Exhibit 10.4
EMPLOYMENT AGREEMENT
Agreement made as of July 1, 2004, between MEDASORB TECHNOLOGIES, LLC, a
Delaware Limited Liability Company with offices at 7 Deer Park Drive, Suite K,
Monmouth Junction, NJ 08852 ("MEDASORB") and DR. JAMES WINCHESTER, an individual
residing at 1323 Pine Tree Road, McLean, Virginia 22101-2416 ("WINCHESTER")
RECITALS
WHEREAS, MEDASORB is engaged in the development and sale of certain
medical technology including the development and production of a polymer resin
useful in the treatment of blood purification, and
WHEREAS, MEDASORB desires to employ WINCHESTER, and WINCHESTER desires to
serve MEDASORB as its Chief Medical Officer ("CMO") with administrative and
technical responsibilities.
TERMS OF AGREEMENT
In consideration of the foregoing and the mutual promises set forth below, the
parties agree as follows:
1. TERM:
1.1 The term of this Agreement shall be one (1) year commencing July 1,
2004 ("Effective Date") and expiring on June 30, 2005 (the "Term").
The Term of this Agreement shall be automatically renewed for
successive one year periods thereafter unless within 90 days prior
to the end of the initial term or the end of any renewal year,
either party gives the other written notice of its intention not to
renew in which event this Agreement shall terminate at the end of
the initial Term or the end of that renewal year term.
2. EMPLOYMENT DUTIES:
2.1 So long as this Agreement continues in effect, WINCHESTER will
devote his full business time and energies to the business and
affairs of MEDASORB as CMO and shall not engage in any other-part or
full-time outside employment or business activity (other than
passive investment) unless specifically agreed to in writing by
MEDASORB or as otherwise set forth on Exhibit A. WINCHESTER will use
his best efforts, skill and abilities to promote MEDASORB's
interests and perform the customary duties of a CMO including,
without limitation: overseeing all clinical trials conducted by
MEDASORB, which shall include interfacing with MEDASORB's product
development department and patients, clinicians and technicians;
organizing, implementing and managing pre-clinical studies and other
clinical research; assisting in the management of MEDASORB by
participating in decisions relating to product manufacture and/or
sourcing, product development and qualification, vendor selection,
development of technical specifications, and long-term research and
development; and any other duties which may be reasonably assigned
to him by the Board of Managers.
3. REMUNERATION:
3.1 Salary: MEDASORB will pay WINCHESTER, for his services hereunder a
base salary ("Base Salary") of One Hundred Twenty Thousand Dollars
($120,000) per annum, payable in accordance with the usual payroll
practices of MEDASORB, but not less frequently than bimonthly
installments.
3.2 Performance Bonus Plan: WINCHESTER shall at the discretion of the
Managers, be entitled to participate in any bonus plan provided to
senior executives including stock option plans, profit sharing plans
and/ or their equivalent.
4. BENEFITS:
4.1 Insurance
MEDASORB will not be responsible for WINCHESTER's life, medical, or
disability insurance. MEDASORB will continue WINCHESTER's insurance
coverage currently in place for a period of up to 120 days from the
date of this Agreement until such time as WINCHESTER notifies
MEDASORB that he has established his own private insurance plan.
4.2 Travel Expenses
During the Term of this Agreement MEDASORB will reimburse
WINCHESTER for approved business travel expenses incurred.
5. VACATION TIME:
WINCHESTER will be entitled to vacation time in accordance with the
customary practices of MEDASORB regarding senior executives which time,
however, shall not be less than three weeks per year. WINCHESTER shall
take vacation hereunder during each year of this Agreement at reasonable
times considering the business activities of MEDASORB.
6. EXPENSES:
MEDASORB will pay or reimburse WINCHESTER for all reasonable and necessary
expenses incurred or paid by Employee in connection with the performance
of his services under this Agreement, on presentation pf expense
statements or vouchers and such other supporting information as is
customarily required by MEDASORB.
7. DISABILITY:
7.1 If during the Term, WINCHESTER, by reason of physical or mental
disability or incapacity, shall be unable to perform his duties
hereunder for ninety (90) successive days or a period of one hundred
twenty (120) days in the aggregate in any year of the Term,
MEDASORB, at its option, may terminate this Agreement by written
notice to WINCHESTER given within fifteen (15) days after the end of
such ninety (90) or one hundred twenty (120) day period.
7.2 If this Agreement is terminated under Section 7.1, MEDASORB shall
pay WINCHESTER his salary through the date of termination.
