Case Summary

The plaintiff, a former CFO, was terminated without cause from her fixed-term employment. She moved for summary judgment, seeking 12 months' severance pay, arguing that the termination provisions of her "Consulting Agreement" were unclear or violated the Employment Standards Act, 2000, particularly regarding a release requirement. The defendant argued for 6 months' severance as per the agreement. The court dismissed the plaintiff's motion for 12 months, finding no lack of clarity or violation of the Act in the termination provisions, and awarded the plaintiff 6 months' severance pay. interesting_citations_summary: > The court applied principles of contractual interpretation, emphasizing the construction of the contract as a whole to give meaning to all terms and preferring interpretations that benefit the employee in cases of ambiguity. It reiterated that termination clauses in fixed-term contracts must be clear to rebut the presumption of damages for the unexpired term, citing Howard v. Benson Group Inc. and Wood v. Fred Deeley Imports Ltd. The decision clarified that a typical release provision does not necessarily violate the Employment Standards Act, 2000, and that a breach of payment timing does not void the entire termination clause, especially where a severability clause exists. final_judgement: The plaintiff's motion for summary judgment for 12 months' severance was dismissed. Judgment was granted for the plaintiff for a 6-month severance payment in accordance with the Agreement. winning_degree_applicant: 3 winning_degree_respondent: 1 judge_bias_applicant: 0 judge_bias_respondent: 0 year: 2017 decision_number: 4147 file_number: "CV-16-550001-0000" source: "https://www.canlii.org/en/on/onsc/doc/2017/2017onsc4147/2017onsc4147.html" keywords: - Employment law - Severance - Fixed-term contract - Summary judgment - Employment Standards Act - Contractual interpretation - Release - Termination clause - Wrongful dismissal areas_of_law: - Employment Law - Contract Law - Civil Procedure cited_cases: legislation: - title: "Employment Standards Act, 2000, S.O. 2000, c. 41" url: "https://www.ontario.ca/laws/statute/00e41" case_law: - title: "Howard v. Benson Group Inc., 2016 ONCA 256, 129 O.R. (3d) 677" url: "https://www.canlii.org/en/on/onca/doc/2016/2016onca256/2016onca256.html" - title: "Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, 134 O.R. (3d) 481" url: "https://www.canlii.org/en/on/onca/doc/2017/2017onca158/2017onca158.html" - title: "BG Checo v. BC Hydro, [1993] 1 S.C.R. 12" url: "https://www.canlii.org/en/ca/scc/doc/1993/1993canlii145/1993canlii145.html" --- # Court File and Parties **Court File No.:** CV-16-550001-0000 **Date:** 2017-06-14 **Ontario Superior Court of Justice** **Between:** JENNIFER TA, Plaintiff – and – DELSHEN THERAPEUTICS CORP., Defendant **Counsel:** Stephen Wolpert, for the Plaintiff Michael L. Byers, for the Defendant **Heard:** April 11, 2017 **Before:** Hood J. # Reasons for Decision ## Overview [1] The plaintiff Jennifer Ta (“Ta”) worked for the defendant Delshen Therapeutics Corp. (“Delshen”). Delshen terminated her employment without cause on February 26, 2016. [2] Ta and Delshen signed a “Consulting Agreement” on March 1, 2014 (the “Agreement”). Both parties agree that, despite the Agreement being labeled a Consulting Agreement, Ta was an employee of Delshen and the [Employment Standards Act, 2000, S.O. 2000, c. 41](https://www.ontario.ca/laws/statute/00e41) (the “Act”) applies. [3] Ta takes the position that, under the Agreement, she is entitled to 12 months’ severance pay for the termination without cause. Delshen takes the position that, under the Agreement, Ta is entitled to 6 months’ severance pay. [4] Ta moves for summary judgment. Both parties agree that summary judgment is appropriate in the circumstances and that I am in a position, based upon the material filed on the motion, to grant either 6 months’ or 12 months’ severance based upon the Agreement itself. No analysis of what is a reasonable notice period is required by me. Nor is there any issue as to mitigation by Ta as it was not required under the Agreement. ## Facts [5] Ta is the former chief financial officer (CFO) of Delshen. [6] On March 1, 2014 the parties executed the Agreement. The complete Agreement, without the signature page, is attached to these reasons as Schedule A. After execution of the Agreement, the company’s name changed to Delshen. The following provisions of the Agreement are relevant to this dispute: [7] The Agreement’s term is set out in Section 1.2, which ran from March 1, 2014 to March 1, 2016. Ta’s right to terminate is set out in Section 6.2. Delshen’s right to terminate is set out in Section 6.3. The various severance payments to be paid by Delshen if it terminates Ta are set out in Section 6.4. This section also provides that no mitigation is required by Ta. Release provisions are set out in Section 6.6. Although there is a dispute resolution provision in Section 7, which contemplates binding arbitration in relation to the interpretation or application of the Agreement, neither party argued that I should not hear the summary judgment motion because of it. Section 9.2 deals with severability. In Section 9.10, Ta acknowledges that she had the opportunity to obtain legal advice in relation to the Agreement and if she did not do so, Delshen did not apply undue pressure to prevent her from doing so. [8] Neither party gave notice of termination before 30 days prior to the end of the term (January 31, 2016). In accordance with Section 1.2, the term of the agreement was automatically extended by one year to March 1, 2017. [9] On February 26, 2016, Delshen terminated Ta’s employment. Delshen, in its letter of termination, advised Ta that it would pay her 6 months’ severance once she executed a release and following “the orderly