Document:

Exhibit 10.12

 

SERVICE AGREEMENT

 

This Service Agreement (the “Agreement”) is entered into as of 11 June, 2015 between Advanced Inhalation Therapies (AIT) Ltd., a company organized and currently existing under the laws of the State of Israel, of 2 Meir Weisgal Rd., Rehovot, 7632605 Israel, (the “Company”), and Guberman Consulting Ltd., of 12 Yad Harutzim RD., Tel-Aviv (the “Service Provider”).

 

WITNESSETH

 

WHEREAS, the Company is in desire of professional services of expertise and know-how, in its field of business; and

 

WHEREAS, Service Provider has the expertise and know-how to provide certain professional services as set forth in this Agreement, and Service Provider has agreed to provide the Company, through Ms. Ifat Tal- Havia, CPA, I.D. number 033570417 (“Ifat”), such services on the terms hereof; and

 

WHEREAS, the Company wishes to appoint Ifat as the Company’s Chief Financial Officer and an office holder (“Noseh Misrah”) of the Company.

 

NOW THEREFORE, in consideration of the premises and mutual agreements hereinafter contained, the parties hereto agree as follows:

 

1.         Provision of the Services

 

1.1           Commencing as of June 11, 2015 (the “Effective Date”), and subject to the terms and conditions set forth herein, the Company shall retain Service Provider to provide to the Company such professional part-time Chief Financial Officer services in accordance with Company's needs from time to time, inter alia, as described in further details in Exhibit A hereto (the “Services”), to be provided personally by Ifat, on behalf of the Service Provider, in accordance with the terms and conditions of this Agreement, and Service Provider and Ifat hereby accepts such engagement to provide to the Company the Services and assume such duties and responsibilities as customarily performed by a Chief Financial Officer of a company.

 

1.2           Ifat shall devote, on behalf of the Service Provider, 30% of his entire business time (approx. 13 hours per week) for the provision of the Services and his attention and abilities to the job duties during all such business hours, and undertakes to act in the best interests of the Company at all times. 

 

1.3           Ifat may be required to travel and to stay abroad from time to time, according to the requirements of her position with the Company. To the extent that due to the foregoing travel abroad, Ifat shall, on behalf of Service Provider, provide Services in such amount exceeding 13 hours during a calendar week (“Additional ServicesAbroad”), Service Provider will be paid for each day of Additional Services Abroad performed by Ifat directly and solely in connection with performance of the Services, a total amount per day of NIS 2,000, plus applicable VAT, as additional Services Fee (i.e. in addition to the NIS 15,000+ VAT as specified in Section 2.1 below).

 

1.4           The parties hereto agree and acknowledge that the Company is entitled to engage Ifat directly for the provision of the Services and terminate this Agreement in accordance with its terms. In such event, the Company shall pay Service Provider a onetime compensation of NIS 22,500.

 

1 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

2.          Consideration

 

2.1           In consideration for the Services, the Company shall pay to Service Provider, on a monthly basis, a monthly fee of NIS 15,000, plus applicable VAT (including travel expenses to the company's premises), for the provision of the Services (the “Services Fee”), subject to the receipt of an invoice from the Service Provider, to be paid within 5 days from the end of the applicable calendar month. It is hereby agreed and acknowledged by the parties, that an amount equal to 30% of the Services Fee payable to Service Provider hereunder shall be paid in consideration for Service Provider's undertakings set forth under Section 6 below. 

 

2.2           In addition, the Company shall reimburse the Service Provider for out-of-pocket expenses properly incurred by the Service Provider directly and solely in connection with performance of the Services, including without limitation, traveling and lodging expenses while traveling, subject to the prior written approval of the Company, against applicable receipts. Such reimbursement of expenses, for each calendar month (or any part thereof) shall be made as part of that month's invoice received from the Service Provider. 

 

2.3           Service Provider shall not be entitled to any further fees, reimbursement of costs and expenses or any other payment or consideration whatsoever, except as specifically set forth herein.

 

2.4           Any and all taxes and liabilities applicable from time to time in connection with the Services and/or the Services Fee and/or any other payment or benefit which Service Provider is entitled to under this Agreement, will be borne solely by Service Provider and the Company shall be entitled to make any mandatory deductions. In the event that pursuant to any law or regulation, tax is required to be withheld at source from any payment or any other consideration made to Service Provider, the Company shall withhold said tax at the rate set forth in the certification issued by the appropriate taxing authority or at the rate determined by said law or regulation.

 

2A ..    D&O insurance and Indemnification agreement

 

2A.1      Subject to the provisions of applicable law and the approval of applicable corporate organs of the Company, the Company shall, during the term of this Agreement provide and include Ifat in its Directors and Officer Insurance policy.

 

2A.2       Subject to the provisions of applicable law and the approval of applicable corporate organs of the Company, the Company will enter into an Indemnification Agreement with Ifat, in the form attached hereto as Exhibit B. Furthermore, the Company undertakes that the terms and conditions of the Indemnification Agreement of Ifat shall be similar to the terms and conditions of the indemnification agreements of other directors and officers of the Company, as may be entered by the Company from time to time.

 

3.         Duration and Termination

 

3.1           This Agreement shall become effective on the Effective Date and continue until terminated in accordance with this Section 3. 

 

3.2           This Agreement may be terminated either party, at any time and at their sole discretion by giving the other party not less than sixty (60) days' notice in writing in respect of the Services.

 

3.3           The Company may terminate this this Agreement at any time, by providing the Service Provider a written notice in this respect, if Ifat shall cease to be employed or engaged by or associated with Service Provider or is otherwise unavailable to continue providing the Services on behalf of the Service Provider in accordance with the provisions hereof.

 

2 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

3.4           Either party may terminate this Agreement at any time, by providing the other party a written notice in this respect, if the other party has materially violated or breached any of its undertakings hereunder.

 

3.5           Any termination of this Agreement shall not derogate of any of Service Provider's and Ifat's continuing obligations under this Agreement intended to survive termination hereof, and therefore, termination of the agreement shall not affect the obligations of the Service Provider and Ifat under Sections 4, 5, 6 and 7 hereunder. In addition, upon termination hereof, Service Provider and Ifat will fully cooperate with the Company to ensure an orderly transfer of responsibilities.

 

4.         Confidentiality

 

4.1           Service Provider shall not (except in the proper performance of its duties hereunder) while engaged with the Company or at any time (without limit) after the date on which Service Provider's engagement with the Company terminates:

 

(a)          divulge or communicate to any person, including by way of publication;

 

(b)          use for its own purposes or for any purposes other than those of the Company; or

 

(c)          through any failure to exercise due care and diligence, cause any unauthorized disclosure of;

 

any Confidential Information (as defined below). These restrictions shall cease to apply to any information which shall become available to the public generally otherwise than through the default by Service Provider.

 

4.2           In the event that Service Provider shall be legally required (by formal questioning or, in the written opinion of its legal counsel, by applicable law) to disclose any Confidential Information, Service Provider shall, to the extent permissible, immediately notify the Company of such request or requirement prior to disclosure so that the Company may seek an appropriate protective order with the reasonable assistance of Service Provider, and/or waive compliance with the terms of this undertaking, at the Company's absolute discretion. If such order or waiver is not timely obtained, only such portion of the Confidential Information as specifically required shall be disclosed. For the avoidance of doubt, any information disclosed pursuant to such event, shall continue to be deemed as Confidential Information.

 

4.3           “Confidential Information” means all information which is identified or treated by the Company as confidential or which by reason of its character or the circumstances or manner of its disclosure is evidently confidential including (without prejudice to the foregoing generality) any business plans, proposals relating to the acquisition or disposal of a company or business or proposed expansion or contraction of activities, maturing new business opportunities, research and development projects, designs, secret processes, trade secrets, source codes, mask works, product or services development and formulae, know-how, inventions, patents, patent applications, sales statistics and forecasts, marketing strategies and plans, costs, profit and loss and other financial information (save to the extent published in audited accounts), prices and discount structures, and also information regarding the compensation of any of the Company’s employees or service providers.

 

4.4           Service Provider represents and warrants that Service Provider has not and will not disclose to the Company any confidential information received by Service Provider from any third party, and subject to restriction on disclosure, or through breach of confidentiality obligations, including without limitations any information received by Service Provider in connection with any prior employer-employee engagement.

 

3 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

4.5           Upon termination of engagement with the Company for any reason, these provisions of Section 4 shall continue to apply to Service Provider, and Service Provider shall promptly return to the Company any and all copies of Confidential Information. 

 

4.6           In this Section 4, the obligations and undertakings of the Service Provider shall apply, mutatis mutandis, to the Service Provider's employees, consultants and/or agents, including without limitations, Ifat.

 

5.          Inventions and Other Works

 

5.1           For the purposes of this Section, “Intellectual Property Rights” means any and all intellectual or industrial property rights (whether registered or unregistered) including, without prejudice to the generality of the foregoing, all existing and future copyrights, design rights, database rights, trade marks, internet rights/domain names, know-how, patents and any and all applications for any of the foregoing and any and all rights to apply for any of the foregoing.

 

5.2           During the term of Service Provider’s engagement with the Company, Service Provider may either alone or in conjunction with others, generate or assist in the generation of documents, materials, designs, drawings, processes, formulae, computer coding, methodologies, techniques, developments, research data, including specifically technical aspects of the technology and devices that are not common knowledge, trade secrets, marketing plans, company financial information, business development information, strategic plans of the Company and other works deemed as Confidential Information and/or Intellectual Property Rights by the Company (“Works”), and Service Provider agrees that such Works and the related Intellectual Property Rights and Confidential Information will belong to and be the absolute property of the Company or any other person the Company may nominate. 

 

5.3           Service Provider hereby agrees to keep and maintain adequate records of all Works developed by him during its engagement with the Company, to the extent generated in connection with this Agreement, which records shall be available to and remain the sole property of the Company.

