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Unassociated Document

    

    

    EXECUTIVE
      EMPLOYMENT AGREEMENT

    

    

    Agreement
      made this 3rd
      day of JANUARY, 2007, between TACTICAL AIR DEFENSE SERVICES, INC., a Nevada
      Corporation, with offices in Denison, Texas, (the “Company”) and VICTOR MILLER,
      a resident in the State of Texas (“Employee”).

     

    WITNESSETH:

     

    WHEREAS,
      the parties acknowledge that Employee has abilities and expertise that are
      unique and valuable to the Company; and

    

    WHEREAS,
      in view of such abilities and expertise, the Company desire to retain Employee
      as a manager; and the possibility of other officer/Director appointments as
      directed; and

    

    WHEREAS,
      the Company and Employee have determined that such engagement of Employee be
      subject to a mutually acceptable written agreement;

    

    NOW
      THEREFORE, in consideration of the mutual agreements contained herein, the
      parties hereto agree as follows:

    

    
      	1.	
              SERVICES

            

    

    

    
      	
            	(a)	
              The
                Company hereby employs Employee and Employee hereby accepts such
                employment on the terms and conditions set forth herein. In this
                regard,
                Employee shall perform and discharge well and faithfully the duties
                and
                responsibilities that are commensurate with his
                position.

            

    

     

    
      	
            	(b)	
              Employee
                is not and shall not be engaged directly or indirectly in any other
                business activity, or previously have contracted to perform such
                activity
                at a future date which would prevent the performance of the obligations
                hereunder or involve activities which would result in a breach of
                any
                provision of this Agreement.

            

    

    

    
      	2.	
              TERM

            

    

    

    
      	
            	(a)	
              The
                term of this Agreement shall be for an initial period of (3) years
                begining on the date hereof and shall cease and terminate upon the
                earliest of (i)the death of Employee; (ii) termination by a vote
                of the
                chorum of the board of directors (“the Company”), at its option, for
                “cause” as defined in subdivision (b) of this Section 2; or (iii)
                termination by mutual agreement between the
                parties.

            

    

     

    
      	
            	(b)	
              As
                used in this Section, “cause” shall mean: any failure in performing in the
                respective capacity, unsatisfactory performance, derogation of duties,
                gross negligence or willful misconduct of Employee in the performance
                of
                his duties.

            

    

     

    
      	3.	
              COMPENSATION

            

    

    

    
      
        	
              	(a)	
                The
                  Company shall pay to Employee a salary of $220,000 per year. (
                  Salary may
                  be paid convertible in stock ( restrictions may apply), option,
                  or
                  warrants, which if exercised, shall be outlined under separate
                  attachment
                  by the company and shall be identified as an “Annex” to this
                  agreement which shall be executed by the parties and incorporated
                  herein.)

              

      

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
            	(b)	
              During
                the term of his employment, Employee shall be entitled to participate
                in
                employee benefit plans or programs of the Company, if any, to the
                extent
                his position, tenure, salary, age, health and other qualifications
                makes
                him eligible to participate, subject to the rules and regulations
                applicable thereto, which plans or programs will include, without
                limitation, health insurance benefits, performance-based options,
                an
                appropriate automobile allowance, and bonus programs, consistent
                with the
                reasonable past practices of the
                Company.

            

    

     

    
      	
            	(c)	
              The
                Company reserves the right to increase the compensation of the Employee,
                specified in this instrument, at any time or times hereafter and
                no such
                increase or adjustment shall operate as a cancellation of this Agreement,
                but merely as an amendment to Section 3, and all the other terms,
                provision, and conditions of this Agreement shall continue in force
                and
                effect as herein provided.

            

    

     

    
      	4.	
              EXPENSES

            

    

    

    The
      Company will reimburse Employee for direct out-of-pocket expenses properly
      incurred by him in his performance of this Agreement and provided that a written
      accounting is made to the Company by Employee.

    

    
      	5.	
              CONFIDENTIALITY
                AND NON-COMPETITION

            

    

    

    
      	
            	(a)	
              Employee
                acknowledges that as a consequence of his relationship with the Company,
                he has been and will continue to be given access to confidential
                information which may include the following types information: financial
                statements and related financial information with respect to the
                Company,
                trade secrets, computer programs, certain methods of operation,
                procedures, improvements, systems, customer lists, supplier lists
                and
                specifications, and other private and confidential materials concerning
                the Company’s business (collectively, “Confidential Information”).
                Employee agrees that he shall maintain any Confidential Information
                in
                strictest confidence and shall not disclose any Confidential information
                to third parties during the terms of this agreement and after the
                termination hereof, however such termination shall occur, unless
                previously approved by the President or Chairman in writing.

               

              
                Notwithstanding
                  the foregoing, nothing herein shall be construed as prohibiting
                  Employee
                  from disclosing any Confidential Information

                (a)
                  which, at the time of disclosure, Employee can demonstrate either
                  was in
                  the public domain and generally available to the public or hereafter
                  became a part of the public domain and generally available to the
                  public
                  by publication or otherwise through no act of Employee;

                (b)
                  which Employee can establish was independently developed by a third
                  party
                  who developed it without the use of the Confidential Information
                  and who
                  did not acquire it directly or indirectly from Employee under an
                  obligation of confidence; (c) which Employee can show was received by
                  him after the termination of this Agreement from a third party
                  who did not
                  acquire it directly or indirectly from the Company under an obligation
                  of
                  confidence; or (d) to the extent that Employee can reasonably demonstrate
                  such disclosure is required by law or in any legal proceeding,
                  governmental investigation, or other similar
                  proceeding.

              

            

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    
      	
            	
              (b)

            	
              Employee
                covenants and agrees that, in order to protect the company’s interest in
                its business, operations and assets during the term of this Agreement
                and
                for a period of one (1) year following the termination of this Agreement,
                however the same shall occur, he will not, without prior written
                consent
                of the Company, directly or
                indirectly:

            

    

    

    
      	
            	(i)	
              engage
                anywhere in the United States, whether by virtue of stock ownership,
                management responsibilities or otherwise, in companies, business,
                organizations and/or ventures which are directly or indirectly competitive
                with the business of the Company as presently conducted or contemplated
                (the “Business”); or

            

    

    

    
      	
            	(ii)	
              become
                interested, directly or indirectly, whether as principal, owner,
                stockholder, partner, agent, officer, director, employee, salesman,
                joint
                venture, consultant, advisor, independent contractor or otherwise,
                in any
                person, firm, partnership, association, venture, corporation or entity
                engaging anywhere in the United State in the Business or directly
                or
                indirectly in competition with the
                Company.

            

    

    

    
      	
            	(iii)	
              It
                is however known that Victor Miller is currently a director and corporate
                officer of AeroGroup Incorporated, International Tactical Training
                Center,
                Inc. and Air-1 Flight Support, Inc., and may continue to serve in
                the
                capacities with the respective companies. Victor Miller will use
                his best
                efforts to serve Tactical Air Defense Services, Inc. in that there
                will
                not arise any conflict of interests in the normal course of
                business.

            

    

     

    
      
        	6.	
                NO
                  WAIVER

              

      

    

    

    The
      failure of any party to insist upon the strict performance of any of the terms,
      conditions or provisions of this Agreement shall not be construed as a waiver
      of
      relinquishment of future compliance therewith, and said terms, conditions and
      provisions shall remain in full force and effect. No interpretation, changes,
      modifications, terminations or waivers of any of the provisions of this
      Agreement shall be binding upon the Company or Employee unless in writing and
      signed by the person to be bound.

     

    
      	7.	
              RIGHTS,
                OBLIGATIONS AND ASSIGNMENT

            

    

    

    The
      rights and obligations of the Company under this Agreement shall inure to the
      benefit of, and shall be binding upon, its successors and assigns. The duties
      of
      Employee to any such successor entity shall not be greater than duties performed
      for the Company prior to such succession. Company shall have the right, at
      its
      election, to assign any of its rights or obligations hereunder, in whole or
      in
      part to any parent, subsidiary, affiliated, or related company, or to any
      person, firm, or corporation owning or acquiring a substantial portion of
      Company’s or Company’s stock or assets, and, to the extent of such assignment,
      Company and/or Company shall thereafter be relieved of their obligations
      hereunder. Executive shall not have the right to assign any of his rights or
      obligations hereunder, except for family gifts or transfers of compensation
      payable to heirs, beneficiaries, or otherwise by operation of law, in accordance
      with Company’s policies, practices and procedures.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	8.	
              ENTIRE
                AGREEMENT AND AMENDMENT

            

    

    

    This
      Agreement and the exhibits hereto embody the entire understanding between the
      parties hereto pertaining to the subject matter hereto and supersedes all prior
      agreements and understanding of the parties in connection therewith. This
      Agreement may not be amended, modified, superseded, canceled, or waived except
      by a written instrument signed by the party to be charged.

    

    
      	9.	
              SEVERABILITY

            

    

    

    If
      any of the provisions of this Agreement shall for any reason be adjudged by
      any
      court of competent jurisdiction to be invalid or unenforceable, such judgement
      shall not affect, impair, or invalidate the remainder of this Agreement, but
      shall be confined in its operations to the provision of this Agreement directly
      involved in the controversy in which such judgment shall have been
      rendered.

    

    
      	10.	
              NOTICES

            

    

    

    Notices,
      other communications or deliveries required or permitted under this Agreement
      shall be in writing directed as follows: 

    

    
      	
            	(a)	
              TO
                THE COMPANY AT:

              
                TACTICAL
                  AIR DEFENSE SERVICES, INC.

                5501
                  AIRPORT DR.

                DENISON,
                  TX. 75020

              

            

    

    
       

    

    
      	
            	(b)	
              TO
                EMPLOYEE:

              VICTOR MILLER

              _____________

              
                _____________

              

            

    

     

    WITH
      A COPY TO:

    None

    

    The
      Parties may designate by notice to each other any new address for the purpose
      of
      this Agreement. Useless otherwise specified in this Agreement, all notices
      shall
      be effective when mailed postage prepaid by registered or certified mail, return
      receipt requested.

    

    
      	11.	
              APPLICABLE
                LAW

            

    

    

    This
      Agreement shall be enforced and construed in accordance with the laws of the
      State of Texas.

    

    
      
        	12.	
                DISPUTES

              

      

    

    

    In
      the event any party brings legal proceedings to resolve a dispute hereunder,
      the
      prevailing party shall have the right to recover reasonable attorneys’ fees and
      costs from the other. The term “legal proceedings” shall include appeals from
      the lower court judgment.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	13.	
              PAYMENT
                ON TERMINATION “BUYOUT” OF
                EMPLOYMENT

            

    

    

    If
      the Company terminates this Agreement, it shall pay Employee an amount equal
      as
      set forth in Section 3(a) as an annual base salary. The current remaining
      balance of the contract shall be due, and is to be divided by twelve and
      multiplied by the number of months remaining of the calendar
      year.

    

    
      	14.	
              HEADINGS

            

    

    

    The
      captions and headings contained in this Employment Agreement are for reference
      purposes only and shall not affect the interpretation or meaning of this
      Agreement.

    

    IN
      WITNESS WHEREOF, the parties have executed this Employment Agreement as
      of

    the
      date and year first above written.

     

    
 

    
      	 	 	 	 	 
	By:	
              /s/
                MARK DANIELS

            	 	 	 
	 	
              
Chairman
              of the Board 	 	 	
            

      
 

       

      
        	EMPLOYEE	 	 	 
	 	 	 	 	 
	By:	
                /s/
                  VICTOR MILLER

              	 	 	 
	 	
                
VICTOR
                MILLER	 	 	
              

    

    
      
        
        

      

      
        5EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement dated as of June 8, 2007 (the “Effective
      Date”)
      between Velcera, Inc., a Delaware corporation (the “Company”)
      with
      its principal corporate offices at 201 Corporate Drive, Langhorne, Pennsylvania
      19047, and Dennis F. Steadman (“Executive”),
      residing at 10 Milton Drive, Yardley, Pennsylvania 19067.

     

    The
      Company and Executive are parties to an employment agreement dated April 20,
      2004, whereby Executive served as President and Chief Executive Officer of
      the
      Company according to the terms set forth therein. That employment agreement
      expired as of May 2, 2007 and Executive and the Company desire that Executive
      continue to serve the Company as President and Chief Executive Officer upon
      the
      terms set forth herein.

     

    The
      parties hereby agree as follows:

     

    1.  Employment

     

    (a)  Services.
      The
      Company hereby agrees to employ Executive as its President and Chief Executive
      Officer. Executive will report to the Board of Directors of the Company (the
      “Board”)
      and
      shall be responsible for directing all daily operations of the Company,
      including, but not limited to, sales, marketing, sourcing, licensing, product
      development and financial affairs, and such other duties as consistent with
      the
      position as President and Chief Executive Officer and are otherwise directed
      by
      the Board (the “Services”).

     

    (b)  Acceptance.
      Executive hereby accepts such employment and agrees to render the
      Services.

     

    2.  Term.

     

    Executive's
      employment under this Agreement shall commence as of June 8, 2007 and shall
      continue through December 31, 2007, subject to earlier termination or renewal
      as
      provided herein (the “Term”
or
      the
“Expiration
      Date”).
      The
      Term will automatically renew on January 1, 2008 and on each successive
      anniversary date thereof for a one-year period unless written notice is given
      by
      the Company or Executive of its or his intention not to extend the Term at
      least
      60 days prior to December 31, 2007 or such subsequent anniversary date, as
      the
      case may be, subject in all cases to earlier termination as set forth herein.
      Notwithstanding anything to the contrary contained herein, the provisions of
      this Agreement governing protection of Confidential Information shall continue
      in effect as specified in Section 6 hereof and survive the expiration or earlier
      termination of the Term. The actual period during which Executive continues
      to
      be employed by the Company is referred to herein as the “Term”
and
      the
      actual date upon which Executive’s employment with the Company is terminated or
      this Agreement expires, as the case may be, is referred to herein as the
“Expiration
      Date”.

     

    3.  Best
      Efforts; Place of Performance.

     

    (a)  Executive
      agrees to perform the Services faithfully and to devote substantially all of
      his
      business time, attention and energies to the business and affairs of the Company
      during the Term and shall use his commercially reasonable best efforts to
      advance the interests of the Company and shall not during the Term be actively
      engaged in any other business activity, whether or not such business activity
      is
      pursued for gain, profit or other pecuniary advantage, that will materially
      interfere with the performance by Executive of his duties hereunder or
      Executive's availability to perform such duties or that will adversely affect,
      or negatively reflect upon, the Company. Notwithstanding the foregoing, it
      is
      understood and agreed that during the Term Executive shall be entitled (i)
      to
      continue to participate in charitable and civic activities, (ii) to maintain
      his
      ownership interest in Valorum Associates, Ltd., (iii) to maintain his ownership
      interest in AgroSource Inc. and (iv) to purchase, hold and sell securities
      of
      publicly-traded corporations for his own account provided that his beneficial
      ownership of any one such issuer does not exceed 2%, in each case without being
      deemed to violate the provisions of this Section 3(a), provided, however, that
      such activities to do not occupy more than 8 business hours per month of
      Executive's time.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)  The
      duties to be performed by Executive hereunder shall be performed primarily
      at an
      office of the Company to be located within a thirty-minute commuting radius
      of
      Executive's current residence in Yardley, Pennsylvania, subject to reasonable
      travel requirements on behalf of the Company, or at such other place as
      Executive and the Board may mutually agree.

     

    4.  Directorship.
      The
      Company shall use its best efforts to cause Executive to be nominated and
      elected as a member of its board of directors throughout the Term and shall
      include Executive in the management slate for election as a director at every
      stockholders meeting held during the Term at which his term as a director would
      otherwise expire. Executive agrees to accept election, and to serve during
      the
      Term, as director of the Company, without any compensation other than as
      specified in this Agreement.

     

    5.  Compensation
      As full
      compensation for the performance by Executive of his duties under this
      Agreement, the Company shall pay Executive as follows:

     

    (a)  Base
      Salary.
      The
      Company shall pay Executive a salary (the “Base
      Salary”)
      equal
      to $275,000 per year, effective as of May 1, 2007. Payment will be made in
      accordance with the Company's normal payroll practices. The Board will consider
      increases to the Base Salary on an annual basis.

     

    (b)  Discretionary
      Bonus.
      At the
      sole discretion of the Board, Executive may receive an annual bonus having
      an
      aggregate value of up to $300,000.00, based upon his performance on behalf
      of
      the Company during the prior calendar year (the “Discretionary
      Bonus”).
      Any
      Discretionary Bonus awarded by the Board for the period from the Effective
      Date
      through December 31, 2007 will be prorated from May 1, 2007 through December
      31,
      2007. The Board will consider increases to the Discretionary Bonus on an annual
      basis. Factors to be considered by the Board in determining if to award a
      Discretionary Bonus and the amount of any Discretionary Bonus awarded include,
      but are not limited to, growth in the Company's market capitalization, product
      development and sales growth, the liquidity and performance of the Company's
      common stock, and financing received by the Company from third parties
      introduced to the Company by Executive. The Discretionary Bonus is payable
      60%
      in cash (as a lump-sum payment on or before March 15th
      of the
      following calendar year) and 40% in common stock of the Company, unless the
      Board determines, in its sole discretion, to adjust the above allocation to
      include more cash. The number of shares of common stock issued hereunder will
      be
      determined by dividing the amount payable to Executive in common stock by the
      closing price of the common stock for the trading day immediately preceding
      payment of the Discretionary Bonus. If the common stock of the Company is not
      then traded, the denominator for the above calculation will be the fair market
      value of the common stock as determined in the sole discretion of the
      Board.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)  Additional
      Bonus.
      Other
      than for products and technologies incorporating PromistTM
      delivery
      technology, Executive will receive a lump-sum cash bonus of $50,000.00 no later
      than 30 days following the adoption of each new product or technology by the
      Company during the Term, as approved by the Board, including, without
      limitation, the adoption of a new product or technology acquired through
      acquisition or in-licensing.

     

    (d)  Withholding.
      The
      Company shall withhold all applicable federal, state and local taxes and social
      security and such other amounts as may be required by law from all amounts
      payable to Executive under this Section 5.

     

    (e)  Stock
      Option.
      As
      additional compensation for the Services, on May 25, 2007 the Company granted
      Executive an option to purchase 280,000 shares of common stock of the Company
      pursuant to the terms set forth in the stock option agreement between Executive
      and the Company on such date. 

     

    (f)  Other
      Benefits.
      Executive shall be entitled to all rights and benefits for which he shall be
      eligible under any benefit or other plans (including, without limitation, life
      insurance, dental, medical, medical reimbursement and hospital plans, pension
      plans, employee stock purchase plans, profit sharing plans, bonus plans and
      other so-called "fringe" benefits) as the Company shall make available to its
      senior executives from time to time.

     

    (g)  Vacation.
      Executive is entitled to 3 weeks per calendar year of vacation, in addition
      to
      holidays observed by the Company. Executive will not be entitled to carry any
      vacation forward to the next year of employment and will not receive any
      compensation for unused vacation days.

     

    6.  Confidential
      Information and Inventions.

     

    (a)  Executive
      recognizes and acknowledges that in the course of his duties he will receive
      confidential or proprietary information owned by the Company, its affiliates
      or
      third parties with whom the Company or any such affiliates has an obligation
      of
      confidentiality. Accordingly, during and after the Term, Executive agrees to
      keep confidential and not disclose or make accessible to any other person or
      use
      for any purpose other than in connection with the fulfillment of Executive’s
      duties under this Agreement, any Confidential and Proprietary Information (as
      defined below) owned by, or received by or on behalf of, the Company or any
      of
      its affiliates. “Confidential
      and Proprietary Information”
means
      confidential or proprietary scientific or technical information, data, formulas
      and related concepts, business plans (both current and under development),
      client lists, promotion and marketing programs, trade secrets, or any other
      confidential or proprietary business information relating to development
      programs, costs, revenues, marketing, investments, sales activities, promotions,
      credit and financial data, manufacturing processes, financing methods, plans
      or
      the business and affairs of the Company or of any affiliate or client of the
      Company. Notwithstanding the foregoing, Confidential and Proprietary Information
      shall not include (i) any information to the extent it becomes generally known
      to the public through no fault of Executive or (ii) any information which
      Executive is required to disclose as a result of a subpoena or other legal
      process, provided, however, Executive shall give prompt notice of such request
      to the Company so that the Company may seek an appropriate protective order.
      If,
      in the absence of a protective order, Executive is legally compelled to disclose
      Confidential and Proprietary Information, such Confidential and Proprietary
      Information (and only such Confidential and Proprietary Information) may be
      disclosed in such proceeding without liability hereunder; provided, however,
      that Executive shall give the Company written notice of the Confidential and
      Proprietary Information to be disclosed as far in advance of its disclosure
      as
      is practical and, upon the Company's request and at the Company's expense,
      Executive shall use all reasonable efforts to obtain assurances that
      confidential treatment will be accorded to the disclosure of such Confidential
      and Proprietary Information in such proceeding. Executive expressly acknowledges
      the trade secret status of the Confidential and Proprietary Information and
      that
      the Confidential and Proprietary Information constitutes a protectable business
      interest of the Company. Executive agrees: (i) not to use any such Confidential
      and Proprietary Information for himself or others; and (ii) not to take any
      Company material, or reproductions (including, but not limited to writings,
      correspondence, notes, drafts, records, invoices, technical and business
      policies, computer programs or disks) thereof from the Company's offices at
      any
      time during his employment by the Company, except as required in the execution
      of Executive's duties to the Company. Executive agrees to return promptly all
      Company materials and reproductions (including, but not limited, to writings,
      correspondence, notes, drafts, records, invoices, technical and business
      policies, computer programs or disks) thereof in his possession to the Company
      upon request and in any event upon termination of employment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)  Except
      with prior written authorization by the Company, Executive agrees not to
      disclose or publish any of the Confidential and Proprietary Information, or
      any
      confidential, scientific, technical or business information of any other party
      to whom the Company or any of its affiliates owes an obligation of confidence
      at
      any time during or after his employment with the Company.

     

    (c)  Executive
      agrees that all inventions, discoveries, improvements and patentable or
      copyrightable works (“Inventions”)
      initiated, conceived or made by him, either alone or in conjunction with others,
      during the Term shall be the sole property of the Company to the maximum extent
      permitted by applicable law and, to the extent permitted by law, shall be "works
      made for hire" as that term is defined in the United States Copyright Act (17
      U.S.C.A., Section 101). The Company shall be the sole owner of all patents,
      copyrights, trade secret rights, and other intellectual property or other rights
      in connection therewith. Executive hereby assigns to the Company all right,
      title and interest he may have or acquire in all such Inventions; provided,
      however, that the Board may in its sole discretion agree to waive the Company's
      rights pursuant to this Section 6(c) with respect to any Invention that is
      not
      directly or indirectly related to the Company's business. Executive further
      agrees to assist the Company in every proper way (but at the Company's expense)
      to obtain and from time to time enforce patents, copyrights or other rights
      on
      such Inventions in any and all countries, and to that end Executive will execute
      all documents necessary;

     

    (i)  to
      apply
      for, obtain and vest in the name of the Company alone (unless the Company
      otherwise directs) letters patent, copyrights or other analogous protection
      in
      any country throughout the world and when so obtained or vested to renew and
      restore the same; and

     

    (ii)  to
      defend
      any opposition proceedings in respect of such applications and any opposition
      proceedings or petitions or applications for revocation of such letters patent,
      copyright or other analogous protection.

     

    (d)  Executive
      acknowledges that while performing the Services under this Agreement Executive
      may locate, identify and/or evaluate patented or patentable inventions having
      commercial potential in the fields of pharmacy, pharmaceutical, biotechnology,
      healthcare, technology and other fields which may be of potential interest
      to
      the Company or one of its affiliates (the “Third
      Party Inventions”).
      Executive understands, acknowledges and agrees that all rights to, interests
      in
      or opportunities regarding, all Third-Party Inventions identified by the
      Company, any of its affiliates or either of the foregoing persons' officers,
      directors, employees (including Executive), agents or consultants during the
      Term will remain the sole and exclusive property of the Company or such
      affiliate and Executive shall have no rights whatsoever to such Third-Party
      Inventions and will not pursue for himself or for others any transaction
      relating to the Third-Party Inventions which is not on behalf of the
      Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)  Executive
      agrees that he will promptly disclose to the Company, or any persons designated
      by the Company, all improvements, Inventions made or conceived or reduced to
      practice or learned by him, either alone or jointly with others, during the
      Term.

     

    (f)  The
      provisions of this Section 6 shall survive the termination of Executive’s
      employment with the Company.

     

    7.  Non-Competition;
      Non-Solicitation; Non-Disparagement.

     

    (a)  Executive
      understands and recognizes that his services to the Company are special and
      unique and that in the course of performing such services Executive will have
      access to and knowledge of Confidential and Proprietary Information (as defined
      in Section 6) and Executive agrees that, during the Term and for an additional
      period of 12 months thereafter (such period, the “Restricted
      Period”),
      he
      shall not in any manner, directly of indirectly, on behalf of himself or any
      person, firm, partnership, joint venture, corporation or other business entity
      (“Person”),
      engage in any business which is directly or indirectly competitive with the
      business of the Company within the geographic area of the Company's business,
      which is worldwide. Executive acknowledges that, due to the unique nature of
      the
      Company's business, the loss of any of its clients or business flow or the
      improper use of its Confidential and Proprietary Information could create
      significant instability and cause substantial damage to the Company and its
      affiliates and therefore the Company has a strong legitimate business interest
      in protecting the continuity of its business interests and the restriction
      herein agreed to by Executive narrowly and fairly serves such an important
      and
      critical business interest of the Company. For purposes of this Agreement,
      the
      Company will be deemed to be actively engaged on the date hereof in the
      development and commercialization of (i) drug delivery systems for animals,
      and
      (ii) in the future of any other business in which it actually devotes
      substantive resources to study, develop or pursue. Notwithstanding the
      foregoing, nothing contained herein shall be deemed to prohibit Executive from
      (i) acquiring, or holding, solely for investment, publicly traded securities
      of
      any corporation, some or all of the activities of which are competitive with
      the
      business of the Company so long as such securities do not, in the aggregate,
      constitute more than 4% of any class or series of outstanding securities of
      such
      corporation,

     

    (b)  During
      the Term and thereafter during the Restricted Period, if any, Executive shall
      not, directly or indirectly, without the prior written consent of the
      Company;

     

    (i)  solicit
      or induce any employee of the Company or any of its affiliates to leave the
      employ of the Company or any such affiliate; or hire for any purpose any
      employee of the Company or any affiliate or any employee who has left the
      employment of the Company or any affiliate within one year of the termination
      of
      such employee's employment with the Company or any such affiliate or at any
      time
      in violation of such employee's non-competition agreement with the Company
      or
      any such affiliate; or

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)  solicit
      or accept employment or be retained by any Person who, at any time during the
      Term, was an agent, client or customer of the Company or any of its affiliates
      where his position will be related to the business of the Company or any such
      affiliate; or

     

    (iii)  solicit
      or accept the business of any agent, client or customer of the Company or any
      of
      its affiliates with respect to products, services or investments similar to
      those provided or supplied by the Company or any of its affiliates.

     

    (c)  The
      Company and Executive each agree that both during the Term and at all times
      thereafter, neither party shall directly or indirectly disparage, whether or
      not
      true, the name or reputation of the other party or any of its affiliates,
      including but not limited to, any officer, director, employee or shareholder
      of
      the Company or any of its affiliates.

     

    (d)  In
      the
      event that Executive breaches any provision of Section 6 or this Section 7
      or
      there is a threatened breach, then, in addition to any other rights which the
      Company may have, the Company will (i) be entitled, without the posting of
      a
      bond or other security, to injunctive relief to enforce the restrictions
      contained in such Sections and (ii) have the right to require Executive to
      account for and pay over to the Company all compensation, profits, monies,
      accruals, increments and other benefits (collectively “Benefits”)
      derived or received by Executive as a result of any transaction constituting
      a
      breach of any of the provisions of Sections 6 or 7 and Executive hereby agrees
      to account for and pay over such Benefits to the Company.

     

    (e)  Each
      of
      the rights and remedies enumerated in Section 7(d) shall be independent of
      the
      others and shall be in addition to and not in lieu of any other rights and
      remedies available to the Company at law or in equity. If any covenant contained
      in this Section 7 is hereafter construed or adjudicated to be invalid or
      unenforceable, the same shall not affect the remainder of the covenants or
      rights or remedies, which will be given full effect without regard to the
      invalid portions. If any covenant contained in this Section 7 is held to be
      invalid or 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
      in
      its reduced form such provision shall then be enforceable. No such holding
      of
      invalidity or unenforceability in one jurisdiction shall bar or in any way
      affect the Company's right to the relief provided in this Section 7 or otherwise
      in the courts of any other state or jurisdiction within the geographical scope
      of such covenants as to breaches of such covenants in such other respective
      states or jurisdictions, such covenants being, for this propose, severable
      into
      diverse and independent covenants.

     

    (f)  In
      the
      event that an actual proceeding is brought in equity to enforce the provisions
      of Section 6 or this Section 7, Executive shall not urge as a defense that
      there
      is an adequate remedy of law nor shall the Company be prevented from seeking
      any
      other remedies which may be available. Executive agrees that he shall not raise
      in any proceeding brought to enforce the provisions of Section 6 or this Section
      7 that the covenants contained in such Sections limit his ability to earn a
      living.

     

    (g)  Notwithstanding
      anything to the contrary in this Section 7, (i) it is understood and agreed
      that
      Executive's performance of his obligations pursuant to this Section 7 during
      the
      Restricted Period, if any, are subject to the Company's performance of its
      obligations to Executive in connection with the termination of his employment
      pursuant to Section 10 below and (ii) it is understood and agreed that the
      Company's performance of its obligations pursuant to Section 10 during the
      Restricted Period, if any, are subject to Executive’s performance of his
      obligations to the Company in connection this Section 7.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (h)  The
      provisions of this Section 7 shall survive the termination of Executive’s
      employment with the Company.

     

    8.  Representations
      and Warranties by Executive.

     

    Executive
      hereby represents and warrants to the Company as follows:

     

    (a) Neither
      the execution or delivery of this Agreement nor the performance by Executive
      of
      his duties and other obligations hereunder violate or will violate any statute,
      law, determination or award, or conflict with or constitute a default or breach
      of any covenant or obligation under (whether immediately, upon the giving of
      notice or lapse of time or both) any prior employment agreement, contract,
      or
      other instrument to which Executive is a party or by which he is
      bound.

     

    (b) Executive
      has the full right, power and legal capacity to enter and deliver this Agreement
      and to perform his duties and other obligations hereunder. This Agreement
      constitutes the legal, valid and binding obligation of Executive enforceable
      against him in accordance with its terms. No approvals or consents of any
      persons or entities are required for Executive to execute and deliver this
      Agreement or perform his duties and other obligations hereunder.

     

    9.  Termination.
      Executive's employment hereunder will be terminated upon Executive's death
      and
      may be terminated as follows:

     

    (a)  Executive's
      employment hereunder may be terminated by the Board for Cause (as defined
      below). Any of the following actions by Executive shall constitute “Cause”;

     

    (i)  Executive's
      commission of embezzlement, theft or other dishonest or fraudulent acts of
      a
      material nature, provided that the Company gives notice thereof identifying
      the
      conduct alleged and allows Executive and his representatives to present his
      position to the Board prior to such termination;

     

    (ii)  Executive's
      conviction of a felony, whether or not committed in the course of his employment
      by the Company;

     

    (iii)  Executive's
      willful malfeasance or gross negligence which has a material adverse effect
      on
      the Company or its business, provided that the Company gives notice thereof
      identifying the conduct alleged and, if such action is capable of cure, gives
      Executive 10 business days to cure;

     

    (iv)  persistent
      inattention or failure by Executive to discharge his duties and responsibilities
      due to alcohol or drug abuse, provided that the Company gives notice thereof
      identifying the conduct alleged and, if such action is capable of cure, give
      Executive 10 business days to cure;

     

    (v)  a
      violation of the Company's policy regarding discrimination or harassment in
      the
      workplace which is deemed by a majority of the disinterested members of the
      Board acting in good faith to warrant the termination of Executive's employment
      hereunder provided that, if such action is capable of cure, the Board gives
      Executive 10 business days to cure unless there is a serious claim filed by
      a
      Company employee which is sustainable in the judgment of the Company's outside
      counsel and, in any event after Executive and his representative have been
      given
      a reasonable opportunity to present his position; and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (vi)  a
      willful
      disregard or failure to perform a written lawful directive of the Board
      consistent with Executive's duties as President and Chief Executive
      Officer;

     

    (vii)  the
      material breach by Executive of this Agreement, which breach remains uncured
      for
      10 business days after written notice of such breach.

     

    (b)  In
      the
      event Executive, by reason of physical or mental disability (excluding
      infrequent and temporary absences due to ordinary transitory illnesses), is
      unable for more than 2 months in the consecutive 12 month period to perform
      the
      Services, or in the event Executive is permanently disabled, a termination
      of
      this Agreement for “Disability”
will
      occur at the end of the month following the month in which the Company gives
      notice to Executive of its intention to terminate the Agreement because of
      such
      Disability.

     

    (c)  Executive's
      employment hereunder may be terminated by the Board (or its successor) upon
      the
      occurrence of a Change of Control. For purposes of this Agreement, “Change
      of Control”
means
      (i) the acquisition, directly or indirectly by any person (as such term is
      defined in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
      as
      amended), in one transaction or a series of related transactions, of securities
      of the Company representing in excess of fifty percent (50%) or more of the
      combined voting power of the Company's then outstanding securities or (ii)
      the
      disposition by the Company (whether direct or indirect, by sale of assets or
      stock, merger, consolidation or otherwise) of all or substantially all of its
      business and/or assets in one transaction or series of related transactions
      (other than a merger effected exclusively for the purpose of changing the
      domicile of the Company).

     

    (d)  Executive's
      employment hereunder may be terminated by Executive for Good Reason. For
      purposes of this Agreement, “Good
      Reason”
means
      (i) failure by the Company to continue Executive in his executive position
      as
      President and Chief Executive Officer of the Company; (ii) material reduction
      in
      the nature or scope of Executive's responsibilities, duties, power or authority,
      in each case as set forth in Section 1 above; (iii) material reduction by the
      Company of Executive's benefits (unless such benefits are similarly reduced
      for
      all employees); (iv) failure of Executive to be nominated to serve as a member
      of the Board at each stockholders meeting of the Company held during the Term
      (and such current Board members will be obligated to vote shares in favor of
      Executive), or (v) a material breach by the Company of any provision of this
      Agreement that is not cured within 10 business days following delivery of
      written notice of such material breach by Executive to the Board.

     

    (e)  Executive’s
      employment may be terminated by the Board without Cause, and for any reason,
      upon 30 days advance written notice to Executive. Executive may terminate his
      employment with the Company for any reason upon 30 days advance written notice
      to the Company. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    10.  Compensation
      upon Termination.

     

    (a)  If
      Executive’s employment is terminated as a result of Executive’s death or
      Disability, the Company shall pay to Executive or to Executive's estate, as
      applicable, (i) his accrued but unpaid Base Salary, (ii) any Discretionary
      Bonus, if any, which has been earned but is unpaid, and (iii) expense
      reimbursement amounts, in each case through the date of Executive’s death or
      Disability. 

     

    (b)  If
      Executive’s employment is terminated by the Company for Cause, then the Company
      shall pay to Executive (i) accrued but unpaid Base Salary in accordance with
      normal payroll practices and (ii) expense reimbursement amounts, in each case
      through the date of termination. In the event of a termination for Cause,
      Executive will have no further entitlement hereunder to any other compensation
      or benefits from the Company except to the extent otherwise provided by law.
      

     

    (c)  Termination
      upon Change of Control.

     

    (i) In
      the
      event Executive’s employment is
      terminated by the Company prior to and as a result of, or within one year
      following, a Change of Control resulting in the Company or its stockholders
      receiving at least $50,000,000 in value, then the Company shall pay to Executive
      on the effective date of such termination (i) one year's Base Salary in a lump
      sum, (ii) his expense reimbursement amounts, in each case through the date
      of
      the Change of Control, (iii) $300,000 in cash, and (iv) an additional amount
      in
      cash equal to $822.00 multiplied by the number of days the Company employed
      Executive under this Agreement during the then current calendar year. In
      addition, at the request of Executive, the Board of Directors will reasonably
      consider releasing Executive from the Non-Competition obligations described
      in
      section 7.

     

    (ii) In
      the
      event Executive’s employment is
      terminated by the Company prior to and as a result of, or within one year
      following, a Change of Control resulting in the Company or its stockholders
      receiving less than $50,000,000 in value, then the Company shall pay to
      Executive on the effective date of such termination (i) 6 months Base Salary
      in
      a lump sum, (ii) his expense reimbursement amounts, in each case through the
      date of the Change of Control, and (iii) an additional amount in cash equal
      to
      $822.00 multiplied by the number of days the Company employed Executive under
      this Agreement during the then current calendar year. In addition, at the
      request of Executive, the Board will reasonably consider releasing Executive
      from the covenants set forth in Section 7.

     

    (d)  If
      Executive terminates his employment with the Company for Good Reason or is
      terminated by the Company other than as a result of Executive's death or
      Disability and other than for reasons specified in Sections 10(b) or 10(c),
      then
      the Company shall (i) continue to pay to Executive his Base Salary for a period
      of 12 months following such termination in accordance with normal payroll
      practices; provided that, if on March 15th
      of the
      calendar year following the date of termination, the required amount has not
      been paid in full, the Company shall pay the remainder on such date, (ii) pay
      Executive in a lump sum on the date of termination any expense reimbursement
      amounts owed through the date of termination, and (iii) pay Executive an
      additional amount in cash equal to $822.00 multiplied by the number of days
      the
      Company employed Executive under this Agreement during the then current calendar
      year. 

     

    (e)  This
      Section 10 sets forth all of the obligations of the Company with respect to
      the
      termination of Executive’s employment. Executive acknowledges that, upon the
      termination of his employment, he will not be entitled to any payments or
      benefits which are not explicitly provided for in this Section 10 except as
      otherwise provided by law.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f)  Upon
      termination of Executive’s employment for any reason by either party, Executive
      shall be deemed to have resigned as director of the Company, effective as of
      the
      date of such termination.

     

    (g)  The
      provisions of this Section 10 shall survive the termination of Executive’s
      employment with the Company.

     

    11.  Indemnification.
      The
      Company agrees to indemnify, defend and hold Executive harmless from and against
      all loss, liability and expense (including, but not limited to, reasonable
      attorneys' fees) arising out of, relating to or incurred by Executive in
      connection with the performance of the Services or his duties as a director
      of
      the Company to the maximum extent permitted by the laws of the State of Delaware
      as in effect from time to time, except to the extent such loss, liability and
      expense arises out of the fraud or willful misconduct of Executive. In addition,
      the Company agrees to advance expenses to Executive in connection with the
      defense of any claim brought against Executive for which Executive is entitled
      to be indemnified by the Company in advance of a final decision on the merits,
      subject to Executive's undertaking to reimburse the Company in the event that
      Executive is finally judicially determined to have failed to meet the applicable
      standard of conduct, to the maximum extent permitted by the laws of the State
      of
      Delaware as in effect from time to time. The provisions of this Section 11
      shall
      survive the termination of Executive’s employment with the Company.

     

    12.  Miscellaneous.

     

    (a)  This
      Agreement is governed by, and construed and interpreted in accordance with,
      the
      laws of the Commonwealth of Pennsylvania, without giving effect to its
      principles of conflicts of laws.

     

    (b)  Any
      dispute arising out of, or relating to, this Agreement or the breach thereof
      (other than Sections 6 or 7 hereof), or regarding the interpretation hereof,
      will be finally settled by arbitration conducted in Philadelphia, Pennsylvania
      in accordance with the rules of the American Arbitration Association then in
      effect before a single arbitrator appointed in accordance with such rules.
      Judgment upon any award rendered therein may be entered and enforcement obtained
      thereon in any court having jurisdiction. The arbitrator shall have authority
      to
      grant any form of appropriate relief, whether legal or equitable in nature,
      including specific performance. For the purpose of any judicial proceeding
      to
      enforce such award or incidental to such arbitration or to compel arbitration
      and for purposes of Sections 6 and 7 hereof, the parties hereby submit to the
      non-exclusive jurisdiction of the state and federal courts having jurisdiction
      over Philadelphia, Pennsylvania, and agree that service of process in such
      arbitration or court proceedings shall be satisfactorily made upon it if sent
      by
      registered mail addressed to it at the address referred to in paragraph (g)
      below. The costs of such arbitration shall be borne proportionate to the finding
      of fault as determined by the arbitrator. Judgment on the arbitration award
      may
      be entered by any court of competent jurisdiction.

     

    (c)  This
      Agreement shall be binding upon and inure to this benefit of the parties hereto,
      and their respective heirs, legal representatives, successors and
      assigns.

     

    (d)  This
      Agreement, and Executive's rights and obligations hereunder, may not be assigned
      by Executive. The Company may assign its rights, together with its obligations,
      hereunder in connection with any sale, transfer or other disposition of all
      or
      substantially all of its business or assets.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)  This
      Agreement cannot be amended orally, or by any course of conduct or dealing,
      but
      only by a written agreement signed by the parties hereto.

     

    (f)  The
      failure of either party to insist upon the strict performance of any of the
      teams, conditions and provisions of this Agreement shall not be construed as
      a
      waiver or relinquishment of future compliance, and such terms, conditions and
      provisions shall remain in full force and effect. No waiver of any term of
      this
      Agreement on the part of either party will be effective for any purpose
      whatsoever unless such waiver is in writing and signed by such
      party,

     

    (g)  All
      notices, requests, consents and other communications, required or permitted
      to
      be given hereunder, will be in writing and will be delivered personally or
      by an
      overnight courier service or sent by registered or certified mail, postage
      prepaid, return receipt requested, to the parties at the addresses set forth
      on
      the first page of this Agreement, and will be deemed given when so delivered
      personally or by overnight courier, or, if mailed, five days after the date
      of
      deposit in the United States mails. Either party may designate another address,
      for receipt of notices hereunder by giving notice to the other party in
      accordance with this paragraph (g).

     

    (h)  This
      Agreement sets forth the entire agreement and understanding of the parties
      relating to the subject matter hereof, and supersedes all prior agreements,
      arrangements and understandings, written or oral, relating to the subject matter
      hereof. No representation, promise, or inducement has been made by either party
      that is not embodied in this Agreement, and neither party shall be bound by
      or
      liable for any alleged representation, promise or inducement not so set
      forth.

     

    (i)  As
      used
      in this Agreement, "affiliate" of a specified Person shall mean and include
      any
      Person controlling, controlled by or under common control with the specified
      Person.

     

    (j)  The
      section headings contained herein are for reference purposes only and shall
      not
      in any way affect the meaning or interpretation of this Agreement.

     

    (k)  This
      Agreement may be executed in any number of counterparts. each of which shall
      constitute an original, but all of which together shall constitute one and
      the
      same instrument.

     

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

     

     

    Velcera,
      Inc.

     

    
      
        	
                By: 
                  /s/ Matthew C. Hill

                Name: Matthew
                  C. Hill

                Title: CFO

              	
                /s/ Dennis F. Steadman

                Dennis F.
                  Steadman

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