EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is intended to be the
operative agreement by and between American Blood Institute, Inc., AVRE, Inc.,
and Binary Associates, Inc. AKA SeraCare (referred to collectively herein
as the "Corporation") and Xxxxx Xxxxx ("Xxxxx"). This Agreement is
conditional upon confirmation of a Plan of Reorganization for the
Corporation and approval of such Plan of Reorganization by the Federal
Bankruptcy Court. The effective date of this Agreement shall be the
Effective Date of the Plan of Reorganization.
1. EMPLOYMENT AS VICE PRESIDENT OF OPERATIONS. The
Corporation hereby agrees to retain Xxxxx and Xxxxx hereby agrees to be
employed as Vice President of Operations for the Plasma Operations to be
acquired by the Corporation via the Plan of Reorganization regarding
American Blood Institute, Inc., AVRE, Inc. and Binary Associates, Inc.
In such capacities, Xxxxx shall perform all of the normal duties and
responsibilities of a Vice President of Operations. In the performance of
his duties and responsibilities, Xxxxx shall at all times be under the
direction of the President and the Board of Directors of the Corporation.
Xxxxx shall perform his duties and responsibilities in accordance with
all reasonable rules, regulations and policies adopted by the Board of
Directors of the Corporation.
2. INDEMNIFICATION; INSURANCE AGREEMENT The Corporation
warrants and assures Xxxxx that the Charter of the Corporation contains
a provision which provides for indemnification of officers by the corporation
to the maximum extent permissible under the laws of the jurisdiction in
which the Corporation is incorporated. Further, the Corporation agrees to
either or both of the following: (A) Enter into an Indemnification Agreement
provided that such Indemnification Agreement shall be modified if necessary
to conform with the laws of the jurisdiction in which the Corporation is
incorporated; (B) Obtain and maintain in full force and effect at
Corporation's sole expense, such director's and officer's liability
insurance for errors and omissions of such type and in such amount as
is customary for similarly situated companies, if available at reasonable
cost.
3. EXTENT OF SERVICES. Xxxxx agrees to devote all of his time
and efforts on behalf of the business of the Corporation. Without
limiting the foregoing, during the term of this Agreement, Xxxxx shall
make written request to the Board of Directors and must obtain written
approval from such Board if Xxxxx wishes to devote any of his time to any
other business effort, whether or not such business effort is in direct
competition with the Corporation.
4. COMPENSATION. On the effective date of this contract, Xxxxx
shall be paid at the rate of $90,000 per year payable bi-weekly. There shall
be a quarterly salary adjustment whereby any pre-tax earnings over
$100,000 per quarter shall be paid to the officers of the Reorganized
Debtor (SeraCare) up to a maximum annual amount of $25,000 to Xxxxxx X.
Xxxxx, Xx. and $10,000 each for Xxxxx X. Xxxxxxx and Xxxxx Xxxxx. The
distribution of the quarterly salary adjustment shall be on a pro rata basis.
5. PERFORMANCE BONUS. There shall also be a Management Bonus
Pool which will allocate ten percent (10%) of pre-tax earnings which are in
excess of $920,549 in year one following the Effective Date of the
Reorganization Plan, $2,590,160 in year two, $4,384,187 in year three,
$6,244,536 in year four, and $8,166,626 in year five to a bonus pool to be
paid pro rata to management on the basis of salaries. Xxxxx shall be a
participant in this Management Bonus Pool during the term of this agreement.
6. FRINGE BENEFITS. Xxxxx shall receive four (4) weeks paid
vacation per year during the course of this Agreement. Xxxxx will also
receive company paid: sick pay, group health insurance, dental care,
vision care, disability insurance, life insurance and such other benefits
in the amounts and as may be provided in the ordinary course to the
Corporation's other senior executives.