 

5.4           Service Provider shall immediately on request by the Company (whether during engagement with the Company or after the termination of such engagement) and at the expense of the Company:

 

		(a)	apply or join with the Company in applying for any Intellectual Property Rights or other protection or registration (“Protection”) for, or in relation to, any Works;

 

		(b)	execute all instruments and do all things necessary for vesting the Works or Protection when obtained and all right, title and interest to and in the same absolutely and as sole beneficial owner in the Company or other person as the Company may nominate;

 

		(c)	in the event that the Company is unable for any reason, after reasonable effort, to secure Service Provider's signature on any document needed in connection with the actions specified in the preceding paragraph, Service Provider hereby: (i) irrevocably designates and appoints the Company and its duly authorized officers and agents as its agent and attorney in fact, which appointment is coupled with an interest, to act for and in its behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by him, and (ii) hereby waives and quitclaims to the Company any and all claims, of any nature whatsoever, which it now or may hereafter have for infringement of any Works assigned hereunder to the Company.

 

4 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

5.5           In this Section 5, the obligations and undertakings of the Service Provider shall apply, mutatis mutandis, to the Service Provider's employees, consultants and/or agents, including without limitations, Ifat.

 

6.         Restrictions after Termination

 

6.1           During the term of the provision of any Services hereunder and for a period of twelve (12) months thereafter (the “Restricted Period”), Service Provider and Ifat shall not, for her/its own account or as an employee, officer, director, partner, venture partner, shareholder, investor, consultant or otherwise (except as an investor in a corporation whose stock is publicly traded and in which such party holds less than 5% of the outstanding shares) be interested in or engage in any activity which directly competes with the Company's business anywhere in the world, other than for the exclusive benefit of the Company. 

 

6.2           During the Restricted Period, neither Service Provider nor Ifat shall solicit any of the Company's or any of its affiliates' employees or consultants engaged by the Company or its affiliates (at such time or for the preceding 12 month period) to leave the Company or any of its affiliates, as the case may be, and shall not employ or offer employment or similar engagement to any such employees or consultants.

 

6.3           Each of Service Provider and Ifat acknowledges that the restrictions set under this Section 6 are fair and reasonable, and are essential for protection of the Company's and the Company's business, proprietary rights and other legitimate interests of the Company, in view of the nature of the business in which the Company is engaged and its innovative course. In addition, such restrictions are fully compensated for by the Services Fee and other benefits granted hereunder. 

 

7.         Scope of Relations 

 

7.1           The relationship between the Company and Service Provider and/or Ifat shall be that of independent contractors. During the term of this Agreement, Service Provider and/or Ifat shall not be deemed to be, nor shall be treated by the Company as, an employee of the Company. Service Provider and/or Ifat shall bear all social benefits required under any applicable law and shall not receive nor be entitled to overtime pay, insurance, paid vacation, severance payments or similar fringe or employment benefits from the Company.

 

7.2           Each of the Service Provider and/or Ifat affirms that this Agreement does not create any employer-employee relationship between the Service Provider and/or Ifat on the one hand and the Company on the other hand. 

 

7.3           Without derogating from the above, the Service Provider and/or Ifat shall reimburse and compensate the Company in the event that the Company is required to pay any sum of money to the Service Provider and/or Ifat, and/or, the Service Provider’s and/or Ifat's heirs, and/or dependents and/or to the National Social Security Authority (Bituach Leumi) and/or the Tax Authorities and/or any other party that sues in the name of the Service Provider and/or Ifat or on Service Provider’s and/or Ifat's behalf, for any rights deriving from a status of an employee of the Company, excluding an action based on negligence of the Company towards the Service Provider.

 

5 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

7.4           The parties acknowledge that had the Company elected to retain the services of the Service Provider and/or Ifat as an employee and had the Service Provider and/or Ifat agreed to accept such employment, the salary payable to the Service Provider and/or Ifat would be substantially lower than the Service Fee as the Service Fee takes into account all social benefits that would otherwise be payable to an employee including, severance payments, etc.

 

7.5           Therefore, if any labor court, or other competent authority, determines that an employer-employee relationship does in fact exist between the Company and the Service Provider and/or Ifat, the provisions of Section 7.8 shall apply, and rights that the Service Provider and/or Ifat may be entitled to according to the provisions of Section 7.8 below, shall be subject to a set-off right of the Company against any amount or other right the Company may be entitled to according to Sections 7.6 and 7.7 below. The Service Provider and/or Ifat hereby irrevocably instructs the Company to deduct and offset from any payment or other right that they may be entitled to, according to the provisions of Section 7.8 below, any amount or other right the Company may be entitled to according to Sections 7.6 and 7.7 below.

 

7.6           In the event that the Service Provider and/or Ifat and/or the Service Provider’s and/or Ifat's heirs and/or dependents and/or to the National Social Security Authority (Bituach Leumi) and/or the Tax Authorities and/or any other party shall file a claim in the name of the Service Provider and/or Ifat or on Service Provider’s and/or Ifat's behalf, for any rights deriving from a status of an employee of the Company, then, the Services Fee and any other consideration (if any) paid to the Service Provider according to this Service Agreement shall be considered to be an index linked loan, bearing interest at the annual rate of 7%, granted by the Company to the Service Provider and/or Ifat, which loan shall be immediately due and payable.

 

7.7           For the avoidance of any doubt, the Service Provider hereby undertakes to confirm, and act in order that, any and all taxes and liabilities applicable from time to time in connection with the Services Fee and/or any other payment or benefit which Service Provider is entitled to under this Agreement, will be paid by him in due time and in accordance with their terms. Upon the receipt by the Company of any demand served by any authority in this respect, the Company shall be entitled, at its sole discretion, to notify that it has determined to activate the provisions of Section 7.6 above, which will be considered to be in full force and effect as of such the notification of the Company. 

 

7.8           Therefore, if any labor court, or other competent authority, determines that an employee relationship does in fact exist between the Company and the Service Provider and/or Ifat, the monthly salary that would have been payable to the Service Provider and/or Ifat as an employee of the Company shall be seventy percent (70%) of the Service Fee (excluding VAT) and this salary shall be the basis for calculating any statutory social benefits due to the employee. 

 

7.9           The above obligations of the Service Provider shall survive the termination of this Agreement.

 

8.         No Conflict, Valid and Binding. Each of Service Provider and Ifat represents that neither the execution of this Agreement nor the performance of Services and/or Service Provider’s and Ifat's obligations under this Agreement will result in a violation or breach of any other agreement by which Service Provider and/or Ifat is bound and that he/it has full power and right to enter into this Agreement. Service Provider and/or Ifat are not authorized to obligate the Company in any way and/or create any commitments of the Company, except to the extent explicitly authorized in advance by the Company in writing. 

 

6 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

9.          Notices. Any notice or other communication required, permitted or contemplated by this Agreement must be in writing and delivered to the other party by registered or certified mail, return receipt requested or delivered by facsimile mail with the original counterpart thereof being sent on the same day or on the day immediately following the date of the facsimile transmission, or by electronic mail. Such notice shall be deemed received three days after a registered or certified letter containing such notice, properly addressed with the postage prepaid, if posted, or on the same day if transmitted by facsimile mail or by electronic mail.

 

10.         Governing Law and Jurisdiction. This Agreement shall be governed by, and construed and enforced in accordance with the law of the state of Israel, without regard to the conflict of law rules thereof. The parties irrevocably agree that the competent courts of Tel-Aviv, Israel are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement. 

 

11.         Assignment and Third Party Rights. This Agreement may not be assigned in whole or in part by any party without the written consent of the other parties hereto. 

 

12.         Entire Agreement. This Agreement shall constitute the entire agreement and understanding between the parties with respect to all matters which are referred to and shall supersede any previous agreements between the parties in relation to the matters referred to in this Agreement.

 

[Remainder of Page Intentionally Left Blank]

7 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first appearing above.

 

	/s/Advanced Inhalation Thereapies (AIT) Ltd.	 
	Advanced Inhalation Therapies (AIT) Ltd.	 
	 	 
	By: Racheli Vizman	 
	Title: COO	 
	 	 
	/s/ Guberman Consulting Ltd.	 
	Guberman Consulting Ltd.	 
	 	 
	By: Tami Guberman	 
	Title: CEO	 
	 	 
	Agreed and Acknowledged:	 
	 	 
	/s/ Ifat Tal	 
	Ifat Tal	 

 

8 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

Exhibit A

Services 

		1	Essence of the contract

 

1.1  AIT hereby requests and Guberman agrees to provide Chief Financial Officer services.

 

1.2  The services shall include inter alias:

 

1.3  Chief Financial Officer

The service may include: 

	 	1.3.1	Weekly/biweekly meeting with the CEO regarding financial and business issues.
	 	1.3.2	Dealing with the annual budget.
	 	1.3.3	Preparing forecasts, Business plans and financial data.
	 	1.3.4	Dealing with the Chief Scientist, Investment Center or other incentive government institutes.
	 	1.3.5	Dealing with option plans and Cap tables.
	 	1.3.6	Help in due diligence and rising capital processes.
	 	1.3.7	Controlling the CF and dealing with banks.
	 	1.3.8	Reporting to the BOD.
	 	1.3.9	Working with lawyers and auditors.
	 	1.3.10	Helping the company prepare for IPO
	 	1.3.11	The service will include one skilled CFO that will serve 30% position per month, 13 hours per week (one working days a week in the company's offices and the rest from his office).

 

9 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

Exhibit B

 

INDEMNIFICATION AND RELEASE AGREEMENT

 

Date: ________, 2015

 

To: Ms. Ifat Tal 

 

It is in the best interest of Advanced Inhalation Therapies (AIT) Ltd. (the “Company”) to retain and attract as directors and/or officers the most capable persons available, and such persons are becoming increasingly reluctant to serve in companies unless they are provided with adequate protection through insurance and indemnification in connection with such service.

 

You are or have been appointed to be a director and/or officer of the Company, and in order to enhance your service to the Company in an effective manner, the Company desires to provide hereunder for your indemnification to the fullest extent permitted by law.

