Document:

zyne_Ex10_26

		
			Exhibit 10.26
		

		
			LEASE AMENDMENT
		

		
			 
		

		
			THIS LEASE AMENDMENT (“Amendment”) is entered into as of the 1st day of December, 2016, by and between PROVCO DEVON, L.L.C., a Pennsylvania limited liability company (hereinafter called the "Landlord"), and ZYNERBA PHARMACEUTICALS, INC. a Pennsylvania corporation (hereinafter referred to as "Tenant"). The following statements are a material part of the Amendment: 
		

		
			 
		

		
			WITNESSETH:
		

		
			 
		

		
			WHEREAS, Landlord and Tenant entered into a written Lease Agreement (the “Lease”) dated February 12, 2015 for that certain premises in known as Suite 300, The World Activity Building, 80 West Lancaster Avenue, Devon, PA 19333 (the “Original Premises”);
		

		
			 
		

		
			WHEREAS, Landlord and Tenant desire to amend Lease as hereinafter provided.
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the mutual agreements, covenants and representations herein contained and those contained in the Lease and in reliance thereon, the parties intending to be legally bound hereby mutually agree as follows:
		

		
			 
		

		
			1.Tenant hereby agrees to lease 3,485 additional rentable square feet (hereinafter the “Expansion Space”) as depicted in Exhibit “A”.
		

		
			 
		

		
			2. This Expansion Space shall increase the total leased premises from 3,860 rentable square feet (3,271 usable square feet) (the “Original Premises”) to 7,345 rentable square feet (6,387 usable square feet).
		

		
			 
		

		
			3. The first sentence of  Paragraph #1 of the Lease shall be deleted and in its place inserted:
		

		
			 
		

		
			Premises.  The Landlord does hereby lease to the Tenant and the Tenant does hereby lease from the Landlord, the following described premises (collectively, the “Premises”): that portion of the third floor of the building known as, Suite 300, The World Activity Building at 80 West Lancaster Avenue, Devon, Chester County, PA (the “Building”), as depicted on the plan prepared by 3GHC Architects, attached hereto as Exhibit “A” and incorporated herein (the “Space Plan”), consisting of approximately 7,345 rentable square feet (including the floor load factor of 15%) and approximately 6,387 usable square feet (excluding the floor load factor of 15%), together with the right of free and uninterrupted access in common with other tenants in the Building and their employees and invitees within the Building and the grounds adjacent thereto (collectively, the “Property”).  An exhibit to this Amendment is attached hereto, made a part hereof, and marked as Exhibit “A”,
		

		
			 
		

		
			4.A paragraph 2(a) shall be inserted after Paragraph 2  as follows: 
		

		
			 
		

		
			2 (a)   Expansion Space Term.   This term of the Expansion Space shall commence on the date Landlord tenders possession of the Expansion Space to Tenant following the completion of Landlord’s Expansion Work (as hereinafter defined)  (the “Expansion Space Commencement Date”), and shall end at the end of the Term defined in Paragraph 2 of the Lease.   Tenant shall have the right of access to the Expansion Space in a manner coordinated by Landlord to the greatest extent reasonably possible prior to the Expansion Space Commencement Date, such access to be limited to access which does not interfere with Landlord’s Expansion Work for Tenant’s construction, wiring and installation of furniture, fixtures, furnishings and equipment, provided, that all terms of the Lease shall apply to Tenant’s access, except for the payment of the Expansion Space Rent (as defined below) or additional rent,. A supplement to this Amendment is attached hereto, made a part hereof, and marked as Exhibit “B”, containing blanks for the Expansion Space Commencement Date.  The parties hereto agree that after the Expansion Space Commencement Date becomes certain, as provided herein, they will complete and execute said supplement to reflect the date.
		

		
			 
		

		
			5.A Paragraph 4(b) shall be inserted after Paragraph 4 as follows:
		

		
			 
		

		
			4 (b). Expansion Space Rent. In addition to the rent to be paid in Paragraph 4 above, the Tenant agrees to pay rent on the Expansion Space beginning on the Expansion Space Commencement Date, in the amount of $7,986.46 per month (equal to $27.50 per rentable square foot) in advance, and thereafter due on the 1st day of each month, 

		 

 

provided the Expansion Space Rent for any initial partial month period shall be apportioned on a per diem basis and shall be due five (5) days after the Expansion Space Commencement Date.  On the following dates, the Expansion Space Rent shall be increased as follows:
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						
Lease Year

					
					
						Base Rent Per
Rentable Square Foot

					
					
						Annual Base Rent

					
					
						Monthly Payment

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						June 1, 2017-May 31, 2018

					
						June 1, 2018-May 31, 2019

					
						June 1, 2019-May 31, 2020

					
					
						$28.00

					
						$28.50

					
						$29.00

					
						 

					
					
						$97,580.00

					
						$99,322.50

					
						$101,065.00

					
						 

					
					
						$8,131.67

					
						$8,276.88

					
						$8,422.08

					
						 

				

		
			 
		

		
			6.The Rent for the Original Premises shall remain as set forth in the Lease.
		

		
			 
		

		
			7.Landlord shall complete the alterations and improvements (the “Landlord’s Expansion Work”) as described in the Work Letter attached hereto as Exhibit “C” and incorporated herein and shall use its best efforts to Substantially Complete (as defined below) Landlord’s Expansion Work by February 1, 2017 (the “Target Date”).  The Landlord shall tender the Expansion Space to Tenant following the Substantial Completion of Landlord’s Expansion Work and the receipt of a Certificate of Occupancy for the Expansion Space.   Landlord’s Expansion Work shall be considered substantially complete when all improvements described on Exhibit "C" have been completed except for (i) minor items of finishing and construction that do not materially interfere with Tenant's use of the Expansion Space and (ii) items not then completed because of delays by Tenant or because of requests by Tenant for changes or additions to the plans and specifications attached hereto as Exhibit "C," (“Substantially Complete”).
		

		
			 
		

		
			8.. Any additional costs or change orders in order to complete Landlord’s Work shall be paid solely by Tenant. 
		

		
			 
		

		
			9.Paragraph 44 of the Lease shall be deleted in its entirety.
		

		
			 
		

		
			10.Exhibit “C” to the Lease, Paragraph 4 shall be changed to the following”
		

		
			 
		

		
			4. “Tenant’s Proportionate Share” shall equal the total rentable square feet in the Premises (which is 7,345) divided by the total rentable square feet in the World Activity Building (which is 54,405) at the present time.
		

