Document:

reph-ex104_326.htm

Exhibit 10.4

Execution Version

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

NCD Meloxicam IV (30mg/ml)

PRODUCT AGREEMENT

(Includes Schedules A to D)

PRODUCT AGREEMENT

This Product Agreement (this “Product Agreement”) is issued under the Master Manufacturing Services Agreement dated July 14th, 2017 between Patheon UK Limited and Recro Ireland Limited (the “Master Agreement”), and is entered into July 14th, 2017 (the “Effective Date”), between Patheon UK Limited, a corporation existing under the laws of England, having a principal place of business at Kingfisher Drive, Covingham, Swindon, SN3 5BZ, England (“Patheon”) and Recro Ireland Limited a private limited company incorporated in Ireland with registered number 562027, having its registered office at 25/28 North Wall, Dublin 1, (“Client”).

The terms and conditions of the Master Agreement are incorporated herein except to the extent this Product Agreement expressly references the specific provision in the Master Agreement to be modified by this Product Agreement.  All capitalized terms that are used but not defined in this Product Agreement will have the respective meanings given to them in the Master Agreement.

The Schedules to this Product Agreement are incorporated into and will be construed in accordance with the terms of this Product Agreement.

	
 
	
1.
	
Product List and Specifications (See Schedule A attached hereto)

	
 
	
2.
	
Minimum Order Quantity, Annual Volume, and Price (See Schedule B attached hereto)

	
 
	
3.
	
Annual Stability Testing and Validation Activities (if applicable) (See Schedule C attached hereto) 

	
 
	
4.
	
Active Materials, Active Materials Credit Value, and Maximum Credit Value (See Schedule D attached hereto)

	
 
	
5.
	
Yearly Forecasted Volume: (insert for sterile products if applicable under Section 4.2.1 of the Master Agreement) 

	
Product
	
[***]

	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

	
NCD Meloxicam IV (30mg/ml)
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

 

	
 
	
6.
	
Territory: USA and EU 

	
 
	
7.
	
Manufacturing Site: Patheon Italia Monza Site Viale GB Stucchi 110, I-20900 Monza Italy.

 

		
	
 
	
 

	
July 14, 2017
	
Product Agreement

	
Confidential
	
Page 1 of 13

 

 

	
 
	
8.
	
Inflation Index: pursuant to Section 4.2(a) of the Master Agreement, the inflation index is the [***]

	
 
	
9.
	
Currency:  Euros

	
 
	
10.
	
Initial Set Exchange Rate: Not Applicable

	
 
	
11.
	
Initial Product Term: (per Section 8.1 of the Master Agreement) from the Effective Date until December 31, 2020 

	
 
	
12.
	
Notices: (Section 13.9 of the Master Agreement)

	
 
	
13.
	
Other Modifications to the Master Agreement: 

[***] 

[***].  [***]

                                                      

IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Product Agreement as of the Effective Date set forth above.

 

		
	
PATHEON UK LIMITED

	
 

	
By:
	
/s/ Andrew Robinson

	
Name:
	
Andrew Robinson

	
Title:
	
Director

	
Date:
	
17 July 2017

 

		
	
RECRO IRELAND LIMITED

	
 

	
By:
	
/s/ Brian Harrison

	
Name:
	
Brian Harrison

	
Title:
	
Director

	
Date:
	
14-July 2017

 

 

		
	
 
	
 

	
July 14, 2017
	
Product Agreement

	
Confidential
	
Page 2 of 13

 

 

SCHEDULE A

PRODUCT LIST AND SPECIFICATIONS

Product List

NCD Meloxicam IV (30mg/ml)

Specifications

Prior to the start of commercial manufacturing of Product under this Agreement Client will give Patheon the copies of originally executed copies of the Specifications as approved by the applicable Regulatory Authority.  If the Specifications received are subsequently amended, then Client will give Patheon copies of the revised executed copies of the revised Specifications.  Upon acceptance of the revised Specifications, Patheon will give Client a signed and dated receipt indicating Patheon’s acceptance of the revised Specifications.

 

		
	
 
	
 

	
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SCHEDULE B

MINIMUM ORDER QUANTITY (MOQ), ANNUAL VOLUME, AND PRICE

Process Validation Batches

	
Product
	
[***]
	
[***]
	
[***]

	
[***]

	
Meloxicam sterile liquid vials
	
[***]
	
[***]
	
[***]

* Excludes the cost of the secondary packaging conversion price which will be charged at the commercial supply price as presented in the table on Page 5.

Bulk Supply

	
Product
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

	
[***]
	
[***]
	
[***]

	
NCD Meloxicam IV (30mg/ml)
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

	
NCD Meloxicam IV (30mg/ml)
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

 

Note: [***]

		
	
 
	
 

	
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Packaging Supply Pricing Only

 

	
Product
	
[***]
	
[***]
	
[***]
	
[***]

	
[***]
	
[***]
	
[***]

	
NCD Meloxicam IV (30mg/ml)
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

	
NCD Meloxicam IV (30mg/ml)
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

	
NCD Meloxicam IV (30mg/ml)
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

	
NCD Meloxicam IV (30mg/ml)
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

 

* [***]. 

