Document:

Exhibit 10.4

 

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

 

COMMON STOCK PURCHASE WARRANT

 

IMMUNE
PHARMACEUTICALS, INC.

 

	Warrant Shares: 1,666,667	Issue Date: April 10, 2017

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, EMA Financial, LLC, a Delaware limited liability
company (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after October 10, 2017 (as defined above) and on or prior to the close of business October
10, 2022 (the “Termination Date”) but not thereafter, to subscribe for and purchase from IMMUNE PHARMACEUTICALS,
INC., a Delaware corporation (the “Company”), up to 1,666,667 shares (the “Warrant Shares”)
(whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) of Common Stock. The
purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b),
subject to adjustment herein. This Warrant is issued by the Company as of the date hereof in connection with the Purchase Agreement
(as defined below).

 

Section 1.              Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated on or about the date hereof, between the Company and the Holder, pursuant
to which this Warrant is being issued.

 

Section 2.              Exercise.

 

a)            Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time and from
time to time on or after the Issue Date and on or before the Termination Date by delivery to the Company (or such other office
or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing
on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto (“Notice
of Exercise”) (which delivery may be made in any manner set forth in the Purchase Agreement, including without limitation
by email); and, within three (3) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall
have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check
drawn on a United States bank, unless payment is being made by cashless exercise as provided in Section 2(c) below. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case the
Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice
of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number
of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder
in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on
the face hereof.

 

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b)            Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $0.20, subject to adjustment hereunder
(the “Exercise Price”).

 

c)            Cashless
Exercise. This Warrant may also be exercised by means of a “cashless exercise” in which the Holder shall be entitled
to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (B), where:

 

	(A)	=	the Market Price (as defined below);
	 	 	 
	(B)	=  	the Exercise Price of this Warrant (as adjusted); and
	 	 	 
	(X)	=	the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

 

“Market
Price” shall mean the closing sale price per share of Common Stock on the principal market where the Common Stock is traded
on the Trading Day immediately preceding delivery of the Notice of Exercise or the Closing Date, whichever is greater. Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).

 

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d)            Holder’s
Restrictions. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
person or entity acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of
Common Stock which would be issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned
by the Holder or any of its Affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities
of the Company (including, without limitation, any rights or securities convertible into or exercisable for Common Stock (“Common
Stock Equivalents”)) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section
2(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. To the extent that the limitation contained in this Section 2(d) applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion
of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(d), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent periodic or annual report, as the case may be, (y) a more recent public announcement by the Company or (z) any other
notice by the Company or the Company’s Transfer Agent setting forth the number of shares of Common Stock outstanding. 
Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.9% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. By written notice to the Company, the
Holder may at any time and from time to time increase or decrease the Beneficial Ownership Limitation to any other percentage specified
in such notice (or specify that the Beneficial Ownership Limitation shall no longer be applicable), provided, however, that (A)
any such increase (or inapplicability) shall not be effective until the sixty-first (61st) day after such notice is delivered to
the Company, and (B) any such increase or decrease shall apply only to the Holder and not to any other holder of Warrants. Notwithstanding
anything to the contrary contained herein, prior to Stockholder Approval, the Company shall not effect the exercise of any portion
of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant pursuant to the terms and conditions
of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect
to such exercise, the shares of Common Stock issued pursuant to this Warrant and the Note sold in the Securities Purchase Agreement
collectively would exceed 19.99% of the shares of Common Stock outstanding immediately prior to the Issuance Date. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section
2(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

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e)            Mechanics
of Exercise.

 

i.            Delivery
of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its
Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system and either
(x) there is an effective registration statement permitting the resale of the Warrant Shares by the Holder, or (y) such shares
may be sold pursuant to Rule 144, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise,
within 3 Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant (if required)
and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant
shall be deemed to have been exercised on the date the Exercise Price is received by the Company. The Warrant Shares shall be deemed
to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise
Price (or by cashless exercise) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(vi) prior to
the issuance of such shares, have been paid. If the Company fails for any reason to deliver to the Holder the Warrant Shares or
certificates evidencing the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date the Company shall
pay to the Holder, in cash, as liquidated damages and not as a penalty, $1,000.00 per Trading Day (increasing to $2,000.00 per
Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share
Delivery Date until such shares or certificates are delivered.

 

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

 

iii.         Rescission
Rights. If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing
the Warrant Shares (or otherwise transmit such shares via DWAC to the Holders DTC account) pursuant to this Section 2(e) by the
Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.         Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant
Shares (or otherwise transmit such shares via DWAC to the Holders DTC account) pursuant to an exercise on or before the Warrant
Share Delivery Date and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder
of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares
that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the
sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number
of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000.00 to cover a Buy-In with
respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation
of $10,000.00, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000.00.
The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and,
upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any
other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver the Warrant Shares or certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

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

 

vi.          Charges,
Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto.

 

Section 3.              Certain
Adjustments.

 

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

 

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b)            Subsequent
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall
sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any
offer, sale, grant or any option to purchase or other disposition) any Common Stock or securities entitling any Person to acquire
shares of Common Stock (upon conversion, exercise or otherwise), at an effective price per share less than the then Exercise Price
(such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights
per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price
per share which is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price
on such date of the Dilutive Issuance, provided that the Note and any conversions thereunder shall not constitute a Dilutive Issuance
regardless of the conversion price thereunder at any point in time), then the Exercise Price shall be reduced and only reduced
to equal the Base Share Price, and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise
Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise
Price prior to such adjustment. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.
The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this Section 3(b), indicating therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of
clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon the occurrence
of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number of Warrant Shares
based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise.

 

c)            Subsequent
Rights Offerings. If the Company, at any time while the Warrant is outstanding, shall issue rights, options or warrants to
all holders of Common Stock (and not to Holders) entitling them to subscribe for or purchase shares of Common Stock at a price
per share less than the closing price at the record date mentioned below, then the Exercise Price shall be multiplied by a fraction,
of which the denominator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the numerator
shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares issued (assuming receipt by the Company in full of all
consideration payable upon exercise of such rights, options or warrants) would purchase at such closing price. Such adjustment
shall be made whenever such rights or warrants are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or warrants.