 

In consideration of you continuing to serve the Company, subject to the provisions of applicable law, as amended from time to time, the Company hereby agrees as follows:

 

		1.	The Company hereby undertakes to indemnify you, in accordance with and subject to the terms and conditions of this Indemnification and Release Agreement (the “Agreement”) to the maximum extent permitted by applicable law, subject to the limitations set forth in Sections 3 and 6 below for any liability, obligation or expense as set forth in paragraphs 1.1 through 1.5 below ("Expenses"), imposed on you or expended by you in respect of any act or omission (“action”) taken or made by you or alleged to have been taken or made by you in your capacity as a director and/or officer of the Company:

 

		1.1.	any financial obligation imposed on you in favor of another person by a court judgment, including a settlement or an arbitrator’s award approved by court; and

 

		1.2.	all reasonable litigation expenses, including attorneys’ fees and the fees and expenses of investigators, accountants and other experts, expended by you, in an investigation or proceeding conducted against you by an agency authorized to conduct such investigation or proceeding, and which investigation or proceeding (i) “concluded without the filing of an indictment” (as such term is defined in Section 260(a)(1a) of the Companies Law 5759-1999) against you and without there having been imposed against you a “financial obligation in lieu of a criminal proceeding” (as such term is defined in Section 260(a)(1a) of the Companies Law), or (ii) “concluded without the filing of an indictment” against you but with there having been imposed against you a “financial obligation in lieu of a criminal proceeding” for an offense that does not require proof of mens rea (criminal intent) or with respect to monetary sanction or penalty; and

 

10 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

		1.3.	all reasonable litigation expenses, including attorneys’ fees and the fees and expenses of investigators, accountants and other experts, expended by you or charged to you by a court, in a proceeding instituted against you by the Company or on its behalf or by another person, or in any criminal proceedings in which you are acquitted, or in any criminal proceedings of a crime which does not require proof of mens rea (criminal intent) in which you are convicted; or in preparation or defense with respect to any threatened proceedings as aforesaid.

 

		1.4.	a financial obligation imposed upon you and reasonable litigation expenses, including attorney fees, expended by you as a result of an administrative proceeding instituted against you. Without derogating from the generality of the foregoing, such obligation or expense will include a payment which you are obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israeli Securities Law, 1968 – 5728 (the "Securities Law") and expenses that you incurred in connection with a proceeding under Chapters H'3, H'4 or I'1 of the Securities Law, including reasonable legal expenses, which term includes attorney fees; and

 

		1.5.	The above indemnification will also apply to any action taken by you in your capacity as a director and/or officer of any other company controlled, directly or indirectly, by the Company (a “Subsidiary”) or in your capacity as an officer, director, or observer at board of directors’ meetings, of a company not controlled by the Company but where your appointment as an officer, director or observer is at the request of the Company (“Affiliate”).

 

provided however, that in respect of any specific action indemnifiable pursuant to the provisions hereof (an "Indemnifiable Event"), the Expenses for which you may be indemnified hereunder will be subject to the Global Limitation (as defined below).

 

		2.	The Company will not indemnify you for any amount you may be obligated to pay in respect of any of the following:

 

		2.1.	a breach of your duty of loyalty, except, to the extent permitted by law, for a breach of your duty of loyalty to the Company, a Subsidiary or an Affiliate while acting in good faith and having reasonable cause to assume that such act would not prejudice the interests of the Company;

 

		2.2.	a willful breach of the duty of care or reckless disregard for the circumstances or to the consequences of a breach of the duty of care other than a breach arising solely out of your negligent conduct;

 

		2.3.	an action, taken or not taken, with the intent of unlawfully realizing personal gain.

 

		2.4.	any fine, civil fine, monetary sanction or penalty payment to propitiate an offense for which and to the extent that applicable law prohibits indemnification.

 

		3.	The indemnification mentioned in paragraph 1 above shall apply only insofar as it results from your actions in the following matters or in connection therewith (which have been determined by the Board of Directors of the Company as foreseeable in view of the Company’s current activity):

 

		3.1.	The offering of securities by the Company and/or by a shareholder to the public and/or to private investors or the offer by the Company to purchase securities from the public and/or from private investors or other holders pursuant to a prospectus, agreements, notices, reports, tenders and/or other proceedings;

 

11 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

		3.2.	Occurrences resulting from the Company’s becoming, or its status as, a public company, and/or from the fact that the Company’s securities were offered to the public and/or are traded on a stock exchange, whether in Israel or abroad;

 

		3.3.	Occurrences in connection with investments that the Company and/or Subsidiaries and/or Affiliates make in other corporations whether before and/or after the investment is made, entering into the transaction, the execution, development and monitoring thereof, including actions taken by you in the name of the Company and/or a Subsidiary and/or an Affiliate as a director, officer, and/or board observer of the corporation the subject of the transaction and the like;

 

		3.4.	The sale, purchase and holding of negotiable securities or other investments for or in the name of the Company, a Subsidiary and/or an Affiliate;

 

		3.5.	Actions in connection with any sale or acquisition of assets by the Company, a Subsidiary and/or an Affiliate or the merger of the Company, a Subsidiary and/or an Affiliate with or into another entity;

 

		3.6.	Actions in connection with the sale of the operations and/or business, or part thereof, of the Company, a Subsidiary and/or an Affiliate;

 

		3.7.	Without derogating from the generality of the above, actions in connection with the purchase or sale of companies, legal entities or assets, and the division or consolidation thereof;

 

		3.8.	Actions concerning the approval of transactions of the Company, its Subsidiaries and/or Affiliates with officers and/or directors and/or holders of controlling interests in the Company, its Subsidiaries and/or Affiliates;

 

		3.9.	Actions taken in connection with the approval and execution of financial statements and business reports and the representations made in connection therewith;

 

		3.10.	Actions taken in connection with labor relations and/or employment matters in the Company, Subsidiaries and/or Affiliates and trade relations of the Company, Subsidiaries and/or Affiliates, including with employees, independent contractors, customers, suppliers and various service providers;

 

		3.11.	Actions in connection with the testing of products developed by the Company, Subsidiaries and/or Affiliates, and/or in connection with the distribution, sale, license and/or use of such products, and/or in connection with the procedure of obtaining regulatory approvals regarding such products, whether in Israel or abroad, and/or in connection with claims that the Company acted without such approvals.

 

		3.12.	Actions taken in connection with the intellectual property of the Company, Subsidiaries and/or Affiliates, and its protection, including the registration or assertion of rights to intellectual property and the defense of claims related to intellectual property;

 

		3.13.	Actions taken pursuant to or in accordance with the policies and procedures of the Company, Subsidiaries and/or Affiliates, whether such policies and procedures are published or not.

 

12 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

		3.14.	Any claim or demand not covered by any of the categories of events described above, which pursuant to any applicable law, a director or officer of the Company may be held liable for in connection with actions taken by such director and/or officer in such capacity.

 

The Company will make available to you all amounts needed in accordance with paragraph 1 above as soon as practicable but in any event no later than thirty (30) days after your written demand shall be presented to the Company (“Time of Indebtedness”), and with respect to items referred to in paragraphs 1.2 and 1.3 above, even prior to a court decision. Notwithstanding the foregoing, the obligations of the Company under Section 1 and the obligation of the Company to make an advance payment of Expenses to you (an "Expense Advance"), shall be subject to the condition that the Company shall not have determined that you are not lawfully entitled to be such indemnification in accordance with the provisions hereunder, in which event, the Company shall be entitled to be reimbursed by you (and you hereby agree to reimburse the Company) for any and all amounts theretofore paid.

 

Without derogating from the generality of the foregoing, Expenses Advances given to cover legal expenses in criminal proceedings or in administrative or investigative proceedings that result in criminal proceedings will be promptly repaid by you to the Company if you are found guilty of a crime which requires proof of criminal intent. 

 

			As part of the aforementioned undertaking, the Company will make available to you any security or guarantee that you may be required to post in accordance with an interim decision given by a court or an arbitrator, including for the purpose of substituting liens imposed on your assets; provided, however, that if it is determined by a court of law that you are not entitled to be indemnified by the Company, you shall promptly execute all documents required and provide all assistance necessary to substitute and replace any Company-provided security or guarantee with alternate security or guarantees.

 

			All amounts paid as indemnification pursuant hereto will be grossed-up to cover any tax payments you may be required to make if the indemnification payments are taxable to you.

 

		4.	The Company’s obligation to indemnify you and advance Expenses in accordance with this Agreement shall be for such period as you shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding or any inquiry or investigation, whether civil, criminal or investigative, arising out of your service/action in the position of a director and/or an officer of the Company/Subsidiary/Affiliate, even if at the relevant Time of Indebtedness you are no longer a director and/or officer of the Company or of a Subsidiary or an officer, director or board observer of an Affiliate and the indemnity will extend to your heirs, executors, administrators and legal representatives.

 

		5.	The Company will not indemnify you for any liability with respect to which you have received payment (by virtue of an insurance policy, Articles of Association, another indemnification agreement or otherwise) of the amounts otherwise indemnifiable hereunder, except for amounts indemnifiable hereunder which are in excess of the amounts actually paid to you as provided above (including deductible amounts not covered by insurance policies).

 

		6.	Subject to the provisions of paragraph 5 above, the total obligation of the Company to all indemnitees under this Agreement, in the aggregate, including all then pending claims for indemnification made by all directors or officers of the Company ("Indemnitees"), whether under law, agreement or the Articles of Association of the Company, will not exceed the higher of: i) US$5 Million; and ii) 25% of the paid-up share capital of the Company (including premiums paid in respect of shares) at such time according to the last approved audited consolidated annual financial statements of the Company (the "Global Limitation"); all of the foregoing in addition to any amounts received or receivable from a directors and officers insurance policy. If the total of all such claims exceed such amount (or the remaining balance of such amount at the relevant time), then the limit amount per each Indemnitee of the Company shall be pro rated among all Indemnitees proportionately to the proven amount of each respective Indemnitee out of the aggregate amount of all proven claims by all Indemnitees.

 

13 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

		7.	The Company will be entitled to reimbursement from you of amounts collected from a third party in connection with liabilities indemnified hereunder, such reimbursement not to exceed the amounts indemnified by the Company.

