Exhibit 10.4.4

 

EMPLOYMENT AGREEMENT

 

AGREEMENT made as of October 28, 2005 and effective as of October 31, 2005 (the
“Effective Date”), by and between Scott Fein, having an address at 191 Bristol
Drive, Woodbury, New York, 11797 (hereinafter referred to as “Employee”) and
Bio-Reference Laboratories, Inc., a New Jersey corporation with principal
offices located at 481 Edward H. Ross Drive, Elmwood Park, New Jersey 07407, and
its successors and assigns (hereinafter referred to as the “Company” or
“Employer”).

 

WITNESSETH

 

WHEREAS, the Company is a New Jersey Corporation and is engaged in the clinical
laboratory business, including, among other things, the ownership, operation and
marketing of licensed clinical laboratories; and

 

WHEREAS, Employee has background and experience in the marketing of clinical
laboratory services and the servicing of customers of clinical laboratories and
has been employed by the Company since March 1994; and

 

WHEREAS, Employee and the Company are parties to an employment agreement
effective May 1, 1999 (the “1999 Agreement”); and

 

WHEREAS, the Company desires to continue the employment of Employee as a
marketing representative; and

 

WHEREAS, the Employee desires to continue employment with the Company, pursuant
to the terms and conditions herein set forth, superseding all prior agreements,
including but not limited to the 1999 Agreement, between the Company, its
subsidiaries, and/or predecessors and Employee;

 

NOW, THEREFORE, it is mutually agreed by and between the parties hereto as
follows:

 

ARTICLE I

EMPLOYMENT

 

Subject to and upon the terms and conditions of this Agreement, the Company
hereby agrees to continue the employment of the Employee, and the Employee
hereby accepts such continued employment in his capacity as Senior Vice
President and Sales Representative of the Company.

 

Employee represents and warrants that there is no restriction or impediment,
contractual or otherwise, to his accepting such employment as provided for
herein, and that he is not in breach or violation of any covenant or agreement
with any party relation to his employment. Employee represents and warrants, and
covenants and agrees that in continuing his employment with the Company and in
the performance of his duties that he is not utilizing any secret or
confidential information of any other person. The Employee also represents and
warrants that he has consulted with an attorney prior to executing this
Employment Agreement.

 

Employer represents and warrants that the products and services to be marketed
and sold by the Employee will in no way contravene any contract, nor will the
anticipated services of the Employee be in contravention of any state, Federal
or local statute or court ruling.

 

ARTICLE II

DUTIES/OBLIGATIONS

 

(A)          In exchange for payment of the consideration set forth in this
Agreement, the Employee shall, during his continued employment with the Company,
and subject to the direction and control of the Company’s executive officers,
perform such reasonable services, duties and functions of a Senior Vice
President and Sales Representative as he may be called upon by such executive
officers during the term of this Agreement. The Employee shall report directly
to the Senior Management of the Company.

 

(B)           During the continuation of his employment, the Employee will work
for the Company on a full-time basis and agrees to devote his best efforts to
the performance of his duties for the Company. The Employee has informed the
Company that from time to time he may be requested to act as a consultant

 

1

--------------------------------------------------------------------------------

 

(“Consulting Work”) for a bio-technical like company not in the clinical
laboratory testing business and not in competition with the Company
(“Non-Clinical Laboratory Companies”). The Consulting Work for Non-Clinical
Laboratory Companies primarily involves introducing these companies and their
products to the doctors that the Employee solicits or is otherwise involved with
on behalf of the Company. The Employee has also informed the Company that the
Consulting Work will not interfere with his work for the Company. The Employee
agrees to notify the Company of his acceptance of Consulting Work and the nature
of the business of the Company for which he will be consulting.

 

(C)           The services, duties and functions referred to in subsection (A)
above that the Employee may be called upon to perform include, but are not
limited to the following:

 

(i)            Those duties attendant to the position with the Company in which
he is employed, including the marketing and sale of the various health and
clinical laboratory services;

 

(ii)           Assist the Company in the planning and implementation of all
sales promotion, advertising, public relations, personnel and product
development programs;

 

(iii)          Promotion of the relationships of the Company and its subsidiary
and affiliate corporations with their respective employees, customers,
suppliers, and others in the business community;

 

(iv)          Work with the Company’s professional staff toward the development
of special programs to offer laboratory services to different groups of
physicians and specialists;

 

(v)           Assisting other sales personnel in marketing and servicing their
accounts;

 

(vi)          Assisting the Company in training and managing other sales and
service personnel;

 

(D)          Work Product.      Employee grants to the Company, and the Company
accepts, Employee’s entire right, title and interest in and to the Work Product
(as defined below) and in and to all patents, copyrights, trade secrets and
other proprietary rights in or based on the Work Product. Employee grants to the
Company, and the Company accepts, an unlimited, unrestricted, royalty-free,
fully paid-up, worldwide and exclusive right and license, with the right to
grant licenses and sublicenses to others without accounting to Employee, under
the Background Rights (as defined below) and all proprietary rights therein or
based thereon. Employee agrees that if the Work Product or any portion thereof
is copyrightable, it shall be deemed to be a “work made for hire,” as such term
is defined in the Copyright Laws of the United States. Employee shall cooperate
with the Company or its designees and execute documents of assignment, oaths,
declaration and other documents, prepared by the Company, to effect the
foregoing or to perfect or enforce any proprietary rights resulting from or
related to this Agreement. Such cooperation and execution shall be at no
additional compensation to Employee; provided, however, the Company shall
reimburse Employee for reasonable out-of-pocket expenses incurred at the
specific request of the Company. For purposes of this provision, the following
definitions shall apply: (a) “Work Product” shall mean all data, documentation,
software and information, in whatever form, first produced or created by
Employee or for Employee as a result of or related to the performance of work or
the rendition of services under this Agreement or under any prior agreement with
the Company including, but not limited to, work or services performed by
Employee as an independent contractor for the Company; and (b) “Background
Rights” shall mean all data, documentation, software and information, in
whatever form, not first produced or created by Employee or for Employee as a
result of or related to the performance of work or the rendition of services
under this Agreement or under any prior Agreement with the Company, but included
in, necessary, useful or utilizable in or with the Work Product or any portion
thereof.

 

ARTICLE III

TERM AND COMPENSATION

 

(A)          The initial term of this Agreement shall be for a period of four
(4) years commencing on November 1, 2005 and ending on October 31, 2009. Each
year of the Agreement (November 1 – October 31) is referred to as a “Contract
Year.” The period of November 1, 2005 through October 31, 2009, plus any
extension years as provided in Article XIII, is referred to as the “Employment
Term.”

 

2

--------------------------------------------------------------------------------

 

(B)           For the Contract Year commencing November 1, 2005, the Company
shall pay to Employee a salary (the “Base Salary”) of $150,000. For the Contract
Years beginning on November 1, 2006, November 1, 2007, and November 1, 2008, the
Company shall pay to Employee a Base Salary of $350,000. The Base Salary is
payable in bi-weekly installments or otherwise pursuant to the Company’s
then-current payroll practices.