** [***].[***].[***].[***] 

Annual Volumes

	
Product
	
[***]

	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

	
NCD Meloxicam IV (30mg/ml)
	
[***]
	
[***]
	
[***]
	
[***]
	
[***]

 

 

		
	
 
	
 

	
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Product Agreement

	
Confidential
	
Page 5 of 13

 

 

Manufacturing Assumptions:

 

API – API (NCD Meloxicam Bulk Intermediate) will be stored under refrigerated conditions (2-8°C). In the case of capacity constraints Patheon may utilize a GMP approved sub-contract storage facility. In such a case, advance notification will be given to the client if the use of such storage will be necessary. Consideration will also be made of temperature controls, and shipping validation.

Batch size –Recro has confirmed that the maximum theoretical bulk batch size will be [***].

Manufacturing campaign – PV batches may not be produced in campaign. The Parties will meet and agree the appropriate protocols in this regard before the applicable manufacturing slots are reserved.

Product sterilization, filling process, and sealing – An aseptic filtration, filling and sealing process will be performed. Sterile filtration (0.22μm) of the solution will be performed prior to filling vials. Empty vials will be washed and depyrogenated using an in line washing and tunnel machine prior to filling vials. 

Hold times – The process is carried out at room temperature. Only standard light protection is employed and no special precautions are required during formulation, filling, and inspection. During storage, brite stock will be wrapped in opaque black plastic.  

Cleaning – Full cleaning occurs after each batch.

Visual inspection – 100% vials visual inspection is carried out by semiautomatic means.

Finished product storage – Finished product will be stored under controlled room temperature conditions – USP (15-30°C). 

 

		
	
 
	
 

	
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Packaging Assumptions:

 

Primary packaging components:

		
	
Component
	
Specification

	
Vial
	
[***]

	
Stopper
	
[***]

	
Seal
	
[***]

 

Secondary packaging – To be definitively established- see above “Packaging Supply”

	
 
	
•
	
Secondary packaging – A single vial will be labelled and packaged in a pre-printed single carton with a patient information leaflet. Single cartons, or bundles of 10 cartons (bundled utilising cellophane wrap), will then be packed into tertiary containers and then into a bulk shipper.

	
 
	
•
	
Secondary packaging campaign - [***]. Packaging orders must be placed in multiples of [***]. A whole bulk batch will be packed off into a single Stock Keeping Unit (SKU). PV batches will not be packaged in campaign.

To be definitively established- see above “Packaging Supply”

Tertiary packaging – According to Patheon’s standard shipment preparations.

Testing Assumptions:

 

Patheon will only perform API ID testing.

QC test methods must be fully validated and robust at the time of manufacture.

	
Testing Requirements

	
In-Process Controls
	
Finished Product Testing

	
[***]
	
[***]

	
[***]
	
 

 

 

 

		
	
 
	
 

	
July 14, 2017
	
Product Agreement

	
Confidential
	
Page 7 of 13

 

 

Supply Chain Assumptions:

 

Patheon will procure components (excluding the preprinted cartons and inserts which will be furnished by Client free of charge) and excipients for the manufacture of Meloxicam sterile liquid vials from Patheon qualified suppliers. Should Client require Patheon to source any materials from specified suppliers, then these suppliers will remain under the quality audit control of Client unless an agreement is reached for Patheon to take on this responsibility.

Components and excipients will be supplied by Patheon in accordance with the specifications agreed. Patheon will issue formal Patheon specifications for each material. 

Each lot of incoming components and excipients will be sampled and tested according to the agreed specifications. 

The API will be provided free issue/released to Patheon by Client or its qualified supplier. 

The API and all excipients used for the manufacture will be GMP grade and from TSE/BSE certified sources.

Finished product will be made available at Patheon’s proposed manufacturing site (supplied EXW according to Incoterms® 2010).

 

 

 

		
	
 
	
 

	
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Product Agreement

	
Confidential
	
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The following cost items are included in the Price for the Products: 

[***]

		
	
 
	
 

	
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Product Agreement

	
Confidential
	
Page 9 of 13

 

 

The following cost items are not included in the Price for the Products:

[***]

 

 

		
	
 
	
 

	
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Product Agreement

	
Confidential
	
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SCHEDULE C

ANNUAL STABILITY TESTING [and VALIDATION ACTIVITIES (if applicable)] 

If applicable Patheon and Client will agree in writing on any stability testing to be performed by Patheon on the Products.  This agreement will specify the commercial and Product stability protocols applicable to the stability testing and the fees payable by Client for this testing including the Price for the Product withdrawn for the stability testing. At the time of signing it is not envisaged that any stability testing will be performed by Patheon.  Patheon will ensure that the required number of samples are taken for Recro’s designated stability program. The samples will be made available at Patheon’s manufacturing site (EXW according to Incoterms® 2010). 

