EMPLOYMENTAGREEMENT

1.  

(a)  

Subject to the terms and conditions hereinafter set forth, the Company hereby employs Executive as President of Puerto Rico Operations, as hereinafter defined.  As President of Puerto Rico Operations, Executive shall have the duties and responsibilities associated with the president of a public corporation.  Executive shall report to the Company’s Chief Executive Officer.  Executive shall also perform such other duties and responsibilities as may be determined by such officer, as long as such duties and responsibilities are consistent with those of president.

2.  

Executive’s Performance  

(a)  

Executive hereby accepts the employment contemplated by this Agreement. Executive shall perform her duties diligently, in good faith and in a manner consistent with the best interests of the Company, and shall devote substantially all of her business time to the performance of her duties under this Agreement.

3.  

(a)  

For her services, the Company shall pay Executive a salary (“Salary”) at the annual rate of $175,000.00. Salary shall be paid in such installments as the Company regularly pays its executive officers, but not less frequently than semi-monthly.

(b)  

In addition to salary, Executive shall receive the following benefits:

(i)  

Such insurance, including major medical health insurance and life insurance, as the Company provides its executive officers, which benefits will not be less than the insurance benefits provided by the Company to its executive officers;

(ii)  

Vacation in accordance with Company policy;

(iii)  

Eligibility to participate in such pension and other benefit plans that are available to executive officers of the Company;

(iv)  

  Lease payments for the automobile presently provided to Executive by the Company; and

(v)  

Such discretionary bonuses and stock options or other equity-based incentives as shall be determined by the Company’s compensation committee; provided, however, that her bonus shall not exceed 50% of her salary and any such bonus shall be paid within 30 days of the completion of the audit for the year for which the bonus relates.

(a)  

The Company shall reimburse Executive, upon presentation of proper expense statements, for all authorized, ordinary and necessary out-of-pocket expenses reasonably incurred by Executive in connection with the performance of her services pursuant to this Agreement in accordance with the Company’s expense reimbursement policy.

5.  

(a)  

This Agreement and Executive’s employment hereunder shall terminate immediately upon her death.

(b)  

This Agreement and Executive’s employment pursuant to this Agreement may be terminated by the Executive or the Company on not less than 30 days’ written notice in the event of Executive’s Disability. The term “Disability” shall mean any illness, disability or incapacity of the Executive which prevents her from substantially performing her regular duties for a period of two consecutive months or three months, even though not consecutive, in any twelve month period; provided however, that any maternity leave or other condition covered by the Puerto Rico labor laws shall not be counted toward such three or two month periods.

(c)  

The Company may terminate this Agreement and Executive’s employment pursuant to this Agreement immediately for Cause, in which event no further compensation shall be payable to Executive subsequent to the date of such termination. The date of termination shall be the date of the notice from the Company stating that Executive’s employment is terminated for Cause. The term “Cause” shall mean:

(vi)

 

(i)The Company shall pay to Executive within 30 days after the date of her termination an amount equal to her salary for the corresponding working period;

 

(ii) The restrictions set forth in Section 7(a) of this Agreement shall terminate immediately.

6.  

 Trade Secrets and Proprietary Information

(a)  

Executive recognizes and acknowledges that the Company, through the expenditure of considerable time and money, has developed and will continue to develop in the future information concerning customers, clients, marketing, products, services, business, research and development activities and operational methods of the Company and its customers or clients, contracts, financial or other data, technical data or any other confidential or proprietary information possessed, owned or used by the Company, the disclosure of which could or does have a material adverse effect on the Company, its businesses, any business in which it proposes to engage, its operations, financial condition or prospects and that the same are confidential and proprietary and considered “confidential information” of the Company for the purposes of this Agreement. In consideration of her employment, Executive agrees that she will not,  without the consent of the Board make any disclosure of confidential information to any person, partnership, corporation or entity either during or after employment with the company, except that nothing in this Agreement shall be construed to prohibit Executive from using or disclosing (a) if such disclosure is necessary in the normal course of the Company’s business in accordance with policies or instructions or authorization from the Board, (b) Executive can demonstrate that such information shall have (i) become public knowledge other than by or as a result of disclosure by a person not having a right to make such disclosure, (ii) been developed by Executive independent of any of the Company’s confidential or proprietary information or (iii) been disclosed to Executive by a person not subject to a confidentiality agreement with or other obligation of confidentiality to the Company.