transition of all accounting information.” Delshen made reference to Sections 6.3(a) and 6.4(c) of the Agreement. Since no cause was alleged, presumably Delshen meant to refer to Section 6.3(c) rather than 6.3(a). [10] Following unsuccessful settlement discussions, Ta issued her claim on March 31, 2016. While Delshen, in its defence, alleged after-acquired cause for her termination, it subsequently withdrew that position following the exchange of the parties’ affidavits of documents. ## Analysis [11] Ta’s position is firstly, that the release provision violates the Act and, because of this, the termination provisions of the Agreement should be struck. As a result, Ta argues she should be awarded damages to the end of the term of the Agreement (March 1, 2017), being 12 months from February 26, 2016. If this is rejected, then Ta’s second position is that the termination provisions are unclear, that there is a contradiction between Section 1.2 and 6.3, that Section 6.3(c) is unclear, and that the severance payments in Section 6.4 are unclear. Because of the lack of clarity, the termination sections are unenforceable or, alternatively, the interpretation that gives the greater benefit to Ta should be preferred. [12] Ta argues that where parties to a fixed-term employment contract, such as this, do not specify a pre-determined notice period, the employee is entitled, on early termination, to the wages the employee would have received to the end of the term: [Howard v. Benson Group Inc., 2016 ONCA 256, 129 O.R. (3d) 677, at para. 22](https://www.canlii.org/en/on/onca/doc/2016/2016onca256/2016onca256.html#par22). There is a presumption of damages equaling the unexpired portion of the fixed-term employment contract; a termination clause will only rebut this presumption if its wording with respect to the pre-determined notice period is clear. As the termination clause in this Agreement is not clear, according to Ta, she is entitled to wages to the end of the term: [Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, 134 O.R. (3d) 481, at para. 28](https://www.canlii.org/en/on/onca/doc/2017/2017onca158/2017onca158.html#par28). [13] Delshen argues that there is no violation of the Act but, if there is, then the release provision should be severed from the Agreement. As to the clarity argument, Delshen’s position is that there are no ambiguities or lack of clarity in the termination provisions and certainly nothing that would invalidate the Agreement. [14] I will deal with the lack of clarity issue first. I do so with the following interpretive tools in mind: (a) the court should construe the contract as a whole, in a manner that gives meaning to all of its terms and avoids an interpretation that would render one or more of its terms ineffective. However, where that cannot be done, the court will rule one clause or the other ineffective: [BG Checo v. BC Hydro, [1993] 1 S.C.R. 12, at pp. 23-24](https://www.canlii.org/en/ca/scc/doc/1993/1993canlii145/1993canlii145.html#par12); and (b) faced with a termination clause that could reasonably be interpreted in more than one way, courts should prefer the interpretation that gives greater benefit to the employee: Wood, at para. 28. [15] Ta argues that the greatest inconsistencies exist between Section 1.2 and Section 6.3, in that Section 1.2 speaks of a notice of termination of no less than 30 days before the end of the term, whereas Section 6.3 speaks of termination at any time. Because of this, Ta argues that the sections are unclear and she is therefore entitled to damages to the end of the fixed term on March 1, 2017. [16] I see no lack of clarity. Section 1.2 deals with the term of the Agreement. It does not directly deal with termination; rather it refers to Section 6 for how the parties may effect termination. It is a fixed-term Agreement. The cases do not say that a termination provision cannot co-exist with a fixed term contract; they say that, in order to be enforceable, the notice provisions must be clear. [17] Section 1.2 provides that the term of the Agreement automatically extends for one year periods unless either party has given notice of termination at least 30 days before the term ends on March 1 each year. Here, there was no such notice prior to the end of the initial two-year term of the Agreement, so it was extended for another year to March 1, 2017. However, the term of the Agreement is not connected to the severance payments under Section 6.4 or the right of Delshen to terminate “at any time” under Section 6.3(c) upon making the payments specified in that section. [18] The extension of the term to March 1, 2017 is a red herring raised by Ta. The term of the contract has nothing to do with the severance payments, which are linked to the anniversary dates of the Agreement and not the term of the Agreement. No argument was made by Ta about the anniversary date. While not a defined term in the Agreement, it is obvious from reading the Agreement as a whole, that the anniversary of the Agreement is March 1. [19] Ta makes other arguments about a lack of clarity. She argues that there are overlapping severance provisions in Section 6.4. She argues that, if she had been terminated at 6 months, then this would have been before both the first anniversary as well as the second anniversary, which provide for different payment amounts. Therefore, the Agreement is unclear because one does not know what severance payment would apply – 3 months or 6 months. To me, there is no lack of clarity. Ta’s interpretation of the payment provisions is not reasonable. In my view, no reasonable person would objectively have been confused in reading the Agreement as a whole. The severance payments are clearly tiered and increasing depending upon when termination might take place in reference to the Agreement’s anniversary date. While it might have