Document:

ex10-2.htm

Exhibit 10.2

 

METASTAT, INC.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made and entered into on September 15, 2013 (the “Effective Date”) by and between MetaStat, Inc. (the “Company”) and Matthew O’Connor (“Employee”).  The Company and Employee are hereinafter collectively referred to as the “Parties”, and individually referred to as a “Party”.

 

Recitals

 

A.           The Company desires assurance of the association and services of Employee in order to retain Employee’s experience, skills, abilities, background and knowledge, and is willing to engage Employee’s services on the terms and conditions set forth in this Agreement.

 

B.           Employee desires to be in the employ of the Company, and is willing to accept such employment on the terms and conditions set forth in this Agreement.

 

Agreement

 

In consideration of the foregoing Recitals and the mutual promises and covenants herein contained, and for other good and valuable consideration, the Parties, intending to be legally bound, agree as follows:

 

1. Employment.

 

1.1 Title.  Effective as of the Effective Date, Employee’s position shall be Principal Scientist, subject to the terms and conditions set forth in this Agreement.

 

1.2 Term.  The term of this Agreement shall begin on the Effective Date and shall continue until it is terminated pursuant to Section 4 herein (the “Term”).

 

1.3 Duties.  Employee shall do and perform all services, acts or things necessary or advisable to manage and conduct the business of the Company and that are normally associated with the position of Principal Scientist.  Employee shall report to the Company’s Chief Employee Officer.

 

1.4 Policies and Practices.  The employment relationship between the Parties shall be governed by this Agreement and by the policies and practices established by the Company and/or the Board of Directors (“Board”), or any designated committee thereof.  In the event that the terms of this Agreement differ from or are in conflict with the Company’s policies or practices or the Company’s Employee Handbook, this Agreement shall control.

 

1.5 Location.  Unless the Parties otherwise agree in writing, during the Term Employee shall perform the services that he is required to perform pursuant to this Agreement from the Company’s offices in Montclair, New Jersey, or such other location as the Parties may mutually agree; provided, however, that the Company may from time to time require him to travel temporarily for short-term visits to other locations in connection with the Company’s business. 

  

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2. Loyalty; Noncompetition; Nonsolicitation.

 

2.1 Loyalty.  During Employee’s employment by the Company, Employee shall devote Employee’s full business energies, interest, abilities and productive time to the proper and efficient performance of Employee’s duties under this Agreement. Notwithstanding the foregoing, except as otherwise agreed to in writing, Employee shall have the right to perform such incidental services as are necessary in connection with (a) his private passive investments, (b) his charitable or community activities, (c) his participation in trade or professional organizations, and (d) his service on the board of directors (or comparable body) of any third-party corporate entity that is not a Competitive Entity (as defined in Section 2.3), so long as these activities do not interfere with Employee’s duties hereunder and, with respect to (d), Employee obtains prior Company consent, which consent will not be unreasonably withheld.

 

2.2 Agreement not to Participate in Company’s Competitors.  During the Term, Employee agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by Employee to be adverse or antagonistic to the Company, its business, or prospects, financial or otherwise, or in any company, person, or entity that is, directly or indirectly, in competition with the business of the Company or any of its Affiliates (as defined below).  Ownership by Employee, in professionally managed funds over which the Employee does not have control or discretion in investment decisions, or as a passive investment, of less than two percent (2%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded on a national securities exchange or in the over-the-counter market shall not constitute a breach of this Section. For purposes of this Agreement, “Affiliate,” means, with respect to any specific entity, any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified entity.

 

2.3 Covenant not to Compete.  During the Term and for a period of three (3) months thereafter, or in the event the Employee is terminated or resigns pursuant to the terms of Section 4.5.4 hereof, for a period of six (6) months thereafter (the “Restricted Period”), Employee shall not engage in competition with the Company and/or any of its Affiliates, either directly or indirectly, in any manner or capacity, as adviser, principal, agent, affiliate, promoter, partner, officer, director, employee, stockholder, owner, co-owner, consultant, or member of any association or otherwise, in any phase of the area of Mena biology or any proprietary targets of the Company discovered during Executive’s employment (a “Competitive Entity”), except with the prior written consent of the Board.

 

2.4 Nonsolicitation.  During the Restricted Period, Employee shall not:  (i) solicit or induce, or attempt to solicit or induce, any employee of the Company or its Affiliates to leave the employ of the Company or such Affiliate; or (ii) solicit or attempt to solicit the business of any client or customer of the Company or its Affiliates with respect to products, services, or investments similar to those provided or supplied by the Company or its Affiliates.

 

2.5 Acknowledgements.  Employee acknowledges and agrees that his services to the Company pursuant to this Agreement are unique and extraordinary and that in the course of performing such services Employee shall have access to and knowledge of significant confidential, proprietary, and trade secret information belonging to the Company.  Employee agrees that the covenant not to compete and the nonsolicitation obligations imposed by this Section 2 are reasonable in duration, geographic area, and scope and are necessary to protect the Company’s legitimate business interests in its goodwill, its confidential, proprietary, and trade secret information, and its investment in the unique and extraordinary services to be provided by Employee pursuant to this Agreement.  If, at the time of enforcement of this Section 2, a court holds that the covenant not to compete and/or the nonsolicitation obligations described herein are unreasonable or unenforceable under the circumstances then existing, then the Parties agree that the maximum duration, scope, and/or geographic area legally permissible under such circumstances will be substituted for the duration, scope and/or area stated herein.

  

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3. Compensation of the Employee.

 

3.1 Base Salary.  The Company shall pay Employee a base salary (the “Base Salary”) at the annualized rate of One Hundred Ten Thousand Dollars ($110,000), less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices.  The Base Salary shall be prorated for any partial year of employment on the basis of a 365-day fiscal year.

 

3.2 Annual Milestone Bonus.  At the sole discretion of the Board or the compensation committee of the Board (the “Compensation Committee”), following each calendar year of employment, Employee shall be eligible to receive an additional cash bonus (the “Annual Milestone Bonus”), based (in whole or in part) on Employee’s attainment of certain financial, clinical development, and/or business milestones (the “Milestones”) to be established annually by the Board or the Compensation Committee. The determination of whether Employee has met the Milestones, and if so, the bonus amount (if any) that will be paid, shall be determined by the Board or the Compensation Committee in its sole and absolute discretion.  Any Annual Milestone Bonuses shall be paid in cash as either single lump-sum payments or in installments, as determined by the Board or the Compensation Committee.  Employee shall also be entitled to any other bonuses at the sole discretion of the Board.