(b)  

In the event that any confidential information is required to be produced by Executive pursuant to legal process, Executive shall give the Company notice of such legal process within a reasonable time, but not later than ten business days prior to the date such disclosure is to be made, unless Executive has received less notice, in which event Executive shall immediately notify the Company. The Company shall have the right to object to any such disclosure, and if the Company objects (at the Company’s cost and expense) in a timely manner so that Executive is not subject to penalties for failure to make such disclosure, Executive shall not make any disclosure until there has been a court determination on the Company’s objections.  If disclosure is required by a court order, final beyond right of review, or if the Company does not object to the disclosure, Executive shall make disclosure only to the extent that disclosure is required by the court order, and Executive will exercise reasonable efforts at the Company’s expense, to obtain reliable assurance that confidential treatment will be accorded the Confidential Information.

(c)  

Executive shall, upon expiration or termination of employment, or earlier at the request of the Company, turn over to the Company or destroy all documents, papers, computer disks or other material in Executive’s possession or under Executive’s control which may contain or be derived from confidential information. To the extent that any confidential information is on Executive’s hard drive or other storage media, he shall, upon the request of the Company, cause either such information to be erased from her computer disks and all other storage media or otherwise take reasonable steps to maintain the confidential nature of the material.

(d)  

Executive further realizes that any trading in the Company’s common stock or other securities or aiding or assisting others in trading in the Company’s common stock or other securities, including disclosing any non-public information concerning the Company to a person who uses such information in trading in the Company’s common stock or other securities, constitutes a violation of federal and state securities laws. Executive will not engage in any transactions involving the Company’s common stock or other securities while in the possession of material non-public information.

(e)  

For the purposes of Sections 6, 7, 8 and 9 of this Agreement, the term “Company” shall include PHARMA-BIO SERV PR, INC., and its subsidiaries and affiliates.

7.  

 

(a)    During the period from the date of this Agreement until two (2) years following the date on which Executive’s employment is terminated, Executive will not, directly or indirectly:

(i)

persuade or attempt to persuade any person or entity which is or was a customer, client or supplier of the Company to cease doing business with the Company, or to reduce the amount of business it does with the Company (the terms “customer” and “client” as used in this Section 7 to include any potential customer or client to whom the Company submitted bids or proposals, or with whom the Company conducted negotiations, during the term of Executive’s employment hereunder or during the twelve months preceding the termination of her employment);

(ii)

solicit for herself or any other person or entity other than the Company the business of any person or entity which is a customer or client of the Company, or was a customer or client of the Company within one (1) year prior to the termination of her employment;

(iii)

persuade or attempt to persuade any employee of the Company, or any individual who was an employee of the Company during the one (1) year period prior to the lawful and proper termination of this Agreement, to leave the Company’s employment, or to become employed by any person or entity other than the Company; or

(iv)

engage in any business in the United States whether as an officer, director, consultant, partner, guarantor, principal, agent, employee, advisor or in any manner, which directly competes with the business of the Company as it is engaged in at the time of the termination of this Agreement, unless, at the time of such termination or thereafter during the period that the Executive is bound by the provisions of this Section 7, the Company ceases to be engaged in such activity, provided, however, that nothing in this Section 7 shall be construed to prohibit the Executive from owning an interest of not more than five (5%) percent of any public Company engaged in such activities.

(b)

Executive will not, during or after employment with the Company, make any disparaging statements concerning the Company, its business, officers, directors and employees that could injure, impair, damage or otherwise affect the relationship between the Company, on the one hand, and any of the Company’s employees, suppliers, customers, clients or any other person with which the Company has or may conduct business or otherwise have a business relationship of any kind and description. The Company will not make any disparaging statements concerning Executive; provided, however, that this sentence shall not be construed to prohibit the Company from giving factual information concerning Executive in response to inquiries that the Company believes are bona fide.

