Document:

Exhibit

        

Exhibit 10.8
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”), dated March 27, 2017, is by and between, Coty Inc., a Delaware corporation (the “Company”) and Lambertus J.H. Becht (the “Subscriber”) and collectively as “Parties”.
RECITALS
WHEREAS, the Subscriber is the independent chairman of the board of directors of the Company.
WHEREAS, the Company and the Subscriber desire to enter into this Agreement to obligate the Subscriber to acquire shares of preferred stock of the Company (as described below) to be delivered to the Subscriber.
WHEREAS, the Company desires to issue and sell to Subscriber, and Subscriber desires to purchase from the Company, 1,000,000 shares of Series A Preferred Stock of the Company (the “Shares”), with the terms and conditions substantially as set forth in that Certificate of Designations filed with the Secretary of State of the State of Delaware relating to the Shares, including the various and several voting powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof set forth in Annex A hereto, at par value of $0.01 per Share, the aggregate being $10,000 (the “Purchase Price”), subject to the terms and conditions described herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE
Section 1.1    Purchase and Sale of the Shares.  Upon the terms and subject to the conditions of this Agreement, at the Closing, subject to Board approval the Company agrees to issue and sell to the Subscriber, and the Subscriber agrees to purchase from the Company, the Shares for an aggregate cash purchase price equal to the Purchase Price. 
Section 1.2    Closing.  
(a)    The sale and purchase of the Shares shall take place at a closing (the “Closing”) to be held at the offices of Coty Inc., on March 27, 2017, at 350 Fifth Avenue, New York, New York 10118, or at such other place or at such other time or on such other date as the Company and the Subscriber mutually may agree in writing.  The day on which the Closing takes place is referred to as the “Closing Date.”

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(b)    At the Closing, the Company shall deliver to Wells Fargo Shareowner Services (the “Transfer Agent”) an instruction letter authorizing and directing the Transfer Agent to record in the share register of the Company book entry positions representing the Shares issued in the name of the Subscriber.
(c)     At the Closing, the Subscriber shall deliver to the Company the Purchase Price in cash.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Subscriber as follows:
Section 2.1    Organization and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware.  The Company has all requisite power, right and authority to carry on its business as now conducted.
Section 2.2    Share Issuance.  The Shares to be issued to the Subscriber pursuant to this Agreement, when issued and delivered in accordance with the terms of this Agreement, will be free and clear of all liens and other encumbrances, duly and validly issued and will be fully paid and non-assessable and free from preemptive rights.
Section 2.3    Authority.  The Company has full corporate power and authority to execute, deliver and perform its obligations under this Agreement.  This Agreement has been duly executed and delivered by the Company and is legal, valid, binding and enforceable upon and against the Company.
Section 2.4    No Conflict; Required Filings and Consents.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby do not and will not (a) violate any provision of the certificate of incorporation or bylaws (or similar organizational documents) of the Company; (b) violate any federal, state or local statute, law, regulation, order, injunction or decree (“Law”); or (c) require any consent or approval of any person, including any registration or filing with, or notice to any federal, state or local governmental authority or any agency or instrumentality thereof (a “Governmental Authority”).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER
The Subscriber, severally as to itself only and not jointly as to or with anyone else, hereby represents and warrants to the Company as follows:
Section 3.1    Authority and Enforceability.  The Subscriber has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized and this Agreement constitutes a valid and legally binding obligation of the Subscriber, except as may be limited by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement of rights of creditors, and except as enforceability of the obligations hereunder are subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).

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Section 3.2    Legends.  The Subscriber understands and agrees that the certificates for the Shares, if any, shall bear substantially the following legend until such Shares shall have been registered under the Securities Act of 1933, as amended (the “Securities Act”) and effectively disposed of in accordance with a registration statement that has been declared effective, and that the Company has no intention of registering such Shares pursuant to the Securities Act:
THE SHARES REPRESENTED BY THIS [CERTIFICATE/STATEMENT] ARE RESTRICTED FROM SALE, TRANSFER, EXCHANGE OR ASSIGNMENT, EXCEPT PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (I) TO THE COMPANY, (II) BY THE LAWS OF DESCENT AND DISTRIBUTION, OR (III) UPON RECEIPT OF A WRITTEN OPINION OF COUNSEL TO THE COMPANY OR THE COMPANY’S SECRETARY AND GENERAL COUNSEL.
Section 3.3    No Conflict; Required Filings and Consents.  The execution, delivery and performance by the Subscriber of this Agreement and the consummation by the Subscriber of the transactions contemplated hereby do not and will not (a) violate any Law, or (b) require any consent or approval of any person, including any registration or filing with, or notice to any Governmental Authority.

Section 3.4    Resale; Accredited Investor.  The Subscriber is acquiring the Shares solely for the Subscriber’s own beneficial account, for investment purposes, and not with a view towards, or resale in connection with, any distribution of the Shares.  The Subscriber is an “accredited investor” as defined in Rule 501(a) under the Securities Act, and a sophisticated purchaser who has made its own independent investigation, review and analysis of the transactions contemplated hereby.  The Subscriber has been furnished with all information (or provided access to all information) regarding the attributes of the Shares for which it is subscribing and the merits and risks of an investment in such Shares that it requested to evaluate the investment in such Shares.  The Subscriber is relying solely on the representations, warranties and agreements of the Company contained in this Agreement, and agrees that at no time was it presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general or public advertising or solicitation.  
ARTICLE IV
GENERAL PROVISIONS
Section 4.1    Amendment and Modification.  This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party.
Section 4.2    Waiver.  No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof.  Any such waiver by a party shall be valid only if set forth in writing by such party.
Section 4.3    Notices.  All notices and other communications hereunder shall be in writing and shall be deemed duly given if delivered personally or sent by facsimile, e‐mail, 

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overnight courier or registered or certified mail, postage prepaid, to the address set forth on the signature pages hereto opposite the party to receive such notice, or to such other address as may be designated in writing by such party.
Section 4.4    Entire Agreement.  This Agreement constitutes the entire agreement, and supersedes all prior written agreements, arrangements and understandings and all prior and contemporaneous oral agreements, arrangements and understandings between the parties with respect to the subject matter of this Agreement.  No party to this Agreement shall have any legal obligation to enter into the transactions contemplated hereby unless and until this Agreement shall have been executed and delivered by each of the parties.
Section 4.5    Third-Party Beneficiaries.  Nothing in this Agreement shall confer upon any person other than the parties and their respective successors and permitted assigns any right of any nature.
Section 4.6    Governing Law.  This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Delaware.
Section 4.7    Submission to Jurisdiction.  Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by the other party or its successors or assigns may be brought and determined in any New York State or federal court sitting in the Borough of Manhattan in The City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any action, suit or proceeding relating thereto except in such courts).  Each of the parties further agrees to accept service of process in any manner permitted by such courts.  Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure lawfully to serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by law, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
Section 4.8    Assignment; Successors.  This Agreement may not be assigned by either party without the prior written consent of the other party, except that the Company may assign this Agreement to any of its Affiliates.  Subject to the preceding sentence, this Agreement will be binding upon the parties and their respective successors and assigns.  For the purposes of this Agreement, the term “Affiliate” shall mean any entity controlling, controlled by or under common control with the named party.
Section 4.9    Severability.  If any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any 

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applicable Law, such invalidity, illegality or unenforceability shall not affect any other provision hereof.
Section 4.10    Counterparts.  This Agreement may be executed in counterparts, including electronic transmission and facsimile counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
	
			
	COTY INC.
	Address for Notices:

	 
	 

	By:
	/s/Sébastien Froidefond
	 

	Name:
	Sébastien Froidefond
	 

	Title:
	Chief Human Resources Officer
	 

	SUBSCRIBER
	Address for Notices:

	 
	 
	 

	By:
	/s/Lambertus J.H. Becht
	 

	Name:
	Lambertus J.H. Becht
	 

	Title:
	Chairman, Coty Inc.
	 