 

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d)            Pro
Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common
Stock (and not to Holders of the Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or rights
or warrants to subscribe for or purchase any security other than the Common Stock (which shall be subject to Section 3(b)), then
in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record
date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall
be the closing price determined as of the record date mentioned above, and of which the numerator shall be such closing price on
such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness
so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In
either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness
so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any
such distribution is made and shall become effective immediately after the record date mentioned above.

 

e)            Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the Company effects any merger or consolidation of the
Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series
of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D)
the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock
is effectively converted into or exchanged for other securities, cash or property (each “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would
have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares
of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such merger, consolidation or disposition
of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event.
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting
the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice
as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice
as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the
extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise
such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3(e) and insuring
that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1) an all
cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Securities Exchange Act of 1934,
as amended, or (3) a Fundamental Transaction involving a person or entity not traded on a national securities exchange, the Nasdaq
Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or the OTCQX, the Company or any successor entity shall
pay at the Holder’s option, exercisable at any time concurrently with or within 30 days after the consummation of the Fundamental
Transaction, an amount of cash equal to the value of this Warrant as determined in accordance with the Black Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg L.P. using (i) a price per share of Common Stock equal to the closing
price of the Common Stock for the Trading Day immediately preceding the date of consummation of the applicable Fundamental Transaction,
(ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant
as of the date of consummation of the applicable Fundamental Transaction and (iii) an expected volatility equal to the 100 day
volatility obtained from the “HVT” function on Bloomberg L.P. determined as of the Trading Day immediately following
the public announcement of the applicable Fundamental Transaction, provided that such Warrant valuation shall not exceed $250,000.

 

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

 

g)            Notice
to Holder.

 

i.            Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.

 

ii.         Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register of the Company, at least 7 business days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale,
transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall
not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this
Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice.

 

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Section 4.              Transfer
of Warrant.

 

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

 

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

 

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

 

d)            Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable
state securities or blue sky laws or eligible for resale under Rule 144, the Company may require, as a condition of allowing such
transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase
Agreement.

 

Section 5.              Miscellaneous.

 

a)            No
Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof as set forth in Section 2(e)(i).

 

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

 

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

 

    	 	11	 

     

    

 

d)            Authorized
Shares.

 

The Company covenants
that from the Issue Date herein, it will reserve from its authorized and unissued Common Stock, the number of shares of Common
Stock equal to 100% of the total shares of Common Stock issuable upon the full exercise of this Warrant (without regard to the
beneficial ownership limitations contained herein). The Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such
reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the trading market upon which the Common Stock may be listed. The Company
covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will,
upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect
of any transfer occurring contemporaneously with such issue).

 

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

 

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

 

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

 

    	 	12	 

     

    

 

g)            Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	13	 

     

    

 

o)            Signatures.
Any signature transmitted by facsimile, e-mail, or other electronic means shall be deemed to be an original signature.

 

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

 

	 	IMMUNE PHARMACEUTICALS, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	14	 

     

    

 

NOTICE OF EXERCISE

 

		To:	IMMUNE PHARMACEUTICALS,
INC.

 

		RE:	Warrant originally issued on or about April 10, 2017 to EMA Financial, LLC for 1,666,667 Warrant
Shares.

 

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

 

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

 

 ̈
in lawful money of the United States; or

 

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

 

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

 

	 	 	 

 

 

The Warrant Shares shall be delivered to
the following DWAC Account Number or by physical delivery of a certificate to:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

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

 

[SIGNATURE
OF HOLDER]

 

	Name of Warrant Holder:	 

	Signature of Authorized Signatory of Warrant Holder:	 

	Name of Authorized Signatory:	 

	Title of Authorized Signatory:	 

	Date:	 

 

    	 		 

     

    

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [____]
all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	 	 whose address is

 

	 	.

 

	 	 

 

	 	Dated: ______________, _______

 

	 	Holder’s Signature:	 	 
	 	 	 	 
	 	Holder’s Address:	 	 
	 	 	 	 
	 	 	 	 

 

	Signature Guaranteed:	 	 

 

NOTE: The signature to this Assignment
Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing Warrant.Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made and entered into as of April 18, 2017, by and between AAR CORP., a Delaware corporation (the “Company”), and David P. Storch (“Employee”), to be effective as of June 1, 2017 (the “Effective Date”).

 

WHEREAS, Employee is an elected director of the Company and holds the position of Chairman of the Board, President  and Chief Executive Officer;

 

WHEREAS, the Company currently employs Employee pursuant to an Amended and Restated Employment Agreement dated as of May 31, 2014 (the “Amended and Restated Employment Agreement”); and

 

WHEREAS, for their mutual convenience, the Company and Employee desire to enter into a new employment agreement that will take effect on the Effective Date upon the expiration of the Amended and Restated Employment Agreement.

 

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

 

1.             Employment.  The Company hereby continues to employ Employee, and Employee hereby accepts continued employment by the Company, upon the terms and subject to the conditions set forth in this Agreement.

 

2.             Term.

 

(a)           The term of this Agreement shall commence on the Effective Date and, unless terminated earlier as herein provided, shall end on May 31, 2020 (the “Term”); provided that on each of June 1, 2020 and June 1, 2021 (each, an “Anniversary Date”), the Term shall automatically and without action by either party be extended for an additional period of one year, unless at least 90 days prior to an Anniversary Date either party notifies the other of its election not to extend the then current Term, in which case the Term shall end at the expiration of the Term as last extended, unless terminated earlier as herein provided.

 

(b)           If the Term is not extended on June 1, 2020 or June 1, 2021, for any reason, Employee will be eligible to receive (A) his Base Salary for the period ending on his termination date, (B) payment for unused vacation days, as determined in accordance with the Company’s policy as in effect at that time, and (C) such other payments, rights and benefits for which Employee may be eligible pursuant to any Company employee benefit plan or pursuant to any other agreement or arrangement between Employee and the Company.

