Document:

Exhibit 10.3

  

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(this “Agreement”) is entered into by and between Frederick Sandford (the “Executive”), and
Sonoma Pharmaceuticals, Inc., a Delaware corporation (the “Corporation”), as of December 11, 2018 (the “Effective
Date”).

 

1. Employment and Duties.

 

1.1 Position.
On the terms and subject to the conditions set forth herein, the Corporation agrees to employ Executive as its President and Chief
Executive Officer and interim Chief Financial Officer until such time as the employment relationship ends or is terminated by either
Party pursuant to Section 2. Executive does hereby accept and agree to such employment, on the terms and conditions expressly
set forth in this Agreement. Executive shall, if requested, also serve as a member of the Board of Directors of the Corporation
(the “Board”) and may be required to serve as an officer or director of any affiliate of the Corporation for
no additional compensation.

 

1.2 Duties.
During the Term of Employment (as defined in Section 2), Executive shall serve the Corporation as its President and Chief
Executive Officer and interim Chief Financial Officer. Executive shall, without limitation and without limiting Executive’s
other duties to the Corporation, and without limiting the authority of the Corporation’s Board of Directors, be responsible
for the general supervision, direction and control of the business and affairs of the Corporation and have such other duties and
responsibilities as the Board shall designate that are consistent with Executive’s position as President and Chief Executive
Officer and interim Chief Financial Officer of the Corporation. Executive shall perform all of such duties and responsibilities
in accordance with the legal directives of the Board and in accordance with the practices and policies of the Corporation as in
effect from time to time throughout the Term of Employment (including, without limitation, the Corporation’s insider trading
and ethics policies, as they may change from time to time). While employed as President and Chief Executive Officer and interim
Chief Financial Officer of the Corporation, Executive shall report exclusively to the Board. Throughout the Term of Employment,
Executive shall not serve on the boards of directors or advisory boards of any other entity, except for any wholly or majority
owned subsidiaries of the Corporation, unless such service is expressly approved by the Board.

 

1.3 No Other Employment;
Minimum Time Commitment. Throughout the Term of Employment, Executive shall both (i) devote substantially all of Executive’s
business time, energy and skill to the performance of the Executive’s duties for the Corporation, and (ii) hold no other
job. Executive agrees that any investment or direct involvement in, or any appointment to or continuing service on the board of
directors or similar body of, any corporation or other entity, other than wholly or majority owned subsidiaries of the Corporation,
must be first approved in writing by the Corporation. The foregoing provisions of this Section 1.3 shall not prevent Executive
from investing in non-competitive, publicly-traded securities to the extent permitted by Section 6(b).

 

1.4 No Breach of
Contract. Executive hereby represents to the Corporation that: (i) the execution and delivery of this Agreement by the Executive
and the Corporation and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach
of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound; (ii)
the Executive has no information (including, without limitation, confidential information and trade secrets) of any other person
or entity which the Executive is not legally and contractually free to disclose to the Corporation; and (iii) the Executive is
not bound by any confidentiality, trade secret or similar agreement (other than this Agreement) with any other person or entity.

 

1.5 Place of Performance.
The principal place of Executive’s employment shall be the Corporation’s principal executive offices, currently located
in Petaluma, California, though such principal place of employment of the Executive may be moved from time to time upon mutual
agreement by the Executive and the Corporation. The Executive agrees that the Executive will be regularly present at the Corporation’s
principal executive offices, or such other location as the parties may designate, and that the Executive may be required to travel
from time to time in the course of performing the Executive’s duties for the Corporation. The Corporation acknowledges that
Executive’s principal place of residence is and will remain during the Term of Employment, Boston, MA.

 

2. At-Will Employment, Term of Employment.
The “Term of Employment” shall commence on the Effective Date, and shall continue in full force and effect until
the earlier of completion of nine months from the Effective Date or the Termination Date pursuant to Section 5.4, and may
be extended by another three months by mutual agreement of both Parties. The Parties agree that Executive’s employment with
the Company will be “at-will” employment and may be terminated at any time with or without cause or notice. This Agreement
shall govern the terms of Executive’s employment hereunder on and after the Effective Date.

 

 

 

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3. Compensation.

 

3.1 Base Salary.
As of the Effective Date and during the Term of Employment, the Corporation shall pay to the Executive a base salary at the rate
of $350,000 per year, subject to increase (but not decrease) by the Board (the “Base Salary”). The Executive’s
Base Salary shall be paid in accordance with the Corporation’s regular payroll practices in effect from time to time, but
no less frequently than monthly.

 

3.2 One-Time Bonus. Executive shall
be eligible for a one-time lump-sum bonus of no more than $210,000 payable in accordance with the parameters determined by the
Corporation’s Board of Directors in a separate bonus plan. The Board shall act in good faith with respect to its considerations
and determinations required by this Section 3.2.

 

3.3 Equity Grant.
Executive shall receive an inducement grant of options to purchase up to 450,000 of the Company’s common stock which will
be as soon as possible after the Effective Date of this Agreement. Such grant will be, subject to a six-months vesting period and
the exercise price will be the closing price of the Company’s common stock on the day of the grant.

 

3.4 Indemnification.
(a) In the event that the Executive is made a party or threatened to be made a party to any action, suit, or proceeding, whether
civil, criminal, administrative or investigative (a “Proceeding”), other than any Proceeding initiated by the
Executive or the Corporation related to any contest or dispute between the Executive and the Corporation or any of its affiliates
with respect to this Agreement or the Executive’s employment hereunder, by reason of the fact that the Executive is or was
a director or officer of the Corporation, or any affiliate of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, member, employee or agent of another corporation or a partnership, joint venture, trust or other enterprise,
the Executive shall be indemnified and held harmless by the Corporation to the maximum extent permitted under applicable law and
the Corporation’s articles and bylaws, as may be amended from time to time, from and against any liabilities, costs, claims
and expenses, including all costs and expenses incurred in defense of any Proceeding (including attorneys’ fees).

