Document:

ex10-1.htm

NATION ENERGY INC.

Suite F - 1500 West 16th Avenue

Vancouver BC V6H 4B9 Canada

 

June 13, 2015

 

	
TO:

	
Paltar Petroleum Limited

1555 Blake Street   Suite 1002

Denver, Colorado  80202 

 

Attention:             Mr. Marc Bruner

Dear Sirs:

RE:           SECOND AMENDED AND RESTATED AGREEMENT regarding Paltar Petroleum Limited Australia Permits & Applications

This letter sets out the Second Amended and Restated Agreement (“Agreement”) reached among Nation Energy Inc., as farmee and optionee (“Nation”), and Paltar Petroleum Limited ("Paltar"), as farmor and optionor, regarding (i) the farmout to Nation of a portion of the oil and gas exploration permits on Exhibit A and (ii) the possible later sale to Nation, at Nation’s option, of Paltar’s entire interest in such permits, the outstanding shares of Officer Petroleum Pty Ltd. (“Officer”), and various applications for exploration permits on Exhibit A (collectively, the “Assets”), all on the terms and conditions set forth herein (collectively, the “Transactions”).  Marc Bruner (“Bruner”) and John Hislop (“Hislop”), as major shareholders (indirectly or directly) of Paltar and Nation, respectively, agree to the terms hereof. This Agreement replaces in its entirety the Amended and Restated Agreement dated November 27, 2014, which was amended by an amendment dated April 29, 2015.

 

All dollar amounts in this Agreement are expressed in Australian dollars.  Loans made by Hislop prior to the date of this letter were not always evidenced by promissory notes (and, in one case, originally cast as an equity purchase, but later converted to a loan) and were not always made in the same currency.  In this Agreement, prior Hislop loans are identified by the date loan proceeds were received by Paltar and principal and interest are always expressed in Australian dollars, which the parties agree reflect an accurate conversion, where applicable, from US dollars to Australian dollars.

 

Officer

 

	
1.  

	
On the FATA Approval Date (as defined in Paragraph 19 of this Agreement), Hislop will lend to Paltar Three Hundred Twenty-Five Thousand Dollars (AUD$325,000) (the “Officer Loan”), which Paltar shall contribute, in its entirety, to the capital of Officer.  Paltar, as the sole owner of Officer, will cause Officer promptly to apply the proceeds of the Officer Loan to the satisfaction of rental and other obligations due under Exploration Permit 468 (“EP 468”).  The Officer Loan will be evidenced by a single promissory note in the principal amount of AUD$325,000, which will provide simple interest at a rate of 15% per annum, and for repayment in one balloon payment of principal and interest on the first anniversary of the Earn-In Closing. The Officer Loan (and the Payoff Loan described in Paragraph 6) will be secured by a first ranking charge or mortgage over either or both of Paltar’s shares in Officer and Officer’s title to EP 468, at Hislop’s option.  Upon request by Hislop, Paltar shall, and shall cause Officer to, promptly take such steps and execute such documents as required in order to grant and create such charge or mortgage and cause it to be registered or recorded as Hislop considers necessary or prudent under law.

 

  

  

  

 

Farmout

 

	
2.  

	
On June 26, 2015 (the “Earn-In Closing Date”) and under seven separate Earning Agreements (the “Earning Agreements”), Paltar will farm out three specific graticular blocks in each of the six petroleum exploration permits identified in Schedule A and will cause Officer to farm out forty blocks in EP 468 in exchange for Nation’s (i) issuance of an aggregate 600 million Nation common shares (the “Nation Shares”) to Paltar, with an agreed value of US$.0333 per share, on the second business day following the Nation Meeting (defined in Paragraph 3, below), and (ii) payment to Paltar of an aggregate $5,315,000 by December 31, 2015.  Each Earning Agreement will require that Nation Australia perform all necessary work and make all necessary expenditures to keep each concerned exploration permit in full force and effect until production licenses have been granted covering the three blocks identified in that permit, although Nation Australia may voluntarily terminate the Earning Agreement and surrender any further earning rights after the end of three permit years.  Upon issuance of a production license covering one of the blocks, Paltar (or, if applicable, Officer) will assign its interest in such license, insofar as it covers the block, to Nation Australia.  Production licenses are granted only where there has been a petroleum discovery, so there is no assurance that production licenses will be granted covering any of the blocks.  There has been no discovery of petroleum on any of the permits and the permits produce no revenues.

 

	
3.  

	
Nation intends to call a shareholder meeting (the “Nation Meeting”) on or about July 22, 2015 to amend and restate its Articles of Incorporation to increase its authorized share capital from 100,000,000 to 5,000,000,000 common shares.  Hislop agrees to vote the Nation shares he owns or controls in favor of this authorized share increase and, if the Transactions come before the shareholders, in favor of the Transactions.

 

Options

 

	
4.  

	
On the Earn-In Closing Date, Paltar will grant to Nation Australia an indivisible option (the “Nation Option”), exercisable in the sole discretion of Nation Australia at any time before July 31, 2018, so long as Nation Australia has performed its material obligations under all Earning Agreements at the date of exercise, to purchase (i) all of the Assets (including the right to exploration permits when applications for such permits are granted) and (ii) all of the outstanding securities of Officer for an aggregate cash purchase price of AUD10,000,000.

 

Paltar Repayment of Hislop Advances

 

	
5.  

	
Hislop lent Paltar amounts equivalent to $1,100,658.63:

 

$172,040 received by Paltar on October 17, 2013 under a promissory note;

 

$127,960 received by Paltar on November 1, 2013 under a promissory note; and

 

$800,658.63 paid on behalf of Paltar to CR Innovations AG on December 16, 2014.

 

On the Earn-In Closing Date, Paltar will issue, and Hislop will accept, 20 million Paltar common shares in full satisfaction of the principal amount of the indebtedness described in Paragraph 5.  Accrued interest under this indebtedness will be satisfied by including the accrued interest amounts in the principal amount of the new loan (“Payoff Loan”) described in Paragraph 6.  Upon issuance of the 20 million shares, the Limited Recourse Guaranty and Stock Pledge by Wotan Group Limited, a guarantor of some of the indebtedness described in Paragraphs 5 and 6, will be released by Hislop.

 

  

2

  

 

	
6.  

	
Hislop also is lending or has lent Paltar amounts equivalent to $577,650:

 

$81,000 received by Paltar on May 1, 2014 as an advance under a line of credit;

 

$124,000 received by Paltar on September 22, 2014 as an advance under a line of credit;

 

$230,000 received by Paltar on December 9, 2014, originally anticipated to be the purchase price for stock but later orally agreed to be a loan; and

 

$142,650, which is the agreed amount of all accrued interest due under the advances described in Paragraph 5 and the three loans described in the three preceding subparagraphs of this Paragraph 6.

 

The Payoff Loan will be evidenced by a single promissory note in the principal amount of $577,650, which will provide simple interest at a rate of 15% per annum and repayment in one balloon payment of principal and interest on the first anniversary of the Earn-In Closing.

