Document:

Exhibit 10.1

 

 

SECOND AMENDED AND RESTATED

INVESTMENT MANAGEMENT AGREEMENT

WHITE MOUNTAINS ADVISORS LLC, a Delaware limited liability company (the “Advisor”), having an address at 200 Hubbard Road, Guilford, Connecticut 06437, and OneBeacon Insurance Group, Ltd., an exempted limited liability company organized under the laws of Bermuda (the “Client”), having an address at 605 North Highway 169, Plymouth, Minnesota 55441, and each affiliate company of the Client listed on Schedule B, and each having an address of 605 North Highway 169, Plymouth, Minnesota 55441, or which hereinafter becomes a party to this Agreement (each, an “Affiliated Company”, and collectively, the “Affiliated Companies”), hereby enter into this Second Amended and Restated Investment Management Agreement (this “Agreement”), dated as of September 28, 2017, and hereby amend and restate in its entirety the Amended and Restated Investment Management Agreement, dated December 23, 2014. The parties hereby agree that the Advisor shall act as discretionary advisor with respect to certain assets of the Client and the Affiliated Companies described below (the “Investment Account”) on the following terms and conditions:

1.            Investment Account. The Investment Account shall consist of the cash and securities of the Client and the Affiliated Companies managed by the Advisor pursuant to this Agreement.

2.            Authority. The Client and each Affiliated Company hereby appoint the Advisor as advisor for the portion of the Investment Account comprised of its investment assets. Except as may be separately agreed in writing among the Advisor, the Client and any Affiliated Company from time to time, the Advisor hereby agrees to direct the investments in the Investment Account in accordance with the investment guidelines agreed upon by the Client, each Affiliated Company and the Advisor from time to time (the “Standard Guidelines”). Any other agreement by the Advisor, and the Client or an Affiliated Company to manage investment assets in a manner deviating from the Standard Guidelines shall be in writing. The board of directors (or other similar governing body) of the Client and each Affiliated Company shall oversee the activities of the Advisor pursuant to this Agreement and shall retain ultimate authority over the Investment Account, in each case, in relation to their respective investment assets and shall monitor services annually for quality assurance. In addition, the Advisor agrees to provide treasury management advisory services specific to the Investment Account (“Treasury Management Services”), as directed by the Client or any Affiliated Company. The Treasury Management Services include, without limitation, (i) executing investment transactions to support short-term treasury cash requirements, (ii) settling inter-company and dividend treasury transactions with cash and securities, (iii) settling quarterly tax liability payments from the Investment Account, (iv) providing preliminary valuation for securities supporting treasury transactions, (v) assisting the Client or any Affiliated Company in evaluating securities lending programs administered by custodians designated by the Client or such Affiliated Company and acceptable to the Advisor, and (vi) collaborating with the Client or any Affiliated Company to provide treasury transaction support to custodians and accounting servicing providers designated by the Client or such Affiliated Company and acceptable to the Advisor.

 

 

 

  

3.            Advisor’s Discretionary Authority. Subject to Section 2, the Advisor shall have full discretion and authority as agent and attorney-in-fact for the Client and each Affiliated Company: (a) to make all investment decisions in respect of the Investment Account on behalf of the Client and the Affiliated Companies and, except as otherwise provided in this Agreement, at the sole risk of the Client and the Affiliated Companies; (b) to buy, sell, exchange, convert, liquidate or otherwise trade in respect of the Investment Account in any stock, bond or other security or investment, including without limitation private investment funds, hedge funds, and other pooled investment vehicles (such private investment funds, hedge funds, and other pooled investment vehicles collectively referred to as “Funds”); (c) to facilitate the subscription for, redemption or transfer of interests in Funds (including but not limited to performing such acts and executing such documents as may be necessary to subscribe or redeem interests in Funds); and (d) in furtherance of the foregoing, to do anything which the Advisor shall deem requisite, appropriate or advisable in connection therewith, including, without limitation, the placing of orders with respect to, and arrangement for, any of the foregoing, and the selection of such brokers, dealers, sub-advisors and others as the Advisor shall determine in its absolute discretion. The Advisor will be responsible for engaging, contracting with, monitoring and terminating sub-advisors; however no sub-advisor shall be given discretionary authority over the Investment Account without the prior approval of the Client, and to the extent affecting the investment assets of any Affiliated Company, such Affiliated Company.

4.            Liability. In the performance of its services, the Advisor will not be liable for any error in judgment or any acts or failures to act except those resulting from the Advisor’s gross negligence, willful misconduct or malfeasance. Nothing herein shall in any way constitute a waiver or limitation of any right of any person under any applicable U.S. federal or state securities laws. The Advisor shall have no responsibility or liability or whatsoever in respect of assets outside the Investment Account.

5.            Custody. Investment Account assets shall be held in one or more separately identified accounts in the custody of one or more banks, trust companies, brokerage firms or other entities designated by the Client and each Affiliated Company, and acceptable to the Advisor. The Advisor will communicate its investment purchase, sale and delivery instructions directly with the appropriate custodian or other qualified depository. The Client and each Affiliated Company shall be responsible for its respective custodial arrangements and the payment of all related custodial charges and fees, and the Advisor shall have no responsibility or liability with respect to custody arrangements or the acts, omissions or other conduct of the custodians.

6.            Brokerage. When placing orders for the execution of transactions for the Investment Account, the Advisor may allocate all transactions to such brokers or dealers, for execution on such markets, at such prices and commission rates, as are selected by the Advisor in its sole discretion. In selecting brokers or dealers to execute transactions, the Advisor need not solicit competitive bids and does not have an obligation to seek the lowest available commission cost. It is not the Advisor’s practice to negotiate “execution only” commission rates, and, in negotiating commission rates, the Advisor shall take into account the financial stability and reputation of brokerage firms and brokerage and

 

 

 

2

 

 

research services provided by such brokers. The Client or any Affiliated Company may be deemed to be paying for research provided or paid for by the broker which is included in the commission rate although the Client or such Affiliated Company may not, in any particular instance, be the direct or indirect beneficiary of the research services provided. Research furnished by brokers may include, but is not limited to, written information and analyses concerning specific securities, companies or sectors, market, finance and economic studies and forecasts, certain financial publications, statistics and pricing services, discussions with research personnel, and certain software and data bases utilized in the investment management process. The Client and each Affiliated Company acknowledge that since commission rates are generally negotiable, selecting brokers on the basis of considerations which are not limited to applicable commission rates may at times result in higher transaction costs than would otherwise be obtainable.