 

(C)           In addition to the Base Salary provided for in this Article III
(B) above, the Employee shall receive sales commissions from the Employer based
upon the net cash revenues actually received by the Company from the Employee’s
accounts less refunds (“Net Cash Revenues”) at the same rates, terms and
conditions as established between the Employee and the Company prior to the
Effective Date of this Agreement, which are set forth below. (Net Cash Revenues
are defined here and throughout this Agreement as those revenues actually
received by the Company less refunds).

 

(i)            For new accounts obtained solely by the Employee’s efforts
(including new accounts obtained prior to the Effective Date), a sales
commission of 9% of the Net Cash Revenues actually received by the Company from
such accounts, which rate of commission shall continue so long as the Company
keeps such account and so long as the Employee services the account. For the
purpose of this provision, a new account shall mean: (x) an account not
previously serviced by the Company and introduced to the Company by the
Employee, or (y) an account previously serviced by the Company which has not
ordered for a period of 180 days and which has become an active account as a
result of the Employee’s efforts. An account having been serviced within 180
days by the Company, from which an order has been received within 180 days
and/or referred to the Employee by the Company shall be denominated a house
account. The foregoing commission rate of 9% shall not apply to accounts
serviced by the Employee prior to the Effective Date where the Employee and the
Company have agreed to a lower rate. For those accounts, the lower rate shall
continue to apply during the term of this Agreement. Additionally, the 9%
commission on new accounts shall not apply to any new accounts where: (x) 50% or
more of the patient mix is Medicaid and or Medicaid/HMO, or; (y) the
professional billing rate is set at the Medicaid rate or below. For such
accounts, the commission rate shall be 4.5%.

 

(ii)           For all those accounts brought to the Company by the Employee in
conjunction with another marketing representative, the Employee will receive
sales commission as determined by mutual agreement of the Company and the
Employee, based upon the Net Cash Revenues. Those accounts considered to have
been in conjunction with another marketing representative include those accounts
not serviced by the Company within the previous 180 days, and/or those accounts
not referred by the Company. Such commission shall continue unabated so long as
the Company keeps such account and so long as the Employee and/or other
marketing representative services such account.

 

(iii)          On sales made by the Employee to the Company’s house accounts or
to accounts developed as a result of Company referrals or leads, the Employee
shall receive a sales commission of 4.5% of the Net Cash Revenues. Such
commission shall continue unabated so long as the Employee services said
account. Accounts considered by the Company to be house accounts for the
purposes of (C)(ii) above shall be those accounts submitted to the Employee by
the Company and agreed upon by the Company representative and the Employee.

 

(iv)          The Employee will receive commissions on the business generated
from drawing stations he assisted in establishing in accordance with sections
(C)(i) and (C)(ii) above. The commission will be mutually agreed upon by the
Company and the Employee upon establishment of each new drawing station.

 

(v)           The standard deduction applicable to all commissions arising from
reference work that was in effect as of the Effective Date will remain in effect
for the Employment Term.

 

(vi)          The sales commission provided for herein shall be paid pursuant to
the terms of the Company’s then-current policy on the payment of commissions.
The Company shall, if required, deduct and withhold all applicable federal,
state, and local employee taxes from such payment.

 

(vii)         The Company shall provide Employee with a report so that the
Employee may determine

 

3

--------------------------------------------------------------------------------

 

his commission on a monthly basis.

 

(vii)         The Company reserves the right to reasonably reject any new
account sold by the Employee, solely or jointly, that is deemed insufficiently
profitable by the Company.

 

(viii)        The Employee reserves the right to refuse to service any account,
house or otherwise, which (1) will not generate more than $500 per month in
commission; (2) or the servicing of which would substantially impair the
Employee’s ability to service other accounts necessary for him to maximize his
profits under the Contract.

 

(D)          If (i) the Employee is absent from work for more than 130 business
days in any twelve-month period by reason of illness or incapacity (whether
physical or otherwise) or (ii) the Company reasonably determines that the
Employee is unable to perform his duties, services and responsibilities
hereunder by reason of illness or incapacity (whether physical or otherwise) for
more than 130 business days in any twelve-month period during the Employment
Term (“Disability” or “Disabled”), the Company shall not be obligated to pay the
Employee any compensation (Salary, bonus or commissions) for any period in
excess of such 130 business; furthermore, any such payments during such 130
business day period shall be reduced by any amount the Employee is entitled to
receive as a result of such disability under any plan provided through the
Company or under state or federal law. See, however, Article X hereof pursuant
to which Employee’s spouse, Debbie Fein, may assume Employee’s obligations under
this Agreement.

 

(E)           Any and all taxable income relating to the compensation and
benefits to be received by Employee hereunder shall be reported pursuant to
applicable federal, state and local tax laws, and Employee shall bear the
financial responsibility for all such tax obligations applicable to him (as
distinct from those tax obligations that are the Employer’s responsibility).

 

ARTICLE IV

SIGNING BONUS

 

The Employee will receive a signing bonus payment as follows:

 

(A)          After the Effective Date but no later than December 31, 2005, the
Employee will receive a signing bonus of $200,000, less all required deductions
and withholdings.

 

ARTICLE V

STOCK OPTIONS

 

The Board of Directors has authorized the Company to grant Employee
non-transferable incentive stock options (the “Options”) exercisable to purchase
shares of Bio-Reference Common Stock (the “Stock”) as set forth below. The
number of Options to be issued to Employee shall be determined by dividing
$100,000 by the closing stock price on the Date of Grant, as defined below (for
example if the closing Stock price on the Date of Grant is equal to $20,
employee will be issued 5,000 Options). The Date of Grant of the Options (“Date
of Grant”) shall be the date determined by the Board of Directors to be the Date
of Grant, but in no event shall the Date of Grant occur later than October 31,
2005. It is the intent of the parties that the Date of Grant will occur on or
prior to the Effective Date. The Option exercise price per share shall be equal
to the last sale price on the NASDAQ Stock Market for the Stock on the Date of
Grant. In the event of and upon grant, the Company and Employee shall execute
and deliver to each other, an Incentive Stock Option Agreement (the “Stock
Option Agreement”) containing such terms and vesting provisions as shall be
determined by the Board of Directors consistent with the provisions of the
Company’s Employee Incentive Stock Option Plan (the “Plan”) pursuant to which
the Options are granted. The Stock Option Agreement will set forth, among other
items, the term of the Option, provisions as to termination in the event of
cessation of employment, death or permanent disability, method of exercise and
restrictions affecting transfer or sale of the underlying Common Stock.
Consistent with the provisions of the Plan, the aggregate fair market value of
Bio-Reference Common Stock with respect to which Options are exercisable by
Employee for the first time during any calendar year shall not exceed $100,000.
Subject to the limitations of the preceding sentence, the Options shall vest
immediately upon the Date of Grant.

