UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 28, 2019
SusGlobal Energy Corp.
(Exact name of registrant as specified in its charter)
| Delaware | 000-56024 | 38-4039116 |
| (State or other jurisdiction of | (Commission | (IRS Employer |
| incorporation) | File Number) | Identification No.) |
| 200 Davenport Road |
| Toronto, ON, Canada, M5R 1J2 |
| (Address of principal executive offices) (Zip Code) |
| (416) 223-8500 |
| (Registrant’s telephone number, including area code) |
| N/A |
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Name of each exchange on which | ||
| Title of each class | Trading Symbol(s) | registered |
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b -2 of this chapter).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [X]
Item 1.01 Entry into a Material Definitive Agreement.
On November 6, 2019, Susglobal Energy Corp. (the "Company") entered into an Executive Chairman Consulting Agreement (the "Hazout Consulting Agreement"), by and among the Company, Travellers International Inc. ("Travellers"), and Marc Hazout, Chairman and President of the Company ("Hazout"), effective January 1, 2020 (the "Effective Date"). The Hazout Consulting Agreement will replace the consulting agreement currently in effect by and among the Company, Travellers, and Hazout, with its term set to expire on December 31, 2019 (the "Expiring Agreement").
Pursuant to the terms of the Hazout Consulting Agreement, Hazout’s monthly fee will remain unchanged and he will be compensated at a rate of $11,327 per month for his services as Chairman, President and Chief Executive Officer of the Company. In addition, the Company agreed to grant Hazout certain restricted stock units of the Company. The Company has also agreed to reimburse Hazout for certain out-of-pocket expenses incurred by Hazout.
The Hazout Consulting Agreement is for a term of twelve (12) months. Upon a Constructive Discharge (as defined in the Hazout Consulting Agreements) and subject to certain notification requirements and the Company’s opportunity to cure the Constructive Discharge, Hazout will be entitled to a compensation of twelve (12) months’ fees, as well as any bonus compensation owing.
On November 6, 2019, the Company entered into an Executive Consulting Agreement (the "Makrimichalos Consulting Agreement"), by and among the Company and Ike Makrimichalos, Chief Financial Officer of the Company ("Makrimichalos"), effective January 1, 2020. Pursuant to the terms of the Makrimichalos Consulting Agreement, Makrimichalos will be entitled to fees of $6,041 per month for his services as Chief Financial Officer of the Company. The Company has also agreed to reimburse Makrimichalos for certain out-of-pocket expenses incurred by Makrimichalos. The Makrimichalos Consulting Agreement is for a term of twelve (12) months. Makrimichalos will continue to be compensated at a rate of $4,531 per month until the Effective Date.
The Makrimichalos Consulting Agreement is for a term of twelve (12) months. Upon a Constructive Discharge (as defined in the Makrimichalos Consulting Agreements) and subject to certain notification requirements and the Company’s opportunity to cure the Constructive Discharge, Makrimichalos will be entitled to a compensation of two (2) months’ fees, as well as any bonus compensation owing.
Item 1.01 of this Current Report on Form 8-K contains only a brief description of the material terms of the Hazout Consulting Agreement, the Expiring Agreement, and the Makrimichalos Consulting Agreement, and does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are qualified in their entirety by reference to the full text of the Hazout Consulting Agreement, the Expiring Agreement, and the Makrimichalos Consulting Agreement, the forms of which are attached as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference.
Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
On August 28, 2019, PACE Savings & Credit Union ("PACE") informed the Company via letter that its credit facilities and corporate term loan with PACE for a total amount owed as of that date of $5,310,922.65 (the "Debt") was in default due to the Company’s going concern disclosure in the Company’s consolidated financial statements for the years ended December 31, 2018 and 2017, and as a result of the Company’s failure to respond to an e-mail request from PACE with respect to the Company’s efforts to arrange for a payout. As a result, PACE was not agreeable to continue with the Debt and accelerated the Debt and had requested that the Company’s indebtedness to PACE be paid in full on or before December 31, 2019.
