Document:

CONFIDENTIAL TREATMENT REQUESTED

 

UNDER 17 C.F.R.§§ 200.80(B)4, AND 240.24B-2

 

Exhibit 10.3

Execution Copy

 

AMENDMENT #1

 

TO THE LICENSE AGREEMENT, DATED MAY 1ST, 2015

 

This AMENDMENT #1 ("Amendment #1") is entered into as of February 10, 2017 (the "Amendment Date") by and between Ionis Pharmaceuticals, Inc. (formerly named Isis Pharmaceuticals, Inc.), a Delaware corporation, having its principal place of business at 2855 Gazelle Court, Carlsbad, CA 92010, USA (“Ionis”), and Bayer AG (upon assignment by Bayer Pharma AG effective January 1, 2017), a company organized under the Laws of Germany, whose office is situated at Muellerstraße 178, 13353 Berlin, Germany (“Bayer”).

 

Ionis and Bayer shall also each individually be referred to herein as a "Party", and shall be referred to collectively as the "Parties". Capitalized terms used in this Amendment #1, whether used in the singular or the plural, have the meaning ascribed to them in the Agreement (defined below), unless expressly stated otherwise herein. All attached appendices and schedules are a part of this Amendment #1.

 

WHEREAS:

 

		(A)	
Ionis and Bayer have entered into a License Agreement dated May 1, 2015, as amended (the “Agreement”) in respect of ISIS-FXIRx, including option rights to a Factor XI follow-on compound and a [***] compound;

 

		(B)	
Under the Agreement, Ionis has completed certain clinical and non-clinical studies for ISIS-FXIRx, including the “Isis Completion Activities” and has identified and designated a follow-on Development Candidate targeting Factor XI incorporating Ionis’ liver-targeted Conjugate Technology, [***];

 

	 	(C)	
The Agreement provides for an Option for Bayer to license ISIS-FXIRx-2 upon the designation of a Development Candidate and Bayer is exercising its Option to ISIS-FXIRx-2 to obtain the license to ISIS-FXIRx-2 in accordance with this Amendment #1; and

 

		(D)	
To expedite the Development of ISIS-FXIRx and ISIS-FXIRx-2, Ionis will conduct the Ionis Development Activities described in this Amendment #1.

 

NOW, THEREFORE, the Parties hereto agree, in accordance with Section 13.12 of the Agreement, to amend the Agreement solely with respect to ISIS-FXIRx and ISIS-FXIRx-2 as follows:

 

	1.	
DEFINITIONS - Appendix 1 of the Agreement shall be amended by adding or amending the definitions as set forth in Appendix 1A attached hereto this Amendment #1.

 

	2.	
ARTICLE 1

 

	2.1	
Sections 1.1 through 1.4 of the Agreement

 

Sections 1.1 through 1.4 of the Agreement shall [***] Bayer has delivered to Ionis a Continuation Notice. Within [***] days following Bayer’s delivery of a Continuation Notice to Ionis, Bayer will deliver to Ionis an updated Strategic Plan in accordance with the Agreement.

 

	2.2	
Section 1.6

 

In Section 1.6.1, the following wording shall be added at the end of sentence 1:

 

“...;provided, however, that until Bayer has delivered to Ionis a Continuation Notice, (i) Bayer shall [***] to Develop or Commercialize any Product under the Agreement, and (ii) with respect to ISIS-FXIRx and ISIS-FXIRx-2, Bayer’s use of Commercially Reasonable Efforts to Develop and Commercialize either ISIS-FXIRx and/or ISIS-FXIRx-2  in accordance with the Agreement will be [***].”

 

	2.3	
New Section 1.7a

 

The following new Section 1.7a shall be added to the Agreement:

 

		
“1.7a

	
Ionis Development Activities 

 

	 	1.7a(i)	
Ionis Development Activities for ISIS-FXIRx. Ionis will use Commercially Reasonable Efforts to Complete the phase IIb clinical trial set forth in Schedule 1.7a attached to this Amendment #1 for ISIS-FXIRx (such study, the “CS5 Study”), in accordance with the timelines specified therein. Ionis and Bayer will collaborate in the creation of a detailed protocol for the CS5 Study to be finalized no later than [***], however, Ionis will [***] regarding [***] of the CS5 Study and such [***] shall be consistent with Schedule 1.7a.

 

		1.7a(ii)	
Ionis Development Activities for ISIS-FXIRx-2. Ionis will use Commercially Reasonable Efforts to Complete the [***], and [***] the Phase I Clinical Trial, in each case as expressly set forth in Schedule 1.7a to this Amendment #1 for ISIS-FXIRx-2 (such [***], collectively, the “Non-Clinical Studies” and such Phase I Clinical Trial, the “CS1 Study”). Ionis and Bayer will collaborate in the creation of detailed protocols for the Non-Clinical Studies and the CS1 Study no later than [***]; however, Ionis will [***] regarding [***] of the Non-Clinical Studies and the CS1 Study and such [***] shall be consistent with Schedule 1.7a.

 

2

		
1.7a(iii)

	
Amendment Data Package. As soon as practicable following Completion of each of the Non-Clinical Studies, the CS1 Study and the CS5 Study (the CS1 Study and CS5 Study, collectively the “Amendment-Clinical Studies”), Ionis will deliver to Bayer, as applicable, [***]. All such information described in this paragraph collectively the “Amendment Data Package”.

 

For purposes of this Amendment #1, with respect to the Non-Clinical Studies, “Completion” or “Completes” means the date the draft report(s) containing the data generated from such Non-Clinical Studies are available. Within [***] days after Ionis Completes the respective Non-Clinical Studies, CS1 Study and the CS5 Study, Ionis will provide Bayer [***].” In all other respects, Ionis Development Activities will be treated in the same manner as “Isis Completion Activities” under the Agreement.

 

For clarity, separate from the Amendment Data Package, Ionis will provide the information required under and in accordance with Section 1.5 of the Agreement for each of the Amendment-Clinical Studies.

 

		
1.7a(iv)

	
Information Exchange. Prior to the Decision Deadline, Ionis shall keep Bayer regularly informed on the Ionis Development Activities. The Parties (including the appropriate clinical and non-clinical personnel of each Party) shall regularly meet in person or hold a telephone conference to share and discuss the progress of ongoing Ionis Development Activities as well as any available new data and results from ongoing or completed Ionis Development Activities, including but not limited to minutes of the Data and Safety Monitoring Board and/or any other relevant safety documentation. Each Party’s Alliance Manager will facilitate and set the agenda for such meetings and otherwise coordinate such interactions between the Parties.

 

		
1.7a(v)

	
Bayer Development Activities. For the avoidance of doubt, irrespective of the Ionis Development Activities and subject to payment by Bayer of the license fee pursuant to Section 7.3.1 of the Agreement (as amended by this Amendment #1), Bayer has the right to initiate at any time additional Development activities with regard to ISIS-FXIRx and/or ISIS-FXIRx-2. Bayer shall consult and coordinate with Ionis prior to initiating any such Development activities. In setting up its Development activities, Bayer shall reasonably consider Ionis’ comments and shall not conduct any Development activity that would have a material negative impact on the Completion of the Ionis Development Activities.”

 

	2.4	
New Section 1.8.3

 

The following Section shall be added as Section 1.8.3:

 

Section 1.8.3  “Upon Bayer’s delivery of a Continuation Notice to Ionis, the provisions set out in this Section 1.8 shall apply to ISIS-FXIRx and/or ISIS-FXIRx-2 (as applicable) and, with respect to the territorial scope, applicability shall include all jurisdictions in which Amendment-Clinical Studies are conducted, mutatis mutandis.”

