**Exhibit 10.4.5**

 

**EMPLOYMENT AGREEMENT**

** **

This Employment Agreement dated as of the 1st day of November, 2005,between Bio-Reference Laboratories, Inc, a New Jersey corporation with itsprincipal place of business at 481 Edward H. Ross Drive, Elmwood Park, NewJersey 07407 (the “Company”) and Richard L. Faherty, residing at 36 Clark Road,Port Jervis, NY 12771 (the “Employee”).

 

**W I T N E S S E T H :**

 

**WHEREAS,** the Companyis primarily engaged in the operation of a clinical laboratory in northern NewJersey, and

 

**WHEREAS,** the Companydesires to avail itself of the Employee’s knowledge and experience and toemploy the Employee as Director of Information Services on the terms andconditions hereinafter set forth, and

 

**WHEREAS,** theEmployee desires to be so employed by the Company on the terms and conditionshereinafter set forth.

 

**NOW, THEREFORE,** inconsideration of the mutual covenants herein contained, the parties agree asfollows:

 

**2.****         Term of Employment.**  The Company agrees to employ the Employee asDirector of Information Services, or in such other position of comparablestatus and responsibility as the Company may from time to time direct and/ordesire, and the Employee agrees to accept such employment with the Company, fora term commencing as of the date of full execution of this Agreement (the “CommencementDate”) and continuing until October 31, 2009 or such later date to whichthe Agreement is extended pursuant to Section 2 hereof (the “ExpirationDate”), or unless sooner terminated as provided in this Agreement (the “EmploymentPeriod”).  As used in this Agreement, theterm “Employment Period” shall also include any periods for which thisAgreement is extended pursuant to Section 2 hereof.

 

**2**. **Extension**. This Agreement may beextended beyond the Initial Expiration Date for additional one year periods atthe Company’s option. This Agreement shall be automatically extended at the endof each Company fiscal year for an additional one year term beyond its thenExpiration Date unless the Company gives written notice to the Employee notless than ten (10) days prior to the end of such fiscal year that itelects not to extend the Agreement. (the “Non-Extension Notice”). By way ofexample:

 
| **If  the**             | ** ** | ** **                    | ** ** |
|-------------------------|------------|-------------------------------|------------|
| **Company  Fails to**   | ** ** | ** **                    | ** ** |
| **Give  Non-Extension** | ** ** | **Agreement Expiration Date** | ** ** |
| **Notice  Prior to**    | ** ** | **Automatically Extended to** | ** ** |
| **October 21**     | ** ** | **October 31**           | ** ** |
| 2006                    |       | 2010                          |       |
| 2007                    |       | 2011                          |       |
| 2008                    |       | 2012                          |       |

 

Once the Company gives a Non-ExtensionNotice, this Agreement shall terminate at the close of business on October 31of the Company’s third fiscal year succeeding the fiscal year in which theNon-Extension Notice was given. By way of example, if the Non-Extension Noticeis given in fiscal 2007 prior to October 21 of such year, the Agreementshall terminate October 31, 2010.

 

**3.   Duties.**

 

a.               During the Employment Period, theEmployee shall perform such duties and exercise such powers relating to theCompany as are commensurate with those of a Director of Information Servicesand shall have such other duties and powers as the Board of Directors or Managementshall from time to time assign to him, including by way of example, but notlimitation, duties with respect to any of the Company’s associatedcompanies.  As used in this Agreement,the term “Associated Companies” shall mean any company (i) of which notless than fifty (50%) percent of the equity is beneficially owned by theCompany or (ii) any subsidiary of such company, if any.

 

b.              During the Employment Period, theEmployee shall devote at least 90% of his working time during normal businesshours and his best efforts and ability to the business of the Company, shallfaithfully and diligently perform the duties of his employment with the Companyand shall do all reasonably in his power to promote, develop and extend thebusiness of the Company.

