Document:

exhibit10_2.htm

    

      EMPLOYMENT
AGREEMENT

       

       THIS AGREEMENT made in
Iselin, New Jersey this 1st day of October 2008 (the “Effective Date”), between
SyntheMed, Inc., a Delaware corporation (the "Company"), and Robert P. Hickey,
the undersigned individual ("Executive").

       

      WHEREAS,
the Executive is currently employed by the Company pursuant to an existing
employment agreement dated as of June 19, 2006, whose term is scheduled to
expire in May 2009, subject to automatic annual renewal unless terminated on six
months’ prior notice; and

       

      WHEREAS,
the parties desire to amend and restate the existing employment
agreement.

       

      NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth, the Company and Executive agree to amend and restate the existing
employment agreement as follows:

       

      1.  Agreement
Term.

       

      The term of this Agreement shall be the
four-year period commencing as of the Effective Date and ending on the fourth
anniversary of the Effective Date (the "Agreement Term"). Subject to earlier
termination as provided in Section 5, the Agreement Term shall automatically be
renewed for annual increments as of the fourth anniversary of the Effective Date
and each subsequent anniversary thereof, subject to the right of either party to
terminate the Agreement at the end of the initial Agreement Term or any such
renewal term upon at least six months’ prior written notice to the other
party.

      

      2. Employment.

      

      (a) Employment by the
Company. Executive agrees to be employed by the Company for the Agreement
Term upon the terms and subject to the conditions set forth in this Agreement.
Executive shall have the titles of President and Chief Executive Officer and
such other titles, if any, as shall be mutually agreed. Executive will report to
the Board of Directors of the Company, and so long as there is an Executive
Chairman, Executive will coordinate his activities with the Executive
Chairman.  Executive shall have such authority and responsibilities as
may be prescribed by the Board of Directors, consistent with customary business
practice for those with the agreed upon titles employed by companies of the
size, type and nature of the Company, and, so long as there is an Executive
Chairman, subject to such allocation of authority and responsibilities between
the Executive and Executive Chairman as the Board of Directors in good faith
deems desirable. The Company will at all times treat the Executive with dignity,
honesty and respect, and will provide Executive with such resources as in the
Company's judgment shall enable the Executive to discharge his
responsibilities.

      

      (b) Performance of
Duties. Throughout the Agreement Term, Executive shall faithfully and
diligently perform Executive's duties in conformity with the directions of the
Company and serve the Company to the best of Executive's ability. Executive
shall devote Executive's entire working time, attention and energies to the
business and affairs of the Company, subject to vacations and sick leave as
provided herein and in accordance with Company policy.

      

      (c) Place of Performance.
During the Agreement Term, Executive shall, subject to travel requirements on
behalf of the Company, be based at (i) the Company’s principal executive offices
or (ii) with the consent of the Board of Directors, the Executive’s residence.
In the event the principal executive offices of the Company are moved to a
location in excess of 20 miles from (i) its current location in Iselin, New
Jersey and (ii) Executive’s current or then residence (whichever is closer to
the new office location), Executive agrees, if so requested by the Board of
Directors, to be based at such new location during the work week for a period
not to exceed three months, provided the reasonable costs of lodging and meals
during the work week and commute to and from Executive’s residence in Oceanport,
New Jersey for weekends and holidays, is borne by the Company.

      

      3. Compensation and
Benefits.

       

      (a) Base Salary. The
Company agrees to pay to Executive for employment hereunder a base salary ("Base
Salary") at the annual rate of $315,000. The Base Salary will be reviewed
annually, based upon performance-based merit guidelines established annually, in
advance, by the Compensation Committee, and may, at the discretion of the Board
of Directors, be increased, based on such factors as the Board of Directors
deems relevant including, without limitation, its assessment of Executive’s
performance of his duties and on the financial performance of the Company. The
Base Salary shall be payable in installments consistent with the Company's
payroll practices then in effect.