		
			 
		

		
			11.Except as modified herein, the parties hereto agree that all the terms and conditions of the Lease, and Amendment shall remain in full force and effect and are hereby ratified and confirmed including that the Landlord May Confess Judgment as follows:
		

		
			 
		

		
			CONFESSION OF JUDGMENT.
		

		
			 
		

		
			THE FOLLOWING PARAGRAPHS SET FORTH WARRANTS OF AUTHORITY FOR AN ATTORNEY TO CONFESS JUDGMENT AGAINST TENANT, IN GRANTING THIS RIGHT TO CONFESS JUDGMENT AGAINST TENANT, TENANT HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND IRREVOCABLY AND, ON THE ADVICE OF THE SEPARATE COUNSEL OF TENANT, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TENANT HAD OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF PENNSYLVANIA.
		

		
			(i)   CONFESSIONS OF JUDGMENT/EJECTMENT.  TENANT HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND IRREVOCABLY AGREES THAT, IN THE EVENT THAT, AND WHEN THIS LEASE SHALL BE DETERMINED BY TERM, COVENANT, LIMITATION OR CONDITION BROKEN, AS AFORESAID, DURING THE TERM, AND ALSO WHEN AND AS SOON AS THE TERM, AS SAME MAY HAVE BEEN EXTENDED FROM TIME TO TIME, HEREBY CREATED SHALL HAVE EXPIRED OR BE TERMINATED, IT SHALL BE LAWFUL FOR ANY ATTORNEY, AS ATTORNEY FOR TENANT TO CONFESS JUDGMENT IN EJECTMENT IN ANY COMPETENT COURT AGAINST TENANT AND ALL PERSONS CLAIMING UNDER TENANT FOR THE RECOVERY BY LANDLORD OF POSSESSION OF THE LEASED PREMISES, WITHOUT 

		 

		

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ANY LIABILITY ON THE PART OF THE SAID ATTORNEY, FOR WHICH THIS LEASE SHALL BE A SUFFICIENT WARRANT; WHEREUPON, IF LANDLORD SO DESIRES, A WRIT OF POSSESSION WITH CLAUSES FOR COSTS MAY ISSUE FORTHWITH WITH OR WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER.  IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED, THE SAME SHALL BE DETERMINED AND THE POSSESSION OF THE LEASED PREMISES REMAINS IN OR IS RESTORED TO TENANT, THE LANDLORD SHALL HAVE THE RIGHT IN THE EVENT OF ANY SUBSEQUENT DEFAULT OR DEFAULTS TO CONFESS JUDGMENT IN EJECTMENT AGAINST TENANT IN THE MANNER AND FORM HEREINBEFORE SET FORTH, TO RECOVER POSSESSION OF THE LEASED PREMISES FOR SUCH SUBSEQUENT DEFAULT, NO SUCH DETERMINATION OF THIS LEASE NOR RECOVERING POSSESSION OF THE LEASED PREMISES SHALL DEPRIVE LANDLORD OF ANY REMEDIES OR ACTION AGAINST TENANT FOR RENT OR FOR DAMAGES DUE OR TO BECOME DUE FOR THE BREACH OF ANY CONDITION OR COVENANT; NOR THE RESORT TO ANY WAIVER OF THE RIGHT TO INSIST UPON THE FORFEITURE, AND TO OBTAIN POSSESSION IN THE MANNER PROVIDED HEREIN.
		

		
			(ii)   AFFIDAVIT OF DEFAULT.  In any action to confess judgment in ejectment, Landlord shall first cause to be filed in such action an affidavit made by Landlord or someone acting for Landlord setting forth the facts necessary to authorize the entry of judgment, of which facts such affidavit shall be conclusive evidence and if a true copy of the Lease (and of the truth of the copy such affidavit shall be sufficient evidence) be filed in such action, it shall not be necessary to file the original as a warrant of attorney, any rule of Court, custom or practice to the contrary notwithstanding.
		

		
			(iii)   TENANT WAIVER.  TENANT SPECIFICALLY ACKNOWLEDGES THAT TENANT HAS KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND IRREVOCABLY WAIVED CERTAIN DUE PROCESS RIGHTS TO A PREJUDGMENT HEARING RELATING SOLELY TO THE POSSESSION OF THE LEASED PREMSIES BY AGREEING TO THE TERMS OF THIS PARAGRAPH REGARDING CONFESSION OF JUDGMENT, TENANT FURTHER SPECIFICALLY AGREES THAT IN THE EVENT OF DEFAULT, LANDLORD MAY PURSUE MULTIPLE REMEDIES INCLUDING OBTAINING POSSESSION OF THE LEASED PREMISES PURSUANT TO A JUDGMENT BY CONFESSION AND ALSO OBTAINING A MONEY JUDGMENT FOR PAST DUE AND ACCELERATED AMOUNTS AND EXECUTING UPON SUCH JUDGMENT.  FURTHERMORE, TENANT SPECIFICALLY WAIVES ANY CLAIM AGAINST LANDLORD AND LANDLORD'S COUNSEL FOR VIOLATION OF TENANT'S CONSTITUTIONAL RIGHTS IN THE EVENT THAT JUDGMENT IS CONFESSED PURSUANT TO THIS PARAGRAPH.
		

		
			 
		

		
			(iv)   In view of the commercial nature of the relationship between the parties hereto and the fact that the parties hereto may have adverse interests, the parties agree that there is no expectation that Landlord shall have any duty under any provision of Chapter 56 of the Pennsylvania Decedents, Estates and Fiduciaries Code (20 Pa. C.S.A. § 5601, et seq.) (including, without limitation, 20 Pa. C.S.A. § 5601.3(a)(1)) to act in the best interest of Tenant hereunder, and it is agreed that Landlord shall have no such duty. Further, Landlord and Tenant hereby agree that all duties owed by an agent as specified under 20 Pa.C.S.A. § 5601.3(b) (as the term “agent” is used therein) are irrevocably waived.
		

		
			 
		

		
			12.This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.
		

		
			 
		

		
			13.This Amendment can be executed in any number of counterparts, each of which shall be deemed an original.
		

