**Exhibit 10.31**

Dated as of January 1, 2001

 

I. Craig Henderson, M.D.c/o ACCESS Oncology, Inc.730 Fifth Avenue, Ninth Floor

New York, NY  10019

Dear Dr. Henderson:

This letter agreement will confirm your employment (“Executive”or “you”) with Access Oncology, Inc. (the “Corporation”), under the following terms and conditions and forthe following consideration:

1.            Termof Agreement; Compensation.  (a)        This agreement shall continue until December31, 2004 (the “Employment Term”), except the term shall be automatically renewed for a period of two years on eachexpiration date unless either party provides six months prior written notice of non-renewal to the other party.

(b)           Executive shall be paid $200,000 per year (the “Base Salary”), payable on a bi-monthly basis in arrears; provided thatExecutive’s Base Salary shall be increased by at least15% annually, with the first adjustment onJanuary 1, 2002 and thereafter on each January 1 that this Agreement is in effect.  Notwithstanding the foregoing, until thetime that the Executive joins the Corporation on a full-time basis, Executive will receive a percentage of the Base Salary equal tothe percentage of time that the Executive is devoting to the Corporation pursuant to paragraph 2 at the time any Base Salarypayment is due.  Additionally, upon the time that Executive joins the Corporation on a full-time basis and assuming thatcorporate resources are adequate to justify such an increase, the Executive’s Base Salary will be increased to a levelcommensurate with Executive’s role and experience level.

(c)           Executive shall be entitled to an annual performance bonus of up to 50% of the Base Salary (the “Performance Bonus”)based on annual target performance objectives to be agreed upon by the Chairman of Board of Directors and the Executive on orbefore the December 15 immediately preceding fiscal year for which the Performance Bonus shall be applicable.  For the fiscalyear ending December 31, 2001, your target performance objectives and bonus amounts will based on the achievement of the statedoverall corporate performance goals for 2001 (and will be agreed upon within 120 days of the date hereof).

(d)            Youshall receive, options (the “Incentive Options”) to purchase 5% of the fully-diluted shares of common stock of theCorporation outstanding as of the date hereof (including the round of financing currently being conducted) with an exercise priceof $.20 per share, which options shall be exercisable for a 10 year period.  Twenty-five percent of the Incentive Optionsshall vest on December 31, 2001 and then equally on a quarterly basis thereafter over the next three-year (3) period while thisAgreement is in effect, such that on December 31, 2004, all such Incentive Options shall be fully vested.  The IncentiveOptionsshall otherwise be subject to the terms and conditions of the Corporation’s Employee StockOption Plan.

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(e)            Upon theoccurrence of each Qualified Offering(as defined in Exhibit B), you shall receive additional options (the “OfferingOptions”) to purchase common stock of the Corporation equal to 5% of the sharesof equity securities issued in such Qualified Offering.  Such options shallhave an exercise price equal to the fair market value of the Common Stock on theclosing date of such transaction, shall be exercisable for a 10-year period andshall otherwise be subject to the terms and conditions of the Corporation’sEmployee Stock Option Plan.  The Offering Options shall vest 25% on thefirst anniversary of such grant and the remainder in equal quarterlyinstallments over the next three years such that all such options shall be veston the fourth anniversary of such grant.

(f)            Fromtime to time, at the discretion of the Board of Directors, you may be eligible for additional stock option grants.

2.  Position and Responsibilities.  Subject to the termsand conditions set forth herein, the Corporation hereby engages and employs the Executive, and the Executive hereby acceptsengagement and employment, as follows:

| **Timeframe**                 | **TimeCommitment** | **Title** | **Anticipated Responsibilities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------|--------------------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| January 1, 2001-June 30, 2001 | 25%                | President | The Executive shall be primarily responsible for overseeing and managing theCorporation’s clinical services division, including, assisting in finalizing the business model, defining the product andservice offerings, developing the model and infrastructure for data management, recruiting and hiring the core team, recruiting toponcology practices to join OCOG and finding additional trial sponsors interested in utilizing the Corporation’s clinicalservices.