 

(b) During the Term
of Employment and for a period of six (6) years thereafter, the Corporation or any successor to the Corporation shall purchase
and maintain, at its own expense, directors’ and officers’ liability insurance providing coverage to the Executive
on terms that are no less favorable than the coverage provided to other directors and similarly situated executives of the Corporation.

 

3.5 Clawback Provisions.
Any incentive-based compensation, or any other compensation, paid to the Executive pursuant to this Agreement or any other agreement
or arrangement with the Corporation which is subject to recovery under any law, government regulation or stock exchange listing
requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation
or stock exchange listing requirement (or any policy adopted by the Corporation pursuant to any such law, government regulation
or stock exchange listing requirement). The Corporation will make any determination for clawback or recovery in accordance with
any applicable law or regulation.

 

4. Benefits.

 

4.1 Health and Welfare.
During the Term of Employment, the Executive shall be entitled to participate in all employee pension and welfare benefit plans
and programs made available by the Corporation to the Corporation’s senior-level employees generally, as such plans or programs
may be in effect from time to time.

 

4.2 Reimbursement
of Business Expenses. The Executive is authorized to incur reasonable expenses in carrying out the Executive’s duties
for the Corporation under this Agreement and entitled to reimbursement for all such expenses the Executive incurs during the Term
of Employment in connection with carrying out the Executive’s duties for the Corporation up to a maximum amount of $15,000
per month, subject to the Corporation’s reasonable expense reimbursement policies in effect from time to time. Such expenses
may include but are not limited to travel, lodging and meals. The Corporation shall reimburse the Executive to the extent required
by the preceding sentence.

 

4.3 Vacation and
Other Leave. During the Term of Employment, the Executive shall accrue and be entitled to take paid vacation of 4 weeks per
annum pro-rated in accordance with the Corporation’s standard vacation policies in effect from time to time, including the
Corporation’s policies regarding vacation accruals. The Executive shall also be entitled to all other holiday and leave pay
generally available to all other employees of the Corporation.

 

 

 

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5. Termination.

 

The Term of Employment
and Executive’s employment hereunder may be terminated by either the Corporation or Executive at any time and for any reason,
for or without cause, for or without good reason, or upon Death or Disability; provided that, unless otherwise provided herein,
either party shall be required to give the other party advance written notice of any termination of the Executive’s employment
in accordance with Sections 5.3 and 5.4. Upon termination of Executive’s employment during the Term of Employment,
Executive (or the Executive’s estate and/or beneficiaries, as the case may be) shall be entitled to the Accrued Amounts and
shall have no further rights to any compensation or any other benefits from the Company or any of its affiliates. All outstanding
equity awards shall remain exercisable for the period of one (1) year from the Termination Date. Notwithstanding any other provision
contained herein, all payments made in connection with Executive’s Disability shall be provided in a manner which is consistent
with federal and state law. The Corporation may deduct, from all payments made hereunder, all applicable taxes and other appropriate
deductions.

 

 5.1 Definitions.
For purposes of this Agreement:

 

(a) “Accrued Amounts”
shall mean:

 

(i)     any
accrued but unpaid Base Salary and accrued but unused vacation which shall be paid in the next regularly scheduled payroll following
one (1) week after the Termination Date (as defined below);

 

(ii)   any
accrued but unpaid bonus pursuant to Section 3.2 which shall be paid in the next regularly scheduled payroll following one (1)
week after the Termination Date (as defined below); and

 

(iii)  reimbursement
for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the
Corporation’s expense reimbursement policy.

 

 

(b) “Disability”
shall mean the Executive’s inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities
under this Agreement, with or without reasonable accommodation, for 90 calendar days out of any three hundred sixty-five (365)
calendar day period, but only if the Executive is considered disabled within the meaning of Treasury Regulation section 1.409A-3(i)(4).
Without limiting the circumstances in which the Executive may be determined to be disabled as defined in Treasury Regulation section
1.409A-3(i)(4), the Executive will be presumed to be disabled if determined to be totally disabled by the Social Security Administration
or if determined to be disabled in accordance with a disability insurance program, provided the definition of disability applied
under such disability insurance program complies with the requirements of Treasury Regulation section 1.409A-3(i)(4). Any question
as to the existence of the Executive’s Disability as to which the Executive and the Corporation cannot agree shall be determined
in writing by a qualified independent physician mutually acceptable to the Executive and the Corporation. If the Executive and
the Corporation cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians
shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Corporation
and the Executive shall be final and conclusive for all purposes of this Agreement.

 

5.2 Release; Exclusive
Remedy.

 

(a) The Executive agrees
that the payments contemplated by Section 5 shall constitute the exclusive and sole remedy for any termination of his employment
and the Executive covenants not to assert or to pursue any other remedies, at law or in equity, with respect to any termination
of employment. The Corporation and Executive acknowledge and agree that there is no duty of the Executive to mitigate damages under
this Agreement. All amounts paid to the Executive pursuant to Section 5 shall be paid without regard to whether the Executive
has taken or takes actions to mitigate damages.

 

(b) As used herein,
“Release” shall mean a written release, discharge and covenant not to sue entered into by the Executive in favor
of the Corporation in the form as in Exhibit A hereto.

 

 

 

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5.3 Notice of Termination.
Any termination of the Executive’s employment hereunder by the Company or by the Executive during the Term of Employment
(other than termination on account of the Executive’s death) shall be communicated by written notice of termination (the
“Notice of Termination”) to the other party hereto in accordance with Section 14(j). Such Notice of Termination
shall be given by the Company no later than 30 calendar days prior to the termination and by Executive no later than 60 calendar
days prior to the termination. The Notice of Termination shall specify:

 

		(a)	The termination provision of this Agreement relied upon;

		(b)	To the extent applicable, the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provisions so indicated; and

		(c)	The applicable Termination Date.