 

4

--------------------------------------------------------------------------------

 

ARTICLE VI

BENEFITS

 

(A)          During the Employment Term, (i) the Company shall make available to
the Employee, his wife and their dependent children eligible for coverage, the
same hospital and major medical insurance benefits coverage provided by the
Company to its Senior Management; (ii) Employee shall be reimbursed by the
Company upon presentation of appropriate vouchers for all reasonable business
and entertainment expenses incurred by the Employee on behalf of the Company;
and (iii) Employee shall receive a car allowance of $1,600 per month. In
addition, the Company will pay for gasoline, maintenance, excess annual mileage
over 15,000 miles per year, and the amount of insurance coverage necessary to
maintain compliance with the leasing company. If the Employee desires insurance
coverage above the coverage provided by the Company, the Employee may obtain
coverage at his own cost.

 

(B)           In the event the Company wishes to obtain and/or maintain Key Man
Life Insurance on the life of the Employee, the Employee agrees to cooperate
with the Company in completing any applications necessary to obtain such
insurance and promptly submit to such physical examinations and furnish such
information as any proposed insurance carrier may request, providing Employee is
insurable.

 

(C)           The Company shall provide Employee, so long as Employee continues
to be employed by the Company, a term life insurance policy in an amount equal
to the lesser of one and one-half (1½) times Employee’s salary or $50,000.

 

(D)          The Company shall indemnify and hold harmless the Employee against
all claims, liability, losses, damages and expenses, including reasonable legal
fees (“Claims”) arising directly or indirectly from acts of the Company and/or
its employees, including but not limited to all tests and other laboratory
services. The indemnity contained in the paragraph does not apply to Claims
arising from the acts or omissions of Employee or his spouse, where such acts or
omissions are or were: (i) outside the scope of their employment; (ii) the
result of gross negligence, or; (iii) the result of intentional wrongdoing.

 

ARTICLE VII

CLIENT ENTERTAINMENT

 

The Company will provide Employee access to a country club of his choosing for
the purpose of entertaining clients. Employee will be one of the named country
club members and yearly membership fees paid by the Company will not exceed
$30,000.

 

ARTICLE VIII

TERMINATION

 

(A)                 Except as otherwise provided in this Agreement, the
employment of Employee hereunder and the Employment Term shall terminate (“Date
of Termination”) upon the earliest to occur of the dates specified below:

 

(i)            the close of business on the date of expiration of the Employment
Term;

 

(ii)           the close of business on the date of the Employee’s death,
unless, following the delivery of notice from the Company, the obligations of
this Agreement are assumed by Debbie Fein as provided in Article X, in which
case the Employment Term shall continue for Debbie Fein;

 

(iii)          the close of business on an early termination date mutually
agreed to in writing by the Company and the Employee;

 

(iv)          the close of business on the day on which the Company shall have
delivered to the Employee a written notice of the Company’s election to
terminate his employment for “Cause” (as defined in Article VIII(C) hereof);

 

5

--------------------------------------------------------------------------------

 

(v)           the close of business on the day on which the Company shall have
delivered to the Employee a written notice of the Company’s election to
terminate his employment because of Disability, unless, following the delivery
of such notice, the obligations of this Agreement are assumed by Debbie Fein
(either permanently or temporarily) as provided in Article X, in which case the
Employment Term shall continue for Debbie Fein and may be later assumed by Scott
Fein at the conclusion of his Disability;

 

(vi)          the close of business on the day on which the Company shall have
terminated the employment of the Employee hereunder and such termination is not
for death, Cause or Disability; or

 

(vii)         the close of business on the date which is five business days
after the date on which the Employee delivers to the Company a written notice of
the Employee’s election to terminate his employment hereunder (x) for “Good
Reason” (as defined in Article VIII(D) hereof) or (y) for any other reason.

 

(B)           Any purported termination by the Company or by the Employee
pursuant to Article VIII(A) (iv) (vii) hereof shall be communicated by written
“Notice of Termination” to the other party. For purposes of this Agreement, a
“Notice of Termination” shall mean a written notice which indicates the specific
termination provision in this Agreement relied upon and which sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee’s employment under the provision so indicated. For
purposes of this Agreement, no such purported termination shall be effective
without delivery of such Notice of Termination.

 

(C)           For purposes of this Agreement, termination of Employee for
“Cause” shall mean termination based on (i) the Employee’s material breach of
this Agreement; (ii) willful misconduct or gross negligence by Employee with
regard to the Company or its business, assets or employees; (iii) the refusal of
Employee to follow the proper and reasonable direction of the Chief Executive
Officer or his designee relating to the normal, customary and reasonably related
duties and responsibilities of Employee as set forth in Article II(C) and
provided that Employee is warned in writing at least three (3) days prior to the
Company terminating his employment for Cause as defined under this paragraph
(C)(iii); (iv) substantial and continuing refusal by the Employee to attempt to
perform the normal, customary, and reasonably related duties and
responsibilities of Employee as set forth in Article II(C) (other than any such
failure resulting from incapacity due to physical or mental illness) and
provided that Employee’s breach of this paragraph (C)(iv) is not cured by
Employee within 15 days following written notice from the Company; (v) the
Employee being convicted of a felony or pleading nolo contendere to a felony
(other than a felony involving a motor vehicle); (vi) the breach by Employee of
any fiduciary duty owed by Employee to the Company; or (vii) Employee’s
misappropriation or fraud with regard to the Company (other than good faith
expense account disputes).

 

(D)          For purposes of this Agreement, the term “Good Reason” shall mean
(i) in the event of a Change in Control (as defined below), or (ii) any material
breach by the Company of this Agreement, provided, however, that Employee first
delivers written notice thereof to the Chief Executive Officer of the Company
and the Company shall have failed to cure such breach within thirty (30) days
after receipt of such written notice.

 

(E)           In the event of termination of this Agreement, for whatever
reason, the Employee agrees to cooperate with the Company and to be reasonably
available to the Company with respect to continuing and/or future matters
arising out of the Employee’s employment or any other relationship with the
Company, whether such matters are business related, legal or otherwise. The
Company agrees to reimburse the Employee for the Employee’s reasonable expenses
incurred in complying with the terms of this paragraph upon delivery by the
Employee to the Company of valid receipts for such expenses. The provisions of
this paragraph shall survive termination of this Agreement.

 

ARTICLE IX

TERMINATION PAYMENTS

 

(A)          In the event that Employee’s employment is terminated for any
reason whatsoever, Employee shall receive his earned but unpaid wages and
commission earned through the date of Employee’s termination and shall be
notified of his rights, if any, to continued benefits coverage under any of the

 

6

--------------------------------------------------------------------------------

 

Company’s benefit plans.

 

(B)           Termination Payments in the Event of Termination By the Company
Without Cause or By Employee With Good Reason.