been better to draft Section 6.4(b) so that it was effective after the first anniversary rather than before the second anniversary, in reading Section 6.4 as a whole the intent is clear. [20] Ta argues that the use of the word “upon” in Section 6.3(c) is unclear. Ta argues that termination should only be allowed once payment has been made and, because payment was not made, the Section must be unclear. In my view, the Section is clear. Payment is supposed to be made by Delshen for termination to be effective. Delshen just did not comply with the Section. A breach of the Section does not mean that it is not clear. [21] Ta also argues that some of the termination provisions of the Agreement violate the Act. Firstly, she argues that since she was not given proper notice under section 57 of the Act, Delshen had to comply with section 61 and make payment to her. Because Delshen did not actually make payment, then the Agreement is void under section 5(1) of the Act as an attempt to contract out of the Act. [22] In my view, the Agreement does not attempt to contract out of the Act. The Agreement itself says Delshen will make payment to Ta under Section 6.3(c). The timing of the payment is not an attempt to contract out of the Act. If anything, the non-payment is a breach of the Agreement. Delshen in argument concedes that the non-payment is also a breach of the Act. If anything, Ta is entitled to her damages for this breach, but the damages would be 6 months, not 12 months, so as to put her in the position she should have been in if the Agreement had been complied with. [23] Secondly, Ta argues that the requirement of the execution and delivery of a release prior to payment, as provided for in Section 6.6 of the Agreement, violates the Act. She argues that the provision in section 61 of the Act for pay in lieu of notice is unconditional. The condition of a release was an attempt to contract out of the minimum standards of the Act and is therefore void. She argues that, if the release provision in Section 6.6 is void, then Section 6.3 is void and she is entitled to be paid the wages she would have received to the end of the term, on March 1, 2017. [24] Ta did not provide any case law to substantiate that the requirement for a release prior to payment violates the Act. Nor did Ta provide a copy of the release she was asked to sign. This is a summary judgment motion and the parties have an obligation to put their best foot forward. There was no argument that the terms were onerous. I do not believe that the court should be asked sight unseen to come to a conclusion that a condition in a contract, which is clearly stated and which one party agreed to, having had the opportunity to obtain legal advice on, should now be declared to be an attempt to contract out of the Act and thus void. [25] While I do not have the necessary facts to come to a determination as to whether the release asked for was an attempt to contract out of the minimum standards of the Act and therefore void, I would think that the provision of a typical release at the end of an employment relationship would not be an effort to contract out of the Act. [26] As well, the release in Section 6.6 is to be provided following payment so that Ta would have payment in hand before having to execute the release. This complies with section 61 of the Act, which allows for termination if the employer pays the employee. While the termination letter possibly suggests a different order—release first, then payment, or release and payment exchanged at the same time—the Agreement itself complies with the Act—payment first, then termination. [27] Moreover, even if the provision of a release was an attempt to contract out and thus void, this would not necessarily make Section 6.3(c) void or Section 6.4(c) void. Section 9.2 of the Agreement could be used to sever Section 6.6 of the Agreement and payment would be made without the necessity of a release. ## Order [28] The plaintiffs’ motion for summary judgment is accordingly dismissed. As indicated at the beginning, both parties agreed that I was to grant judgment for the plaintiff for either a 6 month or 12 month severance payment. Judgment is granted for a 6 month severance payment in accordance with the Agreement. The parties are to work out interest and the execution of the release, if still required. [29] While I was provided with cost outlines, I was advised that there were offers that might impact upon a costs award. If the parties are unable to resolve costs, the defendant is to provide me with cost submissions of no more than two typed, double-spaced pages with any necessary attachments such as offers, case law, and dockets on or before June 28, 2017. The plaintiff shall have 2 weeks from the receipt of the defendant’s submissions to provide me with her submissions subject to the same directions. There will be no reply submissions. Hood J. Released: June 14, 2017 --- ## SCHEDULE “A” THIS CONSULTING AGREEMENT made effective as and from the 1st day of March, 2014, **BETWEEN:** JENNIFER TA of King City, Ontario ("Consultant") OF THE ONE PART - and - FEBRICAN CORP., a company based in Toronto, Ontario and incorporated pursuant to the laws of the Province of Ontario ("Company") OF THE OTHER PART **WHEREAS:** A. The Company is a health care company currently engaged in the production and marketing of marihuana for medical purposes; B. The Company wishes to retain the Consultant to act as its Chief Financial Officer, and to perform all duties incident to and commensurate with the position. C. The Company and the Consultant desire that the Consultant be contracted by the Company to act as Chief Financial Officer of the Company under a formal agreement as per the terms and conditions contained herein; THEREFORE in consideration of the recitals, the following covenants and the payment of one