 

 

 

		
	
 
	
 

	
July 14, 2017
	
Product Agreement

	
Confidential
	
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SCHEDULE D

ACTIVE MATERIALS

 

		
	
Active Materials
	
Supplier

	
NCD Meloxicam Bulk Intermediate
	
Alkermes

 

ACTIVE MATERIALS CREDIT VALUE

The Active Materials Credit Value will be as follows:

			
	
PRODUCT
	
ACTIVE MATERIALS
	
ACTIVE MATERIALS

CREDIT VALUE

	
NCD Meloxicam IV (30mg/ml)
	
Meloxicam
	
[***]

 

MAXIMUM CREDIT VALUE

Patheon's liability for Active Materials calculated in accordance with Section 2.2 of the Master Agreement for any Product in a Year will not exceed, in the aggregate, the maximum credit value set forth below:

		
	
PRODUCT
	
MAXIMUM CREDIT VALUE

	
NCD Meloxicam IV (30mg/ml)
	
[***]

 

 

 

		
	
 
	
 

	
July 14, 2017
	
Product Agreement

	
Confidential
	
Page 12 of 13

 

 

SCHEDULE E

QUALITY AGREEMENT

Either a copy, or a reference to the relevant Quality Agreement between the Client and Patheon Italy will be appended to this schedule once completed. For the avoidance of doubt, no product may be released for commercial sale until the Quality Agreement is signed by both parties.

 

 

 

[End of Product Agreement]

 

		
	
 
	
 

	
July 14, 2017
	
Product Agreement

	
Confidential
	
Page 13 of 13Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement, dated as of August 1, 2017, is made and entered into between Brian M. Culley, an individual having an address at 2153 Whisper Wind Ln., Encinitas, CA 92024 (the “Executive”) and Artemis Therapeutics Inc., a Delaware corporation (the “Company”).

W I T N E S S E T H:

 

WHEREAS, the Company desires to employ the Executive; and

 

WHEREAS, the Executive is willing to render services to the Company, on the terms and subject to the conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants, agreements and promises hereinafter set forth, the parties hereto covenant and agree as follows:

1.             EMPLOYMENT.  The Company will employ the Executive as its Interim Chief Executive Officer (“CEO”) and the Executive hereby accepts such employment, upon the terms and subject to the conditions hereinafter set forth, commencing August 1, 2017, (the “Start Date”), and continuing until terminated pursuant to Section 4 hereof. The term “Employment Period” as used herein means the entire period during which the Executive continues to be employed by the Company hereunder.

 

2.             DUTIES.

 

(a)          Obligations of Executive.  The Executive will report to the Board of Directors of the Company (the “Board”). The Executive will perform and discharge diligently and faithfully the duties as may be assigned to him from time to time by the Board.

 

(b)          Scope of Employment. The Executive will devote the required business time, exercising his full attention, skills and energies to the performance of his duties hereunder and to the promotion of the business of the Company. The parties anticipate the Executive’s hourly commitment to be highly variable and dependent upon the specific urgencies or activities of the Company. Therefore, the Executive’s average hourly commitment will not amount to full-time employment per month for the coming six (6) months. However, there will be surge periods from time to time, and travels will be required. Consistent with such duties, the Executive hereby agrees not to be employed, become an officer of, or be engaged in, any other business activity during the Employment Period without the Company’s written approval which will not be unreasonably withheld; provided, however, that this will not be construed as preventing him from investing his personal assets in businesses which do not compete with the Company.  Notwithstanding the foregoing, and contingent upon it not resulting in a conflict with Company’s interests, or with the Executive’s commitment above to devote his full attention, skills and energies to the performance of his duties for the Company, the Executive’s engagement with Global Blood Therapeutics, Inc., according to a consulting agreement between it and the Executive dated March 21, 2017, is hereby approved by the Company.

 

(c)          Restrictive Covenants.  The Executive is delivering to the Company simultaneously with his execution of this Agreement a signed copy of the Executive Confidentiality and Intellectual Property Rights Agreement annexed hereto as Exhibit A (the “Restrictive Covenants”).

 

3.             COMPENSATION AND BENEFITS.

 

(a)          Salary.  For services rendered by the Executive hereunder, the Company will pay Executive a gross base salary (the “Salary”) at the annual rate of One Hundred and Fifty Thousand US Dollars (US$150,000), less payroll deductions and withholdings as required by applicable law.  Notwithstanding the foregoing, if, by December 31, 2017 (the “Investment Date”), the Company receives capital investments in an aggregate amount that exceeds two million dollars (US$2,000,000.00) (the “Capital Raise”), the Salary will increase to an annual rate of Three Hundred Thousand US Dollars (US$300,000.00), less payroll deductions and withholdings as required by applicable law.  The Salary will be payable in accordance with the Company’s normal payroll practices.

 

(b)          Bonus.

 

(i) The Executive shall be entitled to receive an annual bonus (a “Performance Bonus”) of up to 50% of Executive’s Salary, up to a maximum of $120,000, to be paid no later than February 15th of the following year. The Board shall meet no later than January 31st, 2018 and thereafter, December 31st of each year, to determine the Executive’s percent performance toward the Board-approved corporate goals (the “Corporate Goals”) outlined in Appendix A and as amended on an annual basis, at the sole discretion of the Board.

