Exhibit 10.7


 


AEROVATE. INC.


c/o RA Capital Management


200 Berkeley Street, Boston,
MA 02116


 


November 4, 2019


 


BY EMAIL


Ben Dake


 





Dear Ben:


 


We are pleased
to extend you this offer of employment to serve as the President of Aerovate, Inc. (the "Company") on the terms set forth
herein. This offer may be accepted by countersigning where indicated at the end of this letter agreement. For purposes of this letter
agreement, we have agreed that your start date is January 1, 2020 (the "Start Date").


 


Duties and Extent of Senrice


 


As President
of the Company, you will report directly to the Board of Directors of the Company (the "Board") and will have responsibility
for performing those duties as are customary for, and are consistent with, your position with the Company, as well as those duties as
the Board may from time to time designate. You will resign your current seat on the Company's Board. You agree to abide by the rules,
regulations, instructions, personnel practices and policies of the Company and any changes therein that may be adopted from time to time
by the Company. Except for vacations and absences due to temporary illness, you will devote substantially all of your work time, attention
and ability to the business and affairs of the Company. Notwithstanding the foregoing, you may manage your personal and family investments
and engage in religious, charitable and other community activities so long as such activities do not interfere with your obligations to
the Company.


 


Employment at Will


 


You and the
Company understand and agree that you are an employee at-will, and that you may resign, or the Company may terminate your employment,
at any time and for any or for no reason in accordance with the termination provisions set forth further below in this letter agreement.
Nothing in this letter agreement shall be construed to alter the at-will nature of your employment, nor shall anything in this letter
agreement be construed as providing you with a definite term of employment.


 


Compensation


 


Until the termination of your employment
hereunder, in consideration for your services hereunder, we will compensate you as follows:


 


•                     
Base Salary. We will pay you, in accordance with the Company's then current payroll practices,
a base salary (the "Base Salary") at an annual rate of $200,000.


 


•                     Annual
Bonus. You will be eligible to receive an annual discretionary bonus in an amount up to 30% of
your Base Salary for the relevant year, pro-rated for any partial years. The
determination of whether you will receive a discretionary bonus with respect to any given fiscal year of the Company, and the amount
of any such discretionary bonus, shall be determined by the Board, in its discretion, after considering your performance and the
Company's performance for such fiscal year. If you are awarded a
discretionary bonus with respect to a given fiscal year of the Company, the Company will make payment of such discretionary bonus no
later than March 31 of the next fiscal year of the Company. If you
cease being an employee of the Company for any reason prior to the last day of a fiscal year of the Company, you shall forfeit your
right to receive a discretionary bonus for such fiscal year.


 






     


     


    

 


•                     
Equity Incentives. Subject to the approval of the Company's Board of Directors, the Company
will grant you either a restricted stock or an option award (as you prefer) of shares of the Company's common stock representing 3% of
the Company's current fully-diluted capitalization (the "Granted Shares") at the then-current fair market value. You
will own 10% of the Granted Shares outright; the remaining 90% shall be subject to standard vesting terms (25% cliff at first anniversary
of your Start Date and the balance monthly thereafter over the following thirty-six months, with double-trigger acceleration). This equity
grant will be the subject of further agreements between you and the Company delineating in detail the applicable restrictions.


 


•                    
Vacation. You will be entitled to vacation in accordance with the Company's vacation policy
in effect from time to time. Any vacation shall be taken at the reasonable and mutual convenience of the Company and you.


 


•                     
Benefits. You will also be entitled to participate in such benefits (including group medical
insurance), if any, as the Company shall make generally available from time to time to executive-level employees and in such employee
benefit plans and fringe benefits as may be offered or made available by the Company from time to time to its employees. The Board reserves
the right from time to time to change or terminate the Company's employee benefit plans and fringe benefits. Your participation in such
employee benefit plans and fringe benefits, and the amount and nature of the benefits to which you shall be entitled thereunder or in
connection therewith, shall be subject to the terms and conditions of such employee benefit plans and fringe benefits.


 


•                     
Expenses. Upon delivery of reasonable documentation, you will be entitled to reimbursement
by the Company during the term of your employment for reasonable travel, entertainment and other business expenses incurred by you in
the performance of your duties hereunder in accordance with the policies and practices as the Company may from time to time have in effect.
In addition, the Company shall reimburse you (or pay directly) within 30 days following receipt of an invoice all legal fees reasonably
incurred in connection with the negotiation of this Agreement, up to a cap of $1,500.00.


