Document:

peregrine_10q-ex10117.htm

    Exhibit 10.117

     

    THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.

     

    WARRANT
TO PURCHASE STOCK

    
    

     

    
      	Company:	PEREGRINE
      PHARMACEUTICALS, INC., a Delaware
      corporation
	 	 
	Number
      of Shares:	1,184,433,
      plus all Additional Shares which Holder is entitled to purchase pursuant
      to Section 1.7
	 	 
	Class of
      Stock:  	Common
	 	 
	Warrant
      Price:	$0.2955
	 	 
	Issue
      Date:	December
      19, 2008
	 	 
	Expiration
      Date: 	The 5th
      anniversary after the Issue Date or the earlier expiration of this
      Warrant pursuant to Section 1.6.2(A)(ii)
	 	 
	Credit
      Facility:	This
      Warrant is issued in connection with the Credit Extensions referenced in
      the Loan and Security Agreement among Company, Avid BioServices, Inc.,
      BlueCrest Capital Finance, L.P., as Administrative Agent and as a lender,
      and the other lenders named therein, dated of even date herewith (the
      “Loan
      Agreement”)

    

     

    THIS WARRANT CERTIFIES THAT, for good
and valuable consideration, MIDCAP FUNDING I, LLC (“MidCap”, together
with any registered holder from time to time of this Warrant or any holder of
the shares issuable or issued upon exercise of this Warrant, “Holder”) is entitled
to purchase the number of fully paid and nonassessable shares of the class of
securities (the “Shares”) of the
Company at the Warrant Price, all as set forth above and as adjusted pursuant to
Article 2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant.

    

    ARTICLE
1. EXERCISE.

    

    1.1           Method of
Exercise.  Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company.  Unless Holder is exercising
the conversion right set forth in Article 1.2, Holder shall also deliver to the
Company a check, wire transfer (to an account designated by the Company), or
other form of payment acceptable to the Company for the aggregate Warrant Price
for the Shares being purchased.

    

    1.2           Conversion
Right.  In lieu of exercising this Warrant as specified in
Article 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant being exercised minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share.  The fair market value of
the Shares shall be determined pursuant to Article 1.3.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.3           Fair Market
Value.

    

    1.3.1                      If
the Company’s common stock is traded in a public market, the fair market value
of each Share shall be the closing price of a Share reported for the business
day immediately before Holder delivers its Notice of Exercise to the Company (or
in the instance where the Warrant is exercised immediately prior to the
effectiveness of the Company’s initial public offering, the “price to public”
per share price specified in the final prospectus relating to such
offering).  If the Company’s common stock is not traded in a public
market, the Board of Directors of the Company shall determine fair market value
in its reasonable good faith judgment (the “Company
Determination”).

     

    1.3.2                      If
the Holder disagrees with the Company Determination and by notice to the Company
given within twenty (20) days after receipt of notice of the Company
Determination (an "Appraisal Notice")
elects to dispute the Company Determination, such dispute shall be resolved as
set forth in Section 1.3.3 below.

     

     

    1.3.3                      For
a period of ten (10) days after the Appraisal Notice, the Company and the Holder
shall negotiate in good faith to resolve their differences as to the
determination of fair market value.  In the absence of a mutually
satisfactory resolution within such ten (10)-day period, the Company shall
within ten (10) days after the last day of such ten (10)-day period engage an
investment bank or other qualified appraisal firm reasonably acceptable to the
Holder (the "Appraiser") to make
an independent determination of fair market value (the "Appraiser
Determination").  The Appraiser Determination shall be made
within sixty (60) days of the engagement of such Appraiser, shall be evidenced
in a written report addressed to the Company and the Holder, and shall be final
and binding on the Company and the Holder.  The costs of the Appraiser
Determination shall be borne (i) solely by the Company if the difference between
the Appraiser Determination and the Company Determination is greater than ten
percent (10%), (ii) solely by the Holder if the difference between the Appraiser
Determination and the Company Determination is less than ten percent (10%) and
(iii) equally by the Company and the Holder if the difference between the
Appraiser Determination and the Company Determination is equal to ten percent
(10%).

     

    1.4           Delivery of Certificate and
New Warrant.  Promptly after Holder exercises or converts this
Warrant and, if applicable, the Company receives payment of the aggregate
Warrant Price, the Company shall deliver to Holder certificates for the Shares
acquired and, if this Warrant has not been fully exercised or converted and has
not expired, a new Warrant representing the Shares not so acquired.

    

    1.5           Replacement of
Warrants.  On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of
mutilation on surrender and cancellation of this Warrant, the Company shall
execute and deliver, in lieu of this Warrant, a new warrant of like
tenor.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.6           Treatment of Warrant Upon
Acquisition of Company.

    

    1.6.1                      "Acquisition".  For
the purpose of this Warrant, "Acquisition" means any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of the
Company's securities before the transaction beneficially own less than fifty
percent (50%) of the outstanding voting securities of the surviving entity after
the transaction.

    
       

      1.6.2             
        Treatment of Warrant at
Acquisition.

    

     

    (A)           Upon
the written request of the Company, Holder agrees that, in the event of an
Acquisition that is not an asset sale and in which the sole consideration is
cash, either (i) Holder shall exercise its conversion or purchase right under
this Warrant and such exercise will be deemed effective immediately prior to the
consummation of such Acquisition or (ii) if Holder elects not to exercise the
Warrant, this Warrant will expire upon the consummation of such Acquisition
(subject to the automatic conversion provisions of Section 5.8
below).  The Company shall provide Holder with written notice of its
request relating to the foregoing (together with such reasonable information as
Holder may request in connection with such contemplated Acquisition giving rise
to such notice), which is to be delivered to Holder not less than ten (10) days
prior to the closing of the proposed Acquisition.