dollar made by each party to the other, the receipt and sufficiency of which are acknowledged by each party, the parties agree on the following terms: ### 1. ENGAGEMENT AND DURATION #### 1.1 Engagement The Company hereby contracts the Consultant to act as Chief Financial Officer of the Company and the Consultant agrees to provide such services on the terms and conditions set forth in this Agreement. #### 1.2 Term The Executive's employment pursuant to the terms of this Agreement shall commence effective the 1st day of March, 2014. The initial term of this agreement shall be for two (2) years and will remain in force until March 1st 2016, and unless either party provides notice of Termination of the agreement pursuant to Section 6 of the agreement not less than 30 days before the end of the term or a subsequent anniversary, the agreement will automatically extend for successive periods of one (1) year. ### 2. DUTIES #### 2.1 Performance of Duties The Consultant shall assume and duly and diligently perform the duties and responsibilities as set out in this Agreement and the by-laws of the Corporation and will be responsible for managing and overseeing the financial recording and reporting aspects of the Business of the Corporation (as hereinafter defined) as the Chief Financial Officer, together with such other duties as may reasonably be required from time to time by the Board of Directors of the Corporation. The Consultant shall not wilfully take any action that conflicts with the duties of the office held by the Consultant or with the best interests of the Corporation. The Consultant shall, in performing her functions: (a) act honestly and in good faith and in the best interests of the Company; (b) exercise the care, diligence and skill of a reasonably prudent person; (c) act in accordance with all applicable laws, regulations or standards of all relevant authorities having jurisdiction; (d) devote sufficient time and attention to the business and affairs of the Company as necessary to discharge her duties and responsibilities efficiently; (e) protect the interests of the Company and its business to the best of her ability and judgment and in a manner consistent with standards prevailing in similar businesses in Canada; and (f) comply promptly and faithfully with the reasonable and lawful instructions, directions, requests, rules, policies and regulations of the Chief Executive Officer and the Company. #### 2.2 Other Employment, Appointments, Boards or Committees (a) During the Term, the Consultant shall devote such time and commitment to the Business and the performance of the services as is reasonably necessary in performing the services under this Agreement. The Company is aware that the Consultant has now and will continue to have business interests in other companies and the Company recognizes that these companies will require a certain portion of the Executive's time. The Company agrees that the Consultant may continue to devote time to such outside interests, PROVIDED THAT such interests do not conflict with, in any way, the time required for the Consultant to perform its duties under this Agreement. (b) The Executive's performance of reasonable personal, civic or charitable activities or the Executive's service with any private or public companies, shall not be deemed to interfere with the performance of the Executive's services and responsibilities to the Company pursuant to this Agreement, so long as there is no conflict between the business of the Company and the business of the private or public companies. The Consultant agrees to inform the Chief Executive Officer and Board of Directors forthwith upon the Consultant being appointed to or retained by any such companies. (c) Subsequently, the Consultant will endeavour to avoid any conflicts that could arise between the Company and such companies, however should any conflicts arise or appear to arise between the Company and such companies, the Consultant will inform the Board of Directors or such delegated committee of the Board. #### 2.3 Principal Place of Work The Consultant shall perform her duties primarily from Toronto, Ontario or such other location(s) mutually agreed upon with the Company. The Consultant acknowledges that her duties and responsibilities may involve a significant amount of travel. #### 2.4 Reporting The Consultant shall report directly to the Chief Executive Officer and Board of Directors. #### 2.5 Personal Nature The obligations and rights of the Consultant under this Agreement are personal in nature, based upon the singular skill, qualifications and experience of the Executive. ### 3. SECURITIES LAW #### 3.1 Compliance The Consultant agrees to comply with all applicable Canadian securities legislation ("Securities Laws"), the Narcotic Control Regulations, the Food and Drug Act, and Health Canada's Marihuana for Medical Purposes Regulations. #### 3.2 Inside Information The Consultant acknowledges that Securities Laws prohibit persons, who have knowledge of a material fact or material change about the Company (as that term is defined in the Securities Laws) that has not been generally disclosed, from purchasing or selling securities of the Company and from informing any other person of such material fact or material change. #### 3.3 Insiders The Consultant acknowledges that she is an "insider" as defined by Securities Laws and agrees to file all insider reports required by Securities Laws on a timely basis. ### 4. REMUNERATION AND BENEFITS #### 4.1 Compensation (a) The Company shall pay to the Consultant for her services under this Agreement an annual amount of Cdn $72,000 as base salary, subject to review by the board of directors after twelve months. These fees shall be paid in equal monthly instalments; (b) The Consultant shall qualify for an annual cash bonus to a maximum of up to 