The Advisor is hereby authorized to, and the Client and each Affiliated Company acknowledges that the Advisor may, aggregate orders on behalf of the Investment Account with orders on behalf of other clients of the Advisor. In such event, the allocation of the securities purchased or sold and the expenses incurred in the transaction shall be made in a manner that the Advisor considers to be fair and equitable to all of its clients, including the Client and the Affiliated Companies, and that is consistent with the allocation policies and procedures adopted and implemented by the Advisor, copies of which will be made available to clients upon request.

 

7.            Representations and Warranties.

 

(a)     the Client and each Affiliated Company represents, warrants and agrees that:

 

(i)      it has full legal power and authority to enter into this Agreement;

 

(ii)     the appointment of the Advisor hereunder is permitted by the Client’s or such Affiliated Company’s governing documents and has been duly authorized by all necessary corporate or other action;

 

(iii)    it will indemnify the Advisor and hold it harmless against any and all losses, costs, claims and liabilities which the Advisor may suffer or incur arising out of any material breach of its representations and warranties in this Section 7(a);

 

(iv)    it is not (a) an employee benefit plan, (b) an IRA, (c) a “benefit plan investor” subject to the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended, or (d) an entity in which the participation by benefit plan investors is “significant”, as those terms are defined in regulations issued by the U.S. Department of Labor; and

 

(v)     it understands that the Advisor will be relying upon the representations and information provided herein or in connection herewith by the

 

3

Client and/or the Affiliated Companies in completing and entering into subscription agreements on behalf of the Investment Account.

 

(b)    The Advisor represents, warrants and agrees that:

 

(i)      it has full legal power and authority to enter into this Agreement;

 

(ii)     it is registered as an investment adviser with the Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940, as amended (the “Advisers Act”);

 

(iii)    entering into this Agreement is permitted by the Advisor’s governing documents and has been duly authorized by all necessary corporate or other action;

 

(iv)    it will indemnify the Client and each Affiliated Company and hold it harmless against any and all losses, costs, claims, and liabilities which the Client and/or such Affiliated Company may suffer or incur arising out of any material breach of any representations and warranties of the Advisor in this Section 7(b);

 

(v)     it has established Anti-Money Laundering Policy & Procedures pursuant to Section 352 of the USA Patriot Act; and

 

(vi)    it endeavors to value all securities at fair market value in a manner determined by the Advisor to be consistent with (1) its Valuations Policies and Procedures, as may be amended from time to time, and (2) industry practice. A copy of these policies and procedures is available to clients upon request. The Advisor will not serve as the official pricing agent with respect to the Investment Account but may provide recommendations regarding fair valuation, if the Client or an Affiliated Company so requests.

 

8.            Reports. The Advisor shall provide the Client and each Affiliated Company with reports on the status of the Investment Account on a monthly basis. The books and records of the Client and the Affiliated Companies shall include those books and records developed or maintained under or related to this Agreement. All such records maintained pursuant to this Agreement shall be subject to examination by the Client and, as it relates to its own investment assets, each Affiliated Company, and by persons authorized by it, or by appropriate governmental authorities, at all times upon reasonable notice. The Advisor shall provide copies of trade tickets, custodial reports and other records that the Client and/or any Affiliated Company shall reasonably require for accounting or tax purposes.

 

9.            Management Fee, Treasury Management Fee and Expenses.

 

(a)            The Advisor will be paid a quarterly management fee and Treasury Management Fee (the “Management Fee”) for its investment advisory services and Treasury Management Services provided hereunder, determined in accordance with

 

4

Schedule A to this Agreement. For purposes of Schedule A, the Management Fee shall be calculated treating the Investment Account as a single pool. The Management Fee shall be borne by the Client and the Affiliated Companies pro rata based on their respective Investment Account assets. During the term of this Agreement, the Management Fee shall be calculated in compliance with the NAIC Accounting Practices and Procedures Manual and billed and payable in arrears on a quarterly basis within sixty (60) days after the last day of each calendar quarter based upon the value of the Investment Account as of the last day of the said calendar quarter. The Management Fee shall be pro-rated for any partial quarter. Capital inflows and outflows will be time-weighted so that the Management Fee will be charged for only the period of time such assets are actually managed by the Advisor. In the event that the Management Fee is to be paid by the custodian out of the Investment Account, the Client and/or the relevant Affiliated Company will provide written authorization to the custodian.

(b)           The Client or an Affiliated Company shall be responsible for all expenses incurred directly in connection with transactions effected on behalf of the Client or such Affiliated Company pursuant to this Agreement. These expenses shall include but are not limited to (i) custodial fees; (ii) PAM accounting service fees, (iii) Charles River (or other) compliance service fees, (iv) investment expenses such as commissions, and (v) other expenses reasonably related to the purchase, sale or transmittal of Investment Account assets, provided that the Advisor shall be responsible for research fees and expenses. The Client is prohibited from advancing funds to the Advisor except to pay for services defined in this Agreement.

 

(c)            Sub-advisory management or performance fees (“Sub-advisor Fees”), if any, will be borne by the Client and/or the affected Affiliated Companies, as appropriate, provided that said fees have been approved in advance by the Client and/or the affected Affiliated Company. No Management Fee shall accrue on any assets with respect to which Sub-advisor Fees are paid. At the Advisor’s discretion, Sub-advisor Fees may be structured to be paid directly to the sub-advisor by the Client or Affiliated Companies or be paid by the Advisor and reimbursed by the Client or Affiliated Companies without any markup. Any Management Fees incurred in connection with transactions conducted by the Advisor with regard to interests in Funds will be borne by the Client or the affected Affiliated Companies.

 

10.            Confidential Relationship. All information and advice furnished by any party to another party pursuant to this Agreement shall be treated by the receiving party as confidential and shall not be disclosed to third-parties except as required by law.

 

11.            Assignment. This Agreement may not be assigned (within the meaning of the Advisers Act) by any party without the written consent of the other party, and any assignment without such consent shall automatically cause the termination hereof.

 

12.            Directions to the Advisor. All directions by or on behalf of the Client or an Affiliated Company to the Advisor shall be in writing and may be delivered in any manner permitted by Section 16. The Advisor (i) shall be fully protected in relying upon any such writing that the Advisor believes to be genuine and to be signed or presented or

 

5

sent by the proper person or persons (ii) shall be under no duty to make any investigation or inquiry as to any statement contained therein and (iii) may accept the same as conclusive evidence of the truth and accuracy of the statements therein contained.

