Exhibit 10.27

CONFIDENTIAL SEPARATION AGREEMENT

AND GENERAL RELEASE OF ALL CLAIMS

This Confidential Separation Agreement and General Release of All Claims
("Separation Agreement") is made by and between Neothetics, Inc. ("Neothetics"
or "Company") and Lincoln Krochmal, MD, FAA ("Employee") with respect to the
following facts:

A.Employee is employed by Company pursuant to an employment agreement dated
October 15, 2014 ("Employment Agreement"). Employee's employment with Company
will terminate effective January 21, 2016 ("Separation Date").  Company wishes
to reach an amicable separation with Employee and assist Employee's transition
to other employment.

The parties desire to settle all claims and issues that have, or could have been
raised by Employee, in relation to Employee's employment with Company and
arising out of or in any way related to the acts, transactions or occurrences
between Employee and Company to date, including, but not limited to, Employee's
employment with Company or the termination of that employment, on the terms set
forth below.

THEREFORE, in consideration of the promises and mutual agreements hereinafter
set forth, it is agreed by and between the undersigned as follows:

1.Severance Package.  Pursuant to the terms of the Employment Agreement, and in
exchange for the promises set forth herein, Company shall provide Employee with
the following payments and benefits ("Severance Package") to which Employee is
not otherwise entitled absent executing this Separation Agreement.  Employee
acknowledges and agrees that this Severance Package constitutes adequate legal
consideration for the promises and representations made by Employee in this
Separation Agreement.

1.1Severance Payment.  Company agrees to provide Employee with a severance
payment equal to six (6) months of Employee's base salary, One Hundred Sixty Two
Thousand, Two Hundred Twenty Five Dollars ($162,225), less all appropriate
federal and state income and employment taxes ("Severance Payment"). The
Severance Payment will be paid out in equal installments pursuant to the
Company's regular payroll process beginning on the first regular payroll date
following the Effective Date of this Separation Agreement described below in
paragraph 9.  

1.2Payment for Medicare and Dental Premiums.  Company also agrees to pay
Employee an amount equal to the monthly amount Company has paid during
Employee's employment for Employee's Medicare and group dental insurance
premiums ("Monthly Benefit Payment") for six (6) months following the Separation
Date. These Monthly Benefit Payments will be paid out monthly on the second pay
period of each month following the Separation Date.

2.General Release.

2.1Employee unconditionally, irrevocably and absolutely releases and discharges
Company, and any parent and subsidiary corporations, divisions, investors and
affiliated corporations, partnerships or other affiliated entities of Company,
past and present, as well as Company's employees, officers, directors, agents,
successors and assigns (collectively, "Released Parties"), from all claims
related in any way to the transactions or occurrences between them to date, to
the fullest extent permitted by law, including, but not limited to, Employee’s
employment with Company, the termination of Employee’s employment, and all other
losses, liabilities, claims, charges, demands and causes of action, known or
unknown, suspected or unsuspected, arising directly or indirectly out of or in
any way connected with Employee's employment with Company.  This release is
intended to have the broadest possible application and includes, but is not
limited to, any tort, contract, common law, constitutional or other statutory
claims arising under local state or federal law, including, but not limited to
alleged violations of the California Labor Code, the California Fair Employment
and Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, as amended, and all claims for attorneys' fees, costs and
expenses.  

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2.2Employee expressly waives Employee's right to recovery of any type, including
damages or reinstatement, in any administrative or court action, whether state
or federal, and whether brought by Employee or on Employee's behalf, related in
any way to the matters released herein.   

2.3The parties acknowledge that this general release is not intended to bar any
claims that, by statute, may not be waived, such as Employee's right to file a
charge with the National Labor Relations Board or Equal Employment Opportunity
Commission and other similar government agencies, claims for statutory
indemnity, workers' compensation benefits or unemployment insurance benefits, as
applicable, as amended, as set forth in this Separation Agreement.  

2.4Employee acknowledges that Employee may discover facts or law different from,
or in addition to, the facts or law that Employee knows or believes to be true
with respect to the claims released in this Separation Agreement and agrees,
nonetheless, that this Separation Agreement and the release contained in it
shall be and remain effective in all respects notwithstanding such different or
additional facts or the discovery of them.

2.5Employee declares and represents that Employee intends this Separation
Agreement to be complete and not subject to any claim of mistake, and that the
release herein expresses a full and complete release and Employee intends the
release herein to be final and complete.  Employee executes this release with
the full knowledge that this release covers all possible claims against the
Released Parties, to the fullest extent permitted by law.

