XENETIC BIOSCIENCE INC. 

EMPLOYMENT AGREEMENT

 

This Employment Agreement ("Agreement" ) is entered into as of this 1st day of
January 2017 by and between Xenetic Bioscience, Inc., a Nevada corporation with
a principal place of business in Lexington , Massachusetts (the "Company"), and
Curtis Lockshin, an individual (the " Executive").

 

WHEREAS, the Company and the Executive wish to set forth the terms and
conditions for the employment of the Executive by the Company;

 

NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration the receipt of which is hereby
acknowledged, the parties mutually agree as follows:

 

Section 1. Term of Employment.

 

(a)            General. The Company will employ Executive, and Executive will be
employed by the Company, for the period set forth in Section 1(b), in the
positions set forth in Section 2, and upon the other terms and conditions herein
provided commencing on January 1st, 2017 (the "Effective Date").

 

(b)           Term. The Agreement shall become effective on the Effective Date
and shall continue unless earlier terminated as provided in Section 7 (the
"Term"). The Executive's employment with the Company shall be "at will," meaning
that the Executive's employment may be terminated by the Company or the
Executive at any time and for any reason provided that Executive may not
voluntarily terminate his employment upon less than ninety days prior written
notice delivered to the Company, or upon such shorter notices as Company and
Executive agree.

 

(c)            Location. During the Term, the Executive's principal place of
employment shall be in Lexington, MA. The Executive acknowledges that
Executive's duties and responsibilities shall require the Executive to travel on
business to the extent reasonably necessary to fully perform Executive 's duties
and responsibilities hereunder.

 

Section 2. Duties and Exclusivity.

 

(a)           During the Term, the Executive (i) shall serve as Chief Scientific
Officer of the Company, with responsibilities, duties and authority customary
for such position, subject to direction by the Chief Executive Officer of the
Company, (ii) shall report directly to the Chief Executive Officer; (iii) shall
devote all the Executive' s working time and efforts to the business and affairs
of the Company and its subsidiaries; and (iv) agrees to observe and comply with
the Company's rules and policies as adopted by the Company from time to time.
The Executive's duties, responsibilities and authority may include services for
one or more subsidiaries of the Company.

 

(b)       Notwithstanding anything to the contrary in Section 2(a) above, the
Executive may (i) serve as a director , trustee or officer or otherwise
participate in not-for-profit educational, welfare, social, religious and civic
organizations. During the Term, Executive shall not accept any other employment
or consultancy or serve on the board of directors or similar body of any entity
unless such position is approved by the Chief Executive Officer.

 1 

 

 

 

(c)           Exclusivity. The Executive hereby represents to the Company that:
(i) the execution and delivery of this Agreement by the Executive and the
Company and the performance by the Executive of the Executive's duties hereunder
do not and shall not constitute a breach of, conflict with, or otherwise
contravene or cause a default under, the terms of any other agreement or policy
to which the Executive is a party or otherwise bound or any judgment, order or
decree to which the Executive is subject; (ii) that the Executive has no
information (including, without limitation, confidential information and trade
secrets) relating to any other Person which would prevent, or be violated by,
the Executive entering into this Agreement or carrying out his duties hereunder;
(iii) the Executive is not bound by any agreement with any previous employer or
other party to refrain from (A) competing with the business of, or (B)
soliciting the customers of, that employer or party, in each case, which would
be violated by your employment with the Company; and (iv) the Executive
understands the Company will rely upon the accuracy and truth of the
representations and warranties of the Executive set forth herein and the
Executive consents to such reliance.

 

(d)           Deemed Resignation. Upon termination of Executive's employment for
any reason, Executive shall be deemed to have resigned from all offices, if any,
then held with the Company or any of its subsidiaries, and, at the Company's
request, Executive shall execute such documents as are necessary or desirable to
effectuate such resignations.

 

Section 3. Compensation.

 

(a)            Salary. In consideration of all of the services rendered by the
Executive under the terms of this Agreement, the Company shall pay to the
Executive a base salary at the annualized rate of Two Hundred Fifty Thousand
Dollars United States $250,000.00 per annum, less payroll deductions and all
required withholdings. Executive's Base Salary shall be subject to annual review
and upward adjustment only by the Board of Directors of the Company (the "
Board") or a committee thereof, beginning in fiscal 2017. The Base Salary shall
be paid in accordance with the customary payroll practices of the Company in
effect from time to time. The Executive's salary, as adjusted from time to time
under this Section 3(a), is referred to as ("Base Salary").