13.            Services to Other Clients. It is understood that the Advisor acts as investment advisor to other clients and may give advice and take action with respect to such clients that differs from the advice given or the action taken with respect to the Investment Account. Nothing in this Agreement shall restrict the right of the Advisor, its members, managers, officers, employees or affiliates to perform investment management or advisory services for any other person or entity, and the performance of such service for others shall not be deemed to violate or give rise to any duty or obligation to the Client and/or the Affiliated Companies.

 

14.            Investment by the Advisor for Its Own Account. Nothing in this Agreement shall limit or restrict the Advisor or any of its members, managers, officers, employees or affiliates from buying, selling or trading any securities for its or their own account or accounts. The Client and each Affiliated Company acknowledges that the Advisor and its members, managers, officers employees, affiliates and other clients may at any time have, acquire, increase, decrease or dispose of securities which are at or about the same time acquired or disposed of for the account of the Client or an Affiliated Company. The Advisor shall have no obligation to purchase or sell for the Investment Account or to recommend for purchase or sale by the Investment Account any security that the Advisor or its members, managers, officers, employees or affiliates may purchase or sell for itself or themselves or for any other client.

 

15.            Proxies. Subject to any other written instructions of the Client or any Affiliated Company, the Advisor is hereby appointed as the agent and attorney-in-fact of the Client and each Affiliated Company in its discretion to vote, convert or tender in an exchange or tender offer any securities in the Investment Account, to execute proxies, waivers, consents and other instruments with respect to such securities, to endorse, transfer or deliver such securities and to participate in or consent to any plan of reorganization, merger, combination, consolidation, liquidation or similar plan with reference to such securities. The Advisor shall not incur any liability to the Client or any Company Affiliate by reason of any exercise of, or failure to exercise, any such discretion.

 

16.            Notices. All notices and instructions with respect to securities transactions or any other matters contemplated by this Agreement shall be deemed duly given when actually received by the intended party in writing, via facsimile, or e-mail or by first-class mail to the following addresses: (a) if to the Advisor, at its address set forth above, Attention Chief Financial Officer, if by facsimile to 203.458.0754 and if by e-mail, mplourde@whitemountainsadvisors.com or (b) if to the Client or any Affiliated Company, at its address set forth above, attention Chief Financial Officer, if by facsimile to 888.340.6383, and if by email, pmcdonough@onebeacon.com. A copy of any notice sent to the Client pertaining to the amendment or termination of this Agreement shall be sent to 2020 Robert-Bourassa Boulevard, 6th floor, Montreal, Quebec, Canada, H3A 2A5, Attention: Frédéric Cotnoir, Senior Vice President, Legal and Corporate Services, if by

 

6

facsimile to 514-842-6958 and if by e-mail, frederic.cotnoir@intact.net. Any of the Advisor, the Client or an Affiliated Company may change its physical address, facsimile number or e-mail address or specify a different manner of addressing itself by giving notice of such change in writing to the other party.

17.            Joining and Severing Affiliated Companies. From time to time while this Agreement remains in effect, the Client may cause any other of its affiliates to become an Affiliated Company hereunder by executing a written agreement among the Client, the Advisor and such affiliate in a form reasonably acceptable to each of them, after which the affiliate shall, for all purposes, be treated as an “Affiliated Company” hereunder, including, without limitation, granting the authorities, making the representations and warranties and accepting the obligations of an Affiliated Company in this Agreement. From time to time, the Client and/or the Advisor may sever any Affiliated Company from this Agreement by executing a written agreement among the Client, the Advisor and such Affiliated Company in a form reasonably acceptable to each of them, after which the Affiliated Company shall no longer be treated as being party to this Agreement. The Advisor will periodically update Schedule B to reflect the addition or removal of Affiliated Companies.

 

18.            Entire Agreement, Amendment. This Agreement sets forth the entire agreement of the parties with respect to management of the Investment Account, supersedes any previous Investment Management Agreement between the Advisor and the Client or any Affiliated Company and shall not be amended except by an instrument in writing signed by the parties hereto.

 

19.            Arbitration. Any controversy or claim arising out of or relating to this Agreement or the breach of the same, shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction. All arbitration expenses shall be borne equally by the Advisor, on the one hand, and the Client and any affected Affiliated Company, on the other hand. Any arbitration proceeding arising under this Agreement will be conducted in the County of New York in the State of New York or such other location as the parties mutually agree.

 

20.            Termination. This Agreement shall terminate in its entirety on January 31, 2018 or earlier by the Client upon thirty (30) days’ prior written notice to the Advisor, provided that the Client shall honor any trades executed but not settled before the date of any such termination. Upon termination of this Agreement, (i) any accrued and unpaid Management Fee hereunder, (ii) accrued reimbursable expenses and (iii) any reasonable additional expenses incurred in closing out the Account shall be paid by the Client or the relevant Affiliated Company to the Advisor. Termination of this Agreement will not affect any accrued rights, indemnities, existing commitments or any contractual provisions intended to survive termination. The Advisor may direct the custodian to retain in the Investment Account to settle committed transactions.

 

21.            Receivership. If an Affiliated Company is placed in receivership under a state’s receivership law: (i) the rights of the Affiliated Company under the agreement

 

7

extend to the receiver or the chief state insurance department official; and (ii) the books and records shall be subject to examination of the receiver or the chief state insurance department official immediately upon the receiver or the chief state insurance department official’s request. The Advisor does not have an automatic right to terminate the agreement if an Affiliated Company is placed in receivership under a state’s receivership law. The Advisor will continue to maintain systems, programs, or other infrastructure notwithstanding a seizure by the chief state insurance department official under a state’s receivership law and shall make them available to the receiver for as long as the Advisor continues to receive timely payment for the services rendered.

22.            Severability. If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) of the application of such provision to any other persons or circumstances.

 

23.            Governing Law. To the extent that the interpretation or effect of this Agreement shall depend on state law, this Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

24.            Effective Date. This Agreement shall become effective on the first date written above.

 

25.            Receipt of Disclosure Statement. The Client and each Affiliated Company acknowledges receipt of a copy of Part II of the Advisor’s Form ADV in compliance with Rule 204-3(b) under the Advisers Act, more than 48 hours prior to the date of execution of this Agreement. The Advisor shall annually and without charge, upon request by the Client, deliver to the Client the current version of such form or a written document containing the information then required to be contained in such form.

 

26.            Counterparts. This Agreement may be executed in two counterparts, each one of which shall be deemed to be an original.

 

8

IN WITNESS HEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives as of the date first written above.

 

	
ADVISOR:

	 	
CLIENT:

	
WHITE MOUNTAINS ADVISORS LLC

	 	
ONEBEACON INSURANCE GROUP, LTD.

