Document:

Unassociated Document

    Exhibit
      10.1

    

    EMPLOYMENT
      AGREEMENT

    

    This
      Employment Agreement (“Agreement”) dated June 2, 2005 between BioElectronics
      Corporation, a Maryland Corporation (the “Company”) located at 3612 Sprigg
      Street South, Frederick, Maryland 21704 and Joseph M. Iglesias (the
“Executive”), residing at 1930 Brushoak Ct., Thousand Oaks CA
      91320.

     

    WITNESSETH:

    

    WHEREAS.
      The Board of Directors (the “Board”) of the Company wishes to employ the
      Executive as Vice President, Design and Engineering of the Company on the terms
      and subject to the conditions set forth herein; and

     

    WHEREAS,
      the Executive wishes to accept employment with the Company in the position
      of
      Vice President, Design and Engineering on the terms and subject to the
      conditions set forth herein.

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      obligations hereinafter set forth, the parties agree as follows:

     

    
      	 	
              1)

            	
              EMPLOYMENT

            

    

     

    The
      Executive’s employment under the terms of this Agreement shall commence June 1,
      2005 (the “Effective Date”), and shall continue until May 31, 2008 unless
      terminated earlier pursuant to Section 5. (Such period of employment under
      this
      Agreement is hereinafter referred to as the “Employment Term.”). The Executive
      shall provide services to the Company hereunder as Vice President, Design and
      Engineering of the Company. The Executive will serve the Company subject to
      the
      general supervision, advice and direction of the Executive Vice President/COO
      upon the terms and conditions set forth in this Agreement.

     

    
      	 	
              2)

            	
              DUTIES

            

    

     

    PERFORMANCE
      OF DUTIES.
      During
      the period of the Executive’s employment with the Company, the Executive
      shall:

     

    
      	 	
              a)

            	
              Provide
                overall engineering design management and product development leadership
                to Company’s manufacturing activities, including, but not limited to,
                developing new product designs, coordination fall supplier and
                procurement, product prototyping, testing, production, future project
                research, and IP management. Executive shall also perform such further
                duties as are incidental or implied from its obligation to provide
                overall
                operational management and leadership to the
                Company.

            

    

     

    
      	 	
              b)

            	
              In
                all respects use his best efforts to further, enhance, and develop
                the
                Company’s business, affairs, interests and welfare;
                and

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              c)

            	
              Not
                become directly or indirectly associated with or engaged in any business
                which competes with the Company or accept any employment or other
                engagement whatsoever from any other person, firm, corporation, or
                entity
                or do anything inconsistent with its duties to the
                Company.

            

    

     

    
      	 	
              3)

            	
              COMPENSATION
                AND BENEFITS

            

    

     

    
      	 	
              a)

            	
              BASE
                COMPENSATION.
                The Company shall pay the Executive a base salary (the “Base Salary”), as
                compensation for his employment under this Agreement, in the amount
                of
                $115,000 a year thereafter within the Employment Term, the Base Salary
                shall be as determined by the President and the Board of Directors
                but
                shall not be less than $115,000. During the Employment Term such
                Base
                Salary shall be paid in equal installments on at least a monthly
                basis, or
                on such other basis as is applicable to Executives of the
                Company.

            

    

     

    
      	 	
              b)

            	
              ANNUAL
                BONUS.
                For each calendar year ending during the Employment Term for which
                the
                Executive remains an employee of the Company, the Executive’s bonus
                compensation (“Annual Bonus”) shall be up to 50% of base compensation for
                the year to be calculated as follows:

            

    

     

    
      	 	
              (1)

            	
              Company
                Sales Bonus: Executive shall be eligible to receive up to 30% of
                base
                salary based on overall company sales. The 2005 calendar year bonus
                will
                be predicated and calculated on annual sales as follows:
                

            

    

     

    
      	 	
              (i)

            	
              Sales
                under $1.5 million 0.0%

            

    

    
      	 	
              (ii)

            	
              Sales
                over $1.5 million 1.0% of total
                sales.