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Annex A 
Section 1.    Definitions.
(a)    “Board” means the Board of Directors of the Company.
(b)    “Business Day” shall have the meaning ascribed to such term under the Plan.
(c)    “Cash Exchange Price” has the meaning set forth in Section 2(b)(1).
(d)     “Change in Control” shall have the meaning ascribed to such term under the Plan
(e)    “Closing Price” means, with respect to any date, the closing sale price per share or other security (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal Exchange on which such share or other security is listed or admitted for trading or, if such share or other security is not listed or admitted for trading on a U.S. national or regional securities exchange, as reported on the quotation system on which such share or other security is quoted.  If the share or other security is not listed or admitted for trading on a U.S. national or regional securities exchange and not reported on a quotation system on the relevant date, the “closing price” will be the last quoted bid price for such share or other security in the over-the-counter market on the relevant date as reported by OTC Markets Bureau or another similar organization.  If such share or other security is not so quoted, the last reported sale price will be the average of the mid-point of the last bid and ask prices for such share or other security on the relevant date from each of at least three nationally recognized investment banking firms selected by the Company for this purpose.    
(f)    “Disability” shall have the meaning ascribed to such term in the Plan.
(g)    “Disposition Event” has the meaning set forth in Section 2(g)(2).
(h)     “Exchange” means The New York Stock Exchange, The NASDAQ Global Market, or any other U.S. national securities exchange.
(i)    “Exchange Act” shall have the meaning ascribed to such term under the Plan.
(j)    “Exchange Amount” has the meaning set forth in Section 2(b)(1).
(k)    “Exchange Date” has the meaning set forth in Section 2(d).
(l)    “Exchange Price” has the meaning set forth in Section 2(b)(1).

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(m)    “Fair Market Value” of Class A Common Stock or any other security or property means the fair market value thereof as determined in good faith by the Board, which determination must be set forth in a written resolution of the Board, in accordance with the following rules:
(1)    for Class A Common Stock or other security traded or quoted on an Exchange, the Fair Market Value will be the average of the Closing Prices of such security on such Exchange over a ten consecutive trading day period, ending on the trading day immediately prior to the date of determination; or
(2)    for any security that is not so traded or quoted, or for any other property, the Fair Market Value shall be determined by the Board (or any duly authorized committee thereof) in good faith assuming a willing buyer and a willing seller in an arms’-length transaction.
(n)    “Majority Shareholder” shall have the meaning ascribed to such term under the Plan.
(o)     “Minimum Number of Shares” has the meaning set forth in Section 3(c)(2).
(p)    “original issue date” means, with respect to shares of Series A Preferred Stock, the date of issue of such shares sold to the Subscriber pursuant to the terms of the Subscriber’s Subscription Agreement.
(q)    “Permitted Holder” has the meaning set forth in Section 4(a).
(r)    “Plan” means the Coty Inc 2007 Stock Plan for Directors (as amended and restated from time to time).
(s)    “Preferred Net Value” has the meaning set forth in Section 2(b)(1).
(t)    “Reference Property” has the meaning set forth in Section 2(g)(2).
(u)    “Related Common Stock” means any other capital stock into which such Class A Common Stock may be reclassified or exchanged (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination).
(v)    “Service” has the meaning ascribed to such term in the Plan.
(w)    “Share Exchange Price” has the meaning set forth in Section 2(b)(1).
(x)     “Subscriber Affiliates” shall mean, with respect to the Subscriber, (i) himself, (ii) his wife,  (iii) any business entity in which the Subscriber owns or controls more than a majority of the economic ownership interests in the equity of such entity and 

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has the power to elect a majority of directors of such entity or otherwise has, directly or indirectly, actual control over the business and operations of such entity  and (iv) any trust of which the Subscriber and/or his wife is the grantor and the sole beneficiaries of which are comprised solely of the group consisting of the Subscriber, his wife and any Permitted Holder.
(y)    “Vested Series A Preferred Stock” means all shares of Series A Preferred Stock outstanding and held by a holder on the earliest of (i) the fifth anniversary of the original issue date (the “Fifth Anniversary”); (ii) the date the Subscriber’s death or Disability. 
Other capitalized terms not defined in this Agreement shall have the meanings ascribed to them under the Plan.
Section 2.    Exchange.
(a)    Generally.  The holders of shares of Series A Preferred Stock shall not have any right to exchange such shares into shares of any other class or series of securities of the Company until such time as such shares become Vested Series A Preferred Stock and then only as provided herein. 
(b)      Exchange at the Option of the Holder.  
(1)    Subject to Section 2(b)(2), a holder is entitled to exchange, at the option and election of such holder, any or all Vested Series A Preferred Stock held by such holder at any time and from time to time by notice given to the Company prior to or on the seventh anniversary of the original issue date , into, at the sole election of the Company, either: (i) an amount in cash payable in U.S. dollars per share so exchanged equal to (I) the Fair Market Value of a share of Class A Common Stock, or Reference Property, as applicable, on the Exchange Date minus (II) an amount equal to the sum of US$3.50 (the “Cash Exchange Price”) plus the Fair Market Value of a share of such Class A Common Stock on the original issue date of such Vested Series A Preferred Stock, subject to adjustment from time to time as provided herein (the “Share Exchange Price” and aggregated with the Cash Exchange Price, the “Exchange Price”) (such difference, the “Preferred Net Value”), or (ii) the number of duly authorized, validly issued, fully paid and nonassessable shares of Class A Common Stock, or Reference Property, as applicable, whose aggregate value, as measured by the Fair Market Value of a share of such Class A Common Stock, or Reference Property, as applicable, on the Exchange Date, is equal to the Preferred Net Value (such amount of shares of Class A Common Stock, the “Exchange Amount”); provided, however, that notwithstanding anything herein to the contrary, the Company shall elect on the Exchange Date to pay the Preferred Net Value in cash payable in U.S. dollars and shall not issue any shares of Class A Common Stock or Reference Property, as applicable, unless, to the extent required by the rules and regulations of the Relevant Exchange (as defined below), the issuance of such shares of Class A Common Stock or Reference Property, as applicable, has been approved by holders of a majority of the outstanding shares of Class A Common Stock or Reference Property, as applicable, at 

