Document:

POSITRON CORPORATION 2012 STOCK PURCHASE
AND OPTION PLAN 

 

 

1.        Purpose of Plan. This 2012
Stock Purchase and Option Plan (the "Plan") of Positron Corporation, a Texas corporation (the "Company"),
is designed to provide incentives to such present and future executives, directors, consultants, advisors and key employees of
the Company or its Subsidiaries ("Participants"), as may be selected in the sole discretion of the Committee (or,
in the absence of the Committee, the Board), through the grant of Options by the Company to Participants. This Plan is intended
to advance the best interests of the Company by providing those persons who have a substantial responsibility for its management
and growth with additional incentives by allowing them to acquire an ownership interest in the Company and thereby encouraging
them to contribute to the success of the Company and to continue to provide services to or remain employed by the Company and/or
its Subsidiaries (as the case may be). The availability and offering of Options under the Plan also increases the Company's ability
to attract and retain individuals of exceptional managerial talent upon whom, in large measure, the sustained progress, growth
and profitability of the Company depends. This Plan is a compensatory benefit plan within the meaning of Rule 701 of the Securities
Act, and the issuance of shares of Common Stock pursuant to any Options granted hereunder and the issuance of any other Common
Stock pursuant to this Plan are, to the extent permitted by federal securities laws, intended to qualify for the exemption (the
"Exemption") from registration under Rule 701 of the Securities Act. In the event that any provision of the Plan
would cause any Option granted under the Plan to not qualify for the Exemption, the Plan shall be deemed automatically amended
to the extent necessary to cause all Options granted under the Plan to qualify for the Exemption.

 

 

2.          Definitions. Certain terms used in this Plan have
the meanings set forth below:

 

"Affiliate"
of a Person means any other Person, entity or investment fund controlling, controlled by or under common control with such Person
and, in the case of a Person which is a partnership or limited liability company, any partner or member, respectively, of such
Person.

 

"Board" means the Company's
board of directors.

 

"Cause"
shall have the meaning ascribed to such term in any written employment agreement between the Company or any Subsidiary of the Company
and such Participant, or in the absence of any such written agreement, shall mean (a) the commission of a felony or any other act
or omission involving dishonesty, disloyalty or fraud with respect to the Company or any of its Subsidiaries or any of their customers,
suppliers or any other material business relations, or any other crime involving moral turpitude, (b) conduct tending to bring
the Company or any of its Subsidiaries into public disgrace or disrepute, (c) repeated failure or inability to perform duties and/or
obligations as reasonably directed by the Board, senior executive officers or their respective designees, (d) gross negligence
or willful misconduct with respect to the Company or any of its Subsidiaries, (e) any other material breach of any written agreement
between the Company and such Participant evidencing the grant of any Option or the issuance of any Common Stock or any other written
agreement between such Participant and the Company or any Subsidiary or (f) failure to comply in any material respect (including,
without limitation, the Securities Act, the Securities Exchange Act of 1934, as amended, or any of the rules or regulations promulgated
under any of the foregoing laws).

 

 

"Code"
means the U.S. Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, as the same may be amended
from time to time and any successor statute.

 

    	 

    	 	

    
 

"Committee"
means the committee of the Board which may be designated by the Board to administer the Plan. In the absence of the appointment
of any such Committee, any action permitted or required to be taken hereunder by the Committee shall be deemed to refer to the
Board. 

 

"Common Stock"
means the Company's Common Stock, par value $0.01 per share.

 

"Competitive
Activity" means, during the term of any Participant's employment with the Company or any of its Subsidiaries and during
the one-year period immediately following such Participant's Employment Termination Date, directly or indirectly owning any interest
in, managing, controlling, participating in, consulting with, rendering services for or in any manner engaging in any business
anywhere in the world competing with the products or services of the Company or its Subsidiaries, as such products or services
exist or are in process as of such Participant's Termination Date; provided that the passive ownership of not more than
2% of the outstanding shares of any class of capital stock of a corporation which is publicly traded will not be deemed to be a
Competitive Activity, so long as such Participant has no active participation in the business of such corporation.

 

"Employee Shares"
means, collectively, the Option Shares and the Purchased Shares.

 

"Employment
Termination Date" means the first date on which a Participant is no longer employed, not including any notice period that
may be required under local law (or in the case of a Participant who was not an employee, the first date on which such Participant
is no longer acting as a director of, or consultant or advisor to, the Company or its Subsidiaries) by the Company or its Subsidiaries
for any reason.

 

"Fair Market
Value" of an Employee Share means the fair market value thereof as determined in good faith by the Committee or, in the
absence of the Committee, by the Board.

 

"Independent
Third Party" means any Person who, immediately prior to the contemplated transaction, does not own in excess of 10% of
the Company's Common Stock on a fully diluted basis, who is not controlling, controlled by or under common control with any such
10% owner of the Company's Common Stock and who is not the spouse or descendant (by birth or adoption) of any such 10% owner of
the Company's Common Stock.

 

"Option"
means any option enabling the holder thereof to purchase any of the Company's Common Stock granted by the Committee (or, in the
absence of the Committee, the Board) pursuant to the provisions of this Plan. Options to be granted under this Plan may be incentive
stock options within the meaning of Section 422 of the Code ("Incentive Stock Options") or in such other form,
consistent with this Plan, as the Committee (or, in the absence of the Committee, the Board) may determine.

 

"Option Shares"
means the shares of the Company's Common Stock acquired (or to be acquired) pursuant to the exercise of any Option.

 

"Original Cost"
of each Employee Share will be equal to the price paid therefor (in each case, as proportionally adjusted for all stock splits,
stock dividends and other recapitalizations affecting such shares of Common Stock subsequent to any such purchase).

 

"Person"
means an individual, a partnership, a corporation, a limited liability company, an association, a joint share company, a trust,
a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

    	 

    	 	

    
 

"Purchased
Shares" means any shares of the Company's Common Stock purchased by a Participant pursuant to this Plan.

 

"Sale of the
Company" means any transaction involving the Company or its stockholders and an Independent Third Party or affiliated
group of Independent Third Parties pursuant to which such party or parties acquire (a) a majority of the Company's outstanding
shares of capital stock entitled to vote generally in the election of the Board (whether by merger, consolidation or sale or transfer
of the Company's outstanding shares of capital stock or otherwise) or (b) all or substantially all of the Company's assets determined
on a consolidated basis (for purposes hereof "all or substantially all" shall have the meaning given such phrase in the
Revised Model Business Corporation Act).