 

3.3 Stock Options.  Promptly following the Effective Date and subject to the terms of the Company’s 2012 Amended and Restated Omnibus Securities and Incentive Plan (the “Plan”), the Company shall issue to the Employee 30,000 stock options (the “Stock Options”).  The Stock Options or any other securities will be governed by the Plan and the exercise price per share of the Stock Options or any other stock options will be equal to the fair market value of a single share of common stock of the Company on the issuance date in accordance with the Plan.  The Stock Options shall vest upon achieving the milestones set forth on Exhibit B attached hereto.  In addition, at the sole discretion of the Board or the Compensation Committee and subject to the terms of the Plan, Employee shall be entitled to receive additional stock options or other securities pursuant to the Plan.

 

3.4 Expense Reimbursements. The Company will reimburse Employee for all reasonable business expenses Employee incurs in conducting his duties hereunder, pursuant to the Company’s usual expense reimbursement policies, but in no event later than ninety days after the end of the calendar month following the month in which such expenses were incurred by Employee; provided that Employee supplies the appropriate substantiation for such expenses no later than the end of the calendar month following the month in which such expenses were incurred by Employee.

 

3.5 Changes to Compensation.  Employee’s compensation will be reviewed at least on an annual basis and the Base Salary may be increased from time to time in the Company’s sole discretion.  Employee’s Base Salary also may be reduced in connection with any Company-wide decrease in Employee compensation.

 

3.6 Employment Taxes.  All of Employee’s compensation shall be subject to customary withholding taxes and any other employment taxes as are commonly required to be collected or withheld by the Company.

 

3.7 Benefits. The Employee shall, in accordance with Company policy and the applicable plan documents, be eligible to participate in benefits under any benefit plan or arrangement, including medical, dental, vision, disability and life insurance programs, that may be in effect from time to time and made available to the Company’s senior management employees, subject to the terms and conditions of those benefit plans.  Notwithstanding the foregoing to the contrary, the Parties agree that in lieu of any medical benefits to be received by the Employee, the Employee may elect to have the Company pay to the Employee an amount in cash equal to the amount saved by the Company as a result of the Employee not participating in the Company’s medical plan.

 

3.8 Holidays; Vacation; Personal and Sick Days.  Employee shall receive no less than four (4) weeks of paid vacation per year, which cannot be taken in one four (4) week increment, but which shall accrue if not used in any year and be paid to Employee or carried forward to subsequent years consistent with Company policy and will receive paid Company holidays in accordance with Company policy.  The Employee shall also be entitled to an unlimited number of sick and/or personal days.

  

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4. Termination.

 

4.1 Termination by the Company.  Employee’s employment with the Company is at will and may be terminated by the Company at any time and for any reason, or for no reason, including, but not limited to, under the following conditions:

 

4.1.1 Termination by the Company for Cause.  The Company may terminate Employee’s employment under this Agreement for “Cause” (as defined below) by delivery of written notice to Employee.  Any notice of termination given pursuant to this Section 4.1.1 shall effect termination as of the date of the notice, or as of such other date as specified in the notice.

 

4.1.2 Termination by the Company without Cause.  The Company may terminate Employee’s employment under this Agreement without Cause at any time and for any reason, or for no reason.  Such termination shall be effective on the date Employee is so informed, or as otherwise specified by the Company.

 

4.2 Termination by Resignation of Employee.  Employee’s employment with the Company is at will and may be terminated by Employee at any time and for any reason, or for no reason, including via a resignation for Good Reason in accordance with the procedures set forth in Section 4.6.3 below.

 

4.3 Termination for Death or Complete Disability.  Employee’s employment with the Company shall automatically terminate effective upon the date of Employee’s death or Complete Disability (as defined below).

 

4.4 Termination by Mutual Agreement of the Parties.  Employee’s employment with the Company may be terminated at any time upon a mutual agreement in writing of the Parties.  Any such termination of employment shall have the consequences specified in such agreement.

 

4.5 Compensation Upon Termination.

 

4.5.1 Death or Complete Disability.  If, during the Term of this Agreement, Employee’s employment shall be terminated by death or Complete Disability, the Company shall pay to Employee, his estate, or his heirs, as applicable, any Base Salary owed to Employee, expenses reimbursement amounts owed to Employee, all unpaid amounts of any Annual Milestone Bonus(es) Employee earned prior to the termination date, and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings.  In addition, subject to Employee (or his estate or heirs, as applicable) furnishing to the Company an executed waiver and release of claims in the form attached hereto as Exhibit A (or in such other form as may later be specified by the Company) (the “Release”) within the time period specified therein, and allowing the Release to become effective in accordance with its terms, then Employee, his estate, or his heirs, as applicable, shall also be entitled to: (1) continuation of Employee’s salary (at the Base Salary rate in effect at the time of termination) for a period of ninety (90) days following the termination date; and (2) partial accelerated vesting of each of Employee’s outstanding stock options such that, on the effective date of the Release (as defined therein), Employee shall receive immediate accelerated vesting of each option with respect to the same number of shares that would have vested if Employee had continued in employment with the Company through the next anniversary of the grant date for such option, in accordance with the vesting schedule applicable to such option, provided, however, that if the termination date falls on an anniversary of the grant date of any stock option, no accelerated vesting will be provided for such stock option.  All stock options that have vested in connection with Employee’s termination under this Section 4.5.1 shall remain exercisable for ninety (90) days following such termination.  The Base Salary payments will be subject to standard payroll deductions and withholdings and will be made on the Company’s regular payroll cycle, provided, however, that any payments otherwise scheduled to be made prior to the effective date of the Release shall accrue and be paid in the first payroll period that follows such effective date.

  

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4.5.2 Termination For Cause or Resignation without Good Reason.  If, during the Term of this Agreement, Employee’s employment is terminated by the Company for Cause, or Employee resigns his employment hereunder without Good Reason, the Company shall pay Employee any Base Salary owed to Employee, expenses reimbursement amounts owed to Employee, all unpaid amounts of any Annual Milestone Bonus(es) Employee earned prior to the termination date by meeting the conditions set forth in Section 3.3, and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings.  The Company shall thereafter have no further obligations to Employee under this Agreement, except as otherwise provided by law.