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the time of such approval and in accordance with the rules and regulations of such Relevant Exchange and by the Relevant Exchange prior to the Exchange Date.  
(2)    The right of a holder to exchange any or all shares of Vested Series A Preferred Stock as set forth in Section 2(b)(1) shall also expire and lapse, and be of no further force and effect, on the earliest to occur of: (i) the first (1st) anniversary of the termination of the Subscriber’s Service due to death or Disability, and (ii) the latest date prior to which Vested Series A Preferred Stock can otherwise be exchanged pursuant to Section 2(b)(1).
(c)    Automatic Exchange.  Notwithstanding anything else to the contrary, within 30 Business Days following the date of a Change in Control, the Company shall have the right to exchange, upon notice to a holder, any Vested Series A Preferred Stock into the Preferred Net Value payable, at the sole option and election of the Company, either in cash, Class A Common Stock or Reference Property, as applicable, subject to the provisio contained in Section 2(b)(1).
(d)    Exchange Date. In order to exchange shares of Vested Series A Preferred Stock, the holder must surrender such shares (if uncertificated) or the certificates representing such shares, accompanied by transfer instruments reasonably satisfactory to the Company, free of any adverse interest or liens at the office of the Company’s transfer agent for the Vested Series A Preferred Stock (or at the principal office of the Company, if the Company serves as its own transfer agent), together with written notice that such holder elects to exchange all or such number of shares represented by such certificates as specified therein.  The date of receipt of such certificates, together with such notice, by the transfer agent or the Company will be the date of exchange (the “Exchange Date”).
(e)    Fractional Shares.  No fractional shares of Class A Common Stock will be issued upon exchange of the Vested Series A Preferred Stock.  In lieu of fractional shares, the Company shall pay cash equal to such fractional amount multiplied by the Fair Market Value of the Class A Common Stock as of the Exchange Date.  If more than one share of Vested Series A Preferred Stock is being exchanged at one time by the same holder, then the number of full shares issuable upon exchange, if so elected by the Company, will be calculated on the basis of the aggregate number of shares of Vested Series A Preferred Stock exchanged by such holder at such time.
(f)    Mechanics of Exchange.
(1)    In the event the Company elects to exchange Vested Series A Preferred Stock into shares of Class A Common Stock or Reference Property, as applicable, in accordance with Section 2(b)(1), as soon as practicable after the Exchange Date (and in any event within ten (10) Business Days), the Company shall issue and deliver to such holder the number of shares of Class A Common Stock or such amount of Reference Property, as applicable, to which such holder is entitled, together with a check or cash for payment of fractional shares, if any, in exchange for such shares (if uncertificated) or for the certificates formerly representing shares of Vested Series A Preferred Stock being so 

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exchanged.  Such exchange will be deemed to have been made on the Exchange Date, and the person entitled to receive the shares of Class A Common Stock or Reference Property, as applicable, issuable upon such exchange shall be treated for all purposes as the record holder of such shares of Class A Common Stock, or Reference Property, as applicable, on such Exchange Date.  In case fewer than all the shares represented by any such certificate are to be exchanged, a new certificate shall be issued representing the shares not exchanged without cost to the holder thereof, except for any documentary, stamp or similar issue or transfer tax due because any certificates for shares of Class A Common Stock or Vested Series A Preferred Stock are issued in a name other than the name of the exchanging holder.  The Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of Class A Common Stock upon exchange or due upon the issuance of a new certificate for any shares of Vested Series A Preferred Stock not exchanged other than any such tax due because shares of Class A Common Stock or a certificate for shares of Vested Series A Preferred Stock are issued in a name other than the name of the exchanging holder.
(2)    In the event the Company elects or is required to exchange Vested Series A Preferred Stock into cash in accordance with Section 2(b)(1), as soon as practicable after the Exchange Date (and in any event within ten (10) Business Days), the Company shall pay such amount to such holder, to the extent of funds legally available therefor. Such exchange will be deemed to have been made on the Exchange Date.
(3)    From and after the Exchange Date, the shares of Vested Series A Preferred Stock to be exchanged on such Exchange Date will no longer be deemed outstanding and all rights of the holder thereof as a holder of Series A Preferred Stock (except the right to receive from the Company the Preferred Net Value in cash or Class A Common Stock or Reference Property, as applicable, upon exchange, together with the right to receive any payment in lieu of a fractional share of Class A Common Stock if payment of the Preferred Net Value is to be made in Class A Common Stock or Reference Property, as applicable) shall cease and terminate with respect to such shares; provided, that in the event that a share of Vested Series A Preferred Stock is not exchanged, such share of Vested Series A Preferred Stock will remain outstanding and will be entitled to all of the rights as provided herein.  Any shares of Vested Series A Preferred Stock that have been exchanged will, after such exchange, upon issuance of the shares of Class A Common Stock or Reference Property, as applicable, issuable upon exchange thereof and cash in lieu of fractional shares of Class A Common Stock or Reference Property, as applicable, or payment of cash in the amount of the Preferred Net Value, be deemed cancelled and retired as set forth in Section 14 of the Certificate of Designations.
(4)    The Company shall comply with all federal and state laws, rules and regulations and applicable rules and regulations of the Exchange on which shares of the Class A Common Stock or Reference Property, as applicable, are then listed.  Notwithstanding the other terms contained herein, the Company shall not be required to exchange any Vested Series A Preferred Stock into any Class A Common Stock or Reference Property, as applicable, or issue or deliver the same, to the extent such exchange, 

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issuance or delivery would require:  (i) registration with or approval of any person under any federal or state law before such shares may be validly issued or delivered upon exchange, (ii) approval from the Exchange on which shares of the Class A Common Stock or Reference Property, as applicable, are then listed (the “Relevant Exchange”), unless such approval has been received, or (iii) approval by the Company’s stockholders pursuant to the rules or regulations of the Relevant Exchange, unless such approval has been received or is not otherwise required by the Relevant Exchange.  
(5)    All shares of Class A Common Stock or other securities of the Company issued upon exchange of the shares of Vested Series A Preferred Stock will, upon issuance by the Company, be duly and validly issued, fully paid and nonassessable, not issued in violation of any preemptive rights arising under law or contract and free from all taxes, liens and charges with respect to the issuance thereof, and the Company shall take no action which will cause a contrary result.
(g)    Adjustments to Exchange Price.
(1)    Adjustment for Change In Capital Stock. 
		
	(i)
	If the Company shall, at any time and from time to time while any shares of Series A Preferred Stock are outstanding, issue a dividend or make a distribution on its Class A Common Stock payable in shares of Class A Common Stock to all or substantially all holders of its Class A Common Stock, then each of the Share Exchange Price and the Cash Exchange Price will be adjusted by multiplying each by a fraction:

		
	I
	the numerator of which shall be the number of shares of Class A Common Stock outstanding at the close of business on the Business Day immediately preceding the applicable dividend or distribution date; and

		
	II
	the denominator of which shall be the sum of the number of shares of Class A Common Stock outstanding at the close of business on the Business Day immediately preceding the applicable dividend or distribution date, plus the total number of shares of Class A Common Stock constituting such dividend or other distribution.

		
	(ii)
	If the Company shall, at any time or from time to time while any shares of Series A Preferred Stock are outstanding, subdivide or reclassify its outstanding shares of Class A Common Stock into a greater number of shares of Class A Common Stock, then each of the Share Exchange Price and the Cash Exchange Price in effect at the opening of business on the day upon which such subdivision becomes effective shall be proportionately decreased, and 

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conversely, if the Company shall, at any time or from time to time while any shares of Series A Preferred Stock are outstanding, combine or reclassify its outstanding shares of Class A Common Stock in to a smaller number of shares of Class A Common Stock, then each of the Share Exchange Price and the Cash Exchange Price in effect at the opening of business on the day upon which such combination or reclassification becomes effective shall be proportionately increased.  In each such case, each of the Share Exchange Price and the Cash Exchange Price shall be adjusted by multiplying each such Share Exchange Price and Cash Exchange Price by a fraction, the numerator of which shall be the number of shares of Class A Common Stock outstanding immediately prior to such subdivision or combination and the denominator of which shall be the number of shares of Class A Common Stock outstanding immediately after giving effect to such subdivision, combination or reclassification.  Such increase or reduction, as the case may be, shall become effective immediately after the opening of business on the day upon which such subdivision, combination or reclassification becomes effective.
(2)    Disposition Events.  Subject to Section 2(c), if any of the following events occurs (other than (i) any stock split or combination to which Section 2(g)(1) is applicable or (ii) a liquidation, dissolution, winding up or other transaction to which “Section 5. Liquidation” of the Certificate of Designations is applicable) (any such event, a “Disposition Event”):
		
