**Exhibit 10.31**

 

**BostonBiomedica Inc. – Consultant Agreement**

 

This Agreement is entered intoas of the 31st day of December, 2003, between Boston Biomedica Inc. (“theCompany”) and Richard T. Schumacher (“the Consultant”).

 

WHEREAS, the Company desires toassure itself that the benefits of the consulting abilities and talents of theConsultant relative to certain aspects of the Company’s business will beavailable to the Company;

 

NOW, THEREFORE, inconsideration of the mutual covenants and promises herein contained, thereceipt and sufficiency of which is hereby acknowledged, and intending to belegally bound, it is hereby agreed by and between the parties as follows:

 

1.     Consulting Engagement.  Subject to the terms and conditions of thisAgreement, the Company hereby extends the current engagement of the Consultantas Executive Project Consultant to perform the services set forth herein, andthe Consultant hereby accepts such engagement.

 

2.     Term. The Term of the Consultant’s engagement hereunder shall commence on thedate hereof and extend through December 31, 2004 unless sooner terminated ashereinafter provided.

 

3.     Duties.  Subject to the terms and conditions in thisAgreement, the Consultant’s duties as Executive Project Consultant shall be totake an advisory role in directing the Company’s PCT and Source activities andthe Company’s ownership interest in Panacos Pharmaceuticals, Inc. (“Panacos”),each as further described below, and such other duties as may be assigned tohim by the President of the Company or the Board from time to time.  The Consultant shall report to, bespecifically accountable to, and shall follow the directions of the  Board of Directors of the Company TheConsultant shall devote substantially all his business time and energy and willuse his best efforts to perform his duties hereunder.  The Consultant will be given reasonable access to Companypersonnel to assist the Consultant in the fulfillment of his duties andresponsibilities under this Agreement.

 

4.     Compensation. During the term of the Consultant’s engagement under this Agreement, theConsultant shall be paid $4,807.90 per week, which is equivalent to anannualized salary of $250,000.00, prorated for the number of weeks between thedate hereof and December 31, 2004 and based on a 52 week year.  Such amounts shall be paid periodically inaccordance with the Company’s normal payroll practices.  The Consultant will also be eligible toreceive from the Company a performance bonus in recognition of the successfulcompletion of his duties and responsibilities as described herein.  The amount of such performance bonus, ifany, and the date upon which it will be paid, will be determined by the Boardof Directors of the Company in its sole and exclusive discretion.  In addition to his salary and bonus, if any,for the sole purpose of determining compensation and benefits, the Consultantshall be considered a full time employee and as such will be entitled toparticipate in and immediately eligible for health and medical insurance, disabilityinsurance, group life insurance, group travel insurance, and 401(k) retirementplan applicable to all full

 

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time employees of the Company as they may bein effect from time to time.  TheConsultant’s prior service with the Company shall be attributed to Consultantin determining eligibility to participate in and the extent of benefits fromsuch benefit plans.  There shall be nowaiting period for participation in any such plan.  The Consultant shall be eligible for vacation, holidays and sickdays in accordance with the Company’s policies applicable to all full timeemployees.

 

5.     PCT, Source and Panacos. The Consultantshall assume an advisory role in directing the Company’s PCT and SourceDivisions and the Company’s ownership interest in Panacos.  The heads of the Company’s PCT and SourceDivisions shall report to the Consultant.

 

6.     PCT Division. In performinghis PCT duties set forth in Paragraph 5 above, until such time as the businessplan, including the operating budget, is approved by the Board, the Consultantshall limit the monthly losses from the PCT Division to an amount equal to orless than the average monthly amount of losses that have been incurred by thePCT Division since January 1, 2003.  Forthis purpose, however, the Consultant’s salary and related expenses will not beconsidered in the calculation of PCT’s losses. The Consultant further understands and agrees that the President of theCompany, representing the Board, may determine based on the Company’s overallfinancial condition that it may be necessary to further limit the amount oflosses incurred by the PCT Division.

 

Withoutlimiting the foregoing, the Consultant shall prepare a marketing plan for thePCT Division for the Board.  Themarketing plan shall be prepared within a time period specified by the Board ofDirectors.  The strategy and activitiescontained in the marketing plan shall include, but not be limited to, ongoingscientific review and attendance at scientific conferences, communication withleading scientific investigators in the field and investigation of potentialopportunities with the United States government relating to homeland defense.