 

4.5.3 Termination Without Cause or Resignation For Good Reason Not In Connection with a Change of Control.  If the Company terminates Employee’s employment without Cause, or if Employee resigns for Good Reason, at any time other than upon the occurrence of, or within the six (6) months following, the effective date of a Change of Control (as defined below), the Company shall pay Employee any Base Salary owed to Employee, expenses reimbursement amounts owed to Employee, all unpaid amounts of any Annual Milestone Bonus(es) Employee earned prior to the termination date, and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings.  In addition, subject to Employee furnishing to the Company an executed Release within the time period specified therein, and allowing the Release to become effective in accordance with its terms, Employee shall be entitled to: (1) severance in the form of continuation of his salary (at the Base Salary rate in effect at the time of termination) for a period of three (3) months following the termination date; and (2) accelerated vesting of each of Employee’s outstanding stock options such that, on the effective date of the Release, Employee shall receive immediate accelerated vesting of each option with respect to the same number of shares that would have vested if Employee had continued in employment with the Company through the next anniversary of the grant date for such option, in accordance with the vesting schedule applicable to such option, provided, however, that if the termination date falls on an anniversary of the grant date of any stock option, no accelerated vesting will be provided for such stock option. All stock options that have vested in connection with Employee’s termination under this Section 4.5.3 shall remain exercisable for ninety (90) days following such termination.  These payments will be subject to standard payroll deductions and withholdings and will be made on the Company’s regular payroll cycle, provided, however, that any payments otherwise scheduled to be made prior to the effective date of the Release shall accrue and be paid in the first payroll period that follows such effective date.

 

4.5.4 Termination Without Cause or Resignation For Good Reason In Connection with a Change of Control.  If the Company terminates Employee’s employment without Cause, or if Employee resigns for Good Reason, upon the occurrence of, or within the six (6) months following, the effective date of a Change of Control, the Company shall pay Employee any Base Salary owed to Employee, expenses reimbursement amounts owed to Employee, all unpaid amounts of any Annual Milestone Bonus(es) Employee earned prior to the termination date, and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings.  In addition, subject to Employee furnishing to the Company an executed Release within the time period specified therein, and allowing the Release to become effective in accordance with its terms, then Employee shall be entitled to: (1) severance in the form of continuation of his salary (at the Base Salary rate in effect at the time of termination) for a period of six (6) months following the termination date; and (2) immediate accelerated vesting of any unvested shares subject to any outstanding stock option(s), such that, on the effective date of the Release, the Employee shall be vested in one hundred percent (100%) of the shares subject to such option(s).  The Base Salary payments will be subject to standard payroll deductions and withholdings and will be made on the Company’s regular payroll cycle, provided, however, that any payments otherwise scheduled to be made prior to the effective date of the Release shall accrue and be paid in the first payroll period that follows such effective date.

 

4.6 Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:

  

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4.6.1 Complete Disability.  A termination for “Complete Disability” shall occur:  (i) when the Board has provided a written termination notice to Employee supported by a written statement from a reputable independent physician to the effect that Employee is or shall have become so physically or mentally incapacitated as to be unable to resume, within the ensuing six (6) months, his employment under this Agreement by reason of such physical or mental illness or injury; or (ii) upon rendering of a written termination notice by the Board after the Board determines, in its sole and complete discretion, that Employee has been unable to substantially perform his job duties hereunder for sixty (60) or more consecutive days, or more than one hundred and twenty (120) days in any consecutive twelve (12) month period, by reason of any physical or mental illness or injury.  For purposes of this Section, at the Company’s request Employee agrees to make herself available and to cooperate in a reasonable examination by a reputable independent physician retained by the Company.

 

4.6.2 Cause.  “Cause” for the Company to terminate Employee’s employment hereunder shall mean the occurrence of any of the following events, as determined by the Company and/or the Board in its and/or their sole and absolute discretion:

 

(i) The willful failure, disregard or refusal by Employee to perform his material duties or obligations under this Agreement which, to the extent it is curable by the Employee, is not cured within thirty (30) days after written notice thereof is given to Employee by the Company;

 

(ii) Any willful, intentional or grossly negligent act by Employee having the effect of materially injuring (whether financially or otherwise) the business or reputation of the Company or any of its Affiliates, including but not limited to, any senior officer, director or Employee of the Company or any of its Affiliates;

 

(iii) Willful misconduct by Employee with respect to any of the material duties or obligations of Employee under this Agreement, including, without limitation, willful insubordination with respect to lawful directions received by Employee from the Board which, to the extent it is curable by the Employee, is not cured within thirty (30) days after written notice thereof is given to Employee by the Company;

 

(iv) Employee’s indictment of any felony involving moral turpitude (including entry of a nolo contendere plea);

 

(v) The determination, after a reasonable and good-faith investigation by the Company, that the Employee engaged in some form of harassment or discrimination prohibited by law (including, without limitation, age, sex or race harassment or discrimination);

 

(vi) Employee’s material misappropriation or embezzlement of the property of the Company or its Affiliates (whether or not a misdemeanor or felony); or

 

(vii) Material breach by Employee of any of the provisions of this Agreement, of any Company policy, and/or of his Proprietary Information and Inventions Agreement.

 

For purposes of this definition, the Parties agree that any breach of Sections 2 or 5 of this Agreement shall be deemed a material breach that is not capable of cure by Employee.

 

4.6.3 Good Reason.  For purposes of this Agreement, and subject to the caveat at the end of this Section, “Good Reason” for Employee to terminate his employment hereunder shall mean the occurrence of any of the following events without Employee’s consent:

 

(i) a material reduction by the Company of Employee’s Base Salary as initially set forth herein or as the same may be increased from time to time, provided, however, that if such reduction occurs in connection with a Company-wide decrease in Employee compensation, such reduction shall not constitute Good Reason for Employee to terminate his employment;

 

(ii) a material breach of this Agreement by the Company; or

  

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(iii) a material adverse change in Employee’s duties, authority, or responsibilities relative to Employee’s duties, authority, or responsibilities in effect immediately prior to such reduction.

Provided, however, that, any such termination by Employee shall only be deemed for Good Reason pursuant to this definition if: (1) Employee gives the Company written notice of his intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that he believes constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “Cure Period”); and (3) Employee voluntarily terminates his employment within thirty (30) days following the end of the Cure Period.

 

4.6.4 Change of Control.  For purposes of this Agreement, “Change of Control” shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events (excluding in any case transactions in which the Company or its successors issues securities to investors primarily for capital raising purposes):

 

(i) the acquisition by a third party of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction;

 

(ii) a merger, consolidation or similar transaction following which the stockholders of the Company immediately prior thereto do not own at least fifty percent (50%) of the combined outstanding voting power of the surviving entity (or that entity’s parent) in such merger, consolidation or similar transaction;

 

(iii) the dissolution or liquidation of the Company; or

 

(iv) the sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.

 

4.7 Survival of Certain Sections.  Sections 2, 4, 5, 6, 7, 8, 9, 12, 13, 16, 17 and 19 of this Agreement will survive the termination of this Agreement.