      

      (b) Benefits and Perquisites;
Bonus and Stock Options. Executive shall be entitled to participate in,
to the extent Executive is otherwise eligible under the terms thereof, the
benefit plans and programs, including medical and savings and retirement plans,
and receive the benefits and perquisites, generally provided to employees of the
same level and responsibility as Executive. Executive shall be entitled to five
weeks vacation during each calendar year of the Agreement Term.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       Nothing
in this Agreement shall preclude the Company from terminating or amending from
time to time any Company-wide employee benefit plan or program. For the purposes
of this Agreement, the life insurance and long-term disability benefits of
Executive shall not be deemed to be Company-wide benefits.  Executive
shall be eligible for annual bonuses and stock options, in such amounts as shall
be determined at the discretion of the Board of Directors of the Company based
on such factors as the Board of Directors deems relevant including, without
limitation, its assessment of Executive's performance of his duties and on the
financial performance of the Company. The target amounts for the bonus and stock
options shall be established annually, in advance, by the Compensation
Committee.  The Company shall obtain or maintain life insurance
coverage (assuming the Executive is insurable) on the life and for the benefit
of the Executive's named beneficiaries in an amount equal to twice the amount of
the Base Salary then in effect. The Company shall be entitled to all dividends,
if any, which may be paid under the policy. The Executive represents that the
Executive is currently in good health.

      

      (c) Travel and Business
Expenses. Upon submission of itemized expense statements with supporting
receipts in the manner specified by the Company, Executive shall be entitled to
reimbursement for reasonable travel and other reasonable business expenses duly
incurred by Executive in the performance of Executive's duties under this
Agreement in accordance with the policies and procedures established by the
Company from time to time for employees of the same level and responsibility as
Executive.

      

      (d) No Other Compensation or
Benefits; Payment. The compensation and benefits specified in Sections 3
and 5 of this Agreement shall be in lieu of any and all other compensation and
benefits, except as may become due and owing under the Change of Control
Agreement entered into between the Company and the Executive in June 2006 (“the
Change of Control Agreement”) and except as may otherwise be agreed in writing
between the parties subsequent to the date hereof. Payment of all compensation
and benefits to Executive hereunder shall be made in accordance with the
relevant Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes.

      

      (e) Cessation of
Employment. In the event Executive shall cease to be employed by the
Company for any reason, then Executive's compensation and benefits shall cease
on the date of such event, except as otherwise provided herein, in the Change of
Control Agreement or in any applicable employee benefit plan or
program.

      

      4. Exclusive Employment;
Noncompetition.

       

      (a) No Competition.
Without limiting the generality of the provisions of Section 2(b) and so long as
the Company fulfills its obligations under this Agreement including, without
limitation, its obligations under Section 5, during the period of Executive's
employment with the Company, and for 12 months thereafter (the "Restricted
Period"), Executive shall not, directly or indirectly, own, manage, operate,
join, control, participate in, invest in or otherwise be connected or associated
with, in any manner, including as an officer, director, employee, partner,
stockholder, joint venturer, lender, consultant, advisor, agent, proprietor,
trustee or investor, any Competing Business located in the United States or in
any other location where the Company operates or sells its products or services;
provided, however, that part-time consulting services rendered by Executive to a
Competing Business (defined below) during the Restricted Period shall not be
deemed a violation of this Section 4(a) if pre-approved by the Board of
Directors of the Company (which approval shall not be unreasonably withheld) and
rendered in accordance with such approval (“Approved Consulting
Services”).

      

      (i) As used in this Agreement, the term
"Competing Business" shall mean any business or venture which engages in any
business area, or sells or provides products or services that compete with any
business area, in which the Company engages or is actively developing products
or technology to engage in at any time during the Agreement Term, or any
business or venture which sells or provides products or services that compete or
overlap with the products or services as sold or provided, or are being actively
developed to be sold or provided, by the Company at any time during the
Agreement Term. For the avoidance of doubt, and without limiting the foregoing,
“Competing Business” includes any business or venture that offers for sale
products or services to reduce or prevent formation of adhesions in patients
following surgical procedures.