 

(b)            Annual Bonus. With respect to each Company fiscal year that ends
during the Term, commencing with fiscal year 2017, the Executive shall be
eligible to receive an annual performance-based cash bonus (the "Annual Bonus")
which shall be payable based upon the attainment of individual and/or Company
performance goals established by the Board or a committee thereof. The target
amount of such Annual Bonus shall equal 35% of Executive's Base Salary in the
year to which the Annual Bonus relates, provided that the actual amount of the
Annual Bonus may be greater or less than such target amount (the "Target
Bonus"). Each Annual Bonus, if any, for a fiscal year shall be payable, less
payroll deductions and all required withholdings, not later than the fifteenth
day of the third month following the end of such year. Except as provided in
Section 7, notwithstanding any other provision of this Section 3(b), no bonus
shall be payable with respect to a Company fiscal year unless the Executive
remains continuously employed with the Company until the last day of such year.

 

(c)            Reimbursement of Expenses. The Company will promptly reimburse
Executive for all reasonable out-of-pocket business expenses that are incurred
by Executive in furtherance of the Company's business in accordance with the
Company's policies with respect thereto as in effect from time to time. The
Executive shall be reimbursed by the Company for the reasonable attorneys ' fees
and costs incurred by him in connection with the negotiation and preparation of
this Agreement (and related equity award documentation), up to a maximum of
$3,000 provided that the Executive shall submit invoices to the Company within
ninety (90) days of incurrence of the expense, and the Company shall reimburse
Executive within sixty (60) days thereafter.

 2 

 

 

 

(d)            Fringe Benefits. In addition to any benefits provided by this
Agreement, Executive shall be entitled to participate generally in all employee
benefit, welfare and other plans, practices, policies and programs and fringe
benefits maintained by the Company from time to time on a basis no less
favorable than those provided to other similarly-situated executives of the
Company. The Executive understands that, except when prohibited by applicable
law, the Company's benefit plans and fringe benefits may be amended, enlarged,
diminished or terminated prospectively by the Company from time to time, in its
sole discretion, and that such shall not be deemed to be a breach of this
Agreement.

 

(e)            Vacation. Executive shall be entitled to accrue four (4) weeks of
paid vacation days per year in accordance with and subject to the terms of the
Company ' s vacation policy applicable to other executive officers of the
Company, as it may be amended prospectively from time to time.

 

Section 4. Insurance; Indemnification.

 

During Executive' s employment with the Company, the Company shall maintain the
insurance it currently has with respect to (i) directors' and officers'
liability , (ii) errors and omissions and (iii) general liability insurance
providing coverage to Executive to the same extent as other senior executives of
the Company. Executive's coverage under such insurance shall terminate upon
Executive' s leaving of the Company's employ for any reason. The Executive will
be entitled to indemnification with respect to Executive' s services provided
hereunder pursuant to Nevada law, the terms and conditions of Company's articles
of incorporation and/or bylaws , Company's directors and officers ("D&O")
liability insurance policy, and Company 's standard indemnification agreement
for directors and officers as executed by Company and Executive.

 

Section 5. Equity Awards.

 

(a)            Initial Grant. As incentive to enter into and undertake
employment pursuant to this Agreement, the Company shall grant to Executive on
the Effective Date a non-qualified stock option to purchase 175,000 shares of
common stock of the Company (the "Option") under the Company's Equity Incentive
Plan, effective January 23, 2014 (the "Plan") at an exercise price equal to the
fair market value of the Company's common stock on the grant date. The Option
shall vest one-third upon the first anniversary of the Effective Date, one-third
upon the second anniversary of the Effective Date and one-third upon the third
anniversary of the Effective Date, provided the Executive remains employed with
the Company on the applicable vesting date and further provided that, in the
event of a Change in Control, as defined in the Plan, while Executive is
employed by the Company any unvested portion of the Option shall vest
immediately upon the Change in Control. [Notwithstanding the foregoing in no
event may (i) Executive exercise 87,500 shares with respect to the Option (the "
Unapproved Portion" ) prior to the Company receiving shareholder approval of an
increase in the number of shares of common stock authorized under the Plan (or
adoption of a new plan covering the Unapproved Portion) which amendment to the
Plan or adoption of a new plan shall include provision for the issuance of
shares of common stock underlying the Unapproved Portion; and (ii) if
shareholder approval is not obtained for any reason on or prior to December 1,
2017, the Unapproved Portion shall be cancelled (from the unvested portion of
the Option) and of no further force and effect.] The Option shall be evidenced
in writing by, and subject to the terms and conditions of, the Plan and, except
as otherwise set forth herein, the Company's standard form of stock option
agreement, which agreement shall expire ten (10) years from the date of grant
except as otherwise provided herein, in the stock option agreement or the Plan.

 

 3 

 

 

(b)           Sale of Shares. Executive agrees that he will not loan or pledge
any securities of the Company owned by him or which he may accrue in the future
through Options or other equity awards as collateral for any indebtedness.

 

Section 6. Compliance with Company Policy.

 

During the Term, the Executive shall observe all Company rules, regulations,
policies, procedures and practices in effect from time to time, including,
without limitation, such policies and procedures as are contained in the Company
policy and procedures manual, as may be amended or superseded from time to time.

 

Section 7. Termination of Employment.