 

Document Preparation and Closing

 

	
7.  

	
The parties agree to instruct their attorneys to co-operate and complete comprehensive and definitive Earning Agreements, the promissory note and security described in Paragraph 1, the Nation Option, and such other documents as required to complete the transactions to be completed at the Earn-In Closing Date as contemplated by this Agreement (the “Earn-In Closing Documents”).

 

	
8.  

	
The Earn-In Closing Documents will be executed and delivered on the Earn-In Closing Date.

 

	
9.  

	
Nation will be required within four days after the Earn-In Closing Date to file a comprehensive material change report on Form 8-K, and Paltar promises to provide on a timely basis such information as Nation or its attorneys or auditors consider necessary to prepare the 8-K.

 

	
10.  

	
If the Nation Option is exercised, Nation will be required within four business days after transfer of the Officer Shares to Nation Australia to file a comprehensive material change report on Form 8-K and Paltar promises to provide, and to cause Officer to provide, on a timely basis, such information as Nation or its attorneys or auditors consider necessary to prepare the 8-K.  On or before delivery of the Option Shares to Nation Australia, Paltar will provide audited financial statements regarding Officer and Paltar for the three most recent fiscal years prepared by a PCAOB approved auditor in US GAAP, and such additional fiscal period financial statements as may be required under SEC regulations.

 

	
11.  

	
Paltar acknowledges that the Nation Shares will be restricted as to sale by US securities laws and rules and will carry a restrictive legend indicating such restrictions, and in addition, Paltar has agreed to a lockup of Nation Shares such that none may be sold for 3 years after issuance, except as may be otherwise permitted by resolution of the board of Nation (from which vote Paltar’s nominees to the Nation Board shall abstain).  Any shares that may be transferred by Paltar by way of dividend or otherwise to a party where Marc Bruner is the beneficial owner will be locked up for an additional 2 years (a total of 5 years).  Paltar will become an “affiliate” of Nation and will be required to file insider reports and otherwise comply with applicable SEC rules.  In addition, Paltar acknowledges that Nation is a reporting issuer in Canada under Multilateral Instrument 51-105, and will remain so for a year after Closing, and Canadian securities filings will be required during that time.

 

  

3

  

 

	
12.  

	
Paltar and Hislop shall use commercially reasonable efforts to enter into a shareholder agreement which shall include a covenant that Paltar and Hislop will each vote their Nation common shares to increase the number of Nation directors to five and, for five years after the Nation Shares are issued to Paltar, to elect Hislop (or his nominee), Darrel Causbrook, David Siegel, and Marc Bruner (or such other nominees as Paltar may nominate from time-to-time), and one other person as members of Nation’s board of directors, although there may be as many other directors of Nation as its shareholders may determine.

 

Representations of Nation

 

	
13.  

	
Nation represents and warrants to Paltar that:

 

	
                (a)  

	
the authorized capital of Nation consists of 100,000,000 common shares with no par value per share, of which there are presently 16,020,000 common shares issued and outstanding;

 

 

	
                (b)  

	
other than as contemplated under this Agreement, there are no other rights, warrants or options outstanding pursuant to which any shares of Nation may be issued and there are no other securities issued and outstanding or issuable which are or may be convertible or converted into shares of Nation;

 

 

	
                (c)  

	
Nation is duly incorporated under the laws of Wyoming; and

 

 

	
                (d)  

	
all of Nation’s continuous disclosure filings with the Securities Exchange Commission of the United States are up to date and were, at the date they were filed, complete and accurate and, other than as contemplated herein, there are not and shall not, at each of the Earn-In Closing Date and the Officer Closing Date be, any material adverse changes in Nation’s business and affairs from that which was disclosed in Nation’s most recently-filed continuous disclosure documents.

 

Representations of Paltar

 

	
14.  

	
Each of Paltar and Bruner represents and warrants to Nation that:

 

	
                (a)  

	
subject to required governmental and other approvals as required by law, which Paltar will use its best efforts to obtain, Paltar has the full power and authority to transfer or cause to be transferred the Assets to Nation Australia free and clear of any charges, encumbrances, liens or claims, other than royalties and overriding royalties in existence at the date of this Agreement, including without limitation the overriding royalties referred to in Paragraph 1.1 of the Joint Venture Operating Agreement between Paltar and Sweetpea Petroleum Pty Limited;

 

	
                (b)  

	
other than as contemplated under this Agreement, there are no other rights or options outstanding pursuant to which any third party has any right or interest in the Assets;

 

	
                (c)  

	
Paltar is duly incorporated and in good standing under the laws of Australia; and

 

	
                (d)  

	
other than liens arising under the Joint Venture Operating Agreement between Paltar and Sweetpea Petroleum Pty Limited, Paltar’s interest in the Assets is free and clear of all encumbrances.

 

  

4

  

 

Covenants

 

	
15.  

	
Nation covenants to Paltar:

 

	
                (a)  

	
Nation shall promptly call and hold the Nation Meeting, at which Nation’s Board of Directors shall ask Nation’s shareholders to approve a resolution to amend and restate Nation’s Articles of Incorporation to effect an increase in Nation’s authorized share capital from 100,000,000 common shares to 5,000,000,000 common shares.  In addition, and effective immediately following the increase in its authorized capital, Nation intends to and shall settle approximately $1,340,000 in debt for shares issued at $0.01 per share.

 

	
                (b)  

	
Nation shall conduct its business in the ordinary and normal course and shall not, without the prior written consent of Paltar, enter into any transaction which would cause any of its representations or warranties or agreements in this Agreement to be incorrect or to constitute a breach of any covenant or agreement of Nation herein;

 

	
                (c)  

	
Nation shall not issue or redeem any shares in its capital nor issue any securities convertible or exchangeable into shares other than as disclosed in this Agreement.

 

	
16.  

	
Paltar covenants to Nation:

 

	
                (a)  

	
Paltar shall conduct its business in the ordinary and normal course and shall not enter into any transaction which would cause any of Paltar’ representations or warranties in this Agreement to be incorrect or constitute a breach of any covenant or agreement of Paltar in this Agreement;

 

	
                (b)  

	
Within 60 days after receiving the Nation Shares as provided in Paragraph 2, Paltar shall cause Nation to file (and thereafter diligently pursue until effective) a registration statement with the SEC seeking registration under the Securities Act of 1933 of as many of the approximately 145 million shares anticipated then to be beneficially owned by Hislop as may be permitted by the SEC.  As soon as practicable after the Earn-In Closing Date the parties will negotiate and sign a Registration Rights agreement with Hislop which sets out these rights and provide for penalties if registration does not occur as contemplated;

 

	
                (c)  

	
Paltar will continue to use reasonable efforts consistent with its financial circumstances after the Earn-In Closing Date to cause all Applications outstanding as of the date hereof to be converted to Permits;

 

	
                (d)  

	
Paltar shall not take any action which would result in any material adverse change to Paltar or to sell, transfer, encumber or dispose of any of the Assets or related entitlements, except as permitted in writing by Nation; and

 

	
                (e)  

	
Paltar will not, without the prior written consent of Nation, which may be granted or withheld by Nation in its sole and absolute discretion, transfer any of the Assets to any other party except in accordance with the terms of this Agreement.