50% of the current amount of her annual base salary at each fiscal year end, to be awarded at the discretion of the Board of Directors, subject to subsection 4.2; (c) Subject to regulatory approval, the Plan and in accordance with all Securities Laws, the Consultant shall be eligible for an annual option grant, on the recommendation of the Company's Compensation Committee and the Board of Directors. At the next meeting of the Board of Directors, management shall, subject to compliance with all securities and regulatory laws, rules and policies, recommend the grant to the Consultant of stock options under its Stock Option Plan, as amended (the "Plan"), to purchase up to a maximum of 100,000 common shares of the Company at an exercise price per share to be determined by the Board of Directors expiring (subject to the terms and provisions of the Plan) five years following the date of grant. It is understood that it is anticipated that the stock options will vest in three equal tranches with the first vesting on the date of grant, the second on the first anniversary of the date of grant and the remaining third on the second anniversary of the date of grant. The stock option will be subject to the terms and conditions contained in a separate agreement substantially in the form annexed to the Plan to be entered into between the Company and the Consultant contemporaneously with the grant. #### 4.2 Annual Review The compensation referred to in subsections 4.1(a) and 4.1(b) shall be reviewed annually by the Board of Directors or its designated committee of the Board in consultation with the Executive. The compensation referred to in subsections 4.l(a) and 4.1(b) may be increased by such amount, if any, as is determined by the Board of Directors in its sole discretion taking into consideration: (a) the performance of the Executive; (b) the performance of the Company; (c) the amount of compensation that other companies of comparable size, sector and level of activity pay their Executives or contractors performing comparable services; and (d) market conditions, generally, including the ability of the Company to access the funds it requires to undertake its business activities. In determining whether to pay an annual cash bonus described in subsection 4.1(b) to the Consultant in any fiscal year, the Board of Directors shall take into consideration whether the Consultant has fulfilled certain objectives, such objectives to be mutually determined by the Consultant and the Board of Directors. #### 4.3 Reimbursement of Expenses The Company shall reimburse the Consultant for all reasonable expenses incurred by her in the performance of her duties under this Agreement provided that the Consultant provides the Company with receipts for all expenses and a written expense account. The Company will provide the Consultant with, or reimburse the Consultant for, services and fees necessary for the performance of the Executive's duties. #### 4.4 Vacation The Consultant shall be entitled to four (4) weeks of paid vacation for each fiscal year of the Company. Any untaken vacation time is forfeit without any compensation. ### 5. CONFIDENTIALITY AND NON-DISCLOSURE #### 5.1 Confidential Information The term "Confidential Information" means any and all information concerning any aspect of the Company or any of its affiliates or related companies not publicly disclosed, which the Consultant may receive or develop as a result of her engagement by or involvement with the Company, and including all technical data, concepts, reports, programs, processes, technical information, trade secrets, systems, business strategies, financial information and other information unique to the Company. All Confidential Information, including notes, diagrams, maps, reports, notebook pages, memoranda, sample materials and any excerpts thereof that include Confidential Information are the property of the Company or parties for whom the Company acts as agent or who are customers of the Company, as the case may be, and are strictly confidential to the Company and/or such parties. The Consultant shall not make any unauthorized disclosure or use of and shall use her best efforts to prevent unauthorized disclosure or use of such Confidential Information. #### 5.2 Equitable Remedies The Consultant acknowledges that any unauthorized disclosure or use of such Confidential Information by the Consultant may result in material damages to the Company or its related or affiliated companies and that the Company shall be entitled to seek injunctive relief or any other legal or equitable remedy to prohibit, prevent or enjoin unauthorized disclosure or use of Confidential Information by the Executive. The Consultant acknowledges and agrees that her unauthorized disclosure or use of Confidential Information will cause irreparable harm that could not be adequately compensated by damages. #### 5.3 Protection of Confidential Information The Consultant will safeguard all Confidential Information at all times so that it is not exposed to or used by unauthorized persons, and will exercise at least the same degree of care used to protect the Executive's own confidential information. #### 5.4 Exception The restrictive obligations set forth above shall not apply to the disclosure or use of any information which: (a) is or later becomes publicly known under circumstances involving no breach of this Agreement by the Executive; (b) is already known to the Consultant at the time of receipt of the Confidential Information; (c) is lawfully made available to the Consultant by a third party; (d) is disclosed by the Consultant pursuant to a requirement of a governmental department or agency or disclosure is otherwise required by operation of law, provided that the Consultant gives notice in writing to the Company of the required disclosure immediately upon her