            

    

    
      	 	
              (iii)

            	
              Sales
                over $2.0 million 1.5% of total
                sales.

            

    

    
      	 	
              (iv)

            	
              Sales
                over $3.0 million 2.5% of total
                sales.

            

    

     

    
      	 	
              (2)

            	
              Individual
                Performance Bonus: Executive shall be eligible to receive up to 20%
                of
                base salary based on delivery of new products and performance of
                new
                products as directed by the Executive Vice President/COO.
                

            

    

     

    The
      annual bonus formula after the first year will be established annually by the
      Compensation Committee of the Board of Directors. The Executive’s Annual Bonus
      earned with respect to each year shall be paid on or before March 31st
      of the
      succeeding year. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	 	
              c)

            	
              STOCK
                OPTIONS.
                On the Effective Date of this Agreement, (the “Grant Date”), the Company
                shall in consideration of the Covenants in paragraph 5 grant to the
                Executive an option (the “Option”) to purchase 900 thousand (900,000)
                shares of common stock of the Company, $.01 par value per share (the
                “Stock”). The Option shall be granted subject to the following terms: (i)
                the exercise price with respect to the initial 300,000 shares under
                the
                Option shall be $.30 per share (ii) an additional 300,000 shares
                at a
                grant price of $.40 per share; (iii) an additional 300,000 shares
                at a
                grant price of $.50 per share; (iv) the Option and Grant shall fully
                vest
                over a three-year period based on continuous employment of the Executive
                and the Options are exercisable as follows: 33.3% shall be exercisable
                on
                each of the first year, second year and third year anniversaries
                of the
                Grant Date; and v) the Option shall be exercisable by Executive or
                his
                estate for a period of five years. The Executive shall immediately
                become
                100% vested in, and eligible to exercise, the Option, in the event
                of (a)
                his termination without Cause (as defined in Section 4, (b) a dissolution
                or liquidation of the Company, (c) a sale of all or substantially
                all of
                the Company’s assets, (d) a merger or consolidation involving the Company
                in which the Company is not the surviving corporation, (e) a merger
                or
                consolidation involving the Company in which the Company is the surviving
                corporation but the holders of shares of common stock receive securities
                of another corporation and/or other property, including cash, or
                (f) a
                tender offer for at least a majority of the outstanding stock of
                the
                Company. If immediate vesting occurs because of a termination without
                Cause, the Option shall be exercisable for thirty-six (36) months
                following the effective date of such termination; in all other events
                the
                option will remain exercisable under the terms of the grant. In the
                event
                of a termination of employment for reasons described in Section 4)
                Termination below the Executive or his estate will forfeit unvested
                options. 

            

    

     

    
      	 	
              d)

            	
              BENEFITS.
                During the Employment Term, the Executive shall be entitled to participate
                in all pension, profit sharing and other retirement plans, incentive
                compensation plans and all group health, hospitalization and disability
                insurance plans and other Executive welfare benefit plans in which
                other
                senior executives of the Company may participate on terms and conditions
                no less favorable than those which apply to such other senior executives
                of the Company. The Executive shall be entitled to three weeks annual
                paid
                vacations; and to be reimbursed for any reasonable out-of-pocket
                expenses
                incurred by the Executive in connection with the performance of his
                duties, upon presentation of reasonable evidence satisfactory to
                the
                Company of the amounts and nature of such expenses.
                

            

    

     

    
      	 	
              4)

            	
              TERMINATION

            

    

     

    EVENTS
      OF TERMINATION.
      The
      Employment Term shall terminate upon the first to occur of the following events:
      

     

    
      	 	
              a)

            	
              The
                close of business on May 31, 2008, unless mutually extended in writing
                by
                the parties;

            

    

     

    
      	 	
              b)

            	
              The
                death of the Executive;

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	 	
              c)

