CONSULTING AGREEMENT Arbios Systems, Inc. Waltham, Massachusetts 02451
Exhibit
10.3
Xxxxxx
Systems, Inc.
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxxxxxxx 00000
|
November
8, 2007
|
Xxxxx
Xxxxxxx
000
X.
Xxxx Xxxxx Xxxx.
Xxx
Xxxxxxx, XX 00000
Dear
Xxxxx:
This
letter is to confirm our understanding with respect to (i) your rendering
services as a consultant to the Company, (ii) your continuing agreement not
to
compete with the company in its direct area of business, (iii) your
continuing agreement to protect and preserve information and property which
is
confidential and proprietary to the Company or other parties with whom the
Company does business, and (iv) your agreement to release the Company from
potential claims associated with your past employment (the terms and conditions
agreed to in this letter shall hereinafter be referred to as the “Agreement”).
Hereinafter, reference to “you” or to “we” includes in each case you and all
other associates or subcontractors, if any, which you may employ on behalf
of
the Company, whom you shall ensure are bound by the terms of this Agreement.
In
consideration of the mutual promises and covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency
of
which are hereby mutually acknowledged, we have agreed as follows:
1.
Services
of Consultant.
You
agree to render services to the Company as an independent contractor to, and
not
as an employee of, the Company. Your principal service will be to advise and
support the Company regarding its FDA and similar regulatory and clinical
affairs interactions, and to perform related services in the Company’s business,
each as directed by the Company’s Chief Executive Office (CEO) and each
occasionally and from time to time. You shall devote your best efforts in the
performance of the foregoing services. You acknowledge and agree that you will
be an independent contractor for all purposes including, but not limited to,
payroll and tax purposes, and that you shall not represent yourself to be an
employee or officer of the Company unless so designated by a written agreement
signed by the Company.
2.
Term
of Consulting Arrangement.
Your
services as a consultant to the Company will begin immediately upon your
termination of your regular employment with the Company on September 1, 2007.
You agree that the Company has the right terminate your consulting arrangement
hereunder at any time, with or without cause, which right shall be exercisable
by written notice sent to you by the Company and shall be effective immediately
as of the date of such notice or a later date as the Company may specify.
Similarly, you have the right to terminate your services to the Company at
any
time, which right shall be exercisable by written notice sent to the Company
by
you and shall be effective immediately as of the date of such notice or a later
date as you may specify. In the event such notice is given, you shall use best
efforts to reduce cost to the Company as a result of such termination. The
Company’s obligation will be to reimburse you for cost incurred as of final date
of termination, including any uncancellable legal obligations to third parties
relating to and permitted under this Agreement, such as purchase orders, which
were entered into prior to effective termination notice.
3.
Compensation
for Services.
The
Company shall pay you as your exclusive compensation for your services and
agreements hereunder at a rate of $10,400 per month commencing October 1, 2007,
for work which you perform on behalf of the Company and which has been agreed
in
advance by the CEO of the Company. For the month of September 2007 you will
receive a prorated amount in the amount of $8,216. You shall also be reimbursed
for reasonable and customary expenses (costs) incurred by you on behalf of
the
Company. Such expenses include, but are not limited to, costs incurred for
transportation, travel, lodging, meals, delivery, communications, literature
search and retrieval. To receive payment of such expenses, you shall provide
the
Company with an invoice each month in which work is performed, which reflects
professional services, the nature of such services, and qualifying expenses
rendered through the end of the prior month. The Company agrees that all
invoiced fees and expenses payable under this contract will be paid to you
within thirty (30) days of receipt of said invoice. Any services to be provided
by your associates or subcontractors shall be agreed in advance with the
Company, including compensation to be paid by the Company.
In
addition, you may also be eligible for certain cash bonuses upon completion
of
key milestones by certain dates (e.g. successful platform testing of the Gen
II
cartridge, Filing of the Pivotal IDE, First patient treated in the pivotal
trial). Such payments would not be made until either the closing of the next
round of funding or consummation of a strategic partnership that would result
in
corporate funding.
4.
General
Release and Waiver of Claims.