 

Executive's employment with the Company may be terminated during Term of this
Agreement for any of the following reasons:

 

(a)            By The Company For Cause. At any time during the Term, the
Company may terminate Executive's employment hereunder for Cause. For purposes
of this Agreement, "Cause" shall mean the occurrence of any of the following
events, as determined by the Board or a committee designated by the Board, in
its sole discretion: (i) conduct by Executive constituting a material act of
willful misconduct in connection with the performance of his duties, including,
without limitation, misappropriation of funds or property of the Company or any
of its affiliates other than the occasional, customary and de minimis use of
Company property for personal purposes; (ii) the commission by Executive of a
felony or any misdemeanor involving moral turpitude, deceit, dishonesty or
fraud, or conduct by Executive that would reasonably be expected to result in
material injury to the Company if he were retained in his position; (iii)
continued, willful and deliberate non-performance by Executive of his duties
hereunder (other than by reason of Executive's physical or mental illness,
incapacity or disability) which has continued for more than thirty (30) days
following written notice of such non-performance from the Company; (iv) a
material breach by Executive of any of the provisions contained in Paragraph 7
of this Agreement; (v) a material violation by Executive of the Company' s
employment policies which has continued for more than thirty (30) days following
written notice of such violation from the Company; or (vi) willful failure to
cooperate with a bona fide internal investigation or an investigation by
regulatory or law enforcement authorities, after being instructed by the Company
to cooperate, or the willful destruction or failure to preserve documents or
other materials known to be relevant to such investigation or the willful
inducement of others to fail to cooperate or to produce documents or other
materials.

 

(b)By The Company Without Cause.

 

At any time during the Term, the Company may terminate Executive's employment
hereunder without Cause.

 

(c)By The Executive.

 

At any time during the Term, Executive may terminate his employment hereunder
for any reason, including but not limited to Good Reason. For purposes of this
Agreement, "Good Reason" shall mean that Executive has complied with the "Good
Reason Process" (hereinafter defined) following the occurrence of any of the
following events: (i) a substantial diminution or other substantive adverse
change, not consented to by Executive, in the nature or scope of Executive' s
responsibilities, authorities, powers, functions or duties; (ii) a breach by the
Company of any of its other material obligations under this Agreement, including
but not limited to failure of the Company to make any material payment or
provide any material benefit under this Agreement, or (iii) a change in the
geographic location at which Executive must perform his services as provided
under this Agreement to a location more than fifty miles from the location set
forth in this Agreement; provided that, a change in the employment of Executive
to another affiliate of Company does not in and of itself constitute " Good
Reason." "Good Reason Process" shall mean that (A) Executive reasonably
determines in good faith that a "Good Reason" event has occurred; (B) Executive
notifies the Company in writing of the occurrence of the Good Reason event
within ninety (90) days of the occurrence of such event; (C) Executive
cooperates in good faith with the Company's efforts, for a period not less than
sixty (60) days following such notice , to modify Executive' s employment
situation in a manner acceptable to Executive and Company; (D) notwithstanding
such efforts, one or more of the Good Reason events continues to exist and has
not been modified in a manner acceptable to Executive; and (E) Executive
terminates his employment no later than sixty (60) days after the end of the
sixty (60) day cure period. If the Company cures the Good Reason event in a
manner acceptable to Executive during the sixty (60) day period, Good Reason
shall be deemed not to have occurred.

 

 4 

 

 

(d)Right to Severance.

 

In the event the Company terminates Executive's employment Without Cause or the
Executive terminates employment for Good Reason as provided in Section 7(c) and
if Executive executes and does not revoke during any applicable revocation
period a general release of all claims against the Company and its affiliates in
a form acceptable to the Company (a " Release of Claims") within a reasonable
period of time specified by the Company and in compliance with applicable law,
following such termination, then in addition to any accrued obligations payable
under Section 7(e)(i) below, the Company shall:

 

(i) Pay to the Executive one year of Executive's Base Salary, less payroll
deductions and all required withholdings, paid over time in accordance with the
Company's payroll practices then in effect; and

 

(ii)  The Company shall notify Executive of any right to continue group health
plan coverage sponsored by the Company immediately prior to Executive 's date of
termination pursuant to the provisions of applicable law including, but not
limited to, the provisions of the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended ("COBRA"). If Executive elects to receive such continued
healthcare coverage, the Company shall directly pay, or reimburse Executive for,
the premium for Executive and Executive' s covered dependents, less the amount
of Executive's monthly premium contributions for such coverage prior to
termination, for the period commencing on the first day of the first full
calendar month following such employment termination through the earlier of (i)
the last day of the month for twelve (12) full calendar months (such period
consistent with the severance payment period set forth in Section 7(d)(i) above)
following the date the Release of Claims becomes effective and irrevocable; and
(ii) the date Executive and Executive's covered dependents, if any, become
eligible for healthcare coverage under another employer's plan(s). Executive
shall notify the Company immediately if Executive becomes covered by a group
health plan of a subsequent employer. After the Company ceases to pay premiums
pursuant to this subsection,

 

Executive may, if eligible, elect to continue healthcare coverage at Executive's
expense in accordance the provisions of COBRA or other applicable law.