 

Binding Agreement

 

	
17.  

	
Upon acceptance of the terms of this Agreement by all of the parties hereto, this Agreement shall be deemed to constitute and shall be a legally valid and binding agreement.

 

  

5

  

 

Confidentiality

 

	
18.  

	
Paltar acknowledges that Nation is a public company and has an obligation to disclose all material information about its affairs.  Paltar agrees that it will not trade in the securities of Nation while in possession of, and will ensure that its management does not so trade, nor will Paltar inform others of (except on a need to know basis and subject to a non-disclosure agreement), any non-disclosed material information about Nation.

 

General

 

	
19.  

	
The parties acknowledge that any provision of this Agreement that would effect an acquisition of an interest in Australian urban land [within the meaning of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FATA”)] is subject to and conditional upon the person making the acquisition not having received any order or notice under FATA prohibiting the person from making the acquisition or making the acquisition subject to conditions which are unacceptable to the person.  The parties further acknowledge that the Nation Option, the Officer Loan and/or any of the security for the Officer Loan may constitute the acquisition of an interest in Australian urban land and, accordingly, Nation Austalia and/or Hislop shall, on or as soon as practicable after the date of this Agreement make and pursue all necessary applications and notifications under FATA as required.  The “FATA Approval Date” referred to in Paragraph 1 of this Agreement shall be the earliest to occur of the following: (i) The date upon which Nation Australia receives notice that the grant of the Nation Option is not prohibited under FATA (provided that any conditions placed on the notice (if any) are acceptable to Nation Australia); (ii) the date upon which a notice prohibiting the acquisition can no longer be delivered to Nation Australia and / or Hislop under the FATA; and (iii) the date upon which Nation Australia and / or Hislop (as applicable) waive this condition in accordance with clause 20.

 

	
20.  

	
The obligation to pursue applications and notifications under FATA, and the receipt of any approvals thereunder, may be waived by Nation Australia or Hislop (as applicable) in its or his sole and absolute discretion.

 

	
21.  

	
Each party will pay its own legal costs, whether or not the transactions contemplated hereby are completed.

 

	
22.  

	
This Agreement shall be governed and interpreted under the laws of the State of Wyoming.

 

	
23.  

	
This Agreement may be executed in counterparts with the same effect as if each of the parties hereto had signed the same document and all counterparts will be construed together and constitute one and the same instrument.

 

	
24.  

	
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, personal representatives, successors and assigns.

 

	
25.  

	
This Agreement represents the entire agreement between the parties regarding the transactions contemplated herein and supersedes all other prior agreements, understandings, negotiations and discussions.

 

  

6

  

 

If the foregoing correctly sets out our agreement, please execute this letter in the space provided.

 

NATION ENERGY INC.                                                                                      PALTAR PETROLEUM LIMITED

 

 

Per:  “/s/ John R. Hislop”                                                                                      Per:  “/s/ Marc A. Bruner” 

        Authorized Signatory                                                                                              Authorized Signatory

 

 

 

AGREED TO AND ACCEPTED THIS 13th DAY OF JUNE, 2015.

 

 

 

“/s/ Julie Bernelot Moens                                 

Witness Signature                                               

                                                                            

                 

 

Julie Bernelot Moens                                                           “/s/ Marc A. Bruner”                                                      

Name                                                                                       MARC A. BRUNER

 

Flat 31 Pattison House, Redcross Way)

London  SE1 1EY                                                

Address                                                   

 

 

“/s/ Julie Bernelot Moens                                                

Witness Signature                                                     

 

Julie Bernelot Moens                                                           “/s/ John R. Hislop”                                                      

Name                                                                                         JOHN HISLOP

 

Flat 31 Pattison House, Redcross Way)

London  SE1 1EY                                                

Address                                                     

 

 

  

7

  

 

SCHEDULE A

 

EXPLORATION PERMITS:

 

100% interest in the following permits:

	
Permits

	
Holder

	
Permit Date

	
EP 231

	
Paltar

	
05/09/2012

	
EP 232

	
Paltar

	
03/10/2013

	
EP 234

	
Paltar

	
05/09/2012

	
EP 237

	
Paltar

	
05/09/2012

and,

 

50% interest in Northern Territory Exploration Permits 136 and 143, which are subject to the Joint Venture Operating Agreement between Paltar and Sweetpea Petroleum Pty Limited, dated September 16, 2011.

 

APPLICATIONS FOR EXPLORATION PERMITS

 

As to which Paltar will promise to deliver transfer instruments to Nation when and if exploration permits are issued to Paltar:

	
Applications

	
Applicant

	
Application Date

	
EP(A) 197

	
Paltar

	  
	
EP(A) 230

	
Paltar

	
19/08/2011

	
EP(A) 233

	
Paltar

	
19/08/2011

	
EP(A) 235

	
Paltar

	
19/08/2011

	
EP(A) 236

	
Paltar

	
19/08/2011

	
EP(A) 238

	
Paltar

	
19/08/2011

	
EP(A) 239

	
Paltar

	
19/08/2011

	
EP(A) 240

	
Paltar

	
19/08/2011

	
EP(A) 241

	
Paltar

	
19/08/2011

	
EP(A) 242

	
Paltar

	
19/08/2011

	
EP(A) 243

	
Paltar

	
19/08/2011

	
EP(A) 244

	
Paltar

	
19/08/2011

	
EP(A) 245

	
Paltar

	
19/08/2011

	
EP(A) 246

	
Paltar

	
19/08/2011

	
EP(A) 247

	
Paltar

	
19/08/2011

	
EP(A) 248

	
Paltar

	
19/08/2011

	
EP(A) 249

	
Paltar

	
19/08/2011

	
EP(A) 250

	
Paltar

	
23/08/2011

	
EP(A) 251

	
Paltar

	
23/08/2011

	
NTC/P 12

	
Paltar

	
23/08/2011

	
NTC/P 13

	
Paltar

	
23/08/2011

	
EP(A) 266

	
Paltar

	
18/10/2011

	
EP(A) 267

	
Paltar

	
18/10/2011

	
EP(A) 268

	
Paltar

	
18/10/2011

	
EP(A) 269

	
Paltar

	
18/10/2011

	
EP(A) 270

	
Paltar

	
18/10/2011

	
EP(A) 271

	
Paltar

	
18/10/2011

	
EP(A) 272

	
Paltar

	
18/10/2011

	
EP(A) 273

	
Paltar

	
18/10/2011

	
EP(A) 306

	
Paltar

	
22/08/2011

 

  

8ex10-1.htm

Exhibit 10.1

METASTAT, INC.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made and entered into on June 17, 2015 (the “Effective Date”) by and between MetaStat, Inc. (the “Company”) and Douglas Hamilton (“Executive”).  The Company and Executive are hereinafter collectively referred to as the “Parties”, and individually referred to as a “Party”.