      (ii) For purposes of Section 4(a), the
term "invest" shall not preclude an investment in not more than one percent (1%)
of the outstanding capital stock of a corporation whose capital stock is listed
on a national securities exchange, so long as Executive does not have the power
to control or direct the management of, or is not otherwise associated with,
such corporation.

      

       (b) No Solicitation.
During the Restricted Period, Executive shall not solicit or encourage any
employee or consultant of the Company to leave the employ, or cease his or her
relationship with, the Company for any reason, nor employ or retain such an
individual in a Competing Business or any other business.

      

      (c) Company Customers.
Executive shall not, during the Restricted Period, directly or indirectly,
contact, solicit or do business with any "customers" (as hereinafter defined) of
the Company for the purpose of selling or providing any

       

      
        
          
          

        

        
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      product
or service then sold or provided by the Company to such customers or being
actively developed to be sold or provided to such customers during Executive's
employment by the Company or at the time of termination of Executive's
employment hereunder.

      

      (i) For the purposes of Section 4(c),
"customer" shall include any entity that purchased any product or service from
the Company or its distributors within twelve months of the termination of
Executive's employment hereunder, without regard to the reason for such
termination. The term "customer" also includes any former customer or potential
customer of the Company which the Company has solicited within twelve months of
such termination, for the purpose of selling or providing any product or service
then sold or provided, or then actively being developed to be sold or provided,
by the Company.

      

       (d) Modification of
Covenants. The restrictions against competition set forth in this Section
4 are considered by the parties to be reasonable for the purposes of protecting
the business of the Company. However, if any such restriction is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

      

      5. Termination of
Employment.

       

      (a) Termination. The
Company may terminate Executive's employment for Cause (as hereinafter defined)
in which case the provisions of Section 5(b) shall apply. The Company may also
terminate Executive's employment in the event of Executive's Disability (as
hereinafter defined), in which case the provisions of Section 5(c) shall apply.
The Company may also terminate the Executive's employment for any other reason
by written notice to Executive, in which case the provisions of Section 5(d)
shall apply. If Executive's employment is terminated by reason of Executive's
death, retirement or voluntary resignation without Good Reason, the provisions
of Section 5(b) shall apply.

      

      (b) Termination for Cause;
Termination by Reason of Death or Retirement or Voluntary Resignation without
Good Reason.

      

      (1) In the event that Executive's
employment hereunder is terminated during the Agreement Term (i) by the Company
for Cause (as hereinafter defined), (ii) by reason of Executive's death or
retirement or (iii) by reason of Executive's voluntary resignation without Good
Reason, then the Company shall pay to Executive, within thirty (30) days of the
date of such termination, only the Base Salary through such date of
termination.

      

      (2) For purposes of this Agreement,
"Cause" shall mean (i) gross neglect or misconduct in the performance of
Executive's duties hereunder; (ii) the Executive’s engaging in any act that
constitutes neglect or willful misconduct and that is injurious to the Company
or any of its affiliates including without limitation engaging in conduct in
violation of the Company’s Code of Business Conduct or Insider Trading Policy,
as the same may be in effect from time to time, or making a written
certification that the Executive knows or should know is erroneous and that
contributes to a material error in the Company’s filings with any governmental
agency; (iii) the Executive’s conviction of, or entering a plea of guilty, nolo contendere (or similar
plea) to a crime that constitutes a felony or any crime of moral turpitude; or
(iv) the Executive’s breach of any material provision of this
Agreement.

      

      (3) In the event the Company desires to
terminate Executive's employment for Cause as defined in clauses (i) or
(iv) of the definition thereof, the Company shall first attempt to resolve the
matter(s) at issue through a meeting between
Executive and the Chairman of the Board of Directors of the Company. If such
meeting fails to resolve the matter(s), then Executive will meet with the Board
of Directors of the Company and attempt to resolve the matter(s). The decision
of the Board of Directors of the Company as to the matter(s) shall be final and
binding on the parties and not subject to review or appeal by any other person,
except as to good faith.

