Document:

Exhibit 4.21

 

SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

 

           THIS SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE (the "Settlement Agreement") is made and entered into this 24th day of March, 2019 (the "Effective Date"), by and between Teva Pharmaceutical Industries Ltd. ("Teva"), on the one hand, and MediWound Ltd. ("MediWound"), on the other hand. Teva and MediWound are together referred to as the "Parties" and individually referred to as a “Party”.

 

WITNESSETH:

 

WHEREAS, the Parties have previously collaborated and in conjunction therewith were parties (whether alone or in concert with others) to certain transactions and agreements entered into during the years 2007 through 2013 (collectively, the “Collaboration Agreements”), which have terminated effective as of December 31, 2012 and September 2, 2013, as applicable; and

 

WHEREAS, following such termination of the Collaboration Agreements, each Party raised, and asserted that it further has, certain claims and demands against the other Party in connection with rights and obligations arising from and/or related to the Collaboration Agreements, including claims and demands by MediWound regarding, inter alia, damages related to production, development, loss of potential profits, commercialization costs of the products underlying said collaboration, and unpaid reimbursement obligations, amounting to an aggregate of NIS ~110,000,000, which were allegedly suffered by MediWound as a result of such collaboration and the termination thereof, and including claims and demands by Teva regrading, inter alia, certain unpaid amounts (collectively, the "Asserted Claims"); and

 

WHEREAS, the Parties have been actively discussing their claims and demands since the year 2013 and, in light of the costs and delays associated with litigating the disputes between the Parties, the Parties desire to fully and finally settle all matters arising from and/or related to the their business relationship and the termination of such relationship, including without limitation the Asserted Claims, as more fully set forth herein;

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, it is agreed as follows:

 

1.             Non-Admission of Liability.

 

This Settlement Agreement shall not in any way be construed as an admission by either Party that it has acted wrongfully with respect to the other Party or any other person, and each Party specifically disclaims any liability to or wrongful acts against the other Party or any other person, on the part of itself, its employees, its agents or its other Releasors (as defined in Section 5.1 below).  The Parties specifically acknowledge and agree that this Agreement is made to compromise and settle the Asserted Claims and the Parties' respective rights and defenses in connection therewith, and that neither this Agreement nor any action taken pursuant to this Agreement shall be offered or received in evidence in any action or proceeding by one Party against the other Party.

 

2.             No Other Claims.

 

Each Party represents and warrants to the other Party that it has not filed any complaints, charges or lawsuits against the other Party with any governmental agency, court, or administrative entity.

 

3.             Settlement Payment; Payment Undertaking.

 

Following MediWound’s Asserted Claims, but without admitting of any of the Asserted Claims:

 

3.1.          On or before April 2, 2019, Teva will pay MediWound an amount in cash equal to US$4,000,000 (”Settlement Payment”), as full and final settlement, termination and satisfaction of all Claims (as defined in Section 5.1 below) released by MediWound below. Such Settlement Payment shall be made in accordance with wiring instructions to be provided by MediWound.

3.2.          MediWound hereby undertakes to pay Teva an amount equal to 15% of any recognized revenues of MediWound (according to MediWound’s financial statements, which will be prepared in accordance with International Financial Reporting Standards (IFRS) generally accepted accounting principles) (the “Recognized Revenues”) generated, from time to time after January 1, 2019, from the sale or the license by MediWound or its Affiliates of the Licensed Products (including, for the avoidance of doubt, any Recognized Revenues generated from time to time after January 1, 2019 from any agreement between MediWound and Biomedical Advanced Research and Development Authority dated September 29, 2015 (the “BARDA Agreement” - MediWound confirms that it had not received any Recolonized Revenues from the BARDA Agreement prior to January 1, 2019)(the “Revenues-Based Payments”); all, up to an aggregate amount equal to US$ 10,200,000 (the term “Licensed Product” shall have the meaning ascribed thereto in that certain License and Collaboration Agreement dated August 21, 2007, as amended, by and between MediWound and Teva, which definition is hereby incorporated by reference into this Agreement to constitute an integral part hereof); each such payment shall be made by MediWound to Teva from time to time within 45 days following the later of actual receipt by MediWound of the applicable Recognized Revenues and the recognition of such Recognized Revenues by MediWound in its annual financial statements under applicable financial principals; provided however that, on the date on which MediWound is to pay Teva the Revenue-Based Payment (if any) in respect of the 12-month period ending December 31, 2028 (and regardless of whether or not any such Revenue‐Based Payment is at all due in respect of such period at that time), MediWound shall pay Teva an amount equal to the lesser of:

(i) the sum (if positive) of (A) US$ 10,200,000 minus (B) the aggregate amount of all Revenues-Based Payments that have been paid by MediWound to Teva until such time pursuant to this Section 3.2 (such sum being inclusive of the amount of the Revenue‐Based Payment that may be due by MediWound to Teva at that time in respect of the 12-month period ending December 31, 2028; i.e. no double payment); in which case, MediWound’s obligations under this Section 3.2 shall terminate and be of no further force and effect;

or

(ii) US$ 1,700,000, which amount shall be credited against and be deducted from any future payments that may become due by MediWound to Teva under this Section 3.2 at any time thereafter (in which case, Mediwound's obligations under this Section 3.2 shall continue until such time as the aggregate amount of all payments that have been paid by Mediwound to Teva until such time pursuant to this Section 3.2, inclusive of the amount paid under this clause 3.2(ii), equal an aggregate of US$10,200,000).

3.3.          Anything to the contrary notwithstanding:

(i) in no event shall the aggregate of all payments by MediWound to Teva pursuant to this Agreement, exceed the amount of US$10,200,000, and once such aggregate has been paid in full a aforesaid, all payment obligations of MediWound under this Agreement shall terminate and be of no further force and effect;

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(ii) on or prior to the sixtieth (60th) calendar day following the last day of each calendar year during the period commencing on the Effective Date and expiring upon the time by which the Company shall have completed the payment to Teva of an aggregate amount equal to US$10,200,000, the Company shall deliver to Teva a certificate, executed by an officer of the Company and certified by an outside accountant to the Company (being a firm of Independent Certified Public Accountants who are members of the Israeli Institute of Certified Public Accountants and are associated with one of the "big four" independent public accountants of internationally recognized standing), setting forth the Company’s determination of the amount of Recognized Revenues, which were generated from the sale or license of the  Licensed Products for such preceding calendar year;

(iii) No Assurances. Teva hereby acknowledges that the commercialization of any of the Licensed Products as well as the amount of Recognized Revenues, if any, that may be generated at any time hereafter, are uncertain, and that (A) MediWound or its Affiliates may not (i) commercialize any of the Licensed Products, and/or (ii) generate any revenues from the Licensed Products, and (B) it is therefore not assured that the Company will be required to pay the consideration set forth in Section 3.2(i);

(iv) Without limiting the other provisions of Section 3.3, MediWound shall have sole discretion over all matters relating to the Licensed Products or other technology, including, but not limited to, any development, testing, manufacturing, regulatory, marketing and sales decisions relating to any Licensed Product, and MediWound and its Affiliates shall have no obligations to Teva with respect to such decisions or the development, sales and marketing of the Licensed Products other than with respect to the applicable payments under Section 3.2 above, if any, that may become due and payable pursuant to Section 3.2;

(v) MediWound shall be entitled to assign its rights and obligations pursuant to Sections 3.2 and 3.3 - (A) to any third party who (a) is a recipient of all or substantially all of the assets of MediWound or (b) who (x) is a recipient of all or substantially all marketing and/or commercialization rights of the Licensed Products, in either the United States or Europe, and (y) has either a market capitalization in excess of $3 billion or annual revenues for the most recent fiscal year (calculated in accordance with GAAP) in excess of $200 million, or (B) to any trustee or escrow agent for the benefit of MediWound or its shareholders.