During this period, the Executive will also provide assistance to AOICommunications and AOI Pharmaceuticals on an advisory basis.

Executive will also assist the Corporation in its capital raisingefforts. |

 

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| July 1, 2001-December 31, 2001 | 50%             | President        | The Executive will continue to manage the clinical services division. Additionally, Executive will gradually during this period takeover the oversight management of the entire services division (OCOG,AOI Communications and cancereducation.com), such that by the end of 2001, all the senior executives in the services division willhave a direct reporting relationship to Executive (or his designated appointee).

Executive will continue to assist the Corporation in its capital raisingefforts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------------------------------|-----------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Thereafter                     | Full-time(80%+) | CEO andPresident | As CEO & President, Executive shall assume the day-to-day management ofthe entire Corporation.  Accordingly, senior executives from the Services Division and AOI Pharmaceuticals will reportdirectly to the Executive (or his designated appointee).

In turn, Executive will report directly to Michael S. Weiss, ExecutiveChairman of the Corporation on the progress of the operating units and collaboratively establish monthly, quarterly and annualbudgets and operating plans as well as the establishment of corporate goals and objectives.

It is anticipated that Michael S. Weiss, Executive Chairman, will maintainday-to-day management of the Corporation’s in-licensing/partnering business development efforts as well as focusing onstrategic initiatives for the Corporation, including, mergers & acquisitions, joint ventures and capital raising/wallstreet.  Executive will assist with and participate in these activities as well. |

Additionally, Executive shall be appointed to the Board of Directors of theCorporation at the next in-person Board meeting.

3.           Vacation.  Upon joining the Corporation on a full-time basis, Executive shall be entitled to four (4) weeks of paidvacation during each calendar year.

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4.           Non-Competition.  Executive understands and recognizes that his services to the Corporation are special and unique andagrees that, during the Employment Term and for a period of one (1) year from the date of termination of the Employment Term,Executive shall not in any manner, directly or indirectly, on behalf of Executive or any person, firm, partnership, joint venture,corporation or other business entity (“Person”), enter into, engage in or consult for any commercial business thatoperates an oncology-focused proprietary product development business, an oncology-focused clinical research business,oncology-focused site management organization, oncology-focused clinical research network, oncology-focused web site and/or anoncology-focused medical communications business, in each case which is competitive with the business of the Corporation, either asan individual for his/her own account, or as a proprietor, partner, member, joint venturer, employee, consultant, agent,salesperson, officer, director or shareholder (the “Restricted Businesses”) within the geographic area of theCorporation’s business, which is deemed by the parties to be the United States of America; provided, however, that nothingshall prevent the Executive from purchasing shares of any company in the public market or for working for a company that conducts aRestrictive Business, so long as Executive works in a division of such company that is not engaged in a Restricted Business. Executive acknowledges and agrees that given the services to be provided hereunder that this non-compete clause isreasonable.  Notwithstanding the foregoing, the Corporation acknowledges that Executive has continuing obligations to AlzaCorporation and to certain other pharmaceutical companies, medical communications companies and Internet-based companies to performcertain advisory and speaker activities, and the Corporation explicitly agrees that those activities are outside of thisnon-compete agreement.

5.           Confidential Information.  (a)  Executive agrees thatduring the course of the Employment Term or at any time after termination, Executive will keep in strictest confidence and will notdisclose or make accessible to any other person without the prior written consent of the Corporation, the Corporation’sproducts, services, business plan, manner of doing business and technology, both current and under development, promotion,marketing and educational programs, customer and other lists, trade secrets and other confidential and proprietary businessinformation of the Corporation or any of its clients and third parties including, without limitation, Proprietary Information (asdefined in Section 6) (all the foregoing collectively being referred to herein as the “ConfidentialInformation”).  Executive agrees:  (i) not to use any such Confidential Information for itself or others, (ii) notto disclose or publish any of the Confidential Information and (iii) not to take any such material or reproductions thereof fromthe Corporation’s facilities at any time during the Employment Term except, in each case, as required in connection withExecutive’s duties to the Corporation.