7. STOCK AND WARRANT GRANT. Xxxxx shall be granted 42,110 shares
of common stock of SeraCare (SeraCare is herein defined as AVRE, Inc.,
Binary Associates, Inc., American Blood Institute, Inc. and any post
emergence replacement or successor corporation or entity into which the
Plasma Operations of Avre, Inc. and Binary Associates, Inc. are transferred,
placed, controlled, merged or which are acquired by) and stock options to
purchase 28,073 shares of common stock in SeraCare for a calculated price
which is the mean average between $.74 and the weighted average of the
closing bid price for the Company's stock for the thirty trading days
prior to the vesting date. The vesting date is defined as the anniversary
date of the Effective date of the Reorganization Plan for SeraCare. The
options will vest at the rate of one-third per year and are contingent
upon the company achieving the projected operating results reflected
in the Confidential Memorandum attached herewith except that if the
indicated funding is not provided in timely fashion for the acquisition of
the indicated centers reflected in that Confidential Memorandum, then a
calculation will be made utilizing the projected results of the base six
centers (which includes corporate overhead) plus a pro rated calculation
of the projected operating results of the acquisition centers based upon
the percentage of the secondary financing actually received by SeraCare.
For example, the projections contemplate the acquisition of twelve centers
during year one. Accordingly, at the rate of $200,000 per center this
acquisition program would require $2,400,000. If $1,200,000 or 50% is
actually funded, then a calculation will be made utilizing 100% of the
year one operating results projected for the base six centers ($365,556)
plus 50% of the year one projected operating results for the acquisition
centers (50% X $450,198 = $225,099) with the summation of the two being
($365,556 + $225,099 = $590,655). Accordingly, $590,655 will be the
objective criteria for vesting of one third of the options if $1,200,000
of secondary financing is actually received by SeraCare in year one. If
SeraCare is sold, merged, consolidated with another company or
reorganized to the extent that there is a 50% or more change in
ownership, the options will become immediately vested and exercisable.
8. TERM. This Agreement is conditional upon confirmation of the
Plan of Reorganization for American Blood Institute, Inc., AVRE, Inc. and
Binary Associates, Inc. and approval by the Federal Bankruptcy Court.
The term shall be for the three year period beginning on the
"Effective Date" of the Confirmed Plan of Reorganization and ending
thirty six months after the "Effective Date" unless this Agreement is
terminated at an earlier date per Section 9.
9. TERMINATION.
A. FOR "CAUSE". The Corporation may terminate this
Agreement upon thirty days notice for cause. "Cause" is defined for the
purpose of this agreement as: death; dishonesty; theft; conviction of a
felony; alcohol or drug abuse; unethical business conduct; and a material
breach of this Agreement by Xxxxx. If Xxxxx is terminated for "Cause" as
herein defined, Xxxxx shall receive thirty days notice with pay, and no
other compensation other than the receipt of any options which have already
vested.
B. FOR "ACTIONS DEEMED NOT IN THE BEST INTERESTS". The
Corporation may also terminate this Agreement if Xxxxx fails for any reason,
within ten days after receipt by Xxxxx of written notice thereof from the
Board of Directors, to correct, disassociate, cease or otherwise alter any
actions, associations, insubordination, failure to comply with instructions,
failure or other action or omission to act which, in the opinion of the
Board of Directors, materially affects or may materially affect the
Corporation's business operations. "Actions Deemed Not in the Best
Interests" shall also include the association by Xxxxx with
individuals, companies, organizations or activities which the Board of
Directors has a reasonable basis for believing does or could have a
material negative affect on the Corporations operations, it's market price per
share, or the Corporation's ability to raise additional capital. If Xxxxx
is terminated for "Actions Deemed Not in the Best Interests" as herein
defined, Xxxxx shall receive twelve months severance pay and no other
compensation other than the receipt of any options which have already vested
as of the termination date.
C. OTHER EVENTS. Other events which will result in the
termination of this contract are:
1. The date on which Xxxxx agrees to terminate this
Agreement.
2. The disability of Xxxxx. Disability herein is defined
as being unable to perform the duties hereunder due to a
physical and/or mental condition or impairment for one
hundred eighty (180) consecutive days during the term of
this Agreement or 120 consecutive days in any 365 day
period during the term.