 

3

	2.5	
Section 1.9

 

	2.5.1	
Section 1.9.2(a)(ii) – In the first sentence of Section 1.9.2(a)(ii) the words “first [***]” are deleted and replaced with the words “first [***]”.

 

	
2.5.2

	
New Section 1.9.2(c) - The following Section shall be added as Section 1.9.2(c):

 

		
“1.9.2(c)

	
Supplies for the IONIS Development Activities. Upon Ionis’ request, Bayer will ([***]) provide Ionis with approximately [***] of API for ISIS-FXIRx purchased by Bayer under Purchase Order No. [***], for Ionis’ use in the CS5 Study and together with such API will provide Ionis with such minimum documentation related to Bayer’s transport and storage of such API that Ionis reasonably requires to comply with Applicable Law (including GMP and GCP); for clarity and notwithstanding anything to the contrary, Ionis shall remain responsible for [***] of such API for use in the CS5 Study. In addition, [***], Bayer agrees that Ionis may use in the CS5 Study the Finished Drug Product in Ionis’ possession (or the possession of Ionis’ CMO) that was previously ordered by Bayer under Purchase Order No. [***], and Ionis will [***] for such Finished Drug Product.

 

	2.5.3	
Section 1.9.3 of the Agreement shall be deleted in its entirety and replaced with the following:

 

		“1.9.3	
After Ionis Completes the CS5 Study. After Ionis completes the CS5 Study, and upon Bayer’s delivery of a Continuation Notice to Ionis, upon Bayer’s request, Ionis will deliver to Bayer any inventory of cGMP API, Finished Drug Product and packaged Clinical Study material for ISIS-FXIRx in Ionis’ possession on the terms set forth on Schedule 1.9.2(a) of the Agreement (except for any API Bayer delivered to Ionis for the CS5 Study, which will be returned to Bayer free of charge) and taking into account any amounts Bayer previously paid Ionis for any such material.”

 

	2.5.3	
New Section 1.9.4 - The following new Section 1.9.4 shall be added to the Agreement:

 

		“1.9.4	
After Ionis Completes the Non-Clinical Studies and CS1 Study. After Ionis completes the Non-Clinical Studies and the CS1 Study and upon Bayer’s delivery of a Continuation Notice to Ionis, upon Bayer’s request, Ionis will provide to Bayer any inventory of cGMP API, Finished Drug Product and packaged Clinical Study material for ISIS-FXIRx-2 in Ionis’ possession on the terms set forth on Schedule 1.9.2(a) of the Agreement.”

 

	2.5.4	
The following new Section 1.9.5 shall be added to the Agreement:

 

		
“1.9.5

	
Joint CMC Plan. Following Completion of the Ionis Development Activities and Bayer’s delivery of a Continuation Notice, Bayer will be responsible for supplying API and Finished Product for all future Development and Commercialization. To facilitate Bayer’s efforts in that regard, within the first [***] days after the Amendment Date, the Parties’ CMC teams will discuss and mutually agree on a joint CMC plan for technology transfer for API and Finished Drug Product Manufacturing for ISIS-FXIRx and ISIS-FXIRx-2, however, Bayer will [***] to set up the CMC plan; provided, further, that such [***] will not permit Bayer to [***] to conduct any activity that [***]. Each Party will use Commercially Reasonable Efforts to conduct their respective activities under the mutually agreed CMC plan.”

 

4

	3.	
ARTICLE 2

 

With the exception of Section 2.2.2 and Section 2.6, Article 2 shall no longer apply to ISIS-FXIRx-2, and shall be deemed limited in scope to [***] only, provided however, that Section 2.4 shall apply with respect to Bayer’s exercise of the Option to license ISIS-FXIRx-2 as follows:

 

“Bayer will have an exclusive option (the “Option”) to obtain from Ionis the license set forth in Section 5.1.2 (as amended by this Amendment #1) which shall be deemed exercised by Bayer upon the Amendment Date or – if applicable – [***] Business Days following the date on which antitrust clearance for the exercise of the Option has been obtained (using the process described in Section 13.6, mutatis mutandis, under which the Parties will make the appropriate filings under the HSR Act within [***] days after signature of this Amendment).”

 

	4.	
New ARTICLE 2A

 

The following new ARTICLE 2A shall be added to the Agreement:

 

“ARTICLE 2A. ISIS-FXIRx-2 Decision

 

		2.A(i)	
Within [***] ([***]) days following Bayer’s receipt of the last document required to constitute the Amendment Data Package (the “Decision Deadline”), Bayer shall deliver written notice to Ionis indicating that Bayer will either (i) continue the Development and Commercialization of one or both of ISIS-FXIRx and/or ISIS-FXIRx-2 in accordance with the Agreement (such notice, a “Continuation Notice”), or (ii) terminate the Agreement either (x) in its entirety or (y), subject to Bayer having delivered to Ionis a Drug Discovery Request Notice regarding [***] prior to delivering the notice of termination, with respect to ISIS-FXIRx and ISIS-FXIRx-2 only (such notice, a “Termination Notice”). 

 

		2.A(ii)	
If, by the Decision Deadline, Bayer delivers a Continuation Notice to Ionis, then on the earlier of (i) [***] ([***]) days following Bayer’s delivery of such Continuation Notice, or (ii) Initiation by Bayer of a Clinical Study of ISIS-FXIRx-2 following delivery of the Continuation Notice, Bayer shall pay to Ionis within [***] days following receipt of an invoice from Ionis a milestone payment of $[***].

 

		2.A(iii)	
If, by the Decision Deadline, Bayer delivers a Termination Notice to Ionis, then the Agreement will automatically terminate, as the case may be, either (i) with respect to ISIS-FXIRx and ISIS-FXIRx-2 or (ii) in its entirety, the provisions of Section 11.3 of the Agreement will apply and all rights to ISIS-FXIRx, ISIS-FXIRx-2 and, as the case may be, [***] will revert back to Ionis.

 

5

	5.	
ARTICLE 3

 

	5.1	
Section 3.3.3 shall no longer apply to ISIS-FXIRx-2.

 

	5.2	
The following Section 3.3.4 shall be added to the Agreement:

 

		“3.3.4	
Ionis Development Activities. Ionis will be responsible for all costs associated with the Ionis Development Activities under Schedule 1.7a, including any costs associated with changes to the Amendment-Clinical Studies required by a Regulatory Authority.”

 

	5.3	
New Section 3.5 - The following Section 3.5 shall be added to the Agreement:

 

“In accordance with Section 2.2.2 of the Agreement, Bayer understands and agrees that the [***] technology under the agreement with [***] listed as [***] on Appendix 4 of the Agreement is incorporated into ISIS-FXIRx-2 and accordingly is “Bayer Opt-In Technology” in accordance with Section 2.2.2; provided however, that Ionis will [***] only for any payment due under such [***] agreement that is due [***] the date Bayer delivers to Ionis a Continuation Notice.

 

	6.	
ARTICLE 5

 

	6.1	
Section 5.1.2 shall be amended to read as follows:

 

“Section 5.1.2         ISIS-FXIRx-2 Development, Manufacture and Commercialization License. Subject to the terms and conditions of this Agreement, effective upon Bayer’s payment of the license fee pursuant to Section 7.3.1 of the Agreement (as amended by this Amendment #1), Ionis grants to Bayer a worldwide, exclusive, royalty-bearing license under the Licensed Technology to Research, Develop, Manufacture, have Manufactured and Commercialize ISIS-FXIRx-2 in the Field.”