 

 

3.             Duties.

 

(a)           Employee shall have the title, duties and responsibilities of Chairman of the Board and Chief Executive Officer of the Company and such other titles, duties and responsibilities as may from time to time be assigned by the Board of Directors that are consistent with such duties and responsibilities.

 

(b)           Employee agrees to do and perform all such acts and duties faithfully and diligently and to furnish such services as the Board of Directors may from time to time direct, and do and perform all acts in the ordinary course of business of the Company (within such limits as the Board may prescribe) necessary and conducive to the best interest of the Company.

 

(c)           Employee agrees to devote his full time, energy and skill to the business of the Company and to the promotion of the best interests of the Company and the performance of his duties as Chairman of the Board and Chief Executive Officer of the Company and in such other capacities as he may be elected; provided that Employee shall not (to the extent not inconsistent with Sections 3(d), 8(a) and 8(b) below) be prevented from (i) serving as a director of any corporation consented to in advance by resolution of the Board of Directors of the Company, (ii) engaging in charitable, religious, civic or other non-profit community activities, or (iii) investing his personal assets in such form or manner as will not require any substantial services on his part in the operation or affairs of the business in which such investments are made which would detract from or interfere or cause a conflict of interest with performance of his duties hereunder.

 

(d)           Employee agrees to observe policies and procedures of the Company in effect from time to time applicable to employees of the Company including, without limitation, policies with respect to employee loyalty and prohibited conflicts of interest.

 

4.             Compensation.  The Company shall pay to Employee, for all services to be performed by Employee, an annual base salary (“Base Salary”) at the rate of $941,000 per fiscal year, or such greater amount as may be authorized by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”), in its sole discretion, upon annual review during the Term of this Agreement, payable in periodic installments in accordance with the Company’s payroll practice in effect from time to time and prorated for any portion of a fiscal year (the Company’s fiscal year currently being the period from June 1 of each year through May 31 of the following year).

 

5.             Incentive Bonus Payments.  In addition to the Base Salary described above, Employee will continue to participate in and receive payments under such incentive bonus programs as the Company, in its sole discretion, may authorize from time to time for Employee and other executive officers of the Company; provided, however, Employee will be entitled to the following during the Term of this Agreement:

 

(a)           Annual Discretionary Incentive Bonus Opportunity.  Employee will have a graduated annual cash incentive bonus opportunity of 100% of Base Salary for performance at target and up to 250% of Base Salary (or such higher percentages as the Compensation Committee may determine) for performance in excess of target. Performance will be measured against annual financial targets approved by the Compensation Committee that, in the Compensation Committee’s discretion, may be intended to qualify the cash incentive bonus as performance-based compensation under Code Section 162(m).  Actual bonus amounts paid for particular levels of performance will be as determined by the Compensation Committee, and such bonus amounts will be paid in cash within 2-1/2 months after the end of each fiscal year.

 

2

 

(b)           Long-Term Incentive Bonus Awards.  Employee will receive awards under the Company’s long-term cash-based and/or equity-based programs, which may include stock options, stock appreciation rights, performance and non-performance restricted stock or restricted stock units, and/or cash, as determined by the Compensation Committee; provided that the value of Employee’s long-term incentive bonus equity-based awards at the target level shall be at the 75th percentile of the value of similar awards to Chief Executive Officers at companies in the Company’s then current proxy peer group, unless otherwise determined by the Compensation Committee.

 

6.             Vacation and Fringe Benefits; Executive Perquisites.

 

(a)           Employee will accrue vacation in accordance with the Company’s policy in effect from time to time for other executive officers; provided that no decrease in vacation benefits from those available on the date hereof shall be applicable to Employee during the term hereof.  Employee shall be entitled to participate, according to eligibility provisions of each, in such medical, life and disability insurance programs, profit sharing plans, retirement plans, executive financial planning programs, and other fringe benefit plans as may be in effect from time to time during the term hereof and available to other executive officers of the Company.

 

(b)           In addition, during the Term of this Agreement and any extension thereof, Employee shall be entitled to the following additional perquisites:

 

(i)            personal use (including transportation of accompanying spouse and dependent family members) of any corporate business aircraft owned or chartered by the Company for Company business purposes from time to time, subject to compliance with the Company’s aircraft use policy in effect from time to time;

 

(ii)           automobile allowance of $12,300 per calendar year;

 

(iii)          reimbursement of membership dues, fees and charges for club services or use of facilities (including personal charges not exceeding $10,000 annually, but excluding charges for private parties and individual personal expense items exceeding $300) in the Lake Shore Country Club, Medinah Country Club and the Standard Club;

 

(iv)          reimbursement of membership dues, fees, charges, and travel and related expenses incurred in connection with meeting attendance and organization activities of  such professional clubs/organizations of which he is a member that are appropriate and conducive to the performance of his duties (including but not limited to Executive Club of Chicago, Economics Club of Chicago, the Wings Club and the Young President’s Organization (“YPO”)/World Presidents Organization (“WPO”));

 

(v)           reimbursement of travel and related expenses in connection with services to and participation in meetings of not-for-profit educational organization Boards of which he is a member;

 

(vi)          professional financial planning and income tax preparation assistance expenses actually incurred in an amount not to exceed $25,000 per calendar year;

 

(vii)         participation in the Company’s executive annual physical and preventative health program in effect from time to time; and

 

3

 

(viii)        payment of reasonable legal fees related to the review and negotiation of this Agreement.

 

7.             Termination.

 

(a)           The Company may terminate this Agreement at any time for Cause.  The term “Cause” means:

 

(i)            Employee engages, during the performance of his duties hereunder, in material acts or omissions constituting dishonesty, intentional breach of fiduciary obligation or intentional wrongdoing or malfeasance; or

 

(ii)           Employee intentionally disobeys or disregards a material, lawful and proper direction of the Board; or

 

(iii)          Employee materially breaches the Agreement and such breach, by its nature, is incapable of being cured, or such breach remains uncured for more than 30 days following receipt by Employee of written notice from the Company specifying the nature of the breach and demanding the cure thereof.  For purposes of this clause (iii), a material breach of the Agreement that involves inattention by Employee to his duties under the Agreement shall be deemed a breach capable of cure.