            	
              The
                close of business on the 180th
                day following the date on which the Company gives the Executive written
                notice of the termination of his employment as a result of his Permanent
                Disability. Permanent Disability shall mean the Executive’s inability to
                perform the material duties contemplated by this Agreement by reason
                of a
                physical or mental disability or infirmity which has continued for
                more
                than 30 consecutive days. The Executive agrees to submit such medical
                evidence regarding such disability or infirmity as is reasonably
                requested
                by the Company, including, but not limited to, an examination by
                a
                physician selected by the Company in its sole
                discretion;

            

    

     

    
      	 	
              d)

            	
              The
                close of business on the date on which the Company gives the Executive
                written notice of the Company’s termination of his employment for Cause,
                Cause shall mean (A) the Executive’s neglect f his material duties, (B) an
                act or acts by the Executive, or any omission by him, constituting
                a
                felony, and the Executive has entered a guilty plea or confession
                to, or
                has been convicted of, such felony, (C) the Executive’s failure to follow
                any lawful directive of the President consistent with the Executive’s
                position and duties, (D) an act or acts of fraud or dishonesty by
                the
                Executive which results or is intended to result in financial or
                economic
                harm to the Company, or (E) breach of a material provision of this
                Agreement by the Executive; and 

            

    

     

    
      	 	
              e)

            	
              The
                close of business on the effective date of a Voluntary Termination
                by the
                Executive of his employment with the Company. Voluntary Termination
                shall
                mean any voluntary termination by the Executive of his employment
                with the
                Company provided that the Executive shall give the Company at least
                30
                days’ prior written notice of the effective date of such termination. Such
                Voluntary Termination shall cease acceleration of bonus and options
                as
                defined in Section 3.

            

    

     

    
      	 	
              5)

            	
              PROTECTED
                INFORMATION; PROHIBITED SOLICITATION AND
                COMPETITION

            

    

     

    
      	 	
              a)

            	
              The
                Executive hereby recognizes and acknowledges that during the course
                of his
                employment by the Company, the Company will furnish, disclose or
                make
                available to the Executive confidential or proprietary information
                related
                to the Company’s business, including, without limitation, customer lists,
                ideas, processes, inventions and devices, that such confidential
                or
                proprietary information has been developed and will be developed
                through
                the Company’s expenditure of substantial time and money, and that all such
                confidential information could be used by the Executive and others
                to
                compete with the Company. The Executive hereby agrees that all such
                confidential or proprietary information shall constitute trade secrets,
                and further agrees to use such confidential or proprietary information
                only for the purpose of carrying out his duties with the Company
                and not
                otherwise to disclose such information unless otherwise required
                to do so
                by subpoena or other legal process. The Executive agrees that all
                inventions and discoveries shall be the sole property of the Company,
                and
                the Company shall be the sole owner of all patents.
                

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	 	
              b)

            	
              The
                Executive hereby agrees, in consideration of his employment hereunder
                and
                in view of the confidential position to be held by the Executive
                hereunder, that during the Employment Term and for the period ending
                on
                the date which is one year after the later of the termination of
                the
                Employment Term and the Executive shall not, without the written
                consent
                of the Company, knowingly solicit, entice or persuade any other employee
                of the Company or any affiliate of the Company to leave the services
                of
                the Company or such affiliate for any
                reason.

            

    

     

    
      	 	
              c)

            	
              The
                Executive further agrees that, he shall not during the Employment
                Term and
                for the period ending on the date which one year after enter into
                any
                relationship whatsoever, either directly or indirectly, alone or
                in
                partnership, or as an officer, director, employee or stockholder
                (beneficially owning stock or options to acquire stock totaling more
                than
                five percent of the outstanding shares) of any corporation (other
                than the
                Company),or otherwise acquire or agree to acquire a significant present
                or
                future equity or other proprietorship interest, whether as a stockholder,
                partner, proprietor or otherwise, with any enterprise, business or
                division thereof (other than the Company), which is engaged in the
                development, manufacture or marketing and sales of electromagnetic
                or
                electro stimulation medical
                devices.