		
			 
		

		
			14.To the extent there are any conflicts or inconsistencies between the Lease and this Amendment, this Amendment and the rights and obligations herein shall govern. All other terms and provisions of the previous agreements between the parties shall remain unaffected by this Amendment.
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

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IN WITNESS WHEREOF, the Landlord and Tenant hereto have executed this Amendment as of the date first written above.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						LANDLORD:

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						WITNESS

					
					
						 

					
					
						PROVCO DEVON, L.L.C.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/ Joy Caldwell

					
					
						 

					
					
						By: /s/ Gerald N. Holtz

				
	
					
						 

					
					
						 

					
					
						Its: Vice President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						TENANT:

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						WITNESS

					
					
						 

					
					
						Zynerba Pharmaceuticals, Inc.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/ Suzanne M. Hanlon

					
					
						 

					
					
						By: /s/ Armando Anido

				
	
					
						 

					
					
						 

					
					
						Its: Chief Executive Officer

				

		
			 
		

		
			 
		

		
			 
		

		
			COMMONWEALTH OF PENNSYLVANIA
		

		
			COUNTY OF DELAWARE
		

		
			 
		

		
			 
		

		
			On this the 1st day of December, 2016, before me, a Notary Public in and for the Commonwealth of Pennsylvania, the undersigned officer, personally appeared Armando Anido who acknowledged himself to be the CEO of Zynerba Pharmacueticals, Inc., and who, being authorized to do so, executed the foregoing instrument for the purposes therein contained, by signing their names thereto.
		

		
			 
		

		
			IN WITNESS WHEREOF, I hereunto set my hand and official seal.
		

		
			 
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						[ SEAL ]

					
					
						/s/ Willys K. Silvers, Jr.

				
	
					
						 

					
					
						Notary Public

				

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			COMMONWEALTH OF PENNSYLVANIA
		

		
			COUNTY OF DELAWARE
		

		
			 
		

		
			 
		

		
			On this the _____ day of December, 2016, before me, a Notary Public in and for the Commonwealth of Pennsylvania, the undersigned officer, personally appeared Gerald N. Holtz who acknowledged himself to be the Vice President of Provco Devon, L.L.C. and who, being authorized to do so, executed the foregoing instrument for the purposes therein contained, by signing their names thereto.
		

		
			 
		

		
			IN WITNESS WHEREOF, I hereunto set my hand and official seal.
		

		
			 
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						[ SEAL ]

					
					
						/s/ Willys K. Silvers, Jr.

				
	
					
						 

					
					
						Notary Public

				

		
			 
		

		
			

		 

		

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EXHIBIT “A”
		

		
			 
		

		
			Expansion Space
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

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			EXHIBIT “B”
		

		
			 
		

		
			EXPANSION SPACE COMMENCEMENT AGREEMENT
		

		
			 
		

		
			This Commencement Agreement is entered into this _____ day of _________, 2017 between Provco Devon, L.L.C. (“Landlord”) and Zynerba Pharmaceuticals, Inc.  (“Tenant”)
		

		
			 
		

		
			WHEREAS, Landlord and Tenant entered into a Lease dated February 12, 2015 for the Leased Premises (the “Lease”);
		

		
			 
		

		
			WHEREAS, Landlord and Tenant amended that Lease on December ___, 2016 (the “Amendment”);
		

		
			 
		

		
			WHEREAS, pursuant to the provisions of Paragraph 4 of the Amendment, Landlord and Tenant desire to confirm the Expansion Space Commencement date as defined in the Amendment;
		

		
			 
		

		
			NOW THEREFORE, Landlord and Tenant agree and acknowledge that the information set forth below is true and accurate.
		

		
			1.The Expansion Space Commencement Date shall be the _____ day of __________, 2017.
		

		
			2.The Rent for the Expansion Space shall commence on ______________, 2017.
		

		
			IN WITNESS WHEREOF, the parties have hereunto duly executed this Commencement Agreement on the date first set forth above.
		

		
			 
		

			
					
						 

					
					
						LANDLORD:

				
	
					
						 

					
					
						 

				
	
					
						ATTEST:

					
					
						PROVCO DEVON, L.L.C.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						______________________

					
					
						By: __________________________

				
	
					
						 

					
					
						Its: Vice President

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						TENANT:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						ZYNERBA PHARMACEUTICALS, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:  _________________________

				
	
					
						 

					
					
						Its: 

				

		
			 
		

		
			
		

		
			

		 

		

			 

		

		

			 

		

 

		

		
			 
		

		
			EXHIBIT “C”
		

		
			 
		

		
			Landlord’s Work in Expansion Space
		

		
			 
		

		
			1.  Remove all wallpaper and prepare walls for new paint.
		

		
			2.  Remove existing wall sconces, white boards, hooks and signage and patch walls.
		

		
			3.  New paint throughout space to match color of Tenant’s existing space.
		

		
			4.  Tenant to indicate what walls are to receive accent color similar to Tenant’s existing space.
		

		
			5.  Provide similar LED ceiling light fixtures throughout to match lighting in Tenant’s existing space.
		

		
			6.  Provide similar, operable window blinds throughout to match Tenant’s existing space; repair or replace existing damaged blinds.
		

		
			7.  Install two (2) quad electrical outlets along open wall to accommodate future work stations.
		

		
			8.  Relocate or replace wall switch (motion sensor) in western most glass lined office and current kitchen.
		

		
			9.  Install shelf and coat rod in existing small closet in large conference room.
		

		
			10.  Provide new door lock and key(s) to designated large conference room used for files (currently Monroe Room).
		

		
			11.  Demise expansion space to deck at eastern side.
		

		
			12.  Open wall at appropriate span to connect Tenant’s existing space to expansion space.
		

		
			13.  Install new carpet tiles to match Tenant’s existing space
		

		
			14.  Reinforce conference room wall to accommodate bracket for wall mounted TV – if necessary.
		

		
			15.  Clean windows and repair or replace peeling window film. Clean and repair (where necessary) window trim.zyne_Ex10_7

		

			CONFIDENTIAL 

		

		

			EXECUTION VERSION

		

		

			 

		

		
			Exhibit 10.7
		

		
			EMPLOYMENT AGREEMENT
		

		
			THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of January 18, 2017 (the “Effective Date”) by and between Zynerba Pharmaceuticals, Inc., a Delaware corporation (the “Employer”) and Brian Rosenberger (the “Employee”).
		

		
			Recitals
		

		
			WHEREAS, the Employer desires to employ the Employee and the Employee desires to be employed by the Employer upon the terms and conditions hereinafter set forth.
		