8. DEATH
If WINCHESTER should die during the Term, MEDASORB shall pay to such payee
or payees as he has designated by written notice to MEDASORB, or in
default of such designation then to his estate, all Base Salary and
Benefits through the date of death.
9. TERMINATION OF EMPLOYMENT:
9.1 Notwithstanding any other provision of this Agreement, WINCHESTER's
employment may be terminated prior to the end of the Term hereof as
follows:
9.1.1 Automatically upon the death of WINCHESTER, in which event the
provisions of Article 8 hereof shall govern;
9.1.2 Upon a finding of disability of WINCHESTER pursuant to Article
7, in which event the provisions of that Article shall govern;
9.1.3 At MEDASORB's option, on dismissal of WINCHESTER for "Cause".
"Cause" shall mean one or more of the following:
(a) The willful commission by WINCHESTER of a dishonest , or
tortuous act, as such is reasonably and in good faith
determined by the Managers, with respect to MEDAORB or
any subsidiary or affiliate thereof; or
(b) WINCHESTER is convicted of a criminal act (MEDASORB may
suspend WINCHESTER without pay upon indictment for
commission of a crime); or
(c) WINCHESTER's failure to perform a substantial portion of
his duties and responsibilities hereunder, which failure
continues for more than ten (10) days after receipt by
WINCHESTER of written notice given by the Managers of
MEDASORB, setting forth in reasonable detail the nature
of such failure; or
(d) Alcoholism or drug abuse; or
(e) Breach by WINCHESTER of any material provisions of this
Agreement or the rules or policies established by the
Managers; or
(f) Willful misconduct or negligence by WINCHESTER in the
performance of his duties under this Agreement.
9.1.4 On dissolution of MEDASORB or on cessation by MEDASORB of
active operations, provided in either case, not in connection
with the conversion of MEDASORB from a Limited Liability
Company to a "C" corporation.
10. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION; INVENTIONS; SHOP RIGHTS:
10.1 WINCHESTER shall not use or disclose to any person or entity any
confidential information relating to MEDASORB including, but not
limited to, technical, scientific or medical information, or
information relating to its business operations including, but not
limited to, its customer list, financial information, sales and
marketing data, or its manufacturing methods and/or arrangements,
obtained during the course of his employment, without MEDASORB's
prior written consent.
10.2 Every invention, discovery or improvement made or conceived by
WINCHESTER during his employment by MEDASORB, whenever or wherever
made or conceived, and whether or not during business hours, of any
product, tool, device, formula, or process, software program similar
to, or which constitutes an improvement, on those heretofore, now or
at any time during his employment, developed or used by MEDASORB in
connection with the development, design, or process of any product
related to MEDASORB's business, or of any product which shall or
could reasonably be developed, designed, or marketed in the
reasonable expansion of the business of MEDASORB, shall be and
continue to remain MEDASORB's exclusive property without any added
compensation or any reimbursement for expenses to WINCHESTER, and
upon the conception of any and every such invention, discovery or
improvement and without waiting to perfect or complete it,
WINCHESTER promises and agrees that he will immediately disclose it
to MEDASORB and to no one else and thenceforth will treat it as the
property and secret of MEDASORB. WINCHESTER will also execute any
instruments reasonably requested from time to time by MEDASORB to
vest in MEDASORB complete title and ownership to such invention,
discovery or improvement and will, at the request of MEDASORB, do
such acts and execute such instruments as MEDASORB may require but
at MEDASORB's expense to obtain Letters Patent in the United States
and foreign countries, for such invention, discovery or improvement
and for the purpose of vesting title thereto in MEDASORB, without
any additional compensation of any kind to WINCHESTER.
11. COVENANTS NOT TO COMPETE AND OTHER PROVISIONS
11.1 "Competitive Activity" as used herein shall mean (i) engaging
directly or indirectly, on behalf of himself or in any way on behalf
of any other person, corporation or other entity, in any advising,
investing, consulting or other business activity including becoming
employed by, or acting as an agent or principal or any person, firm,
corporation or other entity that is engaged in any business activity
relating in any manner to any product, process, service or business
activity that competes or potentially could compete with any
product, process, service or business activity of MEDASORB or any
product, service or activity being developed by MEDASORB or whose
development, to the extent WINCHESTER knows or has reason to know,
is being contemplated by MEDASORB, including but not limited to
products or services relating to the detoxification of blood with
adsorbent polymers or the use of adsorbent polymers in any other
medical application; (ii) accepting employment with or being
directly or indirectly involved as an independent contractor,
consultant or otherwise with any company that is, or has been at any
time in the prior twelve months, a customer or client of MEDASORB;
(iii) soliciting for employment or consulting, employing or
retaining, or assisting another person to employ or retain, directly
or indirectly, any employees of MEDASORB or any person who was an
employee of MEDASORB in the prior twelve months; provided, however,
that employing or retaining, or assisting another person to employ
or retain, any person whose employment with MEDASORB has been
terminated without Cause shall not be considered Competitive
Activity; (iv) soliciting, contacting, or otherwise doing business
with any person that is, or at any time in the prior twelve months
has been, a customer, licensor, licensee, client, agent, broker or
dealer of or for MEDASORB.