3. The date on which Xxxxx voluntarily ceases to perform
his duties hereunder, other than by reason of a physical or
mental condition prior to the time that a disability occurs.
In the event that the Corporation shall be sold, merged, devolved,
consolidated or materially reorganized (within the term of this
Agreement and Xxxxx'x position is eliminated, the Company will pay to Xxxxx
within Thirty (30) days of such event the balance of the compensation
which would be due to complete the term of this agreement. In
addition, all then unvested stock options shall become immediately vested and
exercisable.
Any unilateral termination of Xxxxx by the Corporation other than for
"Cause", "Actions Deemed Not in the Best Interests", or the reasons
indicated in 9.(C)(1) through 9.(C)(3) above shall be considered a material
breach of this agreement, the pre-agreed remedy for which is the payment in
cash within thirty (30) days of such termination, the full compensation which
would be due to complete the three year term of this agreement, including
any and all compensation, warrants, options or bonus compensation, plus the
continuation of benefits for a period of twelve months. If terminated for
"Actions Deemed Not in the Best Interests", the Corporation must show
that it has a reasonable basis for believing that the actions or
associations are or could be materially detrimental to the Corporation.
10. NO SOLICITATION OF EMPLOYEES. During the period of
this Agreement and for two (2) full years following termination of this
Agreement, Xxxxx shall not, for any reason either directly or indirectly,
solicit for employment or employ for any other entity any employee of the
Corporation.
11. AGREEMENT NOT TO COMPETE. During the period of this
Agreement and for two (2) full years following termination of this Agreement
(a total of five years), Xxxxx shall not, for any reason either directly or
indirectly, compete with SeraCare either directly through owning and
operating a plasma center, or by being a significant investor, officer
or key employee of any company which competes with the Corporation. On a
geographic basis, compete is defined to mean being in the plasma collection
business within a fifty mile radius of an existing SeraCare collection center.
12. WITHHOLDING. Xxxxx authorizes the Corporation
to withhold and/or deduct from his compensation (including, without
limitation, salary and wages), deductions to recover any amounts loaned
by the Corporation to Xxxxx or paid on Xxxxx'x behalf which, under the
terms of said loan or payment, must be repaid to the Corporation
including, without limitation, loans of money and the value of any of the
Corporations property taken but not returned by Xxxxx. Corporation shall
also have the expressed right to deduct all sums required for federal, state
or local income, Social Security or other taxes now applicable or that may be
enacted in the future.
13. NOTICE. Any notice provided to be given pursuant
to this Agreement shall be in writing and shall be deemed duly given
three days after deposited in the mail, certified mail, return receipt
requested, to the party to receive such notice at the address
specified below:
The Corporation: American Blood Institute, Inc.
DBA - SeraCare
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Board of Directors
For Xxxxx: Xxxxx Xxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
14. GOVERNING LAW. The validity of this Agreement and the
interpretation and performance of all of its terms shall be controlled
exclusively by the substantive law of California, including California law
concerning the interpretation and performance of contracts.
15. ENFORCEABILITY. Any provision of this Agreement which is
invalid, illegal, or unenforceable shall be ineffective only to the extent of
such invalidity, illegality, or unenforceability, without affecting in any
way the remaining provisions hereof or rendering the remaining provisions
hereof invalid, illegal, or unenforceable.
16. WAIVER. The failure of either party hereto to insist upon
strict compliance with any of the terms, covenants or conditions of this
Agreement by the other party shall not be deemed a waiver of that or any
other term, covenant, or condition, nor shall any waiver or relinquishment of
any right or power at any one time or times be deemed a waiver or
relinquishment of that right or power for all or any other times.