4.             Waiver and Termination.

4.1.          Teva on behalf of itself and on behalf of its Releasors (as defined in Section 5 below) hereby irrevocably terminates, waives and forever discharges MediWound and its respective Releasees (as defined in Section 5 below) from any and all Claims, debts, obligations or liabilities that MediWound or any of its Releasees had or has to Teva or any of its Releasors under, in connection with or arising out of the Collaboration Agreements (or any of them) or the termination thereof, or the subsequent repurchase by MediWound of Teva’s shares in MediWound, or any subject matter of the Teva 2013 Waiver and Termination (as defined in Section 10 below); without, however, annulling or otherwise abrogating the binding effect of the Teva 2013 Waiver and Termination or of any other release, waiver, termination, share purchase, share transfer deed, payment or other action or transaction that has been given, made or taken prior to the Effective Date.

4.2.          MediWound on behalf of itself and on behalf of its Releasors hereby irrevocably terminates, waives and forever discharges Teva and its respective Releasees from any and all debts, obligations or liabilities that Teva or any of its Releasees had or has to MediWound or any of its Releasors under, in connection with or arising out of the Collaboration Agreements (or any of them) or the termination thereof, or the subsequent repurchase by MediWound of Teva’s shares in MediWound, or any subject matter of the Teva 2013 Waiver and Termination; without, however, annulling or otherwise abrogating the binding effect of any other release, waiver, termination, share purchase, share transfer deed, payment or other action or transaction that has been given, made or taken prior to the Effective Date.

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4.3.          Each Party, on behalf of itself and on behalf of its Releasors, hereby irrevocably and unconditionally (subject in the case of MediWound, to Section 3.1 above) waives and forever discharges the other Party and its respective Releasees - in consideration for the waivers and releases (and, in the case of MediWound, also in consideration for the Settlement Payment, and in the case of Teva, also in consideration for the payment undertaking in Section 3.2) by the other Party and its Releasors contained in this Settlement Agreement - from any and all claims and demands arising out of any act or omission by such other Party occurring prior and up to the Effective Date relating to, in connection with or arising out of the Collaboration Agreements (or any of them) or the termination thereof, or the subsequent repurchase by MediWound of Teva’s shares in MediWound, or any subject matter of the Teva 2013 Waiver and Termination, or any other agreement, understanding, covenant or promise, whether written or oral, entered into, prior to the Effective Date, between the Parties or their respective Releasors (whether alone or in concert with others), including without limitation MediWound’s demand that Teva pay to MediWound certain consideration, costs, loss of profits, damages and expenses underlying the Asserted Claims; without, however, annulling or otherwise abrogating the binding effect of the Teva 2013 Waiver and Termination  or any other release, waiver, termination, share purchase, share purchase, payment or other action or transaction that has been given, made or taken prior to the Effective Date.

5.             Release.

 

In addition to the provisions of Section 4 above, each Party, on behalf of itself, its past, present and future Affiliates, and its and their respective past, present and future subsidiaries, agents, directors, officers, employees, representatives, attorneys, heirs, administrators, executors, successors and assigns, and all persons acting by, through, under or in concert with any of them (collectively, such Party’s “Releasors”), hereby irrevocably and unconditionally releases, acquits and forever discharges the other Party, each of its past, present and future Affiliates, and its and their respective past, present and future subsidiaries, agents, directors, officers, employees, representatives, attorneys, heirs, administrators, executors, successors and assigns, and all persons acting by, through, under or in concert with any of them (collectively, such Party’s “Releasees”), from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys' fees and costs actually incurred) of any nature whatsoever, known or unknown, suspected or unsuspected, whether in law or equity, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any governmental statute, regulation, or ordinance (any of the foregoing a "Claim," and collectively, the "Claims") which each Party at any time had, has or may have, against the other Party or any of the Releasees by reason of any act or omission concerning any matter, cause or thing prior and up to the Effective Date.

 

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

6.             Certain Exceptions.

 

Anything to the contrary notwithstanding, it is hereby agreed between the Parties that the waivers and releases set forth in this Settlement Agreement do not include and do not intend to include (i) a waiver or release of Claims resulting from a Party's breach of the terms, conditions and covenants of this Settlement Agreement or of the Teva 2013 Waiver and Termination, nor of any claim relating to a breach of one Party’s confidentiality obligations to the other Party, other than any breach of confidentiality obligations which was already known to a party hereto on or prior to the Effective Date; or (ii) an annulment or other abrogation of the binding effect of the of the Teva 2013 Waiver and Termination or of any other release, waiver, termination, share purchase, share transfer deed, payment or other action or transaction that has been given, made or taken prior to the Effective Date.