 

	6.2	
Section 5.2.1 shall be amended to no longer refer to the milestone payment for Completion of the CS IV Study, but to the milestone payment following delivery of a Continuation Notice by Bayer pursuant to Article 2.A(ii). The following sentence shall be added at the end of Section 5.2.1:

 

“This Section 5.2.1 shall equally apply to both, ISIS-FXIRx and ISIS-FXIRx-2. Therefore, where it says “ISIS-FXIRx”, this shall be read as meaning “ISIS-FXIRx and/or ISIS-FXIRx-2”.

 

	6.3	
Section 5.2.2 shall no longer apply to ISIS-FXIRx-2 and will be limited in scope to [***].

 

6

	7.	
ARTICLE 7

 

	7.1	
Section 7.2 shall no longer apply to ISIS-FXIRx-2, and Section 7.2.1 is deleted in its entirety.

 

	7.2	
Section 7.3.1 shall be deleted in its entirety and replaced by the following:

 

“Section 7.3.1 License Fee for ISIS-FXIRx-2. In consideration of the license under Section 5.1.2 of the Agreement for ISIS-FXIRx-2, and, if applicable, provided antitrust clearance for ISIS-FXIRx-2 has been obtained (using the process described in Section 13.6, mutatis mutandis, then, within [***] days following Bayer’s receipt of an invoice from Ionis, Bayer will pay to Ionis a license fee of $[***].”

 

	7.3	
Section 7.4 – The first sentence of Section 7.4 shall be deemed amended to read as follows:

 

“Milestone Payments for Achievement of Development Milestone Events by ISIS-FXIRx or ISIS-FXIRx-2. Bayer will pay to Ionis within [***] days following Bayer’s receipt of an invoice from Ionis, the milestone payments as set forth in Table 1 below when a development milestone event listed in Table 1 is first achieved by either ISIS-FXIRx or ISIS-FXIRx-2.”

 

The second development milestone event “[***]” listed in Table 1 of Section 7.4 of the Agreement is hereby deleted and replaced with “[***]” such that such development milestone event may be achieved [***] and such milestone payment is [***] $[***] to $[***]. For clarity, the milestone will be paid only once.

 

	7.4	
Section 7.5 shall be deleted in its entirety.

 

	8.	
New Article 9A

 

A new Article 9A shall be added to the Agreement to include the additional representation and warranties as of the Amendment Date, as follows:

 

“Article 9A. ADDITIONAL REPRESENTATION AND WARRANTIES AS OF THE AMENDMENT DATE

 

9.1A Representations and Warranties of Both Parties. Each Party hereby represents and warrants as of the Amendment Date to the other Party that:

 

9.1.1A it has the power and authority and the legal right to enter into Amendment #1 and perform its obligations hereunder, and that it has taken all necessary action on its part required to authorize the execution and delivery of Amendment #1 and the performance of its obligations hereunder;

 

9.1.2.A Amendment #1 has been duly executed and delivered on behalf of such Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered a proceeding at law or equity;

 

7

9.1.3A all necessary consents, approvals and authorizations of all Regulatory Authorities and other parties required to be obtained by such Party in connection with the execution and delivery of Amendment #1 and the performance of its obligations hereunder have been obtained;

 

9.1.4A the execution and delivery of Amendment #1 and the performance of such Party’s obligations hereunder (a) do not conflict with or violate any requirement of Applicable Law or any provision of the certificate of incorporation, bylaws or any similar instrument of such Party, as applicable, in any material way, and (b) do not conflict with, violate, or breach or constitute a default or require any consent not already obtained under, any contractual obligation or court or administrative order by which such Party is bound; and

 

9.1.5A all employees, consultants, or (sub)contractors (except academic collaborators or Third Parties under material transfer agreements) of such Party or Affiliates performing development activities hereunder on behalf of such Party will be obligated to assign all right, title and interest in and to any inventions developed by them, whether or not patentable, to such Party or Affiliate, respectively, as the sole owner thereof.

 

9.2A Representations and Warranties of Ionis. Ionis hereby represents and warrants to Bayer as of the Amendment Date, that:

 

9.2.1A Ionis is the owner of, or otherwise has the right to grant all rights and licenses it purports to grant to Bayer with respect to the Licensed Technology under the Agreement for ISIS-FXIRx-2 as it exists on the Amendment Date;

 

9.2.2A all Licensed Patents Covering ISIS-FXIRx-2 that are owned by Ionis (“Ionis Owned Patents”) have been filed and maintained properly and correctly in all material respects;

 

9.2.3A Ionis has not previously entered into any agreement, whether written or oral, with respect to, or otherwise assigned, transferred, licensed, conveyed or otherwise encumbered its right, title or interest in or to, the Licensed Technology (including by granting any covenant not to sue with respect thereto) in such a way as to make the representation set forth in Section 9.2.1A not true;

 

9.2.4A each of the Ionis Owned Patents that are Isis Product-Specific Patents Covering ISIS-FXIRx-2 properly identifies each and every inventor of the claims thereof as determined in accordance with the laws of the jurisdiction in which such Patent Right is issued or such application is pending;

 

9.2.5A to Ionis’ Knowledge, each of the Ionis Owned Patents that are Isis Core Technology Patents Covering ISIS-FXIRx-2 properly identifies each and every inventor of the claims thereof as determined in accordance with the laws of the jurisdiction in which such Patent Right is issued or such application is pending;

 

8

9.2.6A Ionis has not received any written claim alleging that any of the Licensed Technology Covering ISIS-FXIRx-2 is invalid or unenforceable, including any Ionis Owned Patents required in order for Ionis to perform the Ionis Development Activities;

 

9.2.7A Ionis has not received any written claim alleging that any of Ionis’ activities relating to ISIS-FXIRx-2 infringes any intellectual property rights of a Third Party;

 

9.2.8A to Ionis’ Knowledge, (i) the licenses granted to Ionis under the Isis In-License Agreements relevant to ISIS-FXIRx-2 are in full force and effect, (ii) Ionis has not received any written notice, and is not aware, of any breach by any party to such Isis In-License Agreements, and (iii) Ionis’ performance of its obligations under this Amendment (including the Ionis Development Activities) will not constitute a breach of Ionis’ obligations under the Isis In-License Agreements and the licenses granted to Ionis thereunder;

 

9.2.9A to Ionis’ Knowledge, in respect of the pending United States patent applications included in the Ionis Owned Patents relevant to ISIS-FXIRx-2, Ionis has submitted all material prior art of which it is aware in accordance with the requirements of the United States Patent and Trademark Office;

 

9.2.10A to Ionis’ Knowledge, neither Ionis nor its Affiliates owns or Controls any Patent Rights or Know How covering formulation or delivery technology as of the Amendment Date that would be necessary in order for Bayer to further Develop or Commercialize ISIS-FXIRx-2 contemplated as of the Amendment Date;

 

9.2.11A except for the activities Ionis is obligated to conduct under the Prior Agreements as in effect on the Amendment Date, Ionis does not conduct any activities which would violate Article 4 of the Agreement;

 

9.2.12A to Ionis’ Knowledge, Bayer’s performance of its rights and obligations under this Amendment relating to ISIS-FXIRx-2 does not infringe any of Ionis’ or Third Party’s Patent Rights, Know-How or other intellectual property rights; provided, Bayer cannot assert a claim against Ionis for breach of this Section 8.2.12 related to any Third Party Patent Rights Bayer has Knowledge of as of the Amendment Date; and

 

9.2.13A all preclinical and clinical studies and trials conducted by Ionis on ISIS-FXIRx and ISIS-FXIRx-2, have been conducted in accordance with Applicable Law and, as applicable, GLP and GCP, and to Ionis’ Knowledge no claim for injury, loss or damage has been initiated or received in respect of any such studies or trials.