17. ARBITRATION. Any controversy between the Corporation and
Xxxxx involving the construction, application or breach of any of the terms,
provisions, or conditions of this Agreement shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association then in effect (the AAA Rules). Such arbitration shall
take place in Los Angeles, California and shall be conducted by three
arbitrators, one of which shall be selected by each party, and the third of
which shall be selected by the two arbitrators within the time limits
established in the AAA Rules. The decision of the arbitrators may be
enforced in any court having jurisdiction over the party against which
enforcement is sought or its assets. The cost of such arbitration including
the associated attorney fees, arbitrator fees, filing fees, AAA fees and
other legal costs shall be borne by the losing party.
18. TRADE SECRETS. CONFIDENTIAL, AND PROPRIETARY
INFORMATION.
X. Xxxxx and Corporation acknowledge and agree that during
the term of this Agreement and in the course of the discharge of his
duties hereunder, Xxxxx shall have access to and become acquainted with
information owned by the Corporation concerning its operation, which
information derives independent economic value from not being generally
known to the public or competitors, and which includes, without
limitation: (1) manufacturing processes, research, and engineering, (2)
marketing data and techniques, (3) trademarks, tradenames, and servicemarks,
(4) customer and client bases and lists, and (5) financial and personnel
information. Said information constitutes Employer's trade secret,
confidential and proprietary information.
X. Xxxxx agrees that he shall not at any time (during the
period of this agreement or any future time) disclose any such trade
secret, confidential, or proprietary information, directly or indirectly, to
any other person or use it in any way other than as required in the
ordinary course of his employment under this agreement.
X. Xxxxx further agrees that all files, records,
documents, equipment, and similar items relating to the Corporation's
business (including, without limitation, items containing trade secret,
confidential or proprietary information), whether prepared by Xxxxx or
others, including all originals and copies, are and shall be returned to the
Corporation upon Xxxxx'x termination.
X. Xxxxx further agrees that during the period of his
employment by the Corporation and after termination thereof, he will not
disrupt, damage, disparage, impair, or interfere with the
Corporation's business or its reputation, whether by way of
interfering with or soliciting its employees, disrupting its
relationships with or soliciting clients or customers, agents,
representatives, or vendors, aiding competitors, or by way of any other
conduct.
19. NON-ASSIGNABILITY. Xxxxx may not assign any of his rights
or responsibilities under this Agreement.
20. ENTIRE AGREEMENT. This Amended Agreement supersedes any and
all other agreements, either oral or in writing, between the parties hereto
with respect to the employment of Xxxxx by the Corporation and contains
all of the covenants and agreements between the parties with respect to that
employment in any manner whatsoever. Each party to this Agreement
acknowledges that no representation, inducements, promises, or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf
of any party, which are not embodied herein, and that no other agreement,
statement, or promise not contained in this Agreement shall be valid or
binding on either party.
21. MODIFICATIONS. Any modification of this Agreement shall
be effective only if it is in writing and signed by both parties to this
Agreement.
22. LEGAL ACTION. In the event of any litigation or
arbitration between or among the parties hereto respecting or arising out of
this Agreement, the successful or prevailing party shall be entitled to
recover reasonable attorney's fees incurred after a judgement has been
rendered by a court of competent jurisdiction. Any judgement shall include an
attorneys' fees clause which shall entitle the judgement creditor to recover
attorneys' fees incurred to enforce a judgement hereon, which attorneys'
fees shall be an element of post-judgement costs; the parties agree
that this attorneys' fee provision shall not merge into any judgement.
IN WITNESS WHEREOF, the parties hereto, effective as of
November 14, 1995 do hereby authorize and acknowledge that this
Agreement be the effective agreement between the parties. It is
understood that this Agreement will be filed as an amendment to the
Reorganization Plan for the Corporation and will become effective on the
Effective Date of such Plan of Reorganization.
Accepted By: /s/ XXXXXXX X. XXXXXX
--------------------------------
Xxxxxxx X. Xxxxxx
First Equity Capital Securities, Inc.
Placement Agent
/s/ XXXXX X. XXXXX /s/ XXXXXX X. XXXXX, XX.
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Xxxxx X. Xxxxx Xxxxxx X. Xxxxx, Xx.
An individual President & Chairman
American Blood Institute, Inc.