            

    

     

    
      	 	
              d)

            	
              The
                restrictions in this Section 5 shall survive the termination of this
                Agreement and shall be in addition to any restrictions imposed upon
                the
                Executive by statute or at common law. The parties hereby acknowledge
                that
                the restriction in this Section 5 have been specifically negotiated
                and
                agreed to by the parties to protect the Company from unfair
                competition.

            

    

     

    
      	 	
              6)

            	
              INJUNCTIVE
                RELIEF

            

    

     

    The
      Executive hereby expressly acknowledges that any breach or threatened breach
      by
      the Executive of any of the terms set forth in Section 5 of this Agreement
      may
      result in significant and continuing injury to the Company, the monetary value
      of which would be impossible to establish. Therefore, the Executive agrees
      that
      the Company shall be entitled to apply for injunctive relief in court of
      appropriate jurisdiction. The provisions of this Section shall survive the
      Employment Term.

     

    
      	 	
              7)

            	
              PARTIES
                BENEFITED; ASSIGNMENTS

            

    

     

    This
      Agreement shall be binding upon the Executive, his heirs and his personal
      representative or representatives, and upon the Company and its successors
      and
      assigns. Neither this Agreement nor any rights or obligations hereunder may
      be
      assigned by the Executive, other than by will or by the laws of descent and
      distribution.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	 	
              8)

            	
              NOTICES

            

    

     

    Any
      notice required or permitted by this Agreement shall be in writing, sent by
      registered or certified mail, return receipt requested, addressed to the
      President and the Company at its then principal office, or to the Executive
      at
      the address set forth in the preamble, as the case may be, or to such other
      address or addresses as any party hereto may from time to time specify in
      writing for the purpose in a notice given to the other parties in compliance
      with this Section. Notices shall be deemed given when received.

     

    
      	 	
              9)

            	
              GOVERNING
                LAW

            

    

     

    This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of Maryland, without regard to conflict of law
      principles.

     

    
      	 	
              10)

            	
              DISPUTES

            

    

     

    Any
      dispute or controversy arising under, out of, in connection with or in relation
      to this Agreement shall, at the election and upon written demand of either
      the
      Executive or the Company, be finally determined and settled by arbitration
      in
      Frederick, Maryland in accordance with the rules and procedures of the American
      Arbitration Association, and judgment upon the award may be entered in any
      court
      having jurisdiction thereof. 

     

    
      	 	
              11)

            	
              MISCELLANEOUS

            

    

     

    This
      Agreement contains the entire agreement of the parties relating to the subject
      matter hereof. This Agreement supersedes any prior written or oral agreements
      or
      understandings between the parties relating to the subject matter hereof. No
      modification or amendment of this Agreement shall be valid unless in writing
      and
      signed by or on behalf of the parties hereto. A waiver of the breach of any
      term
      or condition of this Agreement shall not be deemed to constitute a waiver of
      any
      subsequent breach of the same or any other term or condition. This Agreement
      is
      intended to be performed in accordance with, and only to the extent permitted
      by, all applicable laws, ordinances, rules and regulations. If any provision
      of
      this Agreement, or the application thereof to any person or circumstance, shall,
      for any reason and to any extent, be held in valid or unenforceable, such
      invalidity and unenforceability shall not affect the remaining provisions hereof
      and the application of such provisions to other persons or circumstances, all
      of
      which shall be enforced to the greatest extent permitted by law. The
      compensation provided to the Executive pursuant to this Agreement shall be
      subject to any withholdings and deductions required by any applicable tax laws.
      Any amounts payable under this Agreement to the Executive after the death of
      the
      Executive shall be paid to the Executive’s estate or legal representative. The
      headings in this Agreement are inserted for convenience of reference only and
      shall not be a part of or control or affect the meaning of any provision
      hereof.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

     

    BioElectronics
      Corporation:

    

    /s/
      Thomas J. O’Connor  

    By:
      Thomas J. O’Connor 

    Executive
      Vice President/COO

    

    Executive

     

    /s/
      Joseph M. Iglesias   

    By:
      Joseph M. Iglesias

    

    
      
         

      

        7Unassociated Document

    Exhibit
      10.2

    

    EMPLOYMENT
      AGREEMENT

    

    This
      Employment Agreement (“Agreement”) January 3, 2005 between BioElectronics
      Corporation, a Maryland Corporation (the “Company”) located at 3612 Sprigg
      Street South, Frederick, Maryland 21704 and Todd J. Kislak (the “Executive”),
      residing at 5809 Middle Crest Drive, Agoura Hills, CA 91301. 