	(i)
	any reclassification or exchange of the Class A Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination);

		
	(ii)
	any merger, consolidation or other combination to which the Company is a constituent party; 

		
	(iii)
	any sale, conveyance, lease, or other disposal of all or substantially all the properties and assets of the Company to any other person; or

		
	(iv)
	the payment of an extraordinary cash dividend which would be treated as a “corporate transaction” within the meaning of the regulations promulgated under Section 424(a) of the U.S. Internal Revenue Code (or any successor provision); and 

in each case, as a result of which event, all of the holders of Class A Common Stock shall be entitled to receive cash, securities or other property for their shares of Class A Common Stock, the Company or the successor or purchasing person, as the case may be, shall provide that any Vested Series A Preferred Stock exchanged following the effective date of 

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any Disposition Event, may be exchanged, in lieu of the Class A Common Stock that the Company otherwise had the option of delivering in lieu of cash upon exchange of Vested Series A Preferred Stock, into the same amount and type (in the same proportion) of cash, securities or other property (collectively, “Reference Property”) received upon the occurrence of such Disposition Event by a holder of Class A Common Stock, with the amount of such Reference Property to be received for each share of Vested Series A Preferred Stock determined based upon the Exchange Amount in effect immediately prior to such Disposition Event, subject to the proviso in Section 2(b)(1); provided that if the Disposition Event provides the holders of Class A Common Stock with the right to receive more than a single type of consideration determined based in part upon any form of stockholder election, the Reference Property shall be comprised of the weighted average of the types and amounts of consideration received by the holders of the Class A Common Stock.
(3)    Minimum Adjustment.  Notwithstanding the foregoing, the Exchange Price will not be adjusted if the amount of such adjustment would be an amount less than $0.01, but any such amount will be carried forward and adjustment with respect thereto will be made at the time that such amount, together with any subsequent amounts so carried forward, aggregates to $0.01 or more.
(4)    Rules of Calculation; Treasury Stock.  All calculations will be made to the nearest one-hundredth of a cent or to the nearest one-ten thousandth of a share.  Except as explicitly provided herein, the number of shares of Class A Common Stock outstanding will be calculated on the basis of the number of issued and outstanding shares of Class A Common Stock, not including shares held in the treasury of the Company.  The Company shall not pay any dividend on or make any distribution to shares of Class A Common Stock held in treasury.
(5)    Par Value.  Anything in this Section 2 notwithstanding, no adjustment to the Exchange Price shall reduce the Exchange Price below the then par value per share of Class A Common Stock, and any such purported adjustment shall instead reduce the Exchange Price to such par value.
(6)    No Duplication.  If any action would require adjustment of the Exchange Price pursuant to more than one of the provisions described in this Section 2 in a manner such that such adjustments are duplicative, only one adjustment shall be made.
(h)    Notice of Record Date.  In the event of:
(1)    any stock split or combination of the outstanding shares of Class A Common Stock;
(2)    any declaration or making of a dividend or other distribution to holders of Class A Common Stock in additional shares of Class A Common Stock, any other capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness);

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(3)    any reclassification or change to which Section 2(g)(1)(ii) applies;
(4)    the dissolution, liquidation or winding up of the Company; 
(5)    any other event constituting a Change in Control; or 
(6)    any other event that would cause or allow for the exchange of any Vested Series A Preferred Stock in accordance with this Section 2, then the Company shall send to the holders of the Vested Series A Preferred Stock, which notice will be deemed effective if sent to their last addresses as shown on the records of the Company, at least 10 days prior to the record date specified in (i) below or 10 days prior to the date specified in (ii) below, a notice stating:
		
	(i)
	the record date of such stock split, combination, dividend or other distribution, or, if a record is not to be taken, the date as of which the holders of Class A Common Stock of record to be entitled to such stock split, combination, dividend or other distribution are to be determined, or

		
	(ii)
	the date on which such reclassification, change, dissolution, liquidation, winding up or other event constituting a Change in Control any other event that would cause or allow for the exchange of any Vested Series A Preferred Stock in accordance with this Section 2 is estimated to become effective, and the date as of which it is expected that holders of Class A Common Stock of record will be entitled to exchange their shares of Class A Common Stock for the capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) deliverable upon such reclassification, change, liquidation, dissolution, winding up or other Change in Control.

No failure to provide such notice will affect the validity of any such actions.
(i)    Certificate of Adjustments.  Upon the occurrence of each adjustment or readjustment of the Exchange Price pursuant to this Section 2, the Company shall promptly as reasonably practicable compute such adjustment or readjustment in accordance with the terms of the Subscription Agreement and furnish to each holder of Vested Series A Preferred Stock a certificate, signed by an officer of the Company, setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based and shall file a copy of such certificate with its corporate records.  The Company shall, upon the reasonable written request of any holder of Vested Series A Preferred Stock, furnish to such holder a similar certificate setting forth (i) the calculation of such adjustments and readjustments in reasonable detail, (ii) the Exchange Price then in effect, and (iii) the number of shares of Class A Common Stock and the amount, if any, of capital stock, other securities or other property (including but not limited to cash and 

9

evidences of indebtedness) which then would be received upon the exchange of Vested Series A Preferred Stock.   
Section 3.    Redemption at the Option of the Company. 
(a)    In Whole Upon Maturity, Death or Disability.  To the extent then still outstanding, the Company shall have the right to redeem all, but not less than all, shares of Series A Preferred Stock at a redemption price equal to $0.01 per share, at the earliest of (i)] on or after latest date prior to which Vested Series A Preferred Stock may be exchanged pursuant to Section 2(b)(1), and (ii) on or after the first (1st) anniversary following the Subscriber’s death or Disability. 
Section 4.    Restrictions on Transfer.  
(a)    The Subscriber shall not be entitled to sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of Series A Preferred Stock, except that the Subscriber may transfer shares of Series A Preferred Stock to any “family members”, as such term is defined on Form S-8 promulgated by the U.S. Securities and Exchange Commission under the U.S. Securities Act of 1933, as amended, as such form may be amended from time to time (such persons, the Subscriber ’s “Permitted Holders”). 
(b)    Following any permitted transfer under Section 4(a), shares of Series A Preferred Stock held by a Permitted Holder, if any, shall remain subject to the same rights, privileges, limitations and conditions relating to such shares of Series A Preferred Stock as set forth herein that would otherwise have applied had the Subscriber continued to hold such shares of Series A Preferred Stock, including, without limitation, those transfer restrictions set forth in Section 4(a).
Section 5.    Information.  
(a)    Within ten (10) Business Days after the original issue date with respect to his shares of Series A Preferred Stock, the Subscriber shall, and shall use reasonable best commercial efforts to cause any Subscriber Affiliate to, notify the Company in writing of the number of shares of Class A Common Stock held of record by such persons or entities, if any, and the amount paid for such shares.  The Subscriber shall notify the Company promptly in writing, and in any event within ten (10) Business Days, of any changes in the Subscriber’s or any Subscriber Affiliate’s holdings, whether direct, beneficial or otherwise, in respect of Class A Common Stock or Related Common Stock, if any.
(b)    Mechanics of Redemption.  If any shares of Series A Preferred Stock are to be redeemed in accordance with this Section 5, the notice of redemption shall be given by first class mail to the holders of record of Series A Preferred Stock to be redeemed, mailed not less than 15 days nor more than 30 days prior to the date fixed for redemption thereof.  Each notice of redemption will include a statement setting forth: (1) the redemption date; (2) the number of shares of Series A Preferred Stock to be redeemed and, if less than all the 

10

shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price; (4) the place or places where the certificates evidencing shares of Series A Preferred Stock are to be surrendered for payment of the redemption price; and (5) that the Company may withdraw its notice of redemption with respect to all or a portion of the shares of Series A Preferred Stock to be redeemed at any time prior to 5:00 p.m. (New York City time) on the Business Day immediately preceding an applicable redemption date.  On and after any redemption date, any such shares of Series A Preferred Stock so redeemed shall no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price, if any.