In
consideration of the payments and other agreements set forth in this Agreement,
you for yourself, and for your heirs, executors, estates, agents,
representatives, attorneys, insurers, successors and assigns (collectively,
the
“Releasors”), hereby voluntarily release and forever discharge the Company and
its subsidiaries (direct and indirect), affiliates, related companies,
divisions, and predecessor and successor companies, and each of its and their
present, former and future shareholders, officers, directors, employees, agents,
representatives, attorneys, insurers and assigns (collectively, the “Releasees”)
from all actions, causes of action, suits, debts, sums of money, accounts,
covenants, contracts, agreements, promises, damages, judgments, demands and
claims which the Releasors ever had, or now have, or hereafter can, shall or
may
have, for, upon or by reason of any matter or cause whatsoever arising from
the
beginning of the world to the date of the execution of this Release, whether
known or unknown, in law or equity, whether statutory or common law, whether
federal, state, local or otherwise, including but not limited to claims arising
out of or in any way related to your engagement by the Company (including your
hiring), or the termination of that engagement, or any related matters
(including but not limited claims, if any, arising under the Age Discrimination
in Employment Act of 1967, as amended by the Older Workers Benefit Protection
Act, the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964,
as
amended, the Civil Rights Act of 1991, as amended, the Americans with
Disabilities Act of 1990, as amended, the Family and Medical Leave Act of 1993,
the Immigration Reform and Control Act of 1986, the Employee Retirement Income
Security Act of 1974, and federal or state statutes governing payment of wages,
federal or state common law, or any other applicable federal, state or local
law, statute, regulation or ordinance. Notwithstanding the foregoing, nothing
contained in this paragraph shall be construed to bar any claim by you to
enforce the terms of this Agreement or any claim of final biweekly compensation
under your employment agreement with the Company.
2
5.
Continuing
Obligations.
Your
obligations under this Agreement other than the provisions of Section 1 shall
not be affected by any termination of your consulting arrangement, including
termination upon the Company’s initiative. Further, your obligations of the
Employee Invention Assignment and Confidentiality Agreement which you have
previously executed with the Company at the outset of your previous employment
shall continue in effect as if you have remained an employee of the Company
during the term of this Agreement.
6.
Prohibited
Competition.
(a)
We
have discussed, and you recognize and acknowledge the competitive and
proprietary nature of the Company’s business operations. You further acknowledge
and agree that a business will be deemed competitive with the Company if it
conducts planning or operations or otherwise engages in the Company’s Field of
Interest. You further acknowledge and agree that, during the course of your
consultancy as well as having previously performed services for the Company
as
an employee, the Company has already and will furnish, disclose or make
available to you confidential and proprietary information related to the
Company’s business. You also acknowledge that such confidential information has
been developed and will be developed by the Company through the expenditure
by
the Company of substantial time, effort and money and that all such confidential
information could be used by you to compete with the Company.
(b)
You
acknowledge and agree that, although the Company has retained your consulting
services on a non-exclusive basis, you currently are not a party to, and during
the term of this Agreement, and for one year following termination of this
Agreement, you will not without first advising the Company in writing a) enter
into any agreement, arrangement, understanding or other relationship pursuant
to
which you are obligated to render advice and/or services to a commercial entity
in the Company’s “Field of Interest,” either as principal, agent, stockholder,
employee, consultant, representative, or in any other capacity or b) own,
manage, operate or control, or be concerned, connected or employed by, or
otherwise associate in any manner with, engage in or have a financial interest
in any such entity, except that nothing contained herein shall preclude you
from
purchasing or owning securities of any such business if such securities are
publicly traded, and provided that your holdings do not exceed three (3%)
percent of the issued and outstanding securities of any class of securities
of
such business. The term “Field of Interest” with respect to the Company
currently means the development or commercialization of medical devices or
cell
therapies for the treatment of liver disease, viral hepatitis or septic shock.
The Company may modify the definition of its Field of Interest by written notice
to you based on the activities in which the Company is then engaged or in which
the Company then proposes to be engaged.
3
(c)
Further, neither individually nor on behalf of or through any third party,
shall
you directly or indirectly, solicit, entice or persuade or attempt to solicit,
entice or persuade any other employees of or consultants to the Company or
any
present or future parent, subsidiary or affiliate of the Company to leave the
services of the Company or any such parent, subsidiary or affiliate for any
reason.
