EX-10.3
[HemoBioTech logo]
AMENDED EMPLOYMENT AGREEMENT
This Amended Employment Agreement (the "Agreement") is effective as of
October 6, 2003, by and between HemoBioTech Inc., a Texas corporation (the
"Company"), and Xxxxxx X. Xxxxxx, Ph.D. (the "Executive"). The Executive
original employment agreement dated April 9, 2003 is amended to reflect on
Executive full disclosure regarding investment and operating interests in other
ventures as well as to reflect on Executive compensations.
WHEREAS, Executive is a senior executive of the Company and is expected
to make contributions to the profitability, growth and financial strength of the
Company;
WHEREAS, the Company desires to assure both the present and future
continuity of management of the Company and desires to establish certain minimum
compensation rights of its senior executive officers, including Executive; and
WHEREAS, the Company and Executive desire to enter into this Agreement
pursuant to which the Company will employ Executive in the capacity, for the
period and on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, the parties hereby agree as follows:
1. EMPLOYMENT AND DUTIES. The Company hereby employs Executive and
Executive hereby accepts such employment in the capacity of Chairman, President
and Chief Executive Officer ("CEO") of the Company to act in accordance with the
terms and conditions hereinafter set forth. During the term of this Agreement,
Executive agrees that he will devote time, attention and skills to the operation
of the Business of the Company and that he will perform such duties, functions,
responsibilities and authority in connection with the foregoing as are from time
to time delegated to Executive by the Board of Directors of the Company (the
"BOARD"). It is understood that executive has investment interest in two other
ventures including Biogress LLC and Quantum Biotech Inc. Biogress LLC has
performed and is continuing to perform operational and technology advisory
services for Company under a separate agreement. Executive will not be involved
in or receive any payments from operations of Biogress LLC or Quantum Biotech
Inc. while associated with Company. None of these ventures are competing with
the Company's business. For purposes of this Agreement, the Business of the
Company shall be defined as the development and commercialization of blood
substitute products.
2. TERM. The term of this Agreement shall commence on the date hereof
and shall continue for a period of three (3) years from the date of this amended
agreement. Thereafter, this Agreement shall be automatically renewed for one
year periods, unless otherwise terminated by the Company or Executive upon
written notice to the other given not less than ninety (90) days prior to the
next anniversary of the Agreement. The initial three year term and any renewals
thereof shall be referred to herein as the "Term".
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3. COMPENSATION. In consideration of all the services to be rendered by
Executive to the Company hereunder, the Company hereby agrees to pay or
otherwise provide Executive the following compensation and benefits, it being
understood that the Company shall Defer compensation payments, including salary,
due to executive after company raises $4 million or more in equity investments
and/or grants. It is furthermore understood that the Company shall have the
right to deduct or withheld under any provision of applicable law (including but
not limited to Social Security payments, income tax withholding and other
required deductions not in effect or which may become effective by law any time
during the Term):
(a) SALARY. Executive shall receive an annual salary of Two Hundred
and Sixty Five Thousand Dollars ($265,000), plus annual cost of living salary
increases ("Base Salary"). The Base Salary shall be reviewed by the Board each
year prior to the anniversary of this Agreement to determine the annual increase
to the Base Salary; PROVIDED, HOWEVER, that in no event shall such annual
increase be less than cost of living increase. While date of this agreement is
Oct. 6, 2003, annual salary is retoactive to April 8, 2003 and Executive's
deferred compensations starting April 8, 2003 are based on the $265,000 annual
salary. Salary will be paid in equal installments not less frequently than
monthly in accordance with the Company's salary payment practices in effect from
time to time for senior executives of the Company.
(b) BONUS PAYMENT. The Board shall establish a Bonus Committee to
determine the criteria for, and amounts of, any potential bonus payments.
(c) BENEFIT PLANS. Executive shall be covered by health, accident,
disability and life insurance programs, and any other fringe benefit
program, which the Company may adopt and implement after it raises $4
million or more in equity investments and/or grants for the benefit of the
Company's employees. The Company anticipates establishing a stock option
plan for some or all of its employees, including Executive, prior to April
30, 2003. Notwithstanding the foregoing however, nothing contained herein
shall be construed as an obligation of the Company to implement any such
program for any period of time for any employee; PROVIDED, HOWEVER, that
the Company agrees to grant to Executive an option for the purchase of a
minimum of 1.2 million shares of Class A Common Stock at an anticipated
exercise price of $1.20 per share pursuant to the terms and conditions of
the stock option plan adopted by the Company. Company also agrees to grant
to Executive 1.8 million shares of Class A Common Stock at par value of
$.001 per share prior to April 30, 2003.