 

5.4 Termination
Date. The Executive’s Termination Date shall be:

 

		(a)	If the Executive’s employment hereunder terminates on account of the Executive’s death,
the date of the Executive’s death;

		(b)	If the Executive’s employment hereunder is terminated on account of the Executive’s
Disability, the date that it is determined that the Executive has a Disability; or

		(c)	If the Corporation terminates the Executive’s employment hereunder for any other reason,
the date specified in the Notice of Termination which shall be no less than 10 calendar days following the date on which the Notice
of Termination is delivered.

 

Notwithstanding anything contained herein,
the Termination Date shall not occur until the date on which the Executive incurs a Separation from Service within the meaning
of Section 409A.

 

5.5 Resignation
From Boards and Committees. After expiration of six months following any termination of Executive’s employment as Chief
Executive Officer with the Corporation, Executive agrees to resign, as of the date of such termination, from (i) each and every
board of directors (or similar body, as the case may be) of the Corporation and each of its affiliates on which Executive may then
serve, including, but not limited to, the Board (and any committees thereof), and (ii) each and every office of the Corporation
and each of its affiliates that the Executive may then hold, and all positions that he may have previously held with the Corporation
and any of its affiliates.

 

5.6 Section 409A
of the Internal Revenue Code.

 

(a) This Agreement
is intended to comply with Section 409A of the Internal Revenue Code of 1986 (“Section 409A”) and shall be construed
and interpreted consistent with that intent. In the event that any payment or benefit payable under Section 5 of this Agreement
is not compliant with Section 409A and any taxes, penalties or interest are imposed on the Executive under Section 409A as a result
of such noncompliance (the “Section 409A Penalties”), the Corporation shall put the Executive in an after-tax
economic position equivalent to the position the Executive would have been in without the imposition of such Section 409A Penalties.
Executive shall notify the Corporation in writing of any claim by the Internal Revenue Service or state tax authorities that, if
successful, would require the payment of any such Section 409A Penalties or related state tax statutes. Executive’s right
to be put in an equivalent after tax economic position is subject to the Executive providing such notification no later than ten
(10) business days after Executive is informed in writing of such claim. If the Corporation desires to contest such claim, Executive
shall (i) cooperate with the Corporation in good faith in order to effectively contest such claim and (ii) permit the Corporation
to participate in any proceedings relating to such claim. The Corporation shall control all proceedings taken in connection with
such contest; provided, however, that the Corporation shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest. This section shall also apply to any taxes, penalties, or interest
imposed by any state that are calculated in a manner similar to taxes, penalties, or interest imposed by Section 409A(a)(1)(B),
including those amounts imposed by the California Revenue and Taxation Code (R&TC) Sections 17501 and 24601.

 

(b) If and to the extent
that any payment or benefit under this Agreement, or any plan or arrangement of the Corporation, is determined by the Corporation
to constitute “non-qualified deferred compensation” subject to Section 409A and is payable to the Executive by reason
of the Executive’s termination of employment, then (a) such payment or benefit shall be made or provided to the Executive
only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations (a “Separation
from Service”) and (b) if the Executive is a “specified employee” (within the meaning of Section 409A and
as determined by the Corporation), such payment or benefit shall not be made or provided before the date that is six (6) months
after the date of the Executive’s Separation from Service (or the Executive’s earlier death). For the purposes of clarity,
the first payment thereof will include a catch-up payment covering the amount that would have otherwise been paid to the Executive
during the period between the termination of Executive’s employment and the first payment date but for the application of
this provision, and the balance of the installments (if any) will be payable in accordance with their original schedule.

 

 

 

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(c) To the extent any
expense reimbursement or in-kind benefit is determined to be subject to Section 409A, the amount of any such expenses eligible
for reimbursement or in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or
in-kind benefits provided in any other taxable year (except under any lifetime limit applicable to expenses for medical care),
in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which the Executive
incurred such expenses, and in no event shall any right to reimbursement or in-kind benefits be subject to liquidation or exchange
for another benefit.

 

(d) To the extent that
any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision will be read in such a manner
so that all payments hereunder comply with Section 409A. To the extent any payment under this Agreement may be classified as a
“short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even
if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Payments pursuant to this section
are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

6. Non-Competition.

 

Executive acknowledges
and recognizes the highly competitive nature of the businesses of the Corporation, the amount of sensitive and confidential information
involved in the discharge of Executive’s position with the Corporation, and the harm to the Corporation that would result
if such knowledge or expertise was disclosed or made available to a competitor. Based on that understanding, Executive hereby expressly
agrees as follows:

 

(a) As a result of
the particular nature of Executive’s relationship with the Corporation, in the capacities identified earlier in this Agreement,
for the Term of Employment, Executive hereby agrees that he will not, directly or indirectly, (i) engage in any business for the
Executive’s own account or otherwise derive any personal benefit from any business that competes with the business of the
Corporation or any of its affiliates (the Corporation and its affiliates are referred to, collectively, as the “Company
Group”), (ii) enter the employ of, or render any services to, any person engaged in any business that competes with the
business of any entity within the Company Group, (iii) acquire a financial interest in any person engaged in any business that
competes with the business of any entity within the Company Group, directly or indirectly, as an individual, partner, member, shareholder,
officer, director, principal, agent, trustee or consultant, or (iv) interfere with business relationships (whether formed before
or after the Effective Date) between the Corporation, any of its respective affiliates or subsidiaries, and any customers, suppliers,
officers, employees, partners, members or investors of any entity within the Company Group. For purposes of this Agreement, businesses
in competition with the Company Group shall include, without limitation, businesses which any entity within the Company Group may
conduct operations, and any businesses which any entity within the Company Group has specific plans to conduct operations in the
future and as to which the Executive is aware of such planning, whether or not such businesses have or have not as of that date
commenced operations.