(d)
You
further recognize and acknowledge that the types of employment which are
prohibited by this Section 5 are narrow and reasonable in relation to the skills
which represent your principal salable asset both to the Company and to your
other prospective employers, and (ii) the specific scope of the provisions
of
this Section 5 is reasonable, legitimate and fair to you in light of the
Company’s need to protect its proprietary information and to make the Company’s
business profitable and in light of the limited restrictions on the type of
employment prohibited herein compared to the types of employment for which
you
are qualified to earn your livelihood.
(e)
Your
acknowledgements and agreements set forth in this Section 5 shall survive the
expiration or termination of this Agreement and the termination of your
employment with the Company for any reason.
7.
Protected
Information.
You
shall at all times, both during and after any termination of the consulting
arrangement by either the Company or you, maintain in confidence and shall
not,
without the prior written consent of the Company, use, except in the course
of
performance of your duties for the Company and specifically not for the benefit
of others outside the Company, disclose or give to others any fact or
information which was disclosed to or discerned or developed by you during
the
course of performing services for, or receiving training from, the Company,
and
is not generally available to the public including but not limited to
information and facts concerning business plans, customers, future customers,
suppliers, licensors, licensees, partners, investors, affiliates or others,
training methods and materials, financial information, sales prospects, client
lists, inventions (as defined in paragraph 7), or any other scientific,
technical, trade or business secret or confidential or proprietary information
of the Company or of any third party provided to you in the course of your
consultancy to the Company. You also agree not to file patents, copyrights
or
trademark applications based on the Company’s technology, property or
confidential information, nor seek to make improvements thereon, without the
Company’s approval. You agree not to make any copies of such confidential or
proprietary information of the Company (except when appropriate for the
furtherance of the business of the Company or duly and specifically authorized
to do so) and promptly upon request, whether during or after the period of
the
consulting arrangement, to return to the Company any and all documentary,
machine-readable or other elements or evidence of such confidential or
proprietary information (including all Regulatory and Clinical documentation),
and any copies that may be in your possession or under your control. In the
event you are questioned by anyone not employed by the Company or by an employee
of or a consultant to the Company not authorized to receive such information,
in
regard to any such information or any other secret or confidential work of
the
Company, or concerning any fact or circumstance relating thereto, you will
promptly notify the President of the Company.
8.
Ownership
of Ideas, Copyrights and Patents.
4
(a)
Property
of the Company.
You
agree that all ideas, discoveries, creations, manuscripts and properties,
innovations, improvements, know-how, inventions, designs, developments,
apparatus, techniques, methods, biological processes, cell lines, laboratory
notebooks, and formulae (all of the foregoing being hereinafter referred to
as
“the inventions”) which may be used in the business of the Company, whether or
not reduced to practice and whether patentable, copyrightable or not, which
you
may conceive, reduce to practice or develop during the Term, alone or in
conjunction with another, or others, and whether at the request or upon the
suggestion of the Company, or otherwise, shall be the sole and exclusive
property of the Company if made or improved during any time during which you
are
providing services to the Company or with the assistance of financial or other
support from the Company, and that you shall not publish any of the inventions
without the prior written consent of the Company. You hereby assign to the
Company all of your right, title and interest in and to all of the foregoing.
You agree to maintain and furnish to the Company complete and current records
of
all such inventions and disclose to the Company in writing any such
inventions.
(b)
Right
of First Refusal of the Company.
In the
event that you, alone or with others, develop or improve any inventions in
the
Field of Interest at times during which you are not providing services to the
Company and without the financial or other support of the Company, you agree
to
provide the Company with a right of first refusal to purchase or license any
and
all such inventions.
(c)
Cooperation.
At any
time during or after the Term, you agree that you will fully cooperate with
the
Company, its attorneys and agents, in the preparation and filing of all papers
and other documents as may be required to perfect the Company’s rights in and to
any of such inventions, including, but not limited to, joining in any proceeding
to obtain letters patent, copyrights, trademarks or other legal rights of the
United States and of any and all other countries on such inventions, provided
that the Company will bear the expense of such proceedings, and that any patent
or other legal right so issued to you, personally, shall be assigned by you
to
the Company without charge by you. You hereby designate the Company as your
agent, and grant to the Company a power of attorney with full power of
substitution (which power of attorney shall be deemed coupled with an interest),
for the purpose of effecting the foregoing assignments from you to the
Company.
9.
Records.
