Document:

<PAGE>

                                                                    EXHIBIT 10.2

                               CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY

 CONFIDENTIAL TREATMENT REQUESTED:  INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
    HAS BEEN REQUESTED IS OMITTED AND NOTED WITH "***." AN UNREDACTED VERSION OF
      THIS DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE
                                                                     COMMISSION.

                             FIRST AMENDMENT TO THE
                        EXCLUSIVE DISTRIBUTION AGREEMENT

      This FIRST AMENDMENT TO THE EXCLUSIVE DISTRIBUTION AGREEMENT (this
"Amendment"), effective as of March 24, 2005, is entered into by and between
BAXTER HEALTHCARE CORPORATION with its principal place of business at One Baxter
Parkway, Deerfield, Illinois 60015-4633 ("Baxter"), and HALOZYME, INC. with its
principal place of business at 11588 Sorrento Valley Road, Suite 17, San Diego,
California 92121 ("Halozyme"), and is the first amendment to that EXCLUSIVE
DISTRIBUTION AGREEMENT (the "Distribution Agreement") between Baxter and
Halozyme that was entered into as of August 13, 2004.

      WHEREAS, the parties are in connection herewith entering into a
Development and Supply Agreement (the "Development and Supply Agreement") that
reflects the parties' ongoing efforts to develop and supply Initial Product(s)
and potentially Other Product(s) the active ingredient of which is human
recombinant PH20 hyaluronidase for certain indications; and

      WHEREAS, the parties wish to provide for a specific and consistent
definition and treatment of the Initial Product(s) and potentially Other
Product(s) pursuant to the terms of the Development and Supply Agreement and the
Distribution Agreement, the parties hereto agree to amend the Distribution
Agreement as follows:

"Product", as used in the Distribution Agreement, shall have the same meaning as
provided for "Initial Product(s)", as defined in the Development and Supply
Agreement;

"Improvements", as used in the Distribution Agreement, shall have the same
meaning as provided for "improvements" under the definition of "Initial
Product(s)", as defined in the Development and Supply Agreement;

"Other Products", as used in the Distribution Agreement, shall have the same
meaning as provided for "Other Products", as defined in the Development and
Supply Agreement;

The "Indemnification" provisions of the Development and Supply Agreement
(specifically Section 15, including Sub-sections 15.1-15.3) shall apply equally
to Products, Improvements and Other Products (individually and collectively
"Distributed Product(s)") under this Distribution Agreement, with "this
Agreement" referring to this Distribution Agreement, "API" referring to API
supplied to Baxter for the Production of Distributed Product(s), and "Product"
referring to Distributed Product(s).

Sub-section 1.6 of the Distribution Agreement is hereby replaced in its entirety
with the following:

  *** Confidential material redacted and submitted separately to the Commission

<PAGE>

                                CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY

            "1.6 Right of First Refusal for Other Products. With regard to
      potential Other Products, Halozyme hereby grants to Baxter a first right
      of refusal (exercisable for six months from the date of written notice of
      such potential Other Product to Baxter) to include any such potential
      product within the scope of Product of this Agreement in exchange for,
      inter alia, the Financial Considerations provided under Sections 2.1
      through 2.6 of this Agreement (or their substantial equivalent as mutually
      agreed by the parties). If Baxter does not provide such written notice
      during the applicable six (6) month period, then such potential product
      shall not become a Product and Baxter shall have no rights under this
      Agreement with respect to such product."

Adding the following sub-section hereby amends Section 4 Covenants of Baxter, of
the Agreement:

            "4.3  Marketing and Incremental Sales Costs. Baxter shall be solely
      responsible for the combined marketing and incremental sales costs of the
      Initial Product and Other Products as defined in the Development and
      Supply Agreement to be executed between the parties by March 24, 2005. In
      no event will total combined marketing and incremental sales costs paid by
      Baxter hereunder exceed *** on an annualized basis. In the event that the
      parties agree in advance to combine marketing and incremental sales costs
      in excess of ***, such excess marketing and incremental sales costs shall
      be shared *** between Baxter and Halozyme.

