the documents to be executed and the consummation of all the transactions to be
consummated in connection therewith, as contemplated by and set forth in the
Private Placement Memorandum of Synthetic, dated November 23, 1992 (the “Private
Placement Memorandum”). Clark further acknowledges and agrees that none of the
execution of the Security Agreement, the taking of actions necessary to perfect
said Security Agreement, the issuance of the Convertible Debentures or the
offering of the Units pursuant to the Private Placement Memorandum, in each case
prior to the date of this Amendment No 1, shall constitute a breach by Synthetic
of any of the terms and conditions of the Employment Agreement.

 

This Amendment No. 1 which is in full force and effect as of the date signed
below was requested by Cato Portfolio AG in order to clarify certain aspects of
Dr. Clark’s Employment Agreement. In the event Cato Portfolio AG is not
successful in closing the Regulation S funding as per the Private Placement
Memorandum dated November 23, 1992, this Amendment No. 1 shall be cancelled and
no longer remain in farce or effect.

 

All other provisions of the Employment Agreement remain in full force and effect
and are not effected by this Amendment No. 1.

 

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If the foregoing correctly Sets forth the understanding between Clark and
Synthetic, please so Indicate in the space provided below for the purpose
whereupon this letter shall constitute a binding amendment to the Employment
Agreement. This Amendment No. l may be executed in counterparts, each of which
shall be deemed to be an original and both of which together shall be deemed to
be one and the same instrument.

 

Very truly yours,

 

SYNTHETIC BLOOD INTERNATIONAL, INC.

By:

 

/s/

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Roger A. Ekbom

   

Chairman of the Board

 

CONFIRMED AND AGREED TO:

 

/s/

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Leland C Clark, Jr., Ph.D. 1993.

 

Dated: January 16, 1993.

 

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SYNTHETIC BLOOD INTERNATIONAL, INC.

402 West Broadway Street, Suite 400

San Diego, California 92101

 

March 6, 1993

 

Leland C. Clark, Jr., Ph.D.

111 South Walnut Street

Yellow Springs, Ohio 45387

 

  Re: Amendment No. 2 to Employment Agreement dated November 20, 1992, between
Synthetic Blood International, Inc. (“Synthetic”) and Leland C. Clark, Jr.,
Ph.D. (“Clark”), as amended by Amendment No. 1 thereto, dated January 16, 1993
(“Amendment No. 1 and collectively with the November 20, 1992 Employment
Agreement, the “Employment Agreement”).

 

Dear Dr. Clark:

 

Reference is made to the Employment Agreement between Clark and synthetic and to
Amendment No. 1 thereto. This Amendment No. 2 to the Employment Agreement (the
“Amendment No. 2”) is being entered into to amend and clarify certain provisions
of Amendment No. 1, which Clark and Synthetic desire to do. Accordingly,
Amendment No. 1 is hereby amended and clarified as follows (defined trims used
herein and not defined herein shall have the meanings set forth in Amendment No.
1).

 

1. The term “Employment Agreement” as used in Amendment No. 1 shall mean the
Employment Agreement, dated November 20, 1992, between Synthetic and Clark.

 

2. The term “Convertible Debentures” as used in Amendment No. 1 shall mean an
aggregate of $780,000.00 in principal amount of Convertible Debentures (and the
associated warrants issued in connection therewith) issued on April 3, 1992
($210,000.00 in principal amount), April 24, 1992 ($214,000.00 in principal
amount), July 24,1992 ($160,000.00 in principal amount), September 30, 1992
($100,000.00 principal amount) and November 20, 1992 ($100,000.00 in principal
amount).

 

3. The words “which are set Earth on pages 5 & 6 of the Employment agreement”
set forth in the ninth and tenth lines of the first full paragraph on page 2 of
Amendment No. 1 (which begins “Clark hereby agrees. . .” and ends with” . . .
set forth in the Employment Agreement”) are hereby deleted.

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4. Paragraph (3) of Amendment No. 1 (which begins “(3) Clark hereby acknowledges
and consents to . . .” and ends with “. . . any of the terms and conditions of
the Employment Agreement” is hereby renumbered paragraph 3(a), and the following
paragraph 3(b) is hereby added:

 

“(b) in the event that Synthetic defaults on its obligations under the
Convertible Debentures and the Secured Parties foreclose and take title to the
Intellectual property rights (or any portion thereof) constituting a portion of
the security interest granted to the Secured Parties pursuant to the Security
Agreement, more particularly described as all right, title and interest of
Synthetic in and to the general intangibles (directly by license or otherwise),
described as (i) Synthetic’s interests and rights in U.S. Patent No. 4,105,798
and its foreign counterpart patents and the U.S. Patent No. 3,911,238 and its
foreign counterpart patents, and (ii) all intellectual property rights, trade
secrets, formulae, data, know-how, copyrights and copyright applications (such
intellectual property rights collectively referred to herein as the
“Intellectual Property Rights”), then for a period of two (2) years from the
date on which the Secured Parties obtain title to such Intellectual Property
Rights Clark shall have the right to purchase from Secured Parties all, but not
less than all, of the Intellectual Property Rights so transferred to the Secured
Parties at a purchase price equal to the full amount of the default in payment
obligations under the Convertible Debentures which default resulted in the
foreclosure by the Secured Parties, plus accrued interest from the date of each
such default to the date of repurchase of the Intellectual Property Rights by
Clark at a simple rate of interest equal to the lesser of (a) 7% or (b) the
highest rate of interest permitted to be charged pursuant to the laws of the
State of California governing usury then in effect.

 

5. The last two fall paragraphs on page 2 of Amendment No. 1 (which begins “This
Amendment No. 1 which is in full force . . .” and ends with “. . . are not
effected by this Amendment No. 1” are hereby deleted in their entirety and
replaced with the following:

 

“This Amendment No. I is in full force and effect as of January 16, 1993, the
date of its execution. Notwithstanding the foregoing, in the event that an
Initial Closing (as defined in the Private Placement Memorandum) with respect to
the sale of Units does not occur in accordance with the terms and conditions of
the Private Memorandum, as such document may be amended or supplemented, then
paragraph number (2) (and only paragraph number (2) of the text of this
Amendment No. 1 (as in effect on the date hereof or as may subsequently be
amended by Synthetic and Clark) shall be rescinded and shall be null and void
and of no force and effect. All other provisions of the Employment Agreement and
this Amendment No. 1 are in full force and effect and shall remain in full force
and effect regardless of whether an initial Closing with respect to the Units
occurs.”

 

If the foregoing correctly, sets forth the understanding between Clark and
Synthetic, please so indicate in the space provided below for that purpose
whereupon this letter shall constitute a binding amendment to Amendment No. 1,
and together with the Employment Agreement shall constitute the entire agreement
of the parties hereto with respect to the subject matter hereof and shall
supersede all prior arrangements, understandings, negotiations and

 

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agreements of the parties hereto with respect to the subject matter hereof. This
Amendment No. 2 may be executed in counterpart, each of which shall be deemed to
be an original and both of which together shall be deemed to be one and the same
instrument.

 

Very truly yours,

 

SYNTHETIC BLOOD INTERNATIONAL, INC.

By:

 

/s/

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Roger A. Ekbom

   

Chairman of the Board

 

CONFIRMED AND AGREED TO:

/s/

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Leland C. Clank, Jr., Ph.D.

Date: March 7,1993

 

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