 

"Securities
Act" means the U.S. Securities Act of 1933, as amended, and any successor statute thereto.

 

"Subsidiary"
means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity
of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to vote in the election of directors or trustees thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more Subsidiaries of that Person or a combination thereof, or (b) if a limited liability company, partnership,
association or other business entity, a majority of the limited liability company, partnership or other similar ownership interest
thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or
a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited
liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of
the limited liability company, partnership, association or other business entity gains or losses or shall be or control the managing
member, general partner or managing director of such limited liability company, partnership, association or other business entity.

 

"Termination
Event" means the consummation of a Sale of the Company.

 

"Unvested Shares"
means any Employee Shares which are designated as Unvested Shares in any separate written agreement with respect to Employee Shares
between the Company and a Participant.

 

"Vested Shares"
means any Employee Shares which are designated as or have become vested shares in any separate written agreement with respect to
Employee Shares between the Company and a Participant and any Employee Shares which are not subject to any vesting requirements
(e.g., shares of capital stock of the Company which have been acquired by the applicable Participant whether pursuant to
an Option or otherwise).

 

3.                 
Grant of Options. The Committee (or in the absence of the Committee, the Board) shall have the right and power to grant
to any Participant such Options at any time prior to the termination of this Plan in such quantity, at such price, on such terms
and subject to such conditions that are consistent with this Plan and established by the Committee (or in the absence of the Committee,
the Board). Options granted under this Plan shall be subject to such terms and conditions and evidenced by agreements entered into
by and between the Company and the Participant as shall be determined from time to time by the Committee (or, in the absence of
the Committee, the Board), which agreements may alter or supplement the provisions of the Plan. Any Participant acquiring Common
Stock pursuant to an Option shall be required to pay in full the acquisition price related thereto.

 

    	 

    	 	

    
 

4.                 
Sale of Stock. The Committee (or in the absence of the Committee, the Board) shall have the power and authority to sell
to any Participant, Common Stock (or any other class of capital stock of the Company then authorized) at any time prior to the
termination of this Plan in such quantity, at such price, on such terms and subject to such conditions that are consistent with
this Plan and established by the Committee (or in the absence of the Committee, the Board). Capital stock sold under this Plan
shall be subject to such terms and evidenced by agreements as shall be determined from time to time by the Committee (or in the
absence of the Committee, the Board). Any Participant acquiring capital stock pursuant to this Plan shall be required to pay in
full the purchase price relating thereto.

 

5.                 
Administration of the Plan; Intent of the Plan. The Committee (or, in the absence of the Committee, the Board) shall have
the power and authority to prescribe, amend and rescind rules and procedures governing the administration of this Plan, including,
but not limited to, the full power and authority (a) to interpret the terms of this Plan, the terms of any Options granted under
this Plan and the rules and procedures established by the Committee (or, in the absence of the Committee, the Board) governing
any such Options, (b) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations
as it deems necessary or advisable to accommodate foreign government laws, regulatory requirements or practices including, but
not limited to, sub-plans established for the purpose of qualifying for preferred tax treatment or securities law compliance under
foreign laws, (c) to determine the rights of any person under this Plan or the meaning of requirements imposed by the terms of
this Plan or any rule or procedure established by the Committee (or, in the absence of the Committee, the Board), (d) to correct
any defect or omission or reconcile any inconsistency in the Plan or in any Option granted hereunder or with respect to any Common
Stock sold hereunder, (e) to determine whether any Options are subject to and/or comply with the requirements of Code Section
409A or the regulations thereunder and (f) to make all other determinations and take all other actions necessary or advisable
for the implementation and administration of the Plan. Each action of the Committee or the Board that is taken in good faith shall
be binding on all persons.

 

          It is the Company's
intent that the Options not be treated as a nonqualified deferred compensation plan that fails to meet the requirements of Section
409A(a)(2), (3) or (4) of the Code and that any ambiguities in construction be interpreted in order to effectuate such intent.
Options under the Plan shall contain such terms as the Committee (or, in the absence of the Committee, the Board) determines are
appropriate to comply with the requirements of Section 409A of the Code. However, neither the Company nor any of its Affiliates
makes any representations with respect to the application of Code Section 409A to the Options and, by the acceptance of the Options,
the Participant agrees to accept the potential application of Code Section 409A to the Options and the tax consequences of the
issuance, vesting, ownership, modification, adjustment, exercise and disposition of the Options. In the event that, after the issuance
of an Option under the Plan, Section 409A of the Code or the regulations thereunder are amended, or the Internal Revenue Service
or Treasury Department issues additional guidance interpreting Section 409A of the Code, the Committee (or, in the absence of the
Committee, the Board) may modify the terms of any such previously issued Option to the extent the Committee (or, in the absence
of the Committee, the Board) determines that such modification is necessary to comply with the requirements of Section 409A of
the Code.

 

6.                 
Limitation on the Aggregate Number of Shares of Common Stock. The number of shares of Common Stock issued under this Plan
(including the number of shares of Common Stock with respect to which Options may be granted under this Plan (and which may be
issued upon the exercise or payment thereof)) shall not exceed, in the aggregate 200,000,000 shares of Common Stock; provided
that the type and the aggregate number of shares which may be subject to Options shall be subject to adjustment in accordance
with the provisions of Section 10 below; provided further that the number of shares of Common Stock with respect
to which Incentive Stock Options may be granted under this Plan (and which may be issued upon the exercise or payment thereof)
shall not exceed, in the aggregate, 200,000,000 shares of Common Stock. If any Options expire unexercised or unpaid or are canceled,
terminated or forfeited in any manner without the issuance of shares of Common Stock or payment thereunder, the shares with respect
to which such Options were granted shall again be available under this Plan. Similarly, if any shares of Common Stock issued hereunder
upon exercise of Options are repurchased hereunder, such shares shall again be available under this Plan for reissuance as Options.
Shares of Common Stock to be issued upon exercise of the Options may be either authorized and unissued shares, treasury shares,
or a combination thereof, as the Committee (or, in the absence of the Committee, the Board) shall determine.