(c)

The Executive acknowledges that the restrictive covenants (the “Restrictive Covenants”) contained in Sections 6 and 7 of this Agreement are a condition of her employment, and are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part of any of the Restrictive Covenants, is invalid or unenforceable, the remainder of the Restrictive Covenants and parts thereof shall not thereby be affected and shall remain in full force and effect, without regard to the invalid portion. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable because of the geographic or temporal scope of such provision, such court shall have the power to reduce the geographic or temporal scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.

8.  

Inventions and Discoveries - Executive agrees promptly to disclose in writing to the Company any invention, design, system, process, development or other discovery or intellectual property (collectively, “inventions and discoveries”) conceived, created or made by her during employment with the Company, whether created or developed by herself or with others, whether during or after working hours, in any business in which the Company is then engaged or which otherwise relates to any product or service dealt in by the Company and such inventions and discoveries shall be the Company’s sole property, regardless of whether such inventions and discoveries are otherwise treated as work performed for hire and regardless of whether such inventions and discoveries are or can be patented, registered or copyrighted. Upon the Company’s request, Executive shall execute and assign to the Company all applications for copyrights, trademarks and letters patent of the United States and such foreign countries as the Company may designate, and Executive shall execute and deliver to the Company such other instruments as the Company deems necessary to vest in the Company the sole ownership of all rights, title and interest in and to such inventions and discoveries, as well as all copyrights and/or patents. Executive shall also give the Company all assistance it may reasonably require, including the giving of testimony in any suit, action, investigation or other proceeding in connection with the foregoing.

9.  

Injunctive Relief - Executive agrees that her violation or threatened violation of any of the provisions of Sections 6, 7 or 8 of this Agreement shall cause immediate and irreparable harm to the Company. In the event of any breach or threatened breach of any of said provisions, Executive consents to the entry of preliminary and permanent injunctions by a court of competent jurisdiction prohibiting Executive from any violation or threatened violation of such provisions and compelling Executive to comply with such provisions. This Section 9 shall not affect or limit, and the injunctive relief provided in this Section 9 shall be in addition to, any other remedies available to the Company at law or in equity or in arbitration for any such violation by Executive. In the event an injunction is issued against any such violation by Executive, the period referred to in Section 7 of this Agreement shall continue until the later of the expiration of the period set forth therein or one (1) month from the date a final judgment enforcing such provisions is entered and the time for appeal has lapsed. Subject to Section 7(c) of this Agreement, the provisions of Sections 6, 7, 8 and 9 of this Agreement shall survive any termination of this Agreement and Executive’s employment.

10.  

 Indemnification - The Company shall provide Executive with payment of legal fees and indemnification to the maximum extent permitted by the Company’s certificate of incorporation, by-laws and applicable law.

11.  

 

(a)   Executive represents, warrants, covenants and agrees that she has a right to enter into this Agreement, that she is not a party to any agreement or understanding, oral or written, which would prohibit performance of her obligations under this Agreement, and that she will not use in the performance of her obligations hereunder any proprietary information of any other party which she is legally prohibited from using.

12.  

(a)  

Executive will cooperate with the Company in connection with the Company’s application to obtain key-person life insurance on her life, on which the Company will be the beneficiary.  Such cooperation shall include the execution of any applications or other documents requiring her signature and submission of insurance applications and submission to a physical.

(b)  

Any notice, consent or communication required under the provisions of this Agreement shall be given in writing and sent or delivered by hand, overnight courier or messenger service, against a signed receipt or acknowledgment of receipt, or by registered or certified mail, return receipt requested, or telecopier or similar means of communication if receipt is acknowledged or if transmission is confirmed by mail as provided in this Section 12(b), to the parties at their respective addresses set forth at the beginning of this Agreement or by telecopier to the Company fax at ###-###-####, or to Executive at available numbers, with notice to the Company being sent to the attention of the individual who executed this Agreement on its behalf.  Any party may, by like notice, change the person, address or fax number to which notice is to be sent.  If no telecopier number is provided for Executive, notice to her shall not be sent by telecopier.

(c)  

(d)  

(e)  

If any term, covenant or condition of this Agreement or the application thereof to any party or circumstance shall, to any extent, be determined to be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law, and any court or arbitrator having jurisdiction may reduce the scope of any provision of this Agreement, including the geographic and temporal restrictions set forth in Section 7 of this Agreement, so that it complies with applicable law.