		
			NOW, THEREFORE, in consideration of the premises and covenants set forth herein, and intending to be legally bound hereby, the parties to this Agreement hereby agree as follows:
		

			
	
			
				 1.
			Duties.  The Employer agrees that the Employee shall serve as Vice President Commercial of the Employer.  The Employee shall report to the Chief Executive Officer of the Employer. The Employee agrees to be so employed by the Employer and to devote his best efforts and substantially all of his business time to advance the interests of the Employer and to perform such executive, managerial, administrative and financial functions as are required to develop the Employer’s business and to perform such other duties that are consistent with the Employee’s position.  Nothing set forth herein shall prohibit the Employee from engaging in personal investing activities, provided such activities do not conflict with the business of the Employer and are consistent with the Employer’s internal trading policies.  The Employee shall be permitted to serve on the boards of directors of other entities whose businesses are not competitive with the Employer in accordance with Employer policy.

			
	
			
				 2.
			 Term.  This Agreement is effective as of the Effective Date, and, from and after the Effective Date, will govern the Employee’s employment by the Employer until that employment ceases in accordance with the terms of this Agreement.

			
	
			
				 3.
			Compensation.

			
	
			
				 (a)
			Salary.  The Employee shall be paid a base salary at the annual rate of $270,000 (the “Base Salary”) in accordance with the Employer’s regular payroll practices.  The Board of Directors of the Company (“Board”) or the Compensation Committee of the Board (the “Compensation Committee”) shall review the Base Salary at least annually at the end of each calendar year pursuant to the normal performance review policies for senior level executives.    

			
	
			
				 (b)
			Incentive Compensation.    

			
	
			
				 (i)
			

			
	
			
			The Employee shall participate in all short-term and long-term incentive programs, including equity compensation programs, established by the Employer for its senior level executives generally, at levels determined by the Board or the Compensation Committee.  The Employee’s incentive compensation shall be subject to the terms of the applicable plans and shall be determined based on the Employee’s individual performance and Employer 

		 

		

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			CONFIDENTIAL 

		

		

			EXECUTION VERSION

		

		

			 

		

	performance as determined by the Board or the Compensation Committee and shall be awarded, if at all, at the discretion of the Employer.  Any annual incentive compensation earned by the Employee shall be paid on or after January 1, but not later than March 15 of the fiscal year following the fiscal year for which the annual incentive compensation is earned.

			
	
			
				 (ii)
			

			
	
			
			Employee’s target annual discretionary bonus shall be thirty-five percent (35%) of Employee’s Base Salary, subject to the achievement of goals to be mutually agreed upon by the Employee and the Board or Compensation Committee.

			
	
			
				 (iii)
			

			
	
			
			Upon the Effective Date of this Agreement, Employee shall receive non-qualified stock options to purchase an aggregate of 37,500 shares of Employer common stock in accordance with the terms of the Nonqualified Stock Option Grant Agreement attached hereto as Exhibit A (the “Option”).  The Option shall have a per share exercise price equal to the closing price of Employer common stock on the date of the Grant (which shall be the Effective Date) and shall vest twenty-five percent (25%) on the first anniversary of the date of the Grant with the remainder vesting over twelve equal quarterly installments thereafter, so that the Option is one hundred percent (100%) vested on the fourth anniversary of the date of Grant. Notwithstanding any term contained herein or in any Grant Instrument to the contrary, if the Employee (A) dies while employed by or providing service to the Employer; or (B) ceases to be employed by, or to provide service to, the Employer on account of the Employee's Total Disability all vested and exercisable Grants held by Employee on such date shall remain exercisable (by Employee or by Employee’s representative) for a period of twelve (12) months following death or Total Disability (or until the expiration date of the applicable Grant, if earlier).  

			
	
			
				 (c)
			Retirement and Welfare Benefits.  The Employee shall participate in employee retirement and welfare benefit plans made available to the Employer’s senior level executives as a group or to its employees generally, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of the plans.  Nothing in this Agreement shall prevent the Employer from amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Employer deems appropriate.  

			
	
			
				 (d)
			Reimbursement of Expenses; Vacation.  The Employee shall be reimbursed for all normal items of travel, entertainment and miscellaneous business expenses reasonably incurred by the Employee on behalf of the Employer, provided that such expenses are documented and submitted in accordance with the reimbursement policies of the Employer as in 

		 

		

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			CONFIDENTIAL 

		

		

			EXECUTION VERSION

		

		

			 

		

	effect from time to time (subject to Section 9 of this Agreement).  The Employee shall be entitled to vacation and sick leave in accordance with the Employer’s applicable leave policies. 

			
	
			
				 4.
			Termination.

			
	
			
				 (a)
			Death.  This Agreement shall automatically terminate effective as of the date of the Employee’s death, in which event the Employer shall have no further obligation or liability under this Agreement except that the Employer shall pay to the Employee’s estate:  (i) any portion of the Employee’s Base Salary for the period up to the Employee’s date of death that has been earned but remains unpaid; and (ii) any benefits that have been earned, accrued and are due to the Employee under the terms of the employee benefit plans of the Employer, which benefits shall be paid in accordance with the terms of those plans.  Any equity that is unvested at the time of Employee’s death shall be treated in accordance with the applicable equity plan.

			
	
			
				 (b)
			Total Disability.  In the event of the Employee’s Total Disability (as defined below), the Employer may terminate the employment of the Employee, to the extent permitted by law, immediately upon written notice to the Employee, in which event, the Employer shall have no further obligation or liability under this Agreement except that the Employer shall pay to the Employee:  (i) any portion of the Employee’s Base Salary for the period up to the date of termination that has been earned but remains unpaid; and (ii) any benefits that have been earned, accrued and are due to the Employee under the terms of the employee benefit plans of the Employer, which benefits shall be paid in accordance with the terms of those plans.  Any equity that is unvested at the time of Employee’s Total Disability shall be treated in accordance with the applicable equity plan.

			
	
			
				 (c)
			Termination by the Employer for Cause.  Subject to any applicable right to cure under Section 4(g)(i), the Employer may terminate the Employee’s employment at any time, effective immediately, for Cause upon written notice to the Employee.  In the event that the Employer terminates the Employee pursuant to this Section 4(c), the Employer shall have no further obligation or liability under this Agreement, except that the Employer shall pay to the Employee: (i) any portion of the Employee’s Base Salary for the period up to the Termination Date that has been earned but remains unpaid; and (ii) any benefits that have been earned, accrued and are due to the Employee under the terms of the employee benefit plans of the Employer, which benefits shall be paid in accordance with the terms of those plans.