 

(b) Notwithstanding
anything to the contrary in this Agreement, Executive may, directly or indirectly, own, solely as an investment, securities of
any Person, other than a business that competes with the business of the Company Group, which are publicly traded on a national
or regional stock exchange or on the over-the-counter market if the Executive (i) is not a controlling Person of, or a member of
a group that controls, such Person, and (ii) does not, directly or indirectly, beneficially own one percent (1%) or more of any
class of securities of such Person. Executive may indirectly, through a mutual or exchange traded fund, own, solely as an investment,
securities of a business that competes with the business of the Company Group, which are publicly traded on a national or regional
stock exchange or on the over-the-counter market if the Executive (i) is not a controlling Person of, or a member of a group that
controls, such Person, and (ii) does not, directly or indirectly, beneficially own one percent (1%) or more of any class of securities
of such business. For purposes of this Section 6(b), “Person” shall have the meaning ascribed to such
terms in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as described
in Section 13(d) thereof.

 

7. Confidential Information.

 

As a material part
of the consideration for the Corporation’s commitment to the terms of this Agreement, Executive hereby agrees that Executive
will not at any time (whether during or after Executive’s employment with the Corporation), other than in the course of Executive’s
duties hereunder, or unless compelled by lawful process after written notice to the Corporation of such notice along with sufficient
time for the Corporation to try and overturn such lawful process, disclose or use for Executive’s own benefit or purposes
or the benefit or purposes of any other person, firm, partnership, joint venture, association, corporation or other business organization,
entity or enterprise, any trade secrets, or other confidential data or information relating to customers, development programs,
costs, marketing, trading, investment, sales activities, promotion, credit and financial data, financing methods, or plans of any
entity within the Company Group; provided, however, that the foregoing shall not apply to information which is generally
known to the industry or the public, other than as a result of the Executive’s breach of this covenant. Executive further
agrees that Executive will not retain or use for his own account, at any time, any trade names, trademark or other proprietary
business designation used or owned in connection with the business of any entity within the Company Group.

 

 

 

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8. Proprietary Rights.

 

(a) Inventions.
All inventions, policies, systems, developments or improvements conceived, designed, implemented and/or made by Executive, either
alone or in conjunction with others, at any time or at any place during the Term of Employment, whether or not reduced to writing
or practice during such Term of Employment, which directly or indirectly relate to the business of any entity within the Company
Group, or which were developed or made in whole or in part using the facilities and/or capital of any entity within the Company
Group, shall be the sole and exclusive property of the Company Group. Executive shall promptly give notice to the Corporation of
any such invention, development, patent or improvement, and shall at the same time, without the need for any request by any person
or entity within the Company Group, assign all of Executive’s rights to such invention, development, patent and/or improvement
to the Company Group. Executive shall sign all instruments necessary for the filing and prosecution of any applications for, or
extensions or renewals of, letters patent of the United States or any foreign country that any entity in the Company Group desires
to file.

 

(b) Work Product.
Executive acknowledges and agrees that all writings, works of authorship, technology, inventions, discoveries, ideas and other
work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived or reduced to
practice by the Executive individually or jointly with others during the Term of Employment by the Corporation and relating in
any way to the business or contemplated business, research or development of the Corporation (regardless of when or where the Work
Product is prepared or whose equipment or other resources is used in preparing the same) and all printed, physical and electronic
copies, all improvements, rights and claims related to the foregoing, and other tangible embodiments thereof (collectively, “Work
Product”), as well as any and all rights in and to copyrights, trade secrets, trademarks (and related goodwill), patents
and other intellectual property rights therein arising in any jurisdiction throughout the world and all related rights of priority
under international conventions with respect thereto, including all pending and future applications and registrations therefor,
and continuations, divisions, continuations-in-part, reissues, extensions and renewals thereof (collectively, “Intellectual
Property Rights”), shall be the sole and exclusive property of the Corporation.

 

For purposes of this
Agreement, Work Product includes, but is not limited to, Company Group information, including plans, publications, research, strategies,
techniques, agreements, documents, contracts, terms of agreements, negotiations, know-how, computer programs, computer applications,
software design, web design, work in process, databases, manuals, results, developments, reports, graphics, drawings, sketches,
market studies, formulae, notes, communications, algorithms, product plans, product designs, styles, models, audiovisual programs,
inventions, unpublished patent applications, original works of authorship, discoveries, experimental processes, experimental results,
specifications, customer information, client information, customer lists, client lists, manufacturing information, marketing information,
advertising information, and sales information.

 

(c) Work Made for
Hire; Assignment. All copyrightable work by Executive during the Term of Employment that relates to the business of any entity
in the Company Group is intended to be “work made for hire” as defined in Section 101 of the Copyright Act of 1976,
and shall be the property of the Company Group. If the copyright to any such copyrightable work is not the property of the Company
Group by operation of the law, Executive will, without further consideration, assign to the Company Group all right, title and
interest in such copyrightable work and will assist the entities in the Company Group and their nominees in every way, at the Company
Group’s expense, to secure, maintain and defend for the Company Group’s benefit, copyrights and any extensions and
renewals thereof on any and all such work including translations thereof in any and all countries, such work to be and to remain
the property of the Company Group whether copyrighted or not.

 

(d) Further Assurances;
Power of Attorney. During and after the Term of Employment, Executive agrees to reasonably cooperate with the Corporation to
(i) apply for, obtain, perfect and transfer to the Company Group the Work Product as well as an Intellectual Property Right in
the Work Product in any jurisdiction in the world; and (ii) maintain, protect and enforce the same, including, without limitation,
executing and delivering to the Corporation any and all applications, oaths, declarations, affidavits, waivers, assignments and
other documents and instruments as shall be requested by the Corporation. Executive hereby irrevocably grants the Corporation power
of attorney to execute and deliver any such documents on Executive’s behalf in the Executive’s name and to do all other
lawfully permitted acts to transfer the Work Product to the Corporation and further the transfer, issuance, prosecution and maintenance
of all Intellectual Property Rights therein, to the full extent permitted by law, if Executive does not promptly cooperate with
the Corporation’s request (without limiting the rights the Corporation shall have in such circumstances by operation of law).
The power of attorney is coupled with an interest and shall not be affected by Executive’s subsequent incapacity.

 

 

 

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(e) No License.
Executive understands that this Agreement does not, and shall not be construed to, grant the Executive any license or right of
any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials, software
or other tools made available to the Executive by the Corporation.