 

		8.	In all indemnifiable circumstances:

 

		8.1.	You shall, as a condition precedent to your right to be indemnified under this Agreement, promptly notify the Company of any legal proceedings initiated against you and of all possible or threatened legal proceedings and, to the extent permitted by law, all administrative or investigative proceedings initiated against you, in each case, for which Indemnification will or could be sought under this Agreement, without delay following your first becoming aware thereof, and you shall deliver to the Company, or to such person as it shall advise you, without delay all documents you receive in connection with these proceedings.

 

			Similarly, you will advise the Company on an ongoing and current basis concerning all events which you suspect may give rise to the initiation of legal proceedings against you. Failure to notify the Company as aforesaid will not relieve the Company of its indemnification obligations pursuant hereto except to the extent that it has been actually prejudiced as a result of such failure.

 

		8.2.	Other than with respect to proceedings that have been initiated against you by the Company or in its name, the Company shall be entitled to undertake the conduct of your defense in respect of such legal proceedings and/or to hand over the conduct thereof to any attorney which the Company may choose for that purpose, except to an attorney who is not, upon reasonable grounds, acceptable to you.

 

Notwithstanding the foregoing you will be entitled to appoint an attorney of your own that shall accompany you in such procedure, at you own expense. Your attorney shall be fully updated on the defense procedure. In the event that you retained your own attorney due to a conflict of interest between you and the Company or between you and the Company's attorney, the Company shall indemnify you for all reasonable expenses incurred by you in connection with engaging such attorney, in accordance with and subject to the provisions hereof.

 

The Company and/or the attorney appointed by it as aforesaid shall be entitled, within the context of the conduct as aforesaid, to conclude such proceedings, all as it shall see fit, at its sole discretion, including by way of settlement without your consent provided that the amount of such settlement does not exceed the applicable limit amount (subject to the limitations set forth below). At the request of the Company, you shall execute all documents reasonably required to enable the Company and/or its attorney as aforesaid to conduct your defense in your name, and to represent you in all matters connected therewith, in accordance with the aforesaid.

 

14 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

For the avoidance of doubt, in the case of criminal proceedings the Company and/or its attorney as aforesaid will not have the right to plead guilty in your name or to agree to a plea-bargain in your name without your prior written consent. Furthermore, in a civil proceeding (whether before a court or as a part of a compromise arrangement), the Company and/or its attorney will not have the right to admit to any occurrences that are not indemnifiable pursuant to this Agreement and/or pursuant to law, or to enter into any settlement, or compromise or consent to any judgment unless such settlement, compromise or consent includes a complete release of you from all liability arising out of the proceeding, without your prior written consent, which will not be unreasonably withheld. However, the aforesaid will not prevent the Company and/or its attorney as aforesaid, with the approval of the Company, to come to, inter alia, a financial arrangement with a plaintiff in a civil proceeding without your consent so long as such arrangement will not be an admittance of an occurrence not indemnifiable pursuant to this Agreement and/or pursuant to law and so long as it includes an complete release as aforesaid.

 

		8.3.	You will fully cooperate with the Company and/or its attorney as aforesaid in every reasonable way as may be required of you within the context of their conduct of such legal proceedings, including but not limited to the execution of power(s) of attorney and other documents, provided that the Company shall cover all costs incidental thereto such that you will not be required to pay the same or to finance the same yourself, all, in accordance with and subject to the provisions hereof,; and provided, further, that you shall not be required to take any action that would in any way prejudice your defense or waive any defense or position available to you in connection with any proceeding.

 

		8.4.	If, in accordance to paragraph 8.2, the Company has taken upon itself the conduct of your defense, the Company will have no liability or obligation pursuant to this Agreement or the resolutions referred to below to indemnify you for any legal expenses, including any legal fees, that you may expend in connection with your defense, except in the event of a conflict of interests pursuant to the second paragraph of Section 8.2 above.

 

		8.5.	The Company will have no liability or obligation pursuant to this Agreement or the resolutions referred to below to indemnify you for any amount expended by you pursuant to any compromise or settlement agreement reached in any suit, demand or other proceeding as aforesaid having been entered into without receiving the Company’s prior written consent to such compromise or settlement, which consent shall not be unreasonably withheld. Neither the Company nor any of its agents, employees, directors or officers shall make any statement to the public or to any other person regarding any settlement of claims against you that would in any manner cast any negative light, inference or aspersion against you, and it shall be a requirement of such settlement that the terms of such settlement shall be confidential.

 

		9.	Subject to section 2 above, the Company hereby exempts and releases you, to the fullest extent permitted by law, from any liability for damages caused as a result of a breach of your duty of care to the Company in your capacity as a director, whether such breach occurred or occurs prior or subsequent to the resolutions referred to below, provided that no such exemption shall apply to a breach of your duty of care in connection with a Distribution (as defined in the Companies Law).

 

10.         If for the validation of any of the undertakings in this Agreement any act, resolution, approval or other procedure is required by any organ of the Company, the Company undertakes to initiate and make its best efforts to cause them to be done or adopted in a manner which will enable the Company to fulfill all its undertakings as aforesaid, subject to any applicable legal requirement on such organ of the Company to act with good faith and in a reasonable manner and any fiduciary duties of such organ.

 

15 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

		11.	For the avoidance of doubt, it is hereby clarified that nothing contained in this Agreement or in the above resolutions derogates from the Company’s right, at its sole discretion, to indemnify you post factum for any amounts which you may be obligated to pay as set forth in paragraph 1 above irrespective of the limitations set forth in paragraphs 3, 6 and 7 above.

 

		12.	If any undertaking included in this Agreement is held invalid or unenforceable, such invalidity or unenforceability will not affect any of the other undertakings, exemptions or releases, which will remain in full force and effect. Furthermore, if such invalid or unenforceable undertaking exemption or release may be modified or amended so as to be valid and enforceable as a matter of law, such undertakings exemptions or releases will be deemed to have been modified or amended, and any competent court or arbitrator are hereby authorized to modify or amend such undertaking exemption or release, so as to be valid and enforceable to the maximum extent permitted by law.

 

		13.	This Agreement and the agreement herein shall be governed by and construed and enforced in accordance with the laws of the State of Israel, as such laws are applied to contracts entered into and to be performed entirely within such State, without regard to its conflict of laws rules.

 

		14.	This Agreement sets forth the entire understanding between the parties hereto relating to the subject matter hereof and cancels any preceding indemnification and release agreement or undertaking that may have been issued to you by the Company.

 

		15.	Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement, (A) to indemnify or advance Expenses to you with respect to claims initiated or brought voluntarily by you and not by way of defense, except: (i) with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or any other agreement, or insurance policy or under the Company's Articles of Association now or hereafter in effect relating to claims for Indemnifiable Events, and in connection therewith, subject to all limitations set herein, the Company shall bear your reasonable costs, including legal expenses, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such suit, (iii) if the claim is initiated in order to preempt a foreseeable claim against you, covered by this Agreement or (iv) as otherwise required under the laws of the Company's (or where applicable, its Subsidiary's) jurisdiction of incorporation, regardless of whether you ultimately determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be, and (B) to indemnify you for expenses and the payment of profits arising from the purchase and sale by you of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any similar applicable law of any jurisdiction.

 

		16.	In the event of any change after the date of this Agreement of any applicable law, statute or rule which expands the right of a corporation of the Company's jurisdiction of incorporation to indemnify a member of its board of directors or an officer, it is the intent of the parties hereto that you shall enjoy by this Agreement the greater benefits afforded by such change, subject however to the Global Limitation. In the event of any change in any applicable law, statute or rule which narrows the right of a corporation of the Company's jurisdiction of incorporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties' rights and obligations hereunder except as set forth in Section 2 hereof.

 

		17.	This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

 

16 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

		18.	This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and legal representative. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

		19.	All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given and shall in any event be deemed to be given: (a) five (5) business days after deposit with the applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the business day of deposit with overnight courier, freight prepaid, or (d) one day after the business day of delivery by facsimile transmission or email, if delivered by facsimile transmission or email, with copy by first class mail, postage prepaid, and shall be addressed if to you, at your address as set forth beneath your signature to this Agreement and if to the Company at the address of its principal corporate offices or at such other address as such party may designate by ten (10) days' advance written notice to the other party hereto.

 

		20.	In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of your rights of recovery, and you shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

 

		21.	No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any of your rights under this Agreement in respect of any action taken or omitted by you prior to such amendment, alteration or repeal. In addition, no amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

		22.	Nothing contained in this Agreement shall be construed as giving you any right to be retained in the employ or otherwise in the service of the Company or any of its Subsidiaries.

 

This Agreement is being issued to you pursuant to the resolutions adopted by the board of directors of the Company on ______________, 2015.

 

Kindly sign and return the enclosed copy of this Agreement to acknowledge your agreement to the contents hereof.

 

[SIGNATURE PAGE TO FOLLOW]

 

17 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat Tal

 

 

[SIGNATURE PAGE TO INDEMNITY AGREEMENT- IFAT TAL]

 

	 	Sincerely,
	 	 
	 	Advanced Inhalation Therapies (AIT) Ltd.
	 	 
	 	By:	 
	 	Title:	 

 

	 	 
	Name: Ms. Ifat Tal	 
	Title: CFO	 

 

18 

 

Service Agreement – AIT – Guberman Consulting Ltd. & Ifat TalExhibit 10.13

 

OPTION AGREEMENT 

 

THIS Option Agreement is entered into this 31st day of August, 2015 by Advanced Inhalation Therapies (AIT) Ltd., a company duly incorporated under the laws of the State of Israel (the “Company”) and Pulmonox Technologies Corporation, a company duly incorporated under the laws of the Province of Alberta, Canada (the “Seller”); each of the Company and the Seller may be referred to as a “Party” and jointly as the “Parties”.