     

    WITNESSETH:

    

    WHEREAS.
      The Board of Directors (the “Board”) of the Company wishes to employ the
      Executive as President, Orthopedics Group of the Company on the terms and
      subject to the conditions set forth herein; and

     

    WHEREAS,
      the Executive wishes to accept employment with the Company in the position
      of
      President, Orthopedics Group on the terms and subject to the conditions set
      forth herein.

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      obligations hereinafter set forth, the parties agree as follows:

     

    
      	 	
              1)

            	
              EMPLOYMENT

            

    

     

    The
      Executive’s employment under the terms of this Agreement shall commence January
      3, 2005 (the “Effective Date”), and shall continue until December 31,2007 unless
      terminated earlier pursuant to Section 5. (Such period of employment under
      this
      Agreement is hereinafter referred to as the “Employment Term.”) The Executive
      shall provide services to the Company hereunder as President, Orthopedic Group
      of the Company. The Executive will serve the Company subject to the general
      supervision, advice and direction of the Chief Executive Officer upon the terms
      and conditions set forth in this Agreement.

     

    
      	 	
              2)

            	
              DUTIES

            

    

     

    PERFORMANCE
      OF DUTIES.
      During
      the period of the Executive’s employment with the Company, the Executive
      shall:

     

    
      	 	
              a)

            	
              Supply
                strategic planning and overall profit/loss management for the Company’s
                Orthopedic Group,

            

    

     

    
      	 	
              b)

            	
              Provide
                overall sales, marketing and product development leadership and management
                to Company’s domestic and international activities of the Orthopedic Group
                including, but not limited to, developing sales and education programs,
                contractual sales and distribution arrangements with medical supply
                distributors and resellers, implementation and management of medical
                conference and trade show presentations, market assessments and product
                development and managing product advertising for the Orthopedic Group.
                Executive shall also perform such further duties as are incidental
                or
                implied from its obligation to provide overall operational management
                and
                leadership to the Company. Assignment of duties including additions
                and
                modifications shall be at the discretion of Company President and
                CEO.
                

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              c)

            	
              In
                all respects use his best efforts to further, enhance, and develop
                the
                Company’s business, affairs, interests and welfare;
                and

            

    

     

    
      	 	
              d)

            	
              Not
                become directly or indirectly associated with or engaged in any business
                which competes with the Company or accept any employment or other
                engagement whatsoever from any other person, firm, corporation, or
                entity
                or do anything inconsistent with its duties to the Company.
                

            

    

     

    
      	 	
              3)

            	
              COMPENSATION
                AND BENEFITS

            

    

     

    
      	 	
              a)

            	
              BASE
                COMPENSATION.
                The Company shall pay the Executive a base salary (the “Base Salary”), as
                compensation for his employment under this Agreement, in the amount
                of
                $150,000 a year thereafter within the Employment Term, the Base Salary
                shall be as determined by the President and the Board of Directors
                but
                shall not be less than $150,000. During the Employment Term such
                Base
                Salary shall be paid in equal installments on at least a monthly
                basis, or
                on such other basis as is applicable to Executives of the
                Company.

            

    

     

    
      	 	
              b)

            	
              ANNUAL
                BONUS.
                For each calendar year ending during the Employment Term for which
                the
                Executive remains an employee of the Company, the Executive’s bonus
                compensation (“Annual Bonus”) shall be up to 50% of base compensation for
                the year. The 2005 calendar year bonus will be predicated and calculated
                on annual net sales as follows: 

            

    

     

    
      	 	
              (i)

            	
              Sales
                under $1.5 million 0.0%

            

    

    
      	 	
              (ii)

            	
              Sales
                over $1.5 million 1.0% of total
                sales.