      

       (c) Disability. If, as a
result of Executive's incapacity due to physical or mental illness, Executive
shall have been absent from Executive's duties hereunder on a full time basis
for either (i) ninety (90) days within any six-month period, or (ii) sixty (60)
consecutive days, and within thirty (30) days after written notice of
termination is given shall not have returned to the performance of Executive's
duties hereunder on a full time basis, the Company may terminate Executive's
employment hereunder for "Disability". In that event, the Company shall pay to
Executive, within thirty (30) days of the date of such termination, only the
Base Salary through such date of termination. During any period that Executive
fails to perform Executive's duties hereunder as a result of incapacity due to
physical or mental illness (a "Disability Period"), Executive shall continue to
receive the compensation and benefits provided by Section 3 hereof until
Executive's employment hereunder is terminated; provided, however, that the
amount of compensation and benefits received by Executive during the Disability
Period shall be reduced by the aggregate amounts, if any, payable to Executive
under disability benefit plans and programs of the Company or under the Social
Security disability insurance program.

      

      (d) Termination By Company For
Any Other Reason; Termination for Good Reason by Executive.  In the
event that Executive's employment hereunder is terminated by the Company during
the Agreement Term for any reason other than as 

      
        
          
          

        

        
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      provided
in Sections 5(b) or 5(c) hereof (including, for these purposes, termination by
the Company as provided in Section 1 that has the effect of preventing automatic
renewal at the end of the Agreement Term) or is terminated for Good Reason by
Executive, then the Company shall pay to Executive (i) within thirty (30) days
of the date of such termination, the Base Salary through such date of
termination and (ii) in lieu of any further compensation and benefits under the
Agreement, severance pay equal to the Base Salary plus the cost of premiums for
health insurance benefits that Executive would otherwise have been entitled to
receive during the period of twelve months from the effective date of such
termination, commencing with such date of termination at the times and in the
amounts such Base Salary and premiums would otherwise have become payable;
provided, however, that in the event that Executive shall breach Sections 4, 6,
7 or 9(m) hereof, in addition to any other remedies the Company may have in the
event Executive breaches this Agreement,  the Company's obligation
pursuant to this Section 5(d) to continue such severance payments shall cease
and Executive's rights thereto shall terminate and shall be forfeited; and
further provided, however, that the Company’s severance obligation pursuant to
this Section 5(d) shall be reduced by an amount equal to the amount of any
compensation earned by Executive in respect of Approved Consulting
Services.  “Good Reason” shall mean (i) the assignment to Executive of
duties resulting in a material change in the nature of the Executive’s
authority, duties, responsibilities or status (including offices, titles,
reporting requirements and supervisory functions), other than in connection with
(A) the sharing of executive authority, duties and/or responsibilities
with the Executive Chairman or the allocation thereof by the Board of Directors
in good faith between the Executive Chairman and Executive or (B) the
Executive’s additional roles as Chief Financial Officer and Secretary of the
Company or the cessation thereof, (ii) a reduction by the Company in the Base
Salary as in effect on the date hereof or as it may be increased from time to
time, other than a reduction of not more than 15% for a period of no more than
six months, provided the same is made in connection with a Company-wide
reduction program, (iii) the failure by the Company to continue any compensation
or benefit plan required hereunder that is material to Executive’s total
compensation or (iv) the required relocation of the Executive’s place of
employment to a location in excess of twenty (20) miles from (A) the Company’s
principal executive offices located in Iselin, New Jersey and (B) the
Executive’s current or then residence (whichever is closer to the new office
location), except for required relocation for up to three months limited to the
work week, provided the reasonable cost of meals and lodging during the work
week, as well as commuting costs to enable the Executive to spend weekends and
holidays at Executive’s Oceanport, New Jersey residence, are borne by the
Company. Notwithstanding the foregoing, “Good Reason” shall not be deemed to
exist unless (i) the Executive has, within 90 days of the initial occurrence of
the condition giving rise to the claim of termination for Good Reason, given
written notice of the condition to the Company and (ii) if such notice has been
timely given, within 30 days thereof the Company has failed to remedy the
condition.