 

    	 

    	 	

    
 

7.                 
Incentive Stock Options. Any of the Options to be granted hereunder may constitute Incentive Stock Options within the meaning
of Section 422 of the Code to the extent expressly designated as such by the Committee or the Board. Only those Participants who
are employees of the Company or its Subsidiaries shall be eligible to receive incentive stock options within the meaning of Section
422 of the Code. All Incentive Stock Options (i) shall have an exercise price per share of Common Stock of not less than 100% of
the Fair Market Value of such share on the date of grant, (ii) shall not be exercisable more than ten years after the date of grant,
(iii) shall not be transferable other than by will or under the laws of descent and distribution and, during the lifetime of the
Participant to whom such Incentive Stock Options were granted, may be exercised only by such Participant (or his guardian or legal
representative) and (iv) shall be exercisable only during the Participant's employment by the Company or a Subsidiary; provided,
however, that the Committee may, in its discretion, provide at the time that an Incentive Stock Option is granted that such
Incentive Stock Option may be exercised for a period ending no later than either (x) the termination of this Plan in the event
of the Participant's death while an employee of the Company or a Subsidiary or (y) the date which is three months after the Employment
Termination Date for any other reason. The Committee's discretion to extend the period during which an Incentive Stock Option is
exercisable shall only apply if and to the extent that (i) the Participant was entitled to exercise such option on the date of
termination and (ii) such option would not have expired had the Participant continued to be employed by the Company or a Subsidiary.
To the extent that the aggregate Fair Market Value of shares with respect to which Incentive Stock Options are exercisable for
the first time by any individual during any calendar year exceeds $100,000, such options shall be treated as options which are
not Incentive Stock Options.

 

8.                 
Listing, Registration and Compliance with Laws and Regulations. Each Option shall be subject to the requirement that if
at any time the Committee (or, in the absence of the Committee, the Board) shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to the Option upon any securities exchange or under any federal, state or
foreign securities or other law or regulation, or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition to or in connection with the granting of such Option or the issue or purchase of shares thereunder, no
such Option may be exercised or paid in shares of Common Stock in whole or in part unless such listing, registration, qualification,
consent or approval (a "Required Listing") shall have been effected or obtained, and the holder of each such
Option will supply the Company with such certificates, representations and information as the Company shall request which are
reasonably necessary or desirable in order for the Company to obtain such Required Listing, and shall otherwise cooperate with
the Company in obtaining such Required Listing. In the case of officers and other persons subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended, the Committee (or, in the absence of the Committee, the Board) may at any time impose any limitations
upon the exercise of an Option which, in the Committee's discretion, are necessary or desirable in order to comply with Section
16(b) and the rules and regulations thereunder.

 

    	 

    	 	

    

 

9.                 
Cash Payments Upon Exercise; Cashless Exercise. Subject to Section 18(d) below, Options may, in the Committee's (or,
in the absence of the Committee, the Board’s) discretion, provide that the holder thereof, as soon as practicable after the
exercise of the Options, will receive, in lieu of any issuance of shares of Common Stock, a cash payment in such amount as the
Committee (or, in the absence of the Committee, the Board) may determine, but not less than the excess of the Fair Market Value
of a share of Common Stock (on the date the holder recognizes taxable income) over the Option's exercise price multiplied by the
number of shares as to which the Option is exercised. In addition, the Committee (or in the absence of the Committee, the Board)
may in its sole discretion, provided that the options be exercised on a cashless basis upon such terms and conditions as the Committee
(or, in the absence of the Committee, the Board deems reasonable in its sole discretion.

 

10.             
Adjustment for Change in Shares of Common Stock. In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation or other change in the Common Stock, the Committee (or, in the absence of
the Committee, the Board) shall make appropriate changes in the number and type of shares authorized by the Plan, the number and
type of shares covered by outstanding Options and the prices specified therein.

 

11.             
Taxes. The Company (and/or any of its Subsidiaries) shall be entitled, if necessary or desirable, to withhold (or secure
payment from the Participant in lieu of withholding) the amount of any withholding or other tax due from the Company (and/or any
of its Subsidiaries) with respect to any amount payable and/or shares issuable under this Plan, and the Company may defer such
payment or issuance unless indemnified to the Board's satisfaction. In any event, each Participant shall be required to indemnify
the Company and hold it harmless for any and all withholding and similar tax obligations arising as a result of the grant or exercise
of Options hereunder or the issuance of any Option Shares upon exercise of the Options.

 

12.             
Termination and Amendment. The Committee (or, in the absence of the Committee, the Board) at any time may suspend or terminate
this Plan and make such additions or amendments as it deems advisable under this Plan (except that it may not (a) increase the
maximum number of shares as to which Options may be granted under this Plan, except pursuant to Section 10 above, or (b)
extend the term of this Plan); provided that, subject to the other provisions hereof, the Committee (or, in the absence
of the Committee, the Board) may not change any of the terms of (i) a written agreement (other than those contained in this Plan
that are incorporated therein by reference) with respect to an Option between the Company and the holder of such Option without
the approval of the holder of such Option in a manner which would have a material adverse effect on the Participant without the
written approval of the holder of such Option (or, in the case of a change with respect to more than one such agreement that affects
the Participant in a manner substantially similar to other applicable Participants, without the written approval of a majority
of the Option Shares obtainable upon exercise of all Options held by all such Participants) or (ii) a written agreement (other
than those contained in this Plan that are incorporated therein by reference) with respect to Common Stock between the Company
and the holder of such Common Stock without the approval of such holder of Common Stock. No Options shall be granted or Common
Stock issued hereunder after January 13, 2032; provided that, if the term of this Plan is otherwise extended, no Incentive
Stock Options shall be granted hereunder after January 13, 2032.

 

13.             
Participant Acknowledgments. In connection with the grant of any Option and/or the issuance of any Common Stock pursuant
to this Plan, each Participant acknowledges and agrees, that as a condition to any such grant or issuance:

 

    	 

    	 	

    
(a)  The Company will have no duty or obligation to disclose to any Participant, and no Participant will have any right to be advised
of, any material information regarding the Company or its Subsidiaries at any time prior to, upon or in connection with the repurchase
of any Employee Shares upon the termination of such Participant's employment with the Company or its Subsidiaries or as otherwise
provided under this Plan or any written agreement evidencing the grant of any Option or the issuance of any shares of Common Stock.

 

(b) Neither the grant
of any Option, the issuance of any Common Stock nor any provision contained in this Plan or in any written agreement evidencing
the grant of any Option or the issuance of any Common Stock shall entitle such Participant to remain in the employment of the Company
or its Subsidiaries or affect the right of the Company or any Subsidiary to terminate any Participant's employment at any time
for any reason.

 

(c) Such Participant
(at such Participant's own expense) will have consulted, or will have had an opportunity to consult with, independent legal counsel
regarding his or her rights and obligations under this Plan and any written agreement evidencing any grant of any Option or the
issuance of any Common Stock and he or she fully understands the terms and conditions contained herein and therein.