 

WHEREAS          Seller is the owner of rights and title in the Acquired IP (as defined below), and the Company is interested in evaluating the purchase of all such rights and title from Seller who is interested in selling such rights and title;

 

WHEREAS          for the purposes of facilitating the purchase of the Acquired IP, Seller is willing to grant the Company a certain Option (as defined below) to purchase all of Seller’s rights and title to the Acquired IP;

 

WHEREAS          for the purposes of further facilitating such possible purchase, during the time between the grant of the Option and its exercise or expiration, Seller is willing to grant the Company a temporary license to use the Acquired IP during such period, as further detailed in this Agreement;

 

WHEREAS          the Company and the Seller wish to lay down the terms of the grant of the Option, the temporary license and of the subsequent sale of the Acquired IP upon exercise of the Option.

 

NOW THEREFORE IT IS AGREED AS FOLLOWS: 

 

		1.	Definitions

 

In this Agreement, the following terms shall have the following meaning ascribed to them, unless the context requires otherwise:

 

		1.1.	"Acquired IP" means all of Seller's Intellectual Property as of the Effective Date and as of the Closing (as defined below), including without limitations, the patents, patent applications and know-how identified as such in Schedule 1.1 attached hereto.

 

		1.2.	“Affiliate” means, with respect to any party hereto, any person, organization or entity directly or indirectly controlling, controlled by or under common control with, such party. For purposes of this definition only, “control” of another person, organization or entity shall mean the ability, directly or indirectly, to direct the activities of the relevant entity, and shall include, without limitation (i) ownership or direct or indirect control of fifty percent (50%) or more of the outstanding voting stock or other ownership interest of the other organization or entity, or (ii) direct or indirect possession, of the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the organization or other entity.

 

		1.3.	"Approved Product" means each of the First Approved Product, the Second Approved Product and/or the Third Approved Product that include revenues paid to the Company for nitric oxide gas for approved medical indications. For the avoidance of any doubt, Approved Product includes nitric oxide and may include the use of a proprietary delivery device. For example, if the First Approved Product is for chronic obstructive pulmonary disease (“COPD”), this First Approved Product will include nitric oxide drug product and any devices necessary to deliver nitric oxide for treatment of COPD.

 

		1.4.	“Combination Product” means a product which comprises an Approved Product and any additional products which do not qualify as Approved Products.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

		 

 

 

		1.5.	"Closing" shall mean the consummation of the acquisition of the Acquired IP by the Company from the Seller in accordance with the provisions hereof.

 

		1.6.	"Documents" means all files, documents, data, instruments, papers, books, reports, records, tapes, microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title policies, lists, regulatory filings, operating data and plans, technical documentation (production files, design specifications, functional requirements, operating instructions, logic manuals, flow charts, etc.), research materials, quality assurance and test procedures, user documentation (installation guides, user manuals, training materials, release notes, working papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web pages, etc.), complete manufacturing files in connection with the Acquired Products and other similar materials, all to the extent related to the Acquired IP, in each case whether in tangible or electronic form

 

		1.7.	"Effective Date" means the date of this Agreement.

 

		1.8.	"Encumbrances" means any charge, lien, attachment, pledge, encumbrance, debt, security interest, mortgage, right of way, easement, servitude, claim, right to acquire or similar restriction, including any restriction on use, transfer, exercise of any other attribute of ownership over or in the relevant property, or any third party rights.

 

		1.9.	"Governmental Body" means any court, administrative agency or commission or other federal, national, provincial, state, local, foreign or other governmental authority, instrumentality, agency or commission.

 

		1.10.	"Inhaled Nitric Oxide" means any and all technology related to using gaseous Nitric Oxide for therapeutics or prevention of disease in animals and humans

 

		1.11.	"Intellectual Property"means all patents, or patent applications and any patent issued therefrom, any divisional, continuation or continuation-in-part application, or application for a patent of addition or another application claiming priority, directly or indirectly, from said patents and patent application, and patents issued therefrom, and any extensions of term, patent term adjustments, supplementary patent certificates and the like of any of the foregoing; registered and unregistered designs; registered and unregistered trade marks; copyrights; design rights; rights in and to databases; know-how; trade secrets; purchasing information; results of development activities, whether in confidential information or otherwise; information of a commercial nature; any materials, results, devices, production files, procedures, protocols, formulae, computer programs, software, source code, algorithms, file structure and any other information or data regardless of form or type, including but not limited to that of a scientific, technical nature experimental data, test data, designs, specifications, processes, manufacturing data, production files, techniques, inventions, drawings, vendor lists, photographs, films, reports, manuals, technical writings, sound recordings, pictorial representations, and other documentation or other representations, graphical or otherwise; and any other information related to development, discoveries, concepts and ideas, whether or not patentable or otherwise subject to proprietary rights or legal protection; on magnetic tape, computer memory, or in any other form, any or all subsisting or issued anywhere in the world.

 

		1.12.	"Legal Requirements" means any applicable federal, national, state, local, municipal, foreign, international, multinational or other constitution, law, ordinance, code, regulation, rule, order, judgment, decree, statute or treaty.

 

		1.13.	“Net Sales means the gross consideration received from the sale or transfer of an Approved Product by the Company or its Affiliates, on a worldwide basis, after deduction of the following expenses, provided and to the extent such expenses are actually incurred and documented and do not exceed reasonable and customary amounts in the market in which such sale occurred: (a) discounts and allowances to customers; (b) rebates paid to Distributors; (c) taxes; (d) freight; and (e) refunds and returns. Net Sales includes all consideration received in respect of any sale of an applicable product, good or service, whether such consideration is in cash, payment in kind, exchange or another form.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	2	 

 

 

Notwithstanding the above, for the purposes of this definition, the transfer of an Approved Product by the Company or one of its Affiliates to another Affiliate of the Company is not a sale; in such case, Net Sales will be determined based on the gross invoice amount of the Approved Product first sold by the Affiliate to independent third-parties, less the deductions permitted herein.

 

In addition, the Net Sales shall be furthermore adjusted and reduced in the event that a Approved Product is sold as part of a Combination Product as set forth in Section 2.4 hereto.

 

		1.14.	"Permits" means any licenses, permits, consents, registrations, approvals, permissions, certificates, applications or other authorizations.

 

		1.15.	"Proceeding" means any claim, demand, action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation.

 

		1.16.	"Product" means any Inhaled Nitric Oxide product, good or service sold by the Company.

 

		1.17.	"Transaction Documents" means this Agreement and all agreements, documents, instruments and certificates ancillary to or contemplated by this Agreement.

 

		2.	The Option; Transfer of Acquired IP 

 

		2.1.	Seller hereby grants the Company, effective as of the Effective Date, an exclusive option to purchase all of the Seller's rights, title and interest in and to the Acquired IP (the "Option"). The grant of the Option is conditioned upon Company paying Seller the sum of US$25,000 in cash within 10 days from the Effective Date (the "Option Consideration").

 

		2.2.	The Option shall be exercisable by a written notice given by the Company to Seller to that effect not later than within six (6) months as of the Effective Date (the "Exercise Notice" and the "Option Period", respectively).

 

		2.3.	Subject to the exercise of the Option by the Company, in consideration for the acquisition by the Company of the Acquired IP from the Seller:

 

		2.3.1.	The Company shall pay Seller the sum of US$500,000 in cash (the "Purchase Price") within 3 business days from the Closing Date;

 

		2.3.2.	The Company shall issue to Seller within 3 business days from the Closing Date warrants to purchase up to such amount of Ordinary Shares (also known as Common Shares) of the Company, in such number equal to: (A) US$1,000,000; divided by (B) 80% of the price per share of each Ordinary Share of the Company determined for the purposes of the Company's initial public offering (the "Exercise Price" and the "Warrant", respectively). The Warrant shall be exercisable, in whole or in part, until the seventh anniversary as of the date of grant of the Warrant, for cash and at Exercise Price, all in accordance with and subject to the terms and conditions of the Warrant attached as Schedule 2.3.2 hereto. In the event that the Company shall not undergo an initial public offering within one (1) year as of the Closing Date, the Parties hereto shall bona fide renegotiate the terms of the Warrant. Seller acknowledges that, if required by the underwriter, any shares issued to it in connection with the exercise of the Warrant as part of the Company's initial public offering, will be subject to a standard lock-up period not to exceed six months. 

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	3	 

 

 

		2.3.3.	The Company shall make the following one-time development milestone payments to Seller, upon achievement of each relevant milestones (each, a “Development Milestone”) (the “DevelopmentMilestone Payments”):

 

		(a)	Obtainment by the Company of its first FDA approval for an Approved Product ("First Approved Product") - $1,500,000;

 

		(b)	Obtainment by the Company of its second FDA approval for an Approved Product ("Second Approved Product") - $1,500,000;

 

		(c)	Obtainment by the Company of its third FDA approval for an Approved Product ("Third Approved Product") - $1,500,000;

 

		2.3.4.	The Company shall make the following one-time sales milestone payments to Seller, upon achievement of each relevant milestones (each, a “Sales Milestone”) (the “SalesMilestone Payments”):

 

		(a)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$20,000,000 worldwide, per all First Approved Product - US$1,500,000.

 

		(b)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$75,000,000 worldwide, per all First Approved Product - US$3,000,000.

 

		(c)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$125,000,000 worldwide, per all First Approved Product - US$3,000,000.

 

		(d)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$500,000,000 worldwide, per all First Approved Product - US$20,000,000.

 

		(e)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$20,000,000 worldwide, per all Second Approved Product - US$1,500,000.

 

		(f)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$75,000,000 worldwide, per all Second Approved Product - US$3,000,000.

 

		(g)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$125,000,000 worldwide, per all Second Approved Product - US$3,000,000.

 

		(h)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$500,000,000 worldwide, per all Second Approved Product - US$20,000,000.

 

		(i)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$20,000,000 worldwide, per all Third Approved Product - US$1,500,000.

 

		(j)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$75,000,000 worldwide, per all Third Approved Product - US$3,000,000.

 

		(k)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$125,000,000 worldwide, per all Third Approved Product - US$3,000,000.