3.California Civil Code Section 1542 Waiver.  Employee expressly acknowledges
and agrees that all rights under Section 1542 of the California Civil Code are
expressly waived.  That section provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

4.Representation Concerning Filing of Legal Actions.  Employee represents that,
as of the date of this Separation Agreement, Employee has not filed any
lawsuits, charges, complaints, petitions, claims or other accusatory pleadings
against Company or any of the other Released Parties in any court or with any
governmental agency related to the matters released in this Separation
Agreement.

5.Nondisparagement.  Employee agrees that Employee will not make any voluntary
statements, written or oral, or cause or encourage others to make any such
statements that defame, disparage or in any way criticize the personal and/or
business reputations, practices or conduct of Company or any of the other
Released Parties.

6.Confidentiality and Return of Company Property.  Employee understands and
agrees that as a condition of receiving the Severance Payment in paragraph 1,
all of Company's property must be returned to Company.  By signing this
Separation Agreement, Employee represents and warrants that Employee has
returned to Company all Company property, data and information belonging to
Company and agrees that Employee will not use or disclose to others any
confidential or proprietary information of Company or the Released Parties.  In
addition, Employee agrees to keep the terms of this Separation Agreement
confidential between Employee and Company, except that Employee may tell
Employee's immediate family and attorney or accountant, if any, as needed, but
in no event should Employee discuss this Separation Agreement or its terms with
any current or prospective employee of Company. However, nothing in this
Agreement shall prohibit Employee from making truthful statements in any legal
proceedings, government investigation or as otherwise required by law.

7.Continuing Obligations.  Employee further agrees to comply with the continuing
obligations regarding confidentiality set forth in the surviving provisions of
Company's Confidential Information and

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Invention Assignment Agreement ("Confidentiality Agreement"), previously
executed by Employee, including, but not limited to, promises not to disclose
and to protect all confidential and proprietary information of the Company. 

8.No Admissions.  By entering into this Separation Agreement, the Released
Parties make no admission that they have engaged, or are now engaging, in any
unlawful conduct.  The parties understand and acknowledge that this Separation
Agreement is not an admission of liability and shall not be used or construed as
such in any legal or administrative proceeding.

9.Effective Date/Acknowledgements.  Employee has 7 days, until January 11, 2016,
to consider whether or not to enter into this Separation Agreement
("Consideration Period") (although Employee may elect not to use the full
Consideration Period at Employee's option).  By signing this Separation
Agreement, Employee acknowledges that (a) Employee has read and understands the
terms of this Separation Agreement; (b) Employee has obtained and considered
such legal counsel as Employee deems necessary; and (c) Employee enters this
Separation Agreement freely, knowingly and voluntarily. This Separation
Agreement shall become effective and enforceable on the day Employee returns a
signed copy of this Separation Agreement to Company, provided it is signed
during the Consideration Period ("Effective Date").

10.Ownership of Claims.  Employee represents and warrants that Employee is the
sole and lawful owner of all rights, title and interest in and to all released
matters, claims and demands as herein contained and that there has been no
assignment or other transfer of any interest of any claim or demand which
Employee may have against Company.

11.Affirmation.  Employee affirms that Employee has been paid all compensation,
wages, bonuses, and commissions due, and has been provided all leaves (paid or
unpaid) and benefits to which Employee may be entitled.  

12.Severability.  In the event any provision of this Separation Agreement shall
be found unenforceable, the unenforceable provision shall be deemed deleted and
the validity and enforceability of the remaining provisions shall not be
affected thereby.

13.Full Defense.  This Separation Agreement may be pled as a full and complete
defense to, and may be used as a basis for an injunction against, any action,
suit or other proceeding that may be prosecuted, instituted or attempted by
Employee in breach hereof.

14.Applicable Law.  The validity, interpretation and performance of this
Separation Agreement shall be construed and interpreted according to the laws of
the United States of America and the State of California.

15.Entire Agreement; Modification.  This Separation Agreement, including the
surviving provisions of Company's Confidentiality Agreement previously executed
by Employee, is intended to be the entire agreement between the parties and
supersedes and cancels any and all other and prior agreements, written or oral,
between the parties regarding this subject matter.  This Agreement may be
amended only by a written instrument executed by all parties hereto.

 

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THE PARTIES TO THIS SEPARATION AGREEMENT HAVE READ THE FOREGOING SEPARATION
AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED
HEREIN.  WHEREFORE, THE PARTIES HAVE EXECUTED THIS SEPARATION AGREEMENT ON THE
DATES SHOWN BELOW.

 

Dated:

  1/5/2016

 

 

/s/ Lincoln Krochmal

 

 

 

 

Lincoln Krochmal, MD, FAA

 

 

 

 

 

 

 

 

 

Neothetics, Inc.

 

 

 

 

 

Dated:

  1/4/2016

 

By:

/s/ George Mahaffey

 

 

 

 

George Mahaffey

President and CEO

 

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