 

(d) Prior to the purchase
of any Common Stock pursuant to this Plan or any written agreement evidencing the purchase of any Common Stock, such Participant
will deliver to the Company an executed consent from such Participant's spouse (if any) in the form attached hereto as Exhibit
1. If, at any time subsequent to the date such Participant purchases any Common Stock and prior to the occurrence of a Termination
Event, such Participant becomes legally married (whether in the first instance or to a different spouse), such Participant shall
cause his or her spouse to execute and deliver to the Company a consent in the form attached hereto as Exhibit 1. Such Participant's
failure to deliver such an executed consent at any time when such Participant would otherwise be required to deliver such consent
shall constitute such Participant's continuing representation and warranty that such Participant is not legally married as of such
date.

 

(e) During the term
of any Participant's employment with the Company or any of its Subsidiaries and during the one year period immediately following
such Participant's Employment Termination Date, Participant shall not directly or indirectly through another Person (i) engage
in any Competitive Activity, (ii) induce or attempt to induce any employee of the Company or any Subsidiary to leave the employ
of the Company or such Subsidiary, or in any way interfere with the relationship between the Company or any Subsidiary and any
employee thereof, (iii) hire or employ any person who is or was during the six months prior to such determination an employee of
the Company or any Subsidiary, (iv) in any way interfere with the relationship between any customer, supplier, licensee or other
business relation of the Company or any Subsidiary and the Company or any Subsidiary (including, without limitation, inducing such
person to cease doing business with the Company or making any negative statements or communications about the Company or its Subsidiaries)
or (v) directly or indirectly acquire or attempt to acquire any business which the Company or any of its Subsidiaries has identified
as a potential acquisition target (an "Acquisition Target") by the Company or any of its Subsidiaries, or take
any action to induce or attempt to induce any Acquisition Target to consummate any acquisition, investment or other similar transaction
with any Person other than the Company or any of its Subsidiaries.

 

(f) That the information,
observations and data (including trade secrets) obtained by Participant while employed by the Company or any of its Subsidiaries
concerning the business or affairs of the Company or any of its Subsidiaries ("Confidential Information") are
the property of the Company or such Subsidiary. Therefore, Participant agrees that Participant shall not disclose to any person
or entity or use for Participant's own purposes any Confidential Information or any confidential or proprietary information of
other persons or entities in the possession of the Company and its Subsidiaries ("Third Party Information"), without
the prior written consent of the Board, unless and to the extent that the Confidential Information or Third Party Information becomes
generally known to and available for use by the public other than as a result of Participant's acts or omissions. Participant shall
deliver to the Company at the termination or expiration of Participant's employment with the Company and its Subsidiaries, or at
any other time the Company may request, all memoranda, notes, plans, records, reports, computer files, disks and tapes, printouts
and software and other documents and data (and copies thereof) embodying or relating to Third Party Information, Confidential Information,
or the business of the Company or any if its Subsidiaries which Participant may then possess or have under his or her control.

 

 

    	 

    	 	

    

 

		14.	Repurchase Option.

 

(a) If a Participant
is no longer employed (or in the case of a Participant who was not an employee, the date on which such Participant is no longer
acting as a director or officer of, or consultant or advisor to, the Company or any of its Subsidiaries) by the Company or its
Subsidiaries for any reason, any Unvested Shares (whether held by such Participant or one or more transferees of such Participant,
other than the Company) as of such Employment Termination Date shall expire and any Vested Shares (whether held by such Participant
or one or more transferees of such Participant, other than the Company) as of such Employment Termination Date shall be subject
to repurchase by the Company (solely at its option) pursuant to the terms and conditions set forth in this Section 14 (the
"Repurchase Option").

 

(b) Repurchase Price.
On or after the Employment Termination Date, the Company may elect to repurchase all or any portion of the Vested Shares at a price
per share equal to (i) in the event of such Participant's termination for Cause or participation in a Competitive Activity, at
the lower of Original Cost or Fair Market Value (as of the Employment Termination Date) and (ii) otherwise, at Fair Market Value
(as of the Employment Termination Date). The Company may elect to purchase all or any portion of any Vested Shares.

 

(c) Repurchase Procedures.
The Company may elect to exercise the Repurchase Option to purchase the Employee Shares by delivering written notice (the "Repurchase
Notice") to the holder or holders of the Vested Shares no later than 365 days following the Employment Termination Date.
The Repurchase Notice will set forth the number of Employee Shares to be acquired from such holder(s), the aggregate consideration
to be paid for such Employee Shares and the time and place for the closing of the transaction. If any Employee Shares are held
by any transferees of a Participant, the Company will purchase the shares elected to be purchased from all such holder(s) of Employee
Shares, pro rata according to the number of Employee Shares held by each such holder(s) at the time of delivery of the Repurchase
Notice (determined as nearly as practicable to the nearest share). If Employee Shares of different classes are to be purchased
pursuant to the Repurchase Option and such Employee Shares are held by any transferees of a Participant, the number of shares of
each class of Employee Shares to be purchased will be allocated among all such holders, pro rata according to the total number
of Employee Shares to be purchased from such Persons.

 

(d) Closing.
The closing of the transactions contemplated by this Section 14 will take place on the date designated in the Repurchase
Notice, which date will not be more than 90 days after the delivery of such notice. The Company will pay for the Employee Shares
to be purchased by it by first offsetting amounts outstanding under any bona fide debts owing by such Participant to the Company
or any of its Subsidiaries, now existing or hereinafter arising (irrespective as to whether such amounts are owing by the holder
of such Employee Shares), and will pay the remainder of the purchase price by, at its option, delivery of a check payable to the
holder of such Employee Shares in the aggregate amount of the purchase price for such shares. Any notes issued by the Company pursuant
to this Section 14(d) shall be subject to any restrictive covenants to which the Company or its Subsidiaries are subject
at the time of such purchase. Notwithstanding anything to the contrary contained herein, all repurchases of Employee Shares by
the Company will be subject to applicable restrictions contained in the corporation law of the Company's jurisdiction of incorporation
and in the Company's and its Subsidiaries' debt and equity financing agreements. If any such restrictions prohibit the repurchase
of Employee Shares hereunder which the Company is otherwise entitled to make, the Company may make such repurchases as soon as
it is permitted to do so under such restrictions. The Company will receive customary representations and warranties from each seller
regarding the sale of the Employee Shares, including, but not limited to, representations that such seller has good and marketable
title to the Employee Shares to be transferred free and clear of all liens, claims and other encumbrances.

 

    	 

    	 	

    
 

(e) Termination
of Repurchase Option. Subject to Section 18(d) below, the provisions of this Section 14 will terminate upon the
consummation of a Sale of the Company.