 

Without limiting the generality of the foregoing, the following shall not constitute Cause for the termination of this Agreement:

 

(x)           any personal or policy disagreement between Employee and the Company or any member of the Board, or

 

(y)           any action taken by Employee in connection with his duties hereunder, or any failure to act, if Employee acted or failed to act in good faith and in a manner he reasonably believed to be in and not opposed to the best interest of the Company and he had no reasonable cause to believe his conduct was unlawful; or

 

(z)           termination of employment of Employee for unsatisfactory performance (including failure to meet financial goals).

 

A finding of termination for Cause shall be made by majority action of all of the independent directors of the Board of Directors taken at a regular or specially called meeting of the Board, upon a minimum of 10 days written notice thereof to Employee, with termination of this Agreement listed as an agenda item.  Employee will be given a reasonable opportunity to be heard at such meeting with his attorney present if Employee desires.

 

Upon termination of this Agreement by the Company for Cause, Employee will be eligible to receive (A) his Base Salary for the period ending on his termination date, (B) payment for unused vacation days, as determined in accordance with the Company’s policy as in effect at that time, and (C) such other payments, rights and benefits for which Employee may be eligible pursuant to any Company employee benefit plan or pursuant to any other agreement or arrangement between Employee and the Company.

 

(b)           The Company may terminate this Agreement at any time without Cause, upon a minimum of 30 days written notice thereof to Employee.  Upon termination of this Agreement pursuant 

 

4

 

to this Section 7(b), the Company will pay to Employee, (i) monthly for 36 months, an amount equal to Employee’s regular monthly Base Salary at the time of termination plus (ii) a lump sum equal to three times Employee’s average annual cash bonus under Section 5(a) for the preceding three fiscal years of the Company; provided, however, all such payment obligations shall terminate immediately upon any material breach by Employee of Section 8(a) of this Agreement or any breach by Employee of Section 8(b) of this Agreement.  Upon termination of this Agreement by the Company without Cause, no further compensation or benefits shall accrue or be payable to Employee under this Agreement except for (i) the payments provided for above, (ii) any Base Salary, bonus or other benefits which have accrued to Employee prior to the date of any such termination, and (iii) such other payments, rights and benefits for which Employee may be eligible pursuant to any Company employee benefit plan or policy (including unused vacation) or pursuant to any other agreement or arrangement between Employee and the Company.

 

(c)           Employee may terminate this Agreement at any time for Good Reason, upon a minimum of 30 days written notice thereof to the Company.  The term “Good Reason” means:

 

(i)            The removal of Employee from the position of Chairman of the Board or Chief Executive Officer of the Company or any successor thereto;

 

(ii)           a material reduction in the nature or scope of Employee’s Chief Executive Officer duties, responsibilities, authority, power or functions, or a material reduction in Employee’s compensation (including benefits) from then-current levels; or

 

(iii)          a material breach of this Agreement by the Company and such breach, by its nature, is incapable of being cured, or such breach remains uncured for more than 30 days following receipt by the Company of written notice from Employee specifying the nature of the breach and demanding the cure thereof; or

 

(iv)          a relocation of the primary place of employment of at least 50 miles.

 

Upon termination of this Agreement by Employee for Good Reason, the Company will pay to Employee, (i) monthly for 36 months, an amount equal to Employee’s regular monthly Base Salary at the time of termination plus (ii) a lump sum equal to three times Employee’s average annual cash bonus under Section 5(a) for the preceding three fiscal years of the Company; provided all such payment obligations shall terminate immediately upon any breach by Employee of Section 8 of this Agreement.  Upon termination of this Agreement by Employee pursuant to this Section 7(c), no further compensation or benefits shall accrue or be payable to Employee under this Agreement except for (i) the payments provided for above, (ii) any Base Salary, bonus or other benefits which have accrued to Employee prior to the date of any such termination, and (iii) such other payments, rights and benefits for which Employee may be eligible pursuant to any Company employee benefit plan or policy (including unused vacation) or pursuant to any other agreement or arrangement between Employee and the Company.

 

(d)           This Agreement shall automatically terminate upon the death of Employee during the term.  Upon termination of this Agreement due to death, Employee’s beneficiary, designated by written instrument delivered to the Company (or, if no beneficiary is designated or survives Employee, to the duly appointed representative of his estate) will be eligible to receive (A) Employee’s Base Salary for the period ending on his termination date, (B) payment for unused vacation days, as determined in accordance with the Company’s policy as in effect at that time, and (C) such other payments, rights and benefits for which Employee may be eligible pursuant to any Company employee 

 

5

 

benefit plan or pursuant to any other agreement or arrangement between Employee and the Company.  Death benefits payable under any of the Company’s benefit plans in which Employee was a participant at the time of his death shall be payable in accordance with the terms of such plans.

 

(e)           The Company or Employee may terminate this Agreement at any time because of the Disability of Employee.  “Disability” shall mean a physical or mental condition that has prevented Employee from substantially performing his duties under this Agreement for a period of 180 days and which is expected to continue to render Employee unable to substantially perform his duties for the remaining Term on a full-time basis.  The Company will make reasonable accommodation for any handicap of Employee as may be required by applicable law.

 

In the event of termination by the Company for Disability, a finding shall be made by resolution adopted by a majority of the independent directors of the Board of Directors of the Company, setting forth the particulars of the Disability.  The Company may require the submission of such medical evidence as to the condition of Employee as it may deem necessary in order to arrive at its determination of its position as to the occurrence of a Disability.  Employee will be provided with reasonable opportunity to present additional medical evidence as to the medical condition of Employee for consideration prior to the independent directors of the Board of Directors making their determination of their position as to the occurrence of a Disability.  In the event of a Disability, Employee shall be eligible for disability benefits at a level no less favorable than the disability benefits under the Company’s disability plan as in effect on May 31, 2014.