11Blueprint

Exhibit
10.6

EMPLOYMENT AGREEMENT

 

 

       

This Employment
Agreement (this “Agreement”) is made and entered into
effective as of May 4, 2017 (the “Effective Date”) by
and between Navidea
Biopharmaceuticals, Inc., a Delaware corporation with a
place of business at 5600 Blazer Parkway, Suite 200, Dublin, Ohio
43017-7550 (the “Company” or “Navidea”) and
Jed A Latkin, residing at
340 West 86th Street Apt 6B, New
York, NY 10024 (the “Executive”). The Company and
Executive are hereinafter sometimes collectively referred to as the
“Parties.”

 

WHEREAS, the
Company has offered to employ Executive as its COO and CFO, and the
Executive desires to accept such employment; and

 

WHEREAS, the
Parties wish to establish terms, covenants, and conditions for the
Executive’s employment with the Company through this
Employment Agreement (this “Agreement").

 

       

NOW, THEREFORE, in
consideration of the mutual agreements herein set forth, the
Parties agree as follows:

 

1. Duties. 
From and after the Effective Date, and based upon the terms and
conditions set forth herein, the Company agrees to employ the
Executive and the Executive agrees to be employed by the Company,
as the Company’s COO and CFO and in such additional executive
level position or positions as shall be assigned to him by the
Company’s Board of Directors (the “Board”). While
serving in such executive level position or positions, the
Executive shall report to, be responsible to, and shall take
direction from the Chief Executive Officer. The Executive shall, if
requested, also serve as a member of Board or as an officer or
director of any affiliate of the Company for no additional
compensation. During the Term (as defined in Section 2 below), the
Executive agrees to devote substantially all of his working time to
the position he holds with the Company and to faithfully,
industriously, and to the best of his ability, experience and
talent, perform the duties that are assigned to him. The Executive
shall also observe and abide by the reasonable corporate policies
and decisions of the Company in all business matters.

 

 

The Executive
represents and warrants to the Company that Exhibit A attached hereto sets
forth a true and complete list of (a) all offices, directorships
and other positions held by the Executive in corporations and firms
other than the Company and its subsidiaries, and (b) any investment
or ownership interest in any corporation or firm other than the
Company beneficially owned by the Executive (excluding investments
in life insurance policies, bank deposits, publicly traded
securities that are less than five percent (5%) of their class and
real estate). The Executive will promptly notify the Board of any
additional positions undertaken or investments made by the
Executive during the Term if they are of a type which, if they had
existed on the date hereof, should have been listed on Exhibit A hereto. As long as
the Executive’s other positions or investments in other firms
do not create a conflict of interest, violate the Executive’s
obligations under Section 6 below or cause the Executive to neglect
his duties hereunder, such activities and positions shall not be
deemed to be a breach of this Agreement.

 

2.

Term of this Agreement. Subject to
Section 4 hereof, the term of this Agreement shall be for a period
commencing on May 4, 2017 and be automatically renewing every year
(the “Term”), unless terminated earlier pursuant to the
termination provisions set forth in Section 4 of this Agreement.
The Term will be renewable annually with the approval of the Board
of Directors and the Executive shall be given at least 30 days
notice prior to the yearly renewal date if the contract will not be
renewed, in which case Executive shall not be entitled to salary or
benefits for the following year.

 

3. Compensation. During the Term, the
Company shall pay, and the Executive agrees to accept as full
consideration for the services to be rendered by the Executive
hereunder, compensation consisting of the following:

 

 

 

A.

Salary. The Company shall pay the
Executive a salary of Three Hundred Twenty Five Thousand Dollars
($325,000) per year (the “Base Salary”).

 

B.

Bonus. For each complete calendar year
of the Term, the Executive shall have the opportunity to earn an
annual bonus (the “Annual Bonus”) of up to 75% of Base
Salary, as in effect at the beginning of the applicable calendar
year during the Term, based on achievement of annual target
performance goals established by the Committee; provided, however,
in the event the market capitalization of the Company at the end of
any calendar year during the Term is at least $250,000,000, then
the Committee may at its sole
discretion increase the Annual Bonus to an amount equal to
up to 100% of Base Salary as in effect at the beginning of the
applicable calendar year during the Term. The Committee will, on an
annual basis, review the performance of the Company and of the
Executive in relation to the target performance goals and will pay
such Annual Bonus, as it deems appropriate, in its discretion, to
the Executive based upon such review. Any bonus earned in any
calendar year will be paid on or before March 15th of the year
following the year such bonus is earned. In order to be eligible to receive an
Annual Bonus, the Executive must be employed by the Company on the
last day of the applicable calendar year with respect to which the
Annual Bonus is to be paid.

 

C.

Benefits. During the Term, the Executive
will receive such employee benefits as are generally available to
all executives and officers of the Company.

 

D.

Stock
Options.

 

i.

The Committee may,
from time to time, grant to the Executive stock options, restricted
stock purchase opportunities and such other forms of equity-based
incentive compensation as it deems appropriate, in its discretion.
On the date of this Agreement, the Committee will grant Executive
non-statutory stock options to purchase 1,000,000 shares of the
Company’s common stock, $0.001 par value (“Common
Stock”), at the following values as of the Execution date
with a vesting schedule as follows; 333,334 at Execution Date with
a strike price of $0.65 and an exercise right not below $0.85,
333,333 on December 31, 2017 with a strike price of $0.75 and an
exercise price not below $1.00, and 333,333 on December 31, 2018
with a strike price of $1.00 and an exercise right not below $1.25.
All awards of equity incentives shall be governed by a separate
equity incentive award agreement, the terms of which shall govern
the rights of the Executive and the Company in the event of any
conflict between such agreement and this Agreement.

ii.

Executive shall
receive pro-rata any shares of any spin-out subsidiary of Navidea
as if his options have fully vested at the time of the proposed
spin-out.

 

E.

Vacation. The Executive shall be
entitled to twenty-five (25) days of vacation during each calendar
year (prorated for partial years) during the Term, in accordance
with the Company's vacation policies, as in effect from time to
time.

 

F.

Expenses. The Company shall reimburse
the Executive for all reasonable out-of-pocket expenses incurred by
him in the performance of his duties hereunder, including expenses
for travel, entertainment and similar items, promptly after the
presentation by the Executive, from time-to-time, of an itemized
account of such expenses.

 

G.

Clawback Policy. The Company’s
obligation to pay any bonus or stock-based incentive compensation
under paragraphs B. or D. of this Section 3, and the
Executive’s right to receive or retain such compensation,
shall be subject to any policy adopted by the Board of Directors or
the Committee (or any successor committee of the Board with
authority over executive compensation) pursuant to the
“clawback” provisions of Section 304 of the
Sarbanes-Oxley Act of 2002, Section 10D of the Securities Exchange
Act of 1934 (the “Exchange Act”) or regulations
promulgated thereunder, or pursuant to any rule of any national
securities exchange on which the equity securities of the Company
are listed implementing Section 10D of the Exchange Act or
regulations promulgated thereunder.

 

 

 

4.

Termination.