 

4.8 Parachute Payment.  If any payment or benefit the Employee would receive pursuant to this Agreement (“Payment”) would (i) constitute a “Parachute Payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion of the Payment, which such amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greatest economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: (i) reduction of cash payments; (ii) cancellation of accelerated vesting of equity awards other than stock options; (iii) cancellation of accelerated vesting of stock options; and (iv) reduction of other benefits paid to Employee.  Within any such category of payments and benefits (that is, (i), (ii), (iii) or (iv)), a reduction shall occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A (as defined in Section 4.9 below) and then with respect to amounts that are.  In the event that acceleration of compensation from Employee’s equity awards is to be reduced, such acceleration of vesting shall be canceled, subject to the immediately preceding sentence, in the reverse order of the date of grant.

 

In the event it is subsequently determined by the Internal Revenue Service that some portion of the Reduced Amount (as determined pursuant to clause (x) in the preceding paragraph) is subject to the Excise Tax, Employee agrees to promptly return to the Company a sufficient amount of the Payment so that no portion of the Reduced Amount is subject to the Excise Tax.  For the avoidance of doubt, if the Reduced Amount is determined in accordance with clause (y) in the preceding paragraph, Employee will have no obligation to return any portion of the Payment pursuant to the preceding sentence.

  

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Unless Employee and the Company agree on an alternative accounting, law or consulting firm, the accounting firm then engaged by the Company for general tax compliance purposes shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting, law or consulting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting, law or consulting firm required to be made hereunder.

 

The Company shall use commercially reasonable efforts such that the accounting, law or consulting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to Employee and the Company within fifteen (15) calendar days after the date on which Employee’s right to a Payment is triggered (if requested at that time by the Employee or the Company) or such other time as requested by the Employee or the Company.

 

4.9 Application of Internal Revenue Code Section 409A.  Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement (the “Severance Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Employee’s termination of employment unless and until Employee has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to Employee without causing Employee to incur the additional 20% tax under Section 409A.

 

It is intended that each installment of the Severance Benefits payments provided for in this Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i).  For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9).  However, if the Company (or, if applicable, the successor entity thereto) determines that the Severance Benefits constitute “deferred compensation” under Section 409A and Employee is, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after Employee’s Separation From Service, or (ii) the date of Employee’s death (such applicable date, the “Specified Employee Initial Payment Date”), the Company (or the successor entity thereto, as applicable) shall (A) pay to Employee a lump sum amount equal to the sum of the Severance Benefit payments that Employee would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of the Severance Benefits had not been so delayed pursuant to this Section and (B) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedules set forth in this Agreement.

 

Notwithstanding anything to the contrary set forth herein, Employee shall receive the Severance Benefits described above, if and only if Employee duly executes and returns to the Company within the applicable time period set forth therein, but in no event more than forty-five days following Separation From Service, a separation agreement containing the Company’s standard form of release of claims in favor of the Company (attached to this Agreement as Exhibit A) and other standard provisions, including without limitation, those relating to non-disparagement and confidentiality (the “Separation Agreement”), and permits the release of claims contained therein to become effective in accordance with its terms.  Notwithstanding any other payment schedule set forth in this Agreement, none of the Severance Benefits will be paid or otherwise delivered prior to the effective date of the Separation Agreement.  Except to the extent that payments may be delayed until the Specified Employee Initial Payment Date pursuant to the preceding paragraph, on the first regular payroll pay day following the effective date of the Separation Agreement, the Company will pay Employee the Severance Benefits Employee would otherwise have received under the Agreement on or prior to such date but for the delay in payment related to the effectiveness of the Separation Agreement, with the balance of the Severance Benefits being paid as originally scheduled.  All amounts payable under the Agreement will be subject to standard payroll taxes and deductions.

  

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5. Confidential And Proprietary Information.

 

As a condition of employment Employee agrees to execute and abide by the Company’s Proprietary Information and Inventions Agreement (“PIIA”).

 

6. Assignment and Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of Employee and Employee’s heirs, executors, personal representatives, assigns, administrators and legal representatives.  Because of the unique and personal nature of Employee’s duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assignable by Employee.  This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation or other business entity which at any tie, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.

 

7. Notices.

 

All notices or demands of any kind required or permitted to be given by the Company or Employee under this Agreement shall be given in writing and shall be personally delivered (and receipted for) or faxed during normal business hours or mailed by certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Company:

 

MetaStat, Inc.

8 Hillside Avenue, Suite 207

Montclair, NJ 07042

Attn: CEO

 

If to Employee:

 

Matthew O’Connor

[______________]

[______________]

 

Any such written notice shall be deemed given on the earlier of the date on which such notice is personally delivered or three (3) days after its deposit in the United States mail as specified above.  Either Party may change its address for notices by giving notice to the other Party in the manner specified in this Section.

 

8. Choice of Law.

 

This Agreement shall be construed and interpreted in accordance with the internal laws of the State of New York without regard to its conflict of laws principles.

 

9. Integration.

 

This Agreement, including Exhibit A and the PIIA, contains the complete, final and exclusive agreement of the Parties relating to the terms and conditions of Employee’s employment and the termination of Employee’s employment, and supersedes all prior and contemporaneous oral and written employment agreements or arrangements between the Parties.

  

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10. Amendment.

 

This Agreement cannot be amended or modified except by a written agreement signed by Employee and the Company.

 

11. Waiver.

 

No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach.

 

12. Severability.

 

The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal.  Such court shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision, which most accurately represents the Parties’ intention with respect to the invalid or unenforceable term, or provision.

 

13. Interpretation; Construction.

 

The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement.  This Agreement has been drafted by legal counsel representing the Company, but the Employee has been encouraged to consult with, and has consulted with, Employee’s own independent counsel and tax advisors with respect to the terms of this Agreement.  The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

 

14. Representations and Warranties.

 

Employee represents and warrants that Employee is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that Employee’s execution and performance of this Agreement will not violate or breach any other agreements between the Employee and any other person or entity.

 

15. Counterparts.

 

This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute one and the same instrument. Signatures to this Agreement transmitted by fax, by email in “portable document format” (“.pdf”) or by any other electronic means intended to preserve the original graphic and pictorial appearance of this Agreement shall have the same effect as physical delivery of the paper document bearing original signature.

  

-10-

  

 

16. Arbitration.

 

To ensure the rapid and economical resolution of disputes that may arise in connection with the Employee’s employment with the Company, Employee and the Company agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to Employee’s employment, or the termination of that employment, will be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration pursuant to the Federal Arbitration Act in New York, New York conducted by the Judicial Arbitration and Mediation Services/Endispute, Inc. (“JAMS”), or its successors, under the then current rules of JAMS for employment disputes; 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.  Accordingly, Employee and the Company hereby waive any right to a jury trial.  Both Employee and the Company shall be entitled to all rights and remedies that either Employee or the Company would be entitled to pursue in a court of law.  The Company shall pay any JAMS filing fee and shall pay the arbitrator’s fee.  The arbitrator shall have the discretion to award attorneys fees to the party the arbitrator determines is the prevailing party in the arbitration.  Nothing in this Agreement is intended to prevent either Employee or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.  Notwithstanding the foregoing, Employee and the Company each have the right to resolve any issue or dispute involving confidential, proprietary or trade secret information, or intellectual property rights, by Court action instead of arbitration.