(d) EXPENSES. Executive shall be entitled to receive reimbursement
for all reasonable expenses incurred by him in connection with the fulfillment
of his duties hereunder; PROVIDED, HOWEVER, that Executive has complied with all
policies and procedures related to the reimbursement of such expenses as shall,
from time to time, be established by the Company.
(e) Automobile allowance may be considered in the future.
(f) VACATIONS AND SICK LEAVE. Executive shall be entitled to four
(4) weeks paid vacation annually to be taken in accordance with the Company's
vacation policy in effect from time to time and at such time or times as many be
agreed upon between the Company and Executive; PROVIDED, HOWEVER, that if for
any reason Executive does not take the full four (4) weeks vacation in any given
year, Executive shall be entitled to accrue and carry over such vacation time
according to the policy established by the Company. Executive shall also be
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entitled to sick leave according to the sick leave policy which the Company many
adopt from time to time.
(f) it is understood that Executive will be based in Dallas at
Company headquarters.
4. INDEMNIFICATION. Company shall at all times during the term of this
Agreement and thereafter, indemnify and defend and hold Executive harmless from
and against all liability, loss, costs, claims, damages, expenses, judgments,
awards, and settlements as well as attorneys' fees and expenses, personal or
otherwise, whether in tort or in contract, law or equity, that it may incur by
reason of or arising out of any claim made by any third party, with respect to
Executive's employment with Company in accordance with this Agreement.
Indemnification shall include all costs, including actual attorneys' fees and
expenses reasonably incurred in pursuing indemnity claim under or enforcement of
this Agreement. Executive shall also at all times during the term of this
Agreement and thereafter, indemnify and defend and hold Company, its founders,
owners, directors, officers, employees, advisors, agents, partners, service
providers and affiliates harmless from and against all liability, loss, costs,
claims, damages, expenses, judgments, awards, and settlements as well as
attorneys' fees and expenses, personal or otherwise, whether in tort or in
contract, law or equity, that it may incur by reason of or arising out of any
claim made by any third party, with respect to any illegal actions during the
Executive's employment with Company in accordance with this Agreement.
Indemnification shall include all costs, including actual attorneys' fees and
expenses reasonably incurred in pursuing indemnity claims under or enforcement
of this Agreement. Executive is not bound by the terms of any agreement with any
previous employer or other party which would limit his abilities to perform his
duties for Company.
5. LIMITATION OF LIABILITY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
THIS AGREEMENT, COMPANY, ITS FOUNDERS, OWNERS, DIRECTORS, OFFICERS, EMPLOYEES,
ADVISORS, PARTNERS AND AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VIABILITY OF COMPANY,
COMMERCIABILITY OF PRODUCT OR VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR
PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE.
EXECUTIVE AGREES THAT REGARDLESS OF THE FORM OF ANY CLAIM, EXECUTIVES'
SOLE REMEDY AND COMPANY OBLIGATION WITH RESPECT TO ANY CLAIMS MADE RELATED TO OR
ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY THIS AGREEMENT, AND IN ALL
CASES EXECUTIVE'S REMEDIES SHALL BE LIMITED SPECIFICALLY TO COMPANY AND NOT TO
ASSETS OR PERSONAL AND BUSINESS INTERESTS OF COMPANY FOUNDERS, OWNERS,
DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS, PARTNERS AND AFFILIATES. IT IS
EXPRESSLY AGREED THAT IN NO EVENT SHALL COMPANY, ITS FOUNDERS, OWNERS,
DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS, PARTNERS AND AFFILIATES BE LIABLE FOR
PERSONAL, INCIDENTAL, DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES OF ANY KIND,
INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS REGARDLESS OF
WHETHER COMPANY
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SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE
POSSIBILITY.