 

		(l)	The achievement by the Company of cumulative aggregate Net Sales exceeding US$500,000,000 worldwide, per all Third Approved Product - US$20,000,000.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	4	 

 

 

For the avoidance of any doubt, (i) Seller shall be entitled to receive each of the Sales Milestone Payments only one-time with respect to the achievement of each Sales Milestone achieved by the Company; (ii) with respect to each of the First, Second and Third Approved Product, Seller may be entitled to receive up to an aggregate amount of US$27,500,000 in total on account of the Sales Milestone Payments for each such Approved Product.

 

For clarification purposes only, for example:

 

(A) in the event that the Company reaches an aggregate Net Sales of US$30,000,000 with respect to the First Approved Product, Seller shall be entitled to receive a one-time payment of US$1,500,000, thereafter if the Company reaches an additional aggregate Net Sales of US$45,000,000 with respect to the First Approved Product, Seller shall be entitled to receive an additional one-time payment of US$3,000,000.

 

(B) in the event that the Company reaches an aggregate Net Sales of US$80,000,000 with respect to the First Approved Product, Seller shall be entitled to receive a one-time payment of US$1,500,000 (for achieving the US$20,000,000 milestone) and a one-time payment of US$3,000,000 (for achieving the US$75,000,000 milestone).

 

		2.4.	Notwithstanding the foregoing, in the event that any Approved Product is sold in a form of a Combination Product, then the parties shall, together, determine in good faith the proportion of such Combination Product to be attributed to the Approved Product, it being agreed that absent such mutual agreement as to the proportion of such Combination Product to be attributed to the Approved Product, the parties shall mutually appoint an independent expert to determine such proportion. Net Sales from such Combination Product for the purposes of determining Sales Milestone Payments thereon shall be determined by multiplying the actual Net Sales of such Combination Product by such mutually agreed or expert-determined proportion, and the Company shall make Sales Milestone Payments to Seller accordingly. For example purposes only, in the event that the Net Sales derived by the Company from the sale of a certain Combination Product which is comprised from the First Approved Product and additional other products are at a certain point US$1,000,000, and the mutually agreed or expert-determined proportion is 4/5, the Net Sales attributed to the First Approved Product on account of the sales of such Combination Product, shall be US$800,000.

 

		2.5.	Company's obligation to make the payments set forth under Sections 2.3.3 and 2.3.4 above may be assigned by the Company, subject to a written notice to Seller, to any third party licensing or acquiring the Acquired IP from the Company, provided that such third party shall undertake in writing to become bound by the applicable provisions hereof. Each such agreement shall include language pursuant to which the permitted assignee or licensee commits to make reasonable commercial efforts to commercialize the Acquired IP.

 

		2.6.	Immediately upon exercise of the Option by the Company, at its sole discretion and at any time during the Option period, Seller shall be deemed to have sold, assigned, and transferred to the Company all of Seller's rights, title and interest in and to the Acquired IP, free and clear of any and all Encumbrances other than 2.5 above.

 

		2.7.	Following the exercise of the Option, Seller undertakes to take all actions, provisions and undertakings necessary to effectuate such sale, assignment and transfer and to assist the Company in any such effort including, without limitation, any registration of the assignment in any territory as will be required, at Company’s cost and expense. In addition, at Company’s request, Seller shall promptly deliver to the Company true and complete files or copies of files relating to the issuance, prosecution, maintenance, enforcement and defense to all Acquired IP in its possession, and shall thereafter promptly forward to the Company any additional information, documents or notices it receives in connection with the Acquired IP.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	5	 

 

 

		2.8.	Seller hereby grants the Company, during the Option Period and to the extent that the Option was exercised by the Company in accordance with the provisions hereof, for an additional period of six (6) month as of the end of the Option Period, an option to purchase all of Seller's tangible assets, including inventory, machinery, equipment, tools, supplies and other tangible property related to, or used in connection with the Acquired IP (the "Tangible Assets"), including without limitation the Tangible Assets listed under Schedule 2.8 attached hereto, for such consideration to be agreed upon between the parties.

 

		2.9.	Value Added Tax will be added to any payment under this Agreement pursuant to applicable law, if applicable according to any applicable law, in which event payment by the Company shall be made, by wire transfer to a bank account designated by the Seller to the Company in writing, subject to and against appropriate tax invoice issued by Seller.

 

		2.10.	The Company shall be entitled to deduct and withhold from any payment made pursuant to this Agreement such amounts required to be deducted and withheld with respect to the making of any such payment under any applicable law (the "Withholding Amount"), unless the Company is provided with an exemption from such withholding Tax or certificate of reduced withholding in respect of each such payment at least 3 Business Days prior to the applicable payment date (a "Withholding Tax Exemption"). Upon the request of Seller, the Company shall reasonably assist Seller in obtaining an applicable Withholding Tax Exemption at Seller's cost. Any Withholding Amount so withheld by the Company shall be remitted to the applicable Governmental Authorities and shall be treated for all purposes of this Agreement as having been paid to the Seller.

 

		2.11.	Seller will bear any taxes which according to applicable law should be borne by a seller in connection with the sale of the Acquired IP and the transactions contemplated hereunder. Without derogating from the foregoing, no Party will have any liability whatsoever for any taxes of any kind or nature, to be borne by the other Party pursuant to applicable law, whether due, arising or payable prior, at or following the Closing Date.

 

		3.	Use of IP 

 

		3.1.	For due consideration hereby acknowledged and for purpose of facilitating the contemplated purchase of the Acquired IP, Seller hereby grants the Company with a temporary exclusive license to use the Acquired IP for preclinical and clinical development purposes during the License Term as defined in Section 3.2 below (the "License"), subject to the provision of Section 2.

 

		3.2.	The term of the License (the “License Term”) shall commence as of the Effective Date and end until the earlier of the following: (a) exercise of the Option; (b) expiry of the Option Period without execution of the Option; or (c) termination of this Agreement without execution of the Option in accordance with the provisions of Section 9 below.

 

		3.3.	At the expense of the Company the Seller undertakes to make any document, provision and undertaking to effectuate the License and assist the Company in any such effort including, without limitation, any license registration in any territory as will be required.

 

		4.	Representations and Warranties

 

Except as set forth in a disclosure schedule delivered by Seller to the Company dated as of the date hereof (the “Disclosure Schedule”) (the Disclosure Schedule will be arranged in sections corresponding to the sections contained in this Section 5 and exceptions and disclosures set forth in any section of the Disclosure Schedule will apply to any other section of the Disclosure Schedule to the extent the relevance to such other section or sections is reasonably apparent), Seller hereby represents and warrants to the Company as of the date hereof and as of the Closing Date:

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	6	 

 

 

		4.1.	Constitution and Compliance

 

		4.1.1.	Seller is duly incorporated and validly existing under the laws of the Province of Alberta, Canada, in good standing and with power and authority to carry on its business as currently conducted and as currently proposed to be conducted and to own, lease, and operate its properties. Seller has at all times carried on its business and affairs related to the Acquired IP in all material respects in accordance with its organizational documents and all applicable Legal Requirements, and has not breached or violated, and is not in breach or violation, of its organizational documents or applicable Legal Requirements in a manner which may materially and adversely affect Seller in connection with the Acquired IP.

 

		4.1.2.	Seller has made available to the Company or to the Company’s legal advisor true, accurate and complete copies of its organizational documents, as amended, as of the date of this Agreement.

 

		4.2.	Authority to Transact

 

		4.2.1.	Seller has all requisite corporate power and authority to execute and deliver the Transaction Documents, and to carry out and perform its obligations under the Transaction Documents and to consummate the transactions contemplated thereby.

 

		4.2.2.	(i) all corporate action on the part of Seller, necessary for the authorization and execution of the Transaction Documents by Seller, and the performance of all of Seller’s obligations under the Transaction Documents, have been taken, and no other corporate proceeding on the part of the Seller is necessary to authorize this Agreement and the transactions contemplated hereby; and (ii) this Agreement and the Transaction Documents constitutes, valid and legally binding obligations of Seller, enforceable against the Seller in accordance with their terms, except as such enforceability may be limited by effect of (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights and (b) general equitable principles, regardless of whether such enforceability is considered in a proceeding at law or in equity.

 

		4.3.	Execution of Agreement

 

Neither the execution and delivery by Seller of the Transaction Documents nor the consummation by Seller of the transactions contemplated thereby, will:

 

		4.3.1.	Violate any provisions of Seller’s organizational documents or any contract, agreement, indenture, mortgage, instrument, note, bond, lease, license, arrangement, or undertaking of any nature, written or oral, of Seller, or cause the acceleration, termination or modification of any contract, agreement, indenture, mortgage, instrument, note, bond, lease, license, arrangement, or undertaking of any nature, written or oral, of Seller, in each case, related to the Acquired IP.

 

		4.3.2.	Require the consent, Permit or agreement of any Governmental Body, entity or any other third party.

 

		4.3.3.	Result in any violation of, or conflict with, or constitute a default under any term of, or result in the creation or enforcement of, any Encumbrances upon any of the properties or assets of Seller used in connection with the Acquired IP.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	7	 

 

 

		4.3.4.	Cause Seller to lose any interest in or the benefit of any asset, right, license or privilege considered as Acquired IP it presently owns or enjoys.

 

		4.3.5.	Result in any breach or violation by Seller of any provisions of any Legal Requirements applicable to the Seller or by which any of its assets or properties is bound or subject.

 

		4.4.	Title to Assets

 

		4.4.1.	Seller owns and has good and valid title to all of the Acquired IP, free and clear of any and all Encumbrances other than those disclosed by Seller to Company as of the effective date of the execution of this agreement.

 

		4.4.2.	No other person or entity has any legal or equitable interest whatsoever in any of the Acquired IP, other than those disclosed by Seller to Company as of the effective date of the execution of this agreement.

 

		4.5.	Compliance with Legal Requirements; Governmental Authorizations

 

		4.5.1.	Seller has at all times acted with best efforts with respect to the Acquired IP in compliance with each Legal Requirement that is or was applicable to it, in all applicable jurisdictions relevant for Seller and to the Acquired IP.