 

7.     In performing his Source Division duties asset forth in Paragraph 5, above, but without limitation of such duties, theConsultant shall assist in identifying potential contract procurementopportunities for the Source Division and in identifying strategicopportunities for the Source Division.

 

8.     Payment of the Commerce Loan. With the proceeds(net of required taxes) Consultant may receive from the sale of any personalassets,  the Consultant shall promptlyapply all such net proceeds to repay all amounts due to Commerce Bank &Trust Company (“Commerce Bank”), whether owed personally or by any affiliate ofthe Consultant, including Resort Accommodations International LLC (“RAI”) andwhether or not then due pursuant to the terms of any note or loan agreementwith Commerce Bank (the “Commerce Bank Loan”) and all amounts owed to theCompany by the Consultant or any such affiliate pursuant to (i) that certainLimited Guaranty by the Company for the benefit of Commerce Bank dated January15, 2002, (ii) that certain Junior Participation Agreement also dated January15, 2002 by and between Commerce Bank, RAI and the Company, (iii) that certainPledge Agreement also dated January 15, 2002 by and between the Company andCommerce Bank, and (iv) that certain Pledge and Security Agreement dated as ofJanuary 15, 2002 by and between the Consultant, the Company and Commerce Bank.  By entering into this Agreement, theConsultant hereby ratifies, confirms and

 

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acknowledges his obligations to the Company undersuch agreements referred to in clauses (i) through (iv) above (the “Company’sGuarantee”).  Notwithstanding theforegoing, if and to the extent the Consultant or his affiliates has funds orassets in excess of ordinary and routine living expenses, the Consultant shallrepay the Commerce Bank Loan and the Company’s Guarantee.

 

9.     Expenses. During the term of this Agreement, the Consultant shall obtain priorapproval for any and all out-of-pocket expenses incurred in connection with theperformance of his duties hereunder and otherwise in accordance with theCompany’s reimbursement policy and procedure as in effect from time to time.  If approved in advance, the Consultant shallsubmit invoices for such approved expenses in accordance with the Company’sexpense reimbursement procedures, and the Company shall reimburse him for allsuch approved out-of-pocket expenses.

 

10.   Written Reports.  The Company may request that plans, progress reports and resultsreports be provided by the Consultant on a weekly or monthly basis as requestedby the Company.  The reports shall be insuch form and setting forth such information and data as is reasonablyrequested by the Company.

 

11.   Inventions. Any and all inventions, discoveries, developments and innovationsconceived by the Consultant during this engagement relative to the duties underthis Agreement shall be the exclusive property of the Company; and theConsultant hereby assigns all right, title, and interest in the same to theCompany.  Any and all inventions,discoveries, developments and innovations conceived by the Consultant prior tohis engagement hereunder and utilized by him in rendering duties to the Companyare hereby licensed to the Company for use in its operations and for aninfinite duration.  This license isnon-exclusive, and may be assigned without the Consultant’s prior written approvalby the Company to a wholly-owned subsidiary of the Company.

 

12.   Confidentiality. The Consultant acknowledgesthat during his engagement hereunder, he will have access to and becomeacquainted with various trade secrets, inventions, innovations, processes,information, records and specifications owned or licensed by the Company and/orused by the Company in connection with the operation of its business including,without limitation, the Company’s business and product processes, methods,customer lists, accounts and procedures. The Consultant agrees that he will not disclose any of the aforesaid,directly or indirectly, or use any of them in any manner, either during hisengagement hereunder or at any time thereafter, except as required in thecourse of his engagement by the Company. All files, records, documents, blueprints, specifications, information,letters, notes, media lists, original artwork/creative, notebooks, and similaritems relating to the business of the Company whether prepared by theConsultant or otherwise coming into his possession during his engagementhereunder, shall remain the exclusive property of the Company.  The Consultant shall not retain any copiesof the foregoing without the Company’s prior written permission.  Upon the termination of his engagementhereunder, or whenever requested by the Company, the Consultant shallimmediately deliver to the Company all such files, records, documents,specifications, information, and other items in his possession or under hiscontrol.