      

      (e) No Further Liability;
Release. Payment made and performance by the Company in accordance with
this Section 5 shall operate to fully discharge and release the Company and its
directors, officers, employees, subsidiaries, affiliates, stockholders,
successors, assigns, agents and representatives from any further obligation or
liability with respect to Executive's employment and termination of employment.
Other than paying Executive's Base Salary through the date of termination of
Executive's employment and making any severance payment pursuant to and in
accordance with this Section 5 (as applicable), the Company and its directors,
officers, employees, subsidiaries, affiliates, stock-holders, successors,
assigns,
agents and representatives shall have no further obligation or liability to
Executive or any other person under this Agreement. The Company shall have the
right to condition the payment of any severance or other amounts pursuant to
Sections 5(c) or 5(d) hereof upon the delivery by Executive to the Company of a
release in form and substance reasonably satisfactory to the Company of any and
all claims Executive may have against the Company and its directors, officers,
employees, subsidiaries, affiliates, stockholders, successors, assigns, agents
and representatives arising out of or related to Executive's employment by the
Company and termination of such employment.

      

      (f) Change of Control Agreement.
Nothing herein to the contrary withstanding, the Change of Control
Agreement remains in full force and effect.

      

      6. 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 in this
Agreement, collectively, as (“Confidential Information”). Confidential
Information includes not only information disclosed by the Company to Executive,
but also information developed or learned by Executive during the course or as a
result of employment with 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 

       

      
        
          
          

        

        
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        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. Executive acknowledges and agrees that in the performance of
duties hereunder Executive develops and acquires, and the Company discloses to
and entrusts Executive with, Confidential Information which is the exclusive
property of the Company and which Executive may possess or use only in the
performance of duties for the Company. Executive also acknowledges that
Executive 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. Executive 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 Executive's assigned duties and for the benefit of
the Company, any Confidential Information, either during the Agreement Term or
thereafter. In the event Executive desires to publish the results of Executive's
work for or experiences with the Company through literature, interviews or
speeches, Executive 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. Executive agrees not to publish, disclose or otherwise disseminate
such information without the prior written approval of the Board of Directors of
the Company.

      

      (c) Delivery of Records,
Etc. In the event Executive's employment with the Company ceases for any
reason, Executive will not remove from the Company's premises without its prior
written consent any records, notes, notebooks, files, drawings, documents,
equipment, materials and writings received from, created for or belonging to the
Company, including those which relate to or contain Confidential Information, or
any copies thereof. Upon request or when employment with the Company terminates,
Executive will immediately deliver the same to the Company.

      

      7. Invention and
Patents.

       

      (a) Executive 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 Executive shall develop, make, conceive or reduce to practice during
Executive's employment by the Company, either solely or jointly with others
(collectively, "Developments"). All such Developments shall be the sole property
of the Company, and Executive 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) Executive 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 remain the sole property of the Company at all
times.

      

      (c) Executive shall assist the Company
in obtaining and enforcing patent, copyright and other forms of legal protection
for the Developments in any country. Upon request, Executive 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) Executive understands that
Executive’s obligations under this section will continue after the termination
of his employment with the Company and that Executive 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 Executive’s employment with the Company and notwithstanding
anything in this Section 7 to the contrary, Executive shall not be required to
provide assistance to the Company in accordance with this Section 7 or Section
9(m) 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 Executive’s consent, not to be unreasonably withheld, and the Company
will compensate Executive on a per diem basis at a per diem rate that is
determined by dividing the Base Salary in effect when the Employment Term was
terminated by 250 days.

       

      
        
          
          

        

        
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      8. Assignment and
Transfer

       

       (a) Company. This
Agreement shall inure to the benefit of and be enforceable by, and may be
assigned by the Company to, any purchaser of all or substantially all of the
Company's business or assets, any successor to the Company or any assignee
thereof (whether direct or indirect, by purchase, merger, consolidation or
otherwise). The Company will require any such purchaser, successor or assignee
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such
purchase, succession or assignment had taken place.