 

9. Anti-Solicitation.

 

In light of the amount
of sensitive and confidential information involved in the discharge of Executive’s duties, and the harm to the Corporation
that would result if such knowledge or expertise were disclosed or made available to a competitor, and as a reasonable step to
help protect the confidentiality of such information, Executive promises and agrees that during the Term of Employment and for
a period of two (2) years thereafter, Executive will not use the Company’s confidential information to, directly or indirectly,
individually or as a consultant to, or as an employee, officer, shareholder, director or other owner or participant in any business,
influence or attempt to influence the customers, vendors, suppliers, joint venturers, associates, consultants, agents, or partners
of any entity within the Company Group, either directly or indirectly, to divert their business away from the Company Group, to
any individual, partnership, firm, corporation or other entity then in competition with the business of any entity within the Company
Group, and he will not otherwise materially interfere with any business relationship of any entity within the Company Group.

 

10. Non-Solicitation of Employees.

 

In light of the amount
of sensitive and confidential information involved in the discharge of Executive’s duties, and the harm to the Corporation
that would result if such knowledge or expertise were disclosed or made available to a competitor, and as a reasonable step to
help protect the confidentiality of such information, Executive promises and agrees that during the Term of Employment and for
a period of one (1) year thereafter, Executive will not, directly or indirectly, individually or as a consultant to, or as an employee,
officer, shareholder, director, or other owner of or participant in any business, solicit (or assist in soliciting) any person
who is then, or at any time within six (6) months prior thereto was, an employee of an entity within the Company Group, who earned
annually $25,000 or more as an employee of such entity during the last six (6) months of his or her own employment to work for
(as an employee, consultant or otherwise) any business, individual, partnership, firm, corporation, or other entity whether or
not engaged in competitive business with any entity in the Company Group.

 

11. Return of Property.

 

Executive agrees to
truthfully and faithfully account for and deliver to the Corporation all property belonging to the Corporation, any other entity
in the Company Group, or any of their respective affiliates, which Executive may receive from or on account of the Corporation,
any other entity in the Company Group, or any of their respective affiliates, and upon the termination of the Term of Employment,
or the Corporation’s demand, Executive shall immediately deliver to the Corporation all such property belonging to the Corporation,
any other entity in the Company Group, or any of their respective affiliates.

 

12. Withholding Taxes.

 

Notwithstanding anything
else herein to the contrary, the Corporation may withhold (or cause there to be withheld, as the case may be) from any amounts
otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other taxes as
may be required to be withheld pursuant to any applicable law or regulation.

 

13. Cooperation in Litigation.

 

Executive agrees that,
during the Term of Employment or after the termination of Executive’s employment, he will reasonably cooperate with the Corporation,
subject to his reasonable personal and business schedules, in any litigation which arises out of events occurring prior to the
termination of his employment, including but not limited to, serving as a witness or consultant and producing documents and information
relevant to the case or helpful to the Corporation. The Corporation agrees to reimburse Executive for all reasonable costs and
expenses he incurs in connection with his obligations under this Section 13 and, in addition, to reasonably compensate Executive
for time actually spent in connection therewith following the termination of his employment with the Corporation.

 

 

 

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14. Miscellaneous.

 

(a) Assignment. This Agreement is
personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement
or any rights or obligations hereunder; provided, however, that in the event of a merger, consolidation, or transfer
or sale of all or substantially all of the assets of the Corporation with or to any other individual(s) or entity, this Agreement
shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge
and perform all the promises, covenants, duties, and obligations of the Corporation hereunder.

 

(b) Number and Gender. Where the
context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all
other genders.

 

(c) Section Headings. The section
headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purposes of convenience only,
and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.

 

(d) Governing Law. This Agreement,
and all questions relating to its validity, interpretation, performance and enforcement, as well as the legal relations hereby
created between the parties hereto, shall be governed by and construed under, and interpreted and enforced in accordance with,
the laws of the State of California, notwithstanding any California or other conflict of law provision to the contrary. This Agreement
is intended to comply with Section 409A of the Internal Revenue Code of 1986 and the regulations promulgated thereunder. Any action
or proceeding by either of the parties to enforce this Agreement shall be brought only in a state or federal court located in the
state of California, Sonoma county. The parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive
the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.

 

(e) Severability. If any provision
of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications
of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this
Agreement are declared to be severable.

 

(f) Entire Agreement. This Agreement
embodies the entire agreement of the parties hereto respecting the matters within its scope. Any prior negotiations, correspondence,
agreements, proposals or understandings relating to the subject matter hereof shall be deemed to have been merged into this Agreement,
and to the extent inconsistent herewith, such negotiations, correspondence, agreements, proposals, or understandings shall be deemed
to be of no force or effect. There are no representations, warranties, or agreements, whether express or implied, or oral or written,
with respect to the subject matter hereof, except as expressly set forth herein.

 

(g) Modifications. This Agreement
may not be amended, modified or changed (in whole or in part), except by a formal definitive written agreement expressly referring
to this Agreement, which agreement is executed by both of the parties hereto.

 

(h) Waiver. Neither the failure
nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege
with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.
No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

(i) Resolution of Disputes.

 

(i)   Any controversy
arising out of or relating to Executive’s employment (whether or not before or after the expiration of the Term of Employment),
any termination of Executive’s employment, this Agreement or the enforcement or interpretation of this Agreement, or because
of an alleged breach, default, or misrepresentation in connection with any of the provisions of this Agreement, including (without
limitation) any state or federal statutory claims, shall be submitted to arbitration in Santa Rosa, California, before a sole arbitrator
(the “Arbitrator”) selected from the American Arbitration Association (“AAA”), and shall
be conducted in accordance with the provisions of California Code of Civil Procedure §§ 1280 et seq. as the exclusive
remedy of such dispute; provided, however, that provisional injunctive relief may, but need not, be sought in a court
of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective
until the matter is finally determined by the Arbitrator. Final resolution of any dispute through arbitration may include any remedy
or relief that the Arbitrator deems just and equitable, including any and all remedies provided by applicable state or federal
statutes. At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth the essential findings
and conclusions upon which the Arbitrator’s award or decision is based. Any award or relief granted by the Arbitrator hereunder
shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction.