 

A.

For Cause. The Company may terminate the
employment of the Executive prior to the end of the Term “for
cause.” Termination “for cause” shall be defined
as a termination by the Company of the employment of the Executive
occasioned by:

 

i.

the failure by the
Executive to cure a willful breach of a material duty imposed on
the Executive under this Agreement or any other written agreement
between Executive and the Company within 15 days after written
notice thereof by the Company;

ii.

the continuation by
the Executive after written notice by the Company of a willful and
continued neglect of a duty imposed on the Executive under this
Agreement;

iii.

acts by Executive
of fraud, embezzlement, theft or other material dishonesty directed
against Navidea;

iv.

the Executive is
formally charged with a felony (other than a traffic offense), or a
crime involving moral turpitude, that in the reasonable good faith
judgment of the Board, results in material damage to the Company or
its reputation, or would materially interfere with the performance
of Executive’s obligations under this Agreement;
or

v.

any condition which
either results from the Executive’s substantial dependence,
as reasonably determined in good faith by the Board, on alcohol, or
on any narcotic drug or other controlled or illegal
substance.

vi.

Neglect or
dereliction of duties by the Executive or failure to rectify
specific performance deficiencies identified by the Company in
writing in a performance review within sixty (60)
days.

 

In the
event of termination by the Company “for cause,” all
salary, benefits and other payments shall cease at the time of
termination, and the Company shall have no further obligations to
the Executive.

 

B.

Resignation. If the Executive resigns for any
reason (other than Good Reason (as defined in paragraph G of this
Section 4 below)), all salary, benefits and other payments (except
as otherwise provided in paragraph G of this Section 4) shall cease
at the time such resignation becomes effective. At the time of any
such resignation, the Company shall pay the Executive the value of
any accrued but unused vacation time, and the amount of all accrued
but previously unpaid Base Salary through the date of such
termination. The Company shall promptly reimburse the Executive for
the amount of any expenses incurred prior to such termination by
the Executive as required under paragraph F of Section 3
above.

 

C.

Disability, Death. The Company may terminate the
employment of the Executive prior to the end of the Term if the
Executive has been unable to perform his duties hereunder
or a similar job for a
continuous period of six (6) months due to a physical or mental
condition that, in the opinion of a licensed physician, will be of
indefinite duration or is without a reasonable probability of
recovery for a period of at least six
(6) months. The Executive agrees to submit to an examination
by a licensed physician of his choice in order to obtain such
opinion, at the request of the Company, made after the Executive
has been absent from his place of employment for at least six (6)
months. The Company shall pay for any requested examination.
However, this provision does not abrogate either the
Company’s or the Executive’s rights and obligations
pursuant to the Family and Medical Leave Act of 1993, and a
termination of employment under this paragraph C shall not be
deemed to be a termination “for cause.”

 

 

 

If
during the Term, the Executive dies or the Executive’s
employment is terminated because of the Executive’s
disability, all salary, benefits and other payments shall cease at
the time of death or termination due to disability, provided,
however, that the Company shall pay such other amounts or provide
such other benefits required to be paid or provided to the
Executive or the Executive's estate under any plan, program,
policy, practice, contract, or arrangement in which the Executive
or the Executive's estate is eligible to receive such payments or
benefits from the Company, for the longer of twelve (12) months
after such death or termination or the full unexpired Term on the
same terms and conditions (including cost) as were applicable
before such death or termination. In addition, for the first six
(6) months of any disability, as defined under Section 409A of the
Internal Revenue Code of 1986, as amended, and any guidance
thereunder, that results in the Executive being unable to perform
any gainful activity, the Company shall pay to the Executive the
difference, if any, between any cash benefits received by the
Executive from a Company-sponsored disability insurance policy and
the Executive’s salary hereunder in accordance with paragraph
A of Section 3 above. At the time of any such termination, the
Company shall pay the Executive or Executive’s estate, the
value of any accrued but unused vacation time, and the amount of
all accrued but previously unpaid Base Salary through the date of
such termination. The Company shall promptly reimburse the
Executive or Executive’s estate for the amount of any
expenses incurred prior to such termination by the Executive as
required under paragraph F of Section 3 above.

 

Notwithstanding
the foregoing, if the Company reasonably determines that any of the
benefits described in this paragraph C may not be exempt from
federal income tax, then for a period of six (6) months after the
date of the Executive’s termination, the Executive shall pay
to the Company an amount equal to the stated taxable cost of such
coverages. After the expiration of the six-month period, the
Executive or Executive’s estate shall receive from the
Company a reimbursement of the amounts paid by the
Executive.

 

D.

Termination Without Cause or by Executive for
Good Reason. A termination “without cause” is a
termination of the employment of the Executive by the Company that
is not “for cause” and not occasioned by the
resignation, death or disability of the Executive. If the
Executive’s employment is terminated by the Company without
cause or by the Executive for Good Reason (whether before the end
of the Term or, if the Executive is employed by the Company under
paragraph E of this Section 4, after the Term), the Company shall,
at the time of such termination, pay to the Executive the severance
payment provided in paragraph F of this Section 4 together with the
value of any accrued but unused vacation time and the amount of all
accrued but previously unpaid Base Salary through the date of such
termination and shall provide him with all benefits to which he is
entitled under paragraph C of Section 3 above for the duration of
the Severance Period (as defined below). Furthermore all share
options listed in section 3(D) shall vest immediately and the
Executive shall have the right for six monhts (6) post the
Termination date to exercise such share options. The Company shall
promptly reimburse the Executive for the amount of any expenses
incurred prior to such termination by the Executive as required
under paragraph F of Section 3.

 

If the
Company terminates the employment of the Executive because it has
ceased to do business or substantially completed the liquidation of
its assets or because it has relocated to another city and the
Executive has decided not to relocate also, such termination of
employment shall be deemed to be without cause.

 

E.

End of the Term of this Agreement.
Except as otherwise provided in paragraphs F and G of this Section
4 below, the Company may terminate the employment of the Executive
at the end of the Term without any liability on the part of the
Company to the Executive, provided that if the Executive continues
to be an employee of the Company after the Term ends, his
employment shall be governed by the terms and conditions of this
Agreement, but he shall be an employee at will and his employment
may be terminated at any time by either the Company or the
Executive without notice and for any reason not prohibited by law
or no reason at all. If the Company terminates the employment of
the Executive at the end of the Term, the Company shall, at the
time of such termination, pay to the Executive the value of any
accrued but unused vacation time and the amount of all accrued but
previously unpaid base salary through the date of such termination.
The Company shall promptly reimburse the Executive for the amount
of any reasonable expenses incurred prior to such termination by
the Executive as required under paragraph F of Section 3
above.

 

 

 

F.

Severance. If the employment of the
Executive is terminated by the Company not for cause as defined in
Section 4 (A), except as per the right to not renew the contract at
the end of term, or if the employment of the Executive is
terminated by the Company without cause or by the Executive for
Good Reason (whether before the end of the Term or, if the
Executive is employed by the Company under paragraph E of this
Section 4 above, after the Term has ended), then, subject to
Executive’s execution and non-revocation of a general release
in favor of the Company, its affiliates and their current and
former officers, directors and employees, in form reasonably
satisfactory to the Company, the Executive shall be paid, as
severance, (i) Executive’s Base Salary, as in effect at the
time of such termination, during the Severance Period as if the
Executive had not been terminated and remained an employee of the
Company through the expiration of such period representing the
remander of his term , and all unvested stock options under section
3(D) shall vest immediately and remain exerciseable for the
Severance Period. For purposes of this Agreement, “Severance
Period” means the period of time commencing immediately after
Executive’s separation of service from the Company through
the date that is twelve (12) months following such separation date,
plus an additional two (2) months for every fully completed year of
Executive’s service to the Company.