6. TERMINATION. (a) EVENTS OF TERMINATION. This Agreement shall terminate on the
earliest to occur of the following events:
(i) the expiration of the Term;
(ii) the mutual agreement of the Company and the Executive;
(iii) the voluntary termination of the Executive other then as a
result of a Constructive Termination Event (as defined
herein);
(iv) the death of Executive or Executive's retirement;
(v) Executive becoming completely unable to perform his duties as
described herein due to injury, illness or disability (mental
or physical), as determined by an independent physician
selected with the approval of the Company and Executive, for a
period of three (3) consecutive months ("Disability"); or
(vi) the termination of the Executive by the Company for "just
cause" (as defines herein) upon giving written notice to
Executive
For the purposes hereof, the Company shall have "just cause" to
terminate Executive's employment hereunder as a result of Executive's gross
negligence, willful misconduct or fraud in carrying out his duties as required
pursuant to the terms of the Agreement. Notwithstanding any other provision
contained herein, the Company shall have the right to terminate the agreement
and Executive's employment without just cause, and Executive's remedies
hereunder in the event of such termination shall be limited to the Severance
Payment set forth in Section 5 hereof.
(b) TERMINATION FOR JUST CAUSE OR VOLUNTARY TERMINATION. If
Executive's employment is terminated prior to the expiration of the Term for
just cause or if Executive's employment is terminated as set forth in Section
6(a) (ii) or (iii) hereof, Executive shall not be entitled to receive Severance
Payment (as defined herein) and will only be entitled to receive compensation
earned buy Severance Payment as of the date of such termination.
(c) TERMINATION WITHOUT JUST CAUSE. If Executive's employment is
terminated by the Company without just cause or as a result of the Executive's
Disability, Executive shall be entitled to receive the Severances Payment set
forth in Section 7 hereof. For purposes of the Agreement, termination without
just cause shall include termination by Executive of his employment with the
Company within 120 days after the occurrence of any of the following events
(collectively herein referred to as "Constructive Termination Events") which are
not remedied within 10 business days after written notice to the Company by
Executive of such event:
(i) failure to elect, re-elect or otherwise maintain Executive in
the office to the position of Chairman, President or CEO (but not necessarily
all of those positions), or a substantially equivalent office or position, of or
with the Company, or the removal of, or failure to re-elect, Executive as a
director of the Company;
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(ii) a significant adverse change in the nature or scope of the
authority, powers, functions, responsibilities or duties attached to the
position of Executive with the Company as set forth herein or a reduction in
Executive's Base Salary and benefits as set forth herein;
(iii) the liquidation, dissolution, merger, consolidation or
reorganization of the Company or transfer of all or a significant portion of its
business and/or asserts, unless the successor or successors shall have assume
all duties and obligations of the Company under the Agreement;
(iv) the Company shall relocate its principal headquarters offices
or require Executive to have his principal location of work changed to any
location which is in excess of fifty (50) miles from its current location
without the prior written consent of Executive; and
(v) without limited the generality or effect of the foregoing, and
material breach of the Agreement by the Company or its successor or successors.
(d) INSURANCE. The Company may secure, in its own name, or
otherwise, and at its own expense, life, health, accident and other insurance
covering Executive or Executive and others. Executive agrees to assist the
Company in procuring such insurance by submitting to the usual and customary
medical and other examinations and by signing, as the insures, such applications
and other instruments in writing as may be reasonably requires by the insurance
companies to which application is made pursuant to such insurance. Executive
agrees the he shall have no right, title, or interest in or to any insurance
policies to the proceeds thereof which the company many so elect to take out or
to continue on his life.
7. SEVERANCE PAYMENT. (a) If the Company terminated Executive's
employment without just cause or if Executive's employment is terminated due to
Disability, Executive shall be entitled to receive, in addition to all
compensation earned by Executive prior to the date of such termination, the
following severance payments (the "Severance Payments"):
(i) equal monthly installments at the Base Salary rate then in
effect, as determined on the first day of the month immediately preceding the
day of termination, to be paid beginning on the first day of the month following
such termination and continuing until the earlier of (A) the expiration of the
Term or (B) the expiration of Twenty four (24) months (the "Severance Period");
PROVIDED, HOWEVER, that in no event shall the Severance Period be less than six
(6) months; and
(ii) during the Severance Period, health and life insurance benefits
substantially similar to those which Executive was receiving or entities to
receive immediately prior to termination; PROVIDED, HOWEVER, such insurance
benefits shall be reduced to the extent comparable benefits during such period
following Executive's termination, and any benefits actually received by
Executive shall be reported by Executive to the Company.