                  4.3.1 The combined marketing and incremental sales costs
            required to promote the Initial Product and Other Products shall
            include the following: (i) direct salary and headcount costs
            directly related to such activity (ii) attendance at conventions and
            conferences (iii) marketing promotions, (iv) public relations, (v)
            marketing communication programs, (vi) sales meetings, (vii) Product
            catalogs, (viii) telemarketing, (ix) market research, (x) direct
            mail, (xi) Product ads, (xii) travel costs and (xiii) use of
            consultants (if and to the extent that in each case (i) to (xiii)
            such costs are directly allocable to promoting the Initial Product
            and/or Other Products)."

Adding the following subsection hereby amends Section 1.2 Territories of the
Agreement:

            "1.2.1 Baxter shall make the decision to enter the European market,
      (hereinafter referred to as an "Additional Territory" as defined in the
      Agreement) on or before ***. It is agreed by the parties that the Gross
      Profit calculation split, as set forth under Section 2.1 of the Agreement
      will not apply to the European market. The parties further agree that the
      Gross Profit split for the European market shall be modeled after the U.S.
      Distribution Agreement dated August 13, 2004, as amended. In the event
      that the parties cannot agree on the U.S. model,

  *** Confidential material redacted and submitted separately to the Commission

<PAGE>

                                CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY

      then the parties shall negotiate in good faith to develop an equitable
      split formula for the European market."

This Amendment may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument and shall be deemed to be a valid amendment in accordance with
Section 9.4 of the Distribution Agreement.

      IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to
the Exclusive Distribution Agreement to be executed by their duly authorized
representatives as of the Effective Date above written.

HALOZYME, INC.                          BAXTER HEALTHCARE
                                        CORPORATION

By:    /s/ Jonathan Lim                  By:    /s/ Daniel Tasse

Name:  Jonathan Lim                      Name:  Daniel Tasse
Title: President and Chief               Title: General Manager - ACCO/Baxter
       Executive Officer

  *** Confidential material redacted and submitted separately to the CommissionEx-10.125

 

EXHIBIT 10.125

AMENDMENT TO

EMPLOYMENT AGREEMENT

     THIS AMENDMENT TO EMPLOYMENT AGREEMENT (“Amendment”) is entered into as of the 21st
day of February, 2005, by and between TIMCO AVIATION SERVICES, INC., a Delaware corporation
(“Company”), and FRITZ BAUMGARTNER (“Employee”)

Preliminary Statements

     A. The parties have previously entered into that certain Employment Agreement dated June 11,
2004 (“Agreement”). Unless otherwise defined, capitalized terms used herein shall have the
meanings given to them in the Agreement.

     B. The parties wish to amend the Agreement to reflect the terms set forth below.

Agreement

     NOW, THEREFORE, in consideration of the premises, the mutual covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

1. Section 2(a) of the Agreement is hereby amended by deleting all of its text and replacing it
with the following text:

     (a) Base Salary. In consideration for the Employee’s services
hereunder and the restrictive covenants contained herein, effective as of November
1, 2004, the Employee’s base salary shall be $175,000 per annum (the “Salary”),
payable in accordance with TIMCO’s customary payroll practices. Notwithstanding the
foregoing, Employee’s annual Salary may be increased at any time and from time to
time to levels greater than the level set forth in the preceding sentence at the
sole discretion of the Compensation Committee of the Board of Directors of TIMCO
(“Committee”) to reflect merit or other increases.

2. Section 3(c) of the Agreement is hereby amended to change the period during which the Company
must continue to make all Severance Payments after a termination Without Cause from six months (as
currently provided in the Agreement) to one year.

3. Except as amended hereby, the Agreement shall remain in full force and effect.

[Signatures on next page]

 

 

     IN WITNESS WHEREOF, the parties have executed this Amendment, effective as of the date set
forth above.

	 	 	 	 	 
	

	 	TIMCO AVIATION SERVICES, INC., a

Delaware corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ Roy T. Rimmer, Jr.
	

	 	 	 	 
	

	 	 	 	Roy T. Rimmer, Jr.