      

      (b) Executive.
Executive's rights and obligations under this Agreement shall not be
transferable by Executive by assignment or otherwise, and any purported
assignment, transfer or delegation thereof shall be void; provided, however,
that if Executive shall die, all amounts then payable to Executive hereunder
shall be paid in accordance with the terms of this Agreement to Executive's
devisee, legatee or other designee or, if there be no such designee, to
Executive's estate.

      

      9. Miscellaneous.

       

      (a) Other Obligations.
Executive represents and warrants that he is not a party to any other employment
agreement and that neither Executive's employment with the Company nor
Executive's performance of Executive's obligations hereunder will conflict with
or violate or otherwise are inconsistent with any other agreements to which
Executive is or has been a party or with any other obligations, legal or
otherwise, which Executive may have.

      

      (b) Nondisclosure; Prior
Employers. Executive will not disclose to the Company, or use, or induce
the Company to use, any proprietary information, trade secrets or confidential
business information of others. Executive represents and warrants that Executive
has returned all property, proprietary information, trade secrets and
confidential business information belonging to all prior employers.

      

      (c) Cooperation.
Following termination of employment with the Company, Executive shall cooperate
with the Company, as requested by the Company, to affect a transition of
Executive's responsibilities and to ensure that the Company is aware of all
matters being handled by Executive. As compensation for such cooperation, the
Company shall pay the Executive on a mutually agreed upon per diem basis. Such
compensation shall be over and above any payments due the Executive
as defined herein.

      

      (d) Governing Law;
Arbitration.

      

       (i) Governing Law. This
Agreement, including the validity, interpretation, construction and performance
of this Agreement, shall be governed by and construed in accordance with the
laws of the State of New Jersey applicable to agreements made and to be
per-formed in such state without regard to such states conflicts of law
principles.

      

      (ii) Arbitration. Subject
to Section 9(k) hereof, any controversy or claim which arises out of or relating
to this Agreement, or the breach thereof shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association then in
effect. The controversy or claim shall be submitted to three arbitrators, one of
whom shall be chosen by the Employee, one of whom shall be chosen by the
Company, and one of whom shall be chosen by the two so selected. The party
desiring arbitration shall give written notice to the other party of its desire
to arbitrate the particular matter in question, naming the arbitrator selected
by it. If the other party shall fail within a period of 15 days after such
notice shall have been given to reply in writing naming the arbitrator chosen as
above provided, or if the two arbitrators selected by the parties shall fail
within 15 days after their selection to agree upon the third arbitrator, then
either party may apply to the American Arbitration Association for the
appointment of an arbitrator to fill the place so remaining vacant. The decision
of any two of the arbitrators shall be final and binding upon the parties
hereto. Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. The proceedings shall be held in New
York, New York. The arbitrators shall have no power to award punitive or
exemplary damages or to ignore or vary the terms of this Agreement, and shall be
bound to apply controlling law. Arbitration shall be binding and the remedy for
the settlement of the controversy or claims (except as set forth in the
preceding paragraph of this Section).

      

      (e) Entire Agreement.
This Agreement (including the Exhibits hereto) contains the entire agreement and
understanding between the parties hereto in respect of the subject matter hereof
and, except for the Change of Control Agreement which remains in full force and
effect, supersedes, cancels and annuls any prior or contemporaneous written or
oral agreements, understandings, commitments and practices between them
respecting the subject matter hereof, including all prior employment agreements,
if any, between the Company and Executive, which agreement(s) hereby are
terminated and shall be of no further force or effect.

      

       (f) Amendment. This
Agreement may be amended only by a writing which makes express reference to this
Agreement as the subject of such amendment and which is signed by Executive and,
on behalf of the Company, by its duly authorized officer.