 

(i) If the Employee’s employment with the Company terminates pursuant to Article
VIII (A)(vi) or Article VIII (A)(vii)(x) hereof, but not within twelve months
following a Change in Control, the Company will pay to Employee the following:

 

salary, bonus, commissions, and other benefits provided for herein for the
remainder of the Employment Term. Salary and Bonus will be paid out pursuant to
the terms of this Agreement and over the Employment Term at the same rate and
amount as Employee would have received had Employee remained employed for the
duration of the Employment Term. Commissions will be calculated by taking the
average of the commissions earned during the last six months of Employee’s
employment (“Average Commissions”). Employee will receive the Average
Commissions on a monthly basis for the remainder of the Employment Term. To
continue receiving the compensation set for in this Article IX(B)(i), the
Employee must engage in mitigation of damages by actively seeking new employment
with similar duties and obligations as set forth in Article II(C) herein. Good
faith mitigation of damages requires the Employee to accept substantially
similar employment, if offered, regularly contact prospective new employers,
investigate new markets, utilize the services of employment search firms, and
employ other avenues which will assist him in finding suitable employment.
Employee will not be obligated to accept employment as being “substantially
similar employment” unless such employment opportunity provides him with the
reasonable opportunity to earn a total financial package of at least $1,200,000
per year. Upon accepting substantially similar employment, payments under this
provision will cease.

 

(ii)           If the Employee’s employment with the Company terminates pursuant
to Article VIII (A)(vi) or Article VIII (A)(vii)(x) hereof within twelve months
following a Change in Control, the Company will pay to Employee the following:

 

a.               In lieu of any further compensation payments for periods
subsequent to the Date of Termination, the Company shall pay to the Employee as
severance pay not later than the tenth business day following the Date of
Termination, a lump sum payment (the “Severance Payment) equal to 2.99 times the
average of the annual Compensation which was payable by the Company and
includible in the Employee’s gross income for federal income tax purposes for
the five (5) calendar years, preceding the earlier of (x) the calendar year in
which a Change in Control occurred or (y) the calendar year of the Date of
Termination (the “Base Period”). Such average shall be determined in accordance
with the provisions of Section 280G(d) of the Internal Revenue Code of 1986 as
amended (the “Code”). As used in this Agreement, the term “Compensation” shall
mean and include every type and form of compensation includible in the
Employee’s gross income in respect of his employment by the Company (but,
excluding compensation or income recognized as a result of the exercise of stock
options or sale of Bio-Reference stock), except to the extent otherwise provided
in Congressional or Joint Committee Reports or temporary or final regulations
interpreting Section 280G(d) of the Code.

 

b.              The Severance Payment shall be reduced by the amount of any
other payment or the value of any benefit received or to be received by the
Employee in connection with the termination of his employment or contingent upon
a Change in Control (whether payable pursuant to the terms of this Agreement,
any other plan, agreement or arrangement with the Company) unless (i) the
Employee shall have effectively waived his receipt or enjoyment of such payment
or benefit prior to the date of payment of the Severance Payment, (ii) in the
opinion of tax counsel selected by the Company such other payment or benefit
does not constitute a “parachute payment” within the meaning of Section
280(G)(b)(2) of the Code, or (iii) in the opinion of such tax counsel, the
Severance Payment (in its full amount or as partially reduced, as the case may
be) plus all other payments or benefits which constitute “parachute payments”
within the meaning of

 

7

--------------------------------------------------------------------------------

 

Section 280(G)(b)(2) of the Code are reasonable compensation for services
actually rendered, within the meaning of Section 280(G)(b)(4) of the Code, and
such payments are deductible by the Company. The value of any non-cash benefit
or any deferred cash payment shall be determined by the Company in accordance
with the principles of Section 280(G)(d)(3) and (4) of the Code.

 

c.               Except to the extent that Congressional or Joint Committee
Reports or temporary or final regulations interpreting Section 280G of the Code
specify that such payments would result, under subsection (b) above, in a
reduction in the Severance Payment:

 

1.               The Company shall pay to the Employee, no later than the tenth
business day following the Date of Termination, a lump sum amount equal to the
sum of (x) any bonus compensation which has been allocated or awarded for a
fiscal year preceding the Date of Termination but has not yet been paid, and (y)
a pro rata portion of any bonus compensation which the Employee has earned for
the fiscal year in which the Date of Termination occurs determined by
multiplying the Employee’s prior years’ bonus compensation by a fraction equal
to the number of full calendar months in the fiscal year prior to the Date of
Termination over twelve.

 

2.               The Company shall also pay all legal fees and expenses incurred
by the Employee as a result of such termination (including all such fees and
expenses, if any, in contesting or disputing any such termination or seeking to
obtain or enforce any right or benefit provided by this Agreement).

 

d.              If it is established pursuant to a final determination of a
court or an Internal Revenue proceeding that, notwithstanding the good faith of
the Employee and the Company in applying the terms of this Section 8, the
aggregate “parachute payments” paid are in an amount that would result in any
portion of such “parachute payments” not being deductible by the Company by
reason of Section 280G of the Code, then the Employee shall have an obligation
to pay the Company upon demand an amount equal to the sum of (i) the portion of
the aggregate “parachute payments” paid that would not be deductible by reason
of Section 280G of the Code and (ii) interest on the amount set forth in clause
(i) of this sentence at the applicable Federal rate (as defined in Section
1274(d) of the Code) from the date of receipt of such excess until date of such
payment.

 

e.               As used in the Agreement, the term “Change in Control” shall
mean a change in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A issued under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) as in effect as of the date hereof
(regardless of whether or not a Proxy Statement is being filed pursuant to such
Regulation at such time), or if Item 6(e) is no longer in effect, any subsequent
regulation issued under the Exchange Act for a similar purpose, whether or not
the Company is subject to such reporting requirements; provided, that without
limitation, such a change in control shall be deemed to have occurred if:

 

1.               any “Person” other than the Employee is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly of securities of the Company representing 25% or more of the
combined voting power of the Company’s then outstanding securities;

 

2.               during any period of two consecutive fiscal years (not
including any period prior to the date of the Agreement), individuals who at the
beginning of such period constitute the Board of Directors, and any new
director, whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in their office who either were directors at the

 

8

--------------------------------------------------------------------------------

 

beginning of the period or whose election or nomination for elections was
previously approved, cease for any reason to constitute a majority of the Board;
or

 

3.               the business of the Company is disposed of by the Company
pursuant to a liquidation, sale of assets of the Company, or otherwise.

 

f.                 The parties reserve the right to mutually amend the
provisions of Article IX(B)(ii) to provide the most favorable tax treatment to
Employee and the company.

 

 

(C)           Termination Payments in the Event of Termination For all Reasons
Other than Those Covered by Article IX (B). In the event Employee’s employment
with the Company is terminated pursuant to Article VIII (i), (ii), (iii), (iv),
(v), or (vii)(y) , the Company shall have no further obligations than those that
are set forth in Article IX(A)

 

(D)          Employee shall only be eligible to receive the payments set forth
in Article IX (B) on the condition that he executes a separation agreement and
release in a form reasonably acceptable to the Company. Moreover, the payments
set forth in Article IX (B) upon termination shall constitute the exclusive
payments due the Employee upon termination under this Agreement, but shall have
no effect on any benefits which may be due the Employee under any plan of the
Company which provides benefits after termination of employment, except that the
Employee shall not be eligible for benefits under any Company severance plan.
Nothing herein shall affect any of the post-Employment restrictions contained in
the Key Employee Agreement attached as Exhibit A and Employee’s violation of any
provisions of such Key Employee Agreement shall result in the immediate and
permanent cessation of any and all post-employment payments under this Article
IX.