 

Upon termination of this Agreement for Disability, Employee will continue to be eligible to participate in the Company’s medical, dental and life insurance programs available to executive officers in accordance with their terms applicable to employees for a period of three years from the date of such termination of this Agreement.  Further, in the event of termination of this Agreement pursuant to this Section 7(e), Employee will be eligible to receive (A) his Base Salary for the period ending on his termination date, (B) payment for unused vacation days, as determined in accordance with the Company’s policy as in effect at that time, and (C) such other payments, rights and benefits for which Employee may be eligible pursuant to any Company employee benefit plan or pursuant to any other agreement or arrangement between Employee and the Company.

 

The provisions of this Section 7(e) shall not be changed by any amendment to, or extension of, this Agreement and shall be included in any subsequent employment agreement between the Company and Employee.

 

(f)            Employee may terminate this Agreement at any time because of Retirement.  The term “Retirement” means Employee’s voluntary termination of employment with the Company that does not otherwise result in any severance benefits paid to him pursuant to this Section 7 or Section 10.  Upon termination of this Agreement by Employee because of Retirement:

 

(i)            Employee will be eligible to receive (A) any Base Salary, bonus or other benefits which have accrued to Employee prior to the date of such termination, (B) payment for unused vacation days, as determined in accordance with the Company’s policy as in effect at that time, and (C) such other payments, rights and benefits for which Employee may be eligible pursuant to any Company employee benefit plan or pursuant to any other agreement or arrangement between Employee and the Company.  Employee (and Employee’s spouse) shall also be entitled to participate, for Employee’s (and Employee’s spouse’s) lifetime, in the Company’s medical, hospitalization and dental benefit plans, and any executive health programs then in effect, on the same terms and in amounts and of the same type(s) generally made available to any actively employed executive officer of the Company; provided, however, 

 

6

 

that such participation shall not be available from and after the date Employee first becomes eligible for health benefit plans provided by another employer of Employee.  Consistent with IRS guidance, the Company will furnish Employee with an IRS Form W-2 that reflects the portion of the premiums paid by the Company for Employee’s continued coverage under these plans.

 

(ii)           Employee shall have the right to enter into a consulting agreement with the Company pursuant to which Employee will provide services to the Company for a period of not less than one year, for an annual consulting fee equal to 50% of his Base Salary in effect at the time of his Retirement, and subject to such other terms and conditions to be mutually agreed upon by the Company and Employee.

 

8.             Confidential Information and Restriction of Competition.

 

(a)           Employee acknowledges that his employment hereunder will place him in a position of utmost trust and confidence and that he will have access to non-public information concerning the operation of the business of the Company and any affiliated companies as to which Employee provided services or had access to confidential information (hereinafter referred to in this Section as the “Affiliated Companies”), including, but not limited to, manufacturing methods, developments, secret processes, know-how, costs, prices and pricing methods, sources of supply, customer information, financial information, and personnel information (the “Confidential Information”).  Employee acknowledges that the Confidential Information is among the Company’s and the Affiliates’ most valuable assets and that the value of such Confidential Information may be destroyed by unauthorized use or disclosure.  All such Confidential Information imparted to or learned by Employee in the course of his employment (whether acquired before or after the date hereof) will not be used or disclosed by Employee, except to the extent necessary to perform his duties and, in no event, disclosed to anyone outside the employ of the Affiliated Companies and their authorized consultants and advisors, unless such Confidential Information is or has been made generally available to the public through no fault or wrongful action of Employee, or express written authorization to use or disclose such Confidential Information has been given by the Company.  If Employee ceases to be employed by the Company for any reason, he shall not take with him any documents or other papers containing or reflecting Confidential Information or any other Company property, and Employee shall return all documents and files (whether in electronic or paper form) and other Company property to the Company immediately upon cessation of his employment.

 

Nothing herein shall prohibit Employee from (i) reporting a suspected violation of law to any governmental or regulatory agency and cooperating with such agency, or from receiving a monetary recovery for information provided to such agency, (ii) testifying truthfully under oath pursuant to subpoena or other legal process or (iii) making disclosures that are otherwise protected under applicable law or regulation.  However, if Employee is required by subpoena or other legal process to disclose Confidential Information, Employee first shall notify the Company promptly upon receipt of the subpoena or other notice, unless otherwise required by law.

 

(b)           Employee agrees that during the term hereof and for a period of two years only after (x) voluntary termination of employment hereunder by Employee for Good Reason, or (y) termination of employment hereunder by the Company without Cause pursuant to Section 7 above, he shall not, without the express written consent of the Company, either alone or as a consultant to, or partner, employee, officer, director, agent, or stockholder of any organization, entity or business, or otherwise, directly or indirectly (i) take or convert for Employee’s personal gain or benefit or for the benefit of any third party, any business opportunity(ies) relating to the Company’s actual or planned business, of which Employee becomes aware during or as a result of his employment, (ii) directly or indirectly, engage in any Prohibited Activities in competition with the Company or any Affiliated

 

7

 

Company’s business, (iii) own, purchase, organize or take preparatory steps for the organization of, or build, design, finance, acquire, lease, operate, mortgage, invest in, provide services directly or indirectly related to Prohibited Activities to, or otherwise engage in, any business in competition with or otherwise similar to the Company’s or any Affiliated Company’s business, (iv) solicit in connection with any activity which is competitive with any of the businesses of the Company or any Affiliated Company, any customers or suppliers of the Company or any Affiliated Company with whom Employee had contact on behalf of the Company during his employment, or induce or attempt to induce any such customer or supplier to terminate or materially change its relationship with Employer; or (v) hire, or solicit or interview for employment, any sales, marketing or management employee of the Company or any Affiliated Company with respect to whom Employee had contact, supervisory responsibility, or access to non-public information.  Prohibited Activities are the maintenance, repair and overhaul of aircraft, aircraft components, aircraft engines and aircraft engine components; the manufacture of aircraft parts or components, aircraft engine parts or components, and military rapid deployment products of the type manufactured by the Company; the financing, buying, selling, trading, brokering and leasing of aircraft, aircraft engines and components; inventory and logistics management; and rapid deployment of military and defense-related products of the type manufactured by the Company.  Covenants (ii) and (iii) above shall be geographically limited to the following territory:  within 100 miles of any location within the United States of America, or any other country, where the Company or any Affiliated Company did business during the last six months of Employee’s employment with the Company.  The Company and Employee acknowledge the reasonableness of these covenants not to compete and non-solicitation.  Nothing herein shall prohibit Employee from being the legal or equitable holder of not more than 5% of the outstanding capital stock of any publicly held corporation which may be in direct or indirect competition with the Company or any Affiliated Company.  Notwithstanding any other provision of this Agreement, this Section 8(b) shall not apply if the Company terminates Employee’s employment for Cause, if Employee’s employment terminates for any reason following a Change in Control of the Company, or if the Company fails to provide severance payments or benefits as required under this Agreement.