 

9.3A DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE 9A, BAYER AND IONIS MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND BAYER AND IONIS EACH SPECIFICALLY DISCLAIM ANY WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENT RIGHTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.”

 

9

	9.	
ARTICLE 11

 

	9.1	
Section 11.2.1 shall be deleted in its entirety and replaced by the following:

 

“Bayer’s Termination for Convenience. At any time following payment by Bayer of (i) the payment under Section 7.1, (ii) the license fee for ISIS-FXIRx-2 under Section 7.3.1, and (iii) the milestone payment for the first development milestone event under Table 1 of Section 7.4, subject to Sections 11.3.1, 11.3.2 and 11.3.3 below, Bayer may terminate this Agreement on a Product-by-Product basis for convenience by providing 90 days written notice to Ionis of such termination.”

 

	10.	
Article 13

 

	10.1	
13.8. Notices. For notices Ionis delivers to Bayer, the company shall be Bayer AG, having an address at Müllerstr. 178, 13353 Berlin. Section 13.8 shall be deemed amended accordingly.

 

	11.	
Appendix 5 (Isis Core Technology Patents) and Appendix 7 (Isis Product-Specific Patents) shall be deleted in their entirety and replaced by Appendix 5A (Ionis Core Technology Patents) and Appendix 7A (Ionis Product-Specific Patents) attached hereto this Amendment.

 

	12.	
Miscellaneous

 

	12.1	
All provisions of the Agreement not altered by this Amendment shall remain in force unaltered. All provisions of the Agreement altered by this Amendment shall only be altered as far as expressly stated in this Amendment.

 

	12.2	
The miscellaneous clauses as set out in Section 13 of the Agreement shall apply mutatis mutandis to this Amendment.

 

[The signature page follows]

 

10

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed and hereby represent and warrant that their respective signatures below indicate that each have been duly authorized by all necessary and appropriate corporate action to execute this Amendment.

 

	
Berlin,

	
Feb 13, 2017

	
Carlsbad, CA USA

	
February 10, 2017

	 	 	 	 
	
(Place)

	
(Date)

	
(Place)

	
(Date)

	 	 
	
Bayer AG

	
Ionis Pharmaceuticals, Inc.

	 	 
	
ppa. /s/ Julio Triana

	
/s/ B. Lynne Parshall

	 	 
	
Name: Julio Triana

	
Name: B. Lynne Parshall

	 	 
	
Function/Title: Chief Financial Officer

	
Function/Title: Chief Operating Officer

	 	 
	
i. V. /s/ Xin Ma

	 
	 	 
	
Name: Dr. Xin Ma

	 
	 	 
	
Function/Title: 

	Head of New Product	 
	 	 	 
	 	
Commercialization &

	 
	 	 	 
	 	
Portfolio Strategy

	 

 

11

Appendix 1A

 

Definitions

 

	1.	
“Amendment-Clinical Studies” has the meaning set forth in Section 2.3 above.

 

	2.	
“Amendment Data Package” has the meaning set forth in Section 2 above.

 

	3.	
“Continuation Notice” has the meaning set forth in Section 4 above.

 

	4.	
“CS1 Study” has the meaning set forth in Section 2.3 above.

 

	5.	
“CS5 Study” has the meaning set forth in Section 2.3 above.

 

	6.	
“Decision Deadline” has the meaning set forth in Section 4 above.

 

	7.	
“Ionis Development Activities” has the meaning set forth in Section 2.3 above.

 

	8.	
“ISIS-FXIRx-2” means the Compound known as [***] having the following sequence and chemistry:

 

[***]

 

	9.	
“ISIS-FXIRx-2 Decision” has the meaning set forth in Section 4 above.

 

	10.	
“Non-Clinical Studies” has the meaning set forth in Section 2.3 above.

 

	11.	
“Termination Notice” has the meaning set forth in Section 4 above.

 

12

Appendix 5A

 

Ionis Core Technology Patents

 

[***]

 

13

Appendix 7A

 

Ionis Product-Specific Patents

 

[***]

 

14

Schedule 1.7a

 

Ionis Development Activities

 

[***]

 

 

15Blueprint

 

 Exhibit 10.1

 

EXECUTIVE CHANGE OF CONTROL AGREEMENT

 

This
Executive Change of Control Agreement (the “Agreement”), dated and
effective as of February 24, 2016 (the “Effective Date”), is
entered into by and between RELM Wireless Corporation, a Nevada
corporation with its principal place of business in West Melbourne,
Florida (the “Company”), and the
Executive of the Company named on the signature page hereto (the
“Executive”).

 

Preliminary Statements

 

The
Board of Directors of the Company (the “Board”) has determined that it is
in the best interest of the Company and its shareholders to assure
itself of the continued availability of the services of the
Executive, notwithstanding the possibility, threat or occurrence of
a Change of Control (as defined below) of the Company.

 

In
order to provide the Executive with enhanced financial security and
sufficient encouragement to remain with the Company notwithstanding
the possibility of a Change of Control, the Board believes that it
is imperative to provide the Executive with certain severance
benefits upon a Change of Control.

 

Agreement

 

In
consideration of the foregoing premises and the respective
covenants and agreements of the parties set forth below, and
intending to be legally bound hereby, the parties agree as
follows:

 

1.           Incentive
for Continuous Employment. If prior to the last day of the
12th full
calendar month following the date of occurrence of an event
constituting a Change of Control (it being recognized that more
than one event constituting a Change of Control may occur in which
case the 12-month period shall run from the date of occurrence of
each such event) (i) the Company terminates the Executive’s
employment other than (A) for Cause (as herein defined), or (B)
because of the Executive’s disability (as defined under the
Company’s disability policy) or death, or (ii) the Executive
terminates his employment for Good Reason (as herein defined) (any
such termination in clauses (i) or (ii) being referred to as a
“Payment
Event”), then, within five (5) business days (or such
other time as specified in Section 9(r) hereof) after such
termination (the “Payment
Date”) the Executive shall be entitled to receive from
the Company a cash payment (the “Payment”) in one lump sum equal
to the sum of: (i) the Payment Percentage provided for on Schedule
1 attached to this Agreement (“Schedule 1”), multiplied by the
Executive’s annual base salary as in effect at the time of
such termination and (ii) the average of the Executive’s
annual cash bonuses from the Company for the two fiscal years
(whether or not paid so long as accrued and declared by the
Company) preceding the fiscal year in which such termination
occurs. In addition, the Executive shall be entitled to the
severance benefits listed on Schedule 1 (the “Severance Benefits”). The
Executive shall not be entitled to any Payment or any Severance
Benefits if the Executive terminates the Executive’s
employment without Good Reason.

 

 

1

 

 

2.           Definitions.
In addition to the capitalized terms used and defined elsewhere in
this Agreement, the following capitalized terms used in this
Agreement shall, for purposes of this Agreement, have the meanings
set forth below.

 

“Affiliate” shall mean any
Person that, directly or indirectly, controls, is controlled by or
is under common control with such Person, and with respect to any
natural person, includes the members of such person’s
immediate family (spouse, children and parents, whether by blood,
marriage or adoption, or anyone residing in such person’s
home).