	
By:

	
/s/ Mark J. Plourde

	 	 	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
Mark J. Plourde

	 	
Print:

	
T. Michael Miller

	
Title:

	
Executive Vice President & CFO

	 	
Title:

	
President & CEO

 

  

9

	
AFFILIATED COMPANIES:

 

 

MILL SHARES HOLDINGS (BERMUDA) LTD.

	 	 
	
By:

	
/s/ Susie Tindall

	 
	
Print:

	
Susie Tindall

	
Title:

	
Assistant Secretary

	
ONEBEACON INSURANCE GROUP LLC

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

	
ONEBEACON U.S. ENTERPRISES HOLDINGS, INC.

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

	
ONEBEACON U.S. FINANCIAL SERVICES, INC.

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

 

  

10

	
ONEBEACON U.S. HOLDINGS, INC.

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

	
ATLANTIC SPECIALTY INSURANCE COMPANY

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

	
HOMELAND INSURANCE COMPANY OF DELAWARE

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

	
HOMELAND INSURANCE COMPANY OF NEW YORK

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

	
OBI NATIONAL INSURANCE COMPANY

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

11

 

	
OBI AMERICA INSURANCE COMPANY

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

  

	
ONEBEACON SELECT INSURANCE COMPANY

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

  

	
ONEBEACON SPECIALTY INSURANCE COMPANY

	 	 
	
By:

	
/s/ T. Michael Miller

	 
	
Print:

	
T. Michael Miller

	
Title:

	
President & CEO

	
SPLIT ROCK INSURANCE, LTD.

	 	 
	
By:

	
/s/ Susie Tindall

	 
	
Print:

	
Susie Tindall

	
Title:

	
Secretary

 

  

12

SCHEDULE A

 

FEE SCHEDULE

 

1.            Investment Account

 

 

	
Assets Under Management

	 	
Annual Fee

	 	
Quarterly Fee

	
 

Investment Grade Fixed Income:

	 	 	 	 
	
Up to $1 billion

	 	
10 bps

	 	
2.5 bps

	
$1 billion - $2 billion

	 	
8.5 bps

	 	
2.125 bps

	
$2 billion - $5 billion

	 	
7.5 bps

	 	
1.875 bps

	
Greater than $5 billion

	 	
2.5 bps

	 	
0.625 bps

	 	 	 	 	 
	
Equities

	 	
100 bps

	 	
25 bps

	 	 	 	 	 
	
Exchange Traded Funds (ETFs)

	 	
10 bps

	 	
2.5 bps

	 	 	 	 	 
	
Hedge Funds

	 	
100 bps

	 	
25 bps

	 	 	 	 	 
	
Private Equities:

	 	 	 	 
	
First 2 Years of Fund’s Life (Committed)

	 	
100 bps

	 	
25 bps

	
Thereafter (Fair Value)

	 	
100 bps

	 	
25 bps

	 	 	 	 	 
	
Affordable Housing Tax Credit Funds

	 	 	 	 
	
First Year of Fund’s Life (Committed)

	 	
100 bps

	 	
25 bps

	
Thereafter (Fair Value)

	 	
10 bps

	 	
2.5 bps

 

 

2.            Treasury Management Services. The Advisor will be paid a quarterly fee for the treasury management services computed at the annual rate of 1.75 basis points (0.0175%) of the aggregate value of the net assets of the Client’s Investment Account.

 

SCHEDULE B

 

AFFILIATED COMPANIES

 

MILL SHARES HOLDINGS (BERMUDA) LTD.

ONEBEACON INSURANCE GROUP LLC

ONEBEACON U.S. ENTERPRISES HOLDINGS, INC.

ONEBEACON U.S. FINANCIAL SERVICES, INC.

ONEBEACON U.S. HOLDINGS, INC.

ATLANTIC SPECIALTY INSURANCE COMPANY

HOMELAND INSURANCE COMPANY OF DELAWARE

HOMELAND INSURANCE COMPANY OF NEW YORK

OBI NATIONAL INSURANCE COMPANY

OBI AMERICA INSURANCE COMPANY

ONEBEACON SELECT INSURANCE COMPANY

ONEBEACON SPECIALTY INSURANCE COMPANY

SPLIT ROCK INSURANCE, LTD.Blueprint

 

 

EMPLOYMENT AGREEMENT

 

This
EMPLOYMENT AGREEMENT, dated as of July 1, 2017, is by and between
SCIENTIFIC INDUSTRIES, INC., a Delaware corporation with its
principal executive offices at 80 Orville Drive, Suite 102,
Bohemia, New York 11716 (the “Company”) and KARL
NOWOSIELSKI, an individual residing at 139 Pascack Road, Pearl
River, New York 10965 (“Employee”).

 

W I T N E S S E T H:

 

WHEREAS,
the Company desires to continue to employ Employee as a senior
executive of the Company, and Employee desires to continue to serve
in such capacity, all on the terms and conditions set forth
below.

 

NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

 

1. Retention of Services; Term.
The Company hereby retains the services of Employee, and Employee
agrees to furnish such services, upon the terms and conditions
hereinafter set forth. Subject to earlier termination on the terms
and conditions hereinafter provided, and further subject to certain
provisions hereof which survive the term of the employment of
Employee by the Company, the term of this Agreement shall be
comprised of a three year period of employment commencing on July
1, 2017 and ending on June 30, 2020 (the “Initial
Term”), and shall be extended thereafter for two additional
one-year periods (each an “Additional Term”, and
together with the Initial Term, the “Term”) unless or
until the Company or Employee provides no less than 90 days’
prior notice to the other party of the termination of this
Agreement at the end of the then-current Term.

 

2. Duties and Extent of Services During
Period of Employment.
During the Term, Employee shall: (a) remain employed by the Company
as (i) President of the Company’s Torbal Division and (ii)
Director of Marketing of the Company; (b) perform such duties and
services as are commensurate with Employee’s positions; (c)
devote Employee’s full business time and exclusive business
efforts to serving the Company; (d) perform all duties incident to
Employee’s position to the best of Employee’s ability
and in compliance with the policies and procedures of the Company,
applicable law and past practice with respect to Employee’s
responsibilities; and (e) perform all of Employee’s
responsibilities and duties hereunder in the Northeast United
States region, subject, however, to the reasonable travel
requirements of Employee’s position, which travel
requirements may include visits or occasional work at other offices
of the Company from time to time. Employee may work from home, from
time to time, with the prior consent of the Company’s Board
of Directors (the “Board”) or Chief Executive
Officer.