			
	
			
				 (d)
			Termination by the Employer Without Cause; Termination by the Employee for Good Reason.  The Employer may terminate the employment of the Employee for any reason other than those specified in Section 4(b) or 4(c) upon thirty (30) days written notice (or the payment of Base Salary and benefit continuation in lieu of such thirty (30) day notice) to the Employee.  In addition, the Employee may terminate his employment at any time, including, without limitation, upon written notice to the Employer for Good Reason in accordance with the requirements of Section 4(g)(vi).  

		
			If the Employee terminates his employment for Good Reason (as such term is defined herein), or the Employer terminates the Employee for any reason other than those specified in Section 4(b) or 4(c) hereof, then the Employer shall pay to the Employee: 
		

		
			

		 

		

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			CONFIDENTIAL 

		

		

			EXECUTION VERSION

		

		

			 

		

		

		
			(i) any portion of the Employee’s Base Salary for the period up to the Termination Date that has been earned but remains unpaid; 
		

		
			(ii) any benefits that have been earned, accrued and are due to the Employee under the terms of any employee benefit plans of the Employer, which benefits shall be paid in accordance with the terms of those plans; and 
		

		
			(iii) subject to the execution and nonrevocation by the Employee of a release satisfactory to the Employer (the “Release) and the Employee’s compliance with all terms and provisions of this Agreement that survive the termination of the Employee’s employment by the Employer, the Employer shall provide the Employee with the payments and benefits set forth below in (A), (B) and (C).  Notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of the Employee’s execution of the Release, directly or indirectly result in the Employee designating the calendar year of payment and to the extent payment could be made in more than one taxable year, payment shall be made in the later taxable year. Moreover, such release must be executed, if at all, no later than sixty (60) days following the date of Employee’s separation from service from Employer. The payments and benefits for such termination are limited to:
		

		
			(A) Severance in an amount equal to salary continuation of Employee’s Base Salary at the rate in effect at the time of the Employee’s termination for a period of nine (9) months following the effective date of the Release; and 
		

		
			(B) Continued medical and dental coverage at the same level in effect at the time of the Termination Date (or generally comparable coverage) for a period of nine (9) months following the Termination Date for himself and, where applicable, his spouse and dependents, at the same premium rates as may be charged from time to time for employees generally, as if the Employee had continued in employment during such nine (9) month period.  If applicable, the health care continuation period shall run concurrently with the foregoing nine (9) month period; and
		

		
			(C)Pro rata vesting of all outstanding unvested stock options and other equity-based awards held by the Employee that would have vested had the Employee remained employed for twelve months following the Termination Date.
		

		
			(D)The Exercise of all vested equity awards by Employee at the termination of employment (except on account of death or disability as indicated in Sections 4(a) and (b)) shall be governed by the terms of the applicable equity plan adopted by Employer. 
		

			
	
			
				 (e)
			Effect of a Change of Control.  Notwithstanding any provision of Section 4(d) to the contrary,  if Employee’s employment is terminated pursuant to Section 4(d) within the ninety (90) day period preceding a Change of Control or on or within twelve (12) months following a Change of Control upon such termination or resignation, Employee shall be entitled to the same payments and benefits described in Section 4(d) above, subject to execution and nonrevocation of the Release and the Employee’s compliance with all terms and provisions of this Agreement that survive the termination of the Employee’s employment by the Employer, provided that in addition to the severance and other benefits set forth in Section 4(d) (iii) (A)-

		 

		

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	(C), (i) one hundred percent (100%) of all outstanding unvested stock options and other equity-based awards held by the Employee as of the Termination Date shall become fully vested and exercisable (to the extent applicable) as of the Termination Date; (ii) all outstanding stock options and other equity-based awards held by the Employee as of the Termination Date that become vested pursuant to (i) above or that are vested as of the Termination Date shall remain exercisable (to the extent applicable) until the earlier of (x) the three (3) year anniversary of the Termination Date and (y) the expiration date of the relevant stock option or other equity-based award; and (iii) Employee shall be entitled to one hundred percent (100%) of Employee’s targeted annual bonus for the year in which the Termination Date occurs, without regard to whether the relevant Employee and Employer goals have been achieved.

		
			Notwithstanding anything set forth in this Agreement to the contrary, if any payment or benefit, including severance benefits, that the Employee would receive from the Employer in connection with a Change of Control or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be either (A) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (B) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in payments or benefits (or a cancellation of the acceleration of vesting of stock options or other equity-based awards) constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, such reduction and/or cancellation of acceleration shall occur in the order that provides the maximum economic benefit to the Employee.  In the event that acceleration of vesting of a stock option or other equity-based award is to be reduced, such acceleration of vesting also shall be canceled in the order that provides the maximum economic benefit to the Employee.  
		

		
			The Employer shall appoint a nationally recognized accounting firm with appropriate subject matter expertise to make the determinations required under this Section 4(e).
		

		
			The Employer shall bear all expenses with respect to the making of the determinations by such accounting firm required to be made under this Section 4(e), up to a maximum of $25,000.  The accounting firm engaged to make the determinations under this Section 4(e) shall provide its calculations, together with detailed supporting documentation, to the Employer and the Employee as soon as practicable after the date on which the Employee’s right to a Payment is triggered (if requested at that time by the Employer or the Employee) or such other time as requested by the Employer or the Employee.  If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Employer with an opinion reasonably acceptable to the Employee that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the accounting firm made under this Section 4(e) shall be final, binding, and conclusive upon the Employer and the Employee.
		

		
			

		 

		

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				 (f)
			Elective Termination by Employee.  Employee may voluntarily terminate his employment with the Employer without Good Reason at any time upon thirty (30) days prior written notice, which termination shall become effective upon the thirtieth (30) day after the receipt of such notice.   In the event that the Employee terminates his

			
	
			
				 (g)
			 employment pursuant to this Section 4(f), the Employer shall have no further obligation or liability for compensation or benefits, except that the Employer shall pay to the Employee:(A) any portion of the Employee's Base Salary for the period up to the Termination Date that has been earned but remains unpaid; and (B) any benefits that have been earned, accrued and are due to the Employee under the terms of the employee benefit  plans of the Employer, which benefit s shall be paid in accordance with the terms of those plans.

			
	
			
				 (h)
			Definitions.    