 

ARTICLE X

SURVIVAL BENEFITS

 

This Agreement may not be assigned to any successors and assigns of the
Employee. The restriction shall not apply to any monetary benefit which the
Employee may be entitled to, which shall in that event inure to the benefit of
the Employee’s heirs, personal representatives, successors and assigns.

 

However, in the event the Employee dies during the term of this Agreement or
shall become Disabled, the Employee, upon prior written instructions or upon
becoming Disabled, may temporarily or permanently assign this Agreement, and all
obligations, compensation and benefits hereunder to his wife, Debbie Fein, so
long as the Employee’s responsibilities are performed and his accounts are
maintained (except those lost to legitimate and normal industry account
turnover) during the term of this Agreement by his wife, Debbie Fein, and
further provided that Debbie Fein, within thirty (30) days following the event
leading to the triggering of this paragraph, agrees in writing to be bound in
the same manner as Employee pursuant to all of the provision of this Agreement.
Unless Employee is incapacitated or deceased, such an assignment must be made in
writing by the Employee. No other assignment of this Agreement may be made nor
can the Employee’s duties be fulfilled by any one other than Scott Fein or his
wife, Debbie Fein, in order for such the benefits of this Agreement to accrue.
Simultaneously herewith, Debbie Fein shall enter into the Agreement attached
hereto as Exhibit B (“DF Agreement”).

 

ARTICLE XI

POST –EMPLOYMENT RESTRICTIONS

 

As an inducement for the Company to enter into this Agreement, Employee agrees
to execute and adhere to the obligations set forth in the Key Employee Agreement
attached hereto as Exhibit A.

 

ARTICLE XII

THE COMPANY’S REPRESENTATIONS

 

The Company warrants and represents the following:

 

(i)            It is presently licensed to perform clinical laboratory services
and tests in New York, New Jersey, and Connecticut and will maintain said
licenses throughout the term of this Agreement; and

 

9

--------------------------------------------------------------------------------

 

(ii)           It has the ability and capacity to service the Employee’s
accounts in a timely and professional manner in accordance with all applicable
governmental regulations and that during the term of this Agreement shall
maintain said ability and capacity and will service the Employee’s accounts in a
timely and professional manner in accordance with all applicable governmental
regulations.

 

(iii)          The execution and delivery of this Agreement and the consummation
of the transaction herein contemplated and the performance, observation and
fulfillment by the Company of all the terms and conditions hereof on its part to
be performed, observed and fulfilled have been approved by resolution of the
Board of Directors of the Company.

 

(iv)          The Company has sufficient shares to issue pursuant to Article V.

 

ARTICLE XIII

CONTRACTUAL RENEWAL

 

Notwithstanding anything to the contrary, this Agreement shall automatically
renew for an additional Contract Year (an “Additional Contract Year”), unless
either party shall notify the other party during the month of August in any
Contract Year of the Employment Term. Thus, for example, unless either party
notifies the other between August 1, 2006 and August 31, 2006, that it desires
not to renew the Agreement, the Employment Term shall then be extended
automatically to conclude on October 31, 2010. The same cancellation option
exists every year. If cancelled, the Agreement will continue only until the end
of the Contract Years remaining in the Employment Term, unless earlier
terminated by the parties pursuant to the Agreement.   Thus, for example, if
either party notifies the other between August 1, 2006 and August 31, 2006, that
it desires not to renew the Agreement, the Employment Term would terminate as of
October 31, 2009. Any Additional Contract Years added to this Agreement as a
result of the operation of this Article XIII shall be under the same terms and
conditions as are applicable to the Contract Year preceding such Additional
Contract Year. Thus, if the Agreement is automatically extended to conclude on
October 31, 2010, the terms and conditions applicable to the Additional Contract
Year commencing November 1, 2009 and concluding October 31, 2010 shall be the
same as those for the Contract Year commencing November 1, 2008 and ending
October 31, 2009.

 

ARTICLE XIV

SEVERABILITY

 

If any provision of the Agreement shall be held invalid and unenforceable, the
remainder of this Agreement shall remain in full force and effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall remain in full force and effect in all other
circumstances.

 

ARTICLE XV

NOTICES

 

All notices required to be given under the terms of this Agreement shall be in
writing and shall be deemed to have been duly given only if delivered to the
addressee in person or mailed by certified mail, return receipt requested, as
follows:

 

IF TO COMPANY:

 

Marc Grodman, M.D.

 

 

Bio-Reference Laboratories, Inc.

 

 

481 Edward H. Ross Drive

 

 

Elmwood Park, New Jersey 07407

 

 

 

WITH COPY TO:

 

Glenn J. Smith, Esq.

 

 

Grotta Glassman & Hoffman

 

 

75 Livingston Avenue

 

 

Roseland, NJ 07068

 

 

 

IF TO EMPLOYEE:

 

Scott Fein

 

 

191 Bristol Drive

 

 

Woodbury, New York 11797

 

or such other additional address as the party to receive the notice shall advise
by due notice in accordance with this paragraph.

 

10

--------------------------------------------------------------------------------

 

ARTICLE XVI

BENEFIT

 

This Agreement shall inure to and be binding upon the parties hereto, the
successors and assigns of the Company and the estate, heirs and successors of
the Employee.

 

ARTICLE XVII

WAIVER

 

The waiver by either party of any breach or violation of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
or construction and validity.

 

ARTICLE XVIII

GOVERNING LAW & ARBITRATION

 

The parties hereto agree that it is their intention and covenant that this
Agreement and performance hereunder and all suits and special proceedings
hereunder be construed in accordance with and pursuant to the laws of the State
of New Jersey.

 

Any dispute, claim or controversy (whether statutory, contractual, or arising
under common law) that relates to this Agreement, Employee’s employment with the
Company, or the termination of Employee’s employment from the Company (but not
relating to the Key Employee Agreement attached hereto as Exhibit A), shall be
submitted to JAMS/Endispute (“JAMS”) for binding arbitration by the complaining
party providing written notice to JAMS and the other party. The arbitration
shall take place in a location mutually agreed upon by Employee and the Company
or, if the parties cannot agree upon a location, in a location in Bergen or
Union County, New Jersey selected by the arbitrator. The parties will try to
agree on a retired judge from the JAMS panel for the binding arbitration. If the
parties are unable to agree, JAMS will provide a list of three available judges
and the Company and the Employee can each strike one. The remaining judge will
serve as the arbitrator. Judgment on the decision of the arbitrator may be
entered in the highest court of any forum, federal or state, having
jurisdiction. The arbitrator shall set the guidelines for discovery. Nothing
contained herein shall prevent either Employee or the Company from applying to a
court having jurisdiction for emergent equitable relief. The cost for JAMS shall
initially be shared equally between Employee and the Company, with the
prevailing party being entitled to recover its share of said cost and reasonable
attorneys’ fees and expenses from the other party. BY EXECUTING THIS EMPLOYMENT
AGREEMENT, EMPLOYEE AGREES TO WAIVE HIS RIGHT TO A JURY TRIAL IN ANY ACTION OR
PROCEEDING. EMPLOYEE UNDERSTANDS THAT HE IS WAIVING HIS RIGHT TO A JURY TRIAL
VOLUNTARILY AND KNOWINGLY AND FREE FROM DURESS OR COERCION. EMPLOYEE UNDERSTANDS
THAT HE HAS A RIGHT TO CONSULT WITH A PERSON OF HIS CHOOSING, INCLUDING AN
ATTORNEY, BEFORE SIGNING THIS EMPLOYMENT AGREEMENT.