 

c.               During the Employment Period, theEmployee shall not, except as a representative of the Company or with thewritten consent of the Company, be directly or indirectly engaged, concerned orinterested in the conduct of any other business competing or likely to competewith the Company; provided, that notwithstanding anything contained in thisAgreement to the contrary, the Employee shall not be precluded from devoting areasonable amount of his time to:

 
| i.     | Serving with the prior written approval of the Company as a director  or member of a committee of any organization involving no conflict of  interest with the business of the Company; |
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| ii.    | Managing his personal investments; provided, that such activities  shall not materially interfere with the Employee’s performance of his duties  hereunder; and                    |

 

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| iii. | Participating in the management and maintenance of his privately held  consulting service corporations (CH Consulting Services and MD Management &  Support Services, Inc.), providing that such management and maintenance  services do not interfere with the further terms and conditions of this  Agreement. |
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d.              The Employee shall be employed at theoffices of the Company located in Elmwood Park, New Jersey; provided that theEmployee acknowledges and agrees that the proper performance of these dutiesmay make it necessary to spend reasonable periods of time in other parts of thecountry.

 

**4.   Compensation.**

 

a.               During the Employment Period, theCompany shall pay the Employee as compensation for his services under thisAgreement, a minimum Base compensation at an annual rate of Four HundredThousand ($400,000) Dollars (the “Base Compensation”).  The Base Compensation shall be payable inequal installments in accordance with regular payroll procedures established bythe Company.  At the appropriate timethereafter at least once during each fiscal year, the Company will considerincreasing the Employee’s compensation under this Agreement, based upon theperformance of the Company and of the Employee during the fiscal year with suchincrease, if granted, taking effect as of the date determined by the Company.

 

b.              The Company shall lease and insure,either under the Company’s policy or by reimbursement to the Employee, an automobilefor the benefit of the Employee.  TheCompany shall be responsible for maintenance, gasoline, repair and all othersuch costs but only to the extent such expenses relate to business use of theautomobile.  At the end of the leaseterm, or in the event of the termination of this Agreement for any reason,including non-renewal, the Employee shall have the following options:

 
| i.     | Surrender the automobile to the Company;               |
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| ii.    | Assume the Company’s lease payment obligation; or |
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| iii.   | Exercise the purchase option of the lease, if any.     |

 

c.               The Company shall promptly pay orreimburse the Employee for all expenses incurred by the Employee in theperformance of his duties under this Agreement. Such expenses shall be limited to reasonable out-of-pocket expensesnecessarily and actually incurred by the Employee in the performance of hisduties; provided that (i) the expenses have been detailed on a formacceptable to the Company and submitted to the Company for review and approvaland (ii) appropriate supporting documentation is submitted together withthe approved expense form.

 

d.              The Employee shall be entitled toparticipate in any fringe benefit and bonus plans available to the Company’semployees as in effect from time to time, to the extent the Employee may beeligible to do so under the applicable provisions of the plans including butnot limited to pension, profit sharing, stock option and similar plans and lifeand medical insurance plans or coverage maintained by the Company for seniorpersonnel and/or all personnel.

 

e.               The Employee shall be entitled to suchvacation, personal time and holidays as he is eligible for under the Company’sEmployment and Personnel Policy as the same presently exists or may hereafterbe amended.

 

f.                 Notwithstanding the provisions ofsubparagraph (a) of this section 4, the Employee shall also beentitled to a percentage increase in his Base Compensation as in effect on June 30of each year that this Agreement is in effect, equal to the percentage increasein the Consumer Price Index – All Items for the New York metropolitan area (orany successor index) for such month of June as compared to such ConsumerPrice Index for the month of June in the immediately preceding year.  Any such increase shall be effective on thenext following February 1.  Noadjustments shall be made for a decrease in such Index.

 

**5.   Disability.**  If during the Employment Period, the Employeeshall incur a Total Disability then, subject to the earlier termination of thisAgreement or the earlier termination of the disability, the Company shallcompensate the Employee as provided in subparagraphs (a), (b), (c) and (d) ofthis Section 5.

 

a.               For the month in which the Employeeincurs the total disability, and for the following twelve (12) months of thedisability, the Company shall compensate the Employee at a rate equal to histhen current Base Compensation.