      

      (g) Severability. If any
term, provision, covenant or condition of this Agreement or part thereof, or the
application

       

      
        
          
          

        

        
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      thereof
to any person, place or circumstance, shall be held to be invalid, unenforceable
or void, the remainder of this Agreement and such term, provision, covenant or
condition shall remain in full force and effect, and any such invalid,
unenforceable or void term, provision, covenant or condition shall be deemed,
without further action on the part of the parties hereto, modified, amended and
limited to the extent necessary to render the same and the remainder of this
Agreement valid, enforceable and lawful. In this regard, Executive acknowledges
that the provisions of Sections 4 and 6 are reasonable and necessary for the
protection of the Company.

      

       (h) Construction. The
headings and captions of this Agreement are provided for convenience only and
are intended to have no effect in construing or interpreting this Agreement. The
language in all parts of this Agreement shall be in all cases construed
according to its fair meaning and not strictly for or against the Company or
Executive. The use herein of the word "including," when following any general
provision, sentence, clause, statement, term or matter, shall be deemed to mean
"including, without limitation". As used herein, "Company" shall mean the
Company and its subsidiaries and any purchaser of, successor to or assignee
(whether direct or indirect, by purchase, merger, consolidation or otherwise) of
all or substantially all of the Company's business or assets which is obligated
to perform this Agreement by operation of law. As used herein, the words "day"
or "days" shall mean a calendar day or days.

      

      (i) Nonwaiver. Neither
any course of dealing nor any failure or neglect of either party hereto in any
instance to exercise any right, power or privilege hereunder or under law shall
constitute a waiver of any other right, power or privilege or of the same right,
power or privilege in any other instance. All waivers by either party hereto
must be contained in a written instrument signed by the party to be charged and,
in the case of the Company, by its duly authorized officer.

      (j) Remedies for Breach.
The parties hereto agree that Executive is obligated under this Agreement to
render personal services during the Agreement Term of a special, unique,
unusual, extraordinary and intellectual character, thereby giving this Agreement
peculiar value, and, in the event of a breach or threatened breach of any
covenant of Executive herein, the injury or imminent injury to the value and the
goodwill of the Company's business could not be reasonably or adequately
compensated in damages in an action at law. Accordingly, Executive expressly
acknowledges that the Company shall be entitled to specific performance,
injunctive relief or any other equitable remedy against Executive, without the
posting of a bond, in the event of any breach or threatened breach of any
provision of this Agreement by Executive (including Sections 4 and 6 hereof).
Without limiting the generality of the foregoing, if Executive breaches Sections
4 or 6 hereof, such breach will entitle the Company to enjoin Executive from
disclosing any Confidential Information to any Competing Business, to enjoin
such Competing Business from receiving Executive or using any such Confidential
Information and/or to enjoin Executive from rendering personal services to or in
connection with such Competing Business. The rights and remedies of the parties
hereto are cumulative and shall not be exclusive, and each such party shall be
entitled to pursue all legal and equitable rights and remedies and to secure
performance of the obligations and duties of the other under this Agreement, and
the enforcement of one or more of such rights and remedies by a party shall in
no way preclude such party from pursuing, at the same time or subsequently, any
and all other rights and remedies available to it.

      

      (k) Notices. Any notice,
request, consent or approval required or permitted to be given under this
Agreement or pursuant to law shall be sufficient if in writing, and if and when
sent by certified or registered mail, return receipt requested, with postage
prepaid, to Executive's residence (as reflected in the Company's records or as
otherwise designated by Executive on thirty (30) days' prior written notice to
the Company) or to the Company's principal executive office, attention: Chairman
of the Board (with copies to the General Counsel), as the case may be. All such
notices, requests, consents and approvals shall be effective upon being
deposited in the United States mail. However, the time period in which a
response thereto must be given shall commence to run from the date of receipt on
the return receipt of the notice, request, consent or approval by the addressee
thereof. Rejection or other refusal to accept, or the inability to deliver
because of changed address of which no notice was given as provided herein,
shall be deemed to be receipt of the notice, request, consent or approval
sent.