 

11

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have hereto set their hands and seals the day
and year written below their names.

 

Signed, sealed and delivered in the presence of:

 

WITNESS

BIO-REFERENCE LABORATORIES, INC.

 

 

 

 

/S/ Sam Singer

 

By:

  /S/ Charles T. Todd. Jr.

 

Sam Singer

Charles T. Todd, Jr. as approved by the Board of Directors

 

 

WITNESS:

 

 

 

/S/ Linda Niedweske

 

By:

  /S/ Scott Fein

 

Linda Niedweske

Scott Fein

 

 

STATE OF NEW JERSEY

:

 

: ss.

COUNTY OF

:

 

On the 28th day of October, 2005, before me personally came Scott Fein known to
me to be the individual described herein and who executed the foregoing
instrument and acknowledged that he executed same.

 

 

 

 

 

Notary Public.

 

12

--------------------------------------------------------------------------------

 

EXHIBIT A

 

KEY EMPLOYEE AGREEMENT

 

This Key Employee Agreement is entered into between BioReference Laboratories,
Inc. (“Company”), a New Jersey Corporation having its principal place of
business in the State of New Jersey with testing facilities in other states, and
Scott Fein (“Employee”), an individual residing at 191 Bristol Drive, Woodbury,
NY 11797 on this 28th day of October, 2005.

 

1.     Employee agrees to the terms and conditions set forth below in exchange
for: (1) Employee’s employment with Company as set forth in the Employment
Agreement (“Employment Agreement”) to which this is attached, and; (2)
Employee’s participation in Company’s employee benefits or other programs
pursuant to the terms thereof.

 

2.     Company agrees to employ Employee and Employee agrees to work for the
Company in the capacity of Senior Vice President and Sales Representative.
 Employee shall, as an employee of the Company, devote full time best efforts
and attention to the performance of Employee’s duties, except as delineated in
Article II(B) of the Employment Agreement.. Should Employee’s position and/or
compensation change, the parties agree that this Key Employee Agreement will
nevertheless remain in effect.

 

3.     This Key Employee Agreement supplements the Employment Agreement.

 

4.     As used in this Key Employee Agreement, “Confidential Information” is
defined as information not generally or publicly known or readily available to
the public, and proprietary to the Company, including, without limitation,
information relating to past, present or prospective customers, vendors,
suppliers and distributors; marketing, merchandising or servicing techniques,
methodologies and procedures; manuals; Agreements; reports; notes; price
schedules; memoranda and correspondence; product lists; financial records;
computer programs, systems or modes; contracts and the content of negotiations
culminating in such contracts, including any records thereof.  This paragraph
shall not apply to any Confidential Information that is or becomes generally
available to the public for reasons other than as a result of disclosure which
is prohibited under this Key Employee Agreement or any agreement.

 

5.     As used in this Key Employee Agreement, the term “Customer” shall include
any entity to whom the Company has sold, provided or been obligated to provide,
any service or product or who has otherwise received any benefit from the
Company within the 180-day period preceding the date of Employee’s termination
of employment.

 

6.     Employee recognizes and acknowledges that Confidential Information, and
relationships with Employee’s actual customers and prospective customers, which
Employee will become knowledgeable of as an employee of Company are valuable,
special, and unique aspects of Company’s business, which have been created and
developed at great time, effort and expense to the Company. Employee
acknowledges that this “Confidential Information”, and these existing and
prospective customer relationships are not transitory and will not soon be
obsolete.

 

A. Accordingly, during Employee’s employment and for a period of one (1) year
following the termination of Employee’s employment with the Company (such one
year period referred to as the “Restricted Period”) for any reason set forth in
Article VIII(A) of the Employment Agreement (except as modified by Section
6(B)(1) and 6(B)(2) of this Key Employee Agreement, and regardless of the reason
therefore, Employee shall not, without the express written consent of Company,
directly or indirectly, by Employee or through any other person, firm,
partnership, corporation, entity or enterprise:

 

(1)           directly or indirectly solicit any sales (or make or derive any
sales from such

 

13

--------------------------------------------------------------------------------

 

direct or indirect solicitation) from any customer or prospective customer of
the Company that Employee (or such other employees of the Company that directly
report to Employee) solicited, serviced, was responsible for or interacted with
(in the performance of Employee’s duties for the Company) while employed by the
Company; or

 

(2)           induce, approach or attempt to induce any employee of the Company
to leave the Company and become professionally affiliated with and/or work for
or with Employee or at Employee’s new employer.

 

B. The Restricted Period may be modified as follows:

 

(1) In the event Employee receives the severance payments set forth in Article
IX(B)(ii) of the Employment Agreement which are triggered in the event of
certain terminations following a Change in Control (as such term is defined in
the Scott Fein Employment Agreement), the Restricted Period shall be for the
period of Employee’s employment with the Company and for a period of three (3)
years following the termination of Employee’s employment with the Company.

 

(2) In the event Employee’s employment with the Company terminates pursuant to
Article VIII (A)(iv) or Article VIII (A)(vi)of the Employment Agreement, but not
within twelve months following a Change in Control, the Restricted Period shall
be for the period of Employee’s employment with the Company and for a period of
six (6) months following the termination of Employee’s employment with the
Company.

 

C. Further, during Employee’s employment and for an unlimited period following
the termination of Employee’s employment with the Company, whether termination
is voluntary or involuntary, and regardless of the reason therefore, Employee
shall not, without the express written consent of Company, directly or
indirectly, by Employee or through any other person, firm, partnership,
corporation, entity or enterprise:

 

(1)           disclose or use, in any manner, or allow to be disclosed or used
in any manner, “Confidential Information”.

 

D. The time restrictions set forth herein shall run from the date of Employee’s
termination of employment for any reason, except that if Employee violates this
Key Employee Agreement, such time restrictions shall commence on the date of
compliance with the restrictions contained herein, whether such compliance is
voluntary or compelled.

 

7.             Employee acknowledges that: (1) compliance with the restrictive
covenants contained in Section 5 of this Key Employee Agreement is necessary to
protect the business and goodwill of Company; and (2) a breach of Section 5 will
result in irreparable and continuing damage to Company for which money damages
may not provide adequate relief. Consequently, Employee agrees that, in the
event Employee breaches or threatens or attempts to breach the restrictive
covenants contained in Section 5, Company shall be entitled to both: (1) a
temporary restraining order, preliminary injunction and permanent injunction in
order to prevent such harm; and (2) money damages as may be determined. Nothing
in this Key Employee Agreement shall be construed to prohibit Company from also
pursuing any other remedy, the parties agreeing that all remedies are
cumulative.