On September 3, 2019, PACE informed the Company via letter that the interest rates on the Debt be increased effective September 15, 2019, by 0.50% and each month thereafter by a further 0.50% .
On November 12, 2019, PACE informed the Company via letter that it would be willing to enter into a credit amending agreement, provided, among other things, that: (i) the Company repay two credit facilities totaling $460,413 on or before December 31, 2019; and (ii) pursuant to the credit amending agreement, the remaining portion of the Debt will be paid on or before June 30, 2020.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Chief Executive Officer
On September 25, 2019, Gerald Hamaliuk submitted his resignation from his positions as Chief Executive Officer and as a member of the Company’s Board of Directors (the "Board"), effective immediately (the "CEO Resignation"). Mr. Hamaliuk did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. The Company and its shareholders thank Mr. Hamaliuk for his many contributions.
Appointment of Chief Executive Officer
On November 6, 2019, in connection with the CEO Resignation, the Board appointed Mr. Marc Hazout, the Chairman of the Board and President of the Company, as Chief Executive Officer, effective immediately (the "CEO Appointment").
Marc M. Hazout, age 54, has served as Chairman and President of the Company since it was founded in 2014. Since 2005, Mr. Hazout has also served as the chief executive officer, president, principal financial and accounting officer and a director of Silver Dragon Resources Inc., a company whose common stock is quoted on the OTC marketplace and is engaged in the acquisition and exploration of silver and other mineral properties. Mr. Hazout has over 20 years of experience in public markets, finance and business operations. Over the past several years, Mr. Hazout has been involved in acquiring, restructuring and providing management services as both a director and an officer to several publicly traded companies. In 1998, Mr. Hazout founded and has been president and chief executive officer of Travellers International Inc. ("Travellers"), a private equity firm headquartered in Toronto. Over the past several years, Travellers has focused on building relationships in China with the objective of participating in that country’s growth opportunities. Mr. Hazout attended York University in Toronto studying International Relations and Economics. Mr. Hazout speaks English, French and Hebrew, as well as some Spanish and Italian. There is no arrangement or understanding between Mr. Hazout and any other persons pursuant to which Mr. Hazout was selected as an officer. There are no family relationships between Mr. Hazout and any director, executive officer or person nominated or chosen by the Company to become a director or executive officer of the Company within the meaning of Item 401(d) of Regulation S-K under the U.S. Securities Act of 1933 ("Regulation S-K"). Since the beginning of the Company’s last fiscal year, the Company has not engaged in any transaction in which Mr. Hazout had a direct or indirect material interest within the meaning of Item 404(a) of Regulation S-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SusGlobal Energy Corp. | ||
| Date: November 13, 2019 | By: | /s/ Marc Hazout |
| Marc Hazout | ||
| Executive Chairman, President and Chief Executive Officer | ||
CFO CONSULTING AGREEMENT
THIS CONSULTING SERVICES AGREEMENT made as of the 1st day of January, 2020
Between
SUSGLOBAL ENERGY CANADA CORP.
a company incorporated under the Laws of Canada (the “Company”)
and
IKE MAKRIMICHALOS
an individual subject to the Laws of Canada (the “Contractor”)
IN CONSIDERATION of the mutual agreements herein contained and of other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the parties agree with one another as follows:
1. Definitions. Capitalized terms and expressions not otherwise defined herein have the meanings to them in Schedule A.
2. Engagement. The Company hereby engages the Contractor to provide the services (the “Services”) of Chief Financial Officer (the “CFO”) of the Company, subject to the directions of the Chief Executive
Officer (the “CEO”), and as agreed in the job description (Exhibit B).
3. Modification of Duties. Subject to Section 10(c), the scope of the Contractor's duties may be changed from time to time by the CEO or the Board of Directors of the Company without thereby terminating this Agreement. If so changed, the Contractor's engagement with the Company shall be construed continuing under this Agreement, as modified in accordance with such determination by the CEO or the Board of Directors.