 

 

 

    	 	8	 

     

    

 

(ii)   The parties acknowledge
and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either
of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with any of the
matters referenced in the first sentence of Section 14(i)(i).

 

(iii)  The parties agree
that the Corporation shall be responsible for payment of the forum costs of any arbitration hereunder, including the Arbitrator’s
fee. The parties further agree that in any proceeding with respect to such matters, the prevailing party will be entitled to recover
its reasonable attorney’s fees and costs from the non-prevailing party (other than forum costs associated with the arbitration
which in any event shall be paid by the Corporation).

 

(iv)  Without limiting
the remedies available to the parties and notwithstanding the foregoing provisions of this Section 14, the Executive and
the Corporation acknowledge that any breach of any of the covenants or provisions contained in Sections 5.9, and Sections
6 through 11 could result in irreparable injury to either of the parties hereto for which there might be no adequate
remedy at law, and that, in the event of such a breach or threat thereof, the non-breaching party shall be entitled to obtain a
temporary restraining order and/or a preliminary injunction and a permanent injunction restraining the other party hereto from
engaging in any activities prohibited by any covenant or provision in Sections 5.9, and Sections 6 through 11
or such other equitable relief as may be required to enforce specifically any of the covenants or provisions of Sections 5.9,
and Sections 6 through 11.

 

(j) Publicity.

 

Executive hereby irrevocably
consents during the term of this Agreement to any and all uses and displays, by the Company Group and its agents, representatives
and licensees, of Executive’s name, voice, likeness, image, appearance and biographical information in, on or in connection
with any pictures, photographs, audio and video recordings, digital images, websites, television programs and advertising, other
advertising and publicity, sales and marketing brochures, books, magazines, other publications, CDs, DVDs, tapes and all other
printed and electronic forms and media throughout the world, at any time during or after the period of his employment by the Company,
for all legitimate commercial and business purposes of the Company Group (”Permitted Uses”) without further consent
from or royalty, payment or other compensation to the Executive. The Executive hereby forever waives and releases the Company Group
and its directors, officers, employees and agents from any and all claims, actions, damages, losses, costs, expenses and liability
of any kind, arising under any legal or equitable theory whatsoever at any time during or after the period of his employment by
the Company, arising directly or indirectly from the Company Group’s and its agents’, representatives’ and licensees’
exercise of their rights in connection with any Permitted Uses. At the end of the term of this Agreement, the Company shall have
no obligation to remove any previously-published displays described in this paragraph.

 

(k) Notices.

 

(i) All notices, requests,
demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been
duly received if (i) delivered by hand or by courier, effective upon delivery, (ii) given by facsimile or electronic version, when
transmitted if transmitted on a business day and during normal business hours of the recipient, and otherwise delivered on the
next business day following transmission, or (iii) sent by registered or certified mail, postage prepaid, return receipt requested,
5 business days after being deposited in the U.S. postal mail. Any notice shall be duly addressed to the parties as follows:

 

(i) If to the Corporation:

 

Sonoma Pharmaceuticals, Inc.

Lead Independent Director of the Board or any Independent Director

1129 North McDowell Boulevard

Petaluma, California 94954

Fax: +1 (707) 283-0551

 

 

 

    	 	9	 

     

    

 

(ii) If to the Executive:

 

Frederick Sandford

At the address on file with the Corporation

 

(ii) Any party may
alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with
the provisions of this Section 24 for the giving of notice.

 

(l) Legal Counsel; Mutual Drafting.
Each party recognizes that this is a legally binding contract and acknowledges and agrees that they have had the opportunity to
consult with legal counsel of their choice. Each party has cooperated in the drafting, negotiation and preparation of this Agreement.
Hence, in any construction to be made of this Agreement, the same shall not be construed against either party on the basis of that
party being the drafter of such language.

 

(m) Provisions that Survive Termination.
The provisions of Sections 3.4, 3.5, 5 through 13, and this Section 14 shall survive any termination
of the Term of Employment.

 

(n) Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears
thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the
signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

 

(o) Tolling. Should the Executive
violate any of the terms of the restrictive covenant obligations articulated herein, the obligation at issue will run from the
first date on which the Executive ceases to be in violation of such obligation.

 

[Signature Page Follows]

 

 

    	 	10	 

     

    

 

IN WITNESS WHEREOF, the Corporation
and Executive have executed this Employment Agreement as of the Effective Date.

  

	 	CORPORATION
	 	 
	 	Sonoma Pharmaceuticals, Inc.,
	 	a Delaware corporation
	 	 
	 	By:	/s/ Jerry McLaughlin
	 	
        Name:

        Title:
	Jerry McLaughlin

Lead Independent Director of
	 	 	Sonoma Pharmaceuticals, Inc.
	 	 	 
	 	 	 
	 	EXECUTIVE
	 	 	 
	 	By:	/s/ Frederick Sandford
	 	Name:	Frederick Sandford

 

 

 

 

 

 

    	 	11	 

     

    

EXHIBIT A — RELEASE

 

1. Definitions.
I intend all words used in this Release to have their plain meanings in ordinary English. Technical legal words are not needed
to describe what I mean. Specific terms I use in this Release have the following meanings:

 

A. “I,”
“me,” and “my” include me, Frederick Sandford, and anyone who has or obtains any legal rights or claims
through me, including my heirs and estate, and each of my descendants, dependents, executors, administrators, assigns and successors.

 

B. “Employer,”
as used in this Release, shall at all times mean Sonoma Pharmaceuticals, Inc. and “Released Party” or “Released
Parties”, individual and collectively, means the Employer and the Employer’s parent, past or present subsidiaries,
affiliates, each of any present or former officers, directors, shareholders, employees, agents or attorneys, trustees, insurers,
successors, predecessors, assigns, or personal representatives.