11.2 In consideration of this Agreement WINCHESTER agrees during the Term
and for a period ending one year following the date of termination
of this Agreement, not to engage in any Competitive Activity, except
as consented to by MEDASORB in writing. Notwithstanding the
foregoing, in no event will WINCHESTER be prohibited from engaging
in the practice of medicine as a nephrologist.
11.3 WINCHESTER acknowledges that MEDASORB will suffer irreparable harm
in the event WINCHESTER reveals any confidential information
relating to MEDASORB, or during any restricted period engages or
threatens to engage in any Competitive Activity or any activity in
violation of this Agreement, and therefore, agrees that in addition
to its remedies by law, MEDASORB shall be entitled to injunctive
relief as a consequence of a violation or threatened violation of
the provisions of this Agreement.
11.4 On the expiration or earlier termination of the Term or WINCHESTER's
resignation, discharge or earlier departure from MEDASORB,
WINCHESTER shall promptly surrender to MEDASORB all of MEDASORB's
books, records, documents, and customer lists and/or other of
MEDASORB's materials or records he may have in his possession.
12. NOTICES:
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if hand delivered
or mailed, by certified mail, return receipt requested, as follows:
To Company:
MedaSorb Technologies, LLC
7 Deer Park Drive, Suite K
Monmouth Junction, NJ 08852
To Attorney:
Rubin Bailin Ortoli Mayer Baker & Fry LLP
405 Park Avenue, 15th Floor
New York, NY 10022
Attn. Joseph Rubin, Esq.
To Employee:
Dr. James Winchester
1323 Pine Tree Road
McLean, VA 22101-2416
With a copy to:
and/or to such persons and addresses as any party shall have specified in
writing to the other by notice as aforesaid.
13. ASSIGNABILITY:
This Agreement (a) may not be assigned by WINCHESTER and (b) shall be
binding on MEDASORB's successors and assigns.
14. WAIVER:
The failure of any party at any time or times to require the performance
of any provisions of this Agreement will in no manner affect the right at
a later time to enforce it. No waiver by any party of any condition or of
the breach of any term contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, will be deemed to be or construed
as a further or continuing waiver of the breach of any other term of this
Agreement.
15. SEVERABILITY:
The invalidity or unenforceability of any provision of this Agreement will
not affect any other provision, and the remainder of the Agreement will be
construed as if the invalid and unenforceable provision were omitted.
16. POWERS AND AUTHORITY:
Each party represents and warrants that it has the right, power and
authority to enter into this Agreement, and to fully perform its
respective obligations hereunder.
17. ENTIRE AGREEMENT:
This Agreement sets forth the entire agreement and understanding of the
parties in respect of the subject matter and supercedes any and all prior
agreements, arrangements, understandings and representations relating to
the subject matter.
18. GOVERNING LAW:
This Agreement will be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be
performed entirely within that State.
19. MISCELLANEOUS:
19.1 Binding Effect
This Agreement will be binding on and inure to the benefit of the
parties hereto and their respective heirs, legal representatives,
successors and assigns.
19.2 Headings
Paragraph headings are inserted for convenience or reference only
and do not form a party of this Agreement, and no construction or
inference will be derived therefrom.
19.3 Counterparts
This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
19.4 Amendment; Waiver, Etc.
This Agreement may be amended, modified, superceded or canceled, and
any of its terms may be waived, only by a written instrument
executed by each party or, in the case of a waiver, by the party or
parties waiving compliance.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
MEDASORB TECHNOLOGIES, LLC
By:_____________________________
Al Kraus, President and CEO
By:_____________________________
James Winchester, M.D.
Exhibit A
Chief Nephrologist at Beth Israel Medical Center
Professor at Beth Israel Medical Center, includes teaching, medical care
and other activities in conjunction with the Renal Research Institute
Editorial Work with respect to Advances in Renal Replacement Therapy
Adjunct Professor at Down State Medical Center
Invited Lecturer
Expect Witness Assignments
Medical Association Executive Positions