(b) DISABILITY. Whenever Severance Payment are payable to Executive
hereunder during a time when Executive is partially or totally disabled and such
Disability would entitle him to disability income payments according to the
terms of any plan or policy now or hereafter provided by the Company, the
Severance Payment payable to Executive hereunder shall be inclusive of any such
disability income and shall not be in addition thereto even if such
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disability income if payable directly to Executive by an insurance company under
instance policy paid for by the Company
8. RESTRICTIVE COVENANTS. Executive and the Company agree that the
Company would suffer irreparable harm and incur substantial damage if Executive
were to enter into Competition (as defined herein) with the Company. Therefore,
in order for the Company to protect its legitimate business interests, Executive
agrees as flows:
(a) Without prior written consent of the Company, Executive shall
not, during the period of employment with the Company, directly or indirectly,
invest or engage in any business that is Competitive (as defined herein) with
the Business of the Company or accept employment or render services to a
Competitor (as defined herein) if the Company as a director, officer, agent,
employee or consultant or solicit or attempt to solicit or accept business the
is Competitive with the Business of the Company, except that Executive may own
up to five percent (5%) of any outstanding class of securities of any company
registered under Section 12 of the Securities Exchange Act of 1934, as amended.
(b) Without prior written consent of the Company and upon any
termination of Executive's employment with the Company and for a period of
twelve (12) months thereafter, Executive shall not, either directly or
indirectly, (i), invest or engage in any business that is Competitive (as
defined herein) with the Business of the Company, except that Executive may own
up to five percent (5%) of any outstanding class of securities of any company
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
(ii) accept employment with or render services to a Competitor of the Company as
a director, officer, agent, employee or consultant unless he is serving in a
capacity that has no relationship to the Competitor's business that is
Competitive with the Business of the Company, or (iii) solicit, attempt to
solicit or accept business Competitive with the Business of the Company from any
of the customers of the Company at the time of his termination or within twelve
(12) months prior thereto or from any person or entity whose business the
Company was soliciting at such time.
(c) Upon termination of his employment with the Company, and for a
period of twelve (12) months thereafter, Executive shall not, either directly or
indirectly, engage, hire, employ or solicit in any manner whatsoever the
employment of an employee of the Company.
(f) For purposes of this Agreement, a business or activity is in
"Competition of Competitive" with the Business of the Company if it involves,
and a person or entity is a "Competitor", if that person or entity is engaged
in, or about to become engaged in, the research, development, design,
manufacturing, marketing or selling of a specific product or technology that
resembles, competes, or is designed to compete, with, or has applications
similar to any product or technology for which the Company has obtained or
applied for a patent or made disclosures, or any product or technology involving
any other proprietary research or development engaged in or conducted by the
Company during the term of Executive's employment with the Company.
9. DISCOVERIES AND INVENTIONS. (a) Executive hereby assigns to the
Company all his right, title, and interest in and to any and all inventions,
discoveries, developments, improvements, techniques, designs and data related to
blood substitutes which
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Executive conceives of, reduces to practice, or otherwise creates, either alone
or jointly with others, in the course of his employment and in which the law
recognizes any protectable interest.
10. CONFIDENTIALITY. For purposes of this Agreement, "Confidential
Information and Trade Secrets" shall mean all information, know how, trade
secrets, processes, computer software or programs and related documentation,
methods, practices, fabricated techniques, marketing plans, and other
compilations of information which relate to the Business of, and are owned by
the Company which were not known generally to others engaged in the Business of
the Company and which the Company has taken affirmative actions to protect from
public disclosure or which do not exist in the public domain. Executive shall
not use, or disclose any of the Confidential Information and Trade Secrets,
either during the term of his employment or at anytime thereafter, except as
required in the course of his employment. All information, data and similar
items and documentation relating to the Business of the Company, shall remain
the exclusive property of the Company unless owned by Executive.
11. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be in writing and deemed to have been given when
delivered in person or when dispatched by telegram, electronic mail, or
electronic facsimile transfer (confirmed in writing by mail, registered or
certified, return receipt requested, postage prepaid, simultaneously dispatched)
to the addressees at the addresses specified below.
If to Executive: Xxxxxx X. Xxxxxx, Ph.D.
00000 Xxxxx Xxxx
Xxxxxx, Xxxxx 00000
Phone No.: 000-000-0000
If to the Company: Xxxxxxx Xxxx
Hemobiotech Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
or to such other address or fax number as either party may from time to time
designate in writing to the other.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto relating to the subject matter hereof, and supersedes
all prior agreements and understandings, whether oral or written, with respect
to the same. No modification, alteration, amendment or revision of or supplement
to this Agreement shall be valid or effective unless the same is in writing and
signed by both parties hereto.
13. GOVERNING LAW. This Agreement and the rights and duties of the
parties hereunder shall be governed by, contrued under and enforced in
accordance with the laws of the State of Texas.
14. ASSIGNMENT. The rights and obligations of the parties under this
Agreement shall not be assignable without written permission of the other party
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15. SEVERABILITY. The invalidity of any provision of this Agreement
under the applicable laws of the State of Texas or any other jurisdiction, shall
not affect the other provisions hereby declared to be severable from all other
provisions. The intention of the parties, as expressed in any provision held to
be void or ineffective, shall be given such full force and effect as may be
permitted by law.
16. SURVIVAL. The obligations of the Company or its successor to pay
any Severance Payments required hereunder subsequent to the termination of this
Agreement and the obligations of Executive under Sections 6, 7 and 8 hereof
shall survive the termination of this Agreement.
17. REMEDIES. Executive and the Company recognize that the services to
be rendered under this Agreement by Executive are special, unique, and of
extraordinary character, and that in the event of the breach by Executive of the
terms and conditions of Sections 4,5, 8, 9 and 10 hereof the Company shall be
entitled, if it so elects, to institute and prosecute proceedings in any court
of competent jurisdiction, to obtain damages for any breach thereof.
18. DISPUTE RESOLUTION. Except for the right of either party to apply
to a court of competent jurisdiction for a temporary restraining order, a
preliminary injunction, or other equitable relief to preserve the status quo or
prevent irreparable harm any and all claims, disputes or controversies arising
under, out of or in connection with the Agreement, including any dispute
relating to production, use or commercialization, which the parties shall be
unable to resolve within sixty (60) days shall be mediated in good faith. The
party raising such dispute shall promptly advise the other party of such claim,
dispute or controversy in a writing, which describes in reasonable detail the
nature of such dispute. By not later than five (5) business days after the
recipient has received such notice of dispute, each party shall have selected
for itself a representative who shall have the authority to bind such party, and
shall additionally have advised the other party in writing of the name and title
of such representative. By not later than ten (10) business days after the date
of such notice of dispute, the party against whom the dispute shall be raised
shall select a mediation firm in Texas and such representatives shall schedule a
date with such firm for a mediation hearing. The parties shall enter into good
faith mediation and shall share the costs equally. If the representatives of the
parties have not been able to resolve the dispute within fifteen (15) business
days after such mediation hearing, the parties shall have the right to pursue
any other remedies legally available to resolve such dispute in ether the Courts
of the State of Texas or in the United States District Court for the District of
Texas, to whose jurisdiction for such purposes Company and Executive each hereby
irrevocably consents and submits.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
HemoBioTech Inc,
A Texas corporation
By: /s/ Xxxxxxx Xxxx
-----------------------------------------
Xxxxxxx Xxxx, Founder, Interim CEO
/s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Executive: Xxxxxx X. Xxxxxx, Ph.D.
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0000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
July 15, 2004
Xx. Xxxxxx Xxxxxx
00000 Xxxxx Xxxx
Xxxxxx, XX 00000
Re: AMENDED EMPLOYMENT AGREEMENT
Dear Art:
On October 6, 2003, Hemobiotech, Inc., a Delaware corporation (the
"Company") entered into an Amended Employment Agreement with you (the "Bollon
Employment Agreement"), pursuant to which the Company agreed to pay you a base
salary of $265,000 per annum in exchange for your agreement to serve as the
Company's full-time President, Chief Executive Officer and Chairman. The Bollon
Employment Agreement further stated that all such compensation would be deferred
until such time as the Company completed an equity financing having gross
proceeds to the Company of at least $4,000,000.