 

(c)                                  If at any time, any clause or portion of this Section 8 shall be deemed invalid or unenforceable by the laws of the jurisdiction in which it is to be enforced by reason of being vague or unreasonable as to duration, geographic scope, nature of activities restricted, or for any other reason, this provision shall be considered divisible as to such portions and the foregoing restrictions shall become and be immediately amended to include only such duration, scope or restriction and such event as shall be deemed reasonable and enforceable by the court or other body having jurisdiction to enforce this Agreement; and the parties hereto agree that the restrictions, as so amended, shall be valid and binding as though the invalid or unenforceable portion had not been involved herein.

 

(d)                                 Employee acknowledges and agrees that the Company would be irreparably harmed by violations of this Section 8 and in recognition thereof, the Company shall be entitled to an injunction or other decree of specific performance with respect to any violation thereof (without any bond or other security being required) in addition to other available legal and equitable remedies.

 

(e)                                  This Section 8 shall survive any termination of this Agreement and any termination of Employee’s employment.  The time period associated with each covenant herein shall be tolled (shall not run) for so long as Employee is in breach of that covenant.

 

9.                                      Changes in Business.  The Company, acting through its Board of Directors, will at all times have complete control over the Company’s business.  Without limiting the generality of the foregoing, the Company may at any time or times change or discontinue any or all of its present or future operations, may close or move any one or more of its divisions or offices, may undertake any new 

 

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servicing or sales operation, may sell any one or more of its divisions or offices to any company not controlled, directly or indirectly, by the Company or may take any and all other steps which its Board of Directors, in its exclusive judgment, shall deem desirable, and Employee shall have no claim or recourse by reason of such action; provided, however, no such action shall result in the reduction of Employee’s Base Salary or other benefits provided for hereunder and provided, further that if the Company discontinues operations, a discretionary bonus may or may not be granted, however, Employee will be entitled to a pro rata share of any non-discretionary incentive bonus through the date of discontinuance.  Said pro rata bonus will be calculated by the Chief Financial Officer of the Company whose determination will be final.

 

10.                               Change in Control.

 

(a)                                 In the event:

 

(i)                   a Change in Control of the Company occurs, and

 

(ii)                at any time during the 24 month period commencing on the date of the Change in Control the Company terminates Employee’s employment for other than Cause or Disability, or Employee terminates his employment for Good Reason, in either case by 30 days written notice to the other party (including the particulars thereof), and having given the other party the opportunity to be heard with respect thereto, then in lieu of benefits described in Section 7(b) or (c):

 

(A)                               The Company shall pay to Employee a lump sum cash payment, within 30 days following such termination of employment, in an amount equal to the sum of (1) all unpaid Base Salary earned through the date of termination, (2) any annual cash bonus under Section 5(a) earned by Employee for the fiscal year of the Company most recently ended prior to the date of termination to the extent unpaid on the date of termination, (3) a pro rata portion of the annual cash bonus under Section 5(a), Employee would have earned had he been employed by the Company on the last day of the fiscal year in which the date of termination occurs (as if all performance goals had been met at target level) that is applicable to the period commencing on the first day of such fiscal year and ending on the date of termination, and (4) any and all other benefits and amounts earned by Employee prior to the date of termination to the extent unpaid.

 

(B)                               The Company shall pay to Employee in a lump sum cash payment, within 30 days after the date of his termination, an amount equal to three times Employee’s total cash compensation (Base Salary plus annual cash bonus under Section 5(a)) for either the fiscal year of the Company most recently ended prior to the date of termination, or the preceding fiscal year, whichever is the highest total cash compensation;

 

(C)                               Employee and his spouse shall continue to be covered by, and receive employee welfare and executive fringe benefits in accordance with the terms of, all of the Company’s welfare benefit plans and executive fringe benefit programs for three years following the date of termination, and at no less than the levels he and his spouse were receiving immediately prior to the Change in Control.  Employee’s spouse shall be entitled to continued benefits coverage pursuant to the preceding sentence for the balance of such three year period in the event of Employee’s death during such period.  The period during which Employee and his spouse are entitled to continuation of group health plan coverage pursuant to Code Section 4980B, and Part 6 of Title I of the Employee Retirement Income Security Act of 1974, as amended, shall commence on the date next following the expiration of the aforementioned three year period.

 

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(D)                               Employee shall receive an additional retirement benefit, over and above that which Employee would normally be entitled to under the AAR CORP. Retirement Savings Plan and the defined contribution feature of the AAR CORP. Supplemental Key Employee Retirement Plan, equal to the lesser of:  (i) three times the amount of Company contributions made to each plan on Employee’s behalf for the calendar year immediately preceding the calendar year in which Employee’s termination of employment occurs, or (ii) $1,526,405.  Such amount shall be paid to Employee in a cash lump sum payment within 30 days following such termination of employment.

 

(E)                                Notwithstanding any conditions or restrictions related to any Award granted to Employee under the AAR CORP. 2013 Stock Plan, (i) all performance opportunity restricted stock shares eligible for award hereunder shall be immediately awarded based on the higher of target or actual performance through the employment termination date using the latest data then available to determine goals applicable for the partial performance period, and all restrictions thereon shall be immediately released, and (ii) all outstanding option grants, stock appreciation rights, restricted stock and restricted stock units granted or awarded under each Plan which have not then become vested or exercisable or which remain restricted, shall immediately become vested or exercisable and restrictions will lapse, as the case may be, and any such options shall remain exercisable for the full remaining life of the option(s).