            

    

    
      	 	
              (iii)

            	
              Sales
                over $2.0 million 1.5% of total
                sales.

            

    

    
      	 	
              (iv)

            	
              Sales
                over $3.0 million 2.5% of total
                sales.

            

    

     

    The
      annual bonus formula after the first year will be established annually by the
      Compensation Committee of the Board of Directors and may be amended to reflect
      sales and overall profitability of the Orthopedic division. The Executive’s
      Annual Bonus earned with respect to each year shall be paid on or before March
      31st
      of the
      succeeding year. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	 	
              c)

            	
              STOCK
                OPTIONS.
                On the Effective Date of this Agreement, (the “Grant Date”), the Company
                shall in consideration of the Covenants in paragraph 5 grant to the
                Executive a Grant of 500,000 thousand shares of restricted common
                stock of
                the Company and an option (the “Option”) to purchase 2.1 million shares of
                common stock of the Company, $.01 par value per share (the “Stock”). The
                Option shall be granted subject to the following terms: (i) the exercise
                price with respect to the initial 700,000 shares under the Option
                shall be
                $.30 per share (ii) an additional 700,000 shares at a grant price
                of $.40
                per share; (iii) an additional 700,000 shares at a grant price of
                $.50 per
                share; (iv) the Option and Grant shall fully vest over a three-year
                period
                based on continuous employment of the Executive and the Options are
                exercisable as follows: 33.3% shall be exercisable on each of the
                first
                year, second year and third year anniversaries of the Grant Date;
                and v)
                the Option shall be exercisable by Executive or his estate for a
                period of
                five years. The Executive shall immediately become 100% vested in,
                and
                eligible to exercise, the Option, in the event of (a) his termination
                without Cause (as defined in Section 4, (b) a dissolution or liquidation
                of the Company, (c) a sale of all or substantially all of the Company’s
                assets, (d) a merger or consolidation involving the Company in which
                the
                Company is not the surviving corporation, (e) a merger or consolidation
                involving the Company in which the Company is the surviving corporation
                but the holders of shares of common stock receive securities of another
                corporation and/or other property, including cash, or (f) a tender
                offer
                for at least a majority of the outstanding stock of the Company.
                If
                immediate vesting occurs because of a termination without Cause,
                the
                Option shall be exercisable for thirty-six (36) months following
                the
                effective date of such termination; in all other events the option
                will
                remain exercisable under the terms of the grant. In the event of
                a
                termination of employment for reasons described in Section 4) Termination
                below the Executive or his estate will forfeit unvested options.
                

            

    

     

    
      	 	
              d)

            	
              BENEFITS.
                During the Employment Term, the Executive shall be entitled to participate
                in all pension, profit sharing and other retirement plans, incentive
                compensation plans and all group health, hospitalization and disability
                insurance plans and other Executive welfare benefit plans in which
                other
                senior executives of the Company may participate on terms and conditions
                no less favorable than those which apply to such other senior executives
                of the Company as determined by the Company Compensation committee.
                The
                Executive shall be entitled to three weeks annual paid vacations;
                and to
                be reimbursed for any reasonable out-of-pocket expenses incurred
                by the
                Executive in connection with the performance of his duties, upon
                presentation of reasonable evidence satisfactory to the Company of
                the
                amounts and nature of such expenses.