  

		15.	Restrictions on Transfer.

 

(a) Transfer of
Employee Shares. No Participant will sell, transfer, assign, pledge or otherwise transfer any interest in any Employee Shares
(whether directly or indirectly, including, without limitation, by transferring Employee Shares to a Permitted Transferee, and
subsequently disposing of an interest in such Permitted Transferee), except pursuant to Sections 14, 15(b), or 18
hereof (or as otherwise expressly set forth in any written agreement with respect to the purchase and sale of Employee Shares between
the Company and such Participant), in each case pursuant to the terms and limitations set forth therein.

 

(b) Certain Permitted
Transfers. The restrictions contained in this Section 15 will not apply with respect to transfers of Employee Shares
(i) pursuant to applicable laws of descent and distribution or (ii) among a Participant's Family Group; provided that the
restrictions contained in this Section 15 will continue to be applicable to the Employee Shares after any such transfer
and the transferees of such Employee Shares shall agree in writing to be bound by the provisions of this Plan and any separate
written agreement between the Company and such Participant with respect to such Employee Shares. "Family Group"
means a Participant's spouse and descendants (whether natural or adopted) and any trust solely for the benefit of such Participant
and/or such Participant's spouse and/or descendants. Any transferee of Employee Shares pursuant to a transfer in accordance with
the provisions of this Section 15(b) is herein referred to as a "Permitted Transferee." Upon the transfer
of Employee Shares pursuant to this Section 15(b), the transferring Participant will deliver a written notice (the "Transfer
Notice") to the Company. The Transfer Notice will disclose in reasonable detail the identity of the Permitted Transferee(s).

 

(c) Termination
of Restrictions. Subject to Section 18(d) below, the rights and restrictions on the transfer of Employee Shares set
forth in this Section 15 will continue with respect to each Employee Share until the date which is one year after the Employment
Termination Date of a Participant.

  

		16.	Additional Restrictions on Transfer.

 

(a) The certificates representing the Employee
Shares will bear the following legend:

 

"THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT"), AND MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS
AND CERTAIN OTHER AGREEMENTS SET FORTH IN THE ISSUER's 2010 STOCK PURCHASE AND OPTION PLAN AND A WRITTEN AGREEMENT BETWEEN THE
ISSUER AND THE ORIGINAL HOLDER OF SUCH SECURITIES, COPIES OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER's PRINCIPAL
PLACE OF BUSINESS WITHOUT CHARGE.

 

 

    	 

    	 	

    

(b) No holder of Employee
Shares may sell, transfer or dispose of any Employee Shares (except pursuant to an effective registration statement under the Securities
Act) without first delivering to the Company an opinion of counsel reasonably acceptable in form and substance to the Company (which
counsel shall be reasonably acceptable to the Company) that registration under the Securities Act is not required in connection
with such transfer.

 

(c) No holder of Employee
Shares will effect any public sale or distribution (including sales pursuant to Rule 144 of the Securities Act) of any Employee
Shares or of any other equity securities of the Company, or any securities, options or rights convertible into or exchangeable
or exercisable for such securities, during the seven days prior to and the 180-day period beginning on the effective date of any
underwritten public offering of the Company's securities, except as part of such underwritten public offering. The restrictions
on transfer set forth in this Section 16(c) shall continue with respect to each Employee Share and each other security,
option or right described in the preceding sentence until the date on which such security has been transferred pursuant to an offering
registered under the Securities Act or to the public through a broker, dealer or market maker pursuant to the provisions of Rule
144 (other than Rule 144(k)) adopted under the Securities Act.

 

17.      Definition of Employee Shares.
For all purposes of this Plan, Employee Shares will continue to be Employee Shares in the hands of any holder other than such Participant
(except for the Company or purchasers pursuant to an offering registered under the Securities Act or purchasers pursuant to a Rule
144 transaction, and each such other holder of Employee Shares will succeed to all rights and obligations attributable to such
Participant as a holder of Employee Shares hereunder and under any separate written agreement between the Company and such Participant.
Employee Shares will also include shares of the Company's capital stock issued with respect to Employee Shares by way of a share
split, share dividend or other recapitalization.

 

		18.	Sale of the Company.

 

(a) If the holders
of at least a majority of the voting Common Stock (the "Requisite Holders") (and, in the case of any sale or other
fundamental change which requires the approval of the board of directors of a Texas corporation pursuant to Texas Business Corporation
Act, the Board shall have approved such sale) approve a sale of all or substantially all of the Company's assets determined on
a consolidated basis or a sale of a majority of the Company's outstanding capital stock (whether by merger, recapitalization, consolidation,
reorganization, combination or otherwise) to any Independent Third Party or group of Independent Third Parties (collectively, an
"Approved Sale"), each holder of Employee Shares will vote for, consent to and raise no objections against such
Approved Sale. If the Approved Sale is structured as (i) a merger or consolidation, each holder of Employee Shares will waive any
dissenter's rights, appraisal rights or similar rights in connection with such merger or consolidation or (ii) a sale of capital
stock, each holder of Employee Shares will agree to sell all of his or her Employee Shares and rights to acquire Employee Shares
on the terms and conditions approved by the Board and/or the Requisite Holders. Each holder of Employee Shares will take all necessary
or desirable actions in connection with the consummation of the Approved Sale as requested by the Company and/or the Requisite
Holders.

 

(b) The obligations
of the holders of Employee Shares with respect to an Approved Sale are subject to the satisfaction of the following conditions:
(i) upon the consummation of the Approved Sale, each holder of the Company's capital stock will receive the same form of consideration
and the same portion of the aggregate consideration that such holders of capital stock would have received if such aggregate consideration
had been distributed by the Company in complete liquidation pursuant to the rights and preferences set forth in the Company's Certificate
of Incorporation as in effect immediately prior to such Approved Sale, (ii) if any holder of a class of capital stock is given
an option as to the form and amount of consideration to be received, each holder of such class of capital stock will be given the
same option and (iii) each holder of then currently exercisable rights to acquire shares of a class of capital stock will be given
an opportunity to exercise such rights prior to the consummation of the Approved Sale and participate in such sale as holders of
such class of capital stock.