Chairman and Chief Executive Officer
	 
	 	 	 	 
	 
	 	 	 	 
	

	 	EMPLOYEE:
	 
	 	 	 	 
	

	 	/s/ Fritz Baumgartner
	

	 	 
	

	 	Fritz Baumgartner

 

 

EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (“Agreement”), dated this 11th day of June, 2004, by and between
TIMCO AVIATION SERVICES, INC., a Delaware corporation (the “Company”), and FRITZ BAUMGARTNER (the
“Employee”).

     In consideration of the mutual representations, warranties, covenants and agreements contained
in this Agreement and other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:

     1. Employment.

          (a) Retention. The Company agrees to employ Employee as its Vice President, Controller
and Chief Accounting Officer, and Employee agrees to accept such employment, subject to the terms
and conditions of this Agreement.

          (b) Employment Period. The period during which the Employee shall serve as an
employee of the Company under this Agreement shall commence as of May 1, 2004 (the “Effective
Date”), and unless earlier terminated pursuant to this Agreement or extended through agreement of
the parties, shall expire on December 31, 2007 (the period for which the Employee is an employee of
the Company is hereinafter referred to as the “Employment Period”).

          (c) Duties and Responsibilities. During the Employment Period, the Employee shall
serve as Vice President and Chief Accounting Officer of the Company and its subsidiaries. In such
role, Employee shall have such authority and responsibility and perform such duties as may be
assigned to him from time to time by the Chief Financial Officer, and in the absence of such
assignment, such duties as are customary to Employee’s office and as are necessary or appropriate
to the business and operations of the Company and its subsidiaries. During the Employment Period,
the Employee’s employment shall be full time. Employee shall perform his duties honestly,
diligently, in good faith and in the best interests of the Company and its subsidiaries, and
Employee shall use his best efforts to promote the interests of the Company and its subsidiaries.

          (d) Other Activities. Except upon the prior written consent of the Company, the
Employee, during the Employment Period, will not accept any other employment. The Employee shall
be permitted to serve in ventures such as passive real estate investments, serving on charitable
and civic boards and organizations, and similar activities, so long as such activities do not
materially interfere with or detract from the performance of Employee’s duties or constitute a
breach of any of the provisions contained in this Agreement.

     2. Compensation.

          (a) Base Salary. In consideration for the Employee’s services hereunder and the
restrictive covenants contained herein, the Employee shall be paid an annual base salary
(“Salary”), as follows:

               (i) $140,000 from the Effective Date until May 1, 2005;

 

 

               (ii) $150,000 from May 1, 2005 until the end of the Employment Period.

Payments hereunder shall be made in accordance with the Company’s customary payroll practices.
Notwithstanding the foregoing, Employee’s annual Salary may be increased at anytime and from time
to time to levels greater than the level set forth in the preceding sentence at the discretion of
the Compensation Committee (the “Committee”) of the Board of Directors (“Board”) of the Company to
reflect merit or other increases.

          (b) Bonus. In addition to the Salary, the Employee shall be eligible to receive an
annual bonus (“Bonus”) equal to 50% of the Employee’s Salary. The Bonus shall be based on the
achievement of corporate goals and objectives as established by the Committee or the Board. The
achievement of said goals and objectives shall be determined by the Committee or the Board.
Notwithstanding the foregoing, Employee’s Bonus for fiscal 2004 shall not be less than $15,000 and,
notwithstanding the payment provision below, such minimum Bonus amount shall be paid to Employee on
or before December 31, 2004. With respect to any Fiscal Year during which the Employee is employed
by the Company for less than the entire Fiscal Year, the Bonus shall be prorated for the period
during which the Employee was so employed. Except as set forth above, all amounts of Bonus earned
by Employee shall be payable within thirty (30) days after completion of the audited financial
statements for the previous Fiscal Year. The term “Fiscal Year” as used herein shall mean each
period of twelve (12) calendar months commencing on January 1st of each calendar year during the
Employment Period and expiring on December 31st of such year.

          (c) Merit and Other Bonuses. Employee shall be entitled to such other bonuses,
payments and benefits may be determined by the Committee or the Board, in their sole discretion.