 

“Cause” shall mean the
occurrence of one or more of the following: (i) Executive’s
willful and continued failure to substantially perform
Executive’s reasonably assigned duties with the Company
(other than any such failure resulting from incapacity due to
disability or from the assignment to Executive of duties that would
constitute Good Reason), which failure continues for a period of at
least thirty (30) days after written demand for substantial
performance has been delivered by the Company to the Executive
which specifically identifies the manner in which the Executive has
failed to substantially perform his duties; (ii) Executive’s
willful conduct which constitutes misconduct and is materially and
demonstrably injurious to the Company, as determined in good faith
by a vote of at least two-thirds of the non-employee directors of
the Company at a meeting of the Board at which the Executive is
provided an opportunity to be heard; or (iii) Executive’s
conviction of a felony which has had or will have a material
adverse effect on the Company’s business or reputation, as
determined in good faith by a vote of at least two-thirds of the
non-employee directors of the Company at a meeting of the Board at
which the Executive is provided an opportunity to be
heard.

 

“Change of Control” shall mean (i)
individuals who, as of the Effective Date, constitute the Board
(the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a
director subsequent to the Effective Date whose election, or
nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest
relating to the election of the directors of the Company, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Securities Exchange Act of 1934) shall be considered as though
such individual was a member of the Incumbent Board; or (ii) the
approval by the shareholders of the Company of a reorganization,
merger, consolidation or other form of corporate transaction or
series of transactions (but not including an underwritten public
offering of the Company’s common stock or other voting
securities (or securities convertible into voting securities of the
Company) for the Company’s own account registered under the
Securities Act of 1933), in each case, with respect to which
Persons who were shareholders of the Company immediately prior to
such reorganization, merger, consolidation or other corporate
transaction do not, immediately thereafter, own more than fifty
percent (50%) of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged
or consolidated entity’s then outstanding voting securities,
or a liquidation or dissolution of the Company or the sale of all
or substantially all of the assets of the Company (unless such
reorganization, merger, consolidation or other corporate
transaction, liquidation, dissolution or sale is subsequently
abandoned or terminated prior to being consummated); or (iii) the
acquisition by any Person, entity or “group”, within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, of more than fifty percent (50%) of either
the then outstanding shares of the Company’s common stock or
the combined voting power of the Company’s then outstanding
voting securities entitled to vote generally in the election of
directors (hereinafter referred to as a “Controlling Interest”) excluding
any acquisitions by (x) the Company or any of its Subsidiaries, (y)
any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its Subsidiaries or (z) any
Person, entity or “group” that as of the Effective Date
owns beneficially (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) a Controlling
Interest.

 

 

2

 

 

“Good Reason” shall mean
(i) the material diminution in Executive’s authority, duties
or responsibilities; (ii) the relocation of Executive to a location
more than thirty (30) miles from his employment location at the
Effective Date; (iii) a material diminution in the
Executive’s annual base salary as in effect immediately prior
to such diminution, other than in connection with a general
diminution in Company compensation levels and in amounts
commensurate with the percentage diminutions of other Company
employees of comparable seniority and responsibility; or (iv) any
other action or inaction which constitutes a material breach by the
Company or any of its Subsidiaries of any agreement under which the
Executive provides services to the Company or any of its
Subsidiaries.

 

No
violation described in clauses (i) through (iv) above shall
constitute Good Reason unless the Executive has given written
notice to the Company specifying the applicable clause and related
facts giving rise to such violation within ninety (90) days after
the occurrence of such violation and the Company has not remedied
such violation to the Executive’s reasonable satisfaction
within thirty (30) days of its receipt of such notice.

 

“Person” shall mean any
natural person or entity with legal status.

 

“Restricted Period” shall
mean the period of time after termination of the Executive's
employment with the Company identified on Schedule 1.

 

“Subsidiary” shall mean any
Person (other than a natural person) controlled by the Company and
for which the Company is required to report the financial results
of on a consolidated basis in its financial statements filed with
the Securities and Exchange Commission.

 

3.    Restrictive Covenants. The Executive
acknowledges that in order to assure the Company that it will
retain the value of its business relationships, it is reasonable
that the Executive be limited in utilizing trade secrets and other
confidential information of the Company, Executive's special
knowledge of the business of the Company and Executive's
relationships with customers, suppliers and others having business
relationships with the Company in any manner or for any purpose
other than the advancement of the interests of the Company, as
hereinafter provided. The Executive acknowledges that the Company
would not enter into this Agreement and provide the benefits
provided for herein without the covenants and agreements of the
Executive set forth in this Section 3. Notwithstanding anything else herein contained,
the term “Company”, as used in this Section 3, shall
refer to the Company and its Subsidiaries and their respective
successors and assigns.

 

(a)           Confidentiality.
The Executive acknowledges that in the course of the Executive's
employment with the Company, Executive has had and is expected to
continue to have extensive contact with Persons with which the
Company has, had or anticipates having business relationships
(including current and anticipated customers and suppliers), and to
have knowledge of and access to trade secrets and other proprietary
and confidential information of the Company, including, without
limitation, the identity of Persons with whom the Company has, had
or anticipates having business relationships, technical
information, know-how, plans, specifications, and information
relating to the financial condition, results of operations,
employees, products and services, sources, leads or methods of
obtaining new business, pricing formulae, methods or procedures,
cost of supplies or services and marketing strategies of the
Company or any other information relating to the Company that could
reasonably be regarded as confidential or proprietary or which is
not in the public domain (other than by reason of Executive's
breach of the provisions of this section) (collectively, the
“Confidential
Information”), and that such information, even to the
extent it may be developed or acquired by or through the efforts of
the Executive, constitutes valuable, special and unique assets of
the Company developed or acquired at great expense which are the
exclusive property of the Company. Accordingly, the Executive shall
not at any time, either during the time Executive is employed by
the Company or thereafter, use or purport to authorize any Person
to use, reveal, report, publish, transfer or otherwise disclose to
any Person, any Confidential Information without the prior written
consent of the Company, except for disclosures by the Executive (i)
as required by applicable law (but only to the extent the Company
is given a reasonable opportunity to object to such disclosure and
protect the Confidential Information) or (ii) to responsible
officers of the Company and other responsible Persons who are in a
contractual or fiduciary relationship with the Company and who have
a need for such information for purposes in the best interests of
the Company. Without limiting the generality of the foregoing, the
Executive shall not, directly or indirectly, disclose or otherwise
make known to any Person any information as to the Company’s
employees and others providing services to the Company, including
with respect to their abilities, compensation, benefits and other
terms of employment or engagement. Upon the termination of the
Executive’s employment with the Company, the Executive shall
promptly deliver to the Company all files, correspondence, manuals,
notes, notebooks, computer diskettes, tapes, reports and copies
thereof, and all other materials relating to the Company’s
business, including without limitation any materials incorporating
Confidential Information, which are in the possession or control of
the Executive.

 

 

3

 

 

(b)           Restriction
on Competition. During the Executive's employment with the
Company and thereafter during the Restricted Period, the Executive
shall not, and shall not permit any Persons subject to Executive's
direction or control (including Executive's Affiliates) to,
directly or indirectly, whether alone or in association with
others, as principal, officer, agent, consultant, employee,
director or owner of any corporation, partnership, association or
other entity, or through the investment of capital, lending of
money or property, rendering of services or otherwise, engage in,
influence, control, have an interest in or otherwise become
actively involved with any business that competes with the Company.
The Executive acknowledges that the business of the Company is
national and international in scope, as its current and anticipated
customers and suppliers are located throughout the United States
and abroad, and that it is therefore reasonable that the
restrictions set forth in this Section 3(b) not be limited to any
specified geographic area.