 

17. Indemnification.

 

The Company shall defend and indemnify Employee in his capacity as Principal Scientist of the Company to the fullest extent permitted under the Nevada Private Corporations Law.  The Company shall also maintain a policy for indemnifying its officers and directors, including but not limited to the Employee, for all actions permitted under the Nevada Private  Corporations Law taken in good faith pursuit of their duties for the Company, including but not limited to maintaining an appropriate level of Directors and Officers Liability coverage and maintaining the inclusion of such provisions in the Company’s by-laws or articles of incorporation, as applicable and customary.  The rights to indemnification shall survive any termination of this Agreement.

 

18. Trade Secrets Of Others.

 

It is the understanding of both the Company and Employee that Employee shall not divulge to the Company and/or its subsidiaries any confidential information or trade secrets belonging to others, including Employee’s former employers, nor shall the Company and/or its Affiliates seek to elicit from Employee any such information.  Consistent with the foregoing, Employee shall not provide to the Company and/or its Affiliates, and the Company and/or its Affiliates shall not request, any documents or copies of documents containing such information.

 

19. Advertising Waiver.

 

Employee agrees to permit the Company, and persons or other organizations authorized by the Company, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company, or the machinery and equipment used in the provision thereof, in which Employee’s name and/or pictures of Employee taken in the course of Employee’s provision of services to the Company appear.  Employee hereby waives and releases any claim or right Employee may otherwise have arising out of such use, publication or distribution.

  

-11-

  

 

 

In Witness Whereof, the Parties have executed this Agreement as of the date first above written.

 

MetaStat, Inc.

 

By:        /s/ Oscar L. Bronsther

Name:  Oscar L. Bronsther

Its:        Chief Executive Officer

Dated:   _____________________

 

Employee:

 

/s/ Matthew O'Connor

Matthew O’Connor

 

Dated: ____________________

  

-12-

  

 

EXHIBIT A

 

RELEASE AND WAIVER OF CLAIMS

 

TO BE SIGNED ON OR FOLLOWING THE SEPARATION DATE ONLY

 

In consideration of the payments and other benefits set forth in the Employment Agreement effective as of September 15, 2013, to which this form is attached, I, Matthew O’Connor, hereby furnish MetaStat, Inc. (the “Company”), with the following release and waiver (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its current and former directors, officers, employees, stockholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date that I sign this Agreement (collectively, the “Released Claims”).  The Released Claims include, but are not limited to:  (a) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (b) all claims related to my compensation or benefits from the Company including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, misclassification, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), the fair employment practices statutes of the state or states in which I have provided services to the Company and/or any other federal, state or local law, regulation or other requirement.  Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (a) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; (b) any rights or claims to unemployment compensation, funds accrued in my 401k account, or any vested equity incentives; (c) any rights that are not waivable as a matter of law; or (d) any claims arising from the breach of this Agreement.  I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

 

I expressly waive and relinquish any and all rights and benefits under any applicable law or statute providing, in substance, that a general release does not extend to claims which a party does not know or suspect to exist in his favor at the time of executing the release, which if known by him would have materially affected the terms of such release.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an Employee of the Company.  If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; and (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired without my having previously revoked this Release and Waiver.

  

-13-

  

 

I acknowledge my continuing obligations under my Proprietary Information and Inventions Agreement.  Pursuant to the Proprietary Information and Inventions Agreement I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control.  I understand and agree that my right to the severance pay I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my Proprietary Information and Inventions Agreement.

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

 

Date: __________________                        By:  ___________________      

                                                                                   Matthew O’Connor

  

-14-

  

 

EXHIBIT B

 

MILESTONES

	
  

	
Vesting of Stock Options:

	
·  

	
One-third to vest upon reaching milestone #1 below.

	
·  

	
One-third to vest upon reaching milestone #2 below.

	
·  

	
One-third to vest upon reaching milestone #3 below.

Milestone #1:

Completion of logistical planning for research, including laboratory setup and essential hires.

Milestone #2:

Completion of screening for new alternatively spliced targets using in silico databases and completion of validation studies for first tier of alternatively spliced targets.

Milestone #3:

Completion of screening for new alternatively spliced targets using acquired resistance models and completion of validation studies for second tier of targets.  Completion of HTS for any targets validated in tier 1.

-15-ex10-3.htm

Exhibit 10.3

AGREEMENT OF LEASE

 

LONG ISLAND HIGH TECHNOLOGY INCUBATOR, INC.

 

METASTAT, INCORPORATED

 

September 1, 2013 – August 31, 2014

  

-1-

  

 

 

AGREEMENT OF LEASE

This Lease dated this First day of September, Two Thousand and Thirteen is by and between LONG ISLAND HIGH TECHNOLOGY INCUBATOR, INC., a nonprofit educational corporation existing under the laws of the State of New York, having its principal place of business located at 25 Health Sciences Drive, Stony Brook, New York 11790, hereinafter referred to as " Landlord," and Metastat, Inc., having its principal place of business located at 25 Health Sciences Drive, Stony Brook, New York 11790, hereinafter referred to as " Tenant ".

 

WHEREAS, by terms of a certain ground lease Agreement between the State University of New York and Landlord, the State University of New York has granted to Landlord the authority to construct a facility on certain land on the campus of Stony Brook, hereinafter referred to as the "Incubator," and to lease space in such facility for emerging high technology enterprises. Such space, specifically suite 105 is the designated premises under this Lease; and

WHEREAS, the Tenant has developed competence and expertise in novel therapeutics for metastasis, the Field (as hereinafter defined); and

WHEREAS, Landlord wishes to promote and foster economic development in the Field, and

WHEREAS, Landlord wishes to make available to the faculty and students, at the State University of New York at Stony Brook (SBU), additional opportunities for practical application and study in the Field; and

WHEREAS, the Tenant qualifies as a start-up company in the area of technology, as provided in the January 22, 1986 Resolution of the State University of New York Board of Trustees “Use of University Facilities by Emerging Technology Enterprises” (SUNY Document Number 5604; furnished upon request); and the Incubator Guidelines and Procedures of the State University of New York at Stony Brook (furnished upon request); and

WHEREAS, Tenant agrees to provide information on revenues and employment for a period of 5 years following graduation from the program. This information will be combined with data from other graduate companies and used in aggregate form for the purposes of demonstrating economic development success of the Incubator; and

WHEREAS, Tenant wishes to stimulate future companies in the Incubator program and will make every effort to contribute to the Incubator corporation in some fashion following graduation; and

NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

 

	
1.  