          (d) Equity Incentives. Employee shall be eligible to receive grants of stock options,
restricted stock or other equity incentives, all at the discretion of the Committee or the Board.

          (e) Other Compensation Programs. The Employee shall be entitled to participate in
Company’s incentive and deferred compensation programs and such other programs as are established
and maintained generally for the benefit of Company’s employees or executive officers, subject to
the provisions of such plans or programs.

          (f) Vacations. The Employee shall be entitled to three weeks of vacation on an annual
basis. Employee shall be entitled to be reimbursed for any accrued and unused vacation time as of
the date he is no longer an employee of Company.

          (g) Other Benefits. During the term of this Agreement, the Employee shall also be
entitled to participate in any other health insurance programs, life insurance programs, disability
programs, stock option plans, bonus plans, pension plans and other fringe benefit plans and
programs as are from time to time established and maintained for the benefit of Company’s employees
or executive officers, subject to the provisions of such plans and programs.

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          (h) Expenses. The Employee shall be reimbursed for all out-of-pocket expenses
reasonably incurred by him on behalf of or in connection with the business of the Company, pursuant
to the normal standards and guidelines followed from time to time by the Company.

          (i) Withholding. All payments made to the Employee hereunder shall be made net of any
applicable withholding for income taxes and the Employee’s share of FICA, FUTA or other taxes. The
Company shall withhold such amounts from such payments to the extent required by applicable law and
remit such amounts to the applicable governmental authorities in accordance with applicable law.

     3. Termination.

          (a) For Cause. The Company shall have the right to terminate this Agreement and to
discharge the Employee for Cause (as defined below), at any time during the term of this Agreement.
Termination for Cause shall mean, during the term of this Agreement, (i) Employee’s conduct that
would constitute under federal or state law either a felony or a misdemeanor involving moral
turpitude, or a determination by the Company’s Board of Directors, after consideration of all
available information and following the procedures set forth below, that Employee has willfully
violated Company policies or procedures involving discrimination, harassment, alcohol or substance
abuse, or work place violence causing material injury to the Company, (ii) Employee’s actions or
omissions that constitute fraud, dishonesty or gross misconduct, (iii) Employee’s knowing and
intentional breach of any fiduciary duty that causes material injury to the Company, and (iv)
Employee’s inability to perform his material duties, after reasonable notice and an opportunity to
resolve the issues, due to alcohol or other substance abuse. Any termination for Cause pursuant to
this Section shall be given to the Employee in writing and shall set forth in detail all acts or
omissions upon which the Company is relying to terminate the Employee for Cause.

     Upon any determination by the Company that Cause exists to terminate the Employee, the Company
shall cause a special meeting of the Board of Directors to be called and held at a time mutually
convenient to the Board of Directors and Employee, but in no event later than ten (10) business
days after Employee’s receipt of the notice that the Company intends to terminate the Employee for
Cause. Employee shall have the right to appear before such special meeting of the Board of
Directors with legal counsel of his choosing to refute such allegations and shall have a reasonable
period of time to cure any actions or omissions which provide the Company with a basis to terminate
the Employee for Cause (provided that such cure period shall not exceed 30 days). A majority of
the members of the Board of Directors must affirm that Cause exists to terminate the Employee. No
finding by the Board of Directors will prevent the Employee from contesting such determination
through appropriate legal proceedings provided that the Employee’s sole remedy shall be to sue for
damages, not reinstatement, and damages shall be limited to those that would be paid to the
Employee if he had been terminated without Cause. In the event the Company terminates the Employee
for Cause, the Company shall only be obligated to continue to pay in the ordinary and normal course
of its business to the Employee his Salary plus accrued but unused vacation time through the
termination date and the Company shall have no further obligations to Employee from and after the
date of termination.

          (b) Resignation by Employee. If the Employee shall resign or otherwise terminate his
employment with the Company at anytime during the term of this Agreement, the

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Employee shall only be entitled to receive his accrued and unpaid Salary and vacation pay
through the termination date, and the Company shall have no further obligations under this
Agreement from and after the date of resignation.