 

b.              For a period of three (3) monthscommencing upon the termination of the period described in subparagraph (a),the Company shall not pay Employee any portion of his Base Compensation andEmployee shall be on an unpaid leave of absence.

 

c.               If the Employee’s disability shallterminate at any time prior to the expiration of the period described insubparagraph (b) of this Section 5, then the Employee shall return tofull and active employment with the Company under the terms of this Agreement;provided that if he shall again become disabled within a period of three (3) monthsafter such return, and such disability is related to his original disability, thenthe Employee shall be deemed to have been continuously disabled from the datehe incurred the original disability.

 

d.              Upon expiration of the three (3) monthperiod described in subparagraph (b) of this Section 5, theemployment of Employee shall terminate, unless an additional leave of absenceis granted by the Company, in which event the employment of the Employee shallterminate upon the expiration of the additional leave of absence.

 

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e.               In the event the Employee shall incur aPartial Disability then during the period of the Partial Disability, theEmployee’s Base Compensation shall be equitably adjusted according to the timethat he is able to devote to the affairs of the Company.

 

f.                 In addition to the foregoing, theEmployee shall be entitled to receive the amounts, if any, as may be payable tohim by reason of his disability under policies of insurance maintained by theCompany.

 

g.              As used in this Agreement, the term “TotalDisability” shall mean disability such that, for physical or mental reasons,the employee is unable to perform any of his usual duties to the Company on afull-time basis.  As used in thisAgreement, the term “Partial Disability” shall mean a disability, such that forphysical or mental reasons, the Employee is unable to perform all of his usualduties to the Company on a full-time basis.

 

**6.   Termination.**

 

a.               **Terminationby Death.**  If the Employeedies during the Employment Period, the Company’s obligations under thisAgreement shall terminate six (6) months after the date of death and theEmployee’s estate shall be entitled to all arrearages of Base Compensation andexpenses.  In addition, the Employee’sestate (or such other named beneficiary) shall be entitled to the amounts, ifany, as may be payable to his estate or beneficiaries under policies ofinsurance maintained by the Company.

 

b.              **Terminationfor Cause.**  This Agreementand the Employee’s employment with the Company may be terminated for Cause atany time in accordance with subparagraph (d) of this Section 6.  In the event this Agreement is terminated forCause, the Employee shall be entitled to all arrearages of Base Compensationand expenses through the Date of Termination but shall not be entitled tofurther compensation.  As used in thisAgreement, and without limitation, the term “Cause” shall mean:

 
| i.     | An act or acts of dishonesty constituting criminal acts by the  Employee resulting or intending to result directly or indirectly in gain to  or personal enrichment of the Employee at the Company’s expense; |
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| ii.    | The commission of any crime involving fraud, embezzlement or theft by  the Employee;                                                                                                                               |
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| iii.   | The Employee’s material breach of this Employment Agreement.                                                                                                                                                  |

 

c.               **Terminationat the Option of the Employee.** This Agreement and the Employee’s employment with the Company may beterminated at any time, at the election of the Employee, for Good Reason inaccordance with subparagraph (d) of this Section 6.  In the event this Agreement is terminated forGood Reason, the Employee shall be paid during the remainder of the EmploymentPeriod (computed without giving effect to the earlier termination hereunder),his Base Compensation (other than due to Partial Disability) at the rate ineffect as of the Date of Termination, and shall continue to be entitled toemployee benefits as if he were still employed by the Company, until completionof such Employment Period (computed without giving effect to the earliertermination hereunder).  As used in theAgreement, and without limitation, the term “Good Reason” shall mean:

 
| i.     | The assignment to the Employee of duties inconsistent with the office  of Director of Information Services of the Company or his then current  office, removal of the Employee from such office or substantial reduction in  the nature or status of the Employee’s then current responsibilities;                                                                                                                                  |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ii.    | The reduction of the Employee’s then current Base Compensation (other  than due to Partial Disability);                                                                                                                                                                                                                                                                                                                             |
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| iii.   | The relocation of the Company’s principal executive offices to a  location more than fifty (50) miles from the Company’s current principal  executive offices or the transfer of the Employee to a place other than the  Company’s principal executive offices (excepting required travel on the  Company’s business in a manner substantially similar to the Employee’s then  current travel obligations); and |
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| iv.    | The failure by the Company to provide the Employee with the benefits  at least as favorable as those in which the Employee was then participating.                                                                                                                                                                                                                                                                                       |