 

Recitals

 

A.           The Company desires assurance of the association and services of Executive in order to retain Executive’s experience, skills, abilities, background and knowledge, and is willing to engage Executive’s services on the terms and conditions set forth in this Agreement.

 

B.           Executive desires to be in the employ of the Company, and is willing to accept such employment on the terms and conditions set forth in this Agreement.

 

Agreement

 

In consideration of the foregoing Recitals and the mutual promises and covenants herein contained, and for other good and valuable consideration, the Parties, intending to be legally bound, agree as follows:

 

1. Employment.

 

1.1 Title.  Effective as of the Effective Date, Executive’s position shall be President and Chief Executive Officer, subject to the terms and conditions set forth in this Agreement.

 

1.2 Term.  The term of this Agreement shall begin on the Effective Date and shall continue for a period of two (2) years or until it is terminated pursuant to Section 4 herein (the “Term”).

 

1.3 Duties.  Executive shall have the customary powers, responsibilities and authorities of President and Chief Executive Officer of corporations of the size, type and nature of the Company, as it exists from time to time.  Executive shall report to the Company’s Board of Directors.

 

1.4 Governing Agreement.  The employment relationship between the Parties shall be governed by this Agreement

 

1.5 Location.  As promptly as practicable following the Company’s underwritten public offering, the Executive shall relocate to any of the States of Massachusetts, Connecticut, New Jersey or New York. Until such relocation occurs, Executive shall perform the services that he is required to perform pursuant to this Agreement from his home office in the San Francisco Bay Area or from the Company’s offices in Boston, MA, provided, however, that the Company may from time to time require him to travel temporarily to other locations in connection with the Company’s business.  For the avoidance of doubt, it is not expected that the Executive relocate his family mid-school year. 

 

2. Loyalty; Noncompetition; Nonsolicitation.

 

2.1 Loyalty.  During Executive’s employment by the Company, Executive shall devote substantially all his business time to the performance of Executive’s duties under this Agreement. Notwithstanding the foregoing, except as otherwise agreed to in writing, Executive shall have the right to perform such incidental services as are necessary in connection with (a) his private passive investments, (b) his charitable or community activities, (c) his participation in trade or professional organizations, and (d) his service on the board of directors (or comparable body) of any third-party corporate entity that is not a Competitive Entity (as defined in Section 2.3), so long as these activities do not materially interfere with Executive’s duties hereunder and, with respect to (d), Executive obtains prior Company consent, which consent will not be unreasonably withheld.  Executive may also provide limited services to other parties provided such services are without remuneration.

	
 

	  	  

  

  

  

 

2.2 Agreement not to Participate in Company’s Competitors.  During the Term, Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by Executive to be adverse or antagonistic to the Company, its business, or prospects, financial or otherwise, or in any company, person, or entity that is, directly or indirectly, in competition with the business of the Company or any of its Affiliates (as defined below).  Ownership by Executive, in professionally managed funds over which the Executive does not have control or discretion in investment decisions, or as a passive investment, of less than five percent (5%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded on a national securities exchange or in the over-the-counter market shall not constitute a breach of this Section. For purposes of this Agreement, “Affiliate,” means, with respect to any specific entity, any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified entity.

 

2.3 Covenant not to Compete.  During the Term and for a period of twelve  (12) months thereafter (the “Restricted Period”), Executive shall not engage in competition with the Company and/or any of its Affiliates, either directly or indirectly, in any manner or capacity, as adviser, principal, agent, affiliate, promoter, partner, officer, director, employee, stockholder, owner, co-owner, consultant, or member of any association or otherwise, in any phase of the business of developing, manufacturing and marketing of cancer diagnostic tests (a “Competitive Entity”), except with the prior written consent of the Board.

 

2.4 Nonsolicitation.  During the Restricted Period, Executive shall not:  (i) solicit or induce, or attempt to solicit or induce, any employee of the Company or its Affiliates to leave the employ of the Company or such Affiliate; or (ii) solicit or attempt to solicit the business of any client or customer of the Company or its Affiliates with respect to products, services, or investments similar to those provided or supplied by the Company or its Affiliates.

 

2.5 Acknowledgements.  Executive acknowledges and agrees that his services to the Company pursuant to this Agreement are unique and extraordinary and that in the course of performing such services Executive shall have access to and knowledge of significant confidential, proprietary, and trade secret information belonging to the Company.  Executive agrees that the covenant not to compete and the nonsolicitation obligations imposed by this Section 2 are reasonable in duration, geographic area, and scope and are necessary to protect the Company’s legitimate business interests in its goodwill, its confidential, proprietary, and trade secret information, and its investment in the unique and extraordinary services to be provided by Executive pursuant to this Agreement.  If, at the time of enforcement of this Section 2, a court holds that the covenant not to compete and/or the nonsolicitation obligations described herein are unreasonable or unenforceable under the circumstances then existing, then the Parties agree that the maximum duration, scope, and/or geographic area legally permissible under such circumstances will be substituted for the duration, scope and/or area stated herein.

 

3. Compensation of the Executive.

 

3.1 Base Salary.  The Company shall pay Executive a base salary (the “Base Salary”) at the annualized rate of Two Hundred Sixty Thousand Dollars ($260,000), less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices.  The Base Salary shall be prorated for any partial year of employment on the basis of a 365-day fiscal year.  The Company may increase, but not decrease (except in connection with a Company-wide decrease in executive compensation), Executive’s Base Salary from time to time, and if so increased, “Base Salary” shall include such increases for purposes of this Agreement.

 

3.2 Bonuses.  At the sole discretion of the Board or the compensation committee of the Board (the “Compensation Committee”), following each calendar year of employment, Executive shall be eligible to receive an additional cash bonus up to one hundred fifty percent (150%) of Executive’s compensation hereunder (the “Annual Milestone Bonus”), based (in whole or in part) on Executive’s attainment of certain financial, clinical development, and/or business milestones (the “Milestones”) to be established annually by the Board or the Compensation Committee. The determination of whether Executive has met the Milestones, and if so, the bonus amount (if any) that will be paid, shall be determined by the Board or the Compensation Committee in its sole and absolute discretion. Any Annual Milestone Bonuses shall be paid in cash as either single lump-sum payments or in installments, as determined by the Board or the Compensation Committee.  Executive shall also be entitled to a discretionary bonus as determined by the Board or the Compensation Committee in the event of a sale or merger transaction in which Executive introduces the acquiring company or target and facilitates the transaction.