As you know, the Company is currently in the process of raising a
minimum of $2,000,000 of Units (the "Minimum Offering") and a maximum of
$3,500,000 of Units (the "Maximum Offering") (which may be increased by up to an
additional $1,000,000) (the "Private Placement"). Following completion of the
Private Placement, the Company plans to complete a Follow-On Offering in one or
more series in which the Company expects to raise a minimum of $2,000,000 and a
maximum of $10,000,000 (the "Follow-On").
In connection with the Private Placement, you have agreed, pursuant to
the terms of a Deferred Compensation Forbearance Agreement dated as of even date
herewith, to waive all deferred compensation due to you under the Bollon
Employment Agreement through the date on which the Company consummates the
Minimum Offering.
This letter serves to amend Article 3 of the Bollon Employment
Agreement to provide that you have agreed to continue to serve as the Company's
full-time President, Chief Executive Officer and Chairman, commencing as of the
date hereof through the Company's consummation of the Maximum Offering (the
"Offering Period"). During the Offering Period, you shall be entitled to accrue
an annual salary at the rate of $120,000 per annum (the "Interim Compensation"),
which shall begin accruing as of the
consummation of the Minimum Offering and shall be deferred until the
consummation of the Maximum Offering. Upon the completion of the Maximum
Offering and out of the proceeds thereof, the Company shall pay you such amount
as shall be equal to the accrued Interim Compensation.
Commencing as of the consummation of the Maximum Offering and through
such time as the Company completes a Follow-On, you have agreed to continue to
serve as the Company's full-time President, Chief Executive Officer and Chairman
in exchange for an adjusted base salary equal to $150,000 per annum payable in
accordance with the Bollon Employment Agreement. Following the completion of a
Follow-On, your annual base salary may be increased.
Other than as expressly set forth herein, all other terms of the Bollon
Employment Agreement shall remain unchanged and in full force.
If the foregoing accurately reflects our agreement, kindly execute this
letter below and return a copy to Xxxxxxx Xxxx, Vice Chairman of the Company, by
facsimile at 000-000-0000 on or by the date first above written.
Very truly yours,
/s/ Xxxxxxx Xxxx
-----------------------
Xxxxxxx Xxxx
Vice Chairman
AGREED TO AND ACCEPTED
as of this 15th day of July, 2004
By: /s/ Xxxxxx Xxxxxx
-------------------------
Xxxxxx Xxxxxx
AMENDMENT
TO AMENDED EMPLOYMENT AGREEMENT BETWEEN
XXXXXX X. XXXXXX AND HEMOBIOTECH, INC.
DATED OCTOBER 6, 2003
THIS IS AN AGREEMENT TO INCREASE THE TERM OF THE AMENDED
EMPLOYMENT AGREEMENT BETWEEN XXXXXX X. XXXXXX AND HEMOBIOTECH DATED OCTOBER 6,
2003 FROM OCTOBER 6, 2006 TO OCTOBER 6, 2007.
/s/ Xxxxxxxx Xxxxxxxxxx
--------------------------
XXXXXXXX XXXXXXXXXX
DIRECTOR AND CHAIRMAN, COMPENSATION COMMITTEE
HEMOBIOTECH, INC.
/s/ Xxxxxx X. Xxxxxx
--------------------------
ACCEPTED: XXXXXX X. XXXXXX
PRESIDENT AND CEO
HEMOBIOTECH, INC.
January 3, 2005
---------------
AMENDMENT
TO AMENDED EMPLOYMENT AGREEMENT BETWEEN
XXXXXX X. XXXXXX AND HEMOBIOTECH, INC.
DATED OCTOBER 6, 2003, AS AMENDED JULY 15, 2004 AND JANUARY 3, 2005
This Agreement is between Hemobiotech, Inc., a Delaware
corporation (the "Company") and Xxxxxx X. Xxxxxx, PhD, the President and Chief
Executive Officer of the Company (the "Employee").