 

3. Remuneration. During the Term,
the Company shall pay to Employee as compensation for
Employee’s services hereunder:

 

(a) a base salary equal
to $157,000 per annum for the period from the date hereof through
June 30, 2018, payable in a manner consistent with the
Company’s payroll practices, which amount shall increase
thereafter on first day of each fiscal year, commencing as of July
1, 2018, by the greater of (i) four percent (4%) per annum, or (ii)
the percentage increase, if any, in the Consumer Price Index for
all urban consumers as published by the U.S. Bureau of Labor
Statistics (“CPI”) at the end of the immediate
preceding year over the CPI as of the beginning of such year
(measured in each case from the nearest date on or prior to the
relevant anniversary date of the Term for which CPI data is
published);

 

(b) an annual bonus of
(i) $10,000 for the fiscal year ending June 30, 2018, payable not
later than October 15, 2018, (ii) $10,000 for the fiscal year
ending June 30, 2019, subject to achievement of a minimum increase
of 5% in the Company’s Torbal division EBITDA over such
fiscal year, payable not later than October 15, 2019, (iii) $10,000
for the fiscal year ending June 30, 2020, subject to achievement of
a minimum increase of 5% in the Company’s Torbal division
EBITDA over such fiscal year, payable not later than October 15,
2020, and (iv) for each subsequent year such additional bonus or
bonuses as may be determined by the Board, or the compensation
committee thereof (the “Compensation Committee”), in
its sole discretion, in each case payable not later than the
97th day
of the next fiscal year; and

 

As soon
as reasonably practicable following the date of this Agreement, the
Company’s Stock Option Committee shall grant to Employee
non-qualified options (the “Stock Options”) to purchase
7,500 shares of common stock of the Company, par value $0.05 per
share (the “Common Stock”), exercisable at an exercise
price equal to the fair market value of the shares of Common Stock
of the Company on the date of grant, pursuant to the
Company’s 2012 Stock Option Plan, as amended (the
“Plan”). The Stock Options will (i) have a ten-year
term, including for the maximum period after any termination of
Employee’s employment by the Company permitted under the
Plan, and (ii) become exercisable one-third on each of the first,
second and third anniversaries of the date of grant; provided,
however, such vesting shall be accelerated by 12 months upon the
occurrence of a Change in Control of the Company (as defined
below), and shall contain a cashless exercise provision. For
purposes of this Agreement, a “Change in Control” of
the Company shall be deemed to have taken place (A) if as the
result of, or in connection with, any cash tender or exchange
offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing
transactions, the persons who were directors of the Company within
twelve months before such transaction shall cease to constitute a
majority of the Board of the Company of any successor entity; (B)
the consummation of a merger or consolidation of the Company, with
or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power of the contributing or
surviving entity’s issued shares or securities outstanding
immediately after such merger, consolidation or other
reorganization is owned beneficially by persons other than the
shareholders who owned beneficially more than 50% of the combined
voting power of the Company’s securities immediately prior to
such merger, consolidation or other reorganization; (C) the sale,
transfer of other disposition of all or substantially all of the
Company’s assets.

 

4. Employee Benefits;
Expenses.

 

(a) During the Term,
the Company shall provide to Employee the right to participate in
the Company’s then existing medical and dental insurance and
all other employee benefit plans and policies on the same terms as
are then generally available to the Company’s senior
executive employees, and not less than as currently provided to
Employee, including without limitation, medical insurance,
disability insurance, life insurance, holiday and sick pay, and the
right to participate in and receive matching contributions pursuant
to the Company’s plan under Section 401(k) of the Internal
Revenue Code.

 

(b) Employee shall be
entitled to paid vacation each fiscal year during the Term at the
rate of twenty days per annum. Vacation shall be taken each year
and, if not taken, up to two weeks of unused vacation days shall be
carried over per year, for up to a maximum aggregate of 35 days
carried over. In the event that Employee’s employment by the
Company is terminated for any reason whatsoever, the Company shall
pay to Employee an amount equal to the number of unused vacation
days, including carried over vacation days, times Employee’s
then-current daily rate of salary pursuant to Section 3(a) above,
upon such termination. Employee shall also be entitled to six (6)
personal days per fiscal year during the Term. In the event that
Employee does not use all such personal days, the Company shall pay
to Employee for up to 3 days of unused personal days’ times
Employee’s then-current daily rate of salary pursuant to
Section 3(a) above.

 

(c) The Company shall
reimburse Employee, in accordance with the practice followed from
time to time for other executive officers of the Company, for a
cellular telephone, a laptop computer, including all expenses
relating to operating a laptop computer and wireless connections
and suitable software thereon, and all reasonable and necessary
business and traveling expenses and other disbursements incurred by
Employee for or on behalf of the Company in the performance of
Employee’s duties hereunder, upon presentation by Employee to
the Company of appropriate documentation of such.

 

5.      
Disability. This
Agreement may be terminated at the option of the Company if, as a
result of any physical or mental disability, Employee is unable to
perform substantially all of Employee’s major duties
hereunder for a continuous period of four months or at least 90
days in any consecutive period of 180 days. Employee shall continue
to receive Employee’s full salary plus bonus payments payable
to Employee under Section 3 hereof regardless of any illness or
incapacity, unless and until this Agreement is terminated. If
Employee’s employment is terminated pursuant to this Section
5, Employee (or Employee’s personal representative, in the
case of Employee’s death) shall be entitled to receive
Employee’s full salary through the effective date of
termination.

 

6.     
  Confidential
Information; Proprietary Rights.

 

(a)      
In the course of Employee's employment by the Company, Employee
will have access to and possession of valuable and important
confidential or proprietary data or information of the Company.
Employee will not, during Employee's employment by the Company or
at any time thereafter, divulge or communicate to any person, nor
shall Employee direct any other employee, representative or agent
of the Company to divulge or communicate to any person or entity
(other than to a person or entity bound by confidentiality
obligations similar to those contained herein and other than as
necessary in performing Employee’s duties hereunder) or use
to the detriment of the Company, or for the benefit of any other
person or entity, including, without limitation, any competitor,
supplier, licensor, licensee or customer of the Company, any of
such confidential or proprietary data or information or make or
remove any copies thereof, whether or not marked or otherwise
identified as “confidential” or “secret.”
Employee shall take all reasonable precautions in handling the
confidential or proprietary data or information within the Company
to a strict need-to-know basis and shall comply with any and all
security systems and measures adopted from time to time by the
Company to protect the confidentiality of confidential or
proprietary data or information.