 

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7.             Knowing and Voluntary Waiver by the Parties.

 

For the purpose of implementing a full and complete release, each Party expressly acknowledges that this Settlement Agreement is intended to include in its effect, without limitation, all Claims which a Party does not know or suspect to exist at the time of execution hereof, and that this Settlement Agreement contemplates the extinguishment of any such Claims.

 

8.             Confidentiality; Publicity.

8.1.          The Parties represent and agree that they will keep the terms and conditions of this Settlement Agreement completely confidential, other than as specifically set forth hereunder. Neither Party shall disclose any information concerning this Settlement Agreement except (i) in response to an order of a court of competent jurisdiction, a subpoena issued by a government agency, or  as required by applicable law or regulations including applicable securities laws and stock exchange regulations, (ii) to any other party to the Collaboration Agreements (or any of them), (iii) as required by any due diligence or inquiry in connection with any current or future contemplated investment, license, acquisition or other transaction (subject, however, to a nondisclosure agreement), and (iv) to such Party's auditors or legal or tax advisors, or as necessary to enforce the terms of this Agreement. Except in the cases listed above in this Section 8.1, each Party, if being asked, will only be entitled to respond that the matter has been resolved.

8.2.          Neither MediWound, Teva or any person acting on their behalf, nor any of their respective Affiliates or any person acting on their behalf, shall issue, without the consent of the MediWound and Teva, any public statement or press release or make any other disclosure concerning the terms and content of this Settlement Agreement, except for such public statement or press release or other disclosure which is required to be made pursuant to any applicable law or stock exchange regulations in which event the party required to make such disclosure shall, to the extent permissible and reasonably feasible, provide both MediWound and Teva with a copy of such public statement or press release or other disclosure reasonably in advance, to enable such MediWound and Teva to comment on such press release or public statement or other disclosure, and shall take into consideration any such comments, provided that the final determination shall be at the sole discretion of the party required to make such disclosure. The press release, regarding the execution of this Settlement Agreement is attached hereto as Schedule A.

9.             Voluntary Act.

 

Each Party represents and acknowledges that it has carefully read and fully understands all of the provisions of this Settlement Agreement and that it is voluntarily entering into this Settlement Agreement wholly of its own free will and volition. Each Party further represents that it has been represented by counsel of its own choice in the negotiations leading to its execution of this Settlement Agreement and that it has received independent legal advice, or has had the opportunity to receive independent legal advice, from such Party’s respective legal counsel with respect to the advisability of executing this Settlement Agreement.

 

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10.           Sole and Entire Agreement.

 

This Settlement Agreement constitutes the full and entire understanding and agreement between the Parties, and fully supersedes any and all prior agreements or understandings between the Parties hereto pertaining to the subject matter hereof and any other written or oral agreement existing between the Parties are expressly terminated, excluding that certain Irrevocable Waiver and Termination Agreement by Teva dated September 2, 2013, a copy of which is attached hereto as Schedule B (the “Teva 2013 Waiver and Termination”) which shall remain in full force and effect notwithstanding the termination of the obligations of MediWound referred to therein.

 

11.           Miscellaneous

11.1.          For the purposes of this Settlement Agreement, neither Party shall be deemed the writer of this document. This Settlement agreement may not be amended, revised or modified in whole or in part, except pursuant to a separate written agreement signed by both Parties.

11.2.          The terms and conditions of this Settlement Agreement shall inure to the benefit of and be binding upon the respective, Releasors, Releasees, successors and assigns of the Parties hereto.  Nothing in this Settlement Agreement, express or implied, is intended to confer upon any party other than the Parties hereto, the Releasees or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Settlement Agreement, except as expressly provided in this Settlement Agreement.