becoming advised of such required disclosure and provided also that the Consultant delays such disclosure so long as it is reasonably possible in order to permit the Company to appeal or otherwise oppose such required disclosure and provides the Company with such assistance as the Company may reasonably require in connection with such appeal or other opposition; (e) is disclosed to a third party under a confidentiality agreement approved by the Company; or (f) is disclosed in the course of the Executive’s proper performance of the Executive’s duties under this Agreement. #### 5.5 Corporate Opportunities The parties agree that: (a) any inventions, discoveries or improvements in systems, methods and processes made by the Consultant in the course of her direct engagement in the Company's activities shall belong to and be the absolute property of the Company. #### 5.6 Survival The provisions of this Section 5 shall survive the termination of this Agreement for a period of 12 months. ### 6. TERMINATION #### 6.1 Change of Control (a) Subject as is hereinafter provided, for the purposes of this Agreement a "change of control" ("Change of Control") shall be deemed to have occurred when: (i) a third party, by any means directly or indirectly, acquires the right or has the ability to appoint or elect the majority of the Board of Directors, and (ii) either of the of the follow occur: (i) The Consultant is relieved of her duties for reasons other than those specified in Sections 6.3(a) and 6.3(b) above, or there is a material change in the Executive's duties such that she is required to assume duties that are not consistent with, or to relinquish responsibilities that are consistent with, those customarily and usually performed by the Executive or (ii) Any material reduction in the Consultant's then current salary or any material adverse changes to the then current location of work, benefits or any other form of remuneration (other than the exercise of the discretion of the Board of Directors in respect of bonuses). (b) In the event a Change of Control occurs while the Consultant remains employed with the Company, then the Consultant shall receive from the Company (i) a severance lump sum payment equal to two (2) times the Executive's current annual base salary, to be paid within five (5) days of termination (if under 6.l(a)(i)) or within ten (10) days if pursuant to a notice received under 6.2(b)), and (ii) reimburse the Consultant within thirty (30) days of such termination or resignation for all expenses as contemplated by section 4.3. #### 6.2 The Executive's Right to Terminate The Consultant may terminate her obligations under this Agreement: (a) at any time upon providing three months' notice in writing to the Company; or (b) at any time following the occurrence of the situation set out in 6.l(a)(ii) occurs by providing notice in writing to the Company. #### 6.3 Company's Right to Terminate The Company may terminate the Executive's employment under this Agreement at any time: (a) for cause which shall include, without limitation, any of the following events: (i) theft, dishonesty or fraud by the Consultant with respect to the business of the Company as determined in the sole discretion of the Company's Board of Directors; (ii) a material breach by the Consultant of any of the Company's policies or procedures, including, without limitation, those relating to anti-corruption, anti-bribery measures or insider trading; (iii) the conviction of the Consultant for a criminal offence that gives rise or is likely to give rise to the Company's stock becoming ineligible for listing on any stock exchange or market or the Company's stock being subject to a cease-trade order by a Canadian or US securities regulatory authority; or (iv) any and all other omissions, commissions or other conduct which would constitute just cause at law; (b) upon the Consultant dying or becoming permanently disabled or disabled for a period exceeding 180 consecutive days or 180 non-consecutive days calculated on a cumulative basis over any two year period during the term of this Agreement. The Consultant shall be deemed to have become disabled if, because of ill health, physical, mental disability or for other causes beyond the control of the Executive, the Consultant has been unable or unwilling or has failed to perform the Executive's duties under this Agreement; or (c) at any time upon making the payments contemplated in subsections 6.4(b) - 6.4(e), as the case may be, to the Executive. #### 6.4 Severance Payment (a) In the event of the termination of the Executive's employment by the Consultant pursuant to subsection 6.1 of this Agreement, the Company shall pay to the Consultant the amounts set out in Section 6.1(b) in accordance with the terms thereof (b) In the event of the termination of the Executive's employment by the Company pursuant to subsection 6.3(c) on or before the first anniversary of this Agreement or by the Company in any manner in breach of this Agreement, the Company shall: (i) pay to the Consultant an amount equal to the monthly instalments of the Executive's current annual base salary at the date of termination for a period of three (3) month after the date of termination; and (ii) reimburse the Consultant within thirty (30) days of such termination for all expenses as contemplated by section 4.3. (c) In the event of the termination of the Executive's employment by the Company pursuant to subsection 6.3(c) on or before the second anniversary of this Agreement or by the Company in any manner in breach of this Agreement, the Company shall: (i) pay to the Consultant an amount equal to the monthly instalments of the Executive's current annual base salary at the date of termination for a period of six (6) months after the date of termination; and (ii) reimburse the Consultant, within thirty (30) days