 

G.

Change of Control Severance. In addition
to the rights of the Executive under the Company’s employee
benefit plans (paragraph C of Section 3 above) but in lieu of any
severance payment under paragraph F of this Section 4 above, if
there is a Change in Control of the Company (as defined below)
during the Term and within six (6) months thereafter the employment
of the Executive is concurrently or subsequently terminated (i) by
the Company without cause, (ii) by the expiration of the Term, or
(iii) by the resignation of the Executive because he has reasonably
determined in good faith that his titles, authorities,
responsibilities, salary, bonus opportunities or benefits have been
materially diminished, that a material adverse change in his
working conditions has occurred, or the Company has breached this
Agreement (clause (iii) of the first paragraph of this Section 4(G)
shall mean “Good Reason”), the Company shall pay the
Executive, as a severance payment, at the time of such termination,
in an amount equal to (A) Executive’s Base Salary, as in
effect at the time of such termination, during the Severance Period
as if the Executive had not been terminated and remained an
employee of the Company through the expiration of such period, (B)
a bonus equal to one (1) year of Base Salary (as in effect on the
date of termination) plus
an additional two months of Base Salary for every fully completed
year of Executive’s service to the Company payable in equal
bi-monthly installments during the Severance Period, and one (1)
year of Bonus (as maximum allowable in effect on the date of
termination) plus an
additional two months of prorated bonus for every fully completed
year of Executive’s service to the Company payable in equal
bi-monthly installments during the Severance Period, (C) without
duplication to (B), the unpaid bonus, if any, for the year in which
the termination occurs, prorated to the date of termination of
Executive’s employment, to be paid at the time the Company
pays bonuses to other senior executives of the Company and (D) the
remaining unvested stock options from 3(D) shall vest immediately.
The Company shall promptly reimburse the Executive for the amount
of any expenses incurred prior to such termination of the Executive
as required under paragraph F of Section 3 above. Notwithstanding the foregoing, before the
Executive may resign pursuant to clause (iii) of this paragraph,
the Executive shall deliver to the Company a written notice of the
Executive’s intent to terminate his employment thereunder,
and the Company shall have been given a reasonable opportunity to
cure any such act, omission or condition within thirty (30) days
after the Company’s receipt of such
notice.

 

 

 

For the
purpose of this Agreement, a Change in Control of the Company has
occurred when: (a) any person (defined for the purposes of this
paragraph G to mean any person within the meaning of Section 13(d)
of the Exchange Act), other than Navidea, an employee benefit plan
created by its Board of Directors for the benefit of its employees,
or a participant in a transaction approved by its Board for the
principal purpose of raising additional capital, either directly or
indirectly, or an Affiliate of such participant, acquires
beneficial ownership (determined under Rule 13d-3 of the
regulations promulgated under Section 13(d) of the Exchange Act) of
securities issued by Navidea having thirty percent (30%) or more of
the voting power of all the voting securities issued by Navidea in
the election of directors at the next meeting of the holders of
voting securities to be held for such purpose; (b) a majority of
the directors elected at any meeting of the holders of voting
securities of Navidea are persons who were not nominated for such
election by the Board or a duly constituted committee of the Board
having authority in such matters; (c) the stockholders of Navidea
approve a merger or consolidation of Navidea with another person
other than a merger or consolidation in which the holders of
Navidea’s voting securities issued and outstanding
immediately before such merger or consolidation continue to hold
voting securities in the surviving or resulting corporation (in the
same relative proportions to each other as existed before such
event) comprising eighty percent (80%) or more of the voting power
for all purposes of the surviving or resulting corporation; or (d)
the stockholders of Navidea approve a transfer of substantially all
of the assets of Navidea to another person other than: (i) a
transfer to a transferee, eighty percent (80%) or more of the
voting power of which is owned or controlled by Navidea or by the
holders of Navidea’s voting securities issued and outstanding
immediately before such transfer in the same relative proportions
to each other as existed before such event, or (ii) a transfer
following which Navidea continues the operation of one or more
lines of business that were operated by Navidea prior to the
transfer, and a class of Navidea’s common stock remains
registered under Section 12 of the Exchange Act. The Parties agree
that for the purpose of determining the time when a Change of
Control has occurred that if any transaction results from a
definite proposal that was made before the end of the Term but
which continued until after the end of the Term and such
transaction is consummated after the end of the Term, such
transaction shall be deemed to have occurred when the definite
proposal was made for the purposes of the first sentence of this
paragraph G of Section 4. Notwithstanding the foregoing, before the
Executive may resign pursuant to clause (iii) of the first
paragraph of this Section 4(G), the Executive shall deliver to the
Company a written notice of the Executive’s intent to
terminate his employment thereunder, and the Company shall have
been given a reasonable opportunity to cure any such act, omission
or condition within thirty (30) days after the Company’s
receipt of such notice.

 

H.

Benefit and Stock Plans. In the event
that a benefit plan, equity plan or award agreement which covers
the Executive has specific provisions concerning termination of
employment, or the death or disability of an employee (e.g., life insurance or disability
insurance), then such benefit plan, equity plan or award agreement
shall control the disposition of the benefits or awards
thereunder.

 

I.

Resignation of All Other Positions. Upon
termination of the Executive's employment hereunder for any reason,
the Executive shall be deemed to have resigned from all positions
that the Executive holds as an officer or member of the Board (and
any committee thereof) of the Company or any of its
affiliates.

 

J.

Cooperation. The Parties agree that
certain matters in which the Executive will be involved during the
Term may necessitate the Executive's cooperation following
termination of his employment. Accordingly, following the
termination of the Executive's employment for any reason, to the
extent reasonably requested by the Board, the Executive shall
cooperate with the Company in connection with matters arising out
of the Executive's service to the Company; provided that, the
Company shall make reasonable efforts to minimize disruption of the
Executive's other activities. The Company shall reimburse the
Executive for reasonable expenses incurred in connection with such
cooperation and, to the extent that the Executive is required to
spend substantial time on such matters, the Company shall
compensate the Executive at an hourly rate based on the Executive's
Base Salary on the date of termination.

 

 

 

5.

Proprietary Information Agreement.
Executive has executed a Proprietary Information Agreement as a
condition of employment with the Company. The Proprietary
Information Agreement shall not be limited by this Agreement in any
manner, and the Executive shall act in accordance with the
provisions of the Proprietary Information Agreement at all times
during the Term.

 

6.

Non-Competition. Executive agrees that
for so long as he is employed by the Company under this Agreement
and for one (1) year thereafter, the Executive will
not:

 

A.

enter into the
employ of or render any services to any person, firm, or
corporation, which is engaged, in any part, in a Competitive
Business (as defined below);

 

B.

engage in any
directly Competitive Business for his own account;

 

C.

become associated
with or interested in through retention or by employment any
Competitive Business as an individual, partner, shareholder,
creditor, director, officer, principal, agent, employee, trustee,
consultant, advisor, or in any other relationship or capacity;
or

 

D.

solicit, interfere
with, or endeavor to entice away from the Company, any of its
customers, strategic partners, or sources of supply.