	
Grant

 

Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, upon and subject to the terms and conditions contained herein, the Premises (as hereinafter defined)

	
2.  

	
Premises

 

The Premises are more particularly described under the State University Board of Trustees resolution of January 22, 1986 and further referenced in paragraph (b) of the Patents and Inventions Policy of State University of New York dated September 19, 1979, and amended November 16, 1988 such facilities are considered Tenant facilities and not State University facilities for purposes of patent and copyright ownership (documents furnished upon request).

  

-2-

  

	
3.  

	
Term

 

The terms of this Lease shall be for one year commencing September 1, 2013 and ending August 31, 2014. The Tenant Selection and Review Committee (TSRC) will review your business annually prior to lease renewal. Any concerns about the incubator management and operations may be brought directly to the TSRC Chair or any member of the TSRC. Current information on the membership of the TSRC and their contact information are posted on the LIHTI website (www.lihti.org). In the event that the Landlord determines in its sole discretion that the Incubator project is abandoned or that an order is received from a government agency to vacate the Premises, the ending date may be accelerated to such date as determined to be reasonable by the Landlord. However, under no circumstances will the lease be terminated without “Cause” (as defined in 14a) unless 60 days written notice is provided to Tenant.

	
4.  

	
Rent

 

	
a)  

	
The rent payable hereunder is $28,000 per year, which sum shall be payable in monthly installments of $ 2,333.33 on the first day of each month during the term. Rent payable by Tenant under this Lease shall be paid when due without prior demand therefore, without any deductions or setoffs or counterclaims whatsoever. Rent will be due on the first day of the month and a 5% late fee on balance due will be charged for any rent that is not received by the 15th of each month.

 

	
b)  

	
Tenant shall pay before delinquency all taxes, assessments, license fees and public charges levied, assessed or imposed upon its business operation, as well as upon its leasehold interest, trade fixtures, furnishings, equipment, leasehold improvements made by Tenant, alterations, changes and additions made by Tenant, merchandise and personal property of any kind owned, installed or used by Tenant in, on or upon the Premises. Tenant shall be responsible for making any necessary returns for and paying any other property taxes separately levied or assessed against the improvements constructed by Tenant on the Premises.

 

	
5.  

	
Indemnification and Hold Harmless

 

	
a)  

	
Tenant agrees to save Landlord harmless from, and indemnify Landlord against, any and all injury, loss or damage and any and all claims for injury, loss or damage, caused by, resulting from, or claimed to have been caused by or to have resulted from (i) the use, occupancy, or enjoyment of the Premises or (ii) any act, omission or negligence of Tenant or anyone claiming under Tenant (including, without limitation, employees, contractors, invitees, successors and assigns or Tenant).

 

	
i)  

	
Comprehensive general liability insurance will be held by Tenant in the amount of $2,000,000 combined single limit. Such policy shall name the Long Island High Technology Incubator, Inc. (Landlord), SUNY at Stony Brook, and the State of New York as an additional insured and loss payee.

	
ii)  

	
Workers Compensation Insurance and New York State Disability Insurance according to and in amounts required under New York State laws.

 

  

-3-

  

	
b)  

	
All policies of insurance provided for in this Section shall be issued in a form acceptable to Landlord by insurance companies qualified to do business in the State of New York. Each such policy shall be issued in the names of Landlord and Tenant and any other party listed above. Said policies shall be for the mutual and joint benefit and protection of Landlord and Tenant and any such other parties in interest, and executed copies of each such policy of insurance or a certificate thereof shall be delivered to each of Landlord within ten (10) days after delivery of possession of the Premises to Tenant and renewals or replacements thereof shall be so delivered at least thirty (30) days prior to the expiration of each said policy. All such policies of insurance shall contain a provision that the company writing said policy will give to Landlord and other said parties in interest at least ten (10) days prior written notice of any cancellation, lapse, or reduction in the amounts of insurance. All such policies shall contain a provision that Landlord and any such other parties in interest, although named as an insured, shall nevertheless be entitled to recover under said policies for any loss occasioned to it, its servants, agents and employees by reason of the negligence of Tenant.

 

	
c)  

	
Tenant shall not do nor suffer to be done, nor keep nor suffer to be kept anything in, upon or about the Premises which could (i) contravene Landlord’s policies insuring against loss or damage by fire or other hazards, (ii) prevent Landlord from procuring such policies from companies acceptable to Landlord (iii) cause an increase in the insurance rates upon any portion of the Premises. If Tenant violates any prohibition provided for in the first sentence of this Section, Landlord may without notice to Tenant, correct the same at Tenant’s expense. Tenants shall pay to Landlord as additional rent forthwith upon demand the amount of any increase in premiums for insurance resulting from any violation of the first sentence of this Section, even if Landlord shall have consented to the doing of, or keeping of, anything on the Premises which constituted such a violation (but the payment of such additional rent shall not entitle Tenant to violate the provisions of the first sentence of this paragraph.)

 

	
6.  

	
Security

 

	
a)  

	
Tenant shall have deposit with Landlord a security deposit equal to two (2) months’ rent. If rent changes, Landlord will bill Tenant so security deposit is maintained as two (2) months of updated rent.

	
b)  

	
If Tenant pays the rent and performs all of its other obligations under this Lease, Landlord will return the unused portion of this security deposit within thirty (30) days after the end of the term.

 

	
7.  

	
Services

 

Landlord shall provide the following services to Tenant; all ordinary and necessary water, gas, electrical services, heating, cooling, sewage and internet access services. Telephone services will be provided in accordance with SBU policy at the expense of the Tenant. Tenant may avail itself of other campus facilities and services at the established third-party rates.

 

Tenant understands and agrees that services offered by SBU to Tenant shall be equivalent to those provided to campus academic and administrative offices, unless otherwise agreed in writing by both parties. All activities of the Tenant involving facilities and services of SBU will be consistent with applicable policies and guidelines of SBU.

 

	
8.  

	
Use of Premises

 

	
a)  

	
Tenant may only use the Premises for an office or laboratory in accordance with the terms hereof and the rules and regulations now or hereafter adopted by Landlord for the Incubator.

	
b)  

	
Tenant agrees to keep the Premises in good order and condition during the term of this agreement.

	
c)  

	
Tenant shall use the Premises only in connection with the Tenant’s business; as such business was described and presented to the Executive Director, or the Tenant Selection and Review Committee, and for no other business without Landlord’s prior, written consent.