4. Independent Contractor. The Contractor shall be an independent contractor and not a servant, employee or agent of the Company. The Company may from time to time give any instructions to the Contractor it considers necessary in connection with the provision of Services but the Contractor shall not be subject to the control of the Company in respect of the manner in which such instructions are carried out. The Contractor will perform his services from the location of the Company office and where required, attend meetings and conference calls from other locations, as required.
5. Compliance with Laws. The Contractor shall comply with all applicable laws, rules and regulations and shall pay any and all taxes, (including the Harmonized Sales Tax (“HST”) and the Canada pension plan contributions), that it is subject to, as well as compliance with other contributions and assessments, including those under any applicable workers compensation legislation, and any other statutorily prescribed payment or assessment of any nature that are payable by virtue of the independent contractor relationship between the Contractor, its personnel if any, and the Company.
6. Contractor is a Key Contractor. The Contractor’s position is a key position in the Company, and the
Contractor shall provide the Services diligently and faithfully and devote his time, attention and energy to the performance of the duties of the Contractor under this Agreement with the degree of care, skill and expertise as is the industry standard and in accordance with applicable laws.
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7. Non-exclusivity of Services. The Company acknowledges that the Contractor may, from time to time, provide services to other persons, firms and companies during the term of this Agreement, but the Contractor shall not provide such services if the ability of the Contractor to provide such Services is hereby materially diminished or impaired. Except as expressly provided in this Agreement, the Contractor shall have the right independently to engage in and receive full benefits from business activities, providing such activities are not competitive with the Company’s activities. In the event a conflict of interest arises, the Contractor agrees to inform the Company as soon as possible and the Company and the Contractor agree to use their best efforts to come to a mutually agreeable solution to the situation.
.
8. Duration and Term of Engagement
The engagement of the Contractor with the Company is for a term (the “Term”) of 12 months beginning on the Effective Date, as hereinafter defined.
9. Fee for Services
(a) Flat Fee. Effective January 1, 2020 (the “Effective Date”), the Company will pay the Contractor a basic fee (the “Fee”) of $8,000.00 per month for 12 months, plus the applicable HST payable monthly, on the 30th of each month and upon presentation of an invoice for FOUR (4) Days per week per month. Final settlement for the month will be billed and payable at the end of each month.
(b) Disbursements
In addition to the Fees, noted above, the Company will reimburse the Contractor for actual out-of-pocket expenses incurred at the specific direction of or with the pre-authorization of the Company provided the Company is invoiced on a timely basis for such expenses with photo scans of proper receipts.
10. Termination
(a) Termination for Cause, Death or Disability. If the Contractor's engagement under this Agreement is terminated:
(i) for Cause;
(ii) by reason of the Contractor’s death or Disability; or
(iii) by reason of the voluntary resignation of the Contractor as the CFO of the Company, the Contractor shall be entitled to the Fee pro-rata through the date of termination.
(b) Termination without Cause
If the Company terminates the engagement of the Contractor without Cause, the Contractor shall be entitled to prompt (within 10 business days of the termination) cash payments equal to 2 months Fees and any bonus compensation owing.
(c) Constructive Discharge
A Constructive Discharge shall be treated for all purposes of this Agreement as a termination by the Company without Cause. Notwithstanding any other provision of this Agreement, a Constructive Discharge shall be deemed to have occurred if:
(i) the Contractor gives the Company written notice specifically identifying circumstances considered by the Contractor to constitute Good Reason, within a reasonable time after acquiring knowledge of circumstances constituting Good Reason;
(ii) the Company fails to correct the circumstances within 15 days after such notice; and
(iii) the Contractor resigns within ninety days after the date of delivery of the notice.
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11. Effect of Termination on Other Positions
If, on the date of termination of this Agreement, the Contractor is a member of the Board or a member of the Board of any of the subsidiaries, or holds any other position with the Company or any subsidiary, the Contractor shall be deemed to have resigned from all such positions as of the date of the termination of this Agreement. The Contractor agrees to execute such documents and take such other actions as the Company may request to reflect such resignation.