 

 5 

 

 

For purposes of this Sect ion 7(d), Executive's termination of employment at the
end of the Term following an earlier notice of nonrenewal by the Company shall
be treated as a termination of the Executive' s employment by the Company
without Cause as of the last day of the Term.

 

(e)            Upon a termination of the Executive's employment for any reason ,
(i) the Executive shall be entitled to receive: (A) any portion of the
Executive's Base Salary through the date of employment termination not
theretofore paid, (B) any expenses owed to the Executive under Section 3(c)
above, (C) any accrued but unused vacation pay owed to the Executive pursuant to
Section 3(e) above, and (D) any amount arising from the Executive's
participation in, or benefits under, any employee benefit plans, programs or
arrangements under Section 3(e), which amounts shall be payable in accordance
with the terms and conditions of such employee benefit plans, programs or
arrangements.

 

(f)             The payments and benefits described in this Section 7 shall be
the only payments and benefits payable in the event of the Executive' s
termination of employment for any reason.

 

Section 8. Survival of Obligations.

 

The obligations of the Executive as set forth in Section 4, Section 7 and
Sections 9 through 1 7 below shall sur vive the term of this Agreement and the
termination of Executive 's employment hereunder regardless of the reason(s)
therefor.

 

Section 9. Non-Competition and Conflicting Employment.

 

(a)            During the Term, the Executive shall not, directly or indirectly,
either as an Executive, employer, employee, consultant, agent, principal,
partner, officer, director, shareholder, member, investor or in any other
individual or representative capacity, engage or participate in any business or
business related activity of any kind that is in competition in any manner
whatever with the business of the Company or any business activity related to
the business in which the Company is now involved or becomes involved during the
Executive ' s employment. For these purposes, the current business of the
Company is described in the Company's prospectus dated November 1, 2016. The
Executive also agrees that, during his employment with the Company, he will not
engage in any other activities that materially conflict with his obligations to
the Company, it being understood that activities approved by the Board under
Section 2(b) or otherwise in writing shall not be considered to violate this
Section 9(a).

 

(b)            As a material inducement to the Company to continue the
employment of the Executive, and in order to protect the Company' s Confidential
In format ion and good will, the Executive agrees that:

 

(i)            For a period of twelve (12) months following termination of the
Executive' s employment with the Company or its affiliates for any reason,
Executive will not directly or indirectly solicit or divert or accept business
relating in any manner to Competing Products or to products, processes or
services of the Company, from any of the customers or accounts of the Company
with which the Executive had any contact as a result of Executive's employment
with the Company; and

 6 

 

 

(c)            For a period of twelve ( 12) months after termination of
Executive's employment with the Company or its affiliates for any reason,
Executive will not (A) render services directly or indirectly , as an Executive,
consultant or otherwise, to any Competing Organization in connection with
research on or the acquisition, development, production, distribution, marketing
or providing of any Competing Product, or (B) own any interest in any Competing
Organization except as an investor or stockholder of more than 2% of the equity
securities of any entity:

 

(i)            "Competing Products" means any product, process, or service of
any person or organization other than the Company, in existence or under
development (a) which is identical to, substantially the same as, or an adequate
substitute for any product, process or service of the Company in existence or
under development, based on any patent or patent application (provisional or
otherwise), or other intellectual property of the Company about which the
Executive acquires Confidential Information, and (b) which is (or could
reasonably be anticipated to be) marketed or distributed in such a manner and in
such a geographic area as to actually compete with such product, process or
service of the Company; and

 

(ii) "Competing Organization " means any person or organization, including the
Executive, engaged in, or about to become engaged in, research on or the
acquisition, development, production, distribution, marketing or providing of a
Competing Product.

 

(d)           The parties agree that the Company is entitled to protection of
its interests in these areas. The parties further agree that the limitations as
to time, geographical area, and scope of activity to be restrained do not impose
a greater restraint upon Executive than is necessary to protect the goodwill or
other business interest of the Company. The parties further agree that in the
event of a violation of this Covenant Not To Compete, that the Company shall be
entitled to the recovery of damages from Executive and injunctive relief against
Executive for the breach or violation or continued breach or violation of this
Covenant. The Executive agrees that if a court of competent jurisdiction
determines that the length of time or any other restriction, or portion thereof,
set forth in this Section 9 is overly restrictive and unenforceable, the court
may reduce or modify such restrictions to those which it deems reasonable and
enforceable under the circumstances, and as so reduced or modified, the parties
hereto agree that the restrictions of this Section 9 shall remain in full force
and effect. The Executive further agrees that if a court of competent
jurisdiction determines that any provision of this Section 9 is invalid or
against public policy, the remaining provisions of this Section 9 and the
remainder of this Agreement shall not be affected thereby, and shall remain in
full force and effect.