 

8.             All originals and photocopies or any other form of reports,
memoranda, manuals, Agreements, books, computer records and printouts, customer
lists, sales records, and any other material and/or equipment furnished to
and/or maintained by Employee in connection with Employee’s employment by
Company shall remain the property of the Company and shall be returned to the
Company: (1) upon demand; or (2) immediately upon termination of employment.

 

9.             If any clause or provision herein shall be adjudged invalid or
unenforceable by a court of competent jurisdiction or by operation of any
applicable law, it shall not affect the validity of any other clause or
provision, which shall remain in full force and effect. This Key Employee
Agreement shall be governed by the internal laws of the State of New Jersey,
without giving effect to its conflict of law principles. The courts of the State
of New Jersey shall have jurisdiction over any disputes arising under this Key
Employee Agreement, and each of the parties hereby consents to such exercise of
jurisdiction. If either party to this Key Employee Agreement breaches any of the
terms of this Key Employee Agreement, that party shall pay to the non-defaulting
party all of the non-defaulting party’s costs and expenses incurred in enforcing
the terms of this Key Employee Agreement, including its attorneys’ fees.

 

14

--------------------------------------------------------------------------------

 

10.           The parties have attempted to limit Employee’s activities only to
the extent necessary to protect the Company from unfair competition. The parties
recognize, however, that reasonable people may differ in making such a
determination. Consequently, the parties hereby agree that, if the scope and/or
enforceability of the restrictive covenants contained herein are in any way
disputed at any time, a court or other trier of fact may modify and enforce such
covenants to the extent that it believes to be reasonable under the
circumstances existing at that time.

 

11.           The waiver by the Company of a breach of any of the provisions of
this Key Employee Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.

 

12.           The Company shall have the right to assign any rights or
obligations under this Key Employee Agreement without the prior written approval
of Employee. The Employee shall not have the right to assign rights or
obligations under this Key Employee Agreement.

 

13.           This Key Employee Agreement contains the entire agreement of the
parties as to the subject matter hereof and supersedes all prior written and
oral agreements and understandings between the parties as to such subject
matter. This Key Employee Agreement may not be modified, changed or altered by
any oral promise or statement by whoever made, nor shall any written
modifications of this Key Employee Agreement be binding on the Company unless
such modification shall have been approved in writing by an officer of the
Company.

 

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS READ THIS KEY EMPLOYEE AGREEMENT,
UNDERSTANDS IT AND IS BOUND BY ITS TERMS AND CONDITIONS AND THAT EMPLOYEE HAS
VOLUNTARILY EXECUTED THIS KEY EMPLOYEE AGREEMENT IN ORDER TO BECOME EMPLOYED IN
ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH HEREIN.

 

 /S/ Linda Niedweske

 

By:

Scott Fein

 

Witness

Date 10/28/05

(Employee)

Date 10/28/05

 

 

 /S/ Sam Singer

 

By:

Charles T. Todd, Jr.

 

Witness

Date 10/28/05

(Company)

Date 10/28/05

 

15

--------------------------------------------------------------------------------

 

EXHIBIT B

 

AGREEMENT BETWEEN DEBBIE FEIN AND BIO-REFERENCE

 

This agreement (“DF Agreement”) is entered into between BioReference
Laboratories, Inc. (“Company”), a New Jersey Corporation having its principal
place of business in the State of New Jersey with testing facilities in other
states, and Debbie Fein (“Debbie Fein”), an individual residing at 191 Bristol
Drive, Woodbury, NY 11797 on this 28th day of October, 2005.

 

1.             Debbie Fein agrees to the terms and conditions set forth below in
exchange for: (1) Scott Fein’s employment with the Company as set forth in the
Employment Agreement (“Scott Fein Employment Agreement” ) of Scott Fein to which
this is attached; (2) Debbie Fein’s employment with the Company as set forth
herein; and (3) Debbie Fein’s participation in Company’s employee benefits or
other programs pursuant to the terms hereof.

 

2.             Company agrees to employ Debbie Fein and Debbie Fein agrees to
work for the Company in the capacity of Sales Representative. Debbie Fein shall
be paid an annual salary of $35,000, pursuant to the regular payroll practices
of the Company for the performance of her duties.  The Board of Directors has
authorized the Company to grant Debbie Fein non-transferable incentive stock
options (the “Options”) exercisable to purchase shares of Bio-Reference Common
Stock (the “Stock”) as set forth below. The number of Options to be issued to
Debbie Fein shall be determined by dividing $100,000 by the closing stock price
on the Date of Grant, as defined below (for example if the closing Stock price
on the Date of Grant is equal to $20, Debbie Fein will be issued 5,000 Options).
The Date of Grant of the Options (“Date of Grant”) shall be the date determined
by the Board of Directors to be the Date of Grant, but in no event shall the
Date of Grant occur later than October 31, 2005. It is the intent of the parties
that the Date of Grant will occur on or prior to the Effective Date. The Option
exercise price per share shall be equal to the last sale price on the NASDAQ
Stock Market for the Stock on the Date of Grant. In the event of and upon grant,
the Company and Debbie Fein shall execute and deliver to each other, an
Incentive Stock Option Agreement (the “Stock Option Agreement”) containing such
terms and vesting provisions as shall be determined by the Board of Directors
consistent with the provisions of the Company’s Employee Incentive Stock Option
Plan (the “Plan”) pursuant to which the Options are granted. The Stock Option
Agreement will set forth, among other items, the term of the Option, provisions
as to termination in the event of cessation of employment, death or permanent
disability, method of exercise and restrictions affecting transfer or sale of
the underlying Common Stock. Consistent with the provisions of the Plan, the
aggregate fair market value of Bio-Reference Common Stock with respect to which
Options are exercisable by Debbie Fein for the first time during any calendar
year shall not exceed $100,000. Subject to the limitations of the preceding
sentence, the Options shall vest immediately upon the Date of Grant. Debbie Fein
shall, as an employee of the Company, devote reasonable effort and attention to
the performance of her duties. Should Debbie Fein’s position and/or compensation
change, the parties agree that this Agreement will nevertheless remain in
effect.

 

3.             This Agreement between Debbie Fein and the Company shall remain
in effect for the duration of the term of the Agreement between the Company and
Scott Fein, which includes any assumption by Debbie Fein of Scott Fein’s
responsibilities pursuant to Article X of the Agreement between the Company and
Scott Fein.

 

4.             As used in this DF Agreement, “Confidential Information” is
defined as information not generally or publicly known or readily available to
the public, and proprietary to the Company, including, without limitation,
information relating to past, present or prospective customers, vendors,
suppliers and distributors; marketing, merchandising or servicing techniques,
methodologies and procedures; manuals; Agreements; reports; notes; price
schedules; memoranda and correspondence; product lists; financial records;
computer programs, systems or modes; contracts and the content of negotiations
culminating in such contracts, including any records thereof.  This paragraph
shall not apply to any Confidential Information that is or becomes generally
available to the public for reasons other than as a result of disclosure which
is prohibited under this DF Agreement or any agreement.

 

5.             As used in this DF Agreement, the term “Customer” shall include
any entity to whom the Company has sold, provided or been obligated to provide,
any service or product or who has otherwise received any benefit from the
Company within the 180-day period preceding the date of Debbie Fein’s
termination of employment.