 

C. “My Claims”
mean actions or causes of action, suits, claims, charges, complaints, contracts (whether oral or written, express or implied from
any source), and promises, whatsoever, in law or equity, that I ever had, may now have or hereafter can, shall or may have against
the Employer or other Released Party as of the date of the execution of this Release, including all unknown, undisclosed and unanticipated
losses, wrongs, injuries, debts, claims or damages to me for, upon, or by reason of any matter, cause or thing whatsoever, that
are in any way related to my employment with or separation (termination of employment) from the Employer.

 

By signing this Release,
I am agreeing to release any actual and potential claim, known or unknown, I have or may potentially have, in law or in equity,
either as an individual or standing in the shoes of the government, under any federal, state or local law, administrative regulation
or legal principle (except as provided in Paragraph 4 of this Release). The following listing of laws and types of claims is not
meant to, and shall not be interpreted to, exclude any particular law or type of claim, law, regulation or legal principle not
listed. I understand I am releasing all my Claims, including, but not limited to, claims for invasion of privacy; breach of written
or oral, express or implied, contract; fraud or misrepresentation; and any claim under Section 1981 of the Civil Rights Act of
1866, Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. §
626, as amended, the Older Workers Benefit Protection Act of 1990 (“OWBPA”), 29 U.S.C. 626(f), Title VII of the Civil
Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e, et seq., the Americans with Disabilities Act Amendments Act
(“ADAAA”), 29 U.S.C. § 2101, et seq., the Family and Medical Leave Act (“FMLA”), 29 U.S.C. §
2601 et seq., the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. §§ 1001,
et seq., Equal Pay Act (“EPA”), 29 U.S.C. § 206(d), the Worker Adjustment and Retraining Notification Act (“WARN”),
29 U.S.C. § 2101 et seq., the False Claims Act, 31 U.S.C. § 3729 et seq., the California Fair Employment and Housing
Act, the California Family Rights Act, any other state human rights or fair employment practices act, and any other federal, state,
or local statute, law, rule, regulation, ordinance or order. This includes, but is not limited to, claims for violation of any
civil rights laws based on protected class status; claims for assault, battery, defamation, intentional or negligent infliction
of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel, negligence, negligent hiring,
retention or supervision, retaliation, constructive discharge, violation of whistleblower protection laws, unjust enrichment, payment
of any kind, including any other claim for severance pay, bonus or incentive pay, sick leave, holiday pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, medical expenses, or disability, violation of public policy, and all other
claims for unlawful employment practices, and all other common law or statutory claims. To the maximum extent permitted by law,
I agree that I will not seek and waive any right to accept any relief or award from any charge or action against the Employer before
any federal, state, or local administrative agency or federal state or local court whether filed by me or on my behalf with respect
to any claim or right covered by this Release.

 

2. Agreement to
Release My Claims. Except as stated in Paragraph 4, I agree to give up all My Claims, waive any rights thereunder, and forever
discharge the Employer and all Released Parties of and from any and all liability to me for actions or causes of action, suits,
or Claims. To the maximum extent permitted by law, I agree that I will not seek and I waive any right to accept any relief or award
from any charge or action against the Employer or other Released Party before any federal, state, or local administrative agency
or federal state or local court whether filed by me or on my behalf with respect to any claim or right covered by this Release.
I also agree to withdraw any and all of my charges and lawsuits against Employer or other Released Party, except that I may, but
am not required to, withdraw or dismiss, or attempt to withdraw or dismiss, any charges that I may have pending against the Employer
or other Released Party with the EEOC or other civil rights enforcement agency.

 

I represent and warrant
that I have not transferred or otherwise assigned my Claims, or parts thereof, to any person or entity, other than the Employer.
I will defend, indemnify and hold harmless the Employer from and against any claim (including the payment of attorneys’ fees
and costs actually incurred whether or not litigation is commenced) that is directly or indirectly based on or in connection with
or arising out of any such assignment or transfer made, purported or claimed.

 

 

 

    	 	12	 

     

    

 

In exchange for my
agreement to release my Claims, I am receiving satisfactory Consideration (compensation) from the Employer to which I am not otherwise
entitled by law, contract, or under any Employer policy. The consideration I am receiving is a full and fair payment for the release
of all my Claims. The Employer and the Released Parties do not owe me anything in addition to what I will be receiving.

 

3. Older Workers
Benefit Protection Act. [This section may be revised if Executive terminates employment as part of a “group” termination.]
The Older Workers Benefit Protection Act (“OWBPA”) applies to individuals age 40 and older and sets forth certain criteria
for such individuals to waive their rights under the Age Discrimination in Employment Act (“ADEA”) in connection with
an exit incentive program or other employment termination program. I understand and have been advised that this Release of My Claims
is subject to the terms of the OWBPA. The OWBPA provides that an individual cannot waive a right or claim under the ADEA unless
the waiver is knowing and voluntary. I have been advised of this law, and I agree that I am signing this Release voluntarily, and
with full knowledge of its consequences. I understand that the Employer is giving me at least twenty-one (21) calendar days from
the date I received a copy of this Release to decide whether I want to sign it. I acknowledge that I have been advised to use this
time to consult with an attorney about the effect of this Release. If I sign this Release before the end of the twenty-one (21)
day period it will be my personal, voluntary decision to do so, and will be done with full knowledge of my legal rights. I agree
that material and/or immaterial changes to the Separation Agreement or this Release will not restart the running of this consideration
period.

 

4. Exclusions from
Release. My Claims do not include my rights, if any, to claim the following: payments required to be made under the Employment
Agreement between Executive and the Corporation dated as of December 11, 2018; unemployment insurance or workers compensation benefits;
claims for my vested post-termination benefits under any 401(k) or similar tax-qualified retirement benefit plan; my COBRA rights;
and my rights to enforce the terms of this Release.