	
 

	
 

	  

  

  

  

 

3.3 Stock Options.  Subject to the terms of the Company’s 2012 Amended and Restated Omnibus Securities and Incentive Plan (the “Plan”), Executive shall be issued promptly following the Effective Date 900,000 stock options pursuant to the Plan, which options shall vest as follows: (i) 150,000 shares shall vest immediately; (ii) 150,000 shares shall vest upon an up-listing to a national securities exchange; (iii) 150,000 shares shall vest upon CLIA certification; (iv) 150,000 shares shall vest upon commercial sales of the Company’s  first product from at least ten different institutions or oncologists; (v) 150,000 shares shall vest upon maintaining a market capitalization of $100M for 30 consecutive days; and (vi) 150,000 shares shall vest upon the Company achieving $25,000,000 of revenue for any consecutive 12 month period. In addition, the Board or the Compensation Committee shall grant additional stock options (such number to be determined in the sole discretion of the Board or the Compensation Committee) to Executive in January 2016 based on the achievement of the 2015 corporate goals as approved by Board and set forth on Exhibit B hereto. Any options issued hereunder will be governed by the Plan and the exercise price per share of any stock options will be equal to the greater of $0.55 or the fair market value of a single share of the Company’s common stock on the issuance date in accordance with the Plan.  Notwithstanding the foregoing to the contrary, it is acknowledged and agreed that such options, if necessary, may be issued outside the Plan so long as the terms and provisions of the Plan as if such options were actually issued pursuant to the Plan.  Notwithstanding the above, all stock options issued by the Company to the Executive, including, but not limited to the 900,000 stock options granted upon employment and any additional options granted in January 2016 (as described above) shall: (i) immediately vest upon the termination of Executive’s employment without Cause or Executive’s resignation for Good Reason in connection with a Change of Control; and (ii) remain exercisable for the later of ninety (90) days following (A) the Company’s up-listing to a national securities exchange; (B) the end of any lock-ups; and (C) the registration of such underlying shares. In the event of any conflict between this Agreement and the terms of the Plan and/or any award agreement, the terms of this Agreement shall control. In addition, the Executive may elect to exercise some or all of the stock options by making a net exercise, in which case the Company shall issue to the Executive a number of shares of unencumbered common stock of the Company equal to: (x) the total number of shares underlying the portion of the stock option being exercised less (y) the number of shares whose fair market value is equal to the sum of (A) the exercise price of the stock options being exercised, plus (B) any required tax withholding amounts in respect of such exercise.

 

3.4 Expense Reimbursements. The Company will reimburse Executive for all reasonable business expenses Executive incurs in conducting his duties hereunder, pursuant to the Company’s usual expense reimbursement policies, but in no event later than ninety days after the end of the calendar month following the month in which such expenses were incurred by Executive; provided that Executive supplies the appropriate substantiation for such expenses no later than the end of the calendar month following the month in which such expenses were incurred by Executive.

 

3.5 Relocation Expense Reimbursement.  Subject to the Company raising gross proceeds of at least $5,000,000 in a financing, the Executive shall use his reasonable best efforts to relocate to the Company’s offices in Boston, MA promptly following such financing. Promptly following such relocation, if any, the Company shall reimburse Executive’s relocation expenses up to a maximum of $25,000.

 

3.6 Changes to Compensation.  As described above, Executive’s compensation will be reviewed at least on an annual basis and the Base Salary may be increased, but not decreased (except in connection with a Company-wide decrease in executive compensation), from time to time in the Company’s sole discretion.

 

3.7 Employment Taxes.  All of Executive’s compensation shall be subject to customary withholding taxes and any other employment taxes as are commonly required to be collected or withheld by the Company.

 

3.8 Benefits. The Executive shall, in accordance with Company policy and the applicable plan documents, be eligible to participate in benefits under any benefit plan or arrangement, including medical, dental, vision, disability and life insurance programs, that may be in effect from time to time and made available to the Company’s senior management employees, subject to the terms and conditions of those benefit plans.

	
 

	
 

	  

  

  

  

 

3.9 Holidays and Vacation.  Executive shall receive twenty (20) days of paid vacation per year, which cannot be taken in one increment, but which shall accrue if not used in any year but only up to a maximum of twenty days, and be paid to Executive or carried forward to subsequent years consistent with Company policy. In addition to such paid vacation, Executive shall receive all paid Company holidays in accordance with Company policy.

 

4. Termination.

 

4.1 Termination by the Company.  Executive’s employment with the Company is at will and may be terminated by the Company at any time and for any reason, or for no reason, including, but not limited to, under the following conditions:

 

4.1.1 Termination by the Company for Cause.  The Company may terminate Executive’s employment under this Agreement for “Cause” by delivery of written notice to Executive.  Any notice of termination given pursuant to this Section 4.1.1 shall effect termination as of the date of the notice, or as of such other date as specified in the notice.

 

4.1.2 Termination by the Company without Cause.  The Company may terminate Executive’s employment under this Agreement without Cause at any time and for any reason, or for no reason.  Such termination shall be effective on the date Executive is so informed, or as otherwise specified by the Company.

 

4.2 Termination by Resignation of Executive.  Executive’s employment with the Company is at will and may be terminated by Executive at any time and for any reason, or for no reason, including via a resignation for Good Reason in accordance with the procedures set forth in Section 4.6.3 below.

 

4.3 Termination for Death or Complete Disability.  Executive’s employment with the Company shall automatically terminate effective upon the date of Executive’s death or Complete Disability (as defined below).

 

4.4 Termination by Mutual Agreement of the Parties.  Executive’s employment with the Company may be terminated at any time upon a mutual agreement in writing of the Parties.  Any such termination of employment shall have the consequences specified in such agreement.

 

4.5 Compensation Upon Termination.

 

4.5.1 Death or Complete Disability.  If, during the Term of this Agreement, Executive’s employment shall be terminated by death or Complete Disability, the Company shall pay to Executive, his estate, or his heirs, as applicable, (i) any Base Salary owed to Executive through the date of termination; (ii) expenses reimbursement amounts owed to Executive; (iii) all unpaid amounts of any Annual Milestone Bonus(es) Executive earned prior to the termination date; (iv) a cash lump sum in respect to accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination; (v) any payments and benefits to which Executive (or his estate) is entitled pursuant to the terms of any employee benefit or compensation plan or program in which he participates (or participated); and (vi) any amount to which Executive is entitled pursuant to any other written agreements between the Company or any of its affiliates and Executive (the amounts in (i) through (vi) above being the “Termination Amounts”). The Company shall pay Executive: (A) the amounts contained in items (i) through (iv) within ten (10) days following such termination; (B) any payments associated with (v) in accordance to the terms of such plans or programs; and (C) any such amounts in (vi) in accordance with the terms of such agreements, with the Termination Amounts being subject to the standard deductions and withholdings (as applicable).  In addition, subject to Executive (or his estate or heirs, as applicable) furnishing to the Company an executed waiver and release of claims in the form attached hereto as Exhibit A (the “Release”) within the time period specified therein, and allowing the Release to become effective in accordance with its terms, then Executive, his estate, or his heirs, as applicable, shall also be entitled to: (1) continuation of Executive’s salary (at the Base Salary rate in effect at the time of termination) for a period of ninety (90) days following the termination date; and (2) a prorated annual bonus equal to the Annual Milestone Bonus, if any, for the year of termination multiplied by a fraction, the numerator of which shall be the number of full and partial months Executive worked for the Company and the denominator of which shall be 12. The Base Salary payments will be subject to standard payroll deductions and withholdings and will be made on the Company’s regular payroll cycle, provided, however, that any payments otherwise scheduled to be made prior to the effective date of the Release shall accrue and be paid in the first payroll period that follows such effective date. The prorated annual bonus payment will be subject to standard payroll deductions and withholdings and will paid at the same time as the Annual Milestone Bonus, if any, would have been paid to Executive under Section 3.2 above, had Executive remained employed with the Company.