of such termination for all expenses as contemplated by section 4.3. (d) In the event of the termination of the Executive's employment by the Company pursuant to subsection 6.3(c) after the second anniversary of this Agreement or by the Company in any manner in breach of this Agreement, the Company shall: (i) pay to the Consultant an amount equal to the monthly instalments of the Executive's current annual base salary at the date of termination for a period of twelve (12) months after the date of termination; and (ii) reimburse the Consultant within thirty (30) days of such termination for all expenses as contemplated by section 4.3. The amounts payable under this section 6.4 shall not be reduced in any respect in the event that the Consultant shall secure or shall not reasonably pursue alternative employment following the termination of the Executive's employment. #### 6.5 Compensation Otherwise Due to the Consultant on Termination In the event of the termination of the Executive's employment under this Agreement: (a) in the circumstances set out in subsections 6.2(a) or 6.3(a) of this Agreement, the Company shall pay to the Consultant within 30 days of such termination the amount of her annual base salary accrued as of the date of termination or effective date of resignation, as applicable; or (b) in the circumstances set out in subsection 6.3(b) of this Agreement, the Company shall pay to the Consultant within 30 days of the termination the amount of her annual base salary accrued as of the date of termination. #### 6.6 No Other Amounts, Delivery of Records (a) The Consultant acknowledges that upon the payment of the amounts described in this Agreement, the Consultant shall have no further claim against the Company for notice or severance (or for payments in lieu thereof), whether statutory or otherwise, or for any further or other termination payment. The Consultant acknowledges that her receipt in full of the payments due to him by the Company hereunder will require the execution and delivery to the Company of a full and final release in favour of the Company and any affiliated companies, and these companies' officers, directors, Executives, agents and assigns, in form satisfactory to the Consultant and the Company, each acting reasonably and in good faith. (b) Upon any termination of her employment and payment of all amounts due to him by the Company as set out herein, the Consultant shall immediately deliver or cause to be delivered to the Company all records, files, manuals, books, documents, materials, supplies, computer programs, money and other property and materials belonging to the Company or for which the Company is liable to others and furnished to the Consultant by the Company or used by him on the Company's behalf or generated or obtained by him during the course of her employment hereunder, including all copies thereof, remaining in the possession, charge, control or custody of the Executive, all of which property and materials shall be and remain at all times the property of the Company. ### 7. DISPUTE RESOLUTION #### 7.1 Dispute Notice Each party hereto agrees that either party may give a notice of any dispute arising from or in connection with the interpretation, application, operation or performance of this Agreement to the other, which shall contain the particulars of the matter in dispute, the details of its position and the relevant provision of this Agreement (the "Dispute Notice") where after the parties will use their best efforts to resolve the matter in dispute through consultation and discussion. #### 7.2 Arbitration In the event the dispute cannot be resolved through consultation and discussion as contemplated in section 7.1 within ten days, the dispute shall be settled exclusively by arbitration as follows: (a) arbitration proceedings shall be commenced by the delivery of a notice by the initiating party seeking the arbitration to the responding party, detailing the dispute or matter concerned, and requiring the resolution of that dispute or matter by arbitration (the "Arbitration Notice"); (b) within 15 days of the giving of the Arbitration Notice under subsection (a), the initiating party and the responding party shall jointly appoint an arbitrator for the hearing of the dispute, but where they cannot agree upon an arbitrator during this 15 day period, then within three days of the conclusion of the 15 day period, they shall each appoint an arbitrator who shall be a person at arm's length to both of them, and those persons shall jointly appoint a third arbitrator within 15 days of the date of the later of their two appointments, and those three persons shall jointly constitute an arbitration panel for the hearing and adjudication of the arbitration; (c) where a person entitled to appoint an arbitrator under subsection (b) fails or refuses to do so within the time allowed, the other party may appoint an arbitrator on that person's behalf; (d) the arbitrator or arbitration panel, as the case may be, shall fix a date for the hearing of the dispute or matter, which date shall be within 30 days of the date of their respective appointment, and both parties and their respective counsel shall be entitled to make submissions at the arbitration; (e) the arbitrator or arbitration panel shall render a decision within 30 days of the date of the conclusion of the hearing of the arbitration, or such longer period of time as the parties may agree, but where the arbitrator or arbitration panel fails to render a decision within the time allowed, either party may terminate the arbitration proceedings, whereupon both parties shall be entitled to proceed in the courts as if this section did not apply; (f) in the case of an arbitration panel, the decision of the majority of the panel shall be deemed to be the decision of the entire panel; (g) any decision