 

(ii) In addition, in the event of a successful Capital Raise in advance of the Investment Date, the Executive shall be entitled to receive, within ten (10) business days of the closing of the financing, a bonus of Twelve Thousand and five hundred US Dollars (US$12,500.00) for each month the Executive was employed with the Company prior to the Investment Date, including pro-rata for any partial months, in which the Executive was employed with the Company prior to the Investment Date. The parties hereby confirm and agree that the date of closing of financing shall be considered the date of receipt of such Capital Raise by the Company.

 

(c)          Benefits.  Beginning on the Start Date and until the end of the Employment Period, the Company will provide the Executive with health and dental group coverage and any other employee benefits, including life insurance and pension benefits, made generally available to salaried employees of the Company from time to time, in accordance with the respective terms of such plans and programs.  Such benefits may be modified at any time in the sole and absolute discretion of the Company. Executive will be responsible for any other allocation or payments as may be required by the health or dental insurance plans. 

 

(d)          Equity Compensation.

 

(i) In consideration of the full and complete performance of the Services and subject to the approval of the Company's Board of Directors, Executive shall be granted non-statutory stock option to purchase 242,640 shares of the Company's Common Stock (the "Options"). The Options shall be subject to a 48-month vesting period where 1/48 of the Options shall vest on a monthly basis starting from the first (1st) day of the month following the date of issuance of the Options (the “Vesting Period”), so that following each month commencing the vesting commencement date as specified above 5,055 Options shall become fully vested, in each case – provided that the Agreement is in effect at such time.

 

(ii) Subject to the approval of the Company's Board of Directors, the Executive may be entitled to an additional, one-time, fully-vested non-statutory stock option grant to purchase up to 48,528 shares of the Company’s Common Stock (“the Bonus Options”), considering Executive’s percent performance toward the Corporate Goals shown in Appendix A, as well as other relevant considerations as will be determined by the Board at its sole discretion.

 

 (iii) Subject to Executive completing at least six (6) month of employment with the Company, and if, within the period commencing 60 days prior to a Change of Control and ending on the first anniversary of the Change of Control, Executive’s services to the Company are terminated by the Company without Cause, then the vesting of the Options under 3(d) shall be partially accelerated such that 50% of unvested Options shall constitute vested Options. Subject to Executive completing at least six (6) month of employment with the Company, and if, within the period commencing 60 days prior to a Change of Control and ending on the first anniversary of the Change of Control, Executive’s services to the Company are terminated (ii) by Executive for Good Reason, then the vesting of the Options under 3(d) shall be fully accelerated such that 100% of unvested Options shall constitute vested Options. For purposes of this section, “Change of Control” means (i) a merger or consolidation in which (x) the Company is a constituent party or (y) a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (ii) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company. For purposes of this section, “Good Reason” shall exist upon (i) mutual written agreement by Executive and the Company that Good Reason exists; (ii) material reduction of the Executive’s annual base salary without the prior consent of the Executive (other than a reduction in annual base salary that is implemented in connection with a contemporaneous reduction in annual base salaries affecting other senior executives of the Company); or (iii) demotion of the Executive to a position with responsibilities substantially less than the Executive’s current position without the prior consent of Executive; provided however, that a change in Executive’s position following a Change of Control shall not constitute Good Reason so long as Executive retains substantially the same duties and responsibilities of a division, subsidiary or business unit that constitutes substantially the same business of the Company following the Change of Control.

 

(iv) In the event of Recapitalization as defined below or any issuance of Company securities consisting of Common Stock or are convertible or exercisable for shares of Common Stock, the Company will make the proper adjustments to the Prices, the Options and the Additional Options. Recapitalization shall mean any event of share combination or subdivision, share split, reverse share split, share dividend, distribution of bonus shares or any other reclassification, reorganization or recapitalization of the Company’s share capital.

 

(v) The exercise price per share shall be equal to the fair market value per share on the date the Options or the Bonus Options is granted. Upon termination of the Agreement for any reason whatsoever, except for cause, all the then-unvested Options and Bonus Options shall expire immediately and become null and void. All vested Options and Bonus Options may be exercised at any time until the lapse of 90 days from the effective date of termination of the Agreement. All other terms and provisions of the Options and Bonus Options not specified herein shall be governed by the terms of the Company’s option plan, as shall be adopted by the Company and may be amended by the Company at its sole discretion from time to time.

 

(e)          Expense Reimbursement.  The Company shall pay or reimburse the Executive for all ordinary and reasonable out-of-pocket expenses actually incurred (and, in the case of reimbursement, paid) by the Executive during the Term in the performance of the Executive’s services under this Agreement.

 

(f)          Vacation.  The Executive will be entitled to twenty (20) vacation days per calendar year, prorated for partial years.  In all other respects, the Executive’s vacation will be governed by the Company’s vacation policy as will be adopted by the Company, and amended from time to time at its sole discretion from time to time.

 

4.             TERMINATION.

 

(a)          Employment at Will. The Executive’s employment with the Company will be on an at-will basis and nothing contained in this Agreement shall create a contract of employment for any term. The Executive may decide to leave his employment at any time and for any reason upon providing to the Company a written notice of termination sixty (60) days prior to the date of effective termination (“Termination Notice”). Similarly, the Company may, in its discretion at any time and for any reason choose to end the Executive’s employment upon providing Executive with written Termination Notice of sixty (60) days, provided, however, that in the event of such termination the Company shall have the option to terminate the Executive’s employment at any time during such notice period, in which event, subject to Section 3(d) above, the Company will immediately pay the Executive the equivalent of his Salary and the benefits, including unused vacation days, according to Section 3(c) above through the end of such notice period.