			
	
			
				 (i)
			

			
	
			
			“Cause” shall be deemed to exist with respect to any termination of employment by the Employer for any of the following reasons:

			
	
			
				 (1)
			

			
	
			
			the Employee’s engagement in conduct constituting breach of fiduciary duty, gross negligence or willful misconduct relating to the Employer or the performance of the Employee’s duties; 

			
	
			
				 (2)
			

			
	
			
			the Employee’s continued failure to perform the Employee’s material duties in a satisfactory manner after written notice specifying the areas in which performance is unsatisfactory and, if subject to cure, the Employee’s failure to perform within thirty (30) days after such notice;

			
	
			
				 (3)
			

			
	
			
			the Employee’s commission of any act of fraud with respect to the Employer;

			
	
			
				 (4)
			

			
	
			
			the Employee’s violation of any covenants or agreements in favor of the Employer regarding confidentiality, non-competition and/or non-solicitation; or

			
	
			
				 (5)
			

			
	
			
			the Employee’s conviction of a felony or a crime involving moral turpitude under the laws of the United States or any state or political subdivision thereof.

		
			Any notice required to be provided to the Employee under clause (2) of this definition of “Cause” shall state that failure to cure within the applicable period will result in termination for Cause.  
		

			
	
			
				 (ii)
			

			
	
			
			“Change of Control” shall mean:

			
	
			
				 (1)
			

			
	
			
			any person or entity becomes the beneficial owner, directly or indirectly, of securities of the Employer representing 

		 

		

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	greater than 50% (>50%) percent of the total voting power of all its then outstanding voting shares; 

			
	
			
				 (2)
			

			
	
			
			a merger or consolidation of the Employer in which its voting securities immediately prior to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity immediately after the merger or consolidation;

			
	
			
				 (3)
			

			
	
			
			a sale of substantially all of the assets of the Employer or a liquidation or dissolution of the Employer.

			
	
			
				 (4)
			

			
	
			
			But in no event shall “Change of Control” mean an initial public offering (“IPO”) of the Employer’s stock or any investment by any individual or entity that does not result in the right of such individual or entity to appoint a majority of the Employer’s Board.

			
	
			
				 (iii)
			

			
	
			
			“Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

			
	
			
				 (iv)
			

			
	
			
			“Fair Market Value” means, for so long as the common stock of Employer is not publicly  traded or, if publicly traded, is not subject to reported transactions requirements, the Fair Market Value per share shall be as determined reasonably and in good faith by the Board or the Compensation Committee through any reasonable valuation method authorized under section 409A of the Code.

			
	
			
				 (v)
			

			
	
			
			"Fully Diluted" means, the number of outstanding shares of common stock as of any date, equal to the sum of (i) the common shares outstanding on such date plus (ii) the maximum number of common shares issuable upon the conversion of the preferred shares outstanding on such date plus (iii) the maximum number of common shares issuable upon the exercise, conversion or exchange of all outstanding options, warrants and other securities exercisable or exchangeable for, or convertible into, common shares. 

			
	
			
				 (vi)
			

			
	
			
			“Good Reason” shall be deemed to exist with respect to any termination of employment by the Employee for any of the following reasons: 

			
	
			
				 (1)
			

			
	
			
			a material reduction in the Employee’s duties and responsibilities, which for purposes of this Agreement means the assignment to Employee of any duties or responsibilities which are materially inconsistent with or 

		 

		

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			EXECUTION VERSION

		

		

			 

		

	adverse to the Employee’s then current duties, responsibilities, positions and/or titles with the Employer; 

			
	
			
				 (2)
			

			
	
			
			a material reduction of the Employee’s then-current base salary or target bonus opportunity;

			
	
			
				 (3)
			

			
	
			
			the requirement that the Employee regularly report to work at a location that is more than fifty (50) miles from the location of the Employee’s employment as of the Effective Date; 

		
			(4)a material breach of this Agreement by the Employer; or
		

		
			(5)in the event of the assignment of this Agreement to a third party, the failure of the assignee or successor entity to agree to be bound to the terms of this Agreement;
		

		
			(6)the consummation of a Change of Control of the Employer, as such term is defined herein.
		

		
			provided,  however, that except with respect to Section 4(g)(vi)(6) above, for any of the foregoing to constitute Good Reason, the Employee must provide written notification of his intention to resign within ninety (90) days after the Employee first knows or first has reason to know of the occurrence of any such event or condition, and, the Employer must have thirty (30) business days from the date of receipt of such notice to effect a cure of the event or condition constituting Good Reason.  If the Employer fails to effect a cure of the event or condition constituting Good Reason, the Employee must actually resign from employment within thirty (30) days following the expiration of the foregoing cure period.  In the event of a cure of such event or condition constituting Good Reason by the Employer, such event or condition shall no longer constitute Good Reason. 
		

			
	
			
				 (vii)
			

			
	
			
			“Grant” shall mean a stock option, stock appreciation right, stock award, stock unit or other stock based award granted to Employee.

			
	
			
				 (viii)
			

			
	
			
			“Grant Instrument shall mean the written agreement that sets forth the terms and conditions of a Grant, including any amendments thereto.

			
	
			
				 (ix)
			

			
	
			
			“Termination Date” shall mean the date on which the Employee’s employment with the Employer terminates in accordance with the applicable provisions of this Agreement.

		
			

		 

		

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				 (x)
			

			
	
			
			“Total Disability,” shall mean an illness, incapacity or a mental or physical condition that renders the Employee unable, despite the provision, if requested, of a reasonable accommodation as that term is defined in the Americans with Disabilities Act, to perform the essential functions of his employment position for a continuous period of six (6) months or more.

			
	
			
				 (i)
			No Mitigation.  The Employee shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by the Employee as the result of employment by another employer or self-employment, by retirement benefits, by offset against any amounts (other than loans or advances to the Employee by the Employer) claimed to be owed by the Employee to the Employer, or otherwise, provided, however, that if Employee becomes eligible for a group health insurance plan during the Severance period, then Employee shall notify Employer of same and Employer shall be relieved of the obligation to make any premium contributions to the continuation of Employee’s health insurance coverage.

			
	
			
				 5.
			Non-Disclosure; Non-Competition and Prior Agreements.

			
	
			
				 (a)
			Non-Disclosure.  The Employee acknowledges that in the course of performing services for the Employer, the Employee will obtain knowledge of the Employer’s business plans, products, processes, software, know-how, trade secrets, formulas, methods, models, prototypes, discoveries, inventions, improvements, disclosures, names and positions of employees and/or other proprietary and/or confidential information (collectively the “Confidential Information”).  The Employee agrees to keep the Confidential Information secret and confidential and not to publish, disclose or divulge to any other party, and the Employee agrees not to use any of the Confidential Information for the Employee’s own benefit or to the detriment of the Employer without the prior written consent of the Employer, whether or not such Confidential Information was discovered or developed by the Employee.  The Employee also agrees not to divulge, publish or use any proprietary and/or confidential information of others that the Employer is obligated to maintain in confidence.