 

		4.5.2.	No event has occurred or circumstance exists that may (with or without notice or lapse of time): (i) to Seller's knowledge, constitute or result in a violation by Seller of, or a failure on the part of Seller to comply with, any Legal Requirement with respect to any of the Acquired IP; or (ii) could reasonably be expected to give rise to any obligation on the part of Seller to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in connection with any Legal Requirement with respect to the Acquired IP.

 

		4.5.3.	Seller has not received, at any time, any written notice or other communication from any Governmental Body or any other person or entity regarding: (i) any actual, alleged, possible or potential violation of, or failure to comply with, any Legal Requirement with respect to any of the Acquired IP; or (ii) any actual, alleged, possible or potential obligation on the part of Seller to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in connection with any Legal Requirement with respect to the Acquired IP, and to Seller's knowledge, there is no factual or legal basis for such.

 

		4.5.4.	There is no action or Proceeding pending or, to the knowledge of the Seller, threatened and no notice has been received by the Seller that has resulted in or, could reasonably be expected to result in, suspension, non-renewal, termination or cancellation of, with respect to, any such Permit.

 

		4.6.	Litigation

 

There is no Proceeding brought, conducted or heard by or before, or otherwise involving, any Governmental Body or any arbitrator or arbitration panel of any kind, at law or in equity (including actions or Proceedings seeking injunctive relief), pending or, to the knowledge of Seller, threatened, against, or involving Seller or any properties, assets or rights of Seller, to the extent consisting part of the Acquired IP, and Seller is not subject to any continuing order of, consent decree, settlement agreement, or other similar written agreement with, or to the knowledge of Seller, continuing investigation by, any Governmental Body, or any judgment, order, writ, injunction, decree, or award of any Governmental Body or arbitrator to the extent related thereto nor is it a party thereto.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	8	 

 

 

		4.7.	Intellectual Property 

 

		4.7.1.	Schedule 4.7.1 contains a true and complete description as of the date of this Agreement and as of the Closing Date of:

 

		(a)	All registered copyrights, registered patents, patent applications, registered trademarks, registered service marks, and registered trade names owned by Seller.

 

		(b)	The jurisdictions in which any applications for patents or registration of any Acquired IP has been made, including the respective application numbers and dates.

 

		(c)	The jurisdictions in which the Acquired IP has been registered, including the respective patent or registration numbers and dates.

 

		(d)	All parties to whom Seller has delivered any copies of the source code constituting part of the AcquiredIP during the past three (3) years, whether pursuant to an escrow arrangement or otherwise, or parties (other than Employees) who have the right to receive such source code.

 

		(e)	All current products, constituting part of the Acquired IP made commercially available by Seller or currently under development by Seller, are as described in Schedule 4.7.1(e) ("Acquired Products").

 

		(f)	Seller is the sole and exclusive owner of all of the Acquired IP. Seller has sole, full and clear title to all of such items of the AcquiredIP, free and clear of any Encumbrances, and upon Closing, the Company will possess sole, full and clear title to all of such items of the Acquired IP, free and clear of any Encumbrances, without the need to obtain any third party or Governmental Body consent or approval, except as may be required under Legal Requirements applicable to the Company in connection with Company's activity. The Acquired IP constitutes all of the Seller Intellectual Property. The Seller has taken all reasonable steps to protect its rights in all of the AcquiredIP, including making all filings and paying all fees required by any Governmental Body with respect to registered Acquired IP.

 

		4.7.2.	All granted and issued patents and all registered mask works and copyright registrations constituting part of the Acquired IP are valid and subsisting. Without limiting the generality of the foregoing, and in connection with such Intellectual Property:

 

		(a)	Seller has not engaged in patent misuse or any fraud in connection with any registered patents.

 

		4.7.3.	Seller has the right to use, sell, license, assign, transfer, convey or dispose of the Acquired IP.

 

		4.7.4.	Seller has taken all necessary and appropriate steps to protect and preserve the confidentiality of the Acquired IP.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	9	 

 

 

		4.7.5.	Seller has secured valid written assignments or licenses, from all employees and consultants of Seller who contributed to the creation or development of the Acquired IP. To Seller's knowledge, Seller does not make use, nor has it made any use, of any invention or other creation of any employees or consultants thereof, made by such employee or consultant prior to their employment or engagement by Seller and with respect to which Seller has not secured a right to use such invention or creation from such employee or consultant.

 

		4.7.6.	As of the date of this Agreement and as of the Closing, no person has asserted or threatened to assert any claims with respect to the Acquired IP or any part thereof: (i) contesting the right of Seller to use, exercise, sell, license, transfer or dispose of any of the Acquired IP; (ii) challenging the ownership, validity or enforceability of any of the Acquired IP; or (iii) alleging any claim of infringement, violation, or misappropriation of the Acquired IP. None of the Acquired IP is subject to any outstanding order, judgment or decree restricting in any manner the licensing, assignment, transfer or conveyance thereof by Seller in a manner which may interfere with the provisions hereof.

 

		4.7.7.	To Seller's knowledge, there has not been and as of the date of this Agreement and as of the Closing Date, there is no unauthorized use, infringement, violation or misappropriation of any of the Acquired IP by any third party. Seller has not brought any actions or lawsuits, or asserted any claims alleging (i) infringement, violation or misappropriation of any of the Acquired IP; or (ii) breach of any license, sublicense or other agreement authorizing another party to use the Acquired IP.

 

		4.7.8.	Neither the execution, delivery or performance of the Transaction Documents, nor the consummation of the transactions contemplated thereby, will, with or without notice or lapse of time, result in or give any other person or entity the right or option to cause or declare: (i) a loss of, or Encumbrance on, any Acquired IP; (ii) a breach of any contract or agreement relating to the Acquired IP to which Seller is a party or by which it is bound; (iii) the release, disclosure or delivery of any of the Acquired IP by or to any escrow agent or other person or entity; or (iv) the grant, assignment or transfer to any third party of any license or other right or interest under, to or in any of the Acquired IP.

 

		4.7.9.	Seller has made available to the Company or the Company’s legal advisor accurate, full and complete copies of the following Documents relating to the Acquired IP and the Acquired Products:

 

		(a)	Any patent clearance for any Acquired Product.

 

		(b)	Any non-infringement or invalidity opinions related to third party patents drafted as a result of an Acquired Product clearance or third party patent assertion.

 

		(c)	Any letter, notification or correspondence to Seller from any third party or from Seller to any third party regarding infringement of the Acquired IP.

 

		4.7.10.	Seller has not provided or disclosed the source code of any software used or embedded in the Acquired IP or the Acquired Products to any person or entity other than their respective employees and authorized consultants and contractors. No contract or agreement grants any third party any exclusive rights, whether or not limited in time or territory, with respect to any of the Acquired Products or the Acquired IP. The Seller has no liability with respect to, or is required to pay, any royalties, commissions, or similar payments to any person or entity in connection with any sale, distribution, license or development of the Acquired Products or Acquired IP.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	10	 

 

 

		4.8.	Brokers and Finders

 

Seller has no Liability or obligation to pay any fees, commissions or similar payments to any broker, finder or agent in connection with the transactions contemplated hereunder.

 

		4.9.	Due Diligence Materials. 

 

Seller has provided to the Company or its representatives, all documents held by Seller of the character and type requested by the Company in connection with its "due diligence" investigation of the Seller and there are no documents in the possession of the Seller or any of its respective agents or representatives of a character or type described in such requests which have not been so provided to the Company or its representatives.

 

		4.10.	Full Disclosure

 

The representations and warranties made by Seller in this Agreement, when read together in their entirety, do not contain as of the date of this Agreement and as of the Closing Date any untrue statement of a material fact, or omit as of the date of this Agreement to state a material fact necessary to make the statements contained herein not misleading, in light of the circumstances under which they were made.

 

		5.	Prosecution and Maintenance of Patent Rights

 

		5.1.	During the Option Period, Seller shall (i) at the written request of the Company, prepare, file, prosecute and maintain patent applications and patents covered by the Acquired IP in any country, if available, at the Company’s cost, (ii) shall take action to actively maintain (i.e., maintenance and annuity fees paid) and prosecute all of the Acquired IP, (iii) shall not neglect nor allow abandonment on any of the Acquired IP, (iv) regularly notify the Company of the status of all pending applications and existing applications and patents constituting part of the Acquired IP, (v) immediately share with the Company all correspondence regarding any of the Acquired IP, all for a maximum of $20,000 USD.

 

		5.2.	During the Option Period, Seller shall not prepare, file, prosecute, abandon or maintain patent applications and patents covered by the Acquired IP in any country, unless such action is made (i) in full cooperation with the Company, and (ii) subject to the Company’s prior written consent, which shall not be unreasonable withheld.

 

		5.3.	Seller and any of its assignees and/or licensees shall not make any priority claims based on any Acquired IP, without the Company’s prior written consent.

 

		6.	Restrictive Covenants of Seller

 

		6.1.	Confidentiality.

 

During the Option Period and for seven (7) years thereafter, to the extent that the Option was exercised by the Company in accordance with the terms hereof, Seller shall not, directly or indirectly, and shall cause its respective directors, officers, employees, agents and representatives, directly or indirectly, and shall cause their respective directors, officers, employees, agents and representatives not to (i) disclose; or (ii) use for its own benefit, or for the benefit of any other person or entity, any trade secret, data or information, whether written, oral or in other form, including without limitation, technology, copyrights, know how, trade secrets, intellectual property, whether registered or not, designs, formulae, methods, experimental works or specifications, discoveries, samples, processes, techniques, developments, production, marketing and sale methods, business plans, prices and pricing methods, customer lists, supplier information, or any similar information, to the extent relating to the Acquired IP (including operations, activities, technology, plans, products or financial affairs) (the "Confidential Information"), without limitation of time; unless such Confidential Information is or becomes part of the public domain without the fault of Seller and except as required by applicable law. Seller acknowledges that the Company is in the process of preparing for an initial public offering of its shares to the public and accordingly may be required by securities laws and / or the U.S. Securities and Exchange Commission (the “SEC”) to file this Agreement, and further consents to the filing of the Agreement, if so required in the Company’s discretion. In the event that the filing of this Agreement is so required, the Parties shall agree in good faith what parts of the Agreement the Company should request the SEC to be kept confidential in light of the confidential information included in such parts on the one hand and the type of information the SEC agrees to redact from agreements such as the Agreement on the other hand.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	11	 

 

 

		6.2.	Non-Compete.

 

During the Option Period and thereafter, provided that the Option was exercised by the Company in accordance with the terms hereof, for an additional period of four (4) years as of the Closing Date, Seller or any person or entity acting on its behalf shall not (except as provided in this Agreement, Schedule 6.2, or any other Transaction Document):

 

		6.2.1.	Engage (whether as an owner, operator, manager, employee, officer, director, consultant, advisor, representative or otherwise), directly or indirectly anywhere in the world (including each and every county thereof as if individually named herein) in any business in competition with the Company; provided that ownership of less than 5% of the outstanding stock of any publicly-traded corporation shall not be deemed to be engaging solely by reason thereof in any of its business and shall not be a violation of the provisions hereof.