  

-4-

  

 

	
d)  

	
Tenant specifically agrees not to hold itself out as representing the State of New York, The State University of New York, or SBU in connection with the use of State- owned property to which this Lease relates, nor shall the name of the State of New York, the State University of New York, or SBU be used by Tenant for any purpose without prior, specific written approval of the party whose name is to be used.

	
e)  

	
Tenant shall meet with Landlord at least annually, at a time determined by Landlord, for the purpose of reviewing the Tenant’s business plan or part thereof and compare the proposed plan of action against reality. Should the Tenant fail to develop a business plan the lease may not be renewed.

	
f)  

	
Tenant will contract through the Research Foundation of the State University of New York, hereinafter referred to as the “Foundation”, for any business and research-related tasks to be performed by faculty or staff of SBU utilizing University facilities. Faculty and staff are permitted to consult with Tenant in accordance with the SUNY Policy (Title J. Patents, Inventions and Copyright Policy, furnished upon request); described in SUNY Policies of the Board of Trustees, 2006 (amended July 26, 2006), and also described by the SBU Office of Technology Licensing and Industry Relations.

	
g)  

	
Tenant may seek and submit proposals for collaborative efforts and joint ventures to Economic Development Groups at SBU for mutual benefit. Accepted proposals will be administered by separate contracts which shall in no way diminish or change any provision of this Lease. The failure of Tenant to fulfill its obligations herewith or the breach of any of the terms hereof or any misrepresentation made by Tenant in connection with this Lease shall constitute a default hereunder and Landlord shall have the right, at its option, to terminate this Lease, in addition to any and all other remedies and rights available to it in equality and at law.

 

	
9.  

	
Right of Entry

 

	
a)  

	
Contact information for tenant representative should be posted next to laboratory entry door along with MSDS information about materials and potential safety risks within the Premises for businesses that have chemicals or materials. Landlord or Landlord's agents shall have the right (but shall not be obligated) to enter the Premises in any emergency at any time, and, at other reasonable times, to examine the same and to make such repairs, replacements and improvements as Landlord may deem necessary and reasonably desirable to the Premises or to any other portion of the Building or which Landlord may elect to perform. Fire Marshall inspections will not be scheduled but will be performed at least annually with escort by Landlord or Landlords agents. In an emergency Landlord or Landlord's agents, will make best efforts to contact the tenant representative at the time of the emergency, and prior to entry. If Tenant is not present to open and permit an entry into the Premises, Landlord or Landlord's agents may enter the same whenever such entry may be necessary or permissible by master key or forcibly and provided reasonable care is exercised to safeguard Tenant's property. Landlord will communicate information about entry if any emergency entry does take place.

	
b)  

	
Landlord or Landlord's agents will make best efforts to contact the tenant representative to schedule repairs and maintenance in advance. Throughout the term hereof Landlord shall have the right to enter the Premises at reasonable hours for the purpose of showing the same to visitors, prospective purchasers or mortgagees of the Building, and during the last six months of the term for the purpose of showing the same to prospective tenants. Landlord will schedule these visits in advance with Tenant to determine a mutually agreed upon time during which a Tenant representative will be present on site. Tenant agrees that it will exercise good faith efforts to schedule visits for these purposes.

	
c)  

	
Tenant agrees that Landlord may conduct construction work in the immediate area surrounding the demised Premises. Landlord agrees that it will exercise good faith efforts to conduct such construction work so as not to unreasonably interfere with Tenant.

 

  

-5-

  

	
10.  

	
No Assignment or Sublease

 

Due to the fact that the LIHTI Incubator is intended to benefit specific types of companies in the developmental stages, and because Tenant has been specifically approved for participation in the LIHTI Incubator project, Tenant agrees that it cannot assign this agreement, or sublease the Premises nor any portion thereof without Landlord's consent, which may be granted or withheld in Landlord's sole discretion.

 

	
11.  

	
Alterations

 

Tenant may make no changes in or to the Premises of any nature without Landlord's prior written consent. All fixtures and all paneling, partitions, railings and like installations, installed in the Premises at any time, either by Tenant or by Landlord on Tenant's behalf, shall, upon installation, become the property of Landlord and shall remain upon and be surrendered with the Premises unless Landlord, by notice to Tenant no later than twenty days prior to the date fixed as the termination of this Lease, elects to relinquish Landlord's right thereto and to have them removed by Tenant, in which event the same shall be removed from the Premises by Tenant prior to the expiration of this Lease at Tenant's expense. Upon removal of such installations as may be required by Landlord; Tenant shall immediately and at its expense, repair and restore the Premises to the condition existing prior to installation and repair any damage to the Premises or the Building due to such removal. All property permitted or required to be removed by Tenant at the end of the term remaining in the Premises after Tenant's removal shall be deemed abandoned and may, at the election of Landlord, either be retained as Landlord's property or may be removed from the Premises by Landlord, at Tenant's expense.

 

	
12.  

	
Rules and Regulations

 

Tenant agrees to adhere to and abide by any rules and regulations that may be adopted or modified by the Landlord.

 

	
a)  

	
Tenant shall not install any signage; awnings or structure of any kind whatsoever in the interior or exterior of the Building without Landlord's written consent.

	
b)  

	
Tenant shall not connect any apparatus, equipment or device to the water, plumbing, and HVAC lines without first obtaining the written consent of the Landlord.

	
c)  

	
Tenant shall not operate any electric powered machines or equipment, except normal office equipments such as copiers, calculators, personal computers, or printers, without first obtaining the written consent of the Landlord.

	
d)  

	
Tenant shall not operate or permit to be operated any musical or sound-producing device, which may be heard outside of Tenant’s Premises. Tenant shall not bring or permit to be brought into the building any animals or birds whether alive or dead. SBU has an authorized animal control facility for such use.

	
e)  

	
No toxic or hazardous substances shall be used, stored or brought into the Building by Tenant without written declaration.

	
f)  

	
Tenant shall not perform or hire any contractors or installation technicians rendering any construction or building services including, but not limited to, electrical, installation of electrical devices, plumbing, HVAC, and installation of any and every nature affecting floors, walls, ceilings, equipment or other physical portions or services of the Building. No outside telecommunications service or provider will be permitted to install communications equipment on Premises without prior written approval.

	
g)  

	
Tenant assumes all risk of damage to any and all articles moved or installed, as well as all injury to any person or property in such movement, and hereby agrees to indemnify Landlord against any loss resulting there from.

	
h)  

	
Landlord shall not be responsible for any loss or stolen property, equipment, money, jewelry from the leased Premises or the public areas of the Building or grounds.

	
i)  

	
Landlord shall have the right to determine the maximum weight and proper position of any heavy equipment, including safes, large files, etc. that are to be placed in the Building, and only those which, in the opinion of the Landlord, will not do damage to the floors, structures or elevators may be moved into the Building.