          (c) Termination by Company Without Cause. At any time during the term of this
Agreement the Company shall have the right to terminate this Agreement and to discharge the
Employee without Cause effective upon delivery of written notice to the Employee. Upon any such
termination by the Company without Cause, the Company shall pay to the Employee all of the
Employee’s accrued but unpaid Salary and vacation pay through the date of termination, and
thereafter, the Company: (i) shall continue to pay to the Employee his Salary payable in accordance
with Section 2(a) for six (6) months from the date of termination, when and as the same would have
been due and payable hereunder but for such termination, (ii) shall continue Employee’s health
benefits under the Company’s then health insurance program(s) for six months from the date of
termination (or until Employee’s death or the date on which Employee becomes covered by the health
plan of a subsequent employer, to the extent that either of these events occurs earlier).
Additionally, if Employee is terminated without Cause, all stock options and restricted stock
grants previously granted to him will immediately vest (to the extent not then already vested), and
all such stock options shall remain exercisable for the lesser of the unexpired term of such
options or six months from the date of Employee’s termination. All payments made to the Employee
pursuant to this Section 3(c) are collectively, referred to herein as the “Severance Payment.”
Other than the Severance Payment, the Company shall have no further obligation to the Employee
except for the obligations set forth in Section 12 of this Agreement after the date of such
termination; provided, however, that the Employee shall only be entitled to continuation of the
Severance Payments as long as he is in compliance with the provisions of Sections 6 and 7 of this
Agreement. Additionally, Employee shall be entitled to receive each month for six-months following
the termination of the Employment Period Employee’s monthly portion of the Salary, so long as
Employee is in compliance with Sections 6 and 7 of the Agreement and so long as Employee has not
been terminated for “Cause,” in which case the restrictive covenant shall apply notwithstanding the
payment of severance.

          (d) Disability of the Employee. This Agreement may be terminated by the Company upon
the Disability of the Employee. “Disability” shall mean any mental or physical illness, condition,
disability or incapacity which prevents the Employee from reasonably discharging his duties and
responsibilities under this Agreement for a period of 180 consecutive days. In the event that any
disagreement or dispute shall arise between the Company and the Employee as to whether the Employee
suffers from any Disability, then, in such event, the Employee shall submit to the physical or
mental examination of a physician licensed under the laws of the State of North Carolina, who is
mutually agreeable to the Company and the Employee, and such physician shall determine whether the
Employee suffers from any Disability. In the absence of fraud or bad faith, the determination of
such physician shall be final and binding upon the Company and the Employee. The entire cost of
such examination shall be paid for solely by the Company. In the event the Company has purchased
Disability insurance for Employee, the Employee shall be deemed disabled if he is completely
(fully) disabled as defined by the terms of the Disability policy. In the event that at any time
during the term of this Agreement the Employee shall suffer a Disability and the Company terminates
the Employee’s employment for such Disability, the Company shall continue to pay to the Employee
his Salary, payable in accordance with Section 2(a) for three (3) months from the date of the
termination, when and as the same would have been due and payable hereunder but for such
termination,

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except that payment of the Salary in accordance with said paragraph shall be mitigated to the
extent payments are made to the Employee pursuant to disability insurance programs maintained by
the Company.

          (e) Death of the Employee. In the event of the death of Employee, the employment of
the Employee by the Company shall automatically terminate on the date of the Employee’s death and
the Company shall only be obligated to pay Employee’s estate Employee’s accrued and unpaid Salary
through the termination date plus accrued but unused vacation time through the termination date and
the Company shall have no further obligations to Employee from and after the date of termination.