 

(b)          Termination for Cause by the Company.  The Company may terminate the Executive’s employment for Cause at any time during the Employment Period, effective immediately upon giving the Executive written notice of such termination.  In such event, the Executive will be entitled only to payments and benefits accrued to the effective date of termination or that are required by applicable law governing wage payments or continuation of benefits, and any Options and Additional Options granted to Executive according to this Agreement, whether vested or not, shall expire immediately and become null and void.  As used herein, the term “Cause” will mean any of the following events:

 

(i)          the Executive is convicted of any felony;

 

(ii)          the Executive is convicted of any misdemeanor involving moral turpitude, if in the reasonable good-faith judgment of the Company such conviction has or could materially damage the reputation of the Company or is likely to materially interfere with the Executive’s performance of his duties hereunder;

 

(iii)          the Executive commits a material breach of this Agreement, or engages in a willful failure to carry out the material directives of any superior authorized by the Company to give such directives (which failure is not cured by Executive within ten (10) days of receipt of written notice); and

 

(iv)          the Executive commits a breach of any fiduciary duty or duty of loyalty owed to the Company, gross negligence, gross malfeasance, gross nonfeasance or willful misconduct in the performance of his duties, including, without limitation, criminal dishonesty, fraud, embezzlement or theft; breach of any of the Restrictive Covenants as specified in Exhibit A; a material violation of any Company or other external (e.g., professional) code of conduct to which the Executive may be subject (which violation is not cured by Executive within ten (10) days of receipt of written notice); and any act or failure to act that the Executive knows or reasonably should know is or likely to be materially injurious to the business or reputation of the Company (which act or failure to act is not cured by Executive within thirty (30) days of receipt of written notice).

 

(c)          Death.  If the Executive dies during the Employment Period, this Agreement and the Executive’s employment will automatically terminate as of the date of his death.  In such event, the Company will pay to the Executive’s estate any accrued, earned and unpaid Salary and benefits through the date of his death, and, if applicable, any unused vacation days accrued as of the date of his death, and the Executive’s estate will neither be entitled to any further payments or benefits under this Agreement except as required by any applicable federal or state law.

 

(d)          Disability.  If the Executive is incapacitated by accident, sickness or otherwise so as to render him mentally or physically incapable of performing fully the services required of him under this Agreement (referred to herein as a “Disability”) for a period of sixty (60) consecutive days, the Company may terminate this Agreement and the Executive’s employment effective immediately after the expiration of such period, upon giving the Executive written notice of such termination. In such event, the Company will pay to the Executive any accrued, earned and unpaid Salary and benefits through the date of termination, and, if applicable, any unused vacation days accrued as of the date of termination, and the Executive will not be entitled to any further payments or benefits under this Agreement. Notwithstanding the foregoing provision, the Company acknowledges that it may be subject to the requirements of the Americans with Disabilities Act, the Family and Medical Leave Act and corresponding state laws which may affect its right to terminate the Executive’s employment on account of a Disability.

 

5.             NOTICES.  Any notices or other communications required to be given pursuant to this Agreement will be in writing and will be deemed given: (i) upon delivery by hand to the Executive, if delivery is to the Executive, or to an officer of the Company, other than the Executive, if delivery is to the Company, as the case may be; (ii) after two (2) business days if sent by express mail or air courier; (iii) four (4) business days after being mailed, if sent by registered mail (airmail if to an address in a foreign country from the point of mailing), postage prepaid, return receipt requested; or (iv) upon transmission, if sent by facsimile or email (provided that a confirmation copy is sent in the manner provided in clause (ii) or clause (iii) of this Section 5 within thirty-six (36) hours after such transmission), except that if notice is received by facsimile or email after 5:00 p.m. on a business day at the place of receipt, it will be effective as of the following business day.  All communications hereunder will be delivered to the respective parties at the following addresses:

 

If to the Company:

Artemis Therapeutics Inc.

18 East 16th Street, Suite 307

New York, New York 10003

Attn:  Chairman of the Board

With a copy to:

ZAG-S&W, LLP

1633 Broadway, 32nd Floor

New York, New York

Fax No: (212) 660-3001

If to the Executive:

 

Brian M. Culley

2153 Whisper Wind Ln.

Encinitas, CA 92024

With a copy to:

Joshua R. Garber

33 Pearl Street, Apt 14

San Francisco, CA 94103

or to such other address as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.

 

6.             GOVERNING LAW AND FORUM.  The parties agree that this Agreement will be governed and construed by and in accordance with the laws of the State of New York regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretations and enforcement of this Agreement and the transactions completed hereunder shall be commenced exclusively in the state and Federal courts sitting in New York County. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of the State of New York for the adjudication of any dispute hereunder or in connection herewith.

 

7.             WAIVER OF BREACH.  The waiver by the Company of a breach of any provision of this Agreement by the Executive will not operate or be construed as a waiver of any subsequent breach by the Executive.