 

Section 10. Confidentiality.

 

(a)            Executive recognizes and acknowledges that he will have access to
certain information of members of the Company and that such information is
confidential and constitutes valuable, special and unique property of such
members of the Company. The parties agree that the Company has a legitimate
interest in protecting the Confidential Information, as defined below. The
parties agree that the Company is entitled to protection of its interests in the
Confidential Information. The Executive shall not at any time, either during his
employment and for seven (7) years after the termination of his employment with
the Company for any reason, or indefinitely to the extent the Confidential
Information constitutes a trade secret under applicable law, disclose to others,
use, copy or permit to be copied, except in pursuance of his duties for and on
behalf of the Company, its successors, assigns or nominees, any Confidential
Information of any member of the Company (regardless of whether developed by the
Executive) without the prior written consent of the Company. Executive
acknowledges that the use or disclosure of the Confidential Information to
anyone or any third party could cause monetary loss and damages to the Company
as well as irreparable harm. The parties further agree that in the event of a
violation of this covenant against non-use and non-disclosure of Confidential
Information, that the Company shall be entitled to a recovery of damages from
Executive and/or to obtain an injunction against Executive for the breach or
violation, continued breach, threatened breach or violation of this covenant.

 

 7 

 

 

(b)           As used herein, the term " Confidential Information" with respect
to any person means any secret or confidential information or know-how and shall
include, but shall not be limited to, plans, financial and operating
information, customers, supplier arrangements, contracts, costs, prices, uses,
and applications of products and services, results of investigation s, studies
or experiments owned or used by such person, and all apparatus, products,
processes, compositions, samples, formulas, computer programs, computer hardware
designs, computer firmware designs, and servicing, marketing or manufacturing
methods and techniques at any time used, developed, investigated, made or sold
by such person, before or during the term of this Agreement, that are not
readily available to the public or that are maintained as confidential by such
person. The Executive shall maintain in confidence any Confidential Information
of third parties received as a result of his employment with the Company in
accordance with the Company's obligations to such third parties and the policies
established by the Company.

 

(c)            As used herein , "Confidential Information" with respect to the
Company means any Company proprietary information, technical data, trade
secrets, know-how or other business information disclosed to the Executive by
the Company either directly or indirectly in writing, orally or by drawings or
inspection or unintended view of parts, equipment, data, documents or the like,
including, without limitation:

 

(i) Medical and drug research and testing results and information, research and
development techniques, processes, methods, formulas, trade secrets, patents,
patent applications, computer programs, software, electronic codes, mask works,
inventions, machine s, improvements, data, formats, projects and research
projects;

 

(ii) Information about costs, profits, markets, sales, pricing, contracts and
lists of customers, distributors and/or vendors and business, marketing and/or
strategic plans;

 

(iii)  Forecasts, unpublished financial information, budgets, projections, and
customer identities, characteristics and agreements as well as all business
opportunities, conceived, designed, devised, developed, perfected or made by the
Executive whether alone or in conjunction with others, and related in any manner
to the actual or anticipated business of the Company or to actual or anticipated
areas of research and development; and

 

(iv) Executive personnel files and compensation information.

 

(d)            Notwithstanding the foregoing, Confidential Information as
defined in Sections 1O(b) and (c) does not include any of the foregoing items
which (i) has become publicly known or made generally available to the public
through no wrongful act of Executive; (ii) has been disclosed to Executive by a
third party having no duty to keep Company matter confidential; (iii) has been
developed by Executive independently of employment with the company; (iv) has
been disclosed by the Company to a third party without restriction on
disclosure; (v) has been disclosed with the Company's written consent, or (vi)
the Company's investors, shareholder s and other capital sources.

 

 8 

 

 

(e)            Executive hereby acknowledges and agrees that all Confidential
Information shall at all times remain the property of the Company.

 

(t) Executive agrees that Executive will not improperly use or disclose any
Confidential Information, proprietary information or trade secrets of any former
employer or other person or entity or entity with which Executive has an
agreement or duty to keep in confidence information acquired by Executive and
that Executive will not bring onto Company premises any unpublished document or
proprietary information belonging to any such employer, person or entity unless
consented to in writing by such employer, person or entity.

 

(g)           Executive recognizes that the Company has received and in the
future will receive from third pat1ies their confidential or proprietary
information subject to a duty on the Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. Executive agrees to hold all such confidential or proprietary
information in the strictest of confidence and not to disclose it to any person,
firm or entity or to use it except as necessary in carrying out Executive 's
work for the Company consistent with Company ' s agreement with such third
party.