	 	
 

	  

  

  

  

 

4.5.2 Termination For Cause or Resignation without Good Reason.  If, during the Term of this Agreement, Executive’s employment is terminated by the Company for Cause, or Executive resigns his employment hereunder without Good Reason, the Company shall pay Executive the Termination Amounts, less standard deductions and withholdings. The Company shall thereafter have no further obligations to Executive under this Agreement, except as otherwise provided by law.

 

4.5.3 Termination Without Cause or Resignation For Good Reason Not In Connection with a Change of Control.  If the Company terminates Executive’s employment without Cause, or if Executive resigns for Good Reason, at any time other than upon the occurrence of, or within thirty (30) days prior to, or six (6) months following, the effective date of a Change of Control (as defined below), the Company shall pay Executive the Termination Amounts, less standard deductions and withholdings. In addition, subject to Executive furnishing to the Company an executed Release within the time period specified therein, and allowing the Release to become effective in accordance with its terms, Executive shall be entitled to: (1) severance in the form of continuation of his salary (at the Base Salary rate in effect at the time of termination, but prior to any reduction triggering Good Reason) for the greater of a period of six (6) months following the termination date or the remaining term; (2) payment of Executive’s premiums to cover COBRA for a period of twelve (12) months following the termination date; and (3) a prorated annual bonus equal to the target Annual Milestone Bonus, if any, for the year of termination (150% of Executive’s compensation) multiplied by a fraction, the numerator of which shall be the number of full and partial months Executive worked for the Company and the denominator of which shall be 12, and (4) with respect to any unvested stock options at the time of termination, in the event such unvested stock options vest within six (6) months following the termination date, Executive shall be entitled to receive the full benefit of such options and have the right to exercise such options for a period of six (6) months following the vesting date.  In addition, all stock options that have vested in connection with Executive’s termination under this Section 4.5.3 shall remain exercisable for six (6) months following such termination.   These payments under (1), (2), (3) and (4) above will be subject to standard payroll deductions and withholdings and will be made on the Company’s regular payroll cycle, provided, however, that any payments otherwise scheduled to be made prior to the effective date of the Release shall accrue and be paid in the first payroll period that follows such effective date.

 

4.5.4 Termination Without Cause or Resignation For Good Reason In Connection with a Change of Control.  If the Company terminates Executive’s employment without Cause, or if Executive resigns for Good Reason, upon the occurrence of, or within thirty (30) days prior to, or within six (6) months following, the effective date of a Change of Control, the Company shall pay Executive the Termination Amounts, less standard deductions and withholdings.  In addition, subject to Executive furnishing to the Company an executed Release within the time period specified therein, and allowing the Release to become effective in accordance with its terms, then Executive shall be entitled to: (1) severance in the form of a lump sum payment equivalent to the greater of one (1) year of his Base Salary (at the Base Salary rate in effect at the time of termination, but prior to any reduction triggering Good Reason) or the remaining Term; (2) payment of Executive’s premiums to cover COBRA for a period of twelve (12) months following the termination date; (3) a prorated annual bonus equal to the target Annual Milestone Bonus, if any, for the year of termination (150% of Executive’s compensation) multiplied by a fraction, the numerator of which shall be the number of full and partial months Executive worked for the Company and the denominator of which shall be 12, and (4) immediate accelerated vesting of any unvested shares subject to any outstanding stock option(s), such that, on the effective date of the Release, the Executive shall be vested in one hundred percent (100%) of the shares subject to such option(s). Executive shall provide transition services for a period of up to six months, if requested.  These payments under (1), (2), and (3) above, will be subject to standard payroll deductions and withholdings and will be made on the Company’s regular payroll cycle, provided, however, that any payments otherwise scheduled to be made prior to the effective date of the Release shall accrue and be paid in the first payroll period that follows such effective date.

 

4.6 Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:

 

4.6.1 Complete Disability.  “Complete Disability” means that Executive is determined to be permanently disabled pursuant to the Company’s long term disability plan and is receiving disability benefits under such plan.

 

4.6.2 Cause.  “Cause” for the Company to terminate Executive’s employment hereunder shall mean the occurrence of any of the following events, as determined by the Company and/or the Board in its and/or their sole and absolute discretion:

	
 

	
 

	  

  

  

  

 

(i) The willful failure, disregard or refusal by Executive to perform his material duties or obligations under this Agreement;

 

(ii) Any grossly negligent act by Executive having the effect of materially injuring (whether financially or otherwise) the business or reputation of the Company or any of its Affiliates, including but not limited to, any senior officer, director or executive of the Company or any of its Affiliates or any willful act by Executive intended to cause such material injury, except any acts (A) made by Executive in connection with the enforcement of his rights, whether under this Agreement, any other agreement between the Company or any affiliate and Executive, or pursuant to applicable law (e.g. disparagement, etc.) or (B) which are required by law or pursuant to a subpoena or demand by a governmental or regulatory body;

 

(iii) Willful misconduct by Executive with respect to any of the material duties or obligations of Executive under this Agreement, including, without limitation, willful refusal to follow the directions received by Executive from the Board;

 

(iv) Executive’s indictment of any felony involving moral turpitude (including entry of a nolo contendere plea);

 

(v) The determination, after a reasonable and good-faith investigation by the Company, that the Executive engaged in discrimination prohibited by law (including, without limitation, age, sex or race  discrimination);

 

(vi) Executive’s material misappropriation or embezzlement of the property of the Company or its Affiliates (whether or not a misdemeanor or felony); or

 

(vii) Material breach by Executive of this Agreement and/or of his Proprietary Information and Inventions Agreement; provided, however, that, any such termination of Executive shall only be deemed for Cause pursuant to this definition if: (1) the Company gives the Executive written notice of the condition(s) alleged to constitute Cause, which notice shall describe such condition(s); and (2) the Executive fails to remedy such condition(s) (if curable) within thirty (30) days following receipt of the written notice.

 

For purposes of this definition, the Parties agree that (1) a change in Executive’s role and/or title to no less than President shall not constitute Cause under this Agreement; and (2) any breach of Sections 2 or 5 of this Agreement shall be deemed a material breach that is not capable of cure by Executive.