 

8.             SUCCESSORS AND ASSIGNS.  This Agreement will be binding upon and will inure to the benefit of the parties hereto and their respective heirs, successors, representatives and assigns.  This Agreement is assignable to any legal successor of the Company.  This Agreement may not be assigned by the Executive.

 

9.             ENTIRE AGREEMENT.  This Agreement, which includes the Restrictive Covenants, constitutes the entire understanding and agreement between the Company and the Executive with regard to all matters contained herein, incorporates and supersedes all prior and simultaneous agreements between the parties concerning the employment of the Executive by the Company.  The parties agree that the Company’s option plan, as shall be adopted by the Company and may be amended by the Company at its sole discretion from time to time, governs the terms of the Company’s stock options and if any provisions of this Agreement conflict with the terms of the Stock Option Plan, the terms of the Stock Option Plan shall govern.  The parties are not relying upon, and cannot rely upon, any prior or contemporaneous agreements, conditions, promises or representations, oral or written, express or implied, that are not expressly set forth herein.

 

10.           INTERNAL REVENUE CODE SECTION 409A.  This Agreement shall be interpreted and administered in a manner so that any amount payable hereunder shall be paid or provided in a manner and at such time and in such form that is either exempt from or compliant with the applicable requirements of Section 409A of the Code and applicable guidance and regulations issued thereunder.  Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder by reason of the Executive’s termination of employment, such amount or benefit will not be payable or distributable to the Executive by reason of such circumstance unless (i) the circumstances giving rise to such termination of employment meet any description or definition of “separation from service” in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. Any taxable reimbursements under this Agreement will be made no later than the end of the calendar year following the calendar year the expense was incurred.  For purposes of complying with Section 409A of the Code, any such reimbursements and any in-kind benefit under this Agreement will be subject to the following: (A) payment of such reimbursements or in-kind benefits during one calendar year will not affect the amount of such reimbursement or in-kind benefits provided during a subsequent calendar year; and (B) such reimbursement benefit or rights or in-kind benefits may not be exchanged or substituted for another form of compensation to the Executive.

 

11.           SEVERABILITY.  If any provision of this Agreement is deemed invalid or unenforceable, the validity of the other provisions of this Agreement will not be impaired.  If any provision of this Agreement will be deemed invalid as to its scope, then notwithstanding such invalidity, that provision will be deemed valid to the fullest extent permitted by law, and the parties agree that, if any court makes such a determination, it will have the power to reduce the duration, scope and/or area of such provision and/or to delete specific words and phrases by “blue penciling” and, in its reduced or blue penciled form, such provision will then be enforceable as permitted by law.

 

12.           MISCELLANEOUS. This Agreement may be executed in any number of counterparts, including facsimile or email counterparts, and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and when a counterpart has been executed by each of the parties hereto, all of the counterparts, when taken together, shall constitute one and the same agreement. This Agreement may not be modified or amended unless agreed to in a writing signed by both parties.

 

[signature page follows]

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

 

	 	
Company:

 

ARTEMIS THERAPEUTICS INC.

 

By: /s/ Chanan Morris

Name: Chanan Morris

 Title:  Chief Financial Officer

 

Executive:

 

/s/ Brian M. Culley

 Brian M. Culley

EXHIBIT A

 

EXECUTIVE CONFIDENTIALITY AND INTELLECTUAL

 PROPERTY RIGHTS AGREEMENT

 

This Agreement is entered into by and between the undersigned Executive and Artemis Therapeutics Inc., a Delaware corporation (the “Company”).

 

RECITALS

 

A.          Executive is now, or desires to become, employed by the Company.

 

B.          Executive understands and acknowledges that he will come into contact with, and be exposed to, valuable, special and unique Company confidential and proprietary information and trade secrets.  Executive further acknowledges the highly competitive nature of the Company’s business, understands, and acknowledges that the restrictions set forth in this Agreement are reasonable and necessary for the protection of the Company’s legitimate business interests.

 

NOW, THEREFORE, in exchange for the mutual covenants and conditions set forth herein, the parties, intending legally to be bound, hereby agree as follows:

 

1.          Consideration.  Executive understands and acknowledges that the consideration for this Agreement is Executive’s employment by the Company and the compensation and other valuable benefits to be received by Executive during the course of Executive’s employment by the Company.

 