by an arbitrator or arbitration panel, as the case may be, shall be binding and conclusive on the parties and there shall be no right of appeal from that decision; (h) an arbitrator or arbitration panel appointed under this section may make rules and give directions to govern the conduct of an arbitration, and may make any award of costs that the arbitrator considers just and reasonable in the circumstances, including an award of costs on a solicitor and client basis; and (i) any arbitration under this Agreement shall be conducted at an office or other place designated by the arbitrator or in such other place as the parties to the arbitration may agree. #### 7.3 Costs and Expenses Each of the parties to the dispute shall bear their own expenses and shall share the costs of the mediator and/or arbitrator(s). ### 8. NOTICES #### 8.1 Delivery of Notice Any notice relating to this Agreement or required or permitted to be given in accordance with this Agreement shall be in writing and shall be personally delivered or mailed by registered mail, postage prepaid as follows: (a) If to the Company: Febrican Corp. 20 Victoria Street, 8th Floor Toronto, ON MSC 2N8 Attention: Barry Kurtzer, CEO (b) if to the Consultant: 72 Alex Campbell Cres. King City, ON L7B OCl Attention: Jennifer Ta #### 8.2 Time of Delivery Any notice shall be deemed to have been received if delivered, when delivered, and if mailed, on the fifth day (excluding Saturdays, Sundays and holidays) after the mailing thereof. If normal mail service is interrupted by strike, slowdown, force majeure or other cause, a notice sent by registered mail will not be deemed to be received until actually received and the party sending the notice shall utilize any other services which have not been so interrupted or shall deliver such notice in order to ensure prompt receipt thereof. #### 8.3 Change of Address Each party to this Agreement may change its address for the purpose of this section 8 by giving written notice of such change in the manner provided for in section 8.1. ### 9. GENERAL #### 9.1 Applicable Law This Agreement shall be governed by and construed in accordance with the laws of the province of Ontario and the federal laws of Canada applicable therein, which shall be deemed to be the proper law hereof. The parties hereto hereby submit to the jurisdiction of the courts of Ontario. All obligations of the parties under this Agreement are subject to receipt of all necessary approvals of the applicable securities regulatory authorities. #### 9.2 Severability If any provision of this Agreement for any reason be declared invalid, such declaration shall not affect the validity of any remaining portion of the Agreement, which remaining portion shall remain in full force and effect as if this Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties that they would have executed the remaining portions of this Agreement without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid. #### 9.3 Entire Agreement This Agreement constitutes the entire agreement between the parties hereto and there are no representations or warranties, express or implied, statutory or otherwise other than set forth in this Agreement and there are no agreements collateral hereto other than as are expressly set forth or referred to herein. This Agreement cannot be amended or supplemented except by a written agreement executed by all parties hereto. #### 9.4 Non-Assignability This Agreement shall not be assigned by any party to this Agreement without the prior written consent of the other parties to this Agreement. #### 9.5 Burden and Benefit This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns. #### 9.6 Time Time is of the essence of this Agreement. #### 9.7 Counterparts This Agreement may be executed in counterparts and by facsimile signature and such counterparts together shall constitute one and the same instrument. #### 9.8 Waiver No consent or waiver, express or implied, by any party to this Agreement of any breach or default by any other party in the performance of its obligations under this Agreement or of any of the terms, covenants or conditions of this Agreement shall be deemed or construed to be a consent or waiver of any subsequent or continuing breach or default in such party's performance or in the terms, covenants and conditions of this Agreement. The failure of any party to this Agreement to assert any claim in a timely fashion for any of its rights or remedies under this Agreement shall not be construed as a waiver of any such claim and shall not serve to modify, alter or restrict any such party's right to assert such claim at any time thereafter. #### 9.9 Indemnity The Company agrees to indemnify and hold harmless the Consultant from any and all losses arising from damages caused to or incurred by third parties or ensuing directly or indirectly from the Executive's performance or non-performance of her duties hereunder, except to the extent caused by or attributable to the Executives wilful misconduct or gross negligence. #### 9.10 Legal Advice The Consultant hereby represents, warrants and acknowledges to the Company that he had the opportunity to seek and was not prevented or discouraged by the Company from seeking independent legal advice prior to the execution and delivery of this Agreement and that, in the event that he did not avail himself of that opportunity prior to signing this Agreement, he did so voluntarily without any undue pressure and agrees that her failure to obtain independent legal advice shall not be used by him as a defence to the enforcement of her obligations under this Agreement. --- COURT FILE NO.: CV-16-550001-0000 DATE: 20170614 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: JENNIFER TA Plaintiff – and – DELSHEN THERAPEUTICS CORP. Defendant REASONS FOR DECISION Hood J. Released: June 14, 2017