(b)            Uponwritten notice by the Corporation, Executive shall promptly redeliver to the Corporation, or, if requested by the Corporation,promptly destroy all written or electronic Confidential Information and any other written or electronic material containing anyinformation included in the Confidential Information (whether prepared by the Corporation, Executive, or a third party), and willnot retain any copies, extracts or other reproductions in whole or in part of such written or electronic Confidential Information(and upon request certify such redelivery or destruction to the Corporation in a written instrument reasonably acceptable to theCorporation and its counsel).

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6.           Ownership Of Proprietary Information.  (a) Executiveagrees that all information, materials and/or inventions created, discovered or developed by Executive under this Agreement(collectively, the “Inventions”), by the Corporation, its subsidiaries, affiliates or licensors or made known to theCorporation or any of its affiliates by Executive during the Employment Term and information relating to the Corporation’scustomers, suppliers, consultants, and licensees, and/or in which property rights have been assigned or otherwise conveyed to theCorporation or its affiliates, shall be the sole property of the Corporation or the affiliates, as applicable, and the Corporationor the affiliates, as the case may be, shall be the sole owner of all patents, copyrights and other rights in connection therewith,including without limitation the right to make application for statutory protection.  All of the aforementioned information ishereinafter called “Proprietary Information.”  By way of illustration, but not limitation, Proprietary Informationincludes web pages, computer programs, trade secrets, processes, discoveries, structures, inventions, designs, ideas, works ofauthorship, copyrightable works, trademarks, copyrights, formulas, data, know-how, show-how, improvements, inventions, productconcepts, techniques, information or statistics contained in, or relating to, marketing plans, strategies, forecasts, blueprints,sketches, records, notes, devices, drawings, customer lists, patent applications, continuation applications, continuation-in-partapplications, file wrapper continuation applications and divisional applications and information about the Corporation’s orits affiliates’ employees and/or consultants (including, without limitation, the compensation and job responsibility of suchemployees and/or consultants).

(b)           Executive shall maintain and furnish to the Corporation complete and current records of all such Inventions and disclose to theCorporation in writing all such Inventions.  Executive:  (i) hereby assigns, sets over and transfers to the Corporationall of his right, title, and interest in and to such Inventions; and (ii) agrees that Executive and his agents shall, during andafter the period Executive is retained by the Corporation, upon reasonable request of the Corporation, cooperate fully in obtainingpatent, trademark, service mark, copyright or other proprietary protection for such Inventions, all in the name of the Corporation(but only at Corporation expense), and, without limitation, shall execute all requested applications, assignments and otherdocuments, and take such other measures as the Corporation shall reasonably request in order to perfect and enforce theCorporation’s rights in such Inventions, and hereby appoints the Corporation as Executive’s attorney to execute anddeliver any such applications, assignments or other documents on Executive’s behalf in the event that the Executive fails orrefuses to execute and deliver any such applications, assignments or other documents requested by the Corporation.

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7.           Non-Solicitation.  During the Employment Term, and for one (1) year thereafter, Executive shall not, directly orindirectly, without the prior written consent of theCorporation:  (a) interfere with, disrupt orattempt to disrupt any past, present or prospective relationship, contractual or otherwise, between the Corporation and any of itslicensees, licensees, clients, customers, suppliers, employees, consultants or other related parties, or (b) solicit or induce forhire any of the employees, agents, consultants or advisors of the Corporation or any such individual who in the past was employedor retained by the Corporation, within six (6) months of the termination of said individual’s employment or retention by theCorporation; provided,however, that this prohibition shall not apply to consultants or advisors so long asExecutive is not in violation of his non-compete agreement and such consultants and advisors do not terminate their relationshipwith the Corporation as a result of their involvement with the Executive, or (c) solicit or accept employment or be retained by anyparty who, at any time during the Employment Term, was a customer or supplier of the Corporation or any of its affiliates or anylicensor or licensee thereof where such person’s position will be related to a Restricted Business (as such term is definedin paragraph 4 above); or (d) solicit or accept the business of any customer or supplier of the Corporation or any affiliate of theCorporation with respect to products similar to those supplied by the Corporation or such affiliate.