 

(h)           Executive represents and warrants that from the time of the
Executive's first contact with the Company, Executive has held in strict
confidence all Confidential Information and has not disclosed any Confidential
Information directly or indirectly to anyone outside the Company, or used,
copied, published or summarized any Confidential Information, except to the
extent otherwise permitted under the terms of this Agreement.

 

(i)            Executive will not disclose to the Company or use on its behalf
any confidential information belonging to others and Executive will not bring
onto the premises of the Company any confidential information belonging to any
such party unless consented to in writing by such party.

 

Section 11. Inventions.

 

(a)            Attached hereto as Exhibit A is a list describing all ide as,
processes, trademarks, service marks, inventions, designs, technologies,
computer hardware or software, original works of authorship, formulas,
discoveries, patents, copyrights, copyrightable works, products, marketing and
business ideas, and all improvements, know-how, data rights, and claims related
to the foregoing, whether or not patentable, registrable or copyrightable, which
were conceived, developed or created by Executive prior to Executive's
employment or first contact with Company (collectively referred to herein as "
Prior Inventions" ), (A) which belong to Executive, (B) which relate to the
Company' s current or contemplated business, products or research and
development, and (C) which are not assigned to the Company hereunder. If there
is no Exhibit A or no items thereon, the Executive represents that there are no
such Prior Inventions. If in the course of Executive's employment with the
Company, the Executive incorporates or embodies into a Company product, service
or process a Prior Invention owned by the Executive or in which the Executive
has an interest, the Company is hereby granted and shall have a non-exclusive,
royalty free, irrevocable, perpetual, world-wide license to make, have made,
modify, use and sell such Prior Invention as part of or in connection with such
product, service or process.

 9 

 

 

(b)            Executive agrees that Executive will promptly make full, written
disclosure to the Company and will hold in trust for the sole right and benefit
of the Company, and the Executive hereby assigns to the Company, or its
designee, all of the Executive' s right, title and interest in and to any and
all ideas, process, trademarks, service marks, inventions, designs,
technologies, computer hardware or software, original works of authorship,
formulas, discoveries, patents , copyrights, copyrightable works, products,
marketing and business ideas, and all improvements, know-how, data, rights and
claims related to the foregoing, whether or not patentable, registrable or
copyrightable, which Executive may, on or after the Effective Date of this
Agreement, solely or jointly with others conceive or develop or reduce to
practice, or cause to be conceived or developed or reduced to practice, during
the period of time the Executive is in the employ of the Company (collectively
referred to herein as "Intellectual Property Items"); and the Executive further
agrees that the foregoing shall also apply to Intellectual Property Items which
relate to the business of the Company or to the Company's anticipated business
as of the end of the Executive's employment and which are conceived, developed
or reduced to practice during a period of one year after the end of such
employment. Without limiting the foregoing, the Executive further acknowledges
that all original works of authorship which are made by Executive (solely or
jointly with others) within the scope of Executive ' employment and which are
protectable by copyright are works made for hire as that term is defined in the
United Stated Copyright Act.

 

(c)            Executive agrees to keep and maintain adequate and current
written records of all Intellectual Property Items made by Executive (solely or
jointly with others) during the term of Executive's employment with the Company.
The records will be in the form of notes, sketches, drawings and any other
format that may be specified by the Company. The records will be available to,
and remain the sole property of, the Company at all times.

 

Section 12. Return of Company Property.

 

Executive agrees that, at any time upon request of the Company, and, in any
event, at the time of leaving the Company's employ, Executive will deliver to
the Company (and will not keep originals or copies in Executive's possession or
deliver them to anyone else) any and all devices, records, data, notes, reports,
proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, material, equipment or other documents or property, or reproduction of
any of the aforementioned items, containing Confidential Information or
otherwise belonging to the Company, its successors or assigns, whether prepared
by the Executive or supplied to the Executive by the Company. Notwithstanding
the foregoing, it is understood that names and contacts in the Executive's
address book acquired both prior to and during employment, including
shareholders of the Company, will remain property of the Executive who will not
be restricted from doing business with them subject to the limitations Sections
10 and 14 hereof and applicable law.

 

Section 13. Non-Solicitation.

 

Executive agrees that Executive shall not, during Executive's employment or
other involvement with the Company and for a period of twelve (12) months
immediately following the termination of the Executive ' s employment with the
Company, for any reason, whether with or without cause, (i) either directly or
indirectly solicit or take away, or attempt to solicit or take away executives
of the Company, either for the Executive's own business or for any other person
or entity and/or (ii) either directly or indirectly recruit, solicit or
otherwise induce or influence any investor, lessor, supplier, customer, agent,
representative or any other person which has a business relationship with the
Company to discontinue, reduce or modify such employment, agency or business
relationship with the Company.

 10 

 

 

Section 14. Publications.