12. Return of Company Property
Upon the termination of this Agreement for any reason, the Contractor shall promptly return to the Company any keys, credit cards, passes, confidential documents or material, or other property belonging to the Company, and to return all writings, files, records, correspondence, notebooks, notes and other documents and things (including any copies thereof) except any personal diaries, calendars, rolodexes or personal notes or correspondence.
13. Confidentiality
The Contractor shall not, directly or indirectly, either during the term of this Agreement or at any time thereafter, in any way use or disclose to any person, other than strictly for the fulfillment of this Agreement or as required by law, any information relating to the business, commercial, technical, trade, marketing, financing or any other confidential affairs of the Company. The Contractor agrees and acknowledges that all such information is the exclusive property of the Company, and the Contractor as the case may be, shall hold all such information in trust for the Company. The Contractor confirms and acknowledges their duty to use their respective best efforts to protect the confidentiality of such information, not to misuse such information, and to protect such information from any misuse, misappropriation, harm and interference in any manner whatsoever.
14. General
(a) Assignments. This Agreement shall not be assignable by either party, provided however, that if the Company merges into or consolidates or amalgamates with, or transfers/sells substantially all of its assets or shares to, another company or business entity, this Agreement shall run to the benefit of and may be assigned to the Company's successors resulting from such merger, consolidation or transfer.
(b) Non-Waiver. No consent or waiver, express or implied, of the Company or the Contractor to or of any breach or default by the other of them in the performance by the other of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default of the same or any other obligation of the other party. Failure on the part of any party to complain of any act or failure to act of the other of them, or to declare the other party in default regardless of how long such failure continues, shall not constitute a waiver by such party of its rights under this Agreement or failure continues, shall not constitute a waiver by such party of its rights under this Agreement or of the right to then or subsequently declare a default.
(c) No Agency. The Contractor shall not, at any time, hold itself out as the agent or representative of the Company except as permitted in this Agreement, and shall not incur any obligations or liabilities or enter into any agreements for or on behalf of the Company except with the prior written consent of the Company.
(d) Loss or Damage. The Contractor shall be responsible for any loss or damage suffered by the Company as a result of any negligent misrepresentation or unauthorized warranties given by the Contractor or agreements or contracts entered into by the Contractor which were not authorized or approved by the Company or any claims made against the Company as a result of the negligence or willful default of the Contractor.
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(e) Notices. Any notice, direction or other instrument required or permitted to be given by any party under this Agreement will be in writing and will be sufficiently given if delivered personally or by courier, or transmitted by telecopier during the transmission of which no indication of failure of receipt is communicated to the sender:
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To the Company at: |
To the Contractor at: |
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|
200 Davenport Road |
Ike Makrimichalos |
|
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Toronto, ON M5R1J2 |
48 Lafayette Drive |
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St. Catharines, Ontario L2N 6C2 |
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(f) Entire Agreement. This Agreement contains the entire agreement between the parties with
respect to its subject matter and supersedes all prior negotiations and oral or written understandings, if any. This agreement may not be modified except by agreement in writing signed by all of the parties.
(g) Partial Enforceability. If any provision of this Agreement is held invalid or unenforceable, it shall be modified or construed restrictively rather than voided, if possible, to give effect to the intent of the parties to the extent possible, and if modification or restrictive construction is not possible, it shall be severed. In any event, all of the other provisions of this Agreement shall be deemed valid and enforceable.
(h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Canada.
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EXHIBIT A
Definitions
For the purposes of this Agreement:
(a) “Cause” means:
(i) the Contractor is convicted of a criminal or other statutory offence which has a potential sentence of imprisonment greater than six (6) months or the Contractor’s conviction of a criminal or other statutory offence involving, in the sole discretion of the Board of Directors of the Company, moral turpitude; or
(ii) a reasonable determination by a vote of the Board of Directors comprising a simple majority of the entire Board of Directors, that, in carrying out his duties, the Contractor has engaged in willful gross neglect or willful gross misconduct, resulting in material economic harm, neglect or willful gross misconduct, to the Company or resulting in reputational harm causing quantifiable material injury to the Company, unless the Contractor had a good faith belief that such conduct was in, or not opposed to the best interests of the Company; or
(iii) any other action or inaction that would constitute “cause” in law.