  

-6-

  

	
j)  

	
Tenant shall not allow any violation of fire or safety regulations. Tenant agrees at its own expense to comply with, and to indemnify and hold Landlord harmless with respect to any violation of, all recommendations and requirements with respect to the Premises, or its use or occupancy, of the insurance underwriters or any similar public or private body, and any governmental authority, having jurisdiction over insurance rates with respect to the use or occupancy of the Building.

 

	
k)  

	
Appliances including but not limited to refrigerators, freezers, cooking equipment (microwaves) are not permitted without first obtaining the written consent of the Landlord.

 

	
13.  

	
Mechanics' Liens

 

Tenant will not permit to be created or to remain undischarged any lien, encumbrance or charge arising out of any work done or materials or supplies furnished by any contractor, mechanic, laborer or materialman by or for Tenant or any mortgage, conditional sale, security agreement or chattel mortgage. If any such lien shall be filed against the Building or any part thereof, Tenant will cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise within thirty (30) days after the filing thereof. If Tenant shall fail to cause such lien or notice of lien to be discharged within the period aforesaid, then, in addition to any other right or remedy Landlord may, but shall not be obligated to, discharge the same either by paying the amounts claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings and in any such event Landlord shall be entitled, if Landlord so elects, to compel the prosecution of an action for the foreclosure of such lien by the lienor and to pay the amount of judgment in favor of the lienor with the interest, costs and allowances. Any amount so paid by Landlord and all costs and expenses, including attorney's fees, incurred by Landlord in connection therewith, shall constitute Additional Rent payable by Tenant under this Lease and. Shall be paid by Tenant to Landlord on demand.

 

	
14.  

	
Termination

 

	
a)  

	
This Lease shall be terminated by:

i) expiration of this agreement or

ii) revocation by the Landlord, subject to the provision of 60 days notice in writing to the Tenant unless revocation is for non-payment of rent, repeat code and lease term violations or other such breaches of the Tenancy Agreement.

	
b)  

	
In the event this agreement is terminated and the Tenant fails to vacate the Premises, the Tenant agrees to pay holdover rental in the amount of $40 per square foot of the Premises and allocated Common Area Space.

 

	
15.  

	
Notice

 

Any Notice hereunder must be in a signed writing and served by certified mail, return receipt requested as follows:

	
a)  

	
Landlord: 

 

Long Island High Technology Incubator, Inc, 25 Health Sciences Drive, Mail Box 100 Stony Brook, NY 11790-3350

Attn.: Executive Director

  

	
b)  

	
Tenant: 

 

Dr. Oscar Bronsther Chief Executive Officer Metastat, Incorporated

  

25 Health Sciences Drive, Mail Box 105 Stony Brook, NY 11790

  

-7-

  

 

	
16.  

	
No Encumbrances

 

Tenant agrees that it cannot mortgage nor encumber neither the Premises nor any portion thereof.

	
17.  

	
Default

 

	
a)  

	
Failure of Tenant to pay rent by the 15th day of any month or to otherwise adhere to the terms and conditions herein shall be deemed an event of default.

 

	
b)  

	
Landlord's Remedies. If any Event of Default occurs, then and in each such case, Landlord may treat the occurrence of such Event of Default as a breach of this Lease, and in addition to any and all other rights or remedies of Landlord in this Lease or by law or in equity provided, Landlord shall have, in its option, without further notice of demand of any kind to Tenant or any other person:

 

	
i)  

	
the right to charge late fees;

	
ii)  

	
the right to terminate this Lease;

	
iii)  

	
the right to bring suit for the collection of Rent, as it accrues pursuant to the terms of this Lease, and damages (including without limitation)

 

	
18.  

	
No Modification

 

This Agreement may not be changed, amended or modified except in a writing duly executed by all parties herein.

	
19.  

	
No Waiver

 

Failure of the Landlord to exercise a right or remedy to which it is entitled to exercise pursuant to this agreement shall not be deemed a waiver of its right to later exercise the right or remedy.

	
20.  

	
Estoppel Certificates

 

Within ten (10) days after Tenant takes possession of the Premises, and from time to time thereafter within ten (10) days after request in writing there for from Landlord, Tenant agrees to execute and deliver to Landlord, or to such other addressee or addressees as Landlord may designate (and any such addressee may rely thereon), a statement in writing in a form and substance prepared by Landlord, certifying (i) that this Lease is unamended and in full force and effect (or identifying any amendments), (ii) whether either party hereto is in default hereof (and specifying any such default), (iii) the date(s) to which Rent has been paid, and (iv) such other matters as Landlord shall reasonably request. In the event that Tenant fails to provide such statement within ten (10) days after Tenant takes possession of the Premises and from time to time thereafter within ten (10) days after  Landlord's  written  request  therefore,  Tenant  does  hereby  irrevocably  appoint Landlord as attorney-in-fact of Tenant, coupled with an interest, in Tenant's name, place and stead so to do in each and every case.

 

	
21.  

	
Subordination

 

Tenant agrees that this Lease and the Tenant's interest herein shall be subordinate to any mortgage, deed of trust, ground or underlying lease, or any method of financing or refinancing now or hereafter placed against the Premises and/or any or all of the Building of which the Premises is a part and/or the land upon which the Building is located; and to all renewals, increases, modifications, replacements, consolidations and extensions thereof. Upon request of Landlord, Tenant agrees to execute and deliver any and all documents as Landlord shall request to evidence such subordination as aforesaid.

  

-8-

  

 

	
22.  

	
Destruction

In the event of the destruction of the Building to such a degree that Landlord shall elect to demolish or substantially renovate or rehabilitate the Building, Landlord shall have the right to terminate this Lease upon notice to Tenant.

	
23.  

	
Building Alterations and Management

 

Landlord shall have the right at anytime without the same constituting an eviction and without incurring liability to Tenant therefore to change the arrangement and/or location of public entrances, passageways, doors, doorways, corridors, elevators, stairs, toilets or other public parts of the Building and to change the name, number or designation by which the Building may be known.

There shall be no allowance to Tenant for dimmution of rental value and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business arising from Landlord or other Tenants making any repairs in the Building or any such alterations, additions and improvements.

  

-9-

  

 

 

Agreement of Lease: Signature page September, 2013

	
Long Island High Technology Incubator, Inc.

(Landlord)

 

By: /s/ Anil Dhundale

Anil Dhundale, Ph.D.

Executive Director

Date: September 9, 2013

 

	  	
Metastat, Incorporated

(Tenant)

 

By: /s/ Oscar Bronsther

Dr. Oscar Bronsther

Chief Executive Officer

 
Date: September 9, 2013

 

 

 

 

-10-

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