 

(c)           Non-solicitation.
During the Executive's employment with the Company and thereafter
during the Restricted Period, the Executive shall not, and shall
not permit any Persons subject to Executive's direction or control
(including Executive's Affiliates) to, directly or indirectly, on
their own behalf or on behalf of any other Person (except the
Company or its Affiliates), (i) call upon, accept business from, or
solicit the business of any Person who is, or who had been at any
time during the preceding twelve months, a customer or supplier of
the Company, (ii) otherwise divert or attempt to divert any
business from the Company, (iii) interfere with the business
relationships between the Company and any of its customers,
suppliers or others with whom they have business relationships or
(iv) recruit or otherwise solicit or induce, or enter into or
participate in any plan or arrangement to cause, any Person who is
an employee of, or otherwise performing services for, the Company
to terminate his or her employment or other relationship with the
Company, or hire any Person who has left the employ of or ceased
providing services to the Company during the preceding twelve
months.

 

 

4

 

 

(d)           Nondisparagement.
The Executive shall not at any time, either during the time
Executive is employed by the Company or thereafter, directly or
indirectly, engage in any conduct or make any statement, whether in
commercial or noncommercial speech, disparaging or criticizing in
any way the Company (including its directors and employees and
other providing services to the Company), or any of its products or
services, nor shall the Executive engage in any other conduct or
make any other statement that could reasonably be expected to
impair the goodwill of any of them, the reputation of any products
or services of the Company or the marketing of such products or
services, in each case except as may be required by law, and then
only after consultation with the Company to the extent
possible.

 

(e)           Exception.
The ownership or control by the Executive or Executive's
Affiliates, as a passive investor, of up to two percent of the
outstanding voting securities or securities of any class of an
entity with a class of securities registered under the Securities
Exchange Act of 1934, as amended, shall not be deemed to be a
violation of the provisions of this Section 3.

 

4.           Remedies.
The Executive agrees that the restrictions set forth in Section 3,
including the length of the Restricted Period, the geographic area
covered and the scope of activities proscribed, are reasonable for
the purposes of protecting the value of the business and goodwill
of the Company. The Executive acknowledges that compliance with the
restrictions set forth in Section 3 will not prevent Executive from
earning a livelihood, and that in the event of a breach by the
Executive of any of the provisions of Section 3, monetary damages
would not provide an adequate remedy to the Company. Accordingly,
the Executive agrees that, in addition to any other remedies
available to the Company, the Company shall be entitled to seek
injunctive and other equitable relief (without having to post bond or other
security and without having to prove damages or the inadequacy of
available remedies at law) to secure the enforcement of
these provisions, and shall be entitled to receive reimbursement
from the Executive for attorneys’ fees and expenses incurred
by it in enforcing these provisions. In addition to its other
rights and remedies hereunder, the Company shall have the right to
require the Executive to account for and pay over to it all
compensation, profits, money, accruals and other benefits derived
or received, directly or indirectly, by the Executive from any
breach of the covenants of Section 3, and may set off any such
amounts due it from the Executive against any amounts otherwise due
Executive from the Company. If the Executive breaches any covenant
set forth in Section 3, the running of the Restricted Period as to
such covenant only shall be tolled for so long as such breach
continues. It is the desire and intent of the parties that the
provisions of Sections 3 and 4 be enforced in full; however, if any
court of competent jurisdiction shall at any time determine that,
but for the provisions of this paragraph, any part of this
Agreement relating to the time period, scope of activities or
geographic area of restrictions is invalid or unenforceable, the
maximum time period, scope of activities or geographic area, as the
case may be, shall be reduced to the maximum which such court deems
enforceable with respect only to the jurisdiction in which such
adjudication is made. If any other part of this Agreement is
determined by such a court to be invalid or unenforceable, the
invalid or unenforceable provisions shall be deemed amended (with
respect only to the jurisdiction in which such adjudication is
made) in such manner as to render them enforceable and to
effectuate as nearly as possible the original intentions and
agreement of the parties.

 

 

5

 

 

5.           Termination
of this Agreement. This Agreement shall commence on the
Effective Date and terminate on February 24, 2020, provided,
however, that if an event constituting a Change of Control shall
occur while this Agreement is in effect, this Agreement shall
automatically be extended for twelve (12) months from the date the
Change of Control occurs; provided that the Company may extend this
Agreement in its sole discretion by written notice to the
Executive. For purposes of this Section 5 only (and not for
purposes of determining whether the Payment and the Severance
Benefits have become payable), a Change of Control shall be deemed
to have occurred if the event constituting a Change of Control has
been consummated on or prior to expiration of the term of this
Agreement or if such event or one or more other events constituting
a Change of Control have not been consummated but the material
agreements for any of such events have been executed and delivered
by the parties to any such event on or prior to expiration of the
term of this Agreement (each such event being referred to as a
“Pending
Event”). For any Pending Event, this Agreement shall
automatically be extended until such time as the related material
agreements have been unconditionally terminated without
consummation of the applicable Pending Event and if any such
Pending Event is consummated pursuant to the related material
agreements (as amended, restated, supplemented or otherwise
modified), this Agreement shall further automatically be extended
for twelve (12) months from the date each such Pending Event is so
consummated. For avoidance of doubt and ambiguity, any event
constituting a Change of Control that occurs after expiration of
the term of this Agreement and during any extension of this
Agreement as so extended by virtue of a Pending Event shall not
result in this Agreement being extending after expiration of its
term in accordance with the immediately preceding
sentence.

 

6.           No
Alteration of Employment Terms or Status. Except as
expressly provided in this Agreement, nothing herein shall alter in
any way any of the terms of employment of the Executive, including
without limitation the Executive's rights with respect to any stock
options or other equity based awards Executive may have been
granted under the Company's equity compensation plans. The Company
and the Executive acknowledge that the Executive’s employment
is and shall continue to be “at-will”, as defined under
applicable law. If the Executive’s employment is terminated
for any reason, the Executive shall not be entitled to any
payments, benefits, damages, awards or compensation other than as
provided by this Agreement or as may otherwise be established under
the Company’s existing employee benefit plans or policies at
the time of termination.

 

7.           Parachute
Payments. (a) If Independent Tax Counsel (as defined below)
determines that the aggregate payments and benefits provided or to
be provided to the Executive pursuant to this Agreement, and any
other payments and benefits provided or to be provided to the
Executive from the Company or any of its Subsidiaries or other
Affiliates or any successors thereto constitute "parachute
payments" as defined in Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code") (or any successor provision
thereto) ("Parachute
Payments") that would be subject to the excise tax imposed
by Section 4999 of the Code (the "Excise Tax"), then, except as otherwise
provided in the next sentence, such Parachute Payments shall be
reduced to the extent necessary so that no portion thereof shall be
subject to the Excise Tax. If Independent Tax Counsel determines
that the Executive would receive in the aggregate greater payments
and benefits on an after tax basis if the Parachute Payments were
not reduced pursuant to this Section 7(a), then no such reduction
shall be made; provided, however, that in such case the provisions
of Sections 7(b)(i) and 7(b)(ii) shall not be operative. The
determination of the Independent Tax Counsel under this subsection
(a) shall be final and binding on all parties hereto. The
determination of which payments or benefits to reduce in order to
avoid the Excise Tax shall be determined in the sole discretion of
the Executive; provided, however, that unless the Executive gives
written notice to the Company specifying the order to effectuate
the limitations described above within ten (10) days of the
Independent Tax Counsel’s determination to make such
reduction, the Company shall first reduce those payments or
benefits that will cause a dollar-for-dollar reduction in total
Parachute Payments, and then by reducing other Parachute Payments,
to the extent possible, in reverse order beginning with payments or
benefits that are to be paid the farthest in time from the date the
reduction is to be made. Any notice given by the Executive pursuant
to the preceding sentence, unless prohibited by law, shall take
precedence over the provisions of any other plan, arrangement or
agreement governing the Executive's rights and entitlement to any
benefits or compensation. For purposes of this Section 7(a),
"Independent Tax Counsel"
shall mean an attorney, a certified public accountant with a
nationally recognized accounting firm, or a compensation consultant
with a nationally recognized actuarial and benefits consulting firm
with expertise in the area of executive compensation tax law, who
shall be selected by the Company and shall be acceptable to the
Executive (the Executive's acceptance not to be unreasonably
withheld), and whose fees and disbursements shall be paid by the
Company.