     

    (B)           Upon
the written request of the Company, Holder agrees that, in the event of an
Acquisition that is an “arms length” sale of all or substantially all of the
Company’s assets (and only its assets) to a third party that is not an Affiliate
(as defined below) of the Company (a “True Asset Sale”), either (i) Holder shall
exercise its conversion or purchase right under this Warrant and such exercise
will be deemed effective immediately prior to the consummation of such
Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant
will continue until the Expiration Date if the Company continues as a going
concern following the closing of any such True Asset Sale.  The
Company shall provide Holder with written notice of its request relating to the
foregoing (together with such reasonable information as Holder may request in
connection with such contemplated Acquisition giving rise to such notice), which
is to be delivered to Holder not less than ten (10) days prior to the closing of
the proposed Acquisition.

     

    (C)           Upon
the closing of any Acquisition other than those particularly described in
subsections (A) and (B) above, the successor entity shall assume the obligations
of this Warrant, and this Warrant shall be exercisable for the same securities,
cash, and property as would be payable for the Shares issuable upon exercise of
the unexercised portion of this Warrant as if such Shares were outstanding on
the record date for the Acquisition and subsequent closing.  The
Warrant Price and/or number of Shares shall be adjusted
accordingly.

     

    As used
herein “Affiliate” shall mean
any person or entity that owns or controls directly or indirectly ten percent
(10%) or more of the stock of Company, any person or entity that controls or is
controlled by or is under common control with such persons or entities, and each
of such person’s or entity’s officers, directors, joint venturers or partners,
as applicable.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1.7           Additional
Shares.  Upon the funding of Tranche Two (as defined in the
Loan Agreement), the Company shall be deemed to have automatically granted to
Holder, in addition to the number of Shares which this Warrant can otherwise be
exercised for by Holder, the right to purchase that number of additional Shares,
rounded upward to the nearest whole number, equal to 350,000 divided by the
Warrant Price (such additional shares being called the “Additional
Shares”).

     

    ARTICLE
2. ADJUSTMENTS TO THE
SHARES.

    

    2.1           Stock Dividends, Splits,
Etc.  If, at any time following the Issue Date, the Company
declares or pays a dividend on the Shares payable in common stock, or other
securities, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend occurred.  If the Company subdivides the
Shares by reclassification or otherwise into a greater number of shares, the
number of shares purchasable hereunder shall be proportionately increased and
the Warrant Price shall be proportionately decreased.  If the
outstanding shares are combined or consolidated, by reclassification or
otherwise, into a lesser number of shares, the Warrant Price shall be
proportionately increased and the number of Shares shall be proportionately
decreased.

    

    2.2           Reclassification, Exchange,
Combinations or Substitution.  Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other
event.  The Company or its successor shall promptly issue to Holder an
amendment to this Warrant setting forth the number and kind of such new
securities or other property issuable upon exercise or conversion of this
Warrant as a result of such reclassification, exchange, substitution or other
event that results in a change of the number and/or class of securities issuable
upon exercise or conversion of this Warrant.  The amendment to this
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Article 2 including,
without limitation, adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise of the new Warrant.  The
provisions of this Article 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.

     

    2.3           No
Impairment.  The Company shall not, by amendment of its
Articles or Certificate (as applicable) of Incorporation or through a
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 to be observed or performed under
this Warrant by the Company, but shall at all times in good faith assist in
carrying out of all the provisions of this Article 2 and in taking all such
action as may be necessary or appropriate to protect Holder's rights under this
Article against impairment.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.4           Fractional
Shares.  No fractional Shares shall be issuable upon exercise
or conversion of this Warrant and the number of Shares to be issued shall be
rounded down to the nearest whole Share.  If a fractional share
interest arises upon any exercise or conversion of the Warrant, the Company
shall eliminate such fractional share interest by paying Holder the amount
computed by multiplying the fractional interest by the fair market value of a
full Share.

    

    2.5           Certificate as to
Adjustments.  Upon each adjustment of the Warrant Price, the
Company shall promptly notify Holder in writing, and, at the Company’s expense,
promptly compute such adjustment, and furnish Holder with a certificate of its
Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based.  The Company shall, upon written request,
furnish Holder a certificate setting forth the Warrant Price in effect upon the
date thereof and the series of adjustments leading to such Warrant
Price.

    

    ARTICLE
3. REPRESENTATIONS AND
COVENANTS OF THE COMPANY.

    

    3.1           Representations and
Warranties.  The Company represents and warrants to Holder as
follows:

    

    (a)           All
Shares which may be issued upon the exercise of the purchase right represented
by this Warrant, and all securities, if any, issuable upon conversion of the
Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, and free of any liens and encumbrances except for restrictions on
transfer provided for herein or under applicable federal and state securities
laws.

    

    (b)           The
Company’s capitalization table attached hereto as Schedule 1 is true
and complete as of the Issue Date.