 

Executive agrees that Executive will, in advance of publication, provide the
Company with copies of all writings and materials which Executive proposes to
publish during the term of Executive's employment and for twenty-four (24)
months thereafter. Executive also agrees that Executive will, at the Company's
request and sole discretion, cause to be deleted from such writings and
materials any information the Company believes discloses or will disclose
Confidential Information. The Company' s good faith judgment in these matters
will be final. The Executive will also, at the Company' request and in its sole
discretion, cause to be deleted any reference whatsoever to the Company from
such writings and materials.

 

Section 15. Equitable Remedies.

 

Executive agrees that any damages awarded the Company for any breach of Sections
9 through 14 of this Agreement by Executive would be inadequate. Accordingly, in
addition to any damages and other rights or remedies available to the Company,
the Company shall be entitled to obtain injunctive relief from a court of
competent jurisdiction temporarily, preliminarily and permanently restraining
and enjoining any such breach or threatened breach and to specific performance
of any such provision of this Agreement. In the event that either party
commences litigation against the other under this Agreement the prevailing party
in said litigation shall be entitled to recover from the other all costs and
expenses incurred to enforce the terms of this Agreement and/or recover damages
for any breaches thereof, including without limitation reasonable attorneys'
fees.

 

Section 16. Representations and Warranties.

 

(a)            Executive represents and warrants as follows that: (i) Executive
has no obligations, legal or otherwise, inconsistent with the terms of this
Agreement or with the Executive's undertaking a relationship with the Company;
and (ii) Executive has not entered into, nor will Executive enter into, any
agreement (whether oral or written) in conflict with this Agreement.

 

(b)           The Company represents and warrants to the Executive that this
Agreement and the Options grant have been duly authorized by the Company's Board
of Directors and are the valid and binding obligations of the Company,
enforceable in accordance with their respective terms.

 

Section 17. Miscellaneous.

 

(a)            Entire Agreement. This Agreement, the exhibits attached hereto,
and the Options granted concurrently herewith under Section 5(a) hereof, contain
the entire understanding of the parties and supersede all previous contracts,
arrangements or understandings, express or implied, between the Executive and
the Company with respect to the subject matter hereof or his engagement by the
Company as Chief Scientific Officer. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement or
in the attached exhibits.

 

(b)            Section Headings. The section headings herein are for the purpose
of convenience only and are not intended to define or limit the contents of any
section.

 

 11 

 

 

(c)            Severability. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, the remainder of
this Agreement shall be amended to provide the parties with the equivalent of
the same rights and obligations as provided in the original provisions of this
Agreement.

 

(d)            No Oral Modification; Waiver or Discharge. No provisions of this
Agreement may be modified, waived or discharged orally, but only by a waiver,
modification or discharge in writing signed by the Executive and such officer as
may be designated by the Board of Directors of the Company to execute such a
waiver, modification or discharge. No waiver by either party hereto at any time
of any breach by the other party hereto of, or failure to be in compliance with,
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the time or at any prior or subsequent time.

 

(e)            Invalid Provisions. Should any portion of this Agreement be
adjudged or held to be invalid, unenforceable or void, such holding shall not
have the effect of invalidating or voiding the remainder of this Agreement and
the parties hereby agree that the portion so held invalid, unenforceable or void
shall, if possible, be deemed amended or reduced in scope, or otherwise be
stricken from this Agreement to the extent required for the purposes of validity
and enforcement

 

(f)             Execution In Counterparts. The parties may sign this Agreement
in counterparts, all of which shall be considered one and the same instrument.
Facsimile transmissions, or electronic transmissions in .pdf format, of any
executed original document and/or retransmission of any executed facsimile or
.pdf transmission shall be deemed to be the same as the delivery of an executed
original of this Agreement.

 

(g)            Governing Law And Performance. This Agreement shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the Commonwealth of Massachusetts, without giving effect to any choice of law or
conflict of law provision or rule (whether of the Commonwealth of Massachusetts
or any other jurisdiction) that would cause the application of the law of any
jurisdiction other than the Commonwealth of Massachusetts. Any legal action or
proceeding with respect to this Agreement shall be brought in the courts of the
Commonwealth of Massachusetts or of the United States of America for the
District of Massachusetts. By execution and delivery of this Agreement, each of
the parties hereto accepts for itself and in respect of its property, generally
and unconditionally, the exclusive jurisdiction of the aforesaid courts. ANY
ACTION, DEMAND, CLAIM, OR COUNTERCLAIM ARISING UNDER OR RELATING TO THIS
AGREEMENT SHALL BE RESOLVED BY A JUDGE ALONE AND EACH OF COMPANY AND EXECUTIVE
WAIVES ANY RIGHT TO A JURY TRIAL THEREOF.

 

(h)            Successor and Assigns. This Agreement shall be binding on and
inure to the benefit of the successors in interest of the parties, including ,
in the case of the Executive, the Executive's heirs, executors and estate. The
Executive may not assign Executive's obligations under this Agreement. Any
successor to the Company (whether direct or indirect and whether by purchase,
merger, consolidation, liquidation or otherwise) to all or substantially all of
the Company's business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under
this Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this Section l 7(h) or which becomes bound by the terms of this
Agreement by operation of law.

