Document:

ex_117614.htm

Exhibit 10.3

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

 

 

COMMON STOCK PURCHASE WARRANT

 

 

IsoRay, Inc.

 

Warrant Shares: _______                         Issue Date: [__     ____], 2018

 

Initial Exercise Date: _______, 2019

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after six months following the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on ______________ (the “Termination Date”) but not thereafter, to subscribe for and purchase from IsoRay, Inc., a Minnesota corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company’s common stock (the “Common Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.     Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated July 9, 2018, among the Company and the purchasers signatory thereto.

 

Section 2.     Exercise.

 

a)     Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

 

 

 

b)     Exercise Price. The exercise price per share of Common Stock under this Warrant shall be ____, subject to adjustment hereunder (the “Exercise Price”).

 

c)     Cashless Exercise. If at any time after the six-month anniversary of the Closing Date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

 

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant.  The Company agrees not to take any position contrary to this Section 2(c).

 

 

 

 

d)     Mechanics of Exercise.

 

i.     Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

 

ii.     Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.     Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.     Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

v.     No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

vi.     Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

vii.     Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

 

 

 

e)     Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

Section 3.     Certain Adjustments.

 

a)     Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)     Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

c)     Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

 

 

 

d)     Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

e)     Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)     Notice to Holder.

 

i.     Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.     Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

 

 

 

Section 4.     Transfer of Warrant.

 

a)     Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)     New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)     Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

d)     Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.

 

e)     Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5.     Miscellaneous.

 

a)     No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle a Warrant exercise.

 

b)     Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)     Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

 

 

 

d)     Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)     Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

 

f)     Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g)     Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrant terminates on the Termination Date. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h)     Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

i)     Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)     Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)     Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)     Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m)     Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n)     Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

 

********************

 

(Signature Page Follows)

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	
			IsoRay, Inc.

			 

			
	
			     By:__________________________________________

			     Name:

			     Title:

			

 

NOTICE OF EXERCISE

 

To:     IsoRay, Inc.

 

(1)     ()The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2)     ()Payment shall take the form of (check applicable box):

 

[ ] in lawful money of the United States; or

 

[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)     ()Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

_______________________________

_______________________________

_______________________________

 

 

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

 

 

 

 

 

 

 

EXHIBIT B

 

 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
			Name:

				 
	 	
			(Please Print)

			
	
			Address:

				 
	
			 

			Phone Number:

			Email Address:

				
			(Please Print)

			______________________________________

			______________________________________

			
	
			Dated: _______________ __, ______

				 
	
			Holder’s Signature:

				 
	
			Holder’s Address:

				 

 

 

1 .llpp_ex1012.htm

EXHIBIT 10.12
  
 LOOP CANADA INC.
  
 EMPLOYMENT AGREEMENT
  
 This Employment Agreement (the “Agreement”) is dated as of April 10, 2018, by and between Nelson Switzer (the “Executive”) and Loop Canada Inc. (the “Company”). 
  
 1. Duties. 
  
 1.1 Position. The Executive is employed as Chief Growth Officer, reporting to the CEO of the Company. The duties and responsibilities of the Executive shall be commensurate with the position of an individual providing the same type of services in a similar company. The Executive shall perform such duties as from time to time may be prescribed for him by the CEO. 
  
 1.2 Obligations to the Company. The Executive agrees to the best of his ability and experience that he will at all times loyally and conscientiously perform all of the duties and obligations required of and from the Executive pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of the Executive’s employment relationship with the Company, the Executive further agrees that he will devote all of his business time and attention to the business of the Company, on a full-time basis, and the Executive will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the CEO, which consent shall not be unreasonably withheld. The Executive will comply with and be bound by the Company’s operating policies, procedures and practices from time to time in effect during the term of the Executive’s employment. 
  
 2. Term of Employment. The Executive’s employment hereunder shall be for an indeterminate term and shall commence on May 8, 2018 or such later date as the parties may agree (“Commencement Date”).
  
 3. Compensation. For the duties and services to be performed by the Executive hereunder, the Company shall pay the Executive in US currency, and the Executive agrees to accept, the salary and other benefits described below in this Section 3. 
  
 3.1 Salary. The Executive shall receive a yearly base salary of $300,000. The Executive’s salary will be payable pursuant to the Company’s normal payroll practices for payment of salary to executive employees. The Executive’s base salary will be reviewed as part of the Company’s normal salary review process.
  
 3.2 Employee Benefit Plans. Executive shall participate in the employee benefit plans, programs and policies maintained by or for the Company for similarly situated employees in accordance with the terms and conditions to participate in such plans, programs and policies as in effect from time to time. The introduction, amendment and administration of benefit plans, programs and policies are within the Company’s sole discretion and the introduction, deletion or amendment of any benefit plan, program or policy of general application will not constitute a breach of this Employment Agreement, conditional on such introduction, deletion or amendment being consistently applied to all executives.
   	 
	1
	 
 
	 

  
 3.3 Annual and Equity Incentive. As set forth in Exhibit “A” attached hereto, the Executive shall be entitled each year to the following incentive awards:
  
  	  
	a)	An annual incentive award opportunity equal to 50% of base salary. The initial award opportunity will be provided in the form of restricted stock units with specific performance measures, goals and other terms and conditions specified at the start of each fiscal year. Depending upon the level of performance achieved relative to specified goals, which will be approved by the Compensation Committee, the award can range up to 200% of the target award opportunity. For the year ending February 28, 2019, the Executive shall be eligible for a prorated award. In future years, the Compensation Committee will approve each year the award type (cash or equity), corresponding award opportunities and other terms and conditions and will approve performance measures and goals recommended by the CEO, in alignment with Loop strategy and CEO goals.
	  
	  
	  

	  
	b)	A long-term incentive award opportunity equal to 70% of base salary. The initial award opportunity will be provided in the form of equity with specific performance measures, goals and other terms and conditions specified at the start of each fiscal year. Depending upon the level of performance achieved relative to specified goals, which will be approved by the Compensation Committee, the award for the portion of the award subject to a range of specified goals can range up to 200% of the target award opportunity. For the year ending February 28, 2019, the Executive shall be eligible for a prorated award. In future years, the Compensation Committee will approve each year the award types and grant mix, corresponding award opportunities and other terms and conditions and will approve performance measures and goals recommended by the CEO, in alignment with Loop strategy and CEO goals.
	  
	  
	  

	  
	c)	Incentive award goals will be set early in the fiscal year.
	  
	  
	  

	  
	d)	In addition to the above, effective on or shortly after the Commencement Date, the Executive will receive a one-time grant of time vesting restricted stock units with a grant date fair value of approximately $243,000. This restricted stock unit award will vest one-third per year, commencing one year after the date of grant, subject to termination for Serious Reason.

  
 The terms and conditions of the incentive awards shall at all times be governed by the Loop Industries, Inc. 2017 Equity Incentive Plan (or any successor plan or plans governing executive incentive awards). For greater clarity, subject to section 4.3 below, any incentive award that remains unvested or has not yet been earned at the time of Executive’s termination shall terminate immediately upon termination of employment.
  
 3.4 Executive Plans and Policies. Executive will comply with any clawback (recoupment) policy, stock ownership/retention guidelines and other plans or polices applicable to other executive positions of a comparable level that the Company may adopt or amend, from time to time in its own discretion.
   	 
	2
	 
 
	 

  
 3.5 Vacation. The Executive shall be eligible for 4 weeks of paid vacation per calendar year, which vacation time shall be taken at such time or times in each year so as not to materially and adversely interfere with the business of the Company. Such entitlement will be prorated for the calendar year in which the Executive commences employment and for any other year of partial employment. Payment of all vacation pay will be in accordance with applicable employment standards legislation. Such vacation entitlement is in addition to any Company closures for any holiday period. Unused vacation may not be carried over from any one-year period to any other period but will be forfeited, subject to the Executive being paid annually the minimum vacation time and vacation pay required under applicable employment standards legislation.
  
 4. Termination of Employment. The Executive or the Company may end the Executive’s employment as described below. The Executive will always receive all accrued compensation, vacation pay and benefits up to his last day of employment or as otherwise provided in applicable employment standards legislation.
  
 4.1 Voluntary Termination. The Executive may terminate this Agreement by voluntary resignation or by the Executive’s Resignation for Good Reason, as defined in Section 5.3 below, upon giving a minimum of 30 days’ advance written notice to the Company (the “Resignation Notice Period”). The Company may, at any time during the Resignation Notice Period, relieve the Executive from all or any of his duties for all or part of the remainder of the Resignation Notice Period. This may include a requirement that the Executive stay away from all or any of the Company’s premises, not be provided with any work, and/or have no business contact with all or any of the Company’s agents, employees, customers, clients, distributors and suppliers. Whether or not the Executive is relieved of any duties during the Resignation Notice Period, the Executive will be paid his base salary and any other benefits and remain entitled to incentive awards and incentive vesting in accordance with this Agreement, his employment will not be terminated by any removal of duties, his employment will continue during the Resignation Notice Period and he will continue to be bound by his obligations under this Agreement. Executive will not disclose his resignation within the first 10 days following delivery of his resignation notice without the prior approval of the Company. The Company will comply with all requirements of applicable employment standards legislation in respect of the termination of the Executive’s employment, and the Company shall not have any further obligation to Executive, except as otherwise set out in Section 4.4 below in respect to a Resignation for Good Reason. 
  
 4.2 Termination for Serious Reason. This Agreement may be terminated immediately by the Company at any time for Serious Reason as defined in section 5.1 below. Upon any termination under this Section 4.2, the Company shall pay the Executive any accrued compensation, vacation pay and benefits up to his last day of employment, and any unpaid expenses owing as at the date of termination. The Company will not be required to provide any form of advance notice of termination, pay in lieu of such notice, or any form of severance pay, except as required by applicable employment standards legislation.
   	 
	3
	 
 
	 

  
 4.3 Termination Without Serious Reason by the Company 
  
  	  
	4.3.1 	The Company may terminate this Agreement at any time and without notice or without Serious Reason by providing the Executive with a separation package as follows:
	  
	  
	  

	  
	  
	 -    10 months of the Employee’s then-current base salary for the first year of service; 
 -    one month of the Employee’s then-current base salary for each additional year of service;
 -    for a maximum of no more than 18 months; 

	  
	  
	  

	  
	  
	 (collectively, the “Separation Package”). The Separation Package shall be payable within (thirty) 30 days of termination in one lump-sum payment. In addition to the Separation Package, the Company shall pay the Executive’s base salary up to the date of termination, any accrued and unused vacation, any unpaid expenses owing as at the date of termination, any vested award granted pursuant to section 3.3 (including the award granted in Section 3.3(d) which shall immediately vest in the case of termination without Serious Reason), a prorated amount of any award granted following achievement of performance measures prior to the termination date (such prorated value to be calculated as follows: period of time from grant date to latest vesting date noted in the award divided by the period of time from grant date to applicable severance end date), and any other amount required by any applicable employment standards legislation. The Executive acknowledges that the foregoing arrangements fully satisfy the Company’s obligations in respect of the termination of the Executive’s employment and irrevocably agrees that the foregoing arrangements constitute an appropriate indemnity in lieu of reasonable notice, in full compliance with the Executive’s entitlements under law having explicit regard for the nature of the employment, the specific circumstances in which it is carried on and the duration of the period of work.

	  
	  
	  

	  
	 4.3.2 
	 The Company’s obligation to pay the Separation Package and other amounts set forth in Section 4.3.1 above is conditional upon the Executive’s ongoing compliance with the post-employment covenants contained in Sections 6 and 8 of this Agreement. In the event that the Executive breaches the post-employment covenants contained in Sections 6 and 8, the Executive will remain bound by all of the terms of this Agreement, any payments made pursuant to the Separation Package will automatically cease, and the Executive will be required to return any payments already made pursuant to the Separation Package. Notwithstanding the cessation and/or return of payments, the Executive will at no point receive payment pursuant to the Separation Package that is less than the minimum amount of payment required to comply with applicable legislation. 

	  
	  
	  

	  
	 4.3.3 
	 The Company’s obligation to pay the Separation Package and other amounts set forth in Section 4.3.1 above is conditional upon the Executive signing, in the presence of a witness, a full and final release in a form satisfactory to the Company, and delivering an original executed copy of the full and final release to the Company within forty-five (45) days after the date of termination. If the Executive fails to execute the full and final release, the Executive will not be entitled to the Separation Package and will instead receive only such payments and benefit continuation as are required by applicable employment standards legislation, if any. 

  
  	 
	4
	 
 
	 

  
  	  
	4.3.4 	If during the applicable severance period set forth in Section 4.3.1 above the Executive starts new employment in a similar capacity with a competitor, the amount of the Separation Package and other amounts due hereunder will be reduced by an amount equal to 30% of the salary paid to the executive by the Company in respect to the period from the date on which new employment begins and the end of the severance period had the amount been prorated over the applicable severance period, except that a) the reduction may in no case exceed 30% of the salary paid to the executive by the new employer between the date on which the new employment begins and the end of the severance period; and b) the reduction only applies if the executive starts the new employment within 10 months following the termination date. The Company may, at any point before or during the severance period, waive section 4.3.4.

    
 4.4 Resignation for Good Reason by Executive. If the Executive’s employment is terminated by the Executive’s Resignation for Good Reason, the Executive’s entitlements and the terms and conditions noted in section 4.3 shall apply. 
  
 4.5 Change of Control. In the event of a Change of Control resulting in Termination Without Serious Reason or Resignation for Good Reason within two years of the Change of Control, all of the Executive’s unvested options, shares or other equity shall immediately vest upon such termination or resignation.
  
 4.6 No Further Rights. Except as otherwise outlined in this Section 4., the Executive shall have no further entitlements upon termination, except if necessary to comply with the minimum requirements of any applicable employment standards legislation, and all vested options, warrants or other bonus entitlements will continue pursuant to their terms. The Executive acknowledges that the foregoing arrangements fully satisfy the Company’s and all affiliates’ obligations to his in respect of the termination of his employment and he agrees that the foregoing arrangements constitute reasonable notice in accordance with the civil law and that he will not be entitled to further notice of termination, severance pay, incentive compensation, damages or other compensatory payments under common law, civil law or contract.
  
 4.7 Return of Company Property. All equipment, documents or any other materials of any kind created or used by the Executive in the course of employment with the Company, or otherwise furnished by the Company or its customers, suppliers, distributors, employees or consultants in the Executive’s possession or control, shall be surrendered to the Company, in good condition, promptly upon the Executive’s termination of employment, irrespective of the time, manner or cause of termination.
  
 5. Definitions. For purposes of this Agreement, the following definitions shall apply: 
  
 5.1 “Serious Reason” means a serious reason that would constitute just cause at common law. 
   	 
	5
	 
 
	 

  
 5.3 “Resignation for Good Reason” means the Executive’s resignation as a result of: (i) a significant and substantial reduction in the Executive’s job, duties, or responsibilities in a manner that is substantially and materially inconsistent with the position, duties, or responsibilities held by the Executive immediately before such reduction; or (ii) any reduction in the Executive’s base salary, other than in connection with and consistent with a general and minimal reduction of all executive base salaries or in the annual and equity incentives set forth herein. In each case, the Executive shall give written notice to the Company of such event, and allow the Company a reasonable period to cure such event.
  
 5.4 “Change of Control” means a sale of all or substantially all of the shares or assets of the Company or its parent, LOOP Industries, Inc. (“LPP”), or any merger or consolidation of either the Company or LPP with or into another corporation other than a merger or consolidation in which the holders of more than 50% of the shares of capital stock of the Company or LPP (as the case may be) outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by their being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company or LPP (as the case may be), or such surviving entity, outstanding immediately after such transaction.
  
 6. Confidentiality Agreement. The Executive has signed a Proprietary Information and Inventions Agreement (the “Proprietary Agreement”) that is incorporated by reference and made a part of this Agreement and the form of which is attached hereto as Schedule “A”. The Executive hereby represents and warrants to the Company that the Executive has complied with all obligations under the Proprietary Agreement and agrees to continue to abide by the terms of the Proprietary Agreement and further agrees that the provisions of the Proprietary Agreement shall survive any termination of this Agreement or of the Executive’s employment relationship with the Company in accordance with the terms of the Proprietary Agreement. 
  
 7. Confidentiality of Terms. The Executive agrees to follow the Company’s strict policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this Agreement, regarding salary or stock purchase allocations to any person, including other employees of the Company (other than such employees who have a need to know such information); provided, however, that the Executive may discuss such terms with members of his immediate family and any legal, tax or accounting specialists who provide the Executive with individual legal, tax or accounting advice. Notwithstanding anything to the contrary herein, disclosure of such information shall not be precluded if such disclosure is in response to a valid order of a court or governmental body or is otherwise required by law.
  
 8. Covenants. This Agreement is conditional upon the Executive signing and agreeing to be bound to the Non-Solicitation and Non-Disparagement Agreement attached as Schedule “B” to this Agreement (the “Non-Solicitation and Non-Disparagement Agreement”), which the Executive agrees to execute and deliver to the Company in connection with this Agreement and is incorporated by reference. 
   	 
	6
	 
 
	 

  
 9. Breach of the Agreement. The Executive acknowledges that upon his breach of this Agreement or the Proprietary Agreement, the Company would sustain irreparable harm from such breach, and, therefore, the Executive agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, the Company shall be entitled to obtain equitable relief, including specific performance and injunctions, restraining the Executive from committing or continuing any such violation of this Agreement or the Proprietary Agreement. The Executive acknowledges and agrees that upon the Executive’s material or intentional breach of any of the provisions of the Agreement (including Sections 6 and 8) or the Proprietary Agreement, in addition to any other remedies the Company may have under this Agreement or otherwise, the Company’s obligations to provide benefits to the Executive as described in this Agreement, including without limitation those benefits provided in Section 4, shall immediately terminate, except as required by applicable law. 
  
 10. Entire Agreement. This Agreement, together with its Exhibits and Schedules (including the Proprietary Agreement and the Non-Solicitation and Non-Disparagement Agreement), sets forth the entire agreement and understanding of the parties relating to the subject matter herein, supersedes any prior agreement, and merges all prior discussions between them. 
  
 11. Conflicts. The Executive represents and warrants that his performance of all the terms of this Agreement will not breach any other agreement or understanding to which the Executive is a party. The Executive has not, and will not during the term of this Agreement, enter into any oral or written agreement in conflict with any of the provisions of this Agreement. 
  
 12. Dispute Resolution. Any dispute, controversy or claim arising under or in connection with this Agreement, or the breach hereof (including a dispute as to whether Serious Reason or Resignation for Good Reason exists), shall be settled by the competent courts of the Province of Ontario, City of Toronto. Each party shall pay his, his or its own costs (including lawyers’ fees) in connection with such court proceeding except that the Company shall pay the fees and expenses of the Executive if the Executive is the ultimate successful party in the dispute as determined in a final, non-appealable judgement. Notwithstanding the foregoing, the Company shall be entitled to seek equitable relief directly from a court of competent jurisdiction with respect to any alleged breach of the Proprietary Agreement or Sections 6 and 8, including specific performance and injunctions, restraining the Executive from committing or continuing to commit such alleged breach. 
  
 13. Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agrees expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. The terms of this Agreement and all of the Executive’s rights hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 
  
 14. Miscellaneous Provisions. 
  
 14.1 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the parties. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party. 
   	 
	7
	 
 
	 

  
 14.2 Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by a nationally-recognized delivery service (such as Federal Express or UPS), or 48 hours after being deposited in the mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice. 
  
 14.3 Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Province of Ontario, and the federal laws of Canada applicable therein, without giving effect to its or any other jurisdiction’s principles of conflict of laws. 
  
 14.4 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms. 
  
 14.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. 
  
 14.6 Advice of Counsel. Each party to this agreement acknowledges that, in executing this Agreement, such party has had the opportunity to seek the advice of independent legal counsel, and has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any party by reason of the drafting of preparation hereof.
  
 14.7 Language. The parties hereto have expressly required that this agreement and documents ancillary thereto be drafted in the English language. Les parties à la présente ont expressément exigé que le présent accord et les documents afférents soient rédigés en langue anglaise.
  
 [Signature page follows.]
   	 
	8
	 
 
	 

  
 The parties have executed this Employment Agreement as of the date first written above. 
  
  	 	 The Company:
  
 LOOP CANADA INC. 
	
	 	 	 	 
	 	By:	/s/ Daniel Solomita	
	  
	  
	Daniel Solomita	 
	 	 	President and CEO	 
	 	 	 	 
	  
	Executive:	  

	  
	  
	  
	  

	  
	 By:
	 /s/ Nelson Switzer
	  

	  
	 Name:
	 Nelson Switzer
	  

	  
	  
	  
	  

	  
	 Address:
	  

  
  	 
	9
	 
 
	 

  
 EXHIBIT A
   
  	 Loop Industries, Inc.
		
	 Pay Term Sheet for Chief Growth Officer
		
	 2018-02-13
		
	 		
	 Base Salary
	 $300,000
	
	 Annual Incentive Opportunity
		
	 Target (percent of salary):
	 50%
	
	 Award type:
	 Performance RSUs

	 Performance goals:
	 Company 75% / Individual 25%

	 Goal duration:
	 1 year (assessed at end of FY2019)

	 Vesting period:
	 1/3 per year, commencing after the award is determined

		 $ amount
	 # of shares

	 Threshold potential award:
	 $75,000
	 4,687

	 Target potential award:
	 $150,000
	 9,375

	 Maximum potential award (2x of target):
	 $300,000
	 18,750

	 		
	 Equity Annual Opportunity
		
	 Target (percent of salary):
	 70%
	
	 Award type:
	 Time Options 50% / Performance Options 50%

	 Vesting of time options:
	 1/3 per year, commencing one year after date of grant

	 Performance option goals and duration:
	 All Company goals, generally 2 to 5 year duration (milestones)

	 Vesting of performance options:
	 Vest 1/3 per year, commencing one year after the goal is achieved

	 Option term / period to exercise:
	 All options have a term of 10 years from the date of grant

		 $ amount
	 # of options

	 Threshold potential award:
	 $157,500
	 14063

	 Target potential award:
	 $210,000
	 18,750

	 Maximum potential award (2x for perf options):
	 $315,000
	 28,125

   	 
	10
	 
 
	 

  
  	 Target Total Direct Comp Annualized Opportunity
		
	 Threshold potential award:
	 $532,500
	 18750

	 Target potential award:
	 $660,000
	 28,125

	 Maximum potential award:
	 $915,000
	 46,875

	 		
	 		  

	 Special One-Time New Hire Grant
	  

		 $ amount
	 # of RSUs

	 RSUs (vest 1/3 per year):
	 $243,000
	 15,188

	 		
	 		  

	 		
	 The number of RSUs to grant is based on the stock price on date of grant. The number of stock options to grant is based on the fair value per option (i.e., stock price at date of grant multiplied by the Black-Scholes ratio) divided into the target award amount.

	 		
	 Assumed Stock Price at Grant:
	 $16.00
	 (to be updated at grant)

	 Assumed Black-Scholes ratio:
	 70%
	 (to be updated at grant)

	 Fair value per option:
	 $11.20
	 (to be updated at grant)

  
  	 
	11
	 
 
	 

  
 SCHEDULE A
  
 PROPRIETARY INFORMATION AND
 INVENTIONS AGREEMENT 
  
 LOOP CANADA INC.
  
 In consideration of my employment by LOOP Canada Inc. (the “Company”, which term includes the Company’s, parent, LOOP Industries, Inc., and any of their respective subsidiaries and affiliates), any opportunity for advancement or reassignment that the Company may offer me, the compensation paid to me in connection with such employment and any stock and/or stock options which have been or may be granted to me by the Company, I, Nelson Switzer, hereby agree as follows: 
  
 1. Whenever used in this Agreement the following terms will have the following meanings: 
  
 1.1 “Invention(s)” means discoveries, developments, designs, improvements, inventions and/or works of authorship, whether or not patentable, copyrightable or otherwise legally protectable. This includes, but is not limited to, any new machine, article of manufacture, biological material, method, process, technique, use, equipment, device, apparatus, system, compound, formulation, composition of matter, design or configuration of any kind, or any improvement thereon. 
  
 1.2 “Proprietary Information” means information or physical material not generally known or available outside the Company or information or physical material entrusted to the Company by third parties. This includes, but is not limited to, Inventions, confidential knowledge, trade secrets, copyrights, product ideas, techniques, processes, formulas, object codes, biological materials such as nucleic acids, proteins, organisms, strands, cell lines, antibodies or antigen source materials, or fragments thereof, mask works and/or any other information of any type relating to documentation, data, schematics, algorithms, flow charts, mechanisms, research, manufacture, improvements, assembly, installation, marketing, forecasts, pricing, customers, the salaries, duties, qualifications, performance levels and terms of compensation of other employees, and/or cost or other financial data concerning any of the foregoing or the Company and its operations. Proprietary Information may be contained in material such as drawings, samples, procedures, specifications, reports, studies, customer or supplier lists, budgets, cost or price lists, compilations or computer programs, or may be in the nature of unwritten knowledge or know-how. 
  
 1.3 “Company Documents” means documents or other media that contain Proprietary Information or any other information concerning the business, operations or plans of the Company, whether such documents have been prepared by me or by others. “Company Documents” include, but are not limited to, blueprints, drawings, photographs, charts, graphs, notebooks, customer lists, computer disks, tapes or printouts, sound recordings and other printed, typewritten or handwritten documents. 
   	 
	12
	 
 
	 

  
 2. I also recognize that the Company possesses or has rights to Proprietary Information (including certain information developed by me during my employment by the Company that has commercial value in the Company’s business. 
  
 3. I understand that the Company possesses Company Documents that are important to its business. 
  
 4. I understand and agree that my employment creates a relationship of confidence and trust between me and the Company with respect to (i) all Proprietary Information and (ii) the confidential information of another person or entity with which the Company has a business relationship and is required by terms of an agreement with such entity or person to hold such information as confidential. At all times, both during my employment by the Company and after its termination, I will keep in confidence and trust all such information, and I will not use or disclose any such information without the written consent of the Company, except as may be necessary in the ordinary course of performing my duties to the Company or as required by law. 
  
 5. In addition, I hereby agree as follows: 
  
 5.1 All Proprietary Information will be the sole property of the Company and its assigns, and the Company and its assigns will be the sole owner of all trade secrets, patents, copyrights and other rights in connection therewith. I hereby assign to the Company any rights I may presently have or I may acquire in such Proprietary Information. 
  
 5.2 All Company Documents, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished to me by the Company or produced by me or others in connection with my employment will be and remain the sole property of the Company. I will return to the Company all such Company Documents, materials and property as and when requested by the Company, excepting only (i) my personal copies of records relating to my compensation; (ii) my personal copies of any materials previously distributed generally to stockholders of the Company; and (iii) my copy of this Agreement (my “Personal Documents”). Even if the Company does not so request, I will return all such Company Documents, materials and property upon termination of my employment by me or by the Company for any reason, and, except for my Personal Documents, I will not take with me any such Company Documents, material or property or any reproduction thereof upon such termination. 
  
 5.3 I will promptly disclose to the Company, or any persons designated by it, all Inventions relating to the Field, as defined below, made or conceived, reduced to practice or created by me, either alone or jointly with others, prior to the term of my employment or consultancy (as the case may be). For purposes of this Agreement, “Field” means research, development, marketing or manufacturing of any products also researched, developed, marketed or manufactured by the Company. 
   	 
	13
	 
 
	 

  
 5.4 All Inventions that I conceive, reduce to practice, develop or have developed (in whole or in part, either alone or jointly with others) during the term of my employment or consultancy (as the case may be) in connection with the business of the Company will be the sole property of the Company and its assigns to the maximum extent permitted by law (and to the fullest extent permitted by law will be deemed “works made for hire”), and the Company and its assigns will be the sole owner of all patents, copyrights and other rights in connection therewith. I hereby assign to the Company my entire right, title and interest, whether possessed now or later acquired, in such Inventions. 
  
 5.5 During or after my employment, upon the Company’s request and at the company’s expense, I will execute all papers in a timely manner and do all acts necessary to apply for, secure, maintain or enforce patents, copyrights and any other legal rights in Inventions assigned to the Company under this Agreement, and I will execute all papers and do any and all acts necessary to assign and transfer to the Company or any person or party to whom the Company is obligated to assign its rights, my entire right, title and interest in and to such Inventions. This obligation will survive the termination of my employment or consultancy (as the case may be), but the Company will compensate me at a reasonable rate after such termination for time actually spent by me at the Company’s request on such assistance. In the event that the Company is unable for any reason whatsoever to secure my signature to any document reasonably necessary or appropriate for any of the foregoing purposes, (including renewals, extensions, continuations, divisions or continuations in part), I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agents and attorneys-in-fact to act for and in my behalf and instead of me, but only for the purpose of executing and filing any such document and doing all other lawfully permitted acts to accomplish the foregoing purposes with the same legal force and effect as if executed by me. 
  
 5.6 So that the Company may be aware of the extent of any other demands upon my time and attention, I will disclose to the Company (such disclosure to be held in confidence by the Company) the nature and scope of any other business activity in which I am or become engaged during the term of my employment. During the term of my employment, I will not engage in any other business activity that is related to the Company’s business or its actual or demonstrably anticipated research and development unless the Company provides its consent. 
  
 6. As a matter of record I attach hereto as Exhibit A a complete list of all Inventions (including patent applications and patents) relevant to the Field that have been made, conceived, developed or first reduced to practice by me, alone or jointly with others, prior to my employment with the Company that I desire to remove from the operation of this Agreement, and I covenant that such list is complete. If no such list is attached to this Agreement, I represent that I have no such Inventions at the time of signing this Agreement. If in the course of my employment with the Company, I use or incorporate into a product or process an Invention not covered by Paragraph 5.4 of this Agreement in which I have an interest, the Company is hereby granted a nonexclusive, fully paid-up, royalty-free, perpetual, worldwide license of my interest to use and sublicense such Invention without restriction of any kind. 
  
 7. I represent that my execution of this Agreement, my employment with the Company and my performance of my proposed duties to the Company in the development of its business will not violate any obligations I may have to any former employer, or other person or entity, including any obligations to keep confidential any proprietary or confidential information of any such employer. I have not entered into, and I will not enter into, any agreement that conflicts with or would, if performed by me, cause me to breach this Agreement. 
   	 
	14
	 
 
	 

  
 8. In the course of performing my duties to the Company, I will not utilize any proprietary or confidential information of any former employer. 
  
 9. This Agreement will be effective as of the first day of my employment by the Company and the obligations hereunder will continue beyond the termination of my employment and will be binding on my heirs, assigns and legal representatives. This Agreement is for the benefit of the Company, its successors and assigns (including all subsidiaries, affiliates, joint ventures and associated companies) and is not conditioned on my employment for any period of time or compensation therefor. I agree that the Company is entitled to communicate any obligations under this Agreement to any future employer or potential employer of mine. 
  
 10. I agree that any dispute in the meaning, effect or validity of this Agreement will be resolved in accordance with the laws of the Province of Ontario without regard to its or any other jurisdiction’s conflict of laws provisions. I further agree that if one or more provisions of this Agreement are held to be unenforceable under applicable laws of the Province of Ontario, such provision(s) will be excluded from this Agreement and the balance of the Agreement will be interpreted as if such provision were so excluded and will be enforceable in accordance with its terms. 
  
 I HAVE READ AND UNDERSTOOD THER AGREEMENT. THER AGREEMENT MAY ONLY BE MODIFIED BY A SUBSEQUENT WRITTEN AGREEMENT EXECUTED BY THE PRESIDENT OR CHIEF OPERATING OFFICER OF THE COMPANY AND MYSELF. 
  
 Dated: ______________________, 2018. 
  
  
  	 By:
	  
	  

	  
	 Name (Print): Nelson Switzer
	  

  
 Accepted and Agreed to: 
  
 LOOP CANADA INC. 
  
  
  	 By:
	  
	  

	  
	 Daniel Solomita, President and CEO
	  

  
  	 
	15
	 
 
	 

  
 EXHIBIT A
 TO
 PROPRIETARY INFORMATION AND
 INVENTIONS AGREEMENT
  
 LOOP Canada Inc. 
  
 Ladies and Gentlemen: 
  
 1. The following is a complete list of all inventions or improvements relevant to the Field that have been made or conceived or first reduced to practice by me, alone or jointly with others, prior to my employment by the Company that I desire to remove from the operation of the Proprietary Information and Inventions Agreement entered into between the Company and me. 
  
  	 ________ No inventions or improvements.
  
 ________ Any and all inventions regarding:
  
 ________ Additional sheets attached.

  
 2. I propose to bring to my employment the following materials and documents of a former employer:
  
  	 ________ No materials or documents.
  
 ________ See below:

  
  	  
	  

	 (Signature) 
	  

	 Print Name: Nelson Switzer
	  

  
  	 
	16
	 
 
	 

  
 SCHEDULE B
 NON-SOLICITATION AND NON-DISPARAGEMENT
  
  	1.	Non-Solicitation of Employees. The Employee shall not, during employment or during the twelve month period following the Termination Date (“Restricted Period)on the Executive’s own behalf or on behalf of any person, whether directly or indirectly, in all or part of the territory, offer employment to or solicit the employment or services of or otherwise entice away from the employment or service of the Company or its Affiliates, any Person or Persons who are, or within the 12 months preceding the Termination Date, were (i) employed by the Company or its Affiliates or (ii) providing consulting or other services to the Company or its Affiliates, whether as an independent contractor or otherwise; whether or not such Person or Persons would commit any breach of his or her contract of employment or services by reason of leaving the service of the Company or its Affiliates.
	  
	  

	2.	Non-Solicitation of Customers and Suppliers. The Executive shall not, during the Restricted Period, on the Executive’s own behalf or on behalf of any Person, whether directly or indirectly, for any purpose which is in competition, in whole or in part, with the Business, solicit any Customer or Supplier or procure or assist in the solicitation of any Customer or Supplier, in all or part of the Territory
	  
	  

	3.	Non-Disparagement. The Executive shall not, during employment with the Company or its Affiliates or following the termination of the Executive’s employment for any reason, on the Executive’s own behalf or on behalf of any person, whether directly or indirectly:

  
  	  
	(a)	take any action intended to impair the reputation of the Company or its Affiliates, or intended to be detrimental to the business or operational interests of the Company or its Affiliates; or
	  
	  
	  

	  
	(b)	criticize, disparage, defame or make any negative comments, statements or images about the Company or its Affiliates, Including their current or former operations, projects, initiatives, employees, consultants, independent contractors, officers, directors, customers, suppliers, distributors, shareholders, agents, representatives, goods, products and/or services, whether oral or written, Including statements and images made or posted via social media or on the internet.

  
  	4.	Definitions. The following capitalized terms, when used herein, have the respective meanings set forth below. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed thereto in the Employment Agreement.
	  
	  

		“Affiliates” means all of the Company’s direct and indirect predecessor, subsidiary, parent, related, affiliated and successor companies.

  
  	 
	17
	 
 
	 

  
  		“Business” means at the Termination Date, or in the two years preceding the Termination Date, any business or industry in which the Company and its Affiliates operate, or sell, provide or distribute goods, products or services.
	  
	  

		“Customer” means any Person, to the Executive’s knowledge:

  
  	  
	(a)	that has purchased or distributed the Company’s or any of its Affiliates’ goods, products or services in connection with the Business at any time during the 12 months preceding the Termination Date; or
	  
	  
	  

	  
	(b)	whom the Company has solicited, called upon or negotiated with at any time during the 12 months preceding the Termination Date with a view to selling or providing goods, products or services to such Person or distributing goods, products or services through such Person.

  
  		“Including” means “including, without limitation”.
	  
	  

		“Person” means any individual, corporation, firm partnership, governmental organization or other entity.
	  
	  

		“Supplier” means any Person, to the Employee’s knowledge:

  
  	  
	(a)	having provided goods, products or services to the Company or any of its Affiliates in connection with the Business at any time during the 12 months preceding the Termination Date; or
	  
	  
	  

	  
	(b)	whom the Company is in negotiation with as at the Termination Date with a view to having such Person provide goods, products or services to the Company [or any of its Affiliates].

  
  		“Termination Date” means the date on which employment will end as specified in the written notice of termination of employment provided by the Employee or the Company, as the case may be.
	  
	  

		“Territory” means Canada or the United States of America.

  
  
 			  
	  

	 Date
	  
	 Nelson Switzer
	  

   	 
	18

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