    

    3.2           Notice of Certain
Events.  If the Company proposes at any time (a) to declare any
dividend or distribution upon any of its stock, whether in cash, property,
stock, or other securities and whether or not a regular cash dividend; (b) to
effect any reclassification or recapitalization of any of its stock; (c) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (d) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the Company's securities
for cash, then, in connection with each such event, the Company shall give
Holder: (1) at least ten (10) days prior written notice of the date on which a
record will be taken for such dividend, distribution, or subscription rights
(and specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (a) above; (2) in the case of the matters referred to in (b) and
(c) above at least ten (10) days prior written notice of the date when the same
will take place (and specifying the date on which the holders of common stock
will be entitled to exchange their common stock for securities or other property
deliverable upon the occurrence of such event); and (3) in the case of the
matter referred to in (d) above, the same notice as is given to the holders of
such registration rights.  Company will also provide information
requested by Holder reasonably necessary to enable Holder to comply with
Holder’s accounting or reporting requirements.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    3.3               Piggyback Registration
Rights.  If at any time the Company proposes to register for
sale its common stock (other than a registration on Form S-4 or Form S-8,
registrations relating solely to dividend investment plans, or any successor or
similar forms), the Company shall give written notice (the “Piggyback Notice”)
at least twenty (20) days prior to such proposed registration to the Holder of
the Company’s intention to do so, of the registration form that has been
selected by the Company and of the Holder’s rights under this Article
3.3.  Upon the written request of the Holder made within ten (10) days
after receipt of the Piggyback Notice (which request shall specify the number of
Shares the Holder wishes to include in such registration), the Company will use
its reasonable best efforts to include, and to cause the underwriter or
underwriters, if applicable, to include, in the proposed offering, on the same
terms and conditions as the securities of the Company included in such offering,
all shares of common stock that the Holder has validly requested be included
pursuant to such notice (each such registration pursuant to this Article 3.3, a
“Piggyback Registration”) and
the Company shall keep such registration statement in effect and maintain
compliance with each federal and state law or regulation for the period
necessary for such Holder to effect the proposed sale or other disposition (but
in no event for a period greater than ninety (90) days); provided that if at any
time after giving a Piggyback Notice and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities, the Company may,
at its election, give written notice of such determination to the Holder and,
thereupon, shall be relieved of its obligation to register any of the common
stock in connection with such abandoned registration, and in case of a
determination by the Company to delay registration of its equity securities, the
Company shall be permitted to delay the registration of the common stock for the
same period as the delay in registering such other equity
securities.

    

    3.4               No Shareholder
Rights.  Except as provided in this Warrant, Holder will not
have any rights as a shareholder of the Company until the exercise of this
Warrant.

    

    3.5               Certain
Information.  The Company agrees to provide Holder at any time
and from time to time with such information as Holder may reasonably request for
purposes of Holder’s compliance with regulatory, accounting and reporting
requirements applicable to Holder.

    

    ARTICLE
4. REPRESENTATIONS,
WARRANTIES OF HOLDER.  Holder represents and warrants to the
Company as follows:

    

    4.1               Purchase for Own
Account.  This Warrant and the securities to be acquired upon
exercise of this Warrant by Holder will be acquired for investment for Holder’s
account, not as a nominee or agent, and not with a view to the public resale or
distribution within the meaning of the Act.  Holder also represents
that Holder has not been formed for the specific purpose of acquiring this
Warrant or the Shares.

    

    4.2               Disclosure of
Information.  Holder has received or has had full access to all
the information it considers necessary or appropriate to make an informed
investment decision with respect to the acquisition of this Warrant and its
underlying securities.  Holder further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to Holder or to which Holder has
access.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    4.3              Investment
Experience.  Holder understands that the purchase of this
Warrant and its underlying securities involves substantial
risk.  Holder has experience as an investor in securities of companies
in the development stage and acknowledges that Holder can bear the economic risk
of such Holder’s investment in this Warrant and its underlying securities and
has such knowledge and experience in financial or business matters that Holder
is capable of evaluating the merits and risks of its investment in this Warrant
and its underlying securities and/or has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables Holder to be aware of
the character, business acumen and financial circumstances of such
persons.

     

    4.4            Accredited Investor
Status.  Holder is an “accredited investor” within the meaning
of Regulation D promulgated under the Act.

    

    4.5           The
Act.  Holder understands that this Warrant and the Shares
issuable upon exercise or conversion hereof have not been registered under the
Act in reliance upon a specific exemption therefrom, which exemption depends
upon, among other things, the bona fide nature of Holder’s investment intent as
expressed herein.  Holder understands that this Warrant and the Shares
issued upon any exercise or conversion hereof must be held indefinitely unless
subsequently registered under the Act and qualified under applicable state
securities laws, or unless exemption from such registration and qualification
are otherwise available.

    

    ARTICLE
5. MISCELLANEOUS.

    

    5.1           Term.  This
Warrant is exercisable in whole or in part at any time and from time to time on
or before the Expiration Date.

    

    5.2           Legends.  This
Warrant and the Shares (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:

    

    THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.

    

    5.3           Compliance with Securities
Laws on Transfer.  This Warrant and the Shares issuable upon
exercise of this Warrant (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) may not be transferred or assigned in
whole or in part without compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation, the
delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company, as reasonably requested by the
Company).  The Company shall not require Holder to provide an opinion
of counsel if the transfer is to an affiliate of
Holder.  Additionally, the Company shall also not require an opinion
of counsel if there is no material question as to the availability of current
information as referenced in Rule 144(c), Holder represents that it has complied
with Rule 144(d) and, if applicable, Rule 144(e) in reasonable detail, the
selling broker represents that it has complied with Rule 144(f), and the Company
is provided with a copy of Holder's notice of proposed sale filed in accordance
with 144(h).