 12 

 

 

(i)             Notices. Any notices or other communications provided for
hereunder may be made by hand, by certified or registered mail, postage prepaid,
return receipt requested, or by nationally recognized express courier services
provided that the same are addressed to the party required to be notified at its
address first written above, or such other address as may hereafter be
established by a party by written notice to the other party. Notice shall be
considered accomplished on the date delivered, three days after being mailed or
one day after deposit with the express courier, as applicable.

 

Section 18. Section 409A.

 

(a)            It is intended that any compensation or benefits under this
Agreement satisfy, to the greatest extent possible, the exemptions from the
application of Section 409A of the Internal Revenue Code of l986, as amended
("Section 409A") provided under Treasury Regulations Sections l. 409A- l (b),
and this Agreement will be construed to the greatest extent possible as
consistent with those provisions, and to the extent not so exempt, this
Agreement (and any definitions hereunder) will be construed in a manner that
complies with Section 409A. For purposes of Section 409A, the Executive's right
to receive any installment payments under this Agreement shall be treated as a
right to receive a series of separate payments and, accordingly, each
installment payment hereunder shall at all times be considered a separate and
distinct payment. Severance benefits under Section 7(d) shall not commence until
the Executive has a " separation from service" for purposes of Section 409A.

 

(b)           To the extent that any reimbursement of expenses or in-kind
benefits constitutes defe1Ted compensation under Section 409A, such
reimbursement or benefit shall be provided no later than December 31 of the year
following the year in which the expense was incurred. The amount of expenses
reimbursed in one year shall not affect the amount eligible for reimbursement in
any subsequent year. The amount of any in-kind benefits provided in one year
shall not affect the amount of in-kind benefits provided in any other year.

 

(c)            If the Executive is deemed at the time of his separation from
service to be a specified employee for purposes of Section 409A(a)(2)(B)(i) of
the Code, to the extent delayed commencement of any portion of the compensation
and benefits to which the Executive is entitled under this Agreement is required
in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of
the Code, such portion of the Executive ' s termination benefits shall be
provided to the Executive immediately after the earlier of (A) the expiration of
the six-month period measured from the date of the Executive' s separation from
service with the Company (as such term is defined in the Treasury Regulations
issued under Section 409A of the Code) or (B) the date of the Executive's death
in a lump sum, and any remaining payments due under the Agreement shall be paid
as otherwise provided herein.

 

Section 19. Limitation of Payments upon Certain Events.

 

(a)           Limitation on Payments. Notwithstanding anything in this Agreement
to the contrary, if any payment or distribution Executive would receive pursuant
to this Agreement or otherwise ("Payment") would (a) constitute a " parachute
payment" within the meaning of Section 280G of the Code), and (b) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code (the
" Excise Tax"), then the Company shall cause to be determined, before any
amounts of the Payment are paid to Executive, which of the following alternative
forms of payment would maximize Executive's after-tax proceeds: (i) payment in
full of the entire amount of the Payment (a " Full Payment"), or (ii) payment of
only a part of the Payment so that Executive receives that largest Payment
possible without being subject to the Excise Tax (a " Reduced Payment"),
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax (all computed at the highest
marginal rate, net of the maximum reduction in federal income taxes which could
be obtained from a deduction of such state and local taxes), results in
Executive's receipt, on an after-tax basis, of the greater amount of the
Payment, notwithstanding that all or some portion the Payment may be subject to
the Excise Tax.

 

 13 

 

 

(b)           The independent registered public accounting firm engaged by the
Company for general audit purposes as of the day prior to the date the first
Payment is due shall make all determinations required to be made under this
Section 19. If the independent registered public accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, group or
entity effecting the transaction, the Company shall appoint a nationally
recognized independent registered public accounting firm to make the
determinations required hereunder. The Company shall bear all expenses with
respect to the determinations by such independent registered public accounting
firm required to be made hereunder.

 

(c)           The independent registered public accounting firm engaged to make
the determinations hereunder shall provide its calculations, together with
detailed supporting documentation, to the Company and Executive at such time as
requested by the Company or Executive. If the independent registered public
accounting firm determines that no Excise Tax is payable with respect to a
Payment, either before or after the application of the Reduced Payment, it shall
furnish the Company and Executive with an opinion reasonably acceptable to
Executive that no Excise Tax will be imposed with respect to such Payment. Any
good faith determinations of the accounting firm made hereunder shall be final,
binding and conclusive upon the Company and Executive.

 

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
under seal as of the date and year first above written.

 

Company:

 

Xenetic Biosciences, Inc.

 

 

By: /s/ Scott Maguire

Scott Maguire

Chief Executive Officer

Executive

 

 

 

 

/s/ Curtis Lockshin

Curtis Lockshin

 

 14