 

    	 

    	 	

    
 

(c) If the Company
or the holders of the Company's securities enter into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated by the Securities and Exchange Commission may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), the holders of Employee Shares will, at the request of the Company,
appoint a purchaser representative (as such term is defined in Rule 501 promulgated by the Securities and Exchange Commission)
reasonably acceptable to the Company. If any holder of Employee Shares appoints a purchaser representative designated by the Company,
the Company will pay the fees of such purchaser representative, but if any holder of Employee Shares declines to appoint the purchaser
representative designated by the Company, such holder will appoint another purchaser representative, and such holder will be responsible
for the fees of the purchaser representative so appointed.

 

(d) In the event of
a Sale of the Company, all Employee Shares shall be assumed or a substantially equivalent share of capital stock, option or right
substituted by the successor corporation or an Affiliate thereof. In the event that the successor corporation refuses to assume
or substitute for the Employee Shares, all such Employee Shares which are Unvested Shares shall fully vest and become exercisable.
If a Participant's Employee Shares become fully vested and exercisable in lieu of assumption or substitution in the event of a
Sale of the Company, the Committee (or, in the absence of 12 the Committee, the Board) shall notify the Participant in writing
or electronically that the Employee Shares shall be fully exercisable for a period of fifteen (15) days from the date of such notice,
and rights to acquire Employee Shares shall expire upon the expiration of such period. For the purposes of this Section 18(d),
the Employee Shares shall be considered assumed if, following the Sale of the Company, the option or right confers the right to
purchase or receive, for each Employee Share immediately prior to the Sale of the Company, the consideration (whether stock, cash,
or other securities or property) received in connection with the Sale of the Company by holders of Common Stock for each share
of Common Stock held on the effective date of the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however,
that if such consideration received in connection with the Sale of the Company is not solely common stock of the successor corporation
or its Affiliate, the Committee (or, in the absence of the Committee, the Board) may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Employees, for each Employee Share, to be solely common stock
of the successor corporation or its Affiliate equal in fair market value to the per share consideration received by holders of
Common Stock in connection with the Sale of the Company.

  

19.           
Transfers in Violation of Plan. Any transfer or attempted transfer of any Employee Shares in violation of any provision
of this Plan shall be void, and the Company shall not record such transfer on its books or treat any purported transferee of such
Employee Shares as the owner of such shares for any purpose.

  

20.           
Severability. Whenever possible, each provision of this Plan will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Plan is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Plan will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision had never been contained herein.

 

    	 

    	 	

    
 

21.          
Remedies. Each of the Company and any Participant will be entitled to enforce its rights under this Plan specifically, to
recover damages and costs (including reasonable attorneys' fees) caused by any breach of any provision of this Plan and to exercise
all other rights existing in its favor. Each Participant and the Company acknowledges and agrees that money damages may not be
an adequate remedy for any breach of the provisions of this Plan and that any party may in its sole discretion apply to any court
of law or equity of competent jurisdiction (without posting any bond or deposit) for specific performance and/or other injunctive
relief in order to enforce or prevent any violations of the provisions of this Plan.

 

22.          
Business Days. If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday
or holiday in the state in which the Company's chief executive office is located, the time period shall be automatically extended
to the business day immediately following such Saturday, Sunday or holiday.

 

23.           
Governing Law. All issues concerning this Plan will be governed by and construed in accordance with the laws of the State
of Texas, without giving effect to any choice of law or conflict of law provision of rule (whether of the State of Texas or any
other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Texas. Each of the
Company and each Participant waives the necessity for personal service of any and all process upon it and consents that all such
service of process may be made by registered or certified mail (return receipt requested), in each case directed to such party
in accordance with the notice requirements set forth in this Plan, and service so made will be deemed to be completed on the date
of actual receipt. Each of the Company and each Participant consents to service of process as aforesaid. Nothing in this Plan
will prohibit personal service in lieu of the service by mail contemplated herein.

 

24.           
Notices. Any notice required or permitted under this Plan or any agreement executed and delivered in connection with this
Plan shall be in writing and shall be either delivered by reputable overnight courier, personally delivered, or mailed by first
class mail, return receipt requested, to any Participant at the address indicated in the Company's records for such Person, and
to the Company at the address below indicated:

 

	
        Notices to the Company:

         

        Positron Corporation

        9715 Kincaid Boulevard, Suite 1000

        Fishers, IN 46038

         

         
	
        With a copy to:

         

        Tarter Krinsky & Drogin LLP

        1350 Broadway

        New York, NY 10018

        Attention: Peter Campitiello

        Facsimile: (212) 216-8001

         

 

or such other address or to the attention
of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under
this Plan shall be deemed to have been given when so delivered or mailed.

 

 

26.       Stockholder Approval. This
Plan shall have been approved by stockholders of the Company holding at least a majority of the Common Stock of the Company within
12 months before or after the date such plan is adopted.exh_101.htm

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is dated as of the 6th day of April, 2012 by and between Shengkai Innovations Inc., a Florida corporation with its principal office at No.106 Zhonghuan South Road, Airport Industrial Park, Tianjin, People’s Republic of China, 300308 (the “Company”), and, Linbin Zhang (“Executive”).

 

WITNESSETH:

 

WHEREAS, the Company is desirous of engaging Linbin Zhang as its interim Chief Financial Officer and she is agreeable to being so appointed on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, the parties agree as follows:

 

1.      Employment and Duties.

 

(a)  Subject to the terms and conditions hereinafter set forth, the Company hereby employs Linbin Zhang as its interim Chief Financial Officer, and she shall have the duties and responsibilities associated with a Chief Financial Officer of a public corporation.  During the Term, as hereinafter defined, Executive shall report to the Company’s Chief Executive Officer and the audit committee of the board of directors. Executive  shall also perform such other duties and responsibilities as may be determined by the Company’s board of directors, audit committee and Chief Executive Officer, as long as such duties and responsibilities are consistent with those of the Company’s Chief Financial Officer.

 

(b) Executive shall also serve in such executive capacity or capacities with respect to any affiliate of the Company to which she may be elected or appointed, provided that such duties are consistent with those of the Company’s Chief Financial Officer.  During the Term, Executive shall receive no additional compensation for services rendered pursuant to this Section 1(b).  For purposes of this Agreement, the term “affiliate” shall mean an entity that is controlled by the Company.

 

(c) Unless terminated earlier as provided in Section 5 of this Agreement, this Agreement shall have a term (the “Term”) commencing as of the date of this Agreement and expiring on the date when a suitable candidate for Chief Financial Officer has been qualified and selected unless terminated by either party on not less than thirty (30) days’ notice prior to the expiration of the Term.

 

2.      Performance.  

Executive hereby accepts the employment contemplated by this Agreement. During the Term, she shall devote substantially all of her business time to the performance of her duties under this Agreement, and shall perform such duties diligently, in good faith and in a manner consistent with the best interests of the Company.