Upon
termination of your relationship with the Company, you shall deliver to the
Company any property of the Company which may be in your possession including
products, materials, memoranda, notes, laboratory notebooks, records, reports,
all Regulatory and Clinical documentation or other documents or photocopies
of
the same.
10.
No
Conflicting Agreements.
You
hereby represent and warrant that you have no commitments or obligations
inconsistent with this Agreement. You hereby agree to indemnify and hold the
Company harmless against any loss, damage, liability or expense arising from
any
claim based upon circumstances alleged to be inconsistent with such
representation and warranty. During the term of this Agreement, you will not
enter into any agreement, either written or oral, which may be in conflict
with
this Agreement, and you will arrange to provide your services under this
Agreement in such a manner and at such times that your services will not
conflict with your responsibilities under any other agreement, arrangement
or
understanding or pursuant to any employment relationship that you may have
at
any time with any third party.
5
11.
No
Employment Relationship Created.
This
Agreement does not constitute, and shall not be construed as constituting,
an
undertaking by the Company to hire you as an employee of the Company. You
acknowledge that you will be working as a consultant only, and not as an
employee. You will not be entitled to receive any of the benefits provided
by
the Company to its employees and you will be solely responsible for the payment
of all federal, state and local taxes and contributions imposed or required
on
income, unemployment insurance, social security and any other law or
regulation.
12.
General.
(a)
Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, shall be addressed to the receiving party’s address set forth below or
to such other address as a party may designate by notice hereunder, and shall
be
either (i) delivered by hand, (ii) made by telex, telecopy or
facsimile transmission, (iii) sent by overnight courier, or (iv) sent
by registered mail, return receipt requested, postage prepaid
If
to
Xxxxxx Systems, Inc.:
Xxxxx
X.
Xxxx
Interim
President and Chief Executive Officer
Xxxxxx
Systems, Inc.
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxxxxxxx 00000
FAX
0-000-000-0000
If
to
you, Xxxxx Xxxxxxx:
Xxxxx
Xxxxxxx
000
X.
Xxxx Xxxxx Xxxx.
Xxx
Xxxxxxx, XX 00000
All
notices, requests, consents and other communications hereunder shall be deemed
to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the
day such notice is delivered to the courier service, or (iv) if sent by
registered mail, on the fifth business day following the day such mailing is
made.
(b)
Entire
Agreement.
This
Agreement embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings relating to the subject matter hereof.
No statement, representation, warranty, covenant or agreement of any kind not
expressly set forth in this Agreement shall affect, or be used to interpret,
change or restrict, the express terms and provisions of this Agreement.
6
(c)
Modifications
and Amendments.
The
terms and provisions of this Agreement may be modified or amended only by
written agreement executed by the parties hereto.
(d)
Waivers
and Consents.
The
terms and provisions of this Agreement may be waived, or consent for the
departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect
to
any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and
for
the purpose for which it was given, and shall not constitute a continuing waiver
or consent.
(e)
Assignment.
The
Company may assign its rights and obligations hereunder to any person or entity
who succeeds to all or substantially all of the Company’s business or that
aspect of the Company’s business in which you are principally involved. Your
rights and obligations under this Agreement may not be assigned by you without
the prior written consent of the Company.
(f)
Benefit.
All
statements, representations, warranties, covenants and agreements in this
Agreement shall be binding on the parties hereto and, in the case of the
Company, its parents, subsidiaries and other affiliates, and in your case,
upon
yours heirs, executors and administrators; and shall inure to the benefit of
the
respective successors and permitted assigns of each party hereto. Nothing in
this Agreement shall be construed to create any rights or obligations except
among the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
(g)
Governing
Law.
This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and governed by the law of The Commonwealth of Massachusetts,
without giving effect to the conflict of law principles thereof.
(h)
Arbitration.