11.3.          This Settlement Agreement and any controversy arising out of or relating to this Settlement Agreement shall be governed by and construed in accordance with the internal laws of the State of Israel, without regard to conflict of law principles that would result in the application of any law other than the laws of the State of Israel. The parties hereto (a) hereby irrevocably and unconditionally submit to the jurisdiction of the competent courts of Tel Aviv-Jaffa, Israel for the purpose of any suit, action or other proceeding arising out of or based upon this Settlement Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Settlement Agreement except in the competent courts of Tel Aviv-Jaffa, Israel.

11.4.          This Settlement Agreement may be executed and deliv-ered by facsimile or electronically-transmitted PDF signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

11.5.          No delay or omission to exercise any right, power or remedy accruing to any Party under this Settlement Agreement, upon any breach or default of any other Party under this Settlement Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Settlement Agreement, or any waiver on the part of any Party of any provisions or conditions of this Settlement Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Settlement Agreement or by law or otherwise afforded to any Party, shall be cumulative and not alternative.

11.6.          The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

11.7.          Each Party to this Settlement Agreement agrees to execute and to deliver such additional documents and instruments, and to perform such additional acts, as may be necessary to effectuate, consummate or perform any of the terms, provisions or conditions of this Settlement Agreement.

 

[Signature Block Follows]

 

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IN WITNESS WHEREOF, this Settlement Agreement and Mutual General Release has been duly executed on the date herein above set forth:

 

	
MediWound Ltd.

 

By: /s/ Gal Cohen

Name: Gal Cohen

Title: Chief Executive Officer

 

 

By: /s/ Sharon Malka

Name: Sharon Malka

Title: Chief Financial Officer

 

 

	
Teva Pharmaceutical Industries Ltd.

 

By:  /s/ Michael Mcclellan

Name: Michael Mcclellan

Title: EVP, Chief Financial Officer

 

 

 

 

By:  /s/ Eli Shani

Name: Eli Shani

Title: SVP, Business Development

 

List of attachments:

	·	
Schedule A – Form of Press Release

	·	
Schedule B - Irrevocable Waiver and Termination Agreement by Teva, dated September 2, 2013

 

[Signature Page to

Settlement Agreement and Mutual General Release / 2019]

 

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March 24, 2019

STRICTLY CONFIDENTIAL

Teva Pharmaceutical Industries Ltd.

5 Basel Street

Petach Tikva 4951033, Israel

 

Re.: Certain Indemnity in connection with Settlement Agreement

MediWound Ltd. ("MediWound") and Teva Pharmaceutical Industries Ltd. ("Teva") are parties to that certain Settlement Agreement and Mutual General Release dated as of the date hereof (the "Settlement Agreement"), relating to certain collaborations and transactions entered into during the years 2007 through 2013, which have terminated effective as of December 31, 2012 and September 2, 2013, as applicable, and to which MediWound was a party (whether together with Teva or alone in concert with others).

One of the aforesaid collaborations was associated with, inter alia, a Buyout Agreement dated December 22, 2010, by and among MediWound, PolyHeal Ltd. (“PolyHeal”), the Equity Holders (as defined therein) and the Shareholders Representative Committee referred to therein (the "Buyout Agreement").

Teva was not a party to such Buyout Agreement.

MediWound informed Teva that claims were made by certain Equity Holders against MediWound concerning the achievement of a PH2 Milestone under the Buyout Agreement and the non-payment by MediWound to the Equity Holders of an amount of US$ 6,750,000 ("PH2 Milestone Payment"), and, to its defense, MediWound relied, inter-alia, on the back-to-back structure of such transactions and suggested a direct rivalry under which the plaintiffs may file their claims directly against Teva.

As it is the Parties’ intention to settle all Asserted Claims (as such term is defined in the Settlement Agreement), then, in order to induce Teva to enter into the Settlement Agreement:

1.          MediWound hereby agrees, subject to the terms and conditions of this letter agreement, to indemnify, defend and hold harmless Teva and its directors, officers, agents, and employees (Teva and each such person being referred to as an “Indemnified Person”), from and against any amount actually paid by such Indemnified Party to any Equity Holder (as defined in the Buyout Agreement) that is not a Releasee of Teva (any such Equity Holder that is not a Releasee of Teva - a “Third Party”) arising out of any and all suits, investigations, claims, or demands made by such Third Party and relating to the (i) achievement of the PH2 Milestone and (ii) the non-payment to such Third Party of all or any of its portion of the PH2 Milestone Payment under the Buyout Agreement (a "Collaboration Agreement Claim"); provided, however, that notwithstanding anything to the contrary: (a) any indemnity that may become payable by MediWound in accordance with this letter agreement shall be paid in cash, (b) subject only to Section 5(b) of this letter agreement, the maximum aggregate liability of MediWound under this letter shall not exceed an amount equal to $10,000,000 (the “Cap Amount”), (c) an Indemnified Person shall only be entitled to indemnification under this letter for a Third Party's Collaboration Agreement Claim with respect to which a notice has been received by MediWound prior to December 31, 2023 (in which case the indemnity hereunder shall survive with respect to such Third Party's Collaboration Agreement Claim until it has been finally resolved), and (d) notwithstanding anything to the contrary, the obligations of MediWound hereunder shall not apply to any special, indirect or consequential damages incurred by any Indemnified Persons themselves but will apply to any special indirect or consequential damages which may become payable by the Indemnified Persons to any Third Party in connection with any Collaboration Agreement Claim. The indemnity, defense and hold-harmless obligation set forth in this letter shall be the sole and exclusive remedy available to the Indemnified Persons with respect to or in connection with any Third Party's Collaboration Agreement Claim. In no event shall MediWound be required to indemnify, defend or hold harmless any Indemnified Person, from or against any claims, demands, losses, costs or expenses, other than as specifically set forth above.

 

2.          Teva shall give MediWound prompt written notice within 10 days of becoming aware of any Third Party's Collaboration Agreement Claim asserted or threatened against an Indemnified Person that could give rise to a right of indemnification under this letter and; provided, however, that the failure to give such notification shall not affect the indemnification provided hereunder except to the extent that MediWound shall have been prejudiced as a result of such failure.

3.          Upon receipt such notice MediWound will assume sole control and defense of such Third Party’s Collaboration Agreement Claim, subject to the right of Teva, as set forth in Section 7 below, to waive its right to indemnity, defense and hold-harmless. Each Indemnified Person shall cooperate with MediWound's investigation and defense of such Third Party’s Collaboration Agreement Claim, as may reasonably be requested by MediWound.

4.          So long as the aggregate potential liability of MediWound under this letter has not exceeded the Cap Amount, MediWound shall assume the defense of any Third Party’s Collaboration Agreement Claim by giving written notice to Teva and the Indemnified Person within 30 days after MediWound's receipt of Teva's notice thereof. Teva on behalf of the Indemnified Persons shall be entitled to participate in, but not control, the defense of the Third Party's claim or demand and to employ counsel of their choice for such purpose at the Indemnified Persons' sole cost and expense.

5.          In the event MediWound has not assumed the defense of any Third Party’s Collaboration Agreement Claim in accordance with the previous paragraph and it is determined by a final judgment of a competent court that MediWound has breached its obligations under this Settlement Agreement to assume the defense of such Third Party’s Collaboration Agreement Claim, then (a) such breach shall not release MediWound from its indemnification obligation hereunder and, accordingly, in such event at the request of Teva, MediWound shall (subject to the Cap Amount and other limitations set forth above) (x) indemnify the Indemnified Persons for any amount actually paid by such Indemnified Persons to such Third Party arising out of such Third Party’s Collaboration Agreement Claim, or (y) pay directly to such Third Party any reasonable settlement amount as requested by the Indemnified Person in settlement of the relevant Third Party's Collaboration Agreement Claim (provided such settlement (i) includes a release from all liabilities in respect of such claim and (ii) does not involve an obligation other than the payment of money, that would bind or impair MediWound), and (b) Teva shall be entitled to full reimbursement of its reasonable legal fees and expenses (notwithstanding the Cap Amount) in defending or settling such Third Party’s Collaboration Agreement Claim, without derogating from any remedy which may be determined by the competent court with respect to MediWound's breach of its obligations hereunder.