 

3.      Compensation and Other Benefits.

 

For her services to the Company during the Term, the Company shall pay Executive an annual salary (“Salary”) at the rate of RMB 180,000 (say RMB One Hundred Eighty Thousand only) per annum.

 

All Salary payments shall be payable in equal monthly installments at the end of each calendar month, as the Company regularly pays its employees in accordance with normal payroll practices.

 

Executive’s Salary as set forth above may be increased at the discretion of the compensation committee of the Board of Directors.

  

  

  

  

4.      Reimbursement of Expenses.  The Company shall reimburse Executive, upon presentation of proper expense statements, for all authorized, ordinary and necessary out-of-pocket expenses reasonably incurred by Executive during the Term in connection with the performance of her services pursuant to this Agreement hereunder in accordance with the Company’s expense reimbursement policy. 

 

5.      Termination of Employment.

 

(a) This Agreement and Executive’s employment hereunder may be terminated by either for any reason whatsoever, with or without cause, at any time within three (3) months of the date of this Agreement (the “Probation Period”).

 

(b) This Agreement and Executive’s employment hereunder shall terminate immediately upon her death.

 

(c)  This Agreement and Executive’s employment pursuant to this Agreement, may be terminated by her or the Company on not less than thirty (30) days’ written notice in the event of Executive’s Disability. The term “Disability” shall mean any illness, disability or incapacity of Executive which prevents her from substantially performing her regular duties for a period of two (2) consecutive months or three (3) months, even though not consecutive, in any twelve (12) month period.  However, if Executive is covered by long-term disability insurance, the Company may not terminate this Agreement pursuant to this Section 5(c) unless she is eligible for disability payments under her long-term disability insurance.

 

(d) The Company may terminate this Agreement and Executive’s employment pursuant to this Agreement for cause with no notice. The term “cause” shall mean:

 (i)  Repeated failure to perform material instructions from the Company’s board of directors, Chief Executive Office, Chief Operating Officer or audit committee, provided that such instructions are reasonable and consistent with her duties as set forth in Section 1 of this Agreement or any other failure or refusal by Executive  to perform her duties required by said Section 1; provided, however, that Executive shall have received notice from the Board specifying the nature of such failure in reasonable detail and she shall have failed to cure the failure within ten (10) business days after receipt of such notice:

 

(ii)  a breach of Section 6, 7 or 8 of this Agreement;

 

(iii)  a breach of trust whereby Executive obtains personal gain or benefit at the expense of or to the detriment of the Company;

 

(iv)  her use of illegal substances;

 

(v)  her abuse of alcohol continuing after written notice from the board of directors or the Company’s Chief Executive Officer or ;

 

(vi)  any fraudulent or dishonest conduct by Executive  or any other conduct by her, which damages the Company or any of its affiliates or their property, business or reputation;

 

(vii)  a conviction of or plea of nolo contendere by Executive of (A) any felony or (B) any other crime involving fraud, theft, embezzlement or use or possession of illegal substances; or

 

(viii)  the admission by Executive of any matters set forth in Section 5(c)(vii) of this Agreement.

 

(ix)  failure to ensure that the Company’s filings with the Securities and Exchange Commission are on time;

 

  

  

  

(x)  failure to ensure the accuracy of Company’s filings with the Securities and  Exchange Commission.

 

(d)           Executive’s resignation prior to the expiration of the Term, other than for Good Reason shall be treated in the same manner as a termination for cause. The term “Good Reason” shall mean:

 

	  	
(i)

	
Any material breach by the Company of its obligations under this Agreement which are not cured within ten (10) business days after notice from Executive which sets forth in reasonable detail the nature of the breach.

 

	  	
(ii)

	
Any change in Executive’s duties such that Executive is no longer the Company’s Chief Financial Officer, unless such change was made with her consent.

 

	  	
(iii)

	
Any action on the part of the Company which impairs Executive’s ability to exercise her duties as the Company’s Chief Financial Officer.

 

6.      Trade Secrets and Proprietary Information.  

Executive  recognizes and acknowledges that the Company, through the expenditure of considerable time and money, has developed and will continue to develop in the future information concerning customers, clients, marketing, products, services, business, research and development activities and operational methods of the Company and its customers or clients, contracts, financial or other data, technical data or any other confidential or proprietary information possessed, owned or used by the Company, the disclosure of which could or does have a material adverse effect on the Company, its business, any business it proposes to engage in, its operations, financial condition or prospects and that the same are confidential and proprietary and considered “confidential information” of the Company for the purposes of this Agreement. In consideration of her employment and engagement as Chief Financial Officer, Executive agrees that she will not, during or after the Term, without the consent of the Company’s Chief Executive Officer, make any disclosure of confidential information now or hereafter possessed by the Company, to any person, partnership, corporation or entity either during or after the term here of, except that nothing in this Agreement shall be construed to prohibit her from using or disclosing such information (a) if such disclosure is necessary in the normal course of the Company’s business in accordance with Company policies or instructions or authorization from the board of directors or executive committee, (b) such information shall become public knowledge other than by or as a result of disclosure by a person not having a right to make such disclosure, (c) complying with legal process; provided, that in the event she is required to make disclosure pursuant to legal process, she  shall give the Company prompt notice thereof and the opportunity to object to the disclosure, or (d) subsequent to the Term, if such information shall have either (i) been developed by her independent of any of the Company’s confidential or proprietary information or (ii) been disclosed to her by a person not subject to a confidentiality agreement with or other obligation of confidentiality to the Company.  For the purposes of Sections 6, 7 and 8 of this Agreement, the term “Company” shall include the Company, its parent, its subsidiaries and its affiliates.

 

7.      Covenant Not To Solicit or Compete.

 

(a) During the period from the date of this Agreement until one (1) year following the date on which Executive’s employment is terminated, she will not, directly or indirectly:

 

(i) Persuade or attempt to persuade any person or entity which is or was a customer, client or supplier of the Company to cease doing business with the Company, or to reduce the amount of business it does with the Company (the terms “customer” and “client” as used in this Section 7 to include any potential customer or client to whom the Company submitted bids or proposals, or with whom the Company conducted negotiations, during the term of Executive’s employment hereunder or during the twelve (12) months preceding the termination of her employment);

 

  

  

  

(ii) solicit for herself or any other person or entity other than the Company the business of any person or entity which is a customer or client of the Company, or was a customer or client of the Company within one (1) year prior to the termination of her employment; or

 

(iii) persuade or attempt to persuade any employee of the Company, or any individual who was an employee of the Company during the one (1) year period prior to the lawful and proper termination of this Agreement, to leave the Company’s employ, or to become employed by any person or entity other than the Company.