            

    

     

    
      	 	
              4)

            	
              TERMINATION

            

    

     

    EVENTS
      OF TERMINATION.
      The
      Employment Term shall terminate upon the first to occur of the following events:
      

     

    
      	 	
              a)

            	
              The
                close of business on December 31, 2007, unless mutually extended
                in
                writing by the parties;

            

    

     

    
      	 	
              b)

            	
              The
                death of the Executive;

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	 	
              c)

            	
              The
                close of business on the 180th
                day following the date on which the Company gives the Executive written
                notice of the termination of his employment as a result of his Permanent
                Disability. Permanent Disability shall mean the Executive’s inability to
                perform the material duties contemplated by this Agreement by reason
                of a
                physical or mental disability or infirmity which has continued for
                more
                than 30 consecutive days. The Executive agrees to submit such medical
                evidence regarding such disability or infirmity as is reasonably
                requested
                by the Company, including, but not limited to, an examination by
                a
                physician selected by the Company in its sole
                discretion;

            

    

     

    
      	 	
              d)

            	
              The
                close of business on the date on which the Company gives the Executive
                written notice of the Company’s termination of his employment for Cause.
                Cause shall mean (A) the Executive’s neglect f his material duties, (B) an
                act or acts by the Executive, or any omission by him, constituting
                a
                felony, and the Executive has entered a guilty plea or confession
                to, or
                has been convicted of, such felony, (C) the Executive’s failure to follow
                any lawful directive of the President consistent with the Executive’s
                position and duties, (D) an act or acts of fraud or dishonesty by
                the
                Executive which results or is intended to result in financial or
                economic
                harm to the Company, or (E) breach of a material provision of this
                Agreement by the Executive; and 

            

    

     

    
      	 	
              e)

            	
              The
                close of business on the effective date of a Voluntary Termination
                by the
                Executive of his employment with the Company. Voluntary Termination
                shall
                mean any voluntary termination by the Executive of his employment
                with the
                Company provided that the Executive shall give the Company at least
                30
                days’ prior written notice of the effective date of such termination. Such
                Voluntary Termination shall cease acceleration of bonus and options
                as
                defined in Section 3.

            

    

     

    
      	 	
              5)

            	
              PROTECTED
                INFORMATION; PROHIBITED SOLICITATION AND
                COMPETITION

            

    

     

    
      	 	
              a)

            	
              The
                Executive hereby recognizes and acknowledges that during the course
                of his
                employment by the Company, the Company will furnish, disclose or
                make
                available to the Executive confidential or proprietary information
                related
                to the Company’s business, including, without limitation, customer lists,
                ideas, processes, inventions and devices, that such confidential
                or
                proprietary information has been developed and will be developed
                through
                the Company’s expenditure of substantial time and money, and that all such
                confidential information could be used by the Executive and others
                to
                compete with the Company. The Executive hereby agrees that all such
                confidential or proprietary information shall constitute trade secrets,
                and further agrees to use such confidential or proprietary information
                only for the purpose of carrying out his duties with the Company
                and not
                otherwise to disclose such information unless otherwise required
                to do so
                by subpoena or other legal process. The Executive agrees that all
                inventions and discoveries shall be the sole property of the Company,
                and
                the Company shall be the sole owner of all patents.
                

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	 	
              b)

            	
              The
                Executive hereby agrees, in consideration of his employment hereunder
                and
                in view of the confidential position to be held by the Executive
                hereunder, that during the Employment Term and for the period ending
                on
                the date which is one year after the later of the termination of
                the
                Employment Term and the Executive shall not, without the written
                consent
                of the Company, knowingly solicit, entice or persuade any other employee
                of the Company or any affiliate of the Company to leave the services
                of
                the Company or such affiliate for any
                reason.

            

    

     

    
      	 	
              c)

            	
              The
                Executive further agrees that, he shall not during the Employment
                Term and
                for the period ending on the date which one year after enter into
                any
                relationship whatsoever, either directly or indirectly, alone or
                in
                partnership, or as an officer, director, employee or stockholder
                (beneficially owning stock or options to acquire stock totaling more
                than
                five percent of the outstanding shares) of any corporation (other
                than the
                Company), or otherwise acquire or agree to acquire a significant
                present
                or future equity or other proprietorship interest, whether as a
                stockholder, partner, proprietor or otherwise, with any enterprise,
                business or division thereof (other than the Company), which is engaged
                in
                the development, manufacture or marketing and sales of electromagnetic
                or
                electro stimulation medical
                devices.