8.           Expenses & Benefits.  (a)  The Corporation will promptlyreimburse Executive for all reasonable and necessary business expenses incurredby him/her in connection with providing the employment services under thisAgreement.

(b)            TheCorporation shall make available to Executive similar health benefits and otherbenefits that it makes available to its other seniorexecutives.

9.           Termination; Severance and Accelerated Vesting.  (a) Upon yourjoining the Corporation on a full-time basis, if thereafter the Corporation terminatesyour employment without “just cause” (as defined in Exhibit A hereto) or youterminate your employment for “good reason” (as defined in Exhibit A hereto),then Executive will be entitled to receive the amounts set forth under paragraph9(b) below and Executive shall receive one additional year of vesting on allstock options granted to you; provided, however, if your employment isterminated in accordance with this paragraph 9(a) within 12 months of a“Qualified Change in Control” then you shall be entitled to immediate vesting ofall remaining unvested stock options.  Additionally, regardless of suchtermination, your stock options shall remain exercisable for the full teen ofsuch options.

(b)            In theevent your employment is terminated in accordance with paragraph 9(a), you shall receive a lump-sum payment equal to:  (i} one(1) year’s Base Salary; (ii) any earned and unpaid bonus as of the date of termination; and (iii) any incurred and unpaidexpenses; provided, however, if your employment is terminated in accordance with paragraph 9(a) within 12 months of a“Qualified Change in Control” then you instead will be entitled to a lump-sum payment equal to:  (x) two (2)year’s Base Salary; (y) any earned and unpaid bonus as of the date of termination; and (z) any incurred and unpaidexpenses.

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(c)            In theevent that your employment is terminated as a result of death or Disability (as defined in Exhibit A) of the Executive, thenExecutive or his estate or legal representative shall receive a lump-sum payment equal to (a) Base Salary through the date oftermination, (b) any earned and unpaid bonus and (c) any incurred and unpaid expenses.

10.           Indemnification.  The Corporation shall defend and indemnify Executive in his capacity as President, Chief ExecutiveOfficer and Director of the Corporation against any and all claims, judgments, damages, liabilities, costs and expenses (includingreasonable attorney’s fees) arising out of, based upon or related to the Executive’s performance of services hereunder,except to the extent that such claims arise out of Executive’s (a) willful misconduct, (b) bad faith, (c) gross negligence or(d) reckless disregard of the duties involved in the conduct of Executive’s position.

11.           Entire Agreement; Waiver.  This Agreement contains the      entire understanding of theparties with respect to the retention of Executive by the Corporation.  There are no restrictions, agreements, promises,warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly setforth herein.  This Agreement may not be altered, modified, or amended except by written instrument signed by the partieshereto.

12.           Governing Law.  This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of theState of New York without regard to such State’s principles of conflict of laws.  The parties hereto consent to theexclusive jurisdiction of the courts of the State of New York or any district court sitting in the State of New York for anydisputes arising under this letter agreement.

13.           Headings.  The headings of the Sections are inserted for convenience of reference only and shall not affect anyinterpretation of this Agreement.

14.           Severability of Provisions.  If any provision of this Agreement shall be declared by a court of competent jurisdictionto be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remainenforceable to the maximum extent permissible consistent with applicable law.  The remaining conditions and provisions orportions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal andenforceable, and no provision shall be deemed dependent upon any other covenant or provision unless so expressed herein.

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**IN WITNESS WHEREOF,** the parties hereto haveexecuted this Letter Agreement as of the day and year first written above.