 

13.   Disclosure. The Consultant shall not disclose the terms of this Agreement to anyperson without the prior written consent of the Company.  The Company may issue a

 

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press release to announce the Consultant’scontinued engagement.  If the Companydetermines to issue such a press release, it shall promptly submit the pressrelease to the Consultant for his review and approval prior to release to thepublic.

 

14.   Conflicts of Interest; Non-hire Provision.  The Consultant represents that he is free toenter into this Agreement, and that this engagement does not violate the termsof any agreement between the Consultant and any third party.  Further, the Consultant, in rendering hisduties shall not utilize any invention, discovery, development, improvement, innovation,or trade secret in which he does not have a proprietary interest.  If the Company is not in breach of itsobligations under this Agreement, for a period of one year followingtermination of his engagement hereunder, the Consultant shall not, directly orindirectly hire, solicit, or encourage to leave the Company’s employment, anyemployee,  consultant, or contractor ofthe Company or hire any such employee, consultant, or contractor who has left the Company’s employment orcontractual engagement within one year of such employment or engagement, (otherthan such employees, consultants and contractors who have been involuntarilyterminated by the Company).

 

15.   Right to Injunction.  The parties hereto acknowledge that theservices to be rendered by the Consultant under this Agreement, the rights andprivileges granted to the Company under the Agreement, the benefits to bereceived by the Consultant and the obligations of the Company hereunder are ofa special, unique, unusual, and extraordinary character which gives them apeculiar value, the loss of which cannot be reasonably or adequatelycompensated by damages in any action at law, and the breach by either party ofany of the provisions of this Agreement will cause the other irreparable injuryand damage.  The parties expressly agreethat each party shall be entitled to injunctive and other equitable relief inthe event of, or to prevent, a breach of any provision of this Agreement bythe  other party.  Resort to such equitable relief, however,shall not be construed to be a waiver of any other rights or remedies that suchparty may have for damages or otherwise. The various rights and remedies of the parties under this Agreement or otherwise shall be construed to becumulative, and no one of the them shall be exclusive of any other or of anyright or remedy allowed by law.

 

16.   Termination.  The Consultant’s engagement hereunder may beterminated prior to December 31, 2004 as follows:

 

(i)            With Cause.  The Board may terminate the Consultant’sengagement hereunder at any time and without further obligation for cause.  If the Board terminates the engagement forcause, then it shall only owe the Consultant compensation that has accrued andhas not yet been paid as of the date of termination (calculated on a dailybasis).  For purposes of this Agreement,“cause” shall mean the occurrence of any of the following events:

 

(A)          any material act of personal dishonesty, orserious misconduct in connection with the Consultant’s responsibilities to theCompany under this Agreement;

 

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(B)           the commission by the Consultant of anycrime classified as a felony under any Federal, state or local law or theConsultant engaging in any acts of moral turpitude;

 

(C)           continued material violations, breach ornoncompliance by the Consultant of the Consultant’s obligations or covenantsunder this Agreement after there has been delivered to the Consultant a writtendemand for performance or compliance from the Company which describes the basisfor the Company’s belief that the Consultant has violated, breached or failedto comply with the Consultant’s duties or complied with the Consultant’sobligations or covenants under this Agreement and such violations, breach ornoncompliance have not been corrected or cured by the Consultant within ten(10) business days following such demand;

 

(D)          continued failure or refusal to comply withthe written policies or reasonable directives of the Company after there hasbeen delivered to the Consultant a written demand for performance or compliancefrom the Company which describes the basis for the Company’s belief that theConsultant has failed or refused to comply with such policies or directives andsuch failure or refusal have not been corrected or cured by the Consultantwithin ten (10) business days following such demand; or

 

(E)           the use by the Consultant of a controlledsubstance without a prescription or the abuse of alcohol which in any wayimpairs the Consultant’s ability to carry out Consultant’s duties andresponsibilities under this Agreement.

 

17.   Termination of Duties, Responsibilities andAuthority.  Although theConsultant’s engagement hereunder shall continue through December 31, 2004, the Board mayreduce, limit or terminate part or all of the Consultant’s duties,responsibilities and authority to provide any services under this Agreement atany time without cause, provided however, that if the Board reduces, limits orterminates part or all of such duties, responsibilities and authority withoutcause prior to December 31, 2004, it shall continue to pay the Consultant allof the compensation, including benefits, which otherwise would have been paidthrough December 31, 2004 had the Board not so terminated such duties,responsibilities and authority.  In suchevent, the Consultant shall continue to be referred to as the Company’sExecutive Project Consultant.