 

6.             Debbie Fein recognizes and acknowledges that Confidential
Information, and relationships with

 

16

--------------------------------------------------------------------------------

 

her or Scott Fein’s actual customers and prospective customers, which she will
become knowledgeable of as an employee of Company are valuable, special, and
unique aspects of Company’s business, which have been created and developed at
great time, effort and expense to the Company. Debbie Fein acknowledges that
this “Confidential Information”, and these existing and prospective customer
relationships are not transitory and will not soon be obsolete.

 

A. Accordingly, during Debbie Fein’s employment and for a period of one (1) year
following the termination of Debbie Fein’s employment with the Company (such one
year period referred to as the “Restricted Period”) for any reason set forth in
Article VIII(A) of the Employment Agreement (except as modified by Section
6(B)(1) and 6(B)(2) of this Key Employee Agreement and regardless of the reason
therefore, Debbie Fein shall not, without the express written consent of
Company, directly or indirectly, by Debbie Fein or through any other person,
firm, partnership, corporation, entity or enterprise:

 

(1) directly or indirectly solicit any sales (or make or derive any sales from
such direct or indirect solicitation) from any customer or prospective customer
of the Company that Debbie Fein or Scott Fein solicited, serviced, was
responsible for or interacted with while employed by the Company; or

 

(2) induce, approach or attempt to induce any employee of the Company to leave
the Company and become professionally affiliated with and/or work for or with
Debbie Fein or Scott Fein or at Debbie Fein’s or Scott Fein’s new employer.

 

B.The Restricted Period may be modified as follows:

 

(1) In the event either Scot Fein or Debbie Fein receives the severance payments
set forth in Article IX(B)(ii) of the Scott Fein Employment Agreement which are
triggered in the event of certain terminations following a Change in Control (as
such term is defined in the Employment Agreement), the Restricted Period shall
be for the period of Debbie Fein’s employment with the Company and for a period
of three (3) years following the termination of Debbie Fein’s or Scott Fein’s
employment with the Company.

 

(2) In the event the employment of either Scott Fein or Debbie Fein with the
Company terminates pursuant to Article VIII (A)(iv) or Article VIII (A)(vi) of
the Employment Agreement, but not within twelve months following a Change in
Control, the Restricted Period shall be for the period of Employee’s employment
with the Company and for a period of six (6) months following the termination of
Employee’s employment with the Company.

 

C. Further, during Debbie Fein’s employment and for an unlimited period
following the termination of Debbie Fein’s employment with the Company, whether
termination is voluntary or involuntary, and regardless of the reason therefore,
Debbie Fein shall not, without the express written consent of Company, directly
or indirectly, by Debbie Fein or through any other person, firm, partnership,
corporation, entity or enterprise:

 

(1) disclose or use, in any manner, or allow to be disclosed or used in any
manner, “Confidential Information”.

 

D. The time restrictions set forth herein shall run from the later of the date
of Debbie Fein’s termination of employment for any reason or Scott Fein’s
termination of employment for any reason, except that if Debbie Fein violates
this DF Agreement, such time restrictions shall commence on the date of
compliance with the restrictions contained herein, whether such compliance is
voluntary or compelled.

 

7.             Debbie Fein acknowledges that: (1) compliance with the
restrictive covenants contained in Section 5 of this DF Agreement is necessary
to protect the business and goodwill of Company; and (2) a breach of Section 5
will result in irreparable and continuing damage to Company for which money
damages may not provide adequate relief. Consequently, Debbie Fein agrees that,
in the event Debbie Fein breaches or threatens or attempts to breach the
restrictive covenants contained in Section 5, Company shall be entitled to both:
(1) a temporary restraining order, preliminary injunction and permanent
injunction in order to prevent such harm; and (2) money damages as may be
determined. Nothing in this DF Agreement shall be construed to prohibit Company
from also pursuing any other remedy, the parties agreeing that all remedies are
cumulative.

 

8.             All originals and photocopies or any other form of reports,
memoranda, manuals, Agreements, books, computer records and printouts, customer
lists, sales records, and any other material and/or equipment furnished to
and/or maintained by Debbie Fein in connection with Debbie Fein’s employment by
Company shall

 

17

--------------------------------------------------------------------------------

 

remain the property of the Company and shall be returned to the Company: (1)
upon demand; or (2) immediately upon termination of employment.

 

9.             If any clause or provision herein shall be adjudged invalid or
unenforceable by a court of competent jurisdiction or by operation of any
applicable law, it shall not affect the validity of any other clause or
provision, which shall remain in full force and effect. This DF Agreement shall
be governed by the internal laws of the State of New Jersey, without giving
effect to its conflict of law principles. The courts of the State of New Jersey
shall have jurisdiction over any disputes arising under this DF Agreement, and
each of the parties hereby consents to such exercise of jurisdiction. If either
party to this DF Agreement breaches any of the terms of this DF Agreement, that
party shall pay to the non-defaulting party all of the non-defaulting party’s
costs and expenses incurred in enforcing the terms of this DF Agreement,
including its attorneys’ fees.

 

10.           The parties have attempted to limit Debbie Fein’s activities only
to the extent necessary to protect the Company from unfair competition. The
parties recognize, however, that reasonable people may differ in making such a
determination. Consequently, the parties hereby agree that, if the scope and/or
enforceability of the restrictive covenants contained herein are in any way
disputed at any time, a court or other trier of fact may modify and enforce such
covenants to the extent that it believes to be reasonable under the
circumstances existing at that time.

 

11.           The waiver by the Company of a breach of any of the provisions of
this DF Agreement by Debbie Fein shall not operate or be construed as a waiver
of any subsequent breach by Debbie Fein.

 

12.           The Company shall have the right to assign any rights or
obligations under this DF Agreement without the prior written approval of Debbie
Fein. Debbie Fein shall not have the right to assign rights or obligations under
this DF Agreement.

 

13.           This DF Agreement contains the entire agreement of the parties as
to the subject matter hereof and supersedes all prior written and oral
agreements and understandings between the parties as to such subject matter.
This DF Agreement may not be modified, changed or altered by any oral promise or
statement by whoever made, nor shall any written modifications of this DF
Agreement be binding on the Company unless such modification shall have been
approved in writing by an officer of the Company.

 

DEBBIE FEIN ACKNOWLEDGES THAT SHE HAS READ THIS DF AGREEMENT, UNDERSTANDS IT AND
IS BOUND BY ITS TERMS AND CONDITIONS AND THAT SHE HAS VOLUNTARILY EXECUTED THIS
DF AGREEMENT IN ORDER TO BECOME EMPLOYED IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH HEREIN.

 

 /S/ Linda Niedweske

 

By:

/S/ Scott Fein

 

Witness

Date        10/28/05

(Employee)

Date 10/28/05

 

 

 /S/ Sam Singer

 

By:

/S/ Charles T. Todd, Jr.

 

Witness

Date        10/28/05

(Company)

Date 10/28/05

 

18

--------------------------------------------------------------------------------