2.          Confidential Information.  Executive agrees that, both during Executive’s employment by the Company and at all times thereafter, Executive will not, except as required to effectively and appropriately discharge Executive’s duties to the Company, directly or indirectly use or disclose to any third person, without the prior written consent of the Company, any Confidential Information (as hereinafter defined) of the Company or its parents, subsidiaries or affiliates worldwide (the “Company Group”).  For purposes of this Agreement, “Confidential Information” means financial data, sales figures, costs and pricing figures, test reports, test data, test procedures, testing manuals, testing software, marketing and other business plans, product development, marketing concepts, personnel matters, drawings, specifications, instructions, methods, processes, techniques, formulae or any other information of any kind relating to the service, business and products of the Company Group, technology, research, research data, business, affairs and finances of the Company Group and all other know-how, trade secrets or proprietary information, or any copies, elaborations, modifications and adaptations thereof, which are in the possession of the Company Group and which have not been published or disclosed to, and are not otherwise known to, the public.  In the event the Company Group is bound by a confidentiality agreement or understanding with a contributor, customer, vendor, supplier or other party regarding the confidential information of such person, which is more restrictive than specified above in this Section 2, and of which Executive has notice or is aware, the provisions of such other confidentiality agreement will be binding upon Executive and will not be superseded by this Section 2. Executive further agrees that all documents containing Confidential Information of the Company shall remain the exclusive property of the Company and that upon the termination of Executive’s employment with the Company for any reason or at any other time upon request, Executive will promptly deliver to the Company, without retaining any copies thereof, all tangible evidence of the Confidential Information, including, without limitation, all notes, memoranda, records, files and other documents, whether tangible or intangible, and regardless of how stored or maintained, whether on hard drives, thumb drives, computer tapes, discs, in “the cloud” or any other form of technology. Notwithstanding anything contained herein to the contrary, it is agreed that the obligations of confidentiality and non-use as set forth hereunder shall not apply to any information that the Executive demonstrates (a) was known to the Executive or in the public domain before the disclosure hereunder; or (b) becomes known to the public through no unauthorized act or omission on the part of the Executive; or (c) is disclosed to the Executive by a third party having a legal right to make such disclosure; or (d) is required to be disclosed by applicable law (but as to such disclosure required by applicable law, the Executive (X) shall give the Company advance notice of such potential disclosure so as to afford the Company an opportunity, at the Company’s expense, to object to such disclosure, or ensure confidential treatment to the Confidential Information revealed according to such requirement, (Y) shall make such disclosure only to the extent required to be made by such applicable law, and (Z) ).

 

3.          Non-Solicitation Covenant.  During the term of Executive’s employment with the Company and for a period of twelve (12) months after such employment terminates, regardless of the reason, Executive will not directly or indirectly, for any reason or purpose whatsoever (other than on behalf of the Company in performing Executive’s required duties for the benefit of the Company) engage in any of the following activities, whether for Executive’s own benefit or on behalf of, or in conjunction with, any other corporation, partnership, limited liability company, proprietorship or business, and whether as an employee, partner, principal, officer, director, consultant, agent, shareholder, or otherwise: (i) request or cause any of the Company’s clients to cancel, modify or terminate any existing or continuing or, to the Executive’s knowledge, prospective business relationship, with the Company; (ii) persuade, induce, solicit, influence or attempt to influence, or cause any client or, to the Executive’s knowledge, prospective client of the Company, to cease or refrain from doing business, or to decline to do business, or to change or alter any existing or prospective business relationship, with the Company; (iii) solicit the employment of, recruit, employ, hire, cause to be employed or hired, entice away, or establish a business with, any then current officer, manager, or other employee or agent of the Company or any of their respective affiliates or any other such person who was employed by the Company within the twelve (12) months immediately prior to such employment or establishment, or suggest to or discuss with any such employee the discontinuation of that person’s status or employment with the Company; or (iv) assist any person, firm, entity, employer, business associate or member of Executive’s family to commit any of the foregoing acts.

 

4.          Other Agreements/Warranties.  Executive warrants that Executive is not bound by the terms of any confidentiality agreement, non-competition agreement or non-solicitation agreement or any other agreement with a former employer or other third party which would preclude Executive from accepting employment with the Company or which would preclude Executive from effectively performing Executive’s duties for the Company.  Executive further warrants that, Executive has the right to make all disclosures that Executive will make to the Company during the course of Executive’s employment by the Company.

 

5.          Company’s Intellectual Property Rights.

 

(i)          Work for Hire.  Executive agrees that all work, materials (tangible and intangible) and products produced, developed, created or completed by Executive on behalf of the Company during the course of Executive’s employment by the Company will be deemed “work for hire,” as such term is defined by the copyright laws of the United States, and are expressly intended to be wholly owned, and all copyrights to be held, by the Company.  To the extent that any such copyrightable works may not, by operation of law, be works for hire, Executive agrees to and hereby does assign to the Company or its designees ownership of all copyrights in those works.  The Company will have the right to obtain and hold in its own name copyrights, registrations and similar protection which may be available for those works.  Executive agrees to give the Company or its designees all assistance reasonably required to secure or protect those rights.

 

(ii)          Company’s Proprietary Rights.  Executive agrees that all discoveries, developments, ideas, improvements, modifications, innovations, inventions, processes, know-how, technical information, secret processes, programs, operating instructions, manuals, documentation, discs, tapes, written materials, systems, techniques, hardware, software, test procedures or other things, whether or not patentable (referred to herein as “Work Products”), that are made, conceived or reduced to practice by Executive, while employed by the Company, solely or with others, whether or not during working hours or on the Company’s premises, and that (i) relate to the Company’s activities or actual or demonstrably anticipated research or development or a reasonable or contemplated expansion thereof, or (ii) result from any work performed by Executive for the Company, or (iii) are developed on the Company’s time or using the Company’s equipment, supplies, facilities or trade secret information, or (iv) are based upon or are related to trade secrets and other confidential information of the Company, its parent company or affiliates that Executive have had access to through Executive’s employment by the Company, will be the exclusive property of, and will promptly be disclosed by Executive to, the Company.