     4. Termination of Employment by Employee for Change of Control.

          (a) Termination Rights. Notwithstanding the provisions of Section 2 and Section 3 of
this Agreement, in the event that there shall occur a Change of Control (as defined below) of the
Company and within two years after such Change of Control the Employee’s employment hereunder is
terminated by the Company without Cause, then the Company shall be required to pay to the Employee
all accrued but unpaid Salary and vacation pay through the date of termination, plus (i) the
product of two (2) multiplied by the Employee’s then current Salary (at a base salary no lower than
the base salary provided in paragraph 2(a) above), plus (ii) the product of two (2) multiplied by
the Bonus that Employee earned with respect to his services in the Fiscal Year prior to the Fiscal
Year in which such termination occurs, assuming that all performance objectives are met
(collectively, the foregoing consideration payable to the Employee shall be referred to herein as
the “Change in Control Payment”). The Change in Control Payment shall be made no later than 10
days after the Employee’s termination pursuant to this Section 4. To the extent that payments are
owed by the Company to the Employee pursuant to this Section 4, they shall be made in lieu of
payments pursuant to Section 3, and in no event shall the Company be required to make payments or
provide benefits to the Employee under both Section 3 and Section 4. Additionally, Employee shall
be entitled to receive the Change of Control Payment set forth above in the event that within six
months after the term of this Agreement, a Change of Control shall occur.

          (b) Change of Control of the Company Defined. For purposes of this Section 4, a
“Change of Control of the Company” shall be deemed to have occurred if:

               (i) Any “person” (as such term is defined in Sections 13(d)(3) and Section 14(d)(3) of the
Exchange Act), other than the Company, any majority owned subsidiary of the Company, any
compensation plan of the Company, any majority owned subsidiary of the Company or Lacy J. Harber
and his affiliates and/or heirs, becomes the “beneficial owner” (as such term is defined in Rule
13d 3 of the Exchange Act), directly or indirectly, of securities of the Company representing more
than 50% of the combined voting power of the Company; or

               (ii) Any “person” (as such term is defined in Sections 13(d)(3) and Section 14(d)(3) of the
Exchange Act), other than the Company, any majority owned subsidiary of the Company, any
compensation plan of the Company, any majority owned subsidiary of the Company or Lacy J. Harber
and his affiliates and/or heirs), becomes the “beneficial owner” (as such term is defined in Rule
13d 3 of the Exchange Act), directly or indirectly, of securities of the Company representing more
than 35% of the combined voting power of the Company provided: (A) such person or person are not
acting as a “group” (as such term is defined in Rule

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13(d) under the Exchange Act) with respect to the Company’s voting securities with Lacy J.
Harber and his affiliates and/or heirs and (B) such person or persons own Company securities with
more of the combined voting power of the Company than those held by Lacy J. Harber and his
affiliates and/or heirs; or

               (iii) The shareholders of the Company approve (1) a reorganization, merger, or consolidation
with respect to which persons who were the shareholders of the Company immediately prior to such
reorganization, merger, or consolidation do not immediately thereafter own more than 50% of the
combined voting power entitled to vote generally in the election of the directors of the
reorganized, merged or consolidated entity; (2) a liquidation or dissolution of the Company; or (3)
the sale of all or substantially all of the assets of the Company or of a subsidiary of the Company
that accounts for more than 66 2/3% of the consolidated revenues of the Company, but not including
a reorganization, merger or consolidation of the Company.

     5. Successor To Company. The Company shall require any successor, whether direct or
indirect, to all or substantially all of the business, properties and assets of the Company whether
by purchase, merger, consolidation or otherwise, prior to or simultaneously with such purchase,
merger, consolidation or other acquisition to execute and to deliver to the Employee a written
instrument in form and in substance reasonably satisfactory to the Employee pursuant to which any
such successor shall agree to assume and to timely perform or to cause to be timely performed all
of the Company’s covenants, agreements and obligations set forth in this Agreement (a “Successor
Agreement”). The failure of the Company to cause any such successor to execute and deliver a
Successor Agreement to the Employee shall constitute a material breach of the provisions of this
Agreement by the Company.

     6. Restrictive Covenants. In consideration of his employment and the other benefits
arising under this Agreement, the Employee agrees that during the term of this Agreement, and for a
period of six months following the termination of this Agreement, the Employee shall not directly
or indirectly:

          (a) alone or as a partner, joint venturer, officer, director, member, employee, consultant,
agent, independent contractor or stockholder of, or lender to, any company or business, engage in
any business which competes, directly or indirectly, with any business of the Company; provided,
however, that the beneficial ownership of less than one percent (1%) of the shares of stock of any
corporation having a class of equity securities actively traded on a national securities exchange
or over-the-counter market shall not be deemed, in and of itself, to violate the prohibitions of
this Section; or