 

(b) Executive acknowledges that the restrictive covenants (the “Restrictive Covenants”) contained in Sections 6 and 7 of this Agreement are a condition of her employment are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part of any of the Restrictive Covenants, is invalid or unenforceable, the remainder of the Restrictive Covenants and parts thereof shall not thereby be affected and shall remain in full force and effect, without regard to the invalid portion. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable because of the geographic or temporal scope of such provision, such court shall have the power to reduce the geographic or temporal scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.

 

8.      Inventions and Discoveries.

Executive agrees promptly to disclose in writing to the Company any invention or discovery made by her during the period of time that this Agreement remains in full force and effect, whether during or after working hours, in any business in which the Company is then engaged or which otherwise relates to any product or service dealt in by the Company and such inventions and discoveries shall be the Company’s sole property. Executive acknowledges that any such invention or discovery developed by her and any intellectual property rights relating thereto shall be considered as “work performed for hire.”  In the event that any such intellectual property rights are not, for any reason, deemed work performed for hire, Executive hereby assigns to the Company any and all of her right, title and interest therein to the Company.  Upon the Company’s request, Executive shall execute and assign to the Company all applications for copyrights and letters patent of the United States and such foreign countries as the Company may designate, and Executive shall execute and deliver to the Company such other instruments as the Company deems necessary to confirm the Company’s sole ownership of all rights, title and interest in and to such inventions and discoveries, as well as all copyrights and/or patents. If services in connection with applications for copyrights and/or patents are performed by Executive at the Company’s request after the termination of her employment hereunder, the Company shall pay her reasonable compensation for such services rendered after termination of this Agreement.

 

9.      Injunctive Relief.

Executive agrees that her violation or threatened violation of any of the provisions of Sections 6, 7 or 8 of this Agreement shall cause immediate and irreparable harm to the Company. In the event of any breach or threatened breach of any of said provisions, Executive consents to the entry of preliminary and permanent injunctions by a court of competent jurisdiction prohibiting her from any violation or threatened violation of such provisions and compelling her to comply with such provisions. In the event an injunction is issued against any such violation by Executive, the period referred to in Section 7 of this Agreement shall continue until the later of the expiration of the period set forth therein or one (1) month from the date a final judgment enforcing such provisions is entered and the time for appeal has lapsed.  The provisions of Sections 6, 7, 8 and 9 of this Agreement shall survive any termination of this Agreement and Executive’s employment pursuant to this Agreement.

 

10.           Miscellaneous.

 

(a) Executive represents, warrants, covenants and agrees that she has a right to enter into this Agreement, that she is not a party to any agreement or understanding, oral or written, which would prohibit performance of her obligations under this Agreement, and that she will not use in the performance of her obligations hereunder any proprietary information of any other party which she is legally prohibited from using.

 

  

  

  

(b) If requested by the Company, Executive will cooperate with the Company in connection with the Company’s application to obtain key-man life insurance on her life, on which the Company will be the beneficiary. Such cooperation shall include the execution of any applications or other documents requiring her signature and submission of insurance applications and submission to a physical.

 

(c) Any notice, consent or communication required under the provisions of this Agreement shall be given in writing and sent or delivered by hand, overnight courier or messenger service, against a signed receipt or acknowledgment of receipt, or by registered or certified mail, return receipt requested, or telecopier or similar means of communication if receipt is acknowledged or if transmission is confirmed by mail as provided in this Section 11(c), to the parties at their respective addresses set forth at the beginning of this Agreement or by telecopier to the Company at at No.106 Zhonghuan South Road, Airport Industrial Park, Tianjin, People’s Republic of China, 300308,  or to Executive, with notice to the Company being sent to the attention of the individual who executed this Agreement on behalf of the Company. Either party may, by like notice, change the person, address or telecopier number to which notice is to be sent.  If no telecopier number is provided for Executive, notice to her shall not be sent by telecopier.

(d) This Agreement shall in all respects be construed and interpreted in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York applicable to contracts executed and to be performed wholly within such State, without regard to principles of conflicts of laws.  The parties hereto agree to submit to the exclusive jurisdiction of the state and federal courts of New York, New York.

 

(e) If any term, covenant or condition of this Agreement or the application thereof to any party or circumstance shall, to any extent, be determined to be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law, and any court having jurisdiction may reduce the scope of any provision of this Agreement, including the geographic and temporal restrictions set forth in Section 7(a) of this Agreement, so that it complies with applicable law.

 

(f) This Agreement constitutes the entire agreement of the Company and Executive as to the subject matter hereof, superseding all prior or contemporaneous written or oral understandings or agreements, including any and all previous employment agreements or understandings, all of which are hereby terminated, with respect to the subject matter covered in this Agreement. This Agreement may not be modified or amended, nor may any right be waived, except by a writing which expressly refers to this Agreement, states that it is intended to be a modification, amendment or waiver and is signed by both parties in the case of a modification or amendment or by the party granting the waiver. No course of conduct or dealing between the parties and no custom or trade usage shall be relied upon to vary the terms of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

(g) Neither party hereto shall have the right to assign or transfer any of its or her rights hereunder except in connection with a merger of consolidation of the Company or a sale by the Company of all or substantially all of its business and assets.

 

(h) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, executors, administrators and permitted assigns.

 

(i) The headings in this Agreement are for convenience of reference only and shall not affect in any way the construction or interpretation of this Agreement.

 

(j) No delay or omission to exercise any right, power or remedy accruing to either party hereto shall impair any such right, power or remedy or shall be construed to be a waiver of or an acquiescence to any breach hereof. No waiver of any breach hereof shall be deemed to be a waiver of any other breach hereof theretofore or thereafter occurring. Any waiver of any provision hereof shall be effective only to the extent specifically set forth in an applicable writing. All remedies afforded to either party under this Agreement, by law or otherwise, shall be cumulative and not alternative and shall not preclude assertion by such party of any other rights or the seeking of any other rights or remedies against any other party.

  

  

  

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

 

	  	
SHENGKAI INNOVATIONS , INC.

	  
	  	  	  	  
	  	
By:

	
 /s/Chen Wang

	  
	  	  	
Chen Wang

	  
	  	  	
Chairman, and Chief Executive Officer

	  
	  	  	  	  
	  	  	  	  
	  	
Executive :

	  
	  	  	  	  
	  	
/s/Linbin Zhang

	  
	  	
Linbin Zhang

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