6.          MediWound shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such third party claim, on such terms as MediWound, in its sole discretion, shall deem appropriate, provided that MediWound shall not settle any such claim without the prior written consent of Teva (which consent shall be binding upon all Indemnified Persons and shall not be unreasonably withheld or delayed) if such settlement (i) exceeds the Cap Amount less any amounts previously paid by Mediwound under this letter agreement, (ii) does not include a release by the applicable Third Party of the Indemnified Persons from all liabilities in respect of such claim or (iii) if such settlement would involve an obligation other than the payment of money, that would bind or impair any such Indemnified Person.

7.          Notwithstanding the foregoing, if, in the reasonable judgment of Teva, such suit or claim involves an issue or matter which could have a material adverse effect on the business, operations or assets of any such Indemnified Person, then Teva may waive (which waiver shall apply to, and be binding upon Teva and all other Indemnified Persons) the rights to indemnity, defense and hold-harmless under this Agreement and shall have the rights to conduct the defense or settlement thereof on behalf of the Indemnified Persons (without derogating from MediWound’s rights to the extent it is a party to any such proceeding), and in such a case MediWound shall have no obligations whatsoever under this letter agreement neither to Teva nor any other Indemnified Person.

The provisions of Sections 8 and 11 of the Settlement Agreement shall apply, mutatis mutandis, to this letter agreement.

This letter agreement shall be governed by and construed in accordance with the laws of the State of Israel, without reference to principles of conflicts of law that may result in the application of the law of any other jurisdiction. Any claim, controversy or dispute arising from this letter shall be referred to and resolved solely in the competent courts located in Tel-Aviv, Jaffa, Israel.

Breach of this letter agreement by Teva or Mediwound shall deemed a breach of the Settlement Agreement by such party.

 

[Signature Page Follows]

 

Very truly yours,

 

	 	
MediWound Ltd.

 

By: /s/ Gal Cohen

Name: Gal Cohen

Title: Chief Executive Officer

 

By: /s/ Sharon Malka

Name: Sharon Malka

Title: Chief Financial Officer

	 	 
	
ACCEPTED AND AGREED:

 

Teva Pharmaceutical Industries Ltd.

 

By:  /s/ Michael Mcclellan

Name: Michael Mcclellan

Title: EVP, Chief Financial Officer

 

By:  /s/ Eli Shani

Name: Eli Shani

Title: SVP, Business Development

	 

 

[Signature Page to

Letter re. Certain Indemnity in connection with Settlement Agreement/ 2019]

 

 

רחוב הירקון 42 אזור תעשייה צפוני יבנה 8122745 טלפון: 972-77-9714100+ פקס: 972-77-9714111+

42 Hayarkon St. Industrial Zone Yavne 8122745 Tel: +972-77-9714100 Fax: +972-77-9714111

E-mail: mediwound@mediwound.com website: www.mediwound.comxene-ex101_90.htm

Exhibit 10.1

 

 

March 19, 2019

 

Confidential

 

Via Electronic Mail

 

Simon Pimstone

 

 

Dear Simon,

 

Re: Amended and Restated Employment Agreement

 

We are pleased to offer you this Amended and Restated Employment Agreement which replaces and supersedes your earlier Employment Agreement. You will be credited for all purposes with your service to the Company back to your start date of July 1, 2000. As of March 19, 2019 (the “Effective Date”), you will continue to be engaged by the Company in the full-time position of CEO.

 

A.Base Salary. Retroactive to January 1, 2019, you will earn a base salary of $444,776 USD per year, less statutory and other applicable deductions as required, for all work and services you perform for the Company (the “Base Salary”). The Base Salary is payable semi-monthly in arrears in accordance with the Company’s applicable payroll policies. The US dollar amount of your semi-monthly pay will be converted to Canadian dollars at the Bank of Canada exchange rate approximately five (5) days prior to each pay date and paid in Canadian dollars. You hereby agree and understand that the exchange rate between US and Canadian dollars may vary either in your favour or in Xenon’s favour (the “Exchange Rate Variance”), and you accept that such Exchange Rate Variance is an accepted term and condition of your employment. 

 

B.Annual Discretionary Bonus. In addition to your Base Salary, you are eligible to earn an annual discretionary bonus, less statutory and other applicable deductions as required, of up to sixty percent (60%) of your base salary earