Document:

mkkn_ex103.htm

EXHIBIT 10.3
  
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
 
MAKKANOTTI GROUP CORP.
 
FORM OF WARRANT TO PURCHASE COMMON STOCK
 
	Warrant No. [ · ]
	Original Issue Date: November 7, 2016

 
Makkanotti Group Corp., a Nevada corporation (the “Company”), hereby certifies that, for value received, [ · ] or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of [ · ] shares of Common Stock (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”), as determined in accordance with the terms herewith, at the Exercise Price (as defined below), at any time and from time to time from, on or after November 7, 2016 (the “Commencement Date”), and through and including 5:30 P.M., U.S. Pacific Standard Time, on November 7, 2020 (the “Expiration Date”), and subject to the following terms and conditions:
 
1. Definitions. As used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1.
 
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144.
 
“Business Day” means any day except Saturday, Sunday and any day which is a federal legal holiday or a day on which banking institutions in the State of California are authorized or required by law or other governmental action to close.
 
	 
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“California Courts” means (i) the state or federal courts sitting in Ventura County, California; or (ii) if such court does not have jurisdiction, then the United States District Court for the Central District of California. 
 
“Common Stock” means the common stock of the Company, $0.001 par value per share, and any securities into which such common stock may hereafter be reclassified or for which it may be exchanged as a class.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“National Trading Market” means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the NYSE MKT, LLC or the New York Stock Exchange (or any successors to any of the foregoing).
 
“Original Issue Date” means the Original Issue Date first set forth on the first page of this Warrant.
 
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
 
“Rule 144” means Rule 144 promulgated by the Securities and Exchange Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission having substantially the same effect as such Rule.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Subsidiary” means any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X promulgated by the Securities and Exchange Commission under the Exchange Act.
 
“Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the OTC Markets Group, Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean a Business Day.
    	 
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“Trading Market” means whichever of the following markets, exchanges or quotation systems on which the Common Stock is listed or quoted for trading on the date in question: New York Stock Exchange, the NYSE MKT, LLC, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, OTC Bulletin Board, or the OTCQX, OTCQB or OTC Pink tiers of the OTC Markets Group, Inc. quotation system (or any successors to any of the foregoing).
 
“Uplisting” means listing of the Company’s common stock for trading on a National Trading Market.
 
“Warrant Shares” means the shares of Common Stock issuable upon exercise of this Warrant.
 
2. Exercise Price. For purposes of this Warrant, the “Exercise Price” means $2.00 per share of Common Stock, subject to adjustment as provided herein.
 
3. Registration of Warrant. 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.
 
4. Registration of Transfers. The Company shall register the transfer of all or any portion of this Warrant in the Warrant Register, upon (i) surrender of this Warrant, with the Form of Assignment attached as Schedule 2 hereto duly completed and signed, to the Company’s transfer agent or to the Company at its address specified herein, (ii) delivery, at the request of the Company, of an opinion of counsel reasonably satisfactory to the Company to the effect that the transfer of such portion of this Warrant may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities or blue sky laws and (iii) delivery by the transferee of a written statement to the Company, in form and substance reasonably acceptable to the Company, certifying that the transferee is an “accredited investor” as defined in Rule 501(a) under the Securities Act and making the representations and certifications as the Company may reasonably request to procure an exemption from section 5 of the Securities Act. Upon any such registration or transfer, a new warrant to purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “New Warrant”) evidencing the portion of this Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a Holder of this Warrant.
 
5. Exercise and Duration of Warrants. 
 
(a) All or any part of this Warrant shall be exercisable by the registered Holder at any time and from time to time from and after the Commencement Date, and through and including 5:30 P.M., U.S. Pacific Standard Time, on the Expiration Date. At 5:30 P.M., U.S. Pacific Standard time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. This Warrant shall also be subject to the Call Rights provision set forth in Section 17 below.
    	 
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(b) The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”), appropriately completed and duly signed, (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being, and the date such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
 
6. Delivery of Warrant Shares. Upon exercise of this Warrant, the Company shall promptly issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate a certificate for the Warrant Shares issuable upon such exercise, with an appropriate restrictive legend. The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date. This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
 
7. Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.
 
8. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.
 
9. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than the Holder (taking into account the adjustments and restrictions of Section 10). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.
    	 
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10. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 10.
 
(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.
 
(b) Fundamental Transactions. If, at any time while this Warrant is outstanding (i) the Company effects any merger or consolidation of the Company with or into another Person, in which the Company is not the survivor, (ii) the Company effects any sale of all or substantially all of its assets or a majority of its Common Stock is acquired by a third party, in each case, in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification 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 (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 10(a) above), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). 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. The Company shall use its reasonable best efforts to ensure that at the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The Company shall use its reasonable best efforts to ensure that the terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (b) and ensuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
    	 
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(c) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 10, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment to the Exercise Price and the number of Warrant Shares.
  
(d) Calculations. All calculations under this Section 10 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
 
(e) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 10, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent.
 
(f) Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction (but only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder) at least 10 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to ensure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.
 
11. Payment of Exercise Price. The Holder may pay the Exercise Price in immediately available funds.
    	 
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12. Limitations on Exercise. The Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise this Warrant, to the extent that after giving effect to such exercise, the Holder (together with such Holder’s affiliates and any Persons acting as a group together with the Holder or any Holder’s affiliates) would beneficially own in excess of 9.99% (“Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Holder and its affiliates, and any Persons acting as a group together with such Holder and such Holder’s affiliates, shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Holder and its affiliates, and any Persons acting as a group together with such Holder and such Holder’s affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such Holder and its affiliates, and any Persons acting as a group together with such Holder and such Holder’s affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. The Warrant Agent shall not be responsible for calculating beneficial ownership in accordance with the provisions of this Section 12. To the extent that the limitation contained in this Section 12 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliate, and any persons acting as a group together with such Holder and such Holder’s affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and Holder’s submission of an Exercise Notice shall be deemed to be the Holder’s determination of whether a Warrant is exercisable (in relation to any other securities owned by the Holder together with any affiliates, and any persons acting as a group together with such Holder and such Holder’s affiliates) and of which portion of a Warrant is exercisable, in each case subject to the Maximum Percentage, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of the 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 and its affiliates, and any Persons acting as a group together with such Holder and such Holder’s affiliates, since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, Holder may remove the limitations on exercises provided in this Section 12 entirely; provided that (i) any such removal will not be effective until the 61st day after such notice is delivered to the Company, and (ii) any such removal will apply only to the Holder sending such notice and not to any other holder of Warrants. For purposes of clarity, the shares of Common Stock issuable pursuant to this Warrant in excess of the Maximum Percentage for the Holder shall not be deemed to be beneficially owned by such Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to exercise this Warrant pursuant to this Section 12 shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 12 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. 
    	 
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13. No Fractional Shares. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the date of exercise.
 
14. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by overnight courier service or sent via facsimile (receipt confirmed) or via electronic mail transmission (“email”) to the parties at the following addresses or facsimile numbers: 
 
If to the Company:
 
1620 Beacon Place 
Oxnard, CA 93033
Tel: (805) 824-0410
Fax: (805) 487-7163
Email: RDavidson@curepharmaceutical.com
 
If to the Holder:
 
[ · ]
 
with all such notices and other communications becoming effective (a) if sent via facsimile, when transmitted and confirmation is received, provided such notice is sent on or before 5:00 P.M. Pacific Standard Time on a Business Day and, if not, on the next Business Day, (b) if sent via email, when transmitted on or before 5:00 P.M. Pacific Standard Time on a Business Day, and if not, on the next Business Day (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not immediately receive an automatically generated message from the recipient’s electronic mail server that such email could not be delivered to such recipient), (c) if sent via overnight courier service, one Business Day after deposit with an overnight courier service, or (d) if personally delivered, upon delivery. The addresses or facsimile number of a party for such notices or communications may be changed by such party by two Trading Days’ prior notice to the other party in accordance with this Section 14.
    	 
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15. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 10 calendar days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause a written notice of its succession as warrant agent to be delivered in accordance with Section 14 herein to the Holder.
 
16. Market Standoff Agreement. The Holder and each transferee of this Warrant (or any replacement issued hereunder) agrees in connection with any registration of the Company’s securities, upon notice by the Company or the underwriters managing any underwritten public offering of the Company’s securities, not to sell, make any short sale of, loan, pledge (or otherwise encumber or hypothecate), grant any option for the purchase of, or otherwise directly or indirectly dispose of this Warrant or any Warrant Shares without the prior written consent of the Company and such managing underwriters for such period of time as the Board of Directors establishes pursuant to its good faith negotiations with such managing underwriters, which period shall not exceed 180 days. The Holder agrees to execute such additional agreements as the managing underwriters may require to effect the intent of this provision. The Holder hereby consents to the placement of stop transfer orders with the Company’s transfer agent in order to enforce the foregoing provision. Notwithstanding the foregoing, the obligations described in this Section 16 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated in the future, or a registration relating solely to an SEC Rule 145 transaction on Form S-4 or similar forms which may be promulgated in the future.
 
17. Call Rights. The Company shall have the right to call the exercise of all, or the remaining portion of this Warrant outstanding and unexercised at the then-current Exercise Price at any time after the effective date of the Company’s Uplisting (the “Call Condition”). In the event the Call Condition is satisfied and the Company desires to exercise its call rights under this Section 17, the Company shall deliver a notice to each registered Holder of the Warrants setting forth the number of Warrants held by Holder being called for exercise (the “Call Amount”) and the dollar amount due to exercise the Warrants (the “Call Notice”). Each Holder shall have fifteen (15) calendar days from the receipt of the Call Notice to exercise the Call Amount of the Warrants (the “Call Period”). The date on which the Call Amount is exercised is referred to herein as the “Forced Exercise Date.” Upon the expiration of the Call Period, any remaining portion of this Warrant which had been called but remained unexercised shall automatically expire. Notwithstanding anything herein to the contrary, (a) in connection with the Company’s exercise of its call rights under this Section 17, the Maximum Percentage limitation on exercise set forth in Section 12 herein shall not apply; and (b) if, after the call right under this Section 17is exercised, the stated Expiration Date of this Warrant would occur prior to the last day of the Call Period, the “Expiration Date” hereof shall be extended to last day of the Call Period solely to the extent necessary to enable this Warrant to be exercised for the Call Amount on the Forced Exercise Date.
    	 
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18. Miscellaneous.
 
(a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns. 
 
(b) All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the California Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the California Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any California Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.
 
(c) 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) The Holder, by acceptance hereof, acknowledges and agrees that the Warrant Shares acquired upon the exercise of this Warrant will have restrictions upon resale imposed by state and federal securities laws.
 
(e) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.
 
(f) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
 
(g) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGE FOLLOWS]
 
	 
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.
 
	 	MAKKANOTTI GROUP CORP.
	
	 	 	 	 
		By:	/s/ Robert Davidson	
	 
	 
	Robert Davidson	 
	 	 	Chief Executive Officer	 

     	 
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SCHEDULE 1
 
FORM OF EXERCISE NOTICE
 
(To be executed by the Holder to exercise the right to purchase shares
of Common Stock under the foregoing Warrant)
 
The undersigned is the Holder of Warrant No. __ (the “Warrant”) issued by Makkanotti Group Corp., a Nevada corporation (the “Company”). Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.
 
	(1)
	The undersigned Holder hereby exercises its right to purchase _________________ Warrant Shares pursuant to the Warrant.

 
	(2)
	The holder shall pay the sum of $____________ to the Company in accordance with the terms of the Warrant.

 
	(3)
	Pursuant to this Exercise Notice, the Company shall deliver to the holder _______________ Warrant Shares in accordance with the terms of the Warrant.

 
	(4)
	By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 12 of this Warrant to which this notice relates.

 
Dated: ____________, ______ 
 
Name of Holder (Print):  _______________________________________________
 
By: _________________________________________
Name: _______________________________________
Title: ________________________________________
 
(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
 
	 
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SCHEDULE 2
 
FORM OF ASSIGNMENT
 
[To be completed and signed only upon transfer of Warrant]
 
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _______________________ (the “Transferee”) the right represented by the within Warrant to purchase __________________ shares of Common Stock of Makkanotti Group Corp. (the “Company”) to which the within Warrant relates and appoints ____________________ attorney to transfer said right on the books of the Company with full power of substitution in the premises. In connection therewith, the undersigned represents, warrants, covenants and agrees to and with the Company that:
 
(a) the offer and sale of the Warrant contemplated hereby is being made in compliance with Section 4(1) of the United States Securities Act of 1933, as amended (the “Securities Act”) or another valid exemption from the registration requirements of Section 5 of the Securities Act and in compliance with all applicable securities laws of the states of the United States;
 
(b) the undersigned has not offered to sell the Warrant by any form of general solicitation or general advertising, including, but not limited to, any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, and any seminar or meeting whose attendees have been invited by any general solicitation or general advertising;
 
(c) the undersigned has read the Transferee’s written statement included herewith, and to its actual knowledge, the statements made therein are true and correct; and
 
(d) the undersigned understands that the Company may condition the transfer of the Warrant contemplated hereby upon the delivery to the Company by the undersigned or the Transferee, as the case may be, of a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable securities laws of the states of the United States.
 
Dated: ____________, ______ 
 
Name of Holder (Print): _______________________________________________
 
By: ___________________________________________
Name: _________________________________________
Title: __________________________________________
  
(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
 
  
	Address of Transferee:
	 
	 

	Transferee Fax No.:	 
	 

	Transferee Email Address:	 
	 

 
 
	 
	13Exhibit

EXHIBIT 10.1

EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made effective November 14, 2016 (the “Effective Date”) by and between Tesco Corporation, a corporation organized under the laws of the Province of Alberta, Canada (hereinafter referred to as “Employer” or the “Company”) and John Gatlin (hereinafter referred to as “Executive”).  Employer and Executive are collectively referred to herein as the “Parties,” and individually referred to as a “Party.”  

RECITALS:
WHEREAS, Employer desires to employ Executive on a continuing basis as provided herein;

WHEREAS, Executive desires to be employed by Employer pursuant to all of the terms and conditions hereinafter set forth; and

WHEREAS, Executive will have access to Employer’s Confidential Information as a result of his employment with Employer.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is AGREED as follows:

AGREEMENT:

		
	1.
	Purpose. The purpose of this Agreement is to formalize the terms and conditions of Executive’s employment with Employer. The recitals contained herein represent both Parties’ intentions with respect to the terms and conditions covered, which terms and conditions cannot be amended during the term of the Agreement except by written addendum to the Agreement signed by both Parties.

		
	2.
	Definitions. For the purposes of this Agreement, the following words shall have the following meanings:

		
	(a)
	“Affiliate” shall mean any Person, or any other Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, another Person.  The term “control” includes, without limitation, the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.  With respect to any amount under this Agreement that is deferred compensation subject to Code Section 409A, for the purposes of Code Section 409A only, Affiliate shall mean all Persons with whom the Employer would be considered a single employer under Code Section 414(b) or 414(c) and for the purposes of a Separation of Service and determining the controlled group but using 50% instead of 80% pursuant to Treasury Regulation section 1.409A-1(h)(3).

		
	(b)
	“Base Annual Salary” shall mean only the amount specified in Section 5(a).

		
	(c)
	“Board of Directors” shall mean the board of directors of Tesco Corporation.

		
	(d)
	“Cause,” in connection with a termination by Employer, shall mean: (1) embezzlement or theft by Executive of any property of the Company or its Affiliates; (2) any breach by Executive of any material provision of this Agreement; (3) any act by Executive constituting a felony or otherwise involving theft, fraud, gross dishonesty, or moral turpitude; (4) negligence or willful misconduct on the part of Executive in the performance of his duties as an employee, officer, or director of the Company or its Affiliates;  (5) the willful and continued failure of Executive substantially to perform his duties with the Company (other than any failure due to physical or mental incapacity) after a written demand for substantial performance is delivered to him by the Chief Executive Officer of the Company which specifically identifies the manner in which the Chief Executive Officer of the Company believes he has not substantially performed his duties, (6) Executive’s breach of his fiduciary obligations to the Company or its Affiliates; (7) Executive’s material violation or breach of the policies or procedures of the Company and its Affiliates (including but not limited to blackout periods for trading Common Shares);  (8) Executive’s intentional action, which Executive knows would not comply with the laws of the United States or any other jurisdiction applicable 

        
EMPLOYMENT AGREEMENT        Page 1

to Executive’s actions on behalf of the Company, and/or any of its Affiliates, including specifically, without limitation, the United States Foreign Corrupt Practices Act, generally codified in 15 USC 78 (the “FCPA”), as the FCPA may hereafter be amended, and/or its successor statute or (9) any chemical dependence of Executive which adversely affects the performance of his duties and responsibilities to the Company or its Affiliates.
		
	(e)
	“Change of Control” means  a “Change in Control Event” within the meaning of Treasury Regulation section 1.409A-3(i)(5) and described in items 1-3 below or any combination thereof as permitted in the Treasury Regulations with respect to the Company.

		
	(1)
	A change in ownership of the Company that occurs when one person or a group (as determined for the purposes of Code Section 409A) acquires stock of the Company that, combined with stock previously owned by such person or group, constitutes more than 50% of the value or voting power of the stock of the Company (incremental increases in ownership by a person or group that already owns fifty percent (50%) of the Company do not result in a change in ownership);

		
	(2)
	A change in effective control of the Company that occurs on the date that, during any 12-month period, either (x) any person or group acquires stock possessing more than 50% of the voting power of the Company, or (y) the majority of the board of directors of the Company is replaced by persons whose appointment or election is not endorsed by a majority of the board of directors of the Company prior to the date of the appointment or election; or

		
	(3)
	A change in ownership of a substantial portion of the assets that occurs on the date that a person or a group acquires, during any 12-month period, assets of the Company having a total gross fair market value equal to more than 50% of the total gross fair market value of all of the Company’s assets; provided, however, that there is no change in control event under this Section 2(e)(3) when there is a transfer to:  (w) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock; (x) an entity, 50 percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company immediately after the asset transfer; (y) a person, or more than one person acting as a group, that owns immediately after the asset transfer, directly or indirectly, 50 percent (50%) or more of the total value or voting power of all the outstanding stock of the Company; or (z) an entity, at least 50 percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a person described in item (y) within the meaning of Code Section 409A.  For the purposes of this this Section 2(e)(3) “gross fair market value” shall have the meaning as provided in Code Section 409A.

		
	(f)
	“Code” means the Internal Revenue Code of 1986, as amended, and the applicable notices, rulings and regulations thereunder.

		
	(g)
	“Code Section 409A” means Section 409A of the Code and applicable Department of Treasury or Internal Revenue Service regulations or other authorities promulgated thereunder.

		
	(h)
	“Common Shares” means common shares of the Company, or any successor security issued in lieu therefor.

		
	(i)
	“Confidential Information” means information (1) disclosed to or known by Executive as a consequence of or through his employment with Employer; (2) not generally known outside Employer; and (3) which relates to any aspect of Employer, its Affiliates or their business, research, or development. “Confidential Information” includes, but is not limited to, Employer’s and its Affiliates trade secrets, proprietary information, business plans, marketing plans, financial information, compensation and benefit information, cost and pricing information, customer contacts, suppliers, vendors, and information provided to Employer or its Affiliates by a third party under restrictions against disclosure or use by Employer, its Affiliates or others.

		
	(j)
	“Conflict of Interest” means any activity which might adversely affect Employer, its Affiliates or their businesses, including ownership of a material interest in any supplier, contractor, distributor, subcontractor, customer, or other entity with which Employer or its Affiliates does business.

		
	(k)
	“Copyright Works” are materials for which copyright protection may be obtained including, but not limited to: literary works (including all written material), computer programs, artistic and graphic works (including designs, graphs, drawings, blueprints, and other works), recordings, models, photographs, slides, motion pictures, and audio‐visual works, regardless of the form or manner in which documented or recorded.

EMPLOYMENT AGREEMENT        Page 2

		
	(l)
	“Company” or “Employer” means Tesco Corporation.

		
	(m)
	“Date of Termination” shall mean the effective date of termination of Executive’s employment with the  Employer.  Termination of Executive’s employment with the Employer, includes due to death, Disability,  Retirement, Termination by the Employer for Cause, Termination by the Employer without Cause, Termination by Executive Without Good Reason and Termination by Executive for Good Reason, and shall mean a “Separation from Service” within the meaning of Code Section 409A, which means a termination of the Executive’s employment with the Company (and its controlled group within the meaning of Treasury Regulation section 1.409A-1(h)(3)) in accordance with the Company’s policies and procedures; provided that the Company and Executive reasonably anticipate that no further services will be performed after the termination date or that the level of bona fide services Executive will perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Company if Executive has been providing services to the Company for less than 36 months).

		
	(n)
	“Disability” or “Disabled” means any physical or mental incapacity qualifying Executive for a long-term disability under the Company’s long-term disability plan.  If no such plan exists on the date on which a relevant determination is being made, the term “Disability” or “Disabled” means any physical or mental incapacity, disease or affliction, as determined by a legally qualified medical practitioner selected by the Company which prevents Executive to a substantial degree from performing his obligations after reasonable accommodation from Employer.

		
	(o)
	“Equity-Based Awards” include stock options, restricted stock, restricted stock units, performance vesting stock, performance stock units, and any other award granted by the Employer which derives its value based upon an equity security of the Employer, regardless whether such award is ultimately intended to be settled in stock or cash.

		
	(p)
	“Good Reason,” in connection with a termination by Executive means the occurrence of any of the following without Executive’s written consent (except in connection with the termination of the employment of Executive by the Employer for Cause or Disability): 

		
	(i)
	a material diminution in the Executive’s Base Annual Salary;

		
	(ii)
	a material diminution in the Executive’s authority, duties, or responsibilities;

		
	(iii)
	a material change in geographic location at which the Executive must perform the services; 

		
	(iv)
	non-renewal or failure to extend this Agreement for any reason pursuant to Section 3; or 

		
	(v)
	any other action or inaction that constitutes a material breach by the Company of the terms of this Agreement.

		
	(q)
	“Inventions” means inventions (whether patentable or not), discoveries, improvements, designs, and ideas (whether or not shown or described in writing or reduced to practice) including, and in addition to any such Confidential Information or Copyright Works.

		
	(r)
	“LTIP” or “Long Term Incentive Plan” means the plan designated by the Company as the Company’s Long-Term Incentive Plan pursuant to which Executive receives Equity Based Awards, as in effect and as amended from time to time.

		
	(s)
	“Person” for the purposes of the term Affiliate in Section 2(a) shall mean any partnership, corporation, limited liability company, group, trust or other legal entity.

		
	(t)
	“Retirement” means for the purposes of this Agreement only the Executive’s resignation from the Company and its Affiliates after age 60.

		
	(u)
	“STIP” or “Short Term Incentive Plan” means any Company’s annual short term cash bonus plan in which Executive participates, as in effect and as amended from time to time.

		
	3.
	Duration. The term of this Agreement shall commence on the Effective Date and end on the third anniversary of the Effective Date.  On the third anniversary of the Effective Date, and each anniversary thereafter, the term of this Agreement will be automatically extended for one (1) year such that the term of this Agreement on the date of each such extension shall be one (1) year; provided, however, that the Company may give written notice to the Executive that the Agreement will not be renewed or continued after the next scheduled expiration date which is not less than one hundred eighty (180) days after the date that the notice of non-renewal was given.  Notwithstanding the above, the term of this Agreement will expire upon Employee’s termination of employment for any reason.

EMPLOYMENT AGREEMENT        Page 3

		
	4.
	Duties and Responsibilities. Upon the Effective Date of employment under this Agreement, the office, position and title for which Executive is initially employed is that of Chief Operating Officer.  Executive shall diligently render his services to Employer in a manner customary for such office or equivalent and in additional positions within the Company and its Affiliates in accordance with Employer’s directives, and Executive shall use his best efforts and good faith in fulfilling such responsibilities and in accomplishing such directives. Executive agrees to devote his full-time efforts, abilities, and attention to the business of Employer, and shall not engage in any activities which will interfere with such efforts. Executive shall well and faithfully serve Employer during the continuance of his employment hereunder and shall use his best efforts to promote the interests of Employer.  Executive’s home office will be in Houston, Texas.  Executive shall report to the Chief Executive Officer.  Executive hereby acknowledges that he is fiduciary with respect to the Company and its Affiliates and shall act in accordance and otherwise comply with his fiduciary obligation to the Company and its Affiliates.  

		
	5.
	Compensation and Benefits. In return for the services to be provided by Executive pursuant to this Agreement, Employer agrees to pay Executive as follows:

		
	(a)
	Base Annual Salary. Executive shall receive a Base Annual Salary annually of three hundred twenty-five thousand U.S. dollars and no cents ($325,000.00) payable in bi-weekly pay periods, subject to deduction of statutorily required amounts, including but not limited to, withholding for federal, state and local income taxes, and amounts payable by employees of Employer for employee benefits. The annual salary to be paid by Employer to Executive shall be reviewed at least annually and may from time to time be increased (but may not be materially decreased) as approved by Employer (any such increase or immaterial decrease shall then be referred to as “Base Annual Salary” for the purposes of this Agreement).

		
	(b)
	Short Term Incentive Plan.  Executive may be eligible to be receive an annual Short Term Incentive Plan bonus subject to the terms of the STIP as determined by the Board of Directors or compensation committee thereof in its sole discretion.  The components, target and maximum amounts of any STIP bonus shall be a percentage of Executive’s Base Annual Salary as determined by the Board of Directors or compensation committee thereof in its sole discretion.  Subject to the foregoing, a portion of the annual STIP bonus may be based upon Employer’s financial performance and a portion of the STIP may be based upon achievement of individual performance objectives, all as may be determined by the Board of Directors or compensation committee thereof in its sole discretion.  STIP bonuses for each calendar year shall be payable in the following calendar year as determined by the Board of Directors or compensation committee thereof, provided that payment, if any, shall be no later than March 15th of the following year.  The Company’s adoption of a STIP bonus for a year does not require the Company to adopt a STIP bonus for any other year.  If the Company adopts a STIP bonus for Company employees for a particular year, Executive may be eligible to participate in such year subject to the foregoing.

		
	(c)
	Long Term Incentive Plan. As a member of executive management team, Executive may participate annually in Employer’s Long Term Incentive Plan as determined by and on such terms as approved by the Board of Directors or the compensation committee thereof in its sole discretion.  The LTIP may include stock options, restricted stock, stock performance units and/or other types of compensation.  The Company’s adoption of a LTIP award for one year does not require the Company to adopt an award or the LTIP in any other year.

		
	(d)
	Legal Expenses.  Employer shall pay Executive’s reasonable attorneys’ fees incurred in negotiating and finalizing this Agreement up to a maximum of five thousand dollars ($5,000.00).  Upon reasonable documentation, as determined by the Company, such expenses shall be paid in a cash lump sum payment as soon as administratively feasible but no later than March 15th of the year following the year the expenses are incurred.

		
	(e)
	Benefits. Executive shall be entitled to participate in Employer’s various employee benefit plans as same may be constituted from time to time, including without limitation Employer’s 401(k) Plan, in the same manner as generally offered to other senior management employees of Employer, subject to the terms and conditions of the plans, as same may be amended or terminated pursuant to their terms from time to time as determined by the Company in its sole discretion.

		
	(f)
	Expenses. Executive shall be reimbursed by Employer for all reasonable business expenses incurred by Executive in performance of his duties hereunder upon the submission of appropriate vouchers, bills or receipts for such expenses in accordance with the Employer’s policy as in effect from time to time, and upon Employer’s acceptance of Executive’s reasonable documentation of such expenses, the expenses 

EMPLOYMENT AGREEMENT        Page 4

shall be paid in a cash lump sum payment as soon as reasonably possible but no later than March 15th in the year following the year in which the expenses are incurred. 
		
	(g)
	Vacation.  Executive will be provided four (4) weeks paid vacation in each calendar year, to be accrued at a prorata monthly rate.  Vacation shall be subject to the Employer’s policy and vacation days must be taken in accordance with Employer’s policy, as may be amended from time to time.

		
	6.
	Termination.

		
	(a)
	Death, Disability or Retirement.  Employer may terminate Executive’s employment if he is Disabled for six (6) consecutive months, or for a total of six (6) months during any twelve (12) month period. Executive may terminate his employment due to Retirement upon thirty (30) days’ written notice to Employer. In the event Executive terminates his employment due to Retirement, he shall remain in Employer’s employ subject to all terms and conditions of this Agreement for the entire thirty (30) day period unless instructed otherwise by Employer in writing. Executive’s employment will be automatically terminated upon his death.  

		
	(b)
	Termination for Cause.  Employer may terminate Executive’s employment by written notice immediately for Cause.

		
	(c)
	Termination without Cause.  Employer may terminate Executive’s employment without Cause and for any reason upon written notice to Executive, and any such termination will not include termination due to death, Disability or Retirement.

		
	(d)
	Termination by Executive Without Good Reason.  Executive may terminate his employment upon thirty (30) days’ written notice to Employer. In the event Executive terminates his employment in this manner, he shall remain in Employer’s employ subject to all terms and conditions of this Agreement for the entire thirty (30) day period unless instructed otherwise by Employer in writing.

		
	(e)
	Termination by Executive for Good Reason.  Executive may terminate his employment for “Good Reason” by giving the Employer advance written notice of such intent and the grounds thereof within a period not to exceed thirty (30) days after the existence of the event constituting Good Reason.  After Executive gives such notice, Employer shall have thirty (30) days to correct the Good Reason event, and if the Employer does not correct the Good Reason event within the prescribed time, the Executive must terminate his employment within sixty-one (61) days of the date of the event constituting Good Reason in order to be entitled to any benefits under Section 7(c).  In addition, once an event constitutes Good Reason, if Employer does not correct the event and if Executive does not give notice (as described above) and terminate his employment within sixty-one (61) days of the event, such specific instance of the event shall no longer constitute Good Reason under this Agreement and, in the case of non-renewal of this Agreement, Executive shall be employed as an at-will employee without an employment agreement.  Termination for Good Reason will not include termination due to death, Disability, or Retirement.

		
	(f)
	Resignation of All Positions.  Executive agrees that after any termination of his employment, he will tender his resignation from any position he may hold as an officer or director of the Company or any Affiliate or otherwise associated companies.

		
	7.
	Severance.  Executive shall be entitled to the following compensation upon termination of his employment under the following circumstances:

		
	(a)
	Death, Disability or Retirement.  In the event Executive’s employment is terminated as a result of his death, Disability or Retirement, Executive’s rights under any Equity-Based Awards or other compensation rights or awards shall be determined in accordance with the controlling plan documents and award agreements (and the definitions herein shall not be deemed to modify any such awards), and his unpaid Base Annual Salary shall be paid through to the Date of Termination in accordance with the Company’s normal payroll practices.  Any unpaid STIP bonus for a calendar year preceding the calendar year of Executive’s Date of Termination shall be paid when the STIP bonus for other participants is paid but in no event later than March 15th following the end of the calendar year of the applicable STIP bonus.  The Company will pay Executive a cash lump sum equal to a prorata portion of the STIP for the calendar year of his Date of Termination (a) calculated on the basis of Executive having fully met all individual performance criteria (financial, personal, or otherwise) for a target bonus (which will not include any maximum that might otherwise be applicable or any multiplier which may be applicable to a bonus) and (b) will be payable in the next calendar year following the calendar year of the Date of Termination but in any event no later than March 15th of such calendar year.  Executive shall not otherwise be entitled to receive any further compensation under this Agreement.  Executive shall be reimbursed for all expenses 

EMPLOYMENT AGREEMENT        Page 5

incurred and in accordance with Section 5(f); Executive shall be paid all accrued unused vacation in accordance with the Company’s vacation policy, as amended from time to time and Executive shall be entitled to all benefits under Section 5(e) subject to the terms and conditions of the applicable plan documents and arrangements, as amended from time to time.
		
	(b)
	Termination for Cause or Termination of Executive Without Good Reason.  If Executive is terminated by the Company for Cause or if Executive resigns (other than due to Retirement) or otherwise terminates without Good Reason, no STIP bonus for the calendar year of his Date of Termination will be paid, all other benefits and rights, including Equity-Based Awards shall be determined under the then governing plans and award agreements (and the definitions herein shall not be deemed to modify any such awards), and his unpaid Base Annual Salary shall be paid through to the Date of Termination in accordance with the Company’s normal payroll practices.  Any unpaid STIP bonus for a calendar year preceding the calendar year of Executive’s Date of Termination shall be paid in accordance with the terms of the applicable STIP and when the STIP bonus for other participants is paid but in no event later than March 15th following the end of the calendar year of the applicable STIP bonus.  Executive shall be reimbursed for all expenses incurred and in accordance with Section 5(f); Executive shall be paid all accrued unused vacation in accordance with the Company’s vacation policy, as amended from time to time and Executive shall be entitled to all benefits under Section 5(e) subject to the terms and conditions of the applicable plan documents and arrangements, as amended from time to time.

		
	(c)
	Termination by the Company Without Cause or Termination by the Executive for Good Reason.  In the event Executive’s employment with Employer is terminated by the Company without Cause or by the Executive for Good Reason, Executive’s rights under any Equity-Based Awards or other compensation rights or awards shall be determined according to the controlling plan documents and award agreements (and the definitions herein shall not be deemed to modify any such awards), and his unpaid Base Annual Salary shall be paid through to his Date of Termination in accordance with the Company’s normal payroll practices.  Any unpaid STIP bonus for a year preceding the calendar year of Executive’s Date of Termination shall be paid when the STIP bonus for other participants is paid but in no event later than March 15th following the calendar year of the applicable STIP bonus.  The Company shall pay Executive an amount equal to one (1) times the total of his Base Annual Salary and his target STIP for the calendar year of the Date of Termination calculated on the basis of Executive having fully met all individual performance criteria (financial, personal or otherwise) for a target bonus (which will not include any maximum that might otherwise be applicable or any multiplier that may be applicable to a bonus) to be paid in a cash lump sum as soon as administratively feasible following the Date of Termination but no later than March 15th of the calendar year following the Date of Termination.  Executive shall be reimbursed for all expenses incurred and in accordance with Section 5(f); Executive shall be paid all accrued unused vacation in accordance with the Company’s vacation policy, as amended from time to time and Executive shall be entitled to all benefits under Section 5(e) subject to the terms and conditions of the applicable plan documents and arrangements, as amended from time to time.

		
	(d)
	Change of Control. Notwithstanding the foregoing provisions (a) - (c) of this Section 7 and in lieu thereof, in the event of a Change of Control and within 12 months following the Change of Control (1) Executive’s employment is terminated by Employer other than for Cause, Disability or death, or (2) Executive’s employment is terminated by Executive for Good Reason, then:

		
	(i)
	The Company shall pay Executive, as soon as administratively feasible after the Date of Termination but no later than March 15th of the calendar year following the Date of Termination, a lump sum cash amount equal to two (2) times the total of Executive’s Base Annual Salary and his target STIP for the calendar year of the Date of Termination calculated on the basis of Executive having fully met all individual performance criteria (financial, personal or otherwise) for a target bonus (which will not include any maximum that might otherwise be applicable or any multiplier which may be applicable to a bonus);

		
	(ii)
	Except as provided in Section 7(d)(iv) with respect to vesting, Executive’s rights under any Equity-Based Awards or other compensation rights, benefits or awards shall be as provided in the governing plan and/or award agreements (and the definitions herein shall not be deemed to modify any such awards), and his unpaid Base Annual Salary shall be paid through to his Date of Termination;

EMPLOYMENT AGREEMENT        Page 6

		
	(iii)
	Any unpaid STIP bonus for a calendar year preceding the calendar year of Executive’s Date of Termination shall be paid when the STIP bonus for other participants is paid but in no event later than March 15th following the calendar year of the applicable STIP bonus;

		
	(iv)
	Notwithstanding any provision of any agreement to the contrary and only for the purposes of this Section 7(d)(iv), if Executive remains continuously employed with the Company or an Affiliate from the date hereof through the date of a Change of Control, upon a Change of Control (excluding the requirement that Executive terminate for Good Reason or without Cause) the Company shall cause all of Executive’s existing unvested Equity-Based Awards to be accelerated and vested immediately and payment or issuance of shares of Common Shares shall be made pursuant to the applicable plans and/or award agreements;

		
	(v)
	Executive shall be reimbursed for all expenses incurred and in accordance with Section 5(f); Executive shall be paid all accrued unused vacation in accordance with the Company’s vacation policy, as amended from time to time and Executive shall be entitled to all benefits under Section  5(e) subject to the terms and conditions of the applicable plan documents and arrangements, as amended from time to time; and

		
	(vi)
	If any payments are payable under this Section 7(d), in no event will any amounts be paid or payable under Section 7(a) - (c).

		
	(e)
	Release of All Claims.  In order to receive any payments (other than any unpaid Base Annual Salary and accrued vacation through to his Date of Termination, if applicable) pursuant to Section 7(c) or (d), Executive shall first be required to repay any amounts then due and owing by Executive to the Company, and Executive shall be required to execute and return a release in a form and substance satisfactory to the Company which releases the Company and its Affiliates, and their officers, employees, directors and any employee benefit plan (and any other Company related person as specified in the release) (the “Company Group”) of any claims which the Executive may have as against the Company Group and such release must be effective and not revoke within the time prescribed in the release and the release must be returned and effective within the time period specified by the Company in the release but in no event later than 60 days after Executive’s Date of Termination.  Notwithstanding anything herein to the contrary, to the extent any amounts payable under Section 7(c) or (d) are deferred compensation and not otherwise exempt from the requirements of Code Section 409A, no payment will be paid or commence to be paid hereunder until the date which is the 60th day after the Date of Termination and such payment date shall comply with the requirements of Code Section 409A.

		
	(f)
	Code Section 280G Payments.  If any of the payments or benefits received or to be received by the Executive (including, without limitation, any payment or benefits received in connection with a Change of Control or the Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred to herein as the “280G Payments”) constitute “parachute payments” within the meaning of Code Section 280G and would, but for this Section 7(f) be subject to the excise tax imposed under Code Section 4999 (the “Excise Tax”), then such 280G Payments shall be reduced in a manner determined by the Company (by the minimum possible amounts) that is consistent with the requirements of Code Section 409A until no amount payable to the Executive will be subject to the Excise Tax.  If two economically equivalent amounts are subject to reduction but are payable at different times, the amounts shall be reduced (but not below zero) on a pro rata basis.

All calculations and determinations under this Section 7(f) shall be made by the accounting firm that was the Company’s independent auditor prior to the Change of Control or any other accounting firm or independent tax counsel appointed by the Company (the “Tax Counsel”) whose determinations shall be conclusive and binding on the Company and the Executive for all purposes.  For purposes of making the calculations and determinations required by this Section 7(f), the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the application of Code Sections 280G and 4999.  The Company and the Executive shall furnish the Tax Counsel with such information and documents as the Tax Counsel may reasonably request in order to make its determinations under this Section 7(f).  The Company shall bear all costs the Tax Counsel may reasonably incur in connection with its services.
		
	(g)
	No Duty to Mitigate. Executive shall not be required to mitigate the amount of any payment or other benefit required to be paid to Executive pursuant to this Agreement, whether by seeking other employment 

EMPLOYMENT AGREEMENT        Page 7

or otherwise, nor shall the amount of any such payment or other benefit be reduced on account of any compensation earned by Executive as a result of employment.  Employer’s obligation to make the payments provided for in this Agreement (including, but not limited to, the payment under Section 7(c) or (d)) and otherwise perform its obligations hereunder shall not be affected by any counterclaim, recoupment, defense or other claim, right or action which Employer may have against Executive or others, exclusive of payroll withholdings required by law.
		
	(h)
	Specified Employees.  If Executive is deemed to be a “Specified Employee” (as that term is defined in Code Section 409A) as of the date of his Separation from Service (as defined under Code Section 409A) as determined by the Company, the payment of any amount under this Agreement on account of Separation from Service that is deferred compensation subject to the provisions of Code Section 409A and not otherwise excluded from Code Section 409A, including, but not limited to any payments under Section 7 or Section 26, shall not be paid until the later of (x) the earlier of (i) the date that is the first business day that is at least six months after the date after Executive’s Separation from Service, (ii) the date of Executive’s death, or (iii) the date that otherwise complies with the requirements of Code Section 409A, or (y) the date the payment is otherwise payable under this Agreement (the “Waiting Period”).  Any payments that would have been made to the Employee during the Waiting Period but for this Section 7(h) shall instead be made to the Executive in the form of a lump sum payment on the date that payments are paid pursuant to the preceding sentence.

		
	8.
	Inventions, Confidential Information, Patents, and Copyright Works.

		
	(a)
	Notification of Company. Upon conception, all Inventions, Confidential Information, and Copyright Works shall become the property of Employer (or the United States Government where required by law) whether or not patent or copyright registration applications are filed for such subject matter. Executive will communicate to Employer promptly and fully all Inventions, or suggestions (whether or not patentable), all Confidential Information or Copyright Works made, designed, created, or conceived by Executive (whether made, designed, created, or conceived solely by Executive or jointly with others) during the period of his employment with Employer: (a) which relate to the actual or anticipated business, research, activities, or development of Employer at the time of the conception; or (b) which result from or are suggested by any work which Executive has done or may do for or on behalf of Employer; or (c) which are developed, tested, improved, or investigated either in part or entirely on time for which Executive was paid by Employer, or using any resources of Employer.

		
	(b)
	Transfer of Rights. Executive agrees, during his employment with Employer, to assign and transfer to and does hereby assign and transfer to Employer Executive’s entire right, title, and interest in all Inventions, Confidential Information, Copyright Works and Patents prepared, made or conceived by or in behalf of Executive (solely or jointly with others): (a) which relate in any way to the actual or anticipated business of Employer, or (b) which relate in any way to the actual or anticipated research or development of Employer, or (c) which are suggested by or result, directly or indirectly, from any task assigned to Executive or in which Executive otherwise engages in behalf of Employer. Executive also agrees to do all things necessary to transfer to Employer Executive’s entire right, title, and interest in and to all such Inventions, Confidential Information, Copyright Works or Patents as Employer may request, on such forms as Employer may provide, at any time during or after Executive’s employment. Executive will promptly and fully assist Employer during and subsequent to his employment in every lawful way to obtain, protect, and enforce Employer’s patent, copyrights, trade secret or other proprietary rights for Inventions, Confidential Information, Copyright Works or Patents in any and all countries.

		
	(c)
	Notice of Rights Under State Statutes. No provision in this Agreement is intended to require assignment of any of Executive’s rights in an Invention for which no equipment, supplies, facilities, Confidential Information, Copyright Works, Inventions, Patents or information of Employer was used, and which was (1) developed entirely on Executive’s own time; (2) does not relate directly or indirectly to the business of Employer or to the actual or demonstrably anticipated research or development of Employer; and (3) does not result from any work performed by Executive for Employer or assigned to Executive by Employer.

		
	(d)
	Rights in Copyrights. Unless otherwise agreed in writing by Employer, all Copyright Works prepared wholly or partially by Executive (alone or jointly with others) within the scope of his employment with Employer, shall be deemed a “work made for hire” under the copyright laws and shall be owned by Employer. Executive understands that any assignment or release of such works can only be made by 

EMPLOYMENT AGREEMENT        Page 8

Employer. Executive will do everything reasonably necessary to enable Employer or its nominee to protect its rights in such works. Executive agrees to execute all documents and to do all things necessary to vest in Employer Executive’s right and title to copyrights in such works. Executive shall not assist or work with any third party that is not an employee of Employer to create or prepare any Copyright Works without the prior written consent of Employer.
		
	(e)
	Assistance in Preparation of Applications.  During and after employment Executive will promptly and fully assist, if requested by Employer, in the preparation and filing of Patents and Copyright Registrations in any and all countries selected by Employer and will assign to Employer Executive’s entire right, title, and interest in and to such Patents and Copyright Registrations, as well as all Inventions or Copyright Works to which such Patents and Copyright Registrations pertain, to enable any such properties to be prosecuted under the direction of Employer and to ensure that any Patent or Copyright Registration obtained will validly issue to Employer.

		
	(f)
	Execute Documents.  During and after employment Executive will promptly sign any and all lawful papers, take all lawful oaths, and do all lawful acts, including testifying, at the request of Employer, in connection with the procurement, grant, enforcement, maintenance, exploitation, or defense against assertion of any patent, trademark, copyright, trade secret or related rights, including applications for protection or registration thereof. Such lawful papers include, but are not limited to, any and all powers, assignments, affidavits, declarations and other papers deemed by Employer to be necessary or advisable.

		
	(g)
	Keep Records.  Executive will keep and regularly maintain adequate and current written records of all Inventions, Confidential Information, and Copyright Works he participates in creating, conceiving, developing, and manufacturing. Such records shall be kept and maintained in the form of notes, sketches, drawings, reports, or other documents relating thereto, bearing at least the date of preparation and the signatures or name of each employee contributing to the subject matter reflected in the record. Such records shall be and shall remain the exclusive property of Employer and shall be available to Employer at all times.

		
	(h)
	Return of Documents, Equipment, Etc.  All writings, records, and other documents and things comprising, containing, describing, discussing, explaining, or evidencing any Inventions, Confidential Information, or Copyright Works and all equipment, components, parts, tools, and the like in Executive’s custody or possession that have been obtained or prepared in the course of Executive’s employment with Employer shall be the exclusive property of Employer, shall not be copied and/or removed from the premises of Employer, except in pursuit of the business of Employer, and shall be delivered to Employer, without Executive retaining any copies, upon notification of the termination of Executive’s employment or at any other time requested by Employer. Employer shall have the right to retain, access, and inspect all property of Executive of any kind in the office, work area, and on the premises of Employer upon termination of Executive’s employment and at any time during employment by Employer, to ensure compliance with the terms of this Agreement.

		
	(i)
	Other Contracts.  Executive represents and warrants that he is not a Party to any existing contract relating to the granting or assignment to others of any interest in Inventions, Confidential Information, Copyright Works or Patents hereafter made by Executive except insofar as copies of such contracts, if any, are attached to this Agreement.

		
	(j)
	Assignment After Termination.  Executive recognizes that ideas, Inventions, Confidential Information, Copyright Works, Copyright Registrations or Patents relating to his activities while working for Employer that are conceived or made by Executive, alone or with others, within one (1) year after termination of his employment may have been conceived in significant part while Executive was employed by Employer. Accordingly, Executive agrees that such ideas, Inventions, Confidential Information, Copyright Works, Copyright Registrations or Patents shall be presumed to have been conceived and made during his employment with Employer and are to be assigned to Employer in accordance with this Section 8.

		
	(k)
	Prior Conceptions.  At the end of this Section 8(k), Executive has set forth what he represents and warrants to be a complete list of all Inventions, if any, patented or unpatented, or Copyright Works, including a brief description thereof (without revealing any confidential or proprietary information of any other Party) which Executive participated in the conception, creation, development, or making of prior to his employment with Employer and for which Executive claims full or partial ownership or other interest, or which are in the physical possession of a former employer and which are therefore excluded from the 

EMPLOYMENT AGREEMENT        Page 9

scope of this Agreement. If there are no such exclusions from this Agreement, Executive has so indicated by writing “None” below in his own handwriting.
Prior Conceptions:
None
		
	9.
	Non‐Competition, Non‐Solicitation, and Confidentiality.  Employer and Executive acknowledge and agree that upon being, and while, employed pursuant to this Agreement Employer gave and will continue to give Executive access to Confidential Information of Employer to which Executive did not have access prior to signing this Agreement and which Executive may need and use during such employment, the receipt of which is hereby acknowledged by Executive; Executive will be provided with specialized training on how to perform his duties; and will be provided contact with Employer’s customers and potential customers. In consideration of all of the foregoing, Employer and Executive agree as follows:

		
	(a)
	Non‐Competition During Employment.  Executive agrees that for the duration of this Agreement, he will not compete with Employer by engaging in the conception, design, development, production, marketing, or servicing of any product or service that is substantially similar to the products or services which Employer provides, and that he will not work for, in any capacity, assist, or become affiliated with as an owner, partner, employee, contractor, joint venture, or otherwise, either directly or indirectly, any individual or business which offers or performs services, or offers or provides products substantially similar to the services and products provided by Employer.

		
	(b)
	Non-Competition After Employment.  Executive agrees that for a period of one (1) year after termination of his employment with Employer for any reason he will not either directly or indirectly, on his own behalf or on behalf of others compete with Employer in the United States or Canada by engaging in the conception, design, development, production, marketing, or servicing of any product or service that is substantially similar to the products or services which Employer provides, and that he will not work for, in any capacity, assist, or become affiliated with as an owner, partner, employee, contractor, joint venture, or otherwise, either directly or indirectly, any individual or business which offers or performs services, or offers or provides products substantially similar to the services and products provided by Employer where trade secrets and other Confidential Information gained by Executive during his employment with Employer would be useful in such new employment, partnership, venture or otherwise; provided that Executive may accept employment with a business which offers or performs services, or offers or provides products substantially similar to the services and products provided by Employer if Executive is employed by a division, affiliate, or subsidiary that does not offer or perform services, or offer or provide products substantially similar to the services and products provided by Employer and Executive understands and agrees that he cannot perform any services for the division, subsidiary, or affiliate which does compete with Employer.

		
	(c)
	Conflicts of Interest.  Executive agrees that for the duration of this Agreement, he will not engage, either directly or indirectly, in any Conflict of Interest, and that Executive will promptly inform a corporate officer of Employer as to each offer received by Executive to engage in any such activity. Executive further agrees to disclose to Employer any other facts of which Executive becomes aware which might involve or give rise to a Conflict of Interest or potential Conflict of Interest.

		
	(d)
	Non‐Solicitation of Customers.  Executive further agrees that, for the duration of this Agreement, and for a period of one (1) year after the termination of this Agreement for any reason, he will not either directly or indirectly, on his own behalf or on behalf of others solicit or accept any business, for services or products substantially similar to the services or products offered by Employer, from any customer or client or prospective customer or client with whom Executive dealt, had contact with or solicited during the time Executive was employed by Employer.

		
	(e)
	Non‐Solicitation of Employees.  Executive agrees that for the duration of this Agreement, and for a period of one (1) year after the termination of this Agreement for any reason, he will not either directly or indirectly, on his own behalf or on behalf of others, solicit, attempt to hire, or hire any person employed by Employer to work for Executive or for any other entity, firm, corporation, or individual; provided however, that nothing in this Section 9 shall prohibit a future employer of Executive from soliciting, attempting to hire, or hiring any person employed by Employer so long as Executive is not directly or indirectly involved in the process including, but not limited to providing or suggesting (directly or 

EMPLOYMENT AGREEMENT        Page 10

indirectly) names of such employees to anyone for purposes of possible employment and/or directing such employees to contact anyone for purposes of possible employment.
		
	(f)
	Confidential Information.  Executive further agrees that he will not, except as Employer may otherwise consent or direct in writing, reveal or disclose, sell, use, lecture upon, publish, or otherwise disclose to any third Party any Confidential Information or proprietary information of Employer, or authorize anyone else to do these things at any time either during or subsequent to his employment with Employer. This Section 9(f) shall continue in full force and effect after termination of Executive’s employment and after the termination of this Agreement for any reason.  Executive’s obligations under this Section 9(f) of this Agreement with respect to any specific Confidential Information and proprietary information shall cease when that specific portion of Confidential Information and proprietary information becomes publicly known, in its entirety and without combining portions of such information obtained separately. It is understood that such Confidential Information and proprietary information of Employer include matters that Executive conceives or develops, as well as matters Executive learns from other employees of Employer.

		
	(g)
	Prior Disclosure.  Executive represents and warrants that he has not used or disclosed any Confidential Information he may have obtained from Employer prior to signing this Agreement, in any way inconsistent with the provisions of this Agreement.

		
	(h)
	Confidential Information of Prior Employers.  Executive will not disclose or use during the period of his employment with Employer any proprietary or confidential information or copyright works, which Executive may have acquired because of employment with an employer other than Employer.

		
	(i)
	Time Period Tolled.  The time periods referenced in this Section 9 during which Executive is restrained from competing against Employer shall not include any period of time during which Executive is in breach of this Agreement. Said time periods referenced in this Section 9 will be tolled, such that Employer will receive the full benefit of the time period in the event Executive breaches this Agreement.

		
	(j)
	Breach.  Executive agrees that any breach of Sections 9(a), (b), (c), (d), (e) or (f) cannot be remedied solely by money damages, and that in addition to any other remedies Employer may have, Employer is entitled to obtain injunctive relief against Executive. Nothing herein, however, shall be construed as limiting Employer’s right to pursue any other available remedy at law or in equity, including recovery of damages and termination of this Agreement.

		
	(k)
	Independent Covenants.  All covenants contained in Section 9 shall be construed as agreements independent of any other provision of this Agreement, and the existence of any claim or cause of action by Executive against Employer, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Employer of such covenants.

		
	(l)
	Reformation of Scope. If the provisions of the confidentiality and/or non-competition obligations and covenants  in this Section 9 should ever be deemed by a court of competent jurisdiction to exceed the time, geographic or occupational limitations permitted by the applicable law, such court may reform such provisions to the maximum time, geographic or occupational limitations permitted by the applicable law.  Executive and the Company agree that such provisions as reformed shall be and are hereby binding and enforceable, and the determination of whether Executive violated such obligation and covenant will be based solely on the limitation as reformed.

		
	10.
	Return of Company Property.  Executive agrees to execute and deliver such documents and take all other actions as Employer may request from time to time in order to effect the transfer and delivery to Employer of any Employer or its Affiliate’s assets in the possession or subject to the control of Executive including, without limitation, Employer or its Affiliate’s computers, printers, books, records, files, databases, software, Confidential Information, and other documents in whatever form or medium and wherever located, and Employer or its Affiliate’s credit cards, travel authority cards, parking and identification badges.

		
	11.
	Right to Enter Agreement.  Executive represents and covenants to Employer that he has full power and authority to enter into this Agreement and that the execution of this Agreement will not breach or constitute a default of any other agreement or contract to which he is a Party or by which he is bound.

		
	12.
	Assignment.  This Agreement may be assigned by Employer, but cannot be assigned by Executive. An assignment of this Agreement by Employer shall not relieve Employer of any liability or obligation under this Agreement except any such assignment in connection with or as a result of a Change of Control (including, but not limited to, by operation of law).

EMPLOYMENT AGREEMENT        Page 11

		
	13.
	Binding Agreement.  Executive understands that his obligations under this Agreement are binding upon Executive’s heirs, successors, personal representatives, and legal representatives.

		
	14.
	Notices.  All notices pursuant to this Agreement shall be in writing and sent certified mail, return receipt requested, by hand delivery or by overnight delivery service addressed as follows:

If to Executive:    John Gatlin 
at the address on the Company’s records
as of the date such notice is given
If to Employer:    Tesco Corporation
Attn: President and Chief Executive Officer
11330 Clay Road, Suite 350
Houston, TX 77041
With a copy to:    Tesco Corporation
Attn: General Counsel
11330 Clay Road, Suite 350
Houston, TX 77041
		
	15.
	Waiver.  No waiver by either Party to this Agreement of any right to enforce any term or condition of this Agreement, or of any breach hereof, shall be deemed a waiver of such right in the future or of any other right or remedy available under this Agreement.

		
	16.
	Severability.  If any provision of this Agreement is determined to be void, invalid, unenforceable, or against public policy, such provisions shall be deemed severable from the Agreement, and the remaining provisions of the Agreement will remain unaffected and in full force and effect. Furthermore, any breach by Employer of any provision of this Agreement shall not excuse Executive’s compliance with the requirements of Sections 8 or 9, to the extent they are otherwise enforceable.

		
	17.
	Arbitration.  Except with respect to injunctive relief which may be sought by the Company or Executive from a court in Harris County, Texas, to which the Parties hereby submit to personal jurisdiction, the Parties agree to resolve any and all claims or controversies past, present, or future arising out of or relating to this Agreement, Executive’s employment and/or termination of employment with the Company, including but not limited to claims for wrongful termination of employment, and claims under the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Family Medical Leave Act, the Sarbanes-Oxley Act, the Equal Pay Act, the Fair Labor Standards Act, Chapter 21 of the Texas Labor Code, formerly known as the Texas Commission on Human Rights Act, the retaliatory discharge provisions of the Texas Worker’s Compensation Act, the Texas Pay Day Act, and any similar state law or local ordinance to binding arbitration under the Federal Arbitration Act, before one neutral arbitrator in the City of Houston, State of Texas, under the American Arbitration Association (“AAA”) National Rules for the Resolution of Employment Disputes.  If the Parties cannot agree on one arbitrator, a list of seven (7) arbitrators will be requested from AAA, and the arbitrator will be selected using alternate strikes with Executive striking first.  Except as expressly awarded in arbitration and subject to Section 26, the Parties further agree that each party shall be responsible for its own expenses, including but not limited to attorneys’ fees in connection with the cost of the arbitration except that the fees of the arbitrators shall be shared equally by Executive and the Company, and collective actions are not permissible unless agreed upon by the parties in writing, that administrative proceedings under the National Labor Relations Act and Title VII of the Civil Rights Act are not precluded, the work of Executive involves interstate commerce, the award rendered by the arbitrator is final and binding, and judgment thereon may be entered in any court having jurisdiction thereof.  The invalidity or unenforceability of any provision of this paragraph shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect; provided, however, that any claim the Company has for breach of the covenants contained in Sections 8 and 9 shall not be subject to mandatory arbitration, and may be pursued in a court of law or equity.

		
	18.
	Entire Agreement.  The terms and provisions contained herein shall constitute the entire agreement between the Parties with respect to Executive’s employment with Employer during the time period covered by this Agreement. This Agreement replaces and supersedes any and all existing agreements entered into between Executive and Employer relating generally to the same subject matter, if any, and shall be binding upon Executive’s 

EMPLOYMENT AGREEMENT        Page 12

heirs, executors, administrators, or other legal representatives or assigns and will continue for the benefit of the Company and its Affiliates.
		
	19.
	Headings and Sections. The headings in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of the Agreement.  All references to section in this Agreement are references to sections of this Agreement unless provided otherwise.

		
	20.
	Modification of Agreement.  This Agreement may not be changed or modified or released or discharged or abandoned or otherwise terminated, in whole or in part, except by an instrument in writing signed by Executive and an officer or other authorized executive of Employer.

		
	21.
	Understand Agreement.  Executive represents and warrants that he has read and understood each and every provision of this Agreement, acknowledges that he has obtained independent legal advice from attorneys of his choice, and confirms that Executive has freely and voluntarily entered into this Agreement.

		
	22.
	Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas without giving any effect to the conflict of laws provisions thereof.

		
	23.
	Code Section 409A.  The parties agree that the Company may amend and/or operate this Agreement to be exempt from or to comply with Code Section 409A including, but not limited to, using the definitions or other terms required by Code Section 409A and including without limitation any notices, rulings, interpretations or regulations issued under Code Section 409A after the date hereof to avoid the application of penalty taxes under Code Section 409A.  The Company and Executive shall cooperate in good faith for the adoption of such amendments and/or the operation of the Agreement to avoid the application of additional taxes or premium interest under Code Section 409A or any penalties thereon.

		
	24.
	No Guarantee of Tax Consequences.  None of the Company nor any of its Affiliates or their officers, directors or employees guarantees or shall be responsible or liable for the federal, state, local, domestic and foreign, tax consequences to Executive respecting any payments or benefits provided to Executive under this Agreement (except the Company shall provide the additional payments expressly provided for in Section 7(h)), including but not limited to, any additional taxes or premium interest that may be imposed under Code Section 409A.  Executive acknowledges that the Company has advised him to consult his own counsel and/or tax advisor respecting all of the terms of this Agreement, including but not limited to, Sections 7, 8 and 9.

		
	25.
	Withholding Taxes.  The Company may withhold from all salary, bonuses, or other benefits or payments under this Agreement all federal, state, local, domestic and foreign, taxes as shall be required pursuant to any law or governmental ruling or regulation as reasonably determined by the Company.

		
	26.
	Legal Fees on Change of Control.  If a Date of Termination occurs within twelve (12) months after a Change of Control occurs, the Company agrees, upon reasonable documentation, to reimburse to the full extent permitted by law, all legal fees and expenses to a maximum of fifty thousand dollars (US$50,000.00) which Executive, Executive’s legal representatives or Executive’s family may reasonably incur arising out of or in connection with any arbitration or litigation, if applicable, concerning the validity or enforceability of any provision of the Agreement, or any action by Executive, Executive’s legal representatives, or Executive’s family to enforce his or their rights under this Agreement, regardless of the outcome of such arbitration or litigation and the Company agrees to pay interest, compounded quarterly, on the total unpaid amount payable under this Agreement commencing the 15th business day after the Company has been provided reasonable documentation (such documentation must be provided within 45 days after the expenses are incurred) until such amount is fully paid, such interest to be calculated at a rate equal to two percent (2%) in excess of the prime commercial lending rate announced from time to time by J.P. Morgan Chase Bank or its successor during the period of such nonpayment.  The expenses that may be reimbursed under this Section 26 shall in no way modify the Executive’s duty to arbitrate any such claims or the arbitration provisions under Section 17.  Notwithstanding the foregoing, to the extent that Code Section 409A is applicable to the expenses under this Section 17, and to the extent that no exception under Code Section 409A is applicable, the following shall apply:  (a) all expenses that are includable in income to be paid under this this Section 17 shall only be paid if such expenses are incurred prior to the last day of the second calendar year following the calendar year in which the Date of Termination occurs; (b) all expenses must be paid by the end of the third year following the calendar year in which the Date of Termination occurs; (c) the Executive (or his legal representative or family) must provide the Company with reasonable documentation of such expenses; (d) payments for such expenses will be made within 15 business days after reasonable documentation of the expenses incurred has been provided to the Company (and such documentation must be provided within 45 days after the expenses are incurred) but in no event later than the end of Executive’s 

EMPLOYMENT AGREEMENT        Page 13

taxable year following the year in which the expenses were incurred; and (e) the payments under this this Section 17 cannot be subject to liquidation or substituted for another benefit.
		
	27.
	Counterparts.  Any number of counterparts of this Agreement may be executed and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one instrument.  This Agreement may be executed by portable document format (pdf) or facsimile signature which signature shall be binding upon the Parties.

		
	28.
	Required Clawbacks or Recoupment.  Notwithstanding any other provisions in this Agreement to the contrary, to the extent that Dodd Frank, Sarbanes-Oxley or any other applicable federal, state or foreign law  or regulation or stock exchange listing requires the Company to recover, recoup or clawback any incentive, performance or stock-based compensation paid to the Executive or an amount received in connection with sales of the Company’s Common Shares pursuant to this Agreement or any other agreement or arrangement with the Company or an Affiliate, such amount will be subject to such deductions, clawback, recoupment or recovery as mandated pursuant to such law or regulation or stock exchange listing requirement (and any policy adopted by the Company or an Affiliate, as may be modified from time to time, mandating such clawbacks adopted pursuant to any such law, regulation or stock exchange listing requirement) and as applicable to any other compensation under this Agreement or otherwise paid by the Company and its Affiliates that would be subject to a mandated clawback or recoupment pursuant to applicable laws and regulations or stock exchange listing requirements as modified from the date hereof and any Company or Affiliate policy mandating such clawbacks adopted pursuant thereto, and, to the extent any amount has been paid to Executive and is subject to such clawback, recoupment or recovery, Executive agrees to repay any such amount to the Company and/or permits the Company to recoup such amounts from any other outstanding amounts payable to Executive by the Company.

[Signature Page Follows.]

EMPLOYMENT AGREEMENT        Page 14

IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective Date first written above.

EXECUTIVE                        EMPLOYER

JOHN GATLIN                        TESCO CORPORATION

Signature: /s/ John Gatlin                        By:    /s/ Fernando R. Assing
John Gatlin                            Fernando R. Assing
President and Chief Executive Officer
                

Date: November 14, 2016                    Date: November 14, 2016

EMPLOYMENT AGREEMENT        Page 15

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