 

 

6

 

 

(b) (i) The Executive shall notify the
Company in writing within thirty (30) days of any claim by the
Internal Revenue Service that, if successful, would require the
payment by the Executive of an Excise Tax. Upon receipt of such
notice, the Company may, in its sole discretion, contest such claim
or provide the Executive with an additional payment (a
"Gross-Up Payment")
intended to reimburse the Executive for any such Excise Tax and all
taxes (including any Excise Tax) imposed upon the Gross-Up Payment
and any interest or penalties with respect to such taxes (except to
the extent such interest or penalty results from the Executive's
failure to act in accordance with the Company's or a Subsidiary's
reasonable directions or the Executive's failure to exercise due
care), or do nothing. If the Company notifies the Executive in
writing that it desires to contest such claim and that it will bear
the costs and provide the indemnification as required by this
sentence, the Executive shall:

 

(A)
give the Company any information reasonably requested by the
Company relating to such claim,

 

(B)
take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company,

 

 

7

 

 

(C)
cooperate with the Company in good faith in order to effectively
contest the claim, and

 

(D)
permit the Company to participate in any proceedings relating to
the claim; provided, however, that the Company shall pay (or cause
to be paid) directly all costs and expenses (including any interest
and penalties, except to the extent such interest or penalty
results from the Executive's failure to act in accordance with the
Company’s or a Subsidiary's reasonable directions or the
Executive's failure to exercise due care) incurred in connection
with the contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income or
other tax, including interest and penalties with respect thereto
(except to the extent such interest or penalty results from the
Executive's failure to act in accordance with the Company’s
or a Subsidiary's reasonable directions or the Executive's failure
to exercise due care), imposed as a result of such representation
and payment of costs and expenses. The Company shall control all
proceedings taken in connection with such contest; provided,
however, that if the Company directs the Executive to pay such
claim and sue for a refund, the Company shall, unless prohibited by
law, advance (or cause to be advanced) the amount of such payment
to the Executive, on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise
Tax or income or other tax, including interest or penalties with
respect thereto (except to the extent such interest or penalty
results from the Executive's failure to act in accordance with the
Company's or a Subsidiary's reasonable directions or the
Executive's failure to exercise due care), imposed with respect to
such advance or with respect to any imputed income with respect to
such advance. If the advancement described in the preceding
sentence is prohibited by law, the Company and the Executive shall
cooperate in an effort to determine an alternative approach to
payment of the claim in a manner permitted by applicable law and
consistent with the original intent and economic benefit to the
Executive of this provision.

 

(ii)
If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 7(b)(i), the Executive becomes entitled
to receive a refund with respect to a payment by the Company with
respect to such claim, the Executive shall, within ten (10) days
after the receipt of such refund, pay to the Company the amount of
such refund, together with any interest paid or credited thereon
after taxes applicable thereto.

 

(iii)
Notwithstanding anything herein to the contrary, this Section 7(b)
shall be interpreted (and, if determined by the Company to be
necessary, reformed) to the extent necessary to fully comply with
the Sarbanes-Oxley Act and Section 409A of the Code; provided that
the Company agrees to maintain, to the maximum extent practicable,
the original intent and economic benefit to the Executive of the
applicable provision without violating the provisions of the
Sarbanes-Oxley Act and Code Section 409A.

 

8.           Code
Section 409A. (a)    If any provision of this
Agreement (or of any payment of compensation, including benefits) would cause
the Executive to incur any additional tax or interest under Code Section
409A or any regulations or Treasury guidance
promulgated thereunder,
the Company shall, after consulting with the Executive, reform such
provision to comply
with Code Section 409A; provided that the Company agrees to make
only such changes as
are necessary to bring such provisions into compliance with Code
Section 409A and to
maintain, to the maximum extent practicable, the original intent
and economic benefit to the Executive of the applicable provision
without violating the provisions of Code Section 409A.

 

 

8

 

 

(b)           Notwithstanding
any provision to the contrary in this Agreement, if the Executive
is deemed on the date of termination of employment to be a
"specified employee" within the meaning of that term under Code
Section 409A(a)(2)(B), then with regard to any payment or the
provision of any benefit that is required to be delayed in
compliance with Section 409A(a)(2)(B) such payment or benefit shall
not be made or provided (subject to the last sentence hereof) prior
to the earlier of (i) the expiration of the six (6)-month period
measured from the date of the Executive's "separation from service"
(as such term is defined in Treasury Regulations issued under Code
Section 409A) or (ii) the date of his death (the "Deferral Period"). Upon the expiration
of the Deferral Period, all payments and benefits deferred pursuant
to this Section 8 (whether they would have otherwise been payable
in a single sum or in installments in the absence of such deferral)
shall be paid or reimbursed to the Executive in a lump sum, and any
remaining payments and benefits due under this Agreement shall be
paid or provided in accordance with the normal payment dates
specified for them herein. Notwithstanding the foregoing, to the
extent that the foregoing applies to the provision of any ongoing
welfare benefits to the Executive that would not be required to be
delayed if the premiums therefor were paid by the Executive, the
Executive shall pay the full cost of premiums for such welfare
benefits during the Deferral Period and the Company shall pay (or
cause to be paid) to the Executive an amount equal to the amount of
such premiums paid by the Executive during the Deferral Period
promptly after its conclusion.

 

(c)           Any
reimbursements by the Company to the Executive of any eligible
expenses under this Agreement that are not excludable from the
Executive’s income for Federal income tax purposes (the
“Taxable
Reimbursements”) shall be made by no later than the
earlier of the date on which they would be paid under the Company's
normal policies and the last day of the taxable year of the
Executive following the year in which the expense was incurred. The
amount of any Taxable Reimbursements, and the value of any in-kind
benefits to be provided to the Executive, during any taxable year
of the Executive shall not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other
taxable year of the Executive. The right to Taxable Reimbursements,
or in-kind benefits, shall not be subject to liquidation or
exchange for another benefit.

 

(d)           Payment
of any Taxable Reimbursements under this Agreement must be made by
no later than the end of the taxable year of the Executive
following the taxable year of the Executive in which the Executive
remits the related taxes.

 

9.           Miscellaneous.

 

(a)           Entire
Agreement. This Agreement (including Schedule 1) sets forth
the entire understanding of the parties with respect to the subject
matter hereof and merges and supersedes any prior or
contemporaneous agreements (whether written or oral) between the
parties pertaining thereto, including without limitation any prior
agreements, arrangements, understandings or commitments of any
nature whatsoever relating to severance payments or other
compensation in connection with termination of Executive's
employment. The Executive acknowledges that he has read and
understands the provisions of this Agreement. The Executive further
acknowledges that he has been given an opportunity for his legal
counsel to review this Agreement and that the provisions of this
Agreement are reasonable. The parties agree and acknowledge that
the Executive Change of Control Agreement, dated February 29, 2012,
by and between the Company and the Executive (the
“Prior
Agreement”) is hereby terminated and of no further
force or effect. The parties further agree and acknowledge that no
“Change of Control” occurred under the Prior Agreement,
the term of such Prior Agreement was not extended, and no payments
have or hereafter may become payable to the Executive under the
Prior Agreement or any previous change of control agreement or
provision between the Company and the Executive.