Except
with respect to the provisions of Sections 5, 6 and 7 hereof, any controversy,
dispute or claim arising out of or in connection with this Agreement, or the
breach, termination or validity hereof, shall be settled by final and binding
arbitration to be conducted by an arbitration tribunal in Boston, Massachusetts,
pursuant to the rules of the American Arbitration Association. The arbitration
tribunal shall consist of three arbitrators. The party initiating arbitration
shall nominate one arbitrator in the request for arbitration and the other
party
shall nominate a second in the answer thereto within thirty (30) days of receipt
of the request. The two arbitrators so named will then jointly appoint the
third
arbitrator. If the answering party fails to nominate its arbitrator within
the
thirty (30) day period, or if the arbitrators named by the parties fail to
agree
on the third arbitrator within sixty (60) days, the office of the American
Arbitration Association in Boston, Massachusetts shall make the necessary
appointments of such arbitrator(s). The decision or award of the arbitration
tribunal (by a majority determination, or if there is no majority, then by
the
determination of the third arbitrator, if any) shall be final, and judgment
upon
such decision or award may be entered in any competent court or application
may
be made to any competent court for judicial acceptance of such decision or
award
and an order of enforcement. In the event of any procedural matter not covered
by the aforesaid rules, the procedural law of the Commonwealth of Massachusetts
shall govern.
7
(i)
Jurisdiction
and Service of Process.
Except
as governed by the above paragraph (h), any legal action or proceeding with
respect to this Agreement shall be brought in the courts of The Commonwealth
of
Massachusetts or of the United States of America for the First District of
Massachusetts. By execution and delivery of this Agreement, each of the parties
hereto accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
hereto irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the party at its address set
forth in Section 12(a) hereof.
(j)
Severability.
The
parties intend this Agreement to be enforced as written. However, (i) if any
portion or provision of this Agreement shall to any extent be declared illegal
or unenforceable by a duly authorized court having jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision
in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
of
this Agreement shall be valid and enforceable to the fullest extent permitted
by
law; and (ii) if any provision, or part thereof, is held to be unenforceable
because of the duration of such provision or the geographic area covered
thereby, the Company and you agree that the court making such determination
shall have the power to reduce the duration and/or geographic area of such
provision, and/or to delete specific words and phrases (“blue-pencilling”), and
in its reduced or blue-pencilled form such provision shall then be enforceable
and shall be enforced.
(k)
Headings
and Captions.
The
headings and captions of the various subdivisions of this Agreement are for
convenience of reference only and shall in no way modify, or affect the meaning
or construction of any of the terms or provisions hereof.
(l)
Injunctive
Relief.
You
hereby expressly acknowledge that any breach or threatened breach of any of
the
terms and/or conditions set forth in Section 5, 6 or 7 of this Agreement will
result in substantial, continuing and irreparable injury to the Company.
Therefore, you hereby agree that, in addition to any other remedy that may
be
available to the Company, the Company shall be entitled to injunctive or other
equitable relief by a court of appropriate jurisdiction in the event of any
breach or threatened breach of the terms of Section 5, 6 or 7 of this Agreement.
(m)
No
Waiver of Rights, Powers and Remedies.
No
failure or delay by a party hereto in exercising any right, power or remedy
under this Agreement, and no course of dealing between the parties hereto,
shall
operate as a waiver of any such right, power or remedy of the party. No single
or partial exercise of any right, power or remedy under this Agreement by a
party hereto, nor any abandonment or discontinuance of steps to enforce any
such
right, power or remedy, shall preclude such party from any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The election of any remedy by a party hereto shall not constitute a waiver
of
the right of such party to pursue other available remedies. No notice to or
demand on a party not expressly required under this Agreement shall entitle
the
party receiving such notice or demand to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
party giving such notice or demand to any other or further action in any
circumstances without such notice or demand.
8
(n)
Expenses.
Should
any party breach this Agreement, in addition to all other remedies available
at
law or in equity, such party shall pay all of any other party’s costs and
expenses resulting therefrom and/or incurred in enforcing this Agreement,
including legal fees and expenses.
(o)
Counterparts.
This
Agreement may be executed in one or more counterparts, and by different parties
hereto on separate counterparts, each of which shall be deemed an original,
but
all of which together shall constitute one and the same instrument.
If
the
foregoing accurately sets forth our agreement, please so indicate by signing
and
returning to us two original copies of this letter. One of them will then be
returned signed for your records.
| Very truly yours, | ||
| Xxxxxx Systems, Inc. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxx | |
|
Xxxxx
X. Xxxx
Interim
President and Chief Executive Officer
|
||
| Accepted and Approved: | |||
| /s/ Xxxxx Xxxxxxx | |||
|
Xxxxx Xxxxxxx |
|||
| Dated: _______________________ |
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