Document:

Unassociated Document

 

SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT

 

This Second Amendment to Credit and Security Agreement (this “Second Amendment”), dated as of October 18, 2011, is made by and among COMMAND SECURITY CORPORATION, a New York corporation (“CSC” or “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, acting through its Wells Fargo Business Credit operating division (the “Lender”).

 

WITNESSETH:

 

WHEREAS, the Borrower and the Lender are parties to a certain Credit and Security Agreement dated as of February 12, 2009 (as amended by that certain Amendment to Credit And Security Agreement dated as of December 1, 2009 and as further amended and in effect, the “Credit Agreement”);

 

WHEREAS, on or about December 31, 2009, three of the four entities that constituted the “Borrower” under the Credit Agreement, Command Security Services, Inc., Strategic Security Services, Inc. and Rodgers Police Patrol, Inc., merged with and into the fourth “Borrower” under the Credit Agreement, CSC, with CSC constituting the surviving legal entity, subject to the corrective corporate compliance actions to be taken by Borrower as further described herein; and

 

WHEREAS, the Borrower and the Lender have agreed to modify and amend certain terms and conditions of the Credit Agreement, all as provided herein.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:

 

	
1. 

	
Defined Terms. Capitalized terms used in this Second Amendment which are defined in the Credit Agreement shall have the same meanings as defined therein, unless otherwise defined herein.

 

	
2. 

	
Amendment to Preamble.  The definition of “Borrower” contained in the Preamble to the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

 

““Borrower” means Command Security Corporation, a New York corporation.”

 

	
3. 

	
Amendment to Section 1.  The provisions of Section 1 of the Credit Agreement are hereby amended as follows:

 

	 	
(a) 

	
Section 1.1(b) of the Credit Agreement is hereby amended by deleting “February 12, 2012” and by substituting “October 18, 2016” in its stead.

 

	 	
(b) 

	
Section 1.3(a)(i) of the Credit Agreement is hereby deleted in its entirety and the following is hereby substituted in its stead:

 

“(i)   Advances upon Borrower’s Request.  Advances may be funded upon Lead Borrower’s request.  No request will be deemed received until Wells Fargo acknowledges receipt, and Lead Borrower, if requested by Wells Fargo, confirms the request in an Authenticated Record.  Borrower shall repay all Advances to Borrower, even if the Person requesting the Advance on behalf of Borrower lacked authorization.  If Borrower wants an Advance, Lead Borrower shall make the request no later than 11:59 a.m. Eastern Time on the Business Day on which Borrower wants the Advance to be funded, which request shall specify both the principal Advance amount and Interest Period being requested.  No more than 3 separate LIBOR Advance Interest Periods may be outstanding at any time.  Each LIBOR Advance shall be in multiples of $500,000 and in the minimum amount of at least $500,000.  Advances shall not be available during Default Periods.”

 

  

  

  

 

	 	
(c) 

	
Section 1.3(b) of the Credit Agreement is hereby amended by deleting “Base Rate Advance” wherever it appears therein and by substituting “Advance” in its stead.

 

	 	
(d) 

	
Section 1.3A(a) of the Credit Agreement is hereby amended by deleting “for three or six month periods” and by substituting “for one or three month periods” in its stead.

 

	 	
(e) 

	
Section 1.3A(b) of the Credit Agreement is hereby deleted in its entirety and the following is hereby substituted in its stead:

 

	 	
“(b) 

	
Reserved.”

 

	 	
(f) 

	
Section 1.3A(c) of the Credit Agreement is hereby amended by deleting the first sentence thereof in its entirety.

 

	 	
(g) 

	
Section 1.3A(d) of the Credit Agreement is hereby amended by deleting “or the conversion of a Base Rate Advance to a LIBOR Advance” where it appears therein.

 

	 	
(h) 

	
Section 1.4(c) of the Credit Agreement is hereby amended by deleting “Base Rate Advances” where it appears therein and by substituting “Advances” in its stead.

 

	 	
(i) 

	
Section 1.5(a) of the Credit Agreement is hereby deleted in its entirety and the following is hereby substituted in its stead:

 

“(a)  Interest Rate Applicable to Line of Credit.  Except as otherwise provided in this Agreement, the unpaid principal amount of each Advance evidenced by the Revolving Note shall accrue interest at an annual interest rate calculated as follows:

 

LIBOR Advance Rate for One or Three Month Interest Periods

 

Advances = LIBOR plus the LIBOR Advance Rate Applicable Margin (the “LIBOR Advance Rate”).”

 

  

  

  

 

	 	
(j) 

	
Section 1.6(b) of the Credit Agreement is hereby amended by deleting “fifteen one-hundredths of one percent (0.15%)” therein and by substituting “one quarter of one percent (0.25%)” in its stead.

 

	 	
(k) 

	
Section 1.6(c) of the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

 

“(c)  Collateral Exam Fees.  Borrower shall pay Wells Fargo fees in connection with any collateral exams, audits or inspections (“Field Exams”) conducted by or on behalf of Wells Fargo, at the current rates established from time to time by Wells Fargo for its customers generally as its collateral exam fees (which fees are currently $1,000.00 per each 8 hour day per collateral examiner (whether the Field Exam shall have been conducted by a Wells Fargo employee or a third party contractor), together with all actual out-of-pocket costs and expenses (which may include the expenses, but no fees of any third party contractor other than the foregoing $1,000.00 daily fee) incurred in conducting any Field Exam; provided, however, that so long as no Event of Default shall have occurred and be continuing, Borrower shall not be obligated to reimburse Wells Fargo for more than two (2) Field Exams during any calendar year; and provided further that Borrower shall not be obligated to pay fees for Field Exams in any calendar year in excess of $15,000.00 plus actual out-of-pocket costs and expenses incurred in conducting any Field Exam.”

 

	 	
(l) 

	
Section 1.6(f) of the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

 

	 	
“(f) 

	
Reserved.”

 

	 	
(m) 

	
Section 1.7(a) of the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

 

“(a)  Interest Payments and Interest Accrual.  Interest accruing on any LIBOR Advance shall be due and payable on the last day of the applicable Interest Period and on the Termination Date; provided, however, for Interest Periods in excess of one month, interest shall nevertheless be due and payable monthly on the last day of each month, and on the last day of the Interest Period.”

 

	
4. 

	
Amendment to Section 5.  The provisions of Section 5 of the Credit Agreement are hereby amended as follows:

 

	 	
(a) 

	
Section 5.2(c) of the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

 

“(c)  Capital Expenditures.  Borrower shall not incur or contract to incur Capital Expenditures of more than $1,000,000 in the aggregate during any 

fiscal year, or more than $250,000 in any one transaction.”

 

  

  

  

 

	
(b) 

	
Section 5.7 of the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

 

“5.7  Dividends and Distributions.  Borrower shall not declare or pay any dividends (other than dividends payable solely in stock of Borrower) on any class of its stock, or make any payment on account of the purchase, redemption or retirement of any shares of its stock, or other securities or evidence of its indebtedness or make any distribution regarding its stock, either directly or indirectly, except as follows:

 

    (a)  Borrower may declare and pay dividends in the ordinary course of its business with respect to its Series A Convertible Preferred Stock, provided that (i) the aggregate amount of such dividends does not exceed in any fiscal quarter $41,000 and (ii) immediately before and after giving effect to the making of such dividend (A) no Event of Default shall have occurred and be continuing, and (B) Borrower shall have at least $500,000 in availability immediately before and after giving effect to the making of each such dividend; and

 

    (b)  Borrower may repurchase its common stock (or, in the alternative, complete a reverse stock split) provided that (i) the amount of such repurchase or reverse stock split does not exceed $2,000,000 in the aggregate, and (ii) immediately before and after giving effect to such repurchase or reverse stock split (A) no Event of Default shall have occurred and be continuing, and (B) Borrower shall have at least $3,000,000 in availability immediately before and after giving effect to such repurchase or reverse stock split together with all undisputed trade payables which are more than 60 days past due or 90 days past invoice date.”

 

	
(c) 

	
Section 5.1 of the Credit Agreement is hereby amended to add a new subsection (q), which shall provide as follows:

 

    “(q)  Temporary Reinstatement of Command Security Services, Inc.  Wells Fargo and the Borrower acknowledge and agree that the Borrower intends to cause to return to existence on a temporary basis (the “De-Merger”) its former subsidiary, Command Security Services, Inc., a New York corporation (“CSS”), and to thereafter file or cause to be filed with the New York Department of State (i) a Certificate of Merger providing for the merger of (A) Strategic Security Services, Inc., formerly a California corporation (“SSS”) and (B) Rodgers Police Patrol, Inc. (“RPP”), formerly a California corporation, each of which were merged out of existence under California law on December 29, 2009, with and into CSS and (ii) as soon as practicable thereafter, file or cause to be filed with the New York Department of State a Certificate of Merger providing for the merger of CSS with and into the Borrower.  In the event that CSS remains to exist as a New York corporation (or as any other legal entity under the laws of any jurisdiction) for more than two Business Days following the De-Merger, the Borrower shall cause CSS to become a “Borrower” hereunder.”

 

  

  

  

 

	
5. 

	
Amendments to Exhibit A.  Exhibit A of the Credit Agreement is hereby amended as follows:

 

	 	
(a) 

	
The definitions of “Base Rate”, “Base Rate Advance”, “Prime Rate” and “Prime Rate Applicable Margin” are hereby deleted in their entirety.

 

	 	
(b) 

	
The following new definition is hereby added to Exhibit A of the Credit Agreement in its correct alphabetical order:

 

	 	
i. 

	
““Daily Three Month LIBOR” means, for any day, the rate of interest equal to the LIBOR then in effect for delivery for a three (3) month period.  Each change in the interest rate shall become effective each Business Day that Wells Fargo determines that Daily Three Month LIBOR has changed.”

 

	 	
(c) 

	
The definition of “Base LIBOR” within the definition of “LIBOR” is hereby deleted in its entirety and the following substituted in its stead:

 

““Base LIBOR” means the rate per annum for United States dollar deposits quoted by Wells Fargo for the purpose of calculating the effective rate for loans making reference to Daily Three Month LIBOR as the Inter-Bank Market Offered Rate in effect from time to time for three (3) month delivery of funds in amounts approximately equal to the principal amount of such loans.  Borrower understands and agrees that Wells Fargo may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Wells Fargo in its discretion deems appropriate including the rate offered for U.S. dollar deposits on the London Inter-Bank Market.”

 

	 	
(d) 

	
The definition of “Eligible Billed Accounts” is hereby amended by deleting clause (m) thereof in its entirety and by substituting the following in its stead:

 

“(m)  Accounts owed by an account debtor, regardless of whether otherwise eligible, to the extent that the aggregate balance of such Accounts exceeds 20% of the aggregate amount of all Eligible Accounts,  provided that (i) Federal Express  may owe up to 30% of the aggregate amount of all Eligible Accounts, (ii) United Parcel Service of America, Inc. may owe up to 25% of the aggregate amount of all Eligible Accounts, and (iii) in the event Delta and Northwest merge or otherwise consolidate into one Person, the surviving Person of such merger or other consolidation may owe up to 25% of the aggregate amount of all Eligible Accounts;”

 

	 	
(e) 

	
The definition of “Interest Period” is hereby amended by deleting “or on which a Base Rate Advance is converted to a LIBOR Advance” where it appears therein.

 

	 	
(f) 

	
The definition of “LIBOR Advance Rate Applicable Margin” is hereby deleted in its entirety and the following substituted in its stead:

 

  

  

  

 

““LIBOR Advance Rate Applicable Margin” means one and three-quarters percent (1.75%) per annum, subject to the provisions of Section 1.5(a).

 

	
6. 

	
Ratification of Loan Documents.  Except as provided for herein, all terms and conditions of the Credit Agreement and the other Loan Documents remain in full force and effect. Borrower hereby ratifies, confirms, and reaffirms all representations, warranties, and covenants contained therein and acknowledges and agrees that the Obligations, as modified hereby, are and continue to be secured by the Collateral.  Borrower warrants and represents to the Lender that as of the date hereof, no Event of Default has occurred and is continuing. Borrower acknowledges and agrees that Borrower does not have any offsets, defenses, or counterclaims against the Lender thereunder, and to the extent that any such offsets, defenses, or counterclaims may exist, Borrower hereby WAIVES and RELEASES the Lender therefrom.

 

	
7. 

	
Conditions Precedent. This Second Amendment shall not be effective until each of the following conditions precedent has been fulfilled to the satisfaction of the Lender:

 

	 	
(a) 

	
This Second Amendment shall have been duly executed and delivered by the respective parties thereto, and shall be in full force and effect and shall be in form and substance satisfactory to the Lender.

 

	 	
(b) 

	
The Lender shall have received the documents, instruments and agreements as the Lender may reasonably require to effectuate this Second Amendment.

 

	 	
(c) 

	
All action on the part of the Borrower necessary for the valid execution, delivery and performance by the Borrower of this Second Amendment shall have been duly and effectively taken and evidence thereof satisfactory to the Lender shall have been provided to the Lender.

 

	 	
(d) 

	
The Borrower shall have paid to the Lender all other fees and expenses then due and owing pursuant to the Credit Agreement.

 

	
8. 

	
Miscellaneous.

 

	 	
(a) 

	
This Second Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument.

 

	 	
(b) 

	
This Second Amendment expresses the entire understanding of the parties with respect to the transactions contemplated hereby.  No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.

 

	 	
(c) 

	
Any determination that any provision of this Second Amendment or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Second Amendment.

 

  

  

  

 

	 	
(d) 

	
The Borrower shall pay on demand all costs and expenses of the Lender, including, without limitation, reasonable attorneys’ fees in connection with the preparation, negotiation, execution and delivery of this Second Amendment.

 

	 	
(e) 

	
The Borrower warrants and represents that the Borrower has consulted with independent legal counsel of the Borrower’s selection in connection with this Second Amendment and is not relying on any representations or warranties of the Lender or its counsel in entering into this Second Amendment.

 

[Remainder of Page Left Blank Intentionally]

 

 

  

  

  

 

IN WITNESS WHEREOF, each party hereto has executed this Second Amendment as a sealed instrument under the laws of the Commonwealth of Massachusetts through its authorized officer as of the date set forth above.

 

	  	
BORROWER:

	  	  
	  	
COMMAND SECURITY CORPORATION

	  	  
	  	
By:        /s/ Barry I. Regenstein        

	  	
Name:   Barry I. Regenstein        

	  	
Title:     President            

	  	  
	  	  
	  	  
	  	
LENDER:

	  	  
	  	
WELLS FARGO BANK, NATIONAL

	  	
ASSOCIATION

	  	  
	  	

By:        /s/ Jeffrey Giunta               

	  	

Name:   Jeffrey Giunta                

	  	

Title:     Authorized Signatory              

 

 

 

 

Signature Page to Amendment to Credit AgreementEMPLOYMENT AGREEMENT

      This Employment Agreement is made and entered into by and between Genesis Biopharma Inc. (the "Company") and Anthony J. Cataldo ("Executive") as of May ___, 2011(the "Effective Date").

WHEREAS, the EMPLOYER is desirous of employing Executive, and Executive wishes to be employed by EMPLOYER in accordance with the terms and conditions set forth in this Agreement.

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, IT IS MUTUALLY AGREED AS FOLLOWS:

 

1.        Position and Duties: Executive shall be employed by the Company as its Executive Chairman ("Chairman") and Chief Executive Officer (“CEO”), reporting only to the Company's Board of Directors. As its Chairman and CEO, Executive agrees to devote the necessary business time, energy and skill to his duties at the Company, and will be permitted engage in outside consulting  and/or employment provided said services do not interfere with Executive’s obligations to Company under the terms of this Agreement.  Executive agrees to advise the Board of any outside Services, and further agrees that the Company’s Board of Directors shall make the sole determination of whether a proposed consulting or employment activity would interfere with Executive’s obligations under this Agreement. These duties of Executive under this Agreement shall include all those duties customarily performed by an Executive Chairman as well as providing advice and consultation on general corporate matters, particularly related to shareholder and investor relations, assisting the Company with respect to raising equity and other financing for the Company, and other projects as may be assigned by the Company’s Board of Directors on an as needed basis. During the term of Executive's employment, Executive shall be permitted to serve on boards of directors of for-profit or not-for-profit entities provided such service does not adversely affect the performance of Executive's duties to the Company under this Agreement, and are not in conflict with the interests of the Company.

In addition to Executive’s appointment as Executive Chairman of the Board of Directors of the Company, Executive shall be nominated to stand for election to the Board of Directors at the next scheduled shareholders meeting.  As a member of the Company's Board, Executive shall continue to be subject to the provisions of the Company's bylaws and all applicable general corporation laws relative to his position on the Board. In addition to the Company's bylaws, as a member of the Board, Executive shall also be subject to the statement of powers, both specific and general, set forth in the Company's Articles of Incorporation.

  

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1.

	
Term of Employment: This Agreement shall remain in effect for a period of five years from the Effective Date (the “Initial Term”) , and thereafter will automatically renew for successive one year periods unless either party provides thirty days' prior notice of termination (the Initial Term along with each renewal period the “Term”). In the event the Company elects to terminate the Agreement, such termination shall be considered to be an Involuntary Termination, and Executive shall be provided benefits as provided in this Agreement. Upon the termination of Executive's employment for any reason, neither Executive nor Company shall have any further obligation or liability under this Agreement to the other, except as set forth below.

2.          Compensation: Executive shall be compensated by the Company for his services as follows:

a.       Base Salary: Executive shall be paid a monthly Base Salary of $25,000.00 per month ($300,000.00 on an annualized basis), subject to applicable withholding, in accordance with the Company's normal payroll procedures. Executive's salary shall be reviewed on at least an annual basis and may be adjusted as appropriate. In the event of such an adjustment, that amount shall become Executive's Base Salary. Furthermore, during the term of this Agreement, in no event shall Executive's compensation be less than any other officer or employee of the Company or any subsidiary.  Notwithstanding the foregoing, $5,000 of the Base Salary shall accrue until such time as mutually agreed by the Company and the Executive.

b.       Benefits: Executive shall have the right, on the same basis as other senior executives of the Company, to participate in and to receive benefits under any of the Company's employee benefit plans, if such plan exists and as such plans may be modified from time to time, and provided that in no event shall Executive receive less than (4) four weeks paid vacation per annum and (6) six paid sick/five paid personal days per annum.

c.       Performance Bonus: Executive shall have the opportunity to earn a performance bonus in accordance with the Company's bonus plan; if the Company does not have a Bonus Plan in effect at any given time during the term of this Agreement, then the Company’s Compensation Committee or Board of Directors shall have discretion as to determining bonus compensation for Executive.

d.       Stock Options: Provided this Agreement is in force and effect, the Company shall grant Executive stock options (the “Options”) pursuant to the Company’s Stock Option Plan or any successor plan (the “Plan”), to purchase up to 2,500,000 shares of the Company’s common stock. The Options will be exercisable pursuant to the limitations of the Plan but shall be available for exercise for a minimum of ten (10) years.  The Options shall vest in equal monthly installments during the Term. The Option shall   be exercisable at an exercise price equal to the closing price of Employer’s common stock on the Effective Date ($1.25).  The Company grants Executive cost free piggyback registration rights for the shares underlying the Options and will use its reasonable efforts to first include the options in the existing Plan and register the underlying shares in a Form S-8 Registration statement, or thereafter in the next registration statement filed by the Company.

e.       Expenses: Company shall reimburse Executive for reasonable travel, lodging, entertainment and meal expenses incurred in connection the performance of services within this Agreement as approved by the Company in advance.

f.       Travel: Executive shall travel as necessary from time to time to satisfy his performance and responsibilities under this Agreement. Notwithstanding, the Executive shall create a budget for all expected Travel and have such budget approved the Company’s Board prior to commencing such Travel.

  

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3.

	
Effect of Termination of Employment:

a.       Voluntary Termination, Death or Disability: In the event of Executive's voluntary termination from employment with the Company, Executive shall be entitled to no compensation or benefits from the Company other than those earned under Section 3 through the date of his termination and, in the case of each stock option, restricted stock award or other Company stock-based award granted to Executive, the extent to which such awards are vested through the date of his termination. In the event that Executive's employment terminates as a result of his death or disability, Executive shall be entitled to a pro-rata share of the Target Bonus (presuming performance meeting, but not exceeding, target performance goals) in addition to all compensation and benefits earned under Section 3 through the date of termination.

b.       Termination for Cause: If Executive's employment is terminated by the Company for Cause, Executive shall be entitled to no compensation or benefits from the Company other than those earned under Section 3 through the date of his termination and, in the case of each stock option, restricted stock award or other Company stock-based award granted to Executive, the extent to which such awards are vested through the date of his termination. In the event that the Company terminates Executive's employment for Cause, the Company shall provide written notice to Executive of that fact prior to, or concurrently with, the termination of employment. Failure to provide written notice that the Company contends that the termination is for Cause shall constitute a waiver of any contention that the termination was for Cause, and the termination shall be irrebuttably presumed to be an Involuntary Termination.

c.       Involuntary Termination During Change in Control Period: If Executive's employment with the Company terminates as a result of a Change in Control Period Involuntary Termination, then, in addition to any other benefits described in this Agreement, Executive shall receive the following:

i.    all compensation and benefits earned under Section 3 through the date of Executive's employment agreement;

ii.   a lump sum payment equivalent to the remaining Base Salary (as it was in the employment agreement  prior to the Change in Control) due Executive from the date of Involuntary Termination to the end of the term of this Agreement ; and

iii.  reimbursement for the cost of medical, life, disability insurance coverage at a level equivalent to that provided by the Company (if provided) for a period expiring upon the earlier of: (a) one year; or (b) the time Executive begins alternative employment wherein said insurance coverage is available and offered to Executive. It shall be the obligation of Executive to inform the Company that new employment has been obtained.

Unless otherwise agreed to by Executive at the time of Involuntary Termination, the amount payable to Executive under subsections (i) through (iii), above, shall be paid to Executive in a lump sum within ninety (90) days following Executive's termination of employment. The amounts payable under subsection (iv) shall be paid monthly during the reimbursement period.

d.       Termination Without Cause in the Absence of Change in Control: In the event that Executive's employment terminates as a result of a Non Change in Control Period Involuntary Termination, then Executive shall receive the following benefits:

i.    all compensation and benefits earned under Section 3 through the completion date of the Executive's employment agreement;

ii.   a lump sum payment equivalent to the remaining Base Salary (as it was in effect immediately prior to the Change in Control) due Executive to the end of the term of this Agreement; and

  

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iii.  reimbursement for the cost of medical, life and disability insurance coverage at a level equivalent to that provided by the Company (if provided) for a period of the earlier of: (a) one year; or (b) the time Executive begins alternative employment wherein said insurance coverage is available and offered to Executive. It shall be the obligation of Executive to inform the Company that new employment has been obtained.

Unless otherwise agreed to by Executive, the amount payable to Executive under subsections (i) through (iii) above shall be paid to Executive in a lump sum within ninety (90) days following Executive's termination of employment. The amounts payable under subsection (iv) shall be paid monthly during the reimbursement period.

e.       Resignation from Positions: In the event that Executive's employment with the Company is terminated for any reason, on the effective date of the termination Executive shall simultaneously resign from each position he holds on the Board and/or the Board of Directors of any of the Company's affiliated entities and any position Executive holds as an officer of the Company or any of the Company's affiliated entities.

4.         5. Certain Definitions: For the purpose of this Agreement, the following capitalized terms shall have the meanings set forth below:

      (a) "Cause" shall mean any of the following occurring on or after the date of this Agreement:

 

            (i) Executive's violation of any law, rule, or regulation (other than traffic violations, misdemeanors or similar offenses) or final cease-and-desist order, in each case that involves moral turpitude;

            (ii) Executive's improper disclosure of the Company's confidential or proprietary information;

 

      (b) "Change in Control" shall mean the occurrence of any of the following events:

            (i) (X) any "person" (as such term is used in Section 13 (d) and 14 (d) of the Securities Exchange Act of 1934, as amended) (other than Executive) becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total combined voting power represented by the Company's then outstanding voting securities other than the acquisition of the Company's Common Stock by a Company-sponsored employee benefit plan or through the issuance of shares sold directly by the Company to a single acquirer, or (Y) any "person" (as such term is used in Section 13 (d) and 14 (d) of the Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act) directly or indirectly, of securities of the Company representing less than fifty percent (50%) of the total combined voting power represented by the Company's then outstanding voting     securities, but in connection with the person's acquisition of securities the person acquires the right to terminate the employment of all or a portion of the Company's management team;

 

  

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            (ii) the Company is party to a merger or consolidation which results in the holders of the voting securities of the Company outstanding immediately prior thereto failing to retain immediately after such merger or consolidation direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the securities entitled to vote generally in the election of directors of the Company or the surviving entity outstanding immediately after such merger of consolidation.

            (iii) effectiveness of an agreement for the sale, lease or disposition by the Company of all or substantially all of the Company's assets; or

            (iv) a liquidation or dissolution of the Company.

      (c) "Change in Control Period" shall mean the period commencing on the date sixty (60) days prior to the date of consummation of the Change of Control and ending sixty (60) days following of same date of consummation of the Changeof Control.

      (d) "Change in Control Period Good Reason" shall mean Executive's resignation for any of the following conditions, first occurring during a Change in Control Period and occurring without Executive's written consent:

            (i) a decrease in Executive's Base Salary and/or a decrease in Executive's Target Bonus (as a multiple of Executive's Base Salary) under the Performance Bonus Plan or employee benefits other than as part of any across-the-board reduction applying to all senior executives and not resulting in those senior executives receiving lesser benefits than similarly situated executives of an acquirer;

            (ii) a material, adverse change in Executive's title, authority, responsibilities, as measured against Executive's title, authority, responsibilities or duties immediately prior to such change.

            (iii) a change in the Executive's ability to maintain his principal workplace at multiple or satellite offices;

            (iv) any material breach by the Company of any provision of this Agreement, which breach is not cured within thirty (30) days following written notice of such breach from Executive;

            (v) any failure of the Company to obtain the assumption of this Agreement by any of the Company's successors or assigns by purchase, merger, consolidation, sale of assets or otherwise.

            (vi) any purported termination of Executive's employment for "material breach of contract" which is purportedly effected without providing the "cure" period, if applicable, described in Section 6 (a)(iii) or (vi), above.

The effective date of any Change in Control Period Involuntary Termination shall be the date of notification to the Executive of the termination of employment by the Company or the date of notification to the Company of the resignation from employment by the Executive for Change in Control Period Good Reason.

  

  

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      (e) "Non Change in Control Period Good Reason" shall mean the Executive's resignation within six months of any of the following conditions first occurring outside of a Change in Control Period and occurring without Executive's written consent:

            (i) a decrease in Executive's total cash compensation opportunity (adding Base Salary and Target Bonus) of greater than ten percent (10%);

            (ii) a material, adverse change in Executive's title, authority, responsibilities or duties, as measured against Executive's title, authority, responsibilities or duties immediately prior to such change;

            (iii) any material breach by the Company of a provision of this Agreement, which breach is not cured within thirty (30) days following written notice of such breach from Executive;

            (iv) any change in the Executive's ability to maintain his principal workplace at multiple or satellite offices;

            (v) any purported termination of Executive's employment for "material breach of contract" which is purportedly effected without providing the "cure" period, if applicable, described in Section 6 (a) (iii) or (vi), above.

The effective date of any Non Change in Control Period Involuntary Termination shall be the date of notification to the Executive of the termination of employment by the Company or the date of notification to the Company of the resignation from employment by the Executive for Non Change in Control Period Good Reason.

      (f) "Incumbent Directors" shall mean members of the Board who either (a) are members of the Board as of the date hereof, or (b) are elected, or nominated for election, to the Board with the affirmative vote of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of members of the Board).

      (g) "Change in Control Period Involuntary Termination" shall mean during a Change in Control Period the termination by the Company of Executive's employment with the Company for any reason other than Cause, Executive's death or Executive's Disability; or

      (h) "Non Change in Control Period Involuntary Termination" shall mean outside a Change in Control Period the termination by the Company of Executive's employment with the Company for any reason other than Cause, Executive's death or Executive's disability.

5.          Dispute Resolution: In the event of any dispute or claim relating to or arising out of this Agreement (including, but not limited to, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Executive and the Company agree that all such disputes shall be fully addressed and finally resolved by (1) binding arbitration conducted by the American Arbitration Association in Los Angeles, in the State of California in accordance with its National Employment Dispute Resolution rules or (2) in any federal or state court located in Los Angeles, CA. The Company agrees that any decisions of the Arbitration Panel will be binding and enforceable in any state that the Company conducts the operation of its business.

  

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6.         Attorneys' Fees: The prevailing party shall be entitled to recover from the losing party its attorneys' fees and costs incurred in any action brought to enforce any right arising out of this Agreement.

7.         Restrictive Covenants:

a.         Nondisclosure. During the Term and following termination of the Executive's employment with the Company, Executive shall not divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any Confidential Information (as hereinafter defined) pertaining to the business of the Company. Any Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company (which shall include, but not be limited to, confidential information concerning the Company's financial condition, prospects, technology, customers, suppliers, methods of doing business and promotion of the Company's products and services) shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary. For purposes of this Agreement "Confidential Information" means information disclosed to the Executive or known by the Executive as a consequence of or through his employment by the Company (including information conceived, originated, discovered or developed by the Executive) prior to or after the date hereof and not generally known or in the public domain, about the Company or its business. Notwithstanding the foregoing, nothing herein shall be deemed to restrict the Executive from disclosing Confidential Information to the extent required by law or by any court.

b.         Non-Competition. The Executive shall not, while employed by the Company and for a period of one year following the Date of Termination for Cause, or Resignation without Good Reason, engage or participate, directly or indirectly (whether as an officer, director, employee, partner, consultant, or otherwise), in any business that manufactures, markets or sells products that directly competes with any product of the Company that is significant to the Company's business based on sales and/or profitability of any such product as of the date of termination of Executive's employment with the Company. Nothing herein shall prohibit Executive from being a passive owner of less than 5 % stock of any entity directly engaged in a competing business.

c.         Property Rights; Assignment of Inventions. With respect to information, inventions and discoveries or any interest in any copyright and/or other property right developed, made or conceived of by Executive, either alone or with others, during his employment by Employer arising out of such employment or pertinent to any field of business or research in which, during such employment, Employer is engaged or (if such is known to or ascertainable by Executive) is considering engaging, Executive hereby agrees:

i.           that all such information, inventions and discoveries or any interest in any copyright and/or other property right, whether or not patented or patentable, shall be and remain the exclusive property of the Employer;

ii.           to disclose promptly to an authorized representative of Employer all such information, inventions and discoveries or any copyright and/or other property right and all information in Executive's possession as to possible applications and uses thereof;

  

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iii.           not to file any patent application relating to any such invention or discovery except with the prior written consent of an authorized officer of Employer (other than Executive);

iv.           that Executive hereby waives and releases any and all rights Executive may have in and to such information, inventions and discoveries, and hereby assigns to Executive and/or its nominees all of Executive's right, title and interest in them, and all Executive's right, title and interest in any patent, patent application, copyright or other property right based thereon. Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as his agent and attorney-in-fact to act for him and on his behalf and in his stead to execute and file any document and to do all other lawfully permitted acts to further the prosecution, issuance and enforcement of any such patent, patent application, copyright or other property right with the same force and effect as if executed and delivered by Executive; and

v.           at the request of the Company, and without expense to Executive, to execute such documents and perform such other acts as Employer deems necessary or appropriate, for Employer to obtain patents on such inventions in a jurisdiction or jurisdictions designated by Employer, and to assign to Employer or its designee such inventions and any and all patent applications and patents relating thereto.

8.         General:

a.          Successors and Assigns: The provisions of this Agreement shall inure to the benefit of and be binding upon the Company, Executive and each and all of their respective heirs, legal representatives, successors and assigns. The duties, responsibilities and obligations of Executive under this Agreement shall be personal and not assignable or delegable by Executive in any manner whatsoever to any person, corporation, partnership, firm, company, joint venture or other entity. Executive may not assign, transfer, convey, mortgage, pledge or in any other manner encumber the compensation or other benefits to be received by him or any rights which he may have pursuant to the terms and provisions of this Agreement.

b.          Amendments; Waivers: No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

c.          Notices: Any notices to be given pursuant to this Agreement by either party may be effected by personal delivery or by overnight delivery with receipt requested. Mailed notices shall be addressed to the parties at the addresses stated below, but each party may change its or his/her address by written notice to the other in accordance with this subsection (c).Mailed notices to Executive shall be addressed as follows:

 

  

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      Anthony J. Cataldo

      _____________________

      _____________________

      _____________________

      Mailed notices to the Company shall be addressed as follows:

      Board of Directors

      Genesis Biopharma, Inc.

      10800 Wilshire Blvd. Suite 950

      Los Angeles, Ca 90024

d.          Entire Agreement: This Agreement constitutes the entire employment agreement between Executive and the Company regarding the terms and conditions of his employment, with the exception of (a) the agreement described in Section 7 and (b) any stock option, restricted stock or other Company stock-based award agreements between Executive and the Company to the extent not modified by this Agreement. This Agreement (including the documents described in (a) and (b) herein) supersedes all prior negotiations, representations or agreements between Executive and the Company, whether written or oral, concerning Executive's employment by the Company.

e.          Withholding Taxes: All payments made under this Agreement shall be subject to reduction to reflect taxes required to be withheld by law.

f.          Counterparts: This Agreement may be executed by the Company and Executive in counterparts, each of which shall be deemed an original and which together shall constitute one instrument.

g.          Headings: Each and all of the headings contained in this Agreement are for reference purposes only and shall not in any manner whatsoever affect the construction or interpretation of this Agreement or be deemed a part of this Agreement for any purpose whatsoever.

h.          Savings Provision: To the extent that any provision of this Agreement or any paragraph, term, provision, sentence, phrase, clause or word of this Agreement shall be found to be illegal or unenforceable for any reason, such paragraph, term, provision, sentence, phrase, clause or word shall be modified or deleted in such a manner as to make this Agreement, as so modified, legal and enforceable under applicable laws. The remainder of this Agreement shall continue in full force and effect.

i.          Construction: The language of this Agreement and of each and every paragraph, term and provision of this Agreement shall, in all cases, for any and all purposes, and in any and all circumstances whatsoever be construed as a whole, according to its fair meaning, not strictly for or against Executive or the Company, and with no regard whatsoever to the identity or status of any person or persons who drafted all or any portion of this Agreement.

  

  

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j.          Further Assurances: From time to time, at the Company's request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement and to provide adequate assurance of Executive's due performance hereunder.

k.         Governing Law: Executive and the Company agree that this Agreement shall be interpreted in accordance with and governed by the laws of the State of California.

l.          Board Approval: The Company warrants to Executive that the Board of Directors of the Company has ratified and approved the within Agreement, and that the Company will cause the appropriate disclosure filing to be made with the Securities and Exchange Commission in a timely manner.

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year written below.

	
May _____________, 2011

	  
	  	 	
 

	  	
Anthony J. Cataldo

	  	  
	
May ______________, 2011

	  
	  	
Genesis Biopharma Inc..

 

	  	
By:

	 	  

 

  

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