      

      (l) Assistance in Proceedings,
Etc. Executive shall, without additional compensation, during and after
expiration of the Agreement Term, upon reasonable notice, furnish such
information and proper assistance to the Company as may reasonably be required
by the Company in connection with any legal or quasi-legal proceeding, including
any external or internal investigation, involving the Company or any of its
affiliates or in which any of them is, or may become, a party, unless Executive
is adverse to the Company in such proceeding or unless Executive and the Company
are both defendants in such proceeding and assisting the Company may impair
Executive’s ability to defend himself in such proceeding. After the Agreement
Term Executive shall provide the same assistance under the same conditions,
except that Executive shall not be required to provide assistance to the Company
in accordance with this Section or Section 7 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 Executive’s consent, not to be
unreasonably withheld, and the Company will compensate Executive on a per diem
basis at a per diem rate that is determined by dividing the Base Salary in
effect when the Employment Term was terminated by 250 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      days.

      

       (m) Survival. Cessation
or termination of Executive's employment with the Company shall not result in
termination of this Agreement. The respective obligations of Executive and
rights and benefits afforded to the Company as provided in this Agreement shall
survive cessation or termination of Executive's employment hereunder. This
Agreement shall not terminate upon, and shall remain in full force and effect
following, expiration of the Agreement Term and all rights and obligations of
the parties hereto as and to the extent provided herein shall survive such
expiration.

      

       (n) Section 409A.
Notwithstanding anything to the contrary in this Agreement, if the Company
determines (a) that
on the date the Executive’s employment with the Company terminates or at such
other time that the Company determines to be relevant, the Executive is a
“specified employee” (as such term is defined under Section 409A of the Internal
Revenue Code  ) of the Company and (b) that any payments to be
provided to the Executive pursuant to this Agreement
are or may become subject to the additional tax under Section 409A (a)(1)(B) of
the Code or any other taxes or penalties imposed under Section 409A of the Code
(“Section 409A  Taxes”) if provided at the time otherwise required
under this Agreement, then such payments shall be delayed until the date (the “
Deferred Payment Date”) that is six months after the date of the Executive’s
“separation from service” (as such term is defined under Section 409A of the
Code) with the Company, or such shorter period that, as determined by the
Company, is sufficient to avoid the imposition of Section 409A Taxes; it being
understood that any payments so delayed shall become payable in the aggregate on
the Deferred Payment Date.  It is the intent of the parties that the
provisions of this Agreement comply with Section 409A of the Code and related
regulations and Department of the Treasury pronouncements. Accordingly,
notwithstanding any provision in this Agreement to the contrary, this Agreement
will be interpreted, applied and to the minimum extent necessary, unilaterally
amended by the Company in its sole discretion, without the consent of Executive,
as the Company deems appropriate for the Agreement to satisfy the requirements
of Section 409A and to avoid the imposition of Section 409A Taxes.

      

      IN WITNESS WHEREOF, the
Company has caused this Agreement to be duly executed on its behalf by an
officer thereunto duly authorized and Executive has duly executed this
Agreement, all as of the date and year first written above.

       

      SYNTHEMED,
INC.

       

          By:  s/ Richard L.
Franklin

      
        	
                 
      

              	
                 Richard
      L. Franklin, MD

                 Executive
      Chairman

              

      

       

      EXECUTIVE

       

      s/ Robert P.
Hickey    

      Robert P.
Hickeyexhibit10_3.htm

     

     

    

    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 Gere S. diZerega, 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 Eilenberg Krause & Paul LLP,
11 E 44th Street,
NY, NY 10017, 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

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    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.

    

    

    SYNTHEMED,
INC.

    

    By:  s/Robert P.
Hickey

                        Name/Title:  R
P. Hickey/Pres. & CEO

    Date:  9/30/08

    

    

    GERE S.
DIZEREGA, MD

    

    s/  Gere S.
diZerega

    Date:  10/1/08

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    EXHIBIT A

    

    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.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    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.

    

    

    

    
      
         

      

      
        3

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