 


Severance


 


We
appreciate that you are taking a risk by leaving your current employment to work for a start up. To that end, your Base Salary will
be guaranteed for a period of twelve months from your Start Date (the "Severance Period") under all circumstances except
termination for Cause. Should your employment be terminated (other than for Cause) prior to the end of the Severance Period, the
only condition precedent to your receiving in a lump sum the remainder of your Base Salary that would have been payable through the
end of the Severance Period will be your execution and delivery of a standard separation agreement including a general release. "Cause"
shall mean any one or more of the following: (i) your intentional commission of an act, or intentional failure to act, that
materially injures the business of the Company; provided, however, that in no event
shall any business judgment made in good faith by you and constitute a basis for termination for Cause under this Agreement; (ii)
your intentional refusal or intentional failure to act in accordance with any lawful and proper direction or order of the Board;
(iii) your intentional and material breach of your fiduciary, statutory, contractual, or common law duties to the Company (including
any material breach of this Agreement, the Proprietary Rights Agreement (as defined below), or the Company's written policies); (iv)
your conviction, or the entry of a guilty plea or no contest by you, of any felony; or (v) your participation in any fraud against
the Company; provided, however, that in the event that any of the foregoing events
(identified in (i)-(v)) is reasonably capable of being cured, the Company shall provide written notice to you describing the nature
of such event and you shall thereafter have ten (10) business days to cure such event.


 






     


     


    

 


Withholding Taxes


 


All payments
and benefits described in this letter agreement or that you may otherwise be entitled or eligible to receive as a result of your employment
with the Company will be subject to applicable federal, state and local tax withholdings.


 


409A Compliance


 


It is intended
that all of the severance benefits and other payments payable under this letter agreement satisfy, to the greatest extent possible, the
exemptions from the application of Section 409A of the Code (the "Section 409A"), provided under Treasury Regulations
1.409A l(b)(4), 1.409A l(b)(S) and 1.409A 1(b)(9), and this letter agreement will be construed to the greatest extent possible as consistent
with those provisions, and to the extent no so exempt, this letter agreement (and any definitions hereunder) will be construed in a manner
that complies with Section 409A. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section
1.409A 2(b)(2)(iii)), your right to receive any installment payments under this letter agreement (whether severance payments, reimbursements
or otherwise) 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. Notwithstanding any provision to the contrary in this letter agreement,
if you are deemed by the Company at the time of your "separation from service" under Section 409A to be a "specified employee"
for purposes of Section 409A(a)(2)(B)(i), and if any of the payments upon separation from service set forth herein and/or under any other
agreement with the Company are deemed to be "deferred compensation", then to the extent delayed commencement of any portion
of such payments is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation
under Section 409A, such payments shall not be provided to you prior to the earliest of (i) the expiration of the six-month and one day
period measured from the date of your separation from service with the Company, or (ii)
such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following
the expiration of such applicable Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this paragraph shall be paid in a
lump sum to you, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest
shall be due on any amounts so deferred. If the Company determines that any severance benefits provided under this letter agreement constitutes
 "deferred compensation" under Section 409A, for purposes of determining the schedule for payment of the severance benefits,
the effective date of the release will not be deemed to have occurred any earlier than the sixtieth (60th) date following the separation
from service, regardless of when the release actually becomes effective. In addition to the above, to the extent required to comply with
Section 409A and the applicable regulations and guidance issued thereunder, if the applicable deadline for you to execute (and not revoke)
the applicable release spans two calendar years, payment of the applicable severance benefits shall not commence until the beginning of
the second calendar year. To the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, amounts reimbursable
to you under this letter agreement shall be paid to you on or before the last day of the year following the year in which the expense
was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to you) during any one year may not
effect amounts reimbursable or provided in any subsequent year. The Company makes no representation that any or all of the payments described
in this letter agreement will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying
to any such payment.


 






     


     


    

 


Nondisclosure, Developments, Non-Compete and Non-Solicitation


 


Prior to
commencing your employment with the Company, you agree to sign a copy of the Company's standard Employee Confidential Information, Invention
Assignment, Non-Compete and Non Solicitation Agreement, attached as Exhibit A hereto (the "Proprietary Rights Agreement").