			
	
			
				 (b)
			Non-Competition.  The Employee agrees that, during  his employment by the Employer hereunder and for an additional period of nine (9) months after the termination of the Employee’s employment hereunder for any reason, neither the Employee nor any corporation or other entity in which the Employee may be interested as a partner, trustee, director, officer, employee, agent, shareholder, lender of money or guarantor, or for which he performs services in any capacity (including as a consultant or independent contractor) shall at any time during such period be engaged, directly or indirectly, in any Competitive Business (as that term is hereinafter defined).  The Employee shall not solicit or, if the Employee owns or has the right to acquire more than five percent (5%) of the fully-diluted equity of the employing entity or its affiliates, hire, directly or indirectly, any person that was employed by Employer during the nine (9) month period immediately preceding the Employee’s termination of employment with the Employer.  For purposes of this Section 5(b) the term “Competitive Business” shall mean any job, role, or specific responsibilities within a firm, company, or business organization that competes directly with the Employer’s business as in effect at the time of the Employee’s termination of 

		 

		

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	employment with the Employer or in a business area planned in writing by the Employer before the Termination Date for entry within nine (9) months of the Termination Date at the time of the Employee’s termination of employment with the Employer.  The foregoing prohibition shall not prevent any employment or engagement of the Employee, after termination of employment with the Employer, by any firm, company, or business organization engaged in a Competitive Business as long as the activities of any such employment or engagement, in any capacity, do not involve work on matters related to any business, product or service being developed, manufactured, marketed, distributed or planned in writing by the Employer at the time of the Employee’s termination of employment with the Employer.    The Employee’s ownership of no more than one percent (1%) of the outstanding voting stock of a publicly traded company shall not constitute a violation of this Section 5(b).  The Employee is entering into this covenant not to compete in consideration of the agreements of the Employer in this Agreement, including but not limited to, the agreement of the Employer to provide the severance and other benefits to the Employee upon a termination of employment pursuant to Section 4(d) hereof and the agreement of the Employer to provide the severance and other benefits upon a Change of Control in accordance with the terms of Section 4(e).

			
	
			
				 (c)
			Prior Agreements.  The Employee represents and warrants to the Employer that there are no restrictions, agreements or understandings whatsoever to which the Employee is a party that would prevent or make unlawful the Employee’s execution of this Agreement or the Employee’s employment hereunder, is or would be inconsistent or in conflict with this Agreement or the Employee’s employment hereunder, or would prevent, limit or impair in any way the performance by the Employee of the obligations hereunder.

			
	
			
				 6.
			Inventions and Discoveries.

			
	
			
				 (a)
			Disclosure.  The Employee shall promptly and fully disclose to the Employer, with all necessary detail, all developments, know-how, discoveries, inventions, improvements, concepts, ideas, formulae, processes and methods (whether copyrightable, patentable or otherwise) made, received, conceived, acquired or written by the Employee (whether or not at the request or upon the suggestion of the Employer, solely or jointly with others), during the period of  his employment with the Employer that (i) result from, arise out of, or relate to any work, assignment or task performed by the Employee on behalf of the Employer, whether undertaken voluntarily or assigned to the Employee within the scope of  his responsibilities to the Employer, or (ii) were developed using the Employer’s facilities or other resources or in Employer time, or (iii) result from the Employee’s use or knowledge of the Employer’s Confidential Information, or (iv) relate to the Employer’s business or any of the products or services being developed, manufactured or sold by the Employer or that may be used in relation therewith (collectively referred to as “Inventions”).  The Employee hereby acknowledges that all original works of authorship that are made by the Employee (solely or jointly with others) within the above terms and that are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.  The Employee understands and hereby agrees that the decision whether or not to commercialize or market any Invention developed by the Employee solely or jointly with others is within the Employer’s sole discretion and for the Employer’s sole benefit and that no royalty shall be due to the Employee as a result of the Employer’s efforts to commercialize or market any such Invention. 

		
			

		 

		

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				 (b)
			Assignment and Transfer.  The Employee agrees to assign and transfer to the Employer all of the Employee’s right, title and interest in and to the Inventions, and the Employee further agrees to deliver to the Employer any and all drawings, notes, specifications and data relating to the Inventions, and to sign, acknowledge and deliver all such further papers, including applications for and assignments of copyrights and patents, and all renewals thereof, as may be necessary to obtain copyrights and patents for any Inventions in any and all countries and to vest title thereto in the Employer and its successors and assigns and to otherwise protect the Employer’s interests therein.  The Employee shall not charge the Employer for time spent in complying with these obligations.  If the Employer is unable because of the Employee’s mental or physical incapacity or for any other reason to secure the Employee’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Employer as above, then the Employee hereby irrevocably designates and appoints the Employer and its duly authorized officers and agents as the Employee’s agent and attorney in fact, to act for and in the Employee’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by the Employee. 

			
	
			
				 (c)
			Records.  The Employee agrees that in connection with any research, development or other services performed for the Employer, the Employee will maintain careful, adequate and contemporaneous written records of all Inventions, which records shall be the property of the Employer.

			
	
			
				 7.
			Employer Documentation.  The Employee shall hold in a fiduciary capacity for the benefit of the Employer all documentation, disks, programs, data, records, drawings, manuals, reports, sketches, blueprints, letters, notes, notebooks and all other writings, electronic data, graphics and tangible information and materials of a secret, confidential or proprietary information nature relating to the Employer or the Employer’s business that are in the possession or under the control of the Employee.

			
	
			
				 8.
			Injunctive Relief.  The Employee acknowledges that his compliance with the agreements in Sections 5, 6, and 7 hereof is necessary to protect the good will and other proprietary interests of the Employer and that he is one of the principal executives of the Employer and conversant with its affairs, its trade secrets and other proprietary information.  The Employee acknowledges that a breach of any of his agreements in Sections 5, 6 and 7 hereof will result in irreparable and continuing damage to the Employer for which there will be no adequate remedy at law; and the Employee agrees that in the event of any breach of the aforesaid agreements, the Employer and its successors and assigns shall be entitled to injunctive relief and to such other and further relief as may be proper.