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    5.4           Transfer
Procedure.  Subject to the provisions of Article 5.3 and unless
the resale of the Shares issuable upon exercise of this Warrant are then
registered on an effective registration statement, upon providing the Company
with written notice, any Holder may transfer all or part of this Warrant or the
Shares issuable upon exercise of this Warrant (or the Shares issuable directly
or indirectly, upon conversion of the Shares, if any) to any transferee,
provided, however, in connection with any such transfer, any Holder will give
the Company notice of the portion of the Warrant being transferred with the
name, address and taxpayer identification number of the transferee and Holder
will surrender this Warrant to the Company for reissuance to the transferee(s)
(and Holder if applicable).  The Company may refuse to transfer this
Warrant or the Shares to any person who directly competes with the Company,
unless, in either case, the stock of the Company is publicly
traded.

    

    5.5           Notices.  All
notices and other communications from the Company to Holder, or vice versa,
shall be deemed delivered and effective when given personally or mailed by
first-class registered or certified mail, postage prepaid, at such address as
may have been furnished to the Company or Holder, as the case may (or on the
first business day after transmission by facsimile) be, in writing by the
Company or such Holder from time to time.  Effective upon receipt of
the fully executed Warrant and the initial transfer described in Article 5.4
above, all notices to Holder shall be addressed as follows until the Company
receives notice of a change of address in connection with a transfer or
otherwise:

    

    MidCap
Funding I, LLC

    7735 Old
Georgetown Road, Suite 400

    Bethesda,
Maryland 20814

    Attn:  Will
Gould

    Facsimile:
(301) 941-1450

    

    Notice to
the Company shall be addressed as follows until Holder receives notice of a
change in address:

    

    Peregrine Pharmaceuticals,
Inc.

    Attn: Paul Lytle

    14282 Franklin Avenue

    Tustin, California 92780

    Facsimile:
(714) 838-5817

    

    5.6           Waiver.  This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    5.7           Attorneys’
Fees.  In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys’ fees.

    

    5.8           Automatic Conversion upon
Expiration.  In the event that, upon the Expiration Date, the
fair market value of one Share (or other security issuable upon the exercise
hereof) as determined in accordance with Section 1.3 above is greater than the
Warrant Price in effect on such date, then this Warrant shall automatically be
deemed on and as of such date to be converted pursuant to Section 1.2 above as
to all Shares (or such other securities) for which it shall not previously have
been exercised or converted, and the Company shall promptly deliver a
certificate representing the Shares (or such other securities) issued upon such
conversion to Holder.

    

    5.9           Counterparts.  This
Warrant may be executed in counterparts, all of which together shall constitute
one and the same agreement.

    

    5.10         Governing
Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to its
principles regarding conflicts of law.

    

    [Signature
page follows.]

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
              “COMPANY”

               

            	 
	
              PEREGRINE
      PHARMACEUTICALS, INC.

               

               

            	 
	By:/s/ Steven King  	 
	
              Name: Steven
      King

              Title:
      President and CEO

            	 
	 	 
	
              “HOLDER”

               

            	 
	
              MIDCAP
      FUNDING I, LLC

               

               

            	 
	By:/s/ Joshua Groman  	 
	
              Name: Joshua
      Groman

              Title:
      Managing Director

            	 

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    SCHEDULE
1

    

    

    CAPITALIZATION
TABLE

    

    

    
      	
               

              Authorized
      Capital:

                Common
      Stock, 325,000,000

                Preferred Stock
      5,000,000(1)

            	 	 	 
	
               

              Shares
      of Common Stock Issued and Outstanding as of December 5,
    2008

            	 	 	226,210,617	 
	
              Common
      shares reserved for issuance upon exercise of outstanding options
      or  reserved for future option grants under our stock incentive
      plans

            	 	 	  15,534,845	 
	
              Common
      shares reserved for issuance upon exercise of outstanding
      warrants

            	 	 	-	 
	
              Shares
      reserved for issuance under two effective shelf registration
      statements

            	 	 	5,030,634	 
	
              Total
      Shares of Common Stock Issued and Reserved for Issuance

            	 	 	246,776,096	(2)

    

    

    (1)  There
are no shares of Preferred Stock issued and outstanding as of December 5,
2008.

    (2)
Excludes shares of Common Stock available for issuance under Registration
Statement No. 333-139975, under which Peregrine may issue, from time to time, in
one or more offerings, shares of Common Stock for remaining gross proceeds of up
to $7,500,000.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    APPENDIX
1

    

    

    NOTICE OF
EXERCISE

    

    

    1.           Holder
elects to purchase ___________ shares of the Common/Series ______ Preferred
[strike one] Stock of __________________ pursuant to the terms of the attached
Warrant, and tenders payment of the purchase price of the shares in
full.

     

    [or]

     

    1.           Holder
elects to convert the attached Warrant into Shares/cash [strike one] in the
manner specified in the Warrant.  This conversion is exercised for
_____________________ of the Shares covered by the Warrant.

     

    [Strike paragraph that does not
apply.]

     

    2.           Please
issue a certificate or certificates representing the shares in the name
specified below:

    

    ___________________________________________

    Holders Name

    

    

    ___________________________________________

    

    ___________________________________________

    (Address)

    

    3.           By
its execution below and for the benefit of the Company, Holder hereby restates
each of the representations and warranties in Article 4 of the Warrant as the
date hereof.

     

    
      	 	
              HOLDER:

               

            
	 	 
	 	By:
	 	 
	 	Name:
	 	 
	 	Title:
	 	 
	 	(Date):

    

     

    12Exhibit 10.16

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is effective as of March 1,
2009 by and between Orchids Paper Products Company (“Company”) and Keith R.
Schroeder (“Executive”).

 

WHEREAS, Executive serves as the Company’s Chief Financial Officer
pursuant to an employment agreement, dated as of March 1, 2004 (the “2004
Employment Agreement”);

 

WHEREAS, the 2004 Employment Agreement expires on March 1, 2009;
and

 

WHEREAS, Executive desires to continue to serve as the Chief Financial
Officer of the Company and in exchange for the protection and other
consideration set forth in this Agreement, is willing to give the Company,
under certain circumstances, his covenant not to compete, and the Company
desires to so employ Executive.

 

NOW, THEREFORE, in consideration of the promises and the mutual
agreements contained herein, the Company and Executive hereby agree as follows:

 

ARTICLE I

Definitions

 

1.1                               Definitions.  As used herein, the following terms shall
have the following meanings.

 

(a)                                “Board”
means the board of directors of the Company.

 

(b)                               “Cause”
means (i) engaging by Executive in willful misconduct which is materially
injurious to Company; (ii) conviction of Executive by a court of competent
jurisdiction of, or entry of a plea of nolo  contendere with
respect to a felony; (iii) engaging by Executive in fraud or dishonesty in
connection with the business of Company; (iv) Executive’s abuse of or
dependency on alcohol or drugs (illicit or otherwise); (v) Executive’s
material breach of this Agreement; or (vi) failure to perform the lawful
directives of the Chief Executive Officer or the Board, including, without
limitation, any failure to regularly report to the office.

 

(c)                                “Change
of Control” means (i) a change in the ownership of the Company, which
occurs on the date that any one person or more than one person acting as a
group, acquires ownership of stock of the Company that, together with stock
held by such person or group constitutes more than 50% of the total fair market
value or total voting power of the stock of the Company; or (ii) a change
in the ownership of all or substantially all of the Company’s assets, which
occurs on the date that any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more than 80% of
the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions.  For this purpose, gross fair market value
means the value of the assets of the Company or the value of the assets being
disposed of determined without regard to any liabilities associated with such
assets.

 

 

(d)                               “Code”
means the Internal Revenue Code of 1986, as amended.

 

(e)                                “Confidential
Information” shall mean all technical and business information of the Company,
or which is learned or acquired by the Company from others with whom the
Company has a business relationship in which, and as a result of which, similar
information is revealed to the Company, whether patentable or not, which is of
a confidential, trade secret and/or proprietary character and which is either
developed by Executive (alone or with others) or to which Executive shall have
had access during his employment. 
Confidential Information shall include (among other things) all
confidential data, designs, plans, notes, memoranda, work sheets, formulas,
processes, and customer and supplier lists.

 

(f)                                  “Good
Reason” means (i) a requirement that the Executive permanently relocate to
a place of business more than 50 miles from the location at which he
principally performs services for the Company; (ii) a material diminution
in the Executive’s duties; (iii) a requirement that Executive regularly
report directly to a person other than the Board; or (iv) a material
breach of this Agreement by the Company.

 

ARTICLE II

Employment

 

2.1                               Employment.  Company agrees to employ Executive and
Executive hereby accepts such employment with the Company, upon the terms and
conditions set forth in this Agreement, for the period beginning on March 1,
2009  (“Start Date”) and ending as provided
in Section 2.4 of this Agreement (“Employment Period”).

 

2.2                               Position
and Duties.

 

(a)                                Commencing
on the Start Date and continuing during the Employment Period, Executive shall
serve as Chief Financial Officer of the Company.  As Chief Financial Officer, Executive,
subject to the control of the Board, shall perform such duties as are customary
for such position and such duties as may be assigned to him by Chief Executive
Officer.

 

(b)                               Executive
shall devote his best efforts and his full business time and attention to the
business and affairs of the Company.  The
Executive shall perform his duties and responsibilities to the best of his
abilities in a diligent, trustworthy, businesslike and efficient manner.  In the performance of his duties hereunder,
Executive shall at all times report and be subject to the lawful direction of
the Chief Executive Officer and perform his duties hereunder subject to and in
accordance with the resolutions or any other determinations of the Board and
the by-laws of the Company and applicable law. 
During the Employment Period, Executive shall not become an employee of
any person or entity other than the Company.

 

2.3                               Base
Salary, Bonus and Benefits.

 

(a)                                Subject
to the terms of this Agreement, in consideration of Executive’s agreements
contained herein, for the period beginning on the Start Date, Executive’s base
salary shall be $190,025 per annum (“Base Salary”), which shall be payable in
equal 

 

2

 

installments during the year in accordance
with the Company’s normal payroll schedule and shall be subject to deductions
for customary withholdings, including, without limitation, federal and state
withholding taxes and social security taxes. 
The Board shall evaluate the Base Salary annually and make such changes
to the Base Salary as it deems are appropriate, but in no event shall the Base
Salary be less than $190,025.

 

(b)                               Executive
shall be eligible for the opportunity to earn annual performance bonuses in an
amount up to 100% of Base Salary (with a target bonus equal to 60% of Base
Salary), based on the achievement of such targets as shall be established, in
accordance with the Company’s annual bonus program.  Executive must remain employed by the Company
on the payment date of any such bonus in order to receive any such bonus.  Subject to the terms of the actual bonus
plan, any bonus thereunder is payable in cash on or after January 1 and no
later than April 15 of the calendar year following the applicable fiscal
year with respect to such bonus.  In
addition, during the Employment Period, Executive shall be entitled to
participate in all retirement, disability, pension, savings, life, health,
medical, dental, insurance and other fringe benefits or plans of the Company
generally available to executive employees of the Company.

 

(c)                                During
the Employment Period, the Company upon the submission of proper substantiation
by the Executive, shall reimburse the Executive for all reasonable business
expenses actually and necessarily paid or incurred by him in the course of and
pursuant to the business of the Company, in accordance with Company policies
relating to the reimbursement of business expenses.

 

(d)                               Executive
shall be entitled to four weeks of vacation during the first year of employment
and five weeks of vacation during each year of employment thereafter,
consistent with Company policy and to be taken at times which do not
unreasonably interfere with the performance of Executive’s duties
hereunder.  Unused vacation time shall be
treated in accordance with the Company’s policies in effect from time to time.

 

2.4                               Term.

 

(a)                                General
Term.  This Agreement shall commence
on the Start Date and terminate on December 31, 2011 (“Initial Term”)
unless extended or sooner terminated as provided herein.  The Initial Term shall automatically be
extended for successive additional one-year periods (each, a “Renewal Period”),
unless either party to this Agreement provides the other party with notice of
termination of this Agreement at least 60 days prior to the expiration of the
Initial Term or any Renewal Period thereafter (“Notice Period”).

 

(b)                               Termination
for Cause or Voluntary Termination. 
If the Executive is terminated by the Company for Cause or if the
Executive terminates his employment for any reason other than as provided in Section 2.4(d),
the Executive shall be entitled only to his Base Salary through the date of
termination, but shall not be entitled to any further Base Salary or any
applicable bonus, benefits or other compensation for that 

 

3

 

year or any future year, except as may be provided in an applicable
benefit plan or program, or to any severance compensation of any kind, nature
or amount.

 

(c)                                  Termination
Without Cause.

 

(i)                                   Before
or More Than Twelve Months Following Change of Control.  If the Executive is terminated by the Company
without Cause before a Change in Control or more than twelve months following a
Change of Control (including any termination which is a direct result of the
Company’s election to terminate the Executive’s employment without Cause at the
end of the Initial Term or any Renewal Period), the Executive shall be entitled
to all previously earned and accrued but unpaid Base Salary up to the date of
such termination and severance pay in an amount equal to one year of Base
Salary.  Such severance payments will be
made in equal installments over a one-year period, payable on the dates on
which the Executive’s Base Salary would have otherwise been paid if Executive’s
employment had continued.  All payments
shall be subject to deductions for customary withholdings, including, without
limitation, federal and state withholding taxes and social security taxes.

 

(ii)                                Within
Twelve Months After Change of Control. 
Notwithstanding the foregoing, if the Executive is terminated by the
Company without Cause within twelve months after a Change of Control
(including, without limitation, any termination which is a direct result of the
Company’s election to terminate the Executive’s employment without Cause at the
end of the Initial Term or any Renewal Period), the Executive shall be entitled
to all previously earned and accrued but unpaid Base Salary up to the date of
such termination and severance pay in an amount equal to two (2) years of
Base Salary.  Such severance payment will
be made in a lump sum on the date that is 90 days after the date of termination
of employment.  All payments shall be
subject to deductions for customary withholdings, including, without
limitation, federal and state withholding taxes and social security taxes.

 

(d)                                 Termination by
Executive.

 

(i)                                   Good
Reason Within Twelve Months After Change of Control.  If Executive terminates his employment for
Good Reason within twelve (12) months after a Change of Control,  Executive shall notify Company in writing if he believes
the termination is for Good Reason. 
Executive shall set forth in reasonable detail why Executive believes
Good Reason exists.  If such termination
is for Good Reason, Executive shall be entitled to all previously earned and
accrued but unpaid Base Salary up to the date of such termination and severance
pay in an amount equal to two (2) years of Base Salary.  Such severance payment will be made in a lump
sum on the date that is 90 days after the date of termination of
employment.  All payments shall be
subject to deductions for customary withholdings, including, without
limitation, federal and state withholding taxes and social security taxes.

 

4

 

(ii)                                Good
Reason Before or More Than Twelve Months After Change of Control.  In the event that Executive terminates his
employment for Good Reason at any time before a Change of Control or more than
twelve months following a Change of Control, Executive shall be entitled to all
previously earned and accrued but unpaid Base Salary up to the date of such
termination and severance pay in an amount equal to one year of Base
Salary.  Such severance payments will be
made in equal installments over a one-year period, payable on the dates on
which the Executive’s Base Salary would have otherwise been paid if Executive’s
employment had continued.  All payments
shall be subject to deductions for customary withholdings, including, without
limitation, federal and state withholding taxes and social security taxes.

 

(iii)                             Other.  In the event that Executive terminates his
employment for any reason at any time other than described in subsections (d)(i) and
(ii) above, Executive shall not be entitled to severance pay and shall be
entitled only to those amounts provided in Section 2.4(b) on a
voluntary termination of employment by Executive.

 

(e)                                Limitation
on Certain Additional Payments. 
Anything in this Agreement to the contrary notwithstanding, in the event
it is determined that any payment or distribution by the Company to or for the
benefit of the Executive (“Payments”) would be subject to the excise tax
imposed by Section 4999 of the Code, then the Payments under this
Agreement shall be decreased to the greatest amount that could be paid to the
Executive such that receipt of Payments will not give rise to any such excise
tax.  In the event it is determined that
Payments would be subject to the excise tax imposed under Section 4999 of
the Code, such Payments shall be first reduced by those Payments under this
Agreement that are not subject to Section 409A of the Code, and, if
necessary, then out of the Payments that are subject to Section 409A of
the Code, starting with the Payments that are to be paid on the latest future
date, so that there will be no Payments subject to the excise tax imposed by Section 4999
of the Code.

 

(f)                                  Severance
Forfeiture.  Executive agrees that
the Executive shall be entitled to the severance pay as set forth in this Section 2.4
only if the Executive executes a release of all claims against the Company in
such form as the Company may require and the Executive has not materially
breached as of the date of termination any provisions of this Agreement and
does not materially breach such provisions at any time during the period for
which such payments are to be made.  The
Company’s obligation to make such payments will terminate upon the occurrence
of any such material breach during the severance period.

 

(g)                               No
Additional Severance.  Executive
hereby agrees that no severance compensation of any kind, nature or amount
shall be payable to Executive, except as expressly set forth in this Section 2.4,
and Executive hereby irrevocably waives any claim for any other severance
compensation.

 

(h)                               Death
or Disability.  The Company’s
obligation under this Agreement terminates on the last day of the month in
which the Executive’s death occurs or on the date as of 

 

5

 

which Executive first becomes entitled to receive and actually receives
disability benefits under the Company’s long-term disability plan.  The Company shall pay to Executive or the
Executive’s estate all previously earned and accrued but unpaid Base Salary up
to such date.  Thereafter, the Executive
or his estate shall not be entitled to any further Base Salary, bonus, benefits
or other compensation for that year or any subsequent year, except as may be
provided in an applicable benefit plan or program.

 

2.5                               Confidential
Information.

 

(a)                                Executive
shall use his best efforts and diligence both during and after his employment
with the Company, regardless of how, when or why Executive’s employment ends,
to protect the confidential, trade secret and/or proprietary character of all
Confidential Information.  Executive
shall not, directly or indirectly, use (for himself or another) or disclose any
Confidential Information, for so long as it shall remain proprietary or
protectible as confidential or trade secret information, except as may be
necessary for the performance of Executive’s duties for the Company.

 

(b)                               Executive
shall promptly deliver to the Company, at the termination of the Employment
Period or at any other time at the Company’s request, without retaining any
copies, all documents, information and other material in Executive’s possession
or control containing, reflecting and/or relating, directly or indirectly, to
any Confidential Information.

 

(c)                                Executive’s
obligations under this Section 2.5 shall also extend to the confidential,
trade secret and proprietary information learned or acquired by Executive
during his employment from others with whom the Company has a business
relationship.

 

(d)                               Executive’s
breach of Section 2.5 of this Agreement shall relieve Company of its
obligations (if any) to pay any further severance benefits under this Agreement.

 

2.6                               Competitive
Activity.

 

(a)                                Executive
covenants and agrees that during the period of his employment hereunder and for
a period ending on the earlier of (i) the second (2nd) anniversary of the
date of termination of his employment with the Company, including without
limitation termination by the Company for Cause or without Cause, and (ii) to
the extent severance payments become payable hereunder and are made in
installments, the last day on which Executive is entitled to receive severance
payments hereunder, Executive shall not, in the United States of America, or in
any other country of the world in which the Company or any of its subsidiaries
has done business at any time during the last two (2) years prior to
termination of Executive’s employment with the Company, engage, directly or
indirectly, whether as principal or as agent, officer, director, employee,
consultant, shareholder, or otherwise, alone or in association with any other
person, corporation or other entity, in any Competing Business.  For purposes of this Agreement, the term “Competing
Business” shall mean any person, corporation or other entity which sells or
attempts to sell any tissue products or 

 

6

 

services or any other products or services which are the same as or
substantially similar to (as commonly understood in the relevant industry) the
products and services (a) sold by the Company or any of its subsidiaries
at any time and from time to time during the last two (2) years prior to
the termination of Executive’s employment hereunder or (b) being developed
by the Company or any of its subsidiaries during the period of Executive’s
employment with the Company.

 

(b)                               Executive
shall continue to be obligated under Section 2.5 of this Agreement not to
use or to disclose Confidential Information so long as it shall remain
proprietary or protectible as confidential or trade secret information.

 

(c)                                During
the applicable non-compete period, following termination of Executive’s
employment with the Company for any reason, Executive agrees to advise the
Company of his new employer, work location and job responsibilities within ten (10) days
after accepting new employment.

 

(d)                               Executive
understands that the intention of Sections 2.5 and 2.6 of this Agreement is not
to prevent the Executive from earning a livelihood and Executive agrees nothing
in this Agreement would prevent Executive from earning a livelihood utilizing
his general skills in any of the companies which are not directly or indirectly
in competition with the Company.

 

(e)                                Executive
agrees that during his employment with the Company, he shall not, directly or
indirectly, solicit the trade of, or trade with, any customer, prospective
customer or supplier of the Company or any of its subsidiaries for any business
propose other than for the benefit of the Company or such subsidiaries.  Executive further agrees that for two (2) years
following termination of his employment with the Company, including without
limitation termination by the Company for Cause or without Cause, Executive
shall not, directly or indirectly, solicit for any Competing Business the trade
of, or trade with, any customers or suppliers, or prospective customers or
suppliers, of the Company or any of its subsidiaries.

 

(f)                                  Executive
agrees that, during his employment with the Company and for two (2) years
following termination of his employment with the Company, including without
limitation termination by the Company for Cause or without Cause, Executive
shall not, directly or indirectly, solicit, hire or induce, or attempt to
solicit, hire or induce, any employee of the Company or any of its subsidiaries
to leave the Company or any of its subsidiaries for any reason whatsoever or
hire any employee of the Company or any of its subsidiaries.

 

(g)                               Executive’s
breach of Section 2.6 of this Agreement shall relieve Company of its
obligations (if any) to pay any further severance benefits under this
Agreement.

 

ARTICLE
III

Miscellaneous

 

3.1                               Executive’s
Representations.  Executive
hereby represents and warrants to the Company that (i) Executive’s
execution, delivery and performance of this Agreement do not and shall not 

 

7

 

conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which Executive is a party
or by which he is bound, and (ii) upon the execution and delivery of this
Agreement by the Company, this Agreement shall be the valid and binding
obligation of Executive, enforceable in accordance with its terms.  Executive hereby acknowledges and represents
that he fully understands the terms and conditions contained herein.

 

3.2                               Survival.  Sections 2.5 and 2.6 and Sections 3.2 through
3.15 shall survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.

 

3.3                               Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered
personally, mailed by certified or registered mail, return receipt requested
and postage prepaid, or sent via a nationally recognized overnight courier, or
sent via facsimile to the recipient.  Such
notices, demands and other communications will be sent to the address indicated
below:

 

To the
Company:

 

Orchids Paper
Products Company

4826 Hunt Street

Pryor, Oklahoma 74361

Attn: Chief Executive Officer

 

with a copy
to:

 

Bryan Cave LLP

161 North Clark Street, Suite 4300

Chicago, Illinois 60601

Attn:  Don Figliulo

 

To Executive:

 

Keith R. Schroeder

8656 East 104th Street

Tulsa, Oklahoma 74133

 

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.

 

3.4                               Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law.  If any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, (a) the parties agree
that such provision(s) will be enforced to the maximum extent permissible
under the applicable law, and (b) any invalidity, illegality or unenforceability
of a particular provision will not affect any other provision of this
Agreement.

 

3.5                               Successors
and Assigns.  Except as otherwise
provided herein, all covenants and agreements contained in this Agreement shall
bind and inure to the benefit of and be enforceable by 

 

8

 

the Company, and their respective successors and assigns.  This Agreement is personal to Executive and
except as otherwise specifically provided herein, this Agreement, including the
obligations and benefits hereunder, may not be assigned to any party by
Executive.

 

3.6                               Descriptive
Headings.  The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

 

3.7                               Counterparts.  This Agreement may be executed in one or more
identical counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

 

3.8                               Waiver.  Neither any course of dealing nor any failure
or neglect of either party hereto in any instance to exercise any right, power
or privilege hereunder or under law shall constitute a waiver of such right,
power or privilege or of any other right, power or privilege or of the same
right, power or privilege in any other instance.  All waivers by either party hereto must be
contained in a written instrument signed by the party to be charged therewith,
and, in the case of Company, by its duly authorized officer.

 

3.9                               Entire
Agreement.  This instrument
constitutes the entire agreement of the parties in this matter and shall
supersede any other agreement between the parties, oral or written, concerning
the same subject matter including, but not limited to, any prior employment and
severance agreements.  Without limiting
the foregoing, the 2004 Employment Agreement is specifically superseded hereby
and of no force or effect.

 

3.10                        Amendment.  This Agreement may be amended only by a
writing which makes express reference to this Agreement as the subject of such
amendment and which is signed by Executive and by a duly authorized officer of
the Company.

 

3.11                        Governing
Law.  This Agreement shall be
signed by the parties in Tulsa, Oklahoma. 
All questions concerning the construction, validity and interpretation
of this Agreement will be governed by and construed in accordance with the
domestic law of the State of Oklahoma, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Oklahoma
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Oklahoma. 
Any litigation relating to or arising out of this Agreement shall be
filed and litigated exclusively in the state or federal courts of Oklahoma.

 

3.12                        Remedies.  Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including reasonable attorneys’ fees) caused by any breach
of any provision of this Agreement and to exercise all other rights existing in
its favor.  The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement, including, without limitation, Sections 2.5 and
2.6 hereof, 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 Agreement.

 

3.13                        Future
Employment.  Executive shall
disclose the existence of this Agreement to any new employer or potential new
employer which offers products or services that compete with the Company’s
business.  Executive consents to the
Company informing any subsequent employer of 

 

9

 

Executive, or any entity which the Company in good faith believes is,
or is likely to be, considering employing Executive, of the existence and terms
of this Agreement.

 

3.14                        Specified
Employee Determination. 
Notwithstanding anything herein to the contrary, in the event that the
Executive is determined to be a specified employee in accordance with Section 409A
of the Code and the regulations and other guidance issued thereunder for
purposes of any payment on termination of employment hereunder, payment(s) shall
be made or begin, as applicable on the first payroll date which is more than
six months following the date of separation from service, to the extent
required to avoid the adverse tax consequences under Section 409A of the
Code.

 

3.15                        Arbitration.  The parties agree
that all disputes arising under or in connection with this Agreement, and any
and all claims by the Executive relating to his employment with the Company,
including any claims of discrimination arising under Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment Act, the
Americans with Disabilities Act or any similar federal, state or local law will
be submitted to arbitration in Tulsa, Oklahoma to the American Arbitration
Association (“AAA”) under its rules then prevailing for the type of claim
in issue.  The parties each hereby
specifically submit to the personal jurisdiction of any federal or state court
located in the State of Oklahoma for any such action and further agree that
service of process may be made within or without the State of Oklahoma by
giving notice in the manner provided herein.

 

10

 

IN WITNESS
WHEREOF, the parties hereto have executed this Employment Agreement this 27 day
of February, 2009 and effective as of the date first written above.

 

THIS
AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED
BY COMPANY.

 

	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Robert A. Snyder

  
	
   

  	
  Name:  Robert Snyder

  
	
   

  	
  Title:  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
    /s/ Keith R. Schroeder

  
	
   

  	
  Name:  Keith R. Schroeder

  

 

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]