 

4.6.3 Good Reason.  For purposes of this Agreement, and subject to the caveat at the end of this Section, “Good Reason” for Executive to terminate his employment hereunder shall mean the occurrence of any of the following events without Executive’s prior written consent:

 

(i) any reduction by the Company of Executive’s Base Salary as initially set forth herein or as the same may be increased from time to time, provided, however, that if such reduction occurs in connection with a Company-wide decrease in executive compensation, such reduction shall not constitute Good Reason for Executive to terminate his employment;

 

(ii) a material breach by the Company (or any of its affiliates) of this Agreement or any other written agreement between the Company or any of its affiliates and Executive; or

 

(iii) a material adverse change in Executive’s duties, titles, authority, responsibilities or reporting relationships, with such determination being made with reference to the greatest extent of your duties, titles, authority, responsibilities or reporting relationships, etc. as increased (but not decreased) from time to time; provided, however, a change in Executive’s role and/or title to no less than President shall not constitute Good Reason under this Agreement;

 

(iv) any failure of the Company or any affiliate to pay Executive any amount owed to Executive under this Agreement or any other written agreement plan or program between the Company, any affiliates and Executive;

 

(v) any reduction in Executive’s bonus eligibility; or

 

(vi) the assignment to Executive of duties materially inconsistent with his position with the Company.

	
 

	
 

	  

  

  

  

 

Provided, however, that, any such termination by the Executive shall only be deemed for Good Reason pursuant to this definition if: (1) the Executive gives the Company written notice of his intent to terminate for Good Reason; which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice the “Cure Period”); and (3) Executive voluntarily terminates his employment within thirty (30) days following the end of the Cure Period.

 

4.6.4 Change of Control.  For purposes of this Agreement, “Change of Control” shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events (excluding in any case transactions in which the Company or its successors issues securities to investors primarily for capital raising purposes):

 

(i) the acquisition by a third party (or more than one party acting as a group) of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction;

 

(ii) a merger, consolidation or similar transaction following which the stockholders of the Company immediately prior thereto do not own at least fifty percent (50%) of the combined outstanding voting power of the surviving entity (or that entity’s parent) in such merger, consolidation or similar transaction;

 

(iii) the dissolution or liquidation of the Company; or

 

(iv) the sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.

 

4.7 Survival of Certain Sections.  Sections 3, 4, 5, 6, 7, 8, 9, 12, 13, 16, 17, 19 and 21 of this Agreement will survive the termination of this Agreement.

 

4.8 Parachute Payment.  If any payment or benefit the Executive would receive pursuant to this Agreement (“Payment”) would (i) constitute a “Parachute Payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive shall be entitled to receive an additional payment from the Company (the “Gross-Up Payment”) in an amount such that the net amount of such additional payment retained by the Executive, after payment of all federal, state and local income and employment and Excise Taxes imposed on the Gross-Up Payment, shall be equal to the Excise Tax imposed on the Payment. The Company shall pay Executive the Gross-Up Payment as soon as practicable following the date Executive’s right to the applicable Payment is triggered, but in no event will the Company make such Gross-Up Payment later than the time required by the rules governing Section 409A, including, but not limited to, Treasury Regulation 1.409A-3(i)(1)(v).

 

Unless Executive and the Company agree on an alternative accounting, law or consulting firm, the accounting firm then engaged by the Company for general tax compliance purposes shall perform the Gross-Up Payment calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting, law or consulting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting, law or consulting firm required to be made hereunder.

 

The Company shall use commercially reasonable efforts such that the accounting, law or consulting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Executive or the Company) or such other time as requested by the Executive or the Company.

 

4.9 Application of Internal Revenue Code Section 409A.  Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement (the “Severance Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Executive’s termination of employment unless and until Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to Executive without causing Executive to incur the additional 20% tax under Section 409A.

	
 

	
 

	  

  

  

  

 

It is intended that each installment of the Severance Benefits payments provided for in this Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i).  For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9).  However, if the Company (or, if applicable, the successor entity thereto) determines that the Severance Benefits constitute “deferred compensation” under Section 409A and Executive is, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after Executive’s Separation From Service, or (ii) the date of Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”), the Company (or the successor entity thereto, as applicable) shall (A) pay to Executive a lump sum amount equal to the sum of the Severance Benefit payments that Executive would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of the Severance Benefits had not been so delayed pursuant to this Section and (B) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedules set forth in this Agreement.

 

Notwithstanding anything to the contrary set forth herein, Executive shall receive the Severance Benefits described above, if and only if Executive duly executes and returns to the Company within the applicable time period set forth therein, but in no event more than forty-five days following Separation From Service, the Release and permits the release of claims contained therein to become effective in accordance with its terms.  Notwithstanding any other payment schedule set forth in this Agreement, none of the Severance Benefits will be paid or otherwise delivered prior to the effective date of the Release.  Except to the extent that payments may be delayed until the Specified Employee Initial Payment Date pursuant to the preceding paragraph, on the first regular payroll pay day following the effective date of the Release, the Company will pay Executive the Severance Benefits Executive would otherwise have received under the Agreement on or prior to such date but for the delay in payment related to the effectiveness of the Release, with the balance of the Severance Benefits being paid as originally scheduled.  All amounts payable under the Agreement will be subject to standard payroll taxes and deductions.

 

All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A. All reimbursements for expenses paid pursuant hereto that constitute taxable income to Executive shall in no event be paid later than the end of the calendar year next following the calendar year in which Executive incurs such expense or pays such related tax. Unless otherwise permitted by Section 409A, the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit and the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, respectively, in any other taxable year.

 

5. Confidential And Proprietary Information.

 

As a condition of employment Executive agrees to execute and abide by the Company’s Proprietary Information and Inventions Agreement (“PIIA”).

 

6. Assignment and Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs, executors, personal representatives, assigns, administrators and legal representatives.  Because of the unique and personal nature of Executive’s duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assignable by Executive.  This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.

	
 

	
 

	  

  

  

  

 

7. Notices.

 

All notices or demands of any kind required or permitted to be given by the Company or Executive under this Agreement shall be given in writing and shall be personally delivered (and receipted for) or faxed during normal business hours or mailed by certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Company:

MetaStat, Inc.

27 DryDock Ave, 2nd Floor

Boston, MA 02210

Attn: CFO

 

If to Executive:

Douglas Hamilton

[_________________]

with a copy to:

Jeffery C. Johnson, Esq.

Pryor Cashman LLP

7 Times Square

New York, NY 10036-6569

 

Any such written notice shall be deemed given on the earlier of the date on which such notice is personally delivered or three (3) days after its deposit in the United States mail as specified above.  Either Party may change its address for notices by giving notice to the other Party in the manner specified in this Section.

 

8. Choice of Law.

 

This Agreement shall be construed and interpreted in accordance with the internal laws of the State of New York without regard to its conflict of laws principles.

 

9. Integration.

 

This Agreement, including Exhibit A and the PIIA, contains the complete, final and exclusive agreement of the Parties relating to the terms and conditions of Executive’s employment and the termination of Executive’s employment, and supersedes all prior and contemporaneous oral and written employment agreements or arrangements between the Parties.

