Exhibit 10.5
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
XXXXX XXXXXXX
THIS FIRST AMENDMENT dated August 16, 2006 (the "Amendment") among
Millennium Biotechnologies Group, Inc., a Delaware corporation ("Group"),
Millennium Biotechnologies, Inc. (the "Company"), and Xxxxx Xxxxxxx (the
"Executive").
WHEREAS, the Executive is currently employed by the Company, a wholly
owned subsidiary of Group, under an Employment Agreement dated as of November
11, 2005 (the "Employment Agreement");
WHEREAS, the Company and Group have entered into a letter of intent with
Aisling Capital II L.P. dated April 5, 2006 (the "Letter of Intent"), which
contemplates the sale of all assets of the Company to a new entity ("Newco") in
exchange for common stock of such new entity;
WHEREAS, the Company and Group are presently negotiating the terms of a
proposed asset purchase agreement with Newco in furtherance of the terms of the
Letter of Intent (the "Asset Purchase Agreement";
WHEREAS, Group, concurrently upon the closing of the Asset Purchase
Agreement, intends to sell a new Series E and Series F Senior Preferred
Convertible Stock pursuant to the terms of a securities purchase agreement (the
"Securities Purchase Agreement") which agreement, among other things, will grant
to the purchaser of the Series F Senior Preferred Convertible Stock the right to
elect a majority of the Board of Directors of Group;
WHEREAS, the closing of the Asset Purchase Agreement and/or the Securities
Purchase Agreement would entitle the Executive to substantial compensation under
the terms of the Employment Agreement which compensation the Executive has
agreed to waive, pursuant to the terms of this Amendment; and
WHEREAS, the Executive, Group and the Company have agreed that subject
to and upon the closing of the Asset Purchase Agreement and the Securities
Purchase Agreement (the "Closing"), the Employment Agreement will be amended as
provided herein.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the Company, Group and the Executive hereby agree as follows:
1. In the event that the Company shall enter into and close the Asset
Purchase Agreement and the Securities Purchase Agreement, the Employment
Agreement shall be amended upon the occurrence of the Closing to provide for the
following:
(a) Notwithstanding the provisions of Section 1.2 of the Employment
Agreement regarding exclusive services, the Executive, during the term of the
Employment Agreement, shall be permitted to render services as a consultant to
Newco for such compensation as shall be agreed to between the Executive and
Newco.
(b) Section 1.3 of the Employment Agreement shall be amended to provide
that the term of employment shall terminate on the earliest of (a) one year from
the date of the Closing; (b) the death of the Executive; or (c) the termination
of the Executive's employment pursuant to this Agreement (the "Employment
Term").
(c) Section 2.1 of the Employment Agreement shall be amended to provide
that for the one year period commencing on the date of Closing, the Executive's
base salary shall be One Hundred Fifty Thousand Dollars ($150,000) per annum,
less the amount of compensation received by the Executive from Newco during such
period with respect to the Executive's consulting services on behalf of Newco.
(d) Section 2.3 of the Employment Agreement is amended to the extent that
the options granted to the Executive to purchase three hundred thirty-four
thousand (334,000) shares of common stock at an exercise price of $.37 per share
shall be reduced to an exercise price of $.25 per share and, the options (the
"Restricted Options) granted to the Executive to purchase an additional two
hundred thousand (200,000) shares of common stock at an exercise price of $.01
per share shall vest upon the Closing.
2. On the date hereof, the Company shall issue to the Executive one
million two hundred thousand (1,200,000) common stock purchase warrants (the
"Restricted Warrants") which shall be exercisable commencing January 1, 2007 and
for a period of five (5) years thereafter at $.25 per share on the condition
that the Closing shall have occurred prior to any such exercise.
3. The Executive shall be prohibited from selling, assigning or otherwise
transferring any of the securities issuable upon exercise of Restricted Options
and the Restricted Warrants for a period of one year from the date of exercise
thereof. The Restricted Options and the Restricted Warrants may not be sold,
assigned or otherwise transferred by the Executive to any third party, and the
Restricted Options and Restricted Warrants, as well as the securities issuable
upon the exercise thereof, shall not have any registration rights and/or
piggyback registration rights.
4. MISCELLANEOUS
(a) Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company or Group, to it at:
Millennium Biotechnologies Group, Inc
000 Xxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: President
2
with a copy to:
Xxxxxxxxx Xxxxx Xxxx & Xxxxx PLLC
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
To the Executive:
Xxxxx Xxxxxxx
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Any such notice or communication shall be sent certified or registered mail,
return receipt requested, or by facsimile, addressed as above (or to such other
address as such party may designate in writing from time to time), and the
actual date of receipt shall determine the time at which notice was given.
(b) Entire Agreement; Amendment. The Employment Agreement as amended by
the Amendment represents the entire agreement of the parties with respect to the
subject matter hereof and shall supersede any and all previous contracts,
arrangements or understandings between or among Group, the Company and the
Executive. The Agreement may be further amended at any time by mutual written
agreement of the parties hereto.
(c) Counterparts. This Amendment may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the Company and Group have caused this First Amendment
to be duly executed by their authorized representatives and the Executive has
hereunto set his hand, in each case effective as of the day and year first above
written.
Millennium Biotechnologies Group, Inc.
Millennium Biotechnologies, Inc.
By: /s/ Xxxxx Xxxx
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Executive
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