 

(iii)          This Agreement does not apply to an invention for which no equipment, supplies, facilities, or trade secret information of the Company was used and which was developed entirely on the receiving party’s own time, unless (a) the invention relates directly (i) to the business of the Company, or (ii) to the Company’s actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by the receiving party for the Company.  Without limiting the foregoing, the receiving party acknowledges that the receiving party has been advised that this Section 5 does not apply to any Work Product or other inventions that fully qualify under Section 2870 of the California Labor Code, which states as follows:

 

		(a)	
Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer.

 

		(b)	
To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

 

(iv)          General.  Without limiting the preceding subsections of this Section 6, all intellectual property developed or generated by Executive during and in the course and scope of his employment with the Company, including any trademarks or trademark rights, shall be the exclusive property of the Company.

 

(v)          Cooperation.  Executive agree that, at any time during or after Executive’s employment with the Company, Executive will, without further compensation but at the Company’s sole expense, sign all papers and cooperate in all other acts reasonably required to secure or protect the Company’s rights in all such property identified in subsection (b) above, including without limitation executing written assignments therefor and applying for, obtaining and enforcing patents thereon in any and all countries.  In the event that Executive is unable or unavailable or will refuse to sign any lawful or necessary documents required in order for the Company to apply for and obtain a patent or patents with respect to any work performed by Executive (including applications or renewals, extensions, divisions or continuations), Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agents and attorneys-in-fact to act for and in Executive’s behalf, and in Executive’s place and stead, to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of patents with respect to such new developments with the same legal force and effect as if executed by Executive.

 

(vi)          Assignment of Intellectual Property Rights.  Nothing set forth in this Agreement will be deemed to limit the Company’s right to assign any intellectual property rights to any other party, whether a member of the Company Group or otherwise.

 

6.          Enforcement/Remedies.  Executive understands and acknowledges that a breach of the provisions of this Agreement would injure the Company irreparably in a way which could not be adequately compensated for by damages.  Executive therefore agrees that in the event of any breach or threatened breach by Executive, Executive will be subject to disciplinary action up to and including termination by the Company, and the Company will be entitled to an injunction, without bond, restraining such breach, as well as costs and attorneys’ fees relating to any such proceeding or any other legal action to enforce the Agreement.  Nothing herein will be construed, however, as prohibiting the Company from pursuing other available remedies or recovering on any claim for damages for such breach or threatened breach.

 

7.          Governing Law and Forum.  The parties agree that this Agreement will be governed and construed by and in accordance with the laws of the State of New York regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretations and enforcement of this Agreement and the transactions completed hereunder shall be commenced exclusively in the state and Federal courts sitting in New York County. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of the State of New York for the adjudication of any dispute hereunder or in connection herewith.

 

8.          Severability.  If any provision of this Agreement is deemed invalid or unenforceable, the validity of the other provisions of this Agreement will not be impaired.  If any provision of this Agreement will be deemed invalid as to its scope, then notwithstanding such invalidity, that provision will be deemed valid to the fullest extent permitted by law, and the parties agree that, if any court makes such a determination, it will have the power to reduce the duration, scope and/or area of such provision and/or to delete specific words and phrases by “blue penciling” and, in its reduced or blue penciled form, such provision will then be enforceable as permitted by law.

 

9.          Assignment.  The provisions of this Agreement will inure to the benefit of the successors and assigns of the Company.

 

10.         Entire Agreement/Waiver.  This Agreement represents the entire understanding of the parties with respect to its subject matter, no modification of any provision hereof will be valid unless made in writing and signed by the parties hereto, and no waiver of any provision hereof will be valid unless made in writing and signed by the party to be charged with such waiver.  The parties are not relying upon, and cannot rely upon, any prior or contemporaneous agreements, conditions, promises or representations, oral or written, express or implied, that are not expressly set forth herein.  This Agreement may be modified or amended only in a writing signed by both parties.

 

[signature page follows]

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized representative, and Executive has executed this Agreement as of the date set forth below.

 

	 	
Company:

 

ARTEMIS THERAPEUTICS INC.

 

By: /s/ Chanan Morris

Name: Chanan Morris

 Title: Chief Financial Officer

 

Executive:

 

/s/ Brian Culley

 Brian Culley

 

APPENDIX A:

 

2017 Board-Approved Corporate Goals with Weightings:

 

	
1.          Develop corporate messaging and solicit and close a Capital Raise to support the Company’s operational plan, by Investment Date.

	
60%

	
2.          Oversee Company’s operations, including staff and contractors, identify issues and implement solutions, to advance the development of Company assets.

	
40%

 

The Company’s Board of Directors shall determine Executive’s percent performance toward the 2017 Corporate Goals. For example, 80% performance on Goal 1 and 70% performance on Goal 2 would equal [(.8*.60)+(.7*.40)] for an overall performance level of 76% toward Executive’s Bonus Eligibility [.76*(50% of Executive’s Salary)], or $114,000, assuming a successful Capital Raise occurs prior to the Investment Date.

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