 

18.   Taxes. The Company shall withhold taxes with respect to the Consultant’scompensation hereunder.

 

19.   Release. In consideration of the Company engaging the Consultant as a consultanthereunder, and for other good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged, the Consultant hereby releases,remises, and

 

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forever discharges the Company and theCompany’s officers, directors and affiliates from all debts, demands, actions,causes of actions, suits, accounts, covenants, contracts, agreements, damages,and all claims and liabilities of every nature, which the Consultant or theConsultant’s successors or assigns now have or ever had against the Company orits officers, directors and affiliates, jointly, severally, or individually.

 

20.   Successors and Assigns.  All of the provisions of this Agreementshall be binding upon and inure to the benefit of the parties hereto and theirrespective heirs, if any, successors, and assigns, provided, however, theConsultant shall not assign any of his rights under this Agreement, or delegatethe performance of any of his duties hereunder, without the prior writtenconsent of the Company.

 

21.   Choice of Law.  The laws of the Commonwealth of Massachusetts shall govern thevalidity of this Agreement, the construction of its terms and theinterpretation of the rights and duties of the parties hereto.

 

22.   Arbitration. Any controversies arising out ofthe terms of this Agreement or its interpretation shall be settled inMassachusetts in accordance with the rules of the American ArbitrationAssociation, and the judgment upon award may be entered in any court havingjurisdiction thereof.

 

23.   Headings. Section headings are not to be considered a part of this Agreement andare not intended to be a full and accurate description of the contents hereof.

 

24.   Waiver. No failure or delay by either part in exercising any right under thisAgreement will operate as a waiver of such right or any other right under thisAgreement. Waiver by one party hereto of breach of any provision of thisAgreement by the other shall not operate or be construed as a continuingwaiver.

 

25.   Notices. Any and all notices, demands, or other communications required or desiredto be given hereunder by any party shall be in writing and shall be validlygiven or made to another party if personally served, or if deposited  in the United States mail, certified orregistered, postage prepaid, return receipt requested.  If such notice or demand is servedpersonally, notice shall be deemed constructively made at the time of suchpersonal service.  If such notice,demand or other communication is given by mail, such notice shall beconclusively deemed given five days after deposit thereof in the United Statesmail addressed to the party to whom such notice, demand or other communicationis to be given as follows:

 

If to the Consultant:

 

Richard T. Schumacher

65 Black Pond Lane

Taunton, MA 02780

 

If to the Company:

 

Boston Biomedica, Inc.

375 West Street

West Bridgewater, MA 02379

 

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Attn:  Chairman of the Board

 

*Any party hereto may change its address for purposes of thisparagraph by written notice given in the manner provided above.*

 

26.   Modification or Amendment.  No amendment, change or modification of thisAgreement shall be valid unless in writing signed by the parties hereto.

 

27.   Entire Understanding.  This document and any exhibit attachedconstitute the entire understanding and agreement of the parties, and any andall prior agreements, understandings, and representations whether written ororal are hereby terminated and canceled in their entirety and are of no furtherforce and effect.

 

28.   Unenforceability of Provisions.  If any provision of this Agreement, or anyportion thereof, is held to be invalid and unenforceable, then the remainder ofthis Agreement shall nevertheless remain in full force and effect.

 

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

 

30.   Captions.** **Captionshave been inserted solely for the convenience of reference and in no waydefine, limit or describe the scope or substance of any provisions of thisAgreement.

 

*IN WITNESS WHEREOF the undersigned have executed thisAgreement as of the day and year first written above.  The parties hereto agree that facsimile signatures shall be aseffective as if originals.*

 
| Boston  Biomedica Inc. |                        | Consultant: |
|------------------------|-----------------------------|-------------|
|                   |                        |        |
|                   |                        | By:         | /s/ Richard  T. Schumacher |   |
| By:                    | /s/ R. Wayne  Fritzsche     |        | Richard T.  Schumacher |
|                   | Its:  Chairman of the Board |        |   |
|                   |                        |        |
|                        |                             |             |  |  |  |  |

 

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