 

 

9

 

 

(b)           Amendment.
This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.

 

(c)           Waiver.
No waiver by any party of any of its rights under this Agreement
shall be effective unless in writing and signed by the party
against which the same is sought to be enforced. No such waiver by
any party of its rights under any provision of this Agreement shall
constitute a waiver of such party’s rights under such
provisions at any other time or a waiver of such party’s
rights under any other provision of this Agreement. No failure by
any party hereto to take any action against any breach of this
Agreement or default by another party shall constitute a waiver of
the former party’s right to enforce any provision of this
Agreement or to take action against such breach or default or any
subsequent breach or default by such other party.

 

(d)           Successors
and Assigns. The Executive shall not have the right to
assign Executive's rights or obligations hereunder. The Company
shall not have the right to assign its rights or obligations under
this Agreement without the prior written consent of the Executive,
except in accordance with subsection (j) below. Subject to the
foregoing, this Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their legal representatives,
heirs, successors and permitted assigns. Except as otherwise
specifically provided herein, the rights and obligations of the
parties under this Agreement shall be unaffected by a Change of
Control of the Company.

 

(e)           Additional
Acts. The Executive and the Company shall execute,
acknowledge and deliver and file, or cause to be executed,
acknowledged and delivered and filed, any and all further
instruments, agreements or documents as may be necessary or
expedient in order to consummate the transactions provided for in
this Agreement and do any and all further acts and things as may be
necessary or expedient in order to carry out the purpose and intent
of this Agreement.

 

(f)           Communications.
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been
given at the time personally delivered, on the business day
following the day such communication is sent by national overnight
delivery service, upon electronic confirmation of recipient’s
receipt of a facsimile of such communication, or five days after
being deposited in the United States mail enclosed in a registered
or certified postage prepaid envelope, return receipt requested,
and addressed to the recipient, in the case of the Company, at the
Company’s headquarters and, in the case of the Executive, at
the address of the Executive on file with the Company, or sent to
such other address as a party may specify by notice to the other
party in accordance herewith, provided that notices of change of
address shall only be effective upon receipt.

 

 

10

 

 

(g)           Severability.
If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, such invalidity
or unenforceability shall not affect the validity and
enforceability of the other provisions of this Agreement and the
provision held to be invalid or unenforceable shall be enforced as
nearly as possible according to its original terms and intent to
eliminate such invalidity or unenforceability.

 

(h)           Withholding
Taxes. The Company may withhold from amounts payable under
this Agreement such federal, state and local taxes as are required
to be withheld pursuant to any applicable law or regulation and the
Company shall be authorized to take such action as may be necessary
in the opinion of the Company’s counsel to satisfy all
obligations for the payment of such taxes.

 

(i)           Governing
Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Florida applicable to agreements made and to be performed
entirely in such state, without regard to the conflict of laws
principles of such state.

 

(j)           Consolidation,
Merger or Sale of Assets. If the Company consolidates or
merges into or with, or transfers all or substantially all of its
assets to, another entity the term "Company" as used in this
Agreement shall mean such other entity and this Agreement shall
continue in full force and effect. In the case of any transaction
in which a successor would not by the foregoing provision or by
operation of law be bound by this Agreement, the Company shall
require such successor expressly and unconditionally to assume and
agree to perform the Company’s obligations under this
Agreement, in the same manner and to the same extent that the
Company would be required to perform if no such succession had
taken place.

 

(k)           Headings.
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.

 

(l)           Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original but all of which together
shall constitute one and the same instrument. In the event that any
signature to this Agreement is delivered by facsimile transmission
or email attachment, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such
facsimile or email-attached signature page were an original
thereof.

 

(m)           Litigation;
Prevailing Party. If any litigation is instituted regarding
this Agreement, the prevailing party shall be entitled to receive
from the non-prevailing party, and the non-prevailing party shall
pay, all reasonable fees and expenses of counsel for the prevailing
party.

 

(n)           Waiver
of Jury Trial. Each party hereto knowingly, irrevocably and
voluntarily waives its right to a trial by jury in any litigation
which may arise under or involving this Agreement.

 

 

11

 

 

(o)           Venue;
Jurisdiction. If any litigation is to be instituted
regarding this Agreement, it shall be instituted in the state and
federal courts located in Brevard County, Florida, and each party
irrevocably consents and submits to the personal jurisdiction of
such courts in any such litigation, and waives any objection to the
laying of venue in such courts. Service of process in any such
litigation shall be effective as to any party if given to such
party by registered or certified mail, return receipt requested, or
by any other means of mail that requires a signed receipt, postage
prepaid, mailed to such party as provided in Section
9(f).

 

(p)           Remedies
Cumulative. No remedy made available by any of the
provisions of this Agreement is intended to be exclusive of any
other remedy, and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity.

 

(q)           No
Duty to Mitigate. The Executive shall not be required to
mitigate the amount of any payment contemplated by this Agreement,
nor shall any such payment be reduced by any earnings that the
Executive may receive from any other source.

 

(r)           Release.
Notwithstanding any provision herein to the contrary, the Company
shall not have any obligation to pay (or cause to be paid) any
amount or provide any benefit under this Agreement unless and until
the Executive executes, within sixty (60) days after a Payment
Event, a release of the Company, its Subsidiaries and other
Affiliates and related parties, in such form as the Company may
reasonably request, of all claims against the Company, its
Subsidiaries and other Affiliates and related parties relating to
the Executive’s employment and termination thereof and unless
and until any revocation period applicable to such release has
expired.

 

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

 

RELM
WIRELESS CORPORATION

 

By:
/s/ William P.
Kelly 

Name:
William P. Kelly

Title:
Executive Vice President and Chief Financial
Officer

 

EXECUTIVE:

 

/s/ Timothy A.
Vitou                                                                           

Timothy
A. Vitou

 

 

 

12

 

Schedule
1

 

 

	
 Executive:

	
 

	
Timothy
Vitou

	
  

	
 

	
  

	
 Position/Title:

	
 

	
Vice President
Sales

	
  

	
 

	
  

	
 Payment
Percentage:

	
 

	
50%

	
  

	
 

	
  

	
 Severance
Benefits:

	
 

	
(A) For a period
commencing with the month in whichtermination of employment shall
have occurred and ending sixmonths thereafter, the Executive and,
as applicable, theExecutive’s covered dependents shall be
entitled to all benefits under the Company’s welfare benefit
plans (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended), as if the
Executive were still employed during such period, at the same level
of benefits and at the same dollar cost to the Executive as is in
effect at the time of termination. If and to the extent that
equivalent benefits shall not be payable or provided under any such
plan, the Company shall pay or provide (or cause to be paid or
provided) equivalent benefits on an individual basis. The benefits
provided in accordance herewith shall be secondary to any
comparable benefits provided to the Executive and, as applicable,
the Executive’s covered dependents by another employer of the
Executive.

	
  

	
 

	
  

	
 

	
 

	
(B) Outplacement
services commencing for a period of six (6) months from the
date of termination of employment, the scope and provider of
which shall be selected by the Executive in his
sole discretion provided that the costs of such services to
the Company shall not exceed $7,500 and such services shall be
directly related to the termination of the Executive’s
services to the Company.

	
 

	
 

	
  

	
 Restricted
Period:

	
 

	
Six (6)
Months

 

 

 

 

 

 

 

 

 

 

 

13

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