WHEREAS, the Company entered into an Employment Agreement with
the Employee on October 6, 2003, pursuant to which the Employee agreed to serve
as the Company's Chairman, President and Chief Executive Officer for an initial
term of three years for an annual base salary of $265,000 and an option to
purchase 651,668 shares of common stock of the Company (the "Initial Employment
Agreement"). The Initial Employment Agreement also provided that payment of the
Employee's base salary would be deferred until such time as the Company
consummated a financing having gross proceeds to the Company of at least $4.0
million;
WHEREAS, due to the Company's financial condition, on July 15,
2004, the Employee agreed to forbear pursuant to the terms of a letter agreement
(the "July 2004 Letter Agreement") all compensation that would be owing to him
as of October 13, 2004 pursuant to the Initial Employment Agreement;
WHEREAS, pursuant to the terms of the July 2004 Letter
Agreement, the Employee agreed to continue to serve as the Company's Chairman,
President and Chief Executive Officer in exchange for an adjusted annual base
salary of $150,000, effective as of the completion of the Company's sale of $4.5
million of Units in its private placement, and the parties agreed that at such
time as the Company consummates a financing having gross proceeds to the Company
of at least $10.0 million (a "Financing"), the Employee's base salary may be
increased to an unspecified amount;
WHEREAS, on January 3, 2005, pursuant to the terms of a letter
agreement (the "January 2005 Letter Agreement" and together with the Initial
Employment Agreement and the July 2004 Letter Agreement, the "Employment
Agreement"), the Company extended the Employee's employment term to October 6,
2007;
WHEREAS, the parties desire to amend the Employment Agreement
(i) to specify the amount of the adjusted annual base salary to which the
Employee will become entitled upon the Company's consummation of a $10.0 Million
Financing (as defined below), (ii) to define the terms constituting an eligible
Financing, (iii) and to provide that,
in exchange for the Employee's continued service to the Company and in
recognition of the Employee's contributions to the Company, the Employee will be
entitled to receive a certain bonus upon the consummation of a $10.0 Million
Financing as set forth in more detail below.
NOW, THEREFORE, in consideration of the mutual premises and
agreements contained herein, the parties hereto agree as follows:
1. The Employment Agreement shall be amended to provide as
follows:
(a) Effective as of the first business day of the
calendar month immediately following the Company's consummation of equity
financings, bank financings or a combination thereof having gross proceeds to
the Company of at least $10.0 million, in which at least Fifty Percent (50%) of
the overall proceeds of such financings have been derived from equity financings
(the "$10.0 Million Financing"), the Employee's annual base salary shall
increase to $210,000 (the "Adjusted Base Salary");
(b) On each October 6 of every year (each, an "Annual
Bonus Date"), commencing as of the first October 6 immediately following the
Company's completion of a $10.0 Million Financing, and so long as the Employee
is the Company's President, Chief Executive Officer and Chairman as of such
Annual Bonus Date, then the Employee shall be entitled to receive a lump-sum
bonus equal to 25% of the Adjusted Base Salary (as may be adjusted from time to
time) (the "Annual Bonus Amount"); PROVIDED, HOWEVER, that if the Employee's
employment with the Company has been terminated in accordance with Section(s)
6(a)(ii), (iv) and/or (v) of the Employment Agreement prior to an Annual Bonus
Date, then the Employee shall be entitled to receive, on such Annual Bonus Date,
an amount equal to the applicable Annual Bonus Amount calculated on a pro rata
basis as of the effective date of the Employee's termination;
(c) Within ten (10) business days following the Company's
consummation of a $10.0 Million Financing, the Employee shall be entitled to
receive a lump-sum bonus equal to $52,500 (which represents 35% of the
Employee's base salary in effect as of the date hereof); and
(d) Upon the consummation of a $10.0 Million Financing,
the Employee's employment term shall be extended to the three (3)-year
anniversary of the closing date of such $10.0 Million Financing.
Other than as expressly set forth herein, all other terms of the
Employment Agreement shall remain unchanged and in full force and effect.
HEMOBIOTECH, INC.
By: /s/ Xxxxxxxx Xxxxxxxxxx
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Xxxxxxxx Xxxxxxxxxx
Director and Chairman, Compensation Committee
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