 

d.              **Noticeof Termination.**  Anypurported termination of the Employee’s employment shall be communicated by awritten notice of termination to the other party hereto and shall specify theDate of Termination (the “Notice of Termination”).  Such notice shall indicate a specified terminationprovision in this Agreement which is relied upon, recite the facts andcircumstances claimed to provide the basis for such termination and specify theDate of Termination.  As used in thisAgreement, the term “Date of Termination” shall mean the date specified in theNotice of Termination, which date shall not be less than thirty (30) days normore than sixty (60) days from the date the Notice of Termination isgiven.  If within thirty (30) days fromthe date the Notice of Termination is given, the party receiving such noticenotifies the other party that a dispute exists concerning such termination, theDate of Termination shall be the date on which the dispute is finallyresolved.  The Date of Termination shallbe extended by notice of dispute only if such notice is given in good faith andthe party giving such notice pursues the resolution of such dispute withreasonable diligence.  Notwithstandingthe pendency of any such dispute, the Company will continue to pay the Employeehis full Base Compensation in effect as of the date of the Notice ofTermination and continue the Employee as a participant in all compensation,benefit and insurance plans in which he was participating at such date, untilthe dispute is finally resolved.  Amountspaid under this subparagraph (d) are in addition to all other amounts dueunder this Agreement and shall not be offset against or reduce any otheramounts due under this Agreement.

 

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**7.   Change in Control.**  In the event of a Change in Control and, as aresult of such Change in Control, the Employee is terminated without Cause orthe Employee elects within a reasonable time thereafter to terminate hisemployment as a result of such Change in Control, then the Employee shallreceive the following benefits:

 

a.                                       TheCompany shall pay to the Employee his full Base Compensation at the rate ineffect at the time of the Notice of Termination through the Date ofTermination.

 

b.                                      Inlieu of any further Base Compensation payments for periods subsequent to theDate of Termination, the Company shall pay to the Employee as severance pay notlater than the tenth business day following the Date of Termination, a lump sumpayment (the “Severance Payment”) equal to 2.99 times the average of the annualCompensation which was payable by the Company and includible in the Employee’sgross income for federal income tax purposes for the five (5) calendaryears, or for the portion of such period during which the Employee was actuallyemployed by the Company if the Employee has been employed by the Company forless than five (5) calendar years, preceding the earlier of the calendaryear in which a Change in Control occurred or the calendar year of the Date ofTermination (the “Base Period”).  Suchaverage shall be determined in accordance with the provisions of Section 280G(d) ofthe Internal Revenue Code of 1986 as amended (the “Code”). In no event shallsuch “average” exceed the annual Compensation payable by the Company andincludible in the Employee’s gross income for federal income tax purposes forthe calendar year preceding the earlier of the calendar year in which a Changeof Control occurred or the calendar year of the Date of Termination. As used inthis Agreement, the term “Compensation” shall mean and include every type andform of compensation includible in the Employee’s gross income in respect ofhis employment by the Company including compensation income recognized as aresult of the exercise of stock options or sale of the stock so acquired,except to the extent otherwise provided in Congressional or Joint CommitteeReports or temporary or final regulations interpreting Section 280G(d) ofthe Code.

 

c.                                       TheSeverance Payment shall be reduced by the amount of any other payment or thevalue of any benefit received or to be received by the Employee in connectionwith 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 shallhave effectively waived his receipt or enjoyment of such payment or benefitprior to the date of payment of the Severance Payment, (ii) in the opinionof tax counsel selected by the Company such other payment or benefit does notconstitute a “parachute payment” within the meaning of Section 280G(b)(2) ofthe Code, or (iii) in the opinion of such tax counsel, the SeverancePayment (in its full amount or as partially reduced, as the case may be) plusall other payments or benefits which constitute “parachute payments” within themeaning of Section 280G(b)(2) of the Code are reasonable compensationfor services actually rendered, within the meaning of Section 280G(b)(4) ofthe Code, and such payments are deductible by the Company.  The value of any non-cash benefit or anydeferred cash payment shall be determined by the Company in accordance with theprinciples of Section 280G(d)(3) and (4) of the Code.