 

(b)      
The term "confidential or proprietary data or information" as used
in this Agreement shall mean information not generally available to
the public, including, without limitation, any patent, patent application, license,
sublicense, copyright, trademark, trade name, service mark, service
name, "know-how", trade secrets, customer lists, vendor lists,
customer pricing or terms, details of client or consultant
contracts, pricing policies, cost information, operational methods,
marketing plans or strategies, product development techniques or
plans, business acquisition plans or any portion or phase of any
business, scientific or technical information, ideas, discoveries,
designs, computer programs (including source or object codes),
processes, procedures, formulae, improvements, information relating
to the products currently being sold, developed or contemplated, by
the Company, or which hereinafter may be sold, developed or
contemplated, by the Company through the date of termination of
this Agreement, including, but not limited to, the proprietary or
intellectual property of the Company, whether or not in written or
tangible form, and whether or not registered, and including all
memoranda, notes, summaries, plans, reports, records, documents and
other evidence thereof. Notwithstanding the foregoing, data
or information shall not constitute "confidential or proprietary
data or information" hereunder if it:

 

(i)
is or becomes part
of the public domain other than due to the breach of this Agreement
by Employee;

(ii)
is already known to
the Employee on a non-confidential basis at the time of disclosure
by the Company;

(iii) becomes
known to the Employee from a source other than the Company,
provided that such source has not entered into a confidentiality
agreement with the Company with respect to such information or
obtained the information from an entity or person who is a party to
a confidentiality agreement with the Company, and without a breach
of this Agreement or without a breach of duty owed by any other
person or entity to the Company;

(iv)
is proven by
competent evidence by the Employee that it was independently
conceived or discovered by the Employee without reference to or use
of the Company’s confidential or proprietary information;
or

(v) is required by law
to be disclosed by Employee.

 

(c)       
Employee will at all times promptly disclose to the Company in such
form and manner as the Company may reasonably require, any
inventions, improvements or procedural or methodological
innovations, including, without limitation, those relating to
programs, methods, forms, systems, services, designs, marketing
ideas, products or processes (whether or not capable of being
trademarked, copyrighted or patented) conceived or developed or
created by Employee during or in connection with Employee’s
employment with the Company and which relate to the business of the
Company (the "Intellectual Property"). Employee agrees that all
such Intellectual Property shall be the sole property of the
Company. Employee hereby assigns all of Employee’s right,
title and interest to the Intellectual Property to the Company.
Employee further agrees that Employee will execute such instruments
and perform such acts as may reasonably be requested by the Company
to transfer to and perfect in the Company all legally protectable
rights in such Intellectual Property. To the extent any moral
rights or other Intellectual Property rights are not legally
transferable to the Company, Employee hereby waives and agrees to
never assert any such rights against the Company or any of its
affiliates, even after termination of employment with the
Company.

 

(d)       
All written materials, books, records and documents made by
Employee or coming into Employee’s possession during
Employee’s employment by the Company concerning any products,
processes or systems used, developed, investigated, purchased, sold
or considered by the Company or otherwise concerning the business
or affairs of the Company, including, without limitation, any
files, customer records such as names, telephone numbers, addresses
and e-mail addresses, lists, firm records, brochures and
literature, shall be the sole property of the Company, shall not be
removed from the Company’s premises or transmitted to third
parties by Employee, and upon termination of Employee’s
employment by the Company, or upon request of the Company during
Employee’s employment by the Company, Employee shall promptly
deliver the same to the Company. In addition, upon termination of
Employee’s employment by the Company, Employee will deliver
to the Company all other Company property in Employee’s
possession or under Employee’s control, including, but not
limited to, financial statements, marketing and sales data,
customer and supplier lists and information, account lists and
other account information, database information, plans, designs and
other documents, and Employee shall not retain any electronically
stored versions of the same.

 

(e)        
During the term of this Agreement, Employee shall comply in all
respects with all applicable federal and state securities laws,
including without limitation with respect to insider trading, and
all policies and codes of conduct or ethics of the Company and its
affiliates with respect thereto.

 

7.            

Non-Competition; Non-Interference;
Non-Solicitation.

 

(a)         
During the Term and for a period of twelve months thereafter (the
"Restricted Period"), Employee shall not, without the written
consent of the Company, directly or indirectly, (i) become
associated with, render services to, invest in, represent, advise
or otherwise participate in as an officer, employee, director,
stockholder, partner, member, promoter, agent of, consultant for or
otherwise, any business, wherever conducted, which is directly
competitive with the business conducted by the Company; or (ii) for
Employee’s own account or for the account of any other person
or entity (A) interfere with the Company’s relationship with
any of its suppliers, customers, accounts, brokers, representatives
or agents or (B) solicit or transact any business with any
customer, account or supplier of the Company who or which transacts
or has transacted business with the Company at any time during the
Term; or (iii) employ or otherwise engage, or solicit, entice or
induce on behalf of Employee or any other person or entity, the
services, retention or employment of any person who has been an
employee, principal, partner, stockholder, sales representative,
trainee, consultant to or agent of the Company within one year of
the date of such offer or solicitation. Notwithstanding any
provisions in this Section 7, (1) this Section 7 shall not prohibit
Employee from purchasing or owning up to five percent (5%) of the
outstanding capital stock of a company which is listed or
authorized for trading on any national securities exchange, Nasdaq
or the over-the-counter markets or has a class of securities
registered under Section 12 of the Securities Act of 1934, as
amended and (2) to the extent not inconsistent with
Employee’s obligations under this Agreement, Employee may
engage in charitable or civic activities and make passive
investments in businesses which are not competitive with the
business of the Company.

 

(b)          
If any one or more of the restrictions contained in this Section 7
shall for any reason be held to be unreasonable with regard to
time, duration, geographic scope or activity, the parties
contemplate and hereby agree that such restriction shall be
modified and shall be enforced to the full extent compatible with
applicable law. The parties hereto intend that the covenants
contained in this Section 7 shall be deemed a series of separate
covenants for each country, state, county and city. If, in any
judicial proceeding, a court shall refuse to enforce all the
separate covenants deemed included in this Section 7 because, taken
together, they cover too extensive a geographic area, the parties
intend that those of such covenants (taken in order of the cities,
counties, states and countries therein which are least populous)
which if eliminated would permit the remaining separate covenants
to be enforced in such proceeding shall, for the purpose of such
proceeding, be deemed eliminated from the provisions of this
Section 7.

 

8.           Remedies.
Employee acknowledges that the covenants contained in Sections 6
and 7 are fair and reasonable in order to protect the
Company’s business and were a material and necessary
inducement for the Company to agree to the terms of this Agreement
and to the employment of Employee by the Company. Employee further
acknowledges that any remedy at law for any breach or threatened or
attempted breach of the covenants contained in Sections 6 and 7 may
be inadequate and that the violation of any of the covenants
contained in Sections 6 and 7 will cause irreparable and continuing
damage to the Company. Accordingly, the Company shall be entitled
to specific performance or any other mode of injunctive and/or
other equitable relief to enforce its rights hereunder, including,
without limitation, an order restraining any further violation of
such covenants, or any other relief a court might award, without
the necessity of showing any actual damage or irreparable harm or
the posting of any bond or furnishing of other security, and that
such injunctive relief shall be cumulative and in addition to any
other rights or remedies to which the Company may be entitled. The
covenants in Sections 6 and 7 shall run in favor of the Company and
its affiliates, successors and assigns. The provisions of Sections
6 and 7 and this Section 8 shall survive the termination of this
Agreement.

 

9.            
Termination.

 

(a)        
   The Company may terminate Employee’s services
hereunder "for cause" by delivering to Employee not less than ten
(10) days prior to the date on which the termination is to be
effective, a written notice of termination for cause specifying the
act, acts or failure to act that constitute the cause. For the
purposes of this Agreement, “for cause” shall mean: (i)
any act of material fraud or embezzlement; (ii) commission by
Employee of any felony or entry of a plea of nolo contendere to a
felony charge; (iii) commission by Employee of a crime involving
moral turpitude or any knowing violation of any federal or state
banking or securities law, (iii) any repeated refusal by Employee
to perform Employee’s duties consistent with the terms of
this Agreement after reasonable notice and opportunity to cure,
(iv) any material breach by Employee of this Agreement, if such
material breach, if capable of cure, is not cured within twenty
(20) days after written notice thereof, (v) the gross negligence or
gross misconduct (including conflict of interest in carrying out
Employee's duties under this Agreement), or (vi) the death of
Employee..

 

(b)           
If (i) the Company terminates Employee’s employment hereunder
"for cause" as set forth in Section 9(a) hereof or (ii) Employee
voluntarily terminates Employee’s employment by the Company
other than for “Good Reason” (as defined below), the
Company shall pay to Employee any unpaid compensation payable
pursuant to Section 3 hereof, which payment (y) shall include all
compensation earned up until and including the date on which the
termination is effective, and (z) shall be made within 30 days
after the termination date, and no other compensation shall be
payable to Employee.

 

(c)           
If the Company terminates Employee’s employment hereunder for
any reason other than "for cause" as set forth in Section 9(a)
hereof, or Employee terminates Employee’s employment
hereunder for “Good Reason” (as defined below), the
Company shall pay to Employee compensation payable pursuant to
Section 3 and Section 4 hereof, as specified herein, for one
calendar year from the date of termination (the “Severance
Payments”), including any accrued but unused vacation and
sick time, and provide the Employee with health insurance benefits
at the cost of the Company for one year after date of termination .
Employee and the Company acknowledge that the foregoing provisions
of this Section 9(c) are reasonable and are based upon the facts
and circumstances of the parties at the time of entering into this
Agreement, and with due regard to future expectations.

 

(d)           Resignation
for Good Reason. Employee may terminate Employee's
employment hereunder for "Good Reason". For purposes of this
Agreement, "Good Reason" shall mean (i) a substantial diminution or
change of the duties of the Employee which is materially
inconsistent with Employee's duties and services provided for in
Section 2 hereof, (ii) a material breach by the Company of this
Agreement after notice and such breach has not been cured within
twenty days after receipt of such notice, or (iii) any purported
termination by the Company of Employee's employment otherwise than
expressly permitted by this Agreement.

 

10.           Indemnification;
Insurance.

 

(a)       
  The Company agrees to indemnify Employee and hold Employee
harmless against any and all losses, claims, damages, liabilities
and costs (and all actions in respect thereof and any legal or
other expenses in giving testimony or furnishing documents in
response to a subpoena or otherwise), including, without
limitation, the reasonable costs of investigating, preparing or
defending any such action or claim, whether or not in connection
with litigation in which Employee is a party, as and when incurred,
directly or indirectly caused by, relating to, based upon or
arising out of any work performed by Employee in connection with
this Agreement to the full extent permitted by the Delaware General
Corporation Law and by the Certificate of Incorporation and Bylaws
of the Company, as may be amended from time to time.

 

(b)           The
indemnification provision of this Section 10 shall be in addition
to any liability which the Company may otherwise have to
Employee.

 

(c)           If
any action, proceeding or investigation is commenced as to which
Employee proposes to demand such indemnification, Employee shall
notify the Company with reasonable promptness. The Company shall
have the right to retain counsel of its own choice to represent
Employee, subject to Employee’s reasonable consent, and the
Company shall pay all reasonable fees and expenses of such counsel;
and such counsel shall, to the fullest extent consistent with such
counsel’s professional responsibilities, cooperate with the
Company and any counsel designated by the Company. The Company
shall be liable for any settlement of any claim against Employee
made with the Company’s written consent, to the fullest
extent permitted by the Delaware General Corporation Law and any
other applicable law, the Certificate of Incorporation and Bylaws
of the Corporation, as may be amended from time to time. No such
settlement of any claim shall be made by Employee without the
written consent of the Company.

 

(d)           Further,
the Company agrees to include Employee
in the coverage of any directors' and officers' liability it
provides on behalf of its directors or senior executive officers
and, if Employee is a fiduciary under a Company plan, coverage
under the applicable fiduciary liability insurance
policy.

 

11.            

Taxes and Compliance with Section
409A.

 

(a)           
This Agreement is intended to comply with Section 409A of the
Internal Revenue Code (the “Code”) (as amplified by any
regulations promulgated thereunder (the “Treasury Regulations”) or other
Internal Revenue Service or U.S. Treasury Department guidance), and
shall be construed and interpreted in accordance with such intent.
If either the Company or Employee reasonably determine that the
Agreement does not meet the requirements of Code Section 409A and
that the Agreement may be amended or modified to meet the
requirements of Code Section 409A, the Agreement shall be amended
or modified in order to meet the requirements of Code Section 409A;
provided, that any
such amendment or modification shall be subject to the mutual
agreement of Employee and the Company. Moreover, if, upon
Employee’s separation from service, Employee is then a
“specified employee” (as defined in Section 409A of the
Code), then only to the extent necessary to comply with Code
Section 409A and avoid imposition of taxes under Code Section 409A,
the Company will defer payment of certain of the amounts owed to
Employee under this Agreement until the earlier of Employee’s
death or the first business day of the seventh month following
Employee’s separation from service.

 

(b)           Any
right to a series of installment payments pursuant to this
Agreement is to be treated as a right to a series of separate
payments. To the extent permitted under Section 409A of the Code,
any separate payment or benefit under this Agreement or otherwise
shall not be deemed “nonqualified deferred
compensation” subject to Section 409A of the Code to the
extent provided in the exceptions in Treasury Regulation Section
1.409A-1(b)(4), Section 1.409A-1(b)(9) or any other applicable
exception or provision of Section 409A of the Code.

 

 

(c)           To
the extent that any payments or reimbursements provided to Employee
under this Agreement are deemed to constitute compensation to
Employee to which Treasury Regulation Section 1.409A-3(i)(1)(iv)
would apply, such amounts shall be paid or reimbursed reasonably
promptly, but not later than 75th day following the fiscal year in
which the expense was incurred. The amount of any such payments
eligible for reimbursement in one year shall not affect the
payments or expenses that are eligible for payment or reimbursement
in any other taxable year, and Employee’s right to such
payments or reimbursement of any such expenses shall not be subject
to liquidation or exchange for any other benefit. No offset by the
Company shall be permitted against amounts that constitute deferred
compensation subject to Code Section 409A.

 

12           Notices.
All notices, claims or other communications to be given or
delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when
delivered personally to the recipient, when sent by email,
facsimile or other electronic transmission, the receipt of which is
electronically confirmed, or one (1) day after being sent to the
recipient by reputable overnight courier service (charges prepaid).
Such notices, claims and other communications shall be sent to the
addresses indicated below or to such other address or to the
attention of such other Person as the recipient party has specified
by prior written notice to the sending party. All notices, claims
and other communications hereunder may be given by any other means,
but shall not be deemed to have been duly given unless and until it
is actually received by the intended recipient:

 

 

 

	

If to
the Employee, to:

	

Karl
Nowosielski

	
 

	

139
Pascack Road

	
 

	

Pearl
River, NY 10965

	
 

	

Telephone:
201-925-7173

	
 

	

Email:
karlnowos@gmail.com

 

	

With a
copy to:

	

Kaufman
& Associates, LLC

	
 

	

200
Motor Parkway, Suite B-13

	
 

	

Hauppauge,
New York 11788

	
 

	

Attention:
Neil M. Kaufman

	
 

	

Telephone:
(631) 972-0042

	
 

	

Facsimile:
(631) 410-1007

	
 

	

Email:
nkaufman@kaufman-associates.com

 

	

If to
the Company, to:

	

Scientific
Industries, Inc.

	
 

	

80
Orville Drive, Suite 102

	
 

	

Bohemia,
New York 11716

	
 

	

Attention:
Chairman of Compensation Committee

	
 

	

Telephone:
(631) 567-4700

	
 

	

Facsimile:
(631) 567-5896

	
 

	

Email:
gmorin@altamirainstruments.com

 

13.           Successors
and Assigns; Third Party Beneficiaries. This Agreement shall
be binding upon and inure to the benefit of the successors and
assigns of the Company, and unless clearly inapplicable, all
references herein to the Company shall be deemed to include any
such successor. In addition, this Agreement shall be binding upon
and inure to the benefit of Employee and Employee’s heirs,
executors, legal representatives and assigns; provided, however,
that the obligations of Employee hereunder may not be delegated
without the prior written approval of the Company. In the event of
any consolidation or merger of the Company into or with any other
corporation during the term of this Agreement, or the sale of all
or substantially all of the assets of the Company to another
corporation, person or entity during the term of this Agreement,
such successor corporation shall assume this Agreement and become
obligated to perform all of the terms and provisions hereof
applicable to the Company, and Employee's obligations hereunder
shall continue in favor of such successor corporation.

 

14.           
Acknowledgment.
Employee acknowledges that Employee has carefully read this
Agreement, has had an opportunity to consult counsel regarding this
Agreement and hereby represents and warrants to the Company that
Employee’s entering into this Agreement, and the obligations
and duties undertaken by Employee hereunder, will not conflict
with, constitute a breach of or otherwise violate the terms of any
other agreement to which Employee is a party and that Employee is
not required to obtain the consent of any person, firm, corporation
or other entity in order to enter into and perform Employee’s
obligations under this Agreement.

 

15.            

Waiver of Jury
Trial.

 

EACH
PARTY TO THIS AGREEMENT HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY RELATED
DOCUMENTS, ANY DEALINGS BETWEEN OR AMONG THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT.

 

16.           
Enforcement. It is
the desire and intent of the parties hereto that the provisions of
this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, to the extent that a
restriction contained in this Agreement is more restrictive than
permitted by the laws of any jurisdiction where this Agreement may
be subject to review and interpretation, the terms of such
restriction, for the purpose only of the operation of such
restriction in such jurisdiction, shall be the maximum restriction
allowed by the laws of such jurisdiction and such restriction shall
be deemed to have been revised accordingly herein. If any provision
of this Agreement shall be held by a court of competent
jurisdiction to be contrary to law or public policy, the remaining
provisions shall remain in full force and effect.

 

17.           Miscellaneous.
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York, without regard
to conflicts of laws. The parties hereto hereby irrevocably submit
to the exclusive jurisdiction of any New York State or Federal
court sitting in Suffolk County, New York over any suit, action or
proceeding arising out of or relating to this Agreement. This
Agreement contains the entire agreement of the parties relating to
the subject matter hereof and supersedes any other agreements
entered into between Employee and the Company prior to the date of
this Agreement relating thereto. This Agreement may not be altered,
modified, amended or terminated except by a written instrument
signed by each of the parties hereto. No term or provision hereof
shall be deemed waived and no breach consented to or excused,
unless such waiver, consent or excuse shall be in writing and
signed by the party claimed to have waived, consented or excused. A
consent, waiver or excuse of any breach shall not constitute a
consent to, waiver or, or excuse of any other or subsequent breach
whether or not of the same kind of the original breach. This
Agreement may be executed and delivered by facsimile signature and
in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument. Counterparts may be delivered via facsimile,
electronic mail (including pdf or any electronic signature
complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other
transmission method and any counterpart so delivered shall be
deemed to have been duly and validly delivered and be valid and
effective for all purposes. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect
the meaning hereof.

 

[SIGNATURE PAGE TO
FOLLOW]

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day of and year first above written.

 

	
 

	

Scientific Industries, Inc.

	
 

	
 

	
 

	
 

	
 

	

By: 

	

/s/ Helena R. Santos

	
 

	
 

	
 

	

Name: Helena R. Santos

	
 

	
 

	
 

	

Title: President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

/s/ Karl Nowosielski

	
 

	
 

	
 

	

Karl Nowosielski

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}]]