          (b) for any reason, (i) induce any customer of the Company or any of its subsidiaries or
affiliates to patronize any business directly or indirectly in competition with the businesses
conducted by the Company or any of its subsidiaries or affiliates in any market in which the
Company or any of its subsidiaries or affiliates does business; (ii) canvass, solicit or accept
from any customer of the Company or any of its subsidiaries or affiliates any such competitive
business; or (iii) request or advise any customer or vendor of the Company or any of its
subsidiaries or affiliates to withdraw, curtail or cancel any such customer’s or vendor’s business
with the Company or any of its subsidiaries or affiliates; or

-6-

 

 

          (c) for any reason, employ, or knowingly permit any company or business directly or indirectly
controlled by him, to employ, any person who was employed by the Company or any of its subsidiaries
or affiliates at or within the prior six months, or in any manner seek to induce any such person to
leave his or her employment.

The provisions of this Section 6 shall apply to Employee whether or not Employee’s employment with
the Company has been terminated for Cause or without Cause and whether or not the Company is
required to pay Employee severance benefits under Section 3 of this Agreement. Notwithstanding the
foregoing, if this Agreement expires by its terms at the end of the Employment Period, then the
provisions of this Section 6 shall only apply to Employee if the Company provides Employee with all
of the severance benefits which it would be obligated to provide to him under Section 3(c) of this
Agreement as if the Employee had been terminated from his employment with the Company without
Cause.

     7. Confidentiality. The Employee agrees that at all times during the term of this
Agreement and after the termination of employment for as long as such information remains
non-public information, the Employee shall (i) hold in confidence and refrain from disclosing to
any other party all information, whether written or oral, tangible or intangible, of a private,
secret, proprietary or confidential nature, of or concerning the Company or any of its subsidiaries
or affiliates and their business and operations, and all files, letters, memoranda, reports,
records, computer disks or other computer storage medium, data, models or any photographic or other
tangible materials containing such information (“Confidential Information”), including without
limitation, any sales, promotional or marketing plans, programs, techniques, practices or
strategies, any expansion plans (including existing and entry into new geographic and/or product
markets), and any customer lists, (ii) use the Confidential Information solely in connection with
his employment with the Company or any of its subsidiaries or affiliates and for no other purpose,
(iii) take all precautions necessary to ensure that the Confidential Information shall not be, or
be permitted to be, shown, copied or disclosed to third parties, without the prior written consent
of the Company or any of its subsidiaries or affiliates, and (iv) observe all security policies
implemented by the Company or any of its subsidiaries or affiliates from time to time with respect
to the Confidential Information. In the event that the Employee is ordered to disclose any
Confidential Information, whether in a legal or regulatory proceeding or otherwise, the Employee
shall provide the Company or any of its subsidiaries or affiliates with prompt notice of such
request or order so that the Company or any of its subsidiaries or affiliates may seek to prevent
disclosure. In addition to the foregoing the Employee shall not at any time libel, defame, ridicule
or otherwise disparage the Company.

     8. Specific Performance; Injunction. The parties agree and acknowledge that the
restrictions contained in Sections 6 and 7 are reasonable in scope and duration and are necessary
to protect the Company or any of its subsidiaries or affiliates. If any provision of Section 6 or
7 as applied to any party or to any circumstance is adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other circumstance or the validity or
enforceability of any other provision of this Agreement. If any such provision, or any part
thereof, is held to be unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have the power to reduce
the duration and/or area of such provision, and/or to delete specific words or phrases, and in its
reduced form, such provision shall then be enforceable and shall be enforced. The Employee agrees
and acknowledges that the breach of Section 6 or 7 will cause irreparable

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injury to the Company or any of its subsidiaries or affiliates and upon breach of any
provision of such Sections, the Company or any of its subsidiaries or affiliates shall be entitled
to injunctive relief, specific performance or other equitable relief, without being required to
post a bond; provided, however, that, this shall in no way limit any other remedies which the
Company or any of its subsidiaries or affiliates may have (including, without limitation, the right
to seek monetary damages).