 

10. Amendment.

 

This Agreement cannot be amended or modified except by a written agreement signed by Executive and the Company.

 

11. Waiver.

 

No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach.

 

12. Severability.

 

The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal.  Such court shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision, which most accurately represents the Parties’ intention with respect to the invalid or unenforceable term, or provision.

 

13. Interpretation; Construction.

 

The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement.  This Agreement has been drafted by legal counsel representing the Company, but the Executive has been encouraged to consult with, and has consulted with, Executive’s own independent counsel and tax advisors with respect to the terms of this Agreement.  The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

	
 

	
 

	  

  

  

  

 

14. Representations and Warranties.

 

Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that Executive’s execution and performance of this Agreement will not violate or breach any other agreements between the Executive and any other person or entity.

 

15. Counterparts.

 

This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute one and the same instrument. Signatures to this Agreement transmitted by fax, by email in “portable document format” (“.pdf”) or by any other electronic means intended to preserve the original graphic and pictorial appearance of this Agreement shall have the same effect as physical delivery of the paper document bearing original signature.

 

16. Arbitration.

 

To ensure the rapid and economical resolution of disputes that may arise in connection with the Executive’s employment with the Company, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to Executive’s employment, or the termination of that employment, will be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration pursuant to the Federal Arbitration Act in New York, New York conducted by the Judicial Arbitration and Mediation Services/Endispute, Inc. (“JAMS”), or its successors, under the then current rules of JAMS for employment disputes; provided that the arbitrator shall:  (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award.  Accordingly, Executive and the Company hereby waive any right to a jury trial.  Both Executive and the Company shall be entitled to all rights and remedies that either Executive or the Company would be entitled to pursue in a court of law.  The Company shall pay any JAMS filing fee and shall pay the arbitrator’s fee.  The arbitrator shall have the discretion to award attorneys fees to the party the arbitrator determines is the prevailing party in the arbitration.  Nothing in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.  Notwithstanding the foregoing, Executive and the Company each have the right to resolve any issue or dispute involving confidential, proprietary or trade secret information, or intellectual property rights, by Court action instead of arbitration.

 

17. Indemnification.

 

The Company shall defend and indemnify Executive in his capacity as President and Chief Executive Officer of the Company to the fullest extent permitted under the Nevada Private Corporations Law.  The Company shall also maintain a policy for indemnifying its officers and directors, including but not limited to the Executive, for all actions permitted under the Nevada Private  Corporations Law taken in good faith pursuit of their duties for the Company, including but not limited to maintaining an appropriate level of Directors and Officers Liability coverage and maintaining the inclusion of such provisions in the Company’s by-laws or articles of incorporation, as applicable and customary.  The rights to indemnification shall survive any termination of this Agreement.

 

18. Trade Secrets Of Others.

 

It is the understanding of both the Company and Executive that Executive shall not divulge to the Company and/or its subsidiaries any confidential information or trade secrets belonging to others, including Executive’s former employers, nor shall the Company and/or its Affiliates seek to elicit from Executive any such information.  Consistent with the foregoing, Executive shall not provide to the Company and/or its Affiliates, and the Company and/or its Affiliates shall not request, any documents or copies of documents containing such information.

 

19. Advertising Waiver.

 

Executive agrees to permit the Company, and persons or other organizations authorized by the Company, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company, or the machinery and equipment used in the provision thereof, in which Executive’s name and/or pictures of Executive taken in the course of Executive’s provision of services to the Company appear.  Executive hereby waives and releases any claim or right Executive may otherwise have arising out of such use, publication or distribution.

 

20. NO MITIGATION. 

 

Executive shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise after the termination of his employment hereunder, and any amounts earned by Executive, whether from self-employment, as a common-law employee or otherwise, shall not reduce the amount of any payment otherwise payable to him.

 

21. LEGAL FEES. 

 

The Company shall promptly pay or reimburse Executive for all legal fees and expenses up to a maximum of $5,000 (upon the submission of appropriate invoices related thereto) he incurs in the negotiation, review, and preparation of this Agreement and any other documents contemplated herein.

 

 [signature page follows]  

	
 

	
 

	  

  

  

  

 

In Witness Whereof, the Parties have executed this Agreement as of the date first above written.

 

	MetaStat, Inc.
	 	 	 
	By: 	/s/ Daniel Schneiderman	 
	 	Name: Daniel Schneiderman	 
	 	Its:  VP, Finance	 
	 	 	 
	Dated:	6/17/15	 
	 	 	 
	Executive:
	 	 
	/s/ Douglas Hamilton	 
	Douglas Hamilton	 
	 	 
	Dated:	6/17/15	 

            

	
 

	
 

	  

  

  

  

 

EXHIBIT A

 

RELEASE AND WAIVER OF CLAIMS

 

TO BE SIGNED ON OR FOLLOWING THE SEPARATION DATE ONLY

 

In consideration of the payments and other benefits set forth in the Employment Agreement effective as of June 17, 2015, to which this form is attached, I, Douglas Hamilton, hereby furnish MetaStat, Inc. (the “Company”), with the following release and waiver (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its current and former directors, officers, employees, stockholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date that I sign this Agreement (collectively, the “Released Claims”).  Except as provided below, the Released Claims include, but are not limited to:  (a) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (b) all claims related to my compensation or benefits from the Company including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, misclassification, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), the fair employment practices statutes of the state or states in which I have provided services to the Company and/or any other federal, state or local law, regulation or other requirement.  Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (a) any rights or claims under the Agreement or any other written agreement between the Company and me, including any stock option award agreement or plan, (b) any rights or claims that may arise as a result of events occurring after the date this Release and Waiver is executed or which otherwise cannot lawfully be waived, (c) any indemnification rights I may have as a former officer or director of the Company or its subsidiaries or affiliated companies, including any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; (d) any claims for benefits under any directors’ and officers’ liability policy maintained by the Company or its subsidiaries or affiliated companies in accordance with the terms of such policy, (e) any rights or claims under any employee benefit or compensation plan or program in which I participate or participated (or was eligible to participate), (f) any rights or claims to unemployment compensation, and (g) reimbursement for business expenses which are consistent with the Company’s reimbursement policy.  I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

 

I expressly waive and relinquish any and all rights and benefits under any applicable law or statute providing, in substance, that a general release does not extend to claims which a party does not know or suspect to exist in his or his favor at the time of executing the release, which if known by him or his would have materially affected the terms of such release.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company.  If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; and (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired without my having previously revoked this Release and Waiver.

 

I acknowledge my continuing obligations under my Proprietary Information and Inventions Agreement.  Pursuant to the Proprietary Information and Inventions Agreement I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control.  I understand and agree that my right to the severance pay I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my Proprietary Information and Inventions Agreement.

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

 

	Date: __________________ 	By: _______________________________
	 	Douglas Hamilton

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}]]