 

(b)                                 In the event that a Change in Control has occurred, and notwithstanding any conditions or restrictions related to any Award granted to Employee under the AAR CORP. Stock Benefit Plan, (i) all performance opportunity restricted stock shares eligible for award hereunder shall be immediately awarded based on the higher of target or actual performance through the effective date of a Change in Control using the latest data then available to determine goals applicable for the partial performance period, and all restrictions thereon shall be immediately released, and (ii) all outstanding option grants, stock appreciation rights, restricted stock and restricted stock units granted or awarded under the Plan which have not then become vested or exercisable or which remain restricted, shall immediately become vested or exercisable and restrictions will lapse, as the case may be, and any such options shall remain exercisable for the full remaining life of the option(s) whether or not Employee’s employment continues.

 

(c)                                  The amounts paid to Employee under this Change in Control provision applicable to Employee shall be considered severance pay in consideration of past services Employee has rendered to the Company and in consideration of Employee’s continued service from the date hereof to entitlement to those payments.

 

(d)                                 For purposes of this provision, Change in Control means the earliest of:

 

(i)                                     any person (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), has acquired (other than directly from the Company) beneficial ownership (as that term is defined in Rule 13d-3 under the Exchange Act), of more than 35% of the outstanding capital stock of the Company entitled to vote for the election of directors; or

 

(ii)                                  the effective time of (A) a merger or consolidation or other business combination of the Company with one or more other corporations as a result of which the holders of the outstanding voting stock of the Company immediately prior to such business combination hold less than 60% of the voting stock of the surviving or resulting corporation, or (B) a transfer of substantially all of the assets of the Company other than to an entity of which the Company owns at least 80% of the voting stock; or

 

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(iii)                               the election, over any 12-month period, to the Board of Directors of the Company without the recommendation or approval of the incumbent Board of Directors of the Company, of the directors constituting a majority of the number of directors of the Company then in office.

 

(e)                                  If in connection with the Change in Control or other event Executive would be or is subject to an excise tax under Section 4999 of the Internal Revenue Code (an “Excise Tax”) with respect to any cash, benefits or other property received, or any acceleration of vesting of any benefit or award (the “Change in Control Benefits”), Employee may elect to have the Change in Control Benefits otherwise payable under this Agreement reduced to the largest amount payable without resulting in the imposition of such Excise Tax.  Within 15 days after the occurrence of the event that triggers the Excise Tax, a nationally recognized accounting firm selected by the Company shall make a determination as to whether any Excise Tax would be reported with respect to the Change in Control Benefits and, if so, the amount of the Excise Tax, the total net after-tax amount of the Change in Control Benefits (after taking into account federal, state and local income and employment taxes and the Excise Tax) and the amount of reduction to the Change in Control Benefits necessary to avoid such Excise Tax.  Any reduction to the Change in Control Benefits shall first be made from any cash benefits payable pursuant to this Agreement, if any, and thereafter, as determined by Employee, and the Company shall provide Employee with such information as is necessary to make such determination.  The Company shall be responsible for all fees and expenses connected with the determinations by the accounting firm pursuant to this Section 10(e).  Employee agrees to notify the Company in the event of any audit or other proceeding by the IRS or any taxing authority in which the IRS or other taxing authority asserts that any Excise Tax should be assessed against Employee and to cooperate with the Company in contesting any such proposed assessment with respect to such Excise Tax (a “Proposed Assessment”).  Employee agrees not to settle any Proposed Assessment without the consent of the Company.  If the Company does not consent to allow Employee to settle the Proposed Assessment, within 30 days following such demand therefor, the Company shall indemnify and hold harmless Employee with respect to any additional taxes, interest and/or penalties that Employee is required to pay by reason of the delay in finally resolving Employee’s tax liability (such indemnification to be made as soon as practicable, but in no event later than the end of the calendar year following the calendar year in which Employee makes such remittance).

 

11.                               Legal Fees.  The Company will pay reasonable legal/attorney’s fees (including court costs and other costs of litigation) incurred by Employee in connection with enforcement of any right or benefit under this Agreement, if Employee prevails in whole or in part, in a court of final jurisdiction or pursuant to final and binding arbitration, in an enforcement action against the Company.  In the event Employee prevails in part, the Company’s obligation hereunder shall be computed on a pro rata basis.

 

12.                               Section 409A Compliance.

 

(a)                                 If at the time of Employee’s termination of employment for reasons other than death he is a “specified employee” (as such term is defined and determined in accordance with the procedures set forth in Treas. Reg. §1.409A-1(i)), any amounts payable to Employee pursuant to this Agreement that are subject to Section 409A of the Internal Revenue Code shall not be paid or commence to be paid until six months following Employee’s termination of employment, or if earlier, Employee’s subsequent death.  Each payment made pursuant to Section 7(b)(i) and 7(b)(ii) or 7(c)(i) and 7(c)(ii) shall be considered a separate payment for purposes of Section 409A.

 

(b)                                 Reimbursements or in-kind benefits provided under this Agreement that are subject to Section 409A of the Internal Revenue Code are subject to the following restrictions:  (1) the amount of expenses eligible for reimbursements, or in-kind benefits provided, to Employee during a 

 

11

 

calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits provided in any other calendar year, and (2) reimbursement of an eligible expense shall be made as soon as practicable, but in no event later than the last day of the calendar year following the calendar year in which the expense was incurred.

 

(c)                                  The provisions of the Agreement and all other Company agreements or arrangements applicable to Employee will be interpreted and construed in favor of their meeting any applicable requirements of Code Section 409A.  The Company, in its reasonable discretion, may amend (including retroactively) this Agreement and any such other agreements or arrangements in order to conform with Code Section 409A, including amending to facilitate the ability of Employee to avoid the imposition of interest and additional tax under Code Section 409A.  If the Company takes any action, or fails to take any action, with respect to this Agreement or any Company benefit plan or arrangement, and such action or failure to act causes (to the knowledge of the Company) any compensation income to Employee to (i) be subject to Code Section 409A, or (ii) fail to comply in any respect with Code Section 409A, without the written consent of Employee, then the Company shall pay Employee a gross-up bonus in an amount equal to (A) all taxes and penalties assessed under Code Section 409A on any such compensation income imposed as a result of such action or failure to act, plus (B) any federal, state, and local income taxes and penalties (including FICA) payable by Employee on such gross-up bonus, in order to put Employee in the same position he would have been in if the tax provisions and penalties of Code Section 409A did not apply.  The gross-up bonus shall be paid within 30 days after Employee remits the related excise tax or other amounts to the appropriate taxing authority.

 

13.                               Survival.  Sections 8 and 11 of this Agreement shall survive and continue in full force and effect in accordance with their terms notwithstanding the termination of this Agreement.

 

14.                               Notices.  Any notice or other instrument or thing required or permitted to be given, served or delivered to any of the parties hereto shall be delivered personally or deposited in the United States mail, with proper postage prepaid, or facsimile transmission to the addresses listed below:

 

(a)         If to the Company, to:

 

AAR CORP.
 1100 N. Wood Dale Road
 Wood Dale, Illinois 60191
 Attention: Compensation Committee Chairman

 

With a copy to:

 

AAR CORP.
 1100 N. Wood Dale Road
 Wood Dale, Illinois 60191
 Attention:  General Counsel

 

(b)         If to Employee, to:

 

David P. Storch
 1270 Linden Avenue
 Highland Park, IL 60035

 

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or to such other address as either party may from time to time designate by notice to the other.  Each notice shall be effective when such notice and any required copy are delivered to the applicable address.

 

15.                               Non-Assignment.

 

(a)                                 The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of Employee, and any attempted unpermitted assignment shall be null and void and without further effect; provided, however, that, upon the sale or transfer of all or substantially all of the assets of the Company, or upon the merger of the Company into or the combination with another corporation or other business entity, or upon the liquidation or dissolution of the Company, this Agreement will inure to the benefit of and be binding upon the person, firm or corporation purchasing such assets, or the corporation surviving such merger or consolidation, or the shareholder effecting such liquidation or dissolution, as the case may be.  After any such transaction, the term Company in this Agreement shall refer to the entity which conducts the business now conducted by the Company.  The provisions of this Agreement shall be binding upon and inure to the benefit of the estate and beneficiaries of Employee and upon and to the benefit of the permitted successors and assigns of the parties hereto.

 

(b)                                 Employee agrees on behalf of himself, his heirs, executors and administrators, and any other person or person claiming any benefit under him by virtue of this Agreement, that this Agreement and all rights, interests and benefits hereunder shall not be assigned, transferred, pledged or hypothecated in any way by Employee or by any beneficiary, heir, executor, administrator or other person claiming under Employee by virtue of this Agreement and shall not be subject to execution, attachment or similar process.  Any attempted assigned, transfer, pledge or hypothecation or any other disposition of this Agreement or of such rights, interests and benefits contrary to the foregoing provisions or the levy or any execution, attachment or similar process thereon shall be null and void and without further effect.

 

16.                               Severability.  If any term, clause or provision contained herein is declared or held invalid by any court of competent jurisdiction, such declaration or holding shall not affect the validity of any other term, clause or provision herein contained.

 

17.                               Construction.  Careful scrutiny has been given to this Agreement by the Company, Employee, and their respective legal counsel.  Accordingly, the rule of construction that the ambiguities of the contract shall be resolved against the party which caused the contract to be drafted shall have no application in the construction or interpretation of this Agreement or any clause or provision hereof.

 

18.                               Entire Agreement.  This Agreement as amended and restated herein and the other agreements referred to herein set forth the entire understanding of the parties and supersede all prior agreements, arrangements and communications, whether oral or written, pertaining to the subject matter hereof.  This Agreement shall not be modified or amended except by the mutual written agreement of the Company and Employee.

 

19.                               Waiver.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Employee and an authorized officer of the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

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20.                               Arbitration.  Any controversy or claim arising out of this Agreement, or breach hereof, shall be settled by arbitration in accordance with the laws of the State of  Illinois by three arbitrators.  Within 15 days after either party notifies the other party, in writing, of an intention to commence arbitration, the Company shall appoint one arbitrator and Employee shall appoint one arbitrator.  The third arbitrator shall be appointed by the first two arbitrators within ten days of their appointment.  If the third arbitrator cannot be agreed upon, the third arbitrator shall be appointed by the American Arbitration Association.  The arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators.  The arbitrator’s determination shall be final and binding upon all parties and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

 

21.                               Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of Illinois without regard to its conflicts of law principles.

 

22.                               Tax Withholding.  All payments hereunder shall be made net of any applicable federal, state and local tax withholding.

 

23.                               Execution.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and which shall constitute but one and the same Agreement.

 

WITNESS the due execution of this Agreement by the parties hereto as of the day and year first above written.

 

	
Employer:
    	
 
    
	
AAR CORP.
    	
 
    
	
 
    	
 
    
	
By:
    	
/S/ RONALD B. WOODARD
    	
 
    
	
 
    	
Ronald B. Woodard
    	
 
    
	
 
    	
Chairman – Compensation   Committee of The Board of Directors
    	
 
    
	
 
    	
 
    
	
AAR CORP.
    	
 
    
	
 
    	
 
    
	
By:
    	
/S/ TIMOTHY J. ROMENESKO
    	
 
    
	
 
    	
Timothy J. Romenesko
    	
 
    
	
 
    	
Vice Chairman and Chief   Financial Officer
    	
 
    
	
 
    	
 
    
	
Employee:
    	
 
    
	
 
    	
 
    
	
/S/ DAVID P. STORCH
    	
 
    
	
David P. Storch
    	
 
    

 

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