            

    

     

    
      	 	
              d)

            	
              The
                restrictions in this Section 5 shall survive the termination of this
                Agreement and shall be in addition to any restrictions imposed upon
                the
                Executive by statute or at common law. The parties hereby acknowledge
                that
                the restriction in this Section 5 have been specifically negotiated
                and
                agreed to by the parties to protect the Company from unfair
                competition.

            

    

     

    
      	 	
              6)

            	
              INJUNCTIVE
                RELIEF

            

    

     

    The
      Executive hereby expressly acknowledges that any breach or threatened breach
      by
      the Executive of any of the terms set forth in Section 5 of this Agreement
      may
      result in significant and continuing injury to the Company, the monetary value
      of which would be impossible to establish. Therefore, the Executive agrees
      that
      the Company shall be entitled to apply for injunctive relief in court of
      appropriate jurisdiction. The provisions of this Section shall survive the
      Employment Term.

     

    
      	 	
              7)

            	
              PARTIES
                BENEFITED; ASSIGNMENTS

            

    

     

    This
      Agreement shall be binding upon the Executive, his heirs and his personal
      representative or representatives, and upon the Company and its successors
      and
      assigns. Neither this Agreement nor any rights or obligations hereunder may
      be
      assigned by the Executive, other than by will or by the laws of descent and
      distribution.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	 	
              8)

            	
              NOTICES

            

    

     

    Any
      notice required or permitted by this Agreement shall be in writing, sent by
      registered or certified mail, return receipt requested, addressed to the
      President and the Company at its then principal office, or to the Executive
      at
      the address set forth in the preamble, as the case may be, or to such other
      address or addresses as any party hereto may from time to time specify in
      writing for the purpose in a notice given to the other parties in compliance
      with this Section. Notices shall be deemed given when received.

     

    
      	 	
              9)

            	
              GOVERNING
                LAW

            

    

     

    This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of Maryland, without regard to conflict of law
      principles.

     

    
      	 	
              10)

            	
              DISPUTES

            

    

     

    Any
      dispute or controversy arising under, out of, in connection with or in relation
      to this Agreement shall, at the election and upon written demand of either
      the
      Executive or the Company, be finally determined and settled by arbitration
      in
      Frederick, Maryland in accordance with the rules and procedures of the American
      Arbitration Association, and judgment upon the award may be entered in any
      court
      having jurisdiction thereof. 

     

    
      	 	
              11)

            	
              MISCELLANEOUS

            

    

     

    This
      Agreement contains the entire agreement of the parties relating to the subject
      matter hereof. This Agreement supersedes any prior written or oral agreements
      or
      understandings between the parties relating to the subject matter hereof. No
      modification or amendment of this Agreement shall be valid unless in writing
      and
      signed by or on behalf of the parties hereto. A waiver of the breach of any
      term
      or condition of this Agreement shall not be deemed to constitute a waiver of
      any
      subsequent breach of the same or any other term or condition. This Agreement
      is
      intended to be performed in accordance with, and only to the extent permitted
      by, all applicable laws, ordinances, rules and regulations. If any provision
      of
      this Agreement, or the application thereof to any person or circumstance, shall,
      for any reason and to any extent, be held in valid or unenforceable, such
      invalidity and unenforceability shall not affect the remaining provisions hereof
      and the application of such provisions to other persons or circumstances, all
      of
      which shall be enforced to the greatest extent permitted by law. The
      compensation provided to the Executive pursuant to this Agreement shall be
      subject to any withholdings and deductions required by any applicable tax laws.
      Any amounts payable under this Agreement to the Executive after the death of
      the
      Executive shall be paid to the Executive’s estate or legal representative. The
      headings in this Agreement are inserted for convenience of reference only and
      shall not be a part of or control or affect the meaning of any provision
      hereof.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

     

    BioElectronics
      Corporation:

    

    /s/
      Andrew J. Whelan   

    By:
      Andrew J. Whelan, President

    

    

    Executive

    

    /s/
      Todd J. Kislak   

    By:
      Todd
      J. Kislak

    

    
      
         

      

        7

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