 

d.                                      Exceptto the extent that Congressional or Joint Committee Reports or temporary orfinal regulations interpreting Section 280G of the Code specify that suchpayments would result, under subsection (c) above, in a reduction inthe Severance Payment:

 
| i.     | The Company shall pay to the Employee, not 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. |
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| ii.    | 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, incurred in contesting or disputing any such termination or  in seeking to obtain or enforce any right or benefit provided by this  Agreement).                                                                                                                                                                                                                                                                                                                                                         |

 

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

 

f.                                         As used in the Agreement, theterm “Change in Control” shall mean a change in control of a nature

 

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

 
| i.     | 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;                                                                                                                                                                                                                                                                                        |
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| ii.    | 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 office who either were directors at the 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 |
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| iii.   | the business of the Company is disposed of by the Company pursuant to  a liquidation, sale of assets of the Company, or otherwise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

 

**8.   Confidential Information.**  The Employee acknowledges an obligation ofconfidentiality to the Company and shall not divulge, disclose or communicateany trade secret, private or confidential information or other proprietaryknowledge of the Company or its associated companies obtained or acquired byhim while so employed.  This restrictionshall apply after the termination of Employee’s employment without limit inpoint of time but shall cease to apply to information or knowledge which maycome into the public domain or whose disclosure may be required by law or courtorder or pursuant to the written consent of the Company.

 

**9.   Return of Information.**  Upon termination of employment, the Employeeagrees to not take with him and to deliver to the Company all records, notes,data, memoranda, models, equipment, blueprints, drawings, manuals, letters,reports and all other materials of a secret or confidential nature relating tothe business of the Company which are in possession or control of the Employee.

 

**10. General Provisions.**

 

a.               This Agreement contains the entire transactionbetween the parties, and there are no other representations, warranties,conditions or agreements relating to the subject matter of this Agreement.

 

b.              The waiver by any party of any breach ordefault of any provision of this Agreement shall not operate or be construed asa waiver of any subsequent breach.

 

c.               This Agreement may not be changed orallybut only by an Agreement in writing duly executed on behalf of the partyagainst which enforcement of any waiver, change, modification, consent or dischargeis sought.

 

d.              This Agreement shall be binding upon andbe enforceable against the Company and its successors and assigns.  Insofar as the Employee is concerned, thisAgreement is personal and cannot be assigned.

 

e.               This Agreement may be executed in one ormore counterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument.

 

f.                 This Agreement shall be construedpursuant to and in accordance with the laws of the State of New Jersey.

 

g.              If any term or provision of thisAgreement is held or deemed to be invalid or unenforceable, in whole or inpart, by a court of competent jurisdiction, this Agreement shall be ineffectiveto the extent of such invalidity or unenforceability without rendering invalidor unenforceable the remaining terms and provisions of this Agreement.

 

h.              Any dispute, grievance or controversyarising under or in conjunction with this Agreement shall be referred to theBoard of Directors of the Company and shall be dealt with by personaldiscussion, and if not satisfactorily resolved, shall be submitted under the Rules ofthe American Arbitration Association of New York City.

 

i.                  Any consent of the Company requiredunder this Agreement shall not be unreasonably withheld or delayed.

 

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**IN WITNESS WHEREOF,**the parties have executed this Agreement on the date first above written.

 
|   | COMPANY:                              |
|--------|---------------------------------------|
|   | Bio-Reference Laboratories, Inc. |
|   |                                  |
|   |                                  |
|   | S/ Marc D. Grodman                    |   |
|   | By: Marc D. Grodman, President        |
|   | Duly Authorized                       |
|   |                                  |
|   |                                  |
|   | EMPLOYEE:                             |
|   |                                  |
|   |                                  |
|   | S/ Richard L. Faherty                 |   |
|   | Richard L. Faherty                    |

 

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