 

A. Nothing in this
Release interferes with my right to file a charge with the Equal Employment Opportunity Commission (“EEOC”) or other
local civil rights enforcement agency, or participate in any manner in an EEOC investigation or proceeding under Title VII, the
ADA, the ADEA, or the EPA. I, however, understand that I am waiving my right to recover individual relief including, but not limited
to, back pay, front pay, reinstatement, attorneys’ fees, and/or punitive damages, in any administrative or legal action whether
brought by the EEOC or other civil rights enforcement agency, me or any other party.

 

B. Nothing in this
Release interferes with my right to challenge the knowing and voluntary nature of this Release under the ADEA and/or OWBPA, if
I have rights under such laws.

 

C. I agree that the
Employer and the Released Parties reserve any and all defenses, which any of them has or might have against any claims brought
by me. This includes, but is not limited to, the Employer’s or other Released Party’s right to seek available costs
and attorneys’ fees, and to have any monetary award granted to me, if any, reduced by the amount of money that I received
in consideration for this Release.

 

D. Nothing in this
Release releases any claims for indemnification by Executive pursuant to any indemnification agreement, statute or otherwise or
claims for coverage under any D&O or other similar insurance policy.

 

5. Effective Date;
Right to Rescind or Revoke. I understand that insofar as this Release relates to my rights under the Age Discrimination in
Employment Act (“ADEA”), it shall not become effective or enforceable until seven (7) calendar days after I sign it.
I also have the right to rescind (or revoke) this Release insofar as it extends to potential claims under the ADEA by written notice
to Employer within seven (7) calendar days following my signing this Release (the “Rescission Period”). Any such rescission
(or revocation) must be in writing and hand-delivered to Employer or, if sent by mail, postmarked within the applicable time period,
sent by certified mail, return receipt requested, and addressed as follows:

 

A. post-marked within
the seven (7) calendar day Rescission Period;

 

B. properly addressed
to

 

[INSERT NAME AND ADDRESS];
and

 

C. sent by certified
mail, return receipt requested.

 

 

 

    	 	13	 

     

    

 

6. I Understand
the Terms of this Release. I have had the opportunity to read this Release carefully and understand all its terms. I have had
the opportunity to review this Release with my own attorney. In agreeing to sign this Release, I have not relied on any statements
or explanations made by the Employer or its attorneys. I understand and agree that this Release and the attached Agreement contain
all the agreements between the Employer (and any other Released Party) and me. We have no other written or oral agreements. I understand
this Release is a very important legal document and I agree to be bound by the terms of this Release.

 

 

	 	 	 
	 	Dated: ____________, 20__	_______________________________
	 	 	Frederick Sandford
	 	 	 

 

 

 

 

 

 

 

 

 

 

    	 	14Exhibit 10.1

 

December 12, 2018

 

PERSONAL AND CONFIDENTIAL

 

[Insert Name]

MDC Partners Inc.

745 Fifth Ave.

New York, NY 10151

 

Dear [Insert Name]:

 

MDC Partners Inc. (“MDC”
or the “Company”) is pleased to provide you with this retention bonus agreement (the “Agreement”)
in consideration for past performance as the Company’s [Insert Title]. Capitalized terms used but not defined
herein shall have the applicable meanings set forth in your employment agreement with the Company.

 

1.            
Retention Bonus Amount; Payment Event.  You will be eligible to receive a bonus in an aggregate amount equal to $[●]
(the “Retention Bonus”), which bonus will be payable upon the earliest to occur of (i) a Change of Control
(as defined in the Company’s 2016 Stock Incentive Plan) or (ii) the closing of the sale of one or more assets of the Company
to a third party or the closing of a direct investment or capital markets offering of securities resulting in aggregate gross
proceeds to the Company from any such transactions equal to not less than $100 million (each, a “Payment Event”),
subject to your continued employment through the applicable Payment Event (except as provided below).  The Payment Event
must occur on or prior to December 31, 2019 in order for you to receive any Retention Bonus payment under this Agreement.  The
Retention Bonus will be paid by the Company in a cash lump sum on the first regularly scheduled payroll date immediately following
the applicable Payment Event.  In the event your employment is terminated by you for “Good Reason” or by the
Company without “Cause” prior to a Payment Event, you will be entitled to receive the Retention Bonus on the first
regularly scheduled payroll date immediately following the date of your termination of employment.  

 

2.            
No Assignment. This Agreement, and all of our respective rights hereunder, shall not be assignable or delegable by either
of us. Any purported assignment or delegation by either of us in violation of the foregoing shall be null and void ab initio
and of no force and effect.

 

3.            
Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees.

 

4.            
Withholding. The Company will be authorized to withhold from the payment of your Retention Bonus the amount of any applicable
federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

5.            
No Right to Employment or Other Benefits. This Agreement will not be construed as giving you the right to be retained in
the employ of the Company or any of its subsidiaries or affiliates.

  

     

     

    

 

6.            
Entire Agreement. This Agreement constitutes the entire agreement between the Company and you concerning the subject matter
hereof.

 

7.            
Unfunded Bonus. The Bonus shall be unfunded. This Agreement will not be construed to create a trust or separate fund of
any kind or a fiduciary relationship between the Company and any of its affiliates and you or any other person or entity. Your
right to receive payments from the Company under this Agreement is no greater than the right of any unsecured general creditor
of the Company.

 

8.            
Section 409A of the Internal Revenue Code. The Company intends that this Agreement be exempt from Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”), pursuant to the short term deferral exception under Treas.
Reg. Section 1.409A - 1(b)(4). However, if any amount paid under this Agreement is determined to be “non-qualified deferred
compensation” within the meaning of Section 409A, then this Agreement will be interpreted or reformed in the manner necessary
to achieve compliance with Section 409A.

 

9.            
Governing Law; Counterparts. The validity, construction, and effect of this Agreement will be determined in accordance with
the laws of the State of New York, without reference to principles of conflict of laws. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

We look forward to your acceptance of this
letter agreement, which you can indicate by promptly signing and dating below.

 

	 	 	MDC Partners Inc.
	 	 	 
	 	 	 
	 	 	 
	 	 	By:
	 	 	Title:
	 	 	 
	Acknowledged and Agreed:	 	 
	 	 	 
	 	 	 
	[Name]

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