			
	
			
				 9.
			Application of Section 409A of the Internal Revenue Code.  

			
	
			
				 (a)
			Compliance.  This Agreement shall be interpreted to avoid any penalty sanctions under section 409A of the Code.  If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed.  For purposes of section 409A of the Code, all payments to be 

		 

		

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			EXECUTION VERSION

		

		

			 

		

	made upon a termination of employment under this Agreement may only be made upon a “separation from service” under section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment, and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments.  In no event shall the Employee, directly or indirectly, designate the calendar year of payment.  All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Employee’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. 

			
	
			
				 (b)
			Payment Delay.   Notwithstanding any provision in this Agreement to the contrary, if at the time of the Employee’s termination of employment with the Employer, the Employer has securities which are publicly-traded on an established securities market and the Employee is a “specified employee” (as defined in section 409A of the Code) and it is necessary to postpone the commencement of any severance payments otherwise payable pursuant to this Agreement as a result of such termination of employment in order to prevent any accelerated or additional tax under section 409A of the Code, then the Employer shall postpone the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Employee) that are not otherwise paid within the short-term deferral exception under section 409A of the Code and are in excess of the lesser of two (2) times (i) the Employee’s then-annual compensation or (ii) the limit on compensation then set forth in section 401(a)(17) of the Code, until the first payroll date that occurs after the date that is six (6) months following the Employee’s “separation from service” with the Employer (as defined under section 409A of the Code).  If any payments are postponed due to such requirements, such postponed amounts shall be paid in a lump sum to the Employee, and any installment payments due to the Employee shall recommence, on the first payroll date that occurs after the date that is six (6) months following the Employee’s “separation from service” with the Employer.  If the Employee dies during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of the Employee’s estate within sixty (60) days after the date of the Employee’s death.

			
	
			
				 10.
			Supersedes Other Agreements.  This Agreement supersedes and is in lieu of any and all other employment arrangements between the Employee and the Employer.

			
	
			
				 11.
			Amendments.  Any amendment to this Agreement shall be made in writing and signed by the parties hereto.

			
	
			
				 12.
			Enforceability.  If any provision of this Agreement shall be invalid or unenforceable, in whole or in part, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law as if such provision had been 

		 

		

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	originally incorporated herein as so modified or restricted or as if such provision had not been originally incorporated herein, as the case may be.

			
	
			
				 13.
			Governing Law.  This Agreement shall be governed in all respects by the laws of the Commonwealth of Pennsylvania without regard to the conflicts of laws principles of any jurisdiction.  Any legal proceeding arising out of or relating to this Agreement shall be instituted in the Pennsylvania state or Federal courts.  Employee hereby consents to the personal and exclusive jurisdiction of such court and hereby waives any objection that the Employee may have to the laying of venue of any such proceeding and any claim or defense of inconvenient forum. 

			
	
			
				 14.
			Jury Waiver. The Employer and Employee hereby waive trial by jury for all actions arising from or relating to any breaches or claimed breaches of this Agreement, or any circumstance or matter arising from or relating to Employee’s employment by Employer.

			
	
			
				 15.
			Assignment.

			
	
			
				 (a)
			By the Employer.  The rights and obligations of the Employer under this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Employer.  This Agreement may be assigned by the Employer without the consent of the Employee.  The Employer shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Unless expressly provided otherwise, “Employer” as used herein shall mean the Employer as defined in this Agreement and any successor to its business and/or assets as aforesaid.

			
	
			
				 (b)
			By the Employee.  This Agreement and the obligations created hereunder may not be assigned by the Employee, but all rights of the Employee hereunder shall inure to the benefit of and be enforceable by his heirs, devisees, legatees, executors, administrators and personal representatives.

			
	
			
				 16.
			Notices.  All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given when mailed by certified mail, return receipt requested, or delivered by a national overnight delivery service addressed to the intended recipient as follows:

		
			If to the Employer:
		

		
			Zynerba Pharmaceuticals, Inc.
		

		
			80 W. Lancaster Avenue, Suite 300
		

		
			Devon, PA  19333
		

		
			Attention:  General Counsel
		

		
			 
		

		
			If to the Employee:
		

		
			Brian K. Rosenberger
		

		
			1041 Haverhill Road
		

		
			
		

		
			

		 

		

			13

		

 

		

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			Chester Springs, PA  19425
		

		
			 
		

		
			 
		

		
			Any party may from time to time change its address for the purpose of notices to that party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the party sought to be charged with its contents.
		

			
	
			
				 17.
			Waivers.  No claim or right arising out of a breach or default under this Agreement shall be discharged in whole or in part by a waiver of that claim or right unless the waiver is supported by consideration and is in writing and executed by the aggrieved party hereto or his or its duly authorized agent.  A waiver by any party hereto of a breach or default by the other party hereto of any provision of this Agreement shall not be deemed a waiver of future compliance therewith, and such provisions shall remain in full force and effect.

			
	
			
				 18.
			Indemnification.  Employer agrees to indemnify, defend and hold harmless, Employee to the maximum extent permitted by law and under the by-laws and articles of incorporation of the Employer, as well as to cover Employee under any indemnification agreements or arrangements maintained by the Employer for its directors and officers from time to time, subject to the terms and conditions thereof. Employer specifically acknowledges and agrees the obligations set forth herein include but are not limited to any and all claims, demands, investigations, suits or actions for any and all liabilities, losses, damages, penalties, costs or expenses of every kind whatsoever (including but not limited to court costs, legal fees, awards or settlements) arising out of, in connection with or related to any negligent or intentional act, error or omission of Employer, any predecessor entity of Employer, or any of their respective current or former directors, officers, employees, representatives or agents prior to the Effective Date of this Agreement.

			
	
			
				 19.
			Survival of Covenants.  The provisions of Sections 5 through 18 hereof shall survive the termination of this Agreement.  Furthermore, any other provision of this Agreement that, by its terms, is intended to continue beyond the termination of the Employee’s employment shall continue in effect thereafter.  

		
			[signature page follows]

		 

		

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IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date first above written.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						ZYNERBA PHARMACEUTICALS, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 /s/ Armando Anido

				
	
					
						 

					
					
						 

					
					
						  Armando Anido

				
	
					
						 

					
					
						 

					
					
						  Chief Executive Officer

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						EMPLOYEE

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 /s/ Brian Rosenberger

				
	
					
						 

					
					
						Brian Rosenberger

				

		
			

		 

		

			15

		

 

		

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EXHIBIT A
		

		
			NON-QUALIFIED STOCK OPTION AGREEMENT
		

		
			 
		

		
			 
		

		
			 
		

		 

		

			16

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