 


No Conflicting Obligation


 


You hereby
represent and warrant that the execution and delivery of this letter agreement, the performance by you of any or all of the terms of this
letter agreement and the performance by you of your duties as an employee of the Company do not and will not breach or contravene (i)
any agreement or contract (including, without limitation, any employment or consulting agreement, any agreement not to compete or any
confidentiality or nondisclosure agreement) to which you are or may become a party on or at any time after the Start Date or (ii) any
obligation you may otherwise have under applicable law to any former employer or to any person to whom you have provided, provide or will
provide consulting services. You hereby further represent and warrant to the Company that, prior to the date of this letter agreement,
you have provided to the Company a copy of any and all potentially conflicting agreements for the Company's review.


 


Termination


 


You acknowledge
that the employment relationship between the Company and you is at-will, meaning that the employment relationship may be terminated by
the Company or you for any reason or for no reason. Either party may terminate your employment with the Company at any time and for any
or no reason upon thirty (30) days prior written notice; provided that the Company may terminate you for Cause at any time upon
written notice.


 


Regardless
of the reason your employment with the Company terminates, you will continue to comply with the Proprietary Rights Agreement contemplated
hereby.


 


Work Eligibility


 


You have
provided to the Company sufficient documentation to demonstrate your eligibility to work in the United States and, at the request of the
Company, shall provide any additional documentation requested by the Company to demonstrate your eligibility to work in the United States.


 


Governing Law


 


This letter agreement shall be governed
by and construed in accordance with the internal substantive laws of the Commonwealth of Massachusetts.


 






     


     


    

 


Dispute Resolution


 


To
ensure the rapid and economical resolution of disputes that may arise in connection with your employment with the Company, you and
the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory
claims, arising from or relating to the enforcement, breach, performance, or interpretation of this letter agreement, your
employment with the Company, or the termination of your employment from the Company, will be resolved pursuant to the Federal
Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration
conducted in Boston, Massachusetts by JAMS, Inc. ("JAMS") or its successors, under JAMS' then applicable rules and
procedures for employment disputes (which can be found at http://www.jamsadr.com/rules-clauses/, and which will be provided to you
on request); provided that the arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of
the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including
the arbitrator's essential findings and conclusions and a statement of the award. You and the Company shall be entitled to all
rights and remedies that either would be entitled to pursue in a court of law. Both you and the Company acknowledge that by agreeing
to this arbitration procedure, you and the Company waive the right to resolve any such dispute through a trial by jury or judge or
administrative proceeding. The Company shall pay all filing fees in excess of those which would be required if the dispute were
decided in a court of law, and shall pay the arbitrator's fee. Nothing in this letter agreement is intended to prevent either the
Company or you from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such
arbitration.


 


Entire Agreement; Amendment


 


This letter
agreement (together with the Proprietary Rights Agreement contemplated hereby) sets forth the sole and entire agreement and understanding
between the Company and you with respect to the specific matters contemplated and addressed hereby and thereby. No prior agreement, whether
written or oral, shall be construed to change or affect the operation of this letter agreement in accordance with its terms, and any provision
of any such prior agreement, which conflicts with or contradicts any provision of this letter agreement, is hereby revoked and superseded.
Any prior agreement, if any, you may have with the Company regarding your employment, whether written or oral, is hereby, and without
any further action on your part or the Company's, terminated, revoked and superseded by this letter agreement. This letter agreement may
be amended or terminated only by a written instrument executed both by you and the Company.


 






     


     


    

 





We are excited to have you on board
as the Company's President. Please acknowledge your acceptance of this offer and the terms of this letter agreement by signing below and
returning a copy to me.


 


	 	Sincerely,
	 	 
	 	AEROVATE, INC.
	 	 
	 	 
	 	By: 	Joshua Resnick



 


	 	Name: 	/s/ Joshua Resnick
	 	 
	 	Title: 	Chairman
	 	 



 


	Accepted and Agreed:	 
	 	 
	I hereby acknowledge that I have had a full and adequate opportunity to read, understand and discuss the terms and conditions contained in this letter agreement prior to signing hereunder.	 
	 	 
	 	 
	/s/ Benjamin T. Dake  	 
	Benjamin T. Dake	 
	 	 
	Date: December 5, 2019