 

		6.2.2.	Contact, encourage or solicit any consultant, independent contractor, agent, lessor, licensor, supplier, investigator, distributor, reseller, or other business associate who is employed or engaged by the Company (other than by a general solicitation directed to the public at large through the mailing or other means of distribution of a letter, pamphlet, handbill, circular or other written or printed media), to terminate or modify his, her or its respective employment, engagement or business relationship therewith;

 

		6.2.3.	Contact, encourage or solicit any employee, who is employed or engaged by the Company (other than by a general solicitation directed to the public at large through the mailing or other means of distribution of a letter, pamphlet, handbill, circular or other written or printed media) to terminate, modify or cease to provide any services to the Company, or otherwise to be engaged by Seller or provide it any services; and

 

		6.2.4.	Contact, encourage, or solicit any customer of the Company to terminate or modify such customer’s business relationship with the Company.

 

		6.3.	Exclusivity.

 

From the date hereof and until the earlier of termination or expiration hereof and the Closing Date, Seller and its respective officers, directors, employees, agents or other representatives acting on its behalf, shall not consummate any transaction involving the sale, transfer, license, pledge or other disposition, as the case may be, of any assets comprising of the Acquired IP of the Seller (a "Restricted Transaction"), or negotiate or encourage or solicit any offers for, respond to any unsolicited offers for, or conduct any negotiations with any other person, in respect of any Restricted Transaction.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	12	 

 

 

		7.	Indemnification

 

The Company shall indemnify and hold Seller and its directors, officers, employees, agents, consultants and counsel ("Seller Indemnitees") harmless from and against any and all liabilities, damages, losses, costs or expenses (including reasonable attorneys’ and professional fees and other expenses of litigation and arbitration) resulting from a claim, suit or proceeding brought by a third party against a Seller Indemnitee, arising from or occurring as a result of (i) any practice by the Company of the licenses granted or Acquired IP herein, (ii) the development, manufacture, use, importation, marketing, sale and commercialization by the Company, its Subsidiaries or any Sublicensee of any Product, except, in each case, to the extent caused by the willful misconduct, and or gross negligence, and or violation of law of the Seller.

 

		8.	Closing

 

Within 7 business days following the Exercise Notice date or at such other time and date as may be agreed by Seller and the Company in writing (the "Closing Date"), the Closing shall take place and the Seller shall transfer to the Company appropriate assignment forms required in order to give effect to the sale and assignment of the Acquire IP to the Company, in such forms reasonably satisfactory to the Company;

 

		9.	Term and Termination

 

		9.1.	This Agreement shall commence upon the date hereof and shall remain in effect unless and until (i) the expiration of the Option Period, to the extent the Company did not exercise the Option until such date; or (ii) terminated in accordance with the terms of this Section 8 or as otherwise specifically set forth in this Agreement.

 

		9.2.	The Company shall have the right to terminate this Agremeent at any time prior to the exercise of the Option, upon a written notice to the Seller.

 

		9.3.	The failure by either party to comply with any of the obligations contained in this Agreement shall entitle the non-breaching party to give notice to have the default cured. If such default is not cured within ten (10) days after the receipt of such notice, or diligent steps are not taken to cure or if by its nature such default could not be cured within ten (10) days, the notifying party shall be entitled, without prejudice to any of its other rights conferred on it by this Agreement, and in addition to any other remedies that may be available to it by law, pursuant to this Agreement or otherwise, to terminate this Agreement.

 

		9.4.	The provisions under which this Agreement may be terminated shall be in addition to any and all other legal remedies which either party may have for the enforcement of any and all terms hereof, and do not in any way limit any other legal remedy such party may have, except as specifically specified hereunder. Termination, relinquishment or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of any party prior to such termination, relinquishment or expiration. Such termination, relinquishment or expiration shall not relieve any party from obligations which are expressly indicated to survive termination or expiration of this Agreement. All obligations which are not expressly indicated to survive termination or expiration of this Agreement shall terminate upon the termination or expiration of this Agreement.

 

		9.5.	In the event that the Company fails to comply with any of its financial obligations hereunder, and provided that Seller have sent the Company a written notice to that effect, stating the circumstances of such incompliance, and the Company did not cure such incompliance within 90 days from the of receipt by it of such notice or the Company rejected the veracity of the content of such notice, then, the Parties shall submit the said dispute to the New York International Arbitration Centre in New York, USA, pursuant to its rules and regulations.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	13	 

 

 

		10.	Miscellaneous

 

		10.1.	Non-Transferability.

 

Unless otherwise agreed in writing, during the Option Period neither party shall assign, sub-license, pledge, lien or otherwise dispose of or transfer any right under this Agreement.

 

		10.2.	Agreement Binding On Successors.

 

This Agreement shall be binding on and shall inure to the benefit of the parties hereto, and their heirs, administrators, successors, and assigns.

 

		10.3.	Relationship of the Parties.

 

This Agreement shall not be construed to make any party hereto the agent, partner, joint venture or legal representative of the other for any purpose whatsoever. Neither party hereto is granted any express or implied right or authority to assume or create any obligation or responsibility on behalf of or in the name of the other party, except as herein otherwise expressly provided.

 

		10.4.	Governing Law and Jurisdiction.

 

This Agreement shall be governed by the Laws of the State of Delaware, without regard to its rules of private international Law, and each party irrevocably submits to the non-exclusive jurisdiction of the State of New York.

 

		10.5.	Entire Agreement.

 

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, and cancels and supersedes all prior negotiations, understandings and agreements relating to the subject matter hereof.

 

		10.6.	Amendments in Writing.

 

This Agreement may not be amended except pursuant to a written instrument signed by each of the parties.

 

		10.7.	Notices.

 

All notices or other communications hereunder shall be in writing and shall be given in person, by registered mail (registered international air mail if mailed internationally), by an overnight courier service which obtains a receipt to evidence delivery, or by facsimile or e-mail transmission (provided that written confirmation of receipt is provided) with a copy by mail, addressed as set forth below:

 

	If to the Company:	Advanced Inhalation Therapies (AIT) Ltd.
	 	2 Derech Meir Weisgal,
	 	Rehovot 7632605, Israel
	 	Attention: Amir Avniel

 

	With a copy to (which shall not constitute notice):	Oded Har-Even
	 	Attorney at Law
	 	Sullivan & Worcester LLP
	 	ZAG/S&W 1633 Broadway, New York, NY 10019, USA

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	14	 

 

 

	If to Seller:	Pulmonox Technologies Corporation.
	 	#102, 10835 - 120 Street
	 	Edmonton, Alberta, Canada
	 	T5H 3P9
	 	Attention: Doug Hole

 

	With a copy to (which shall not constitute notice):	Hugh MacNaught
	 	2738 Saint Andrews Ave.
	 	North Vancouver, BC, V7N 1Z3, Canada

 

or such other address as any Party may designate to the other in accordance with the aforesaid procedure. All communications delivered in person or by courier service shall be deemed to have been given upon delivery, those given by facsimile or e-mail transmission shall be deemed given on the Business Day following transmission with confirmed answer back, and all notices and other communications sent by registered mail (or air mail if the posting is international) shall be deemed given ten (10) days after posting.

 

		10.8.	Expenses.

 

As between the Parties, each Party shall be responsible for the fees and expenses (including legal, accountants’ and financial advisors’ fees and expenses) incurred by it in connection with the preparation, negotiation, execution and delivery of this Agreement and any document required to be executed by any of such agreements, and otherwise in connection with the consummation of the transaction contemplated hereby.

 

		10.9.	Delays or Omissions; Waiver.

 

The rights of a Party may be waived by such Party only in writing and specifically; the conduct of any one of the Parties shall not be deemed a waiver of any of its rights pursuant to this Agreement or as a waiver or consent on its part as to any breach or failure to meet any of the terms of this Agreement or as an amendment hereto. A waiver by a Party in respect of a breach by the other Party of its obligations shall not be construed as a justification or excuse for a further breach of its obligations.

 

No delay or omission to exercise any right, power, or remedy accruing to any Party upon any breach or default by the other under this Agreement shall impair any such right or remedy nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein or in any similar breach or default thereafter occurring.

 

		10.10.	Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. A signed Agreement received by a Party via facsimile or electronic mail will be deemed an original, and binding upon the Party which signed it.

 

		10.11.	No Third-Party Beneficiaries.

 

Except as otherwise set forth herein, nothing in this Agreement shall create or confer upon any Person, other than the Parties or their respective successors and permitted assigns, any rights, remedies, obligations or liabilities.

 

The Parties to this Agreement have caused this Agreement to be executed and delivered as of the date above first written.

 

	
IP Acquisition Option Agreement – AIT - Pulmonox

	15	 

 

 

SELLER:

 

	/s/ Doug Hole	 

PULMONOX TECHNOLOGIES CORPORATION

 

By: Doug Hole

Title: Chairman

 

COMPANY:

 

	/s/ Amir Avniel	 

ADVANCED INHALATION THERAPIES (AIT) LTD.

 

By: Amir Avniel

Title: Chief Executive Officer

 

 

	

IP Acquisition Option Agreement – AIT - Pulmonox

	
16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00268-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00268-of-00352.parquet"}]]