     9. Notices. All notices, requests, demands, claims and other communications hereunder
shall be in writing and shall be deemed given if delivered by hand delivery, by certified or
registered mail (first class postage pre-paid), guaranteed overnight delivery or facsimile
transmission if such transmission is confirmed by delivery by certified or registered mail (first
class postage pre-paid) or guaranteed overnight delivery to, the following addresses and telecopy
numbers (or to such other addresses or telecopy numbers which such party shall designate in writing
to the other parties): (a) if to the Company, at its principal executive offices, addressed to the
Chief Executive Officer, with a copy to Philip B. Schwartz, Esq., Akerman, Senterfitt & Eidson,
P.A., One Southeast Third Avenue, Miami, Florida 33156; and (b) if to the Employee, at the address
listed on the signature page hereto.

     10. Amendment; Waiver. This Agreement may not be modified, amended, or supplemented,
except by written instrument executed by all parties. No failure to exercise, and no delay in
exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege hereunder preclude the exercise of
any other right, power or privilege. No waiver of any breach of any provision shall be deemed to
be a waiver of any preceding or succeeding breach of the same or any other provision, nor shall any
waiver be implied from any course of dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under any other agreement shall be deemed
to be an extension of the time for performance of any other obligations or any other acts. The
rights and remedies of the parties under this Agreement are in addition to all other rights and
remedies, at law or equity, that they may have against each other.

     11. Assignment; Third Party Beneficiary. This Agreement, and the Employee’s rights
and obligations hereunder, may not be assigned or delegated by him. The Company may assign its
rights, and delegate its obligations, hereunder to any affiliate of the Company, or any successor
to the Company or its aviation services business, specifically including the restrictive covenants
set forth in Section 6 hereof. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon its respective successors and assigns.

     12. Severability; Survival. In the event that any provision of this Agreement is
found to be void and unenforceable by a court of competent jurisdiction, then such unenforceable
provision shall be deemed modified so as to be enforceable (or if not subject to modification then
eliminated herefrom) to the extent necessary to permit the remaining provisions to be enforced in
accordance with the parties intention. The provisions of Sections 6 and 7 will survive the
termination for any reason of the Employee’s relationship with the Company.

     13. Indemnification. The Company agrees to indemnify the Employee during the term and
after termination of this Agreement in accordance with the provisions of the Company’s certificate
of incorporation and bylaws and the Delaware General Corporation Law.

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     14. Counterparts. This Agreement may be signed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one and the same instrument.

     15. Governing Law. This Agreement shall be construed in accordance with and governed
for all purposes by the laws of the State of North Carolina applicable to contracts executed and to
be wholly performed within such State.

     16. Entire Agreement. This Agreement contains the entire understanding of the parties
in respect of its subject matter and supersedes all prior agreements and understandings (oral or
written) between or among the parties with respect to such subject matter.

     17. Headings. The headings of Paragraphs and Sections are for convenience of
reference and are not part of this Agreement and shall not affect the interpretation of any of its
terms.

     18. Construction. This Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any party. The parties acknowledge that each of them has
reviewed this Agreement and has had the opportunity to have it reviewed by their respective
attorneys and that any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not apply in the interpretation of this Agreement.

     19. Resolution of Disputes. Any disputes arising under or in connection with this
Agreement shall be resolved by third party mediation of the dispute and, failing that, by binding
arbitration to be held in Greensboro, North Carolina in accordance with the rules and procedures of
the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.

[Signatures on Next Page]

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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above
written.

	 	 	 	 	 
	

	 	TIMCO AVIATION SERVICES, INC.,

a Delaware corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ C. Robert Campbell
	

	 	 	 	 
	

	 	 	 	C. Robert Campbell, Executive Vice President

and Chief Financial Officer
	 
	 	 	 	 
	 
	 	 	 	 
	

	 	EMPLOYEE:
	 
	 	 	 	 
	

	 	/s/ Fritz Baumgartner
	

	 	 
	

	 	FRITZ BAUMGARTNER
	 
	 	 	 	 
	

	 	Address for Notices:
	

	 	_____________________
	

	 	_____________________
	

	 	_____________________

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