 

| EXECUTIVE:

 

by:        /s/ I. Craig Henderson,M.D.   Name:  I. Craig Henderson, M.D. | CORPORATION:

ACCESS Oncology, Inc.

by:        /s/ Michael S.Weiss                Name:  Michael S. WeissTitle:    Chairman & CEO |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

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**Exhibit A**

## Certain Definitions

- **JustCause.**  Any of the following actions by the Executive shall constitute just cause for termination by the Chairman ofthe Board of Directors of the Corporation:

-  Material breach by the Executive of the confidentiality, non-compete, ownershipof inventions and non-solicitation covenants contained in this Employment LetterAgreement; or 
-  Any action by the Executive constituting willful misconduct in respect of theExecutive’s obligation to the Corporation that has or is likely to result inmaterial., economic damage to the Corporation; or 
-  The willful and continual failure or refusal by the Executive to perform hisduties as under this letter employment (other than by reason of death orDisability (as defined below), or other reasons beyond Executive’s control),provided such failure or refusal continues for a period of 30 days after receiptof written notice thereof from the Chairman of the Board of Directors inreasonable detail of such failure or refusal; or 
-  Conviction of any crime which involves (i) an intentionalwrongful act or (ii) an act of moral turpitude that (a) is intended to result in substantial personal enrichment of the Executiveat the expense of the Corporation or (b) may have a material adverse impact on the business or reputation of theCorporation. 

- **GoodReason**.  Any of the following actions or omissions by the Corporation shall constitute good reason for termination byExecutive:

-  Material breach by the Corporation of any provision of this Employment LetterAgreement which is not cured by the Corporation within 30 days of notice thereoffrom the Executive; or 
-  A failure to elect or reelect the Executive to the office of President, ChiefExecutive Officer and Director of the Corporation or other diminution of theExecutive’s function, duties or responsibilities in each case without theExecutive’s written consent; or 
-  Reduction in Executive’s Base Salary or incentives or other fringe benefits of amaterial economic effect; or 
-  Termination of the Executive’s employment within 12 months of a “change incontrol” (as defined below) if such termination is initiated bytheCorporation (or such successor corporation) without “just cause” or by the Executive for “good reason”(other than as set forth in this subparagh (D)).  A “change in control,” shall mean either:  (x) a Merger (asdefined below), except for a transaction the principal purpose of which is to change the:  State of incorporation, (y) thesale, transfer or other disposition of all or substantially all of the assets of the Corporation; or (z) any other corporatereorganization or business combination (including, but not limited to, a merger in which the Corporation is the surviving entity)in which more than fifty percent (50%) of the Corporation then outstanding voting stock is transferred to different holders in asingle transaction or a series of related transactions; or 

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-  Relocation of Executive, without his prior consent to a facility or locationthat is more than fifty (50) miles away from the Executive’s then presentlocation. 

-  **Disability**.  Shall mean (i) the suffering of any mental or physical illness, disability or incapacity that shallin all material respects preclude the Executive from performing his employment duties or (ii) the Executive’s absence fromemployment by reason of any mental or physical illness, disability or incapacity for a period of four and one-half months duringany nine-month period; provided that such illness, disability or incapacity shall be reasonably determined by the Chairman of theBoard of Directors of the Corporation to be of a permanent nature based on the foregoing standards. 
-  **Merger.**  Shall mean a merger or consolidation of the Corporation with any other corporation or entity, otherthan a merger or consolidation which would result in the voting securities outstanding immediately prior thereto continuing torepresent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty(50%)percent of the total voting power represented by the voting securities of the Corporation or such surviving entity outstandingimmediately after such merger or consolidation. 
-   **Qualified Offering.** Shall mean the sale of securities of the Corporation prior to the earlier to occur of (a)raising $30 million and (b) the initial underwritten public offering, provided that the price paid for such securities places avaluation on the Corporation that is greater than the post-offering valuation of the Corporation for the round of financingimmediately preceding such sale of securities. 
-  **Qualified Change in Control.**  Shall mean a “change in control”, which places a value on theCorporation of in excess of $50 million. 

NYC01/7725055v1