 

 

Nothing in this
Agreement shall preclude Executive from taking employment in the
banking or related financial services industries nor from investing
his personal assets in the securities or any Competitive Business
if such securities are traded on a national stock exchange or in
the over-the-counter market and if such investment does not result
in his beneficially owning, at any time, more than one percent (1%)
of the publicly-traded equity securities of such Competitive
Business. “Competitive Business” for purposes of this
Agreement shall mean any business or enterprise:

 

a.

which is engaged in
the development, commercialization or distribution of drugs and/or
systems for use in detection, diagnosis or treatment of cancer,
inflammatory or immune-related diseases, including without
limitation the development, commercialization or distribution of
radiopharmaceuticals for such purposes, or

 

b.

which reasonably
could be understood to be competitive in the relevant market with
products and/or systems described in clause a above, or

 

c.

in which the
Company engages in during the Term pursuant to a determination of
the Board and from which the Company derives a material amount of
revenue or in which the Company has made a material capital
investment.

 

 

The covenant set
forth in this Section 6 shall terminate immediately upon the
substantial completion of the liquidation of assets of the Company
or the termination of the employment of the Executive by the
Company without cause or at the end of the Term.

 

   
    7.    Arbitration. Any dispute or
controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration in Columbus, Ohio, in
accordance with the non-union employment arbitration rules of the
American Arbitration Association (“AAA”) then in
effect. If specific non-union employment dispute rules are not in
effect, then AAA commercial arbitration rules shall govern the
dispute. If the amount claimed exceeds $100,000, the arbitration
shall be before a panel of three arbitrators. Judgment may be
entered on the arbitrator’s award in any court having
jurisdiction. The Company shall indemnify the Executive against and
hold him harmless from any attorney’s fees, court costs and
other expenses incurred by the Executive in connection with the
preparation, commencement, prosecution, defense, or enforcement of
any arbitration, award, confirmation or judgment in order to assert
or defend any right or obtain any payment under paragraph C of
Section 4 above or under this sentence; without regard to the
success of the Executive or his attorney in any such arbitration or
proceeding.

 

 

 

8. 

Attorneys’ Fees and Expenses.
Except as otherwise provided in Section 7, in the event that any
action, suit, or other legal or equitable proceeding is brought by
either party to enforce the provisions of this Agreement, or to
obtain money damages for the breach thereof, then the party which
substantially prevails in such action (whether by judgment or
settlement) shall be entitled to recover from the other party all
reasonable expenses of such litigation (including any appeals),
including, but not limited to, reasonable attorneys' fees and
disbursements.

 

9. 

Governing Law. The Agreement shall be
governed by and construed in accordance with the laws of the State
of Ohio without regard to its conflicts of laws
principles.

 

10. 

Jurisdiction; Service of Process. Except
as otherwise provided in Section 7, any action or proceeding
arising out of or relating to this Agreement shall be brought
exclusively in the state or federal courts located in New York, New
York and each of the Parties irrevocably submits to the
jurisdiction of each such court in any such action or proceeding,
waives any objection it may now or hereafter have to venue or to
convenience of forum, agrees that all claims in respect of the
action or proceeding shall be heard and determined only in any such
court and agrees not to bring any action or proceeding arising out
of or relating to this Agreement in any other court. The Parties
agree that either or both of them may file a copy of this Section
with any court as written evidence of the knowing, voluntary and
bargained agreement between the Parties irrevocably to waive any
objections to venue or to convenience of forum. Process in any
action or proceeding referred to in the first sentence of this
section may be served on any party anywhere in the
world

 

11. 

Waiver of Jury
Trial. THE PARTIES HEREBY
UNCONDITIONALLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION ARISING DIRECTLY OR INDIRECTLY OUT OF,
RELATED TO, OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OR BREACH
OF THIS AGREEMENT, AND/OR THE RELATIONSHIP THAT IS BEING
ESTABLISHED BETWEEN THEM. The scope of this waiver is intended to
be all encompassing of any and all disputes that may be filed in
any court or other tribunal (including, without limitation,
contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims). THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS, OR MODIFICATIONS TO THIS AGREEMENT AND RELATED
DOCUMENTS. In the event of litigation, this Agreement may be filed
as a written consent to a trial by the court.

 

12. 

Validity. The invalidity or
unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other
provision of the Agreement, which shall remain in full force and
effect.

 

 

 

13. 

Compliance with Section 409A of the Internal
Revenue Code. It
is intended that this Agreement comply with Section 409A of the
Internal Revenue Code of 1986, as amended, and any guidance
thereunder (“Section 409A”). If, when the Executive's
employment with the Company terminates, the Executive is a
"specified employee" as defined in Section 409A(a)(1)(B)(i), and if
any payments under this Agreement, including payments under Section
4, will result in additional tax or interest to the Executive under
Section 409A(a)(1)(B) ("Section 409A Penalties"), then despite any
provision of this Agreement to the contrary, the Executive will not
be entitled to payments until the earliest of (a) the date that is
at least six months after termination of the Executive's employment
for reasons other than the Executive's death, (b) the date of the
Executive's death, or (c) any earlier date that does not result in
Section 409A Penalties to the Executive. As soon as practicable
after the end of the period during which payments are delayed under
this provision, the entire amount of the delayed payments shall be
paid to the Executive in a lump sum. Additionally, if any provision
of this Agreement would subject the Executive to Section 409A
Penalties, the Company will apply such provision in a manner
consistent with Section 409A during any period in which an
arrangement is permitted to comply operationally with Section 409A
and before a formal amendment to this Agreement is required. For
purposes of this Agreement, any reference to the Executive's
termination of employment will mean that the Executive has incurred
a "separation from service" under Section 409A. No payments to be
made under this Agreement may be accelerated or deferred except as
specifically permitted under Section 409A. Any payments that
qualify for the “short-term deferral” exception or
another exception under Section 409A of the Code shall be paid
under the applicable exception. Each payment of compensation under
this Agreement shall be treated as a separate payment of
compensation for purposes of Section 409A. To the extent that any
reimbursements provided under this Agreement constitute deferred
compensation subject to Section 409A, such amounts shall be paid or
reimbursed to Executive promptly, but in no event later than
December 31 of the year following the year in which the expense is
incurred. The amount of any such payments eligible for
reimbursement in one year shall not affect the payments or expenses
that are eligible for payment or reimbursement in any other taxable
year, and Executive’s right to such payments or reimbursement
shall not be subject to liquidation or exchange for any other
benefit.

 

14. 

Entire Agreement. This Agreement,
together with the Proprietary Information Agreement referenced
above, constitutes the entire understanding between the Parties
with respect to the subject matter hereof, and supersedes all
negotiations, prior discussions, and preliminary agreements to this
Agreement. This Agreement may not be amended except in writing
executed by the Parties.

 

15. 

Effect on Successors of Interest. This
Agreement shall inure to the benefit of and be binding upon heirs,
administrators, executors, successors and assigns of each of the
Parties. Notwithstanding the above, the Executive recognizes and
agrees that his obligation under this Agreement may not be assigned
without the consent of the Company. The Company, however, may
assign its rights and obligations under this
Agreement.

 

16. 

Counterpart Signatures. This Agreement
may be signed in counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument. A fully signed copy,
pdf or facsimile copy of this Agreement shall be deemed an
original.

 

[signature page
follows]

 

Exhibit
10.6

IN WITNESS WHEREOF, the Parties have
executed and delivered this Agreement as of the date first written
above.

 

 

	

NAVIDEA BIOPHARMACEUTICALS, INC.

	
 

	

EXECUTIVE:

	
 

	
 

	
 

	
 

	

By:

	

/s/
Michael M. Goldberg

	
 

	

/s/ Jed
A. Latkin

	

Name:

	

Michael
M. Goldberg

	
 

	

Jed A.
Latkin

	

Its:

	

CEO

	
 

	
 

 

 

 

 

Exhibit A

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