(b) “Disability” means the Contractor’s inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities contemplated by this Agreement. In the event of a dispute as to whether the Contractor is disabled, the determination shall be made by a licensed medical doctor selected by the Company and agreed to by the Contractor. If the parties cannot agree on a medical doctor, each party shall select a medical doctor and the two doctors shall elect a third who shall be the approved medical doctor for this purpose. The Company agrees to cause the Contractor to submit to such tests and examinations as such medical doctor shall deem appropriate.
(c) “Good Reason” means, without the Contractor's express written consent (and except in consequence of a prior termination of the Contractor's engagement), the occurrence of any of the following circumstances:
(i) reduction by the Company in the Contractor's Fee to an amount that is less than required under Section 9(a), without its consent.
(ii) the removal of the Contractor from any of the positions described in Section 3.
(iii) A material diminution in the Contractor's duties or the assignment to the Contractor of any duties inconsistent with his/her position.
(iv) A change in the Contractor's reporting relationship such that the Contractor no longer reports directly to the CEO.
(v) A breach by the Company of any of its material obligations to the Contractor under this Agreement. (vi) The failure of the Company to obtain a satisfactory agreement from any successor to all or substantially all of the assets or business of the Company to assume and agree to perform this Agreement within 15 days after a merger, consolidation, sale or similar transaction.
EXHIBIT B
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Chief Financial Officer
Job Description & General Conduct when acting for the Company.
The role of the CFO is to carry out the traditional CFO activities in a public company, consisting of general finance/accounting advice and accounting support.
To execute this role, specific responsibilities include (but shall not be limited to) the following:
1. Assist in the preparation of the appropriate working paper documentation/financial reporting for public company purposes, i.e. timely assistance on quarterly financial statements, preparation of the MD&A, preparation for the audits and reviews and budgeting.
2. Develop a system of internal controls and ensure adherence to the system of internal controls. Included, will be proper and complete approval of invoices by the CFO and CEO for payment, subject to any expenditure limits already in place or to be implemented and the assurance of alternate cheque signing authority, should the CFO or CEO, not be available.
3.Report on the quarterly and annual financial statements and MD&A, to the Audit Committee and other matters as directed by the CEO.
4. Assist, when requested, any additional duties with respect to current financial reporting and other duties generally required of a CFO. And as may be requested by the CEO and/or the Board of Directors as directed by the Audit Committee.
To assist the Contractor in carrying out his duties, the Company will:
1. Provide financial information on a timely basis to assist with the immediate reporting requirements. Provide such information as may be requested of outside legal counsel, external auditors and internally in the organization.
2. Keep Contractor appraised of information requirements and corporate needs so as to properly discharge his duties, and
3. Provide adequate liability insurance for the Contractor in his capacity as CFO and Officer of the Company, signing corporate documents.
General Considerations:
SusGlobal Energy Canada Corp. is a wholly owned subsidiary of SusGlobal Energy Corp. (OTCQB:SNRG) which is a publicly quoted company in the United States of America. Any exchanges of information or opinions relating to the Company and its operations, whether expressed publicly or privately, may affect the share price and could potentially be construed as insider trading (which is a criminal offence). Reasonable measures must therefore be observed in order to control the flow of information to third party individuals and organizations. Unless otherwise approved by the CEO:
1. No information or opinions relating to the Company, its operations, or developments is to be discussed or divulged to third parties, unless such information is already a matter of public record. Material information should at all times be secured in such a manner as to prevent access by third parties.
2. When information needs to be conveyed to third parties acting in an authorized or professional capacity to the Company, the terms of their engagement must provide for confidentiality prior to information being exchanged, and information should thereafter be exchanged by secure means.
3. When third parties are invited to visit the Company’s project sites and prior to commencing such visits, they shall be required to sign an indemnity form, and as directed by the CEO, may also be required to sign a confidentiality agreement.
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The Parties, intending to be contractually bound, have executed this Agreement as of the date set out in the first page.
SUSGLOBAL ENERGY CANADA CORP.
___________________________
MARC HAZOUT President
___________________________
IKE MAKRIMICHALOS Contractor
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EXECUTIVE CHAIRMAN CONSULTING AGREEMENT
THIS CONSULTING SERVICES AGREEMENT made as of the 1st day of January, 2020
Between
SUSGLOBAL ENERGY CANADA CORP.
a company incorporated under the Laws of Canada (the “Company”)
and
TRAVELLERS INTERNATIONAL INC.
a company incorporated under the Laws of Canada (the “Contractor”)
and
MARC HAZOUT
an individual (the “Contractor”)
IN CONSIDERATION of the mutual agreements herein contained and of other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the parties agree with one another as follows:
1. Definitions. Capitalized terms and expressions not otherwise defined herein have the meanings to them in Schedule A.
2. Engagement. The Company hereby engages the Contractor to provide the services (the “Services”) of Executive Chairman (“Chairman”), President (“President”) and Chief Executive Officer (“CEO”) of the Company.
3. Modification of Duties. Subject to Section 10(c), the scope of the Contractor's duties may be changed from time to time by the Board of Directors of the Company without thereby terminating this Agreement. If so changed, the Contractor's engagement with the Company shall be construed continuing under this Agreement, as modified in accordance with such determination by the Board of Directors.
4. Independent Contractor. The Contractor shall be an independent contractor and not a servant, employee or agent of the Company. The Company may from time to time give any instructions to the Contractor it considers necessary in connection with the provision of Services but the Contractor shall not be subject to the control of the Company in respect of the manner in which such instructions are carried out. The Contractor will perform his services from the location of the Company office and where required, attend meetings and conference calls from other locations, as required.
5. Compliance with Laws. The Contractor shall comply with all applicable laws, rules and regulations and shall pay any and all taxes, (including the Harmonized Sales Tax (“HST”) and the Canada pension plan contributions), that it is subject to, as well as compliance with other contributions and assessments, including those under any applicable workers compensation legislation, and any other statutorily prescribed payment or assessment of any nature that are payable by virtue of the independent contractor relationship between the Contractor, its personnel if any, and the Company.
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6. Contractor's Key Contractor. The Contractor’s position is a key position in the Company, and the Contractor shall provide the Services diligently and faithfully and devote his time, attention and energy to the performance of the duties of the Contractor under this Agreement with the degree of care, skill and expertise as is the industry standard and in accordance with applicable laws.
7. Non-exclusivity of Services. The Company acknowledges that the Contractor may, from time to time, provide services to other persons, firms and companies during the term of this Agreement, but the Contractor shall not provide such services if the ability of the Contractor to provide such Services is hereby materially diminished or impaired. Except as expressly provided in this Agreement, the Contractor shall have the right independently to engage in and receive full benefits from business activities, providing such activities are not competitive with the Company’s activities. In the event a conflict of interest arises, the Contractor agrees to inform the Company as soon as possible and the Company and the Contractor agree to use their best efforts to come to a mutually agreeable solution to the situation.
8. Duration and Term of Engagement
The engagement of the Contractor with the Company is for a term (the “Term”) of 12 months beginning on the Effective Date, as hereinafter defined.
9. Fee for Services
(a) Flat Fee. Effective January 1, 2020 (the “Effective Date”), the Company will pay the Contractor a basic fee (the “Fee”) of $15,000.00 per month for 12 months, plus the applicable HST payable monthly, on the 30th of each month and upon presentation of an invoice. Final settlement for the month will be billed and payable at the end of each month.
(b) Disbursements
In addition to the Fees, noted above, the Company will reimburse the Contractor for actual out-of- pocket expenses incurred at the specific direction of or with the pre-authorization of the Company provided the Company is invoiced on a timely basis for such expenses with photo scans of proper receipts.
(c) Other Fees and Compensation
In addition to all fees noted above, the Contractor will be granted the 2019 Restricted Stock Units (the “RSU”) vesting on January 1st 2020. Each restricted stock unit represents a right to receive one share of common stock of the Company.
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10. Termination
(a) Termination for Cause, Death or Disability. If the Contractor's engagement under this Agreement is terminated:
(i) for Cause;
(ii) by reason of the Contractor’s death or Disability; or
(iii) by reason of the voluntary resignation of the Contractor as the Chairman of the Company, the Contractor shall be entitled to the Fee pro-rata through the date of termination.
(b) Termination without Cause
If the Company terminates the engagement of the Contractor without Cause, the Contractor shall be entitled to prompt (within 10 business days of the termination) cash payments equal to 12 months Fees and any bonus compensation owing.
(c) Constructive Discharge
A Constructive Discharge shall be treated for all purposes of this Agreement as a termination by the Company without Cause. Notwithstanding any other provision of this Agreement, a Constructive Discharge shall be deemed to have occurred if:
(i) the Contractor gives the Company written notice specifically identifying circumstances considered by the Contractor to constitute Good Reason, within a reasonable time after acquiring knowledge of circumstances constituting Good Reason.
(ii) the Company fails to correct the circumstances within 15 days after such notice; and
(iii) the Contractor resigns within ninety days after the date of delivery of the notice.
11. Return of Company Property
If, on the date of termination of this Agreement, the Contractor is a member of the Board or a member of the Board of any of the subsidiaries, or holds any other position with the Company or any subsidiary, the Contractor shall be deemed to have resigned from all such positions as of the date of the termination of this Agreement. The Contractor agrees to execute such documents and take such other actions as the Company may request to reflect such resignation.
12. Confidentiality
The Contractor shall not, directly or indirectly, either during the term of this Agreement or at any time thereafter, in any way use or disclose to any person, other than strictly for the fulfillment of this Agreement or as required by law, any information relating to the business, commercial, technical, trade, marketing, financing or any other confidential affairs of the Company. The Contractor agrees and acknowledges that all such information is the exclusive property of the Company, and the Contractor as the case may be, shall hold all such information in trust for the Company. The Contractor confirms and acknowledges their duty to use their respective best efforts to protect the confidentiality of such information, not to misuse such information, and to protect such information from any misuse, misappropriation, harm and interference in any manner whatsoever.
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13. General
(a) Assignments. This Agreement shall not be assignable by either party, provided however, that if the Company merges into or consolidates or amalgamates with, or transfers/sells substantially all of its assets or shares to, another company or business entity, this Agreement shall run to the benefit of and may be assigned to the Company's successors resulting from such merger, consolidation or transfer.
(b) Non-Waiver. No consent or waiver, express or implied, of the Company or the Contractor to or of any breach or default by the other of them in the performance by the other of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default of the same or any other obligation of the other party. Failure on the part of any party to complain of any act or failure to act of the other of them, or to declare the other party in default regardless of how long such failure continues, shall not constitute a waiver by such party of its rights under this Agreement or failure continues, shall not constitute a waiver by such party of its rights under this Agreement or of the right to then or subsequently declare a default.
(c) No Agency. The Contractor shall not, at any time, hold itself out as the agent or representative of the Company except as permitted in this Agreement, and shall not incur any obligations or liabilities or enter into any agreements for or on behalf of the Company except with the prior written consent of the Company.
(d) Loss or Damage. The Contractor shall be responsible for any loss or damage suffered by the Company as a result of any negligent misrepresentation or unauthorized warranties given
by the Contractor or agreements or contracts entered into by the Contractor which were not authorized or approved by the Company or any claims made against the Company as a result of the negligence or willful default of the Contractor.
(e) Notices. Any notice, direction or other instrument required or permitted to be given by any party under this Agreement will be in writing and will be sufficiently given if delivered personally or by courier, or transmitted by Telecopier during the transmission of which no indication of failure of receipt is communicated to the sender:
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To the Company at:
200 Davenport Road Toronto, ON M5R 1J2 |
To the Contractor at:
200 Davenport Road Toronto, ON M5R 1J2 |
(f) Entire Agreement. This Agreement contains the entire agreement between the parties with respect to its subject matter and supersedes all prior negotiations and oral or written understandings, if any. This agreement may not be modified except by agreement in writing signed by all of the Parties.
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(g) Partial Enforceability. If any provision of this Agreement is held invalid or unenforceable, it shall be modified or construed restrictively rather than voided, if possible, to give effect to the intent of the parties to the extent possible, and if modification or restrictive construction is not possible, it shall be severed. In any event, all of the other provisions of this Agreement shall be deemed valid and enforceable.
(h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Canada.
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EXHIBIT A
Definitions
For the purposes of this Agreement:
(a) “Cause” means:
(i) the Contractor is convicted of a criminal or other statutory offence which has a potential sentence of imprisonment greater than six (6) months or the Contractor’s conviction of a criminal or other statutory offence involving, in the sole discretion of the Board of Directors of the Company, moral turpitude; or
(ii) a reasonable determination by a vote of the Board of Directors comprising a simple majority of the entire Board of Directors, that, in carrying out his duties, the Contractor has engaged
in willful gross neglect or willful gross misconduct, resulting in material economic harm, neglect or willful gross misconduct, to the Company or resulting in reputational harm causing quantifiable material injury to the Company, unless the Contractor had a good faith belief that such conduct was in, or not opposed to the best interests of the Company; or
(iii) any other action or inaction that would constitute “cause” in law.
(b) “Disability” means the Contractor’s inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities contemplated by this Agreement. In the event of a dispute as to whether the Contractor is disabled, the determination shall be made by a licensed medical doctor selected by the Company and agreed to by the Contractor. If the parties cannot agree on a medical doctor, each party shall select a medical doctor and the two doctors shall elect a third who shall be the approved medical doctor for this purpose. The Company agrees to cause the Contractor to submit to such tests and examinations as such medical doctor shall deem appropriate.
(c) “Good Reason” means, without the Contractor's express written consent (and except in consequence of a prior termination of the Contractor's engagement), the occurrence of any of the following circumstances:
(i) reduction by the Company in the Contractor's Fee to an amount that is less than required under Section 9(a), without its consent.
(ii) the removal of the Contractor from any of the positions described in Section 3.
(iii) A material diminution in the Contractor's duties or the assignment to the Contractor of any duties inconsistent with his/her position.
(iv) A change in the Contractor's reporting relationship such that the Contractor no longer reports directly to the Board of Directors.
(v) A breach by the Company of any of its material obligations to the Contractor under this Agreement.
(vi) The failure of the Company to obtain a satisfactory agreement from any successor to all or substantially all of the assets or business of the Company to assume and agree to perform this Agreement within 15 days after a merger, consolidation, sale or similar transaction.
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General Considerations
SusGlobal Energy Canada Corp. is a wholly owned Subsidiary of SusGlobal Energy Corp. a publicly quoted company on the U.S. (“OTCQB”). Any exchanges of information or opinions relating to the Company and its operations, whether expressed publicly or privately, may affect the share price and could potentially be construed as insider trading (which is a criminal offence). Reasonable measures must therefore be observed in order to control the flow of information to third party individuals and organizations.
1. No information or opinions relating to the Company, its operations, or exploration findings is to be discussed or divulged to third parties, unless such information is already a matter of public record. Material information should at all times be secured in such a manner as to prevent access by third parties.
2. When information needs to be conveyed to third parties acting in an authorized or professional capacity to the Company, the terms of their engagement must provide for confidentiality prior to information being exchanged, and information should thereafter be exchanged by secure means.
3. When third parties are invited to visit the Company’s project sites and prior to commencing such visits, they shall be required to sign an indemnity form and may also be required to sign a confidentiality agreement.
The Parties, intending to be contractually bound, have executed this Agreement as of the date set out in the first page.
SUSGLOBAL ENERGY CORP.
___________________________
Vincent Ramoutar
Director
Chair of the Compensation Committee
___________________________
MARC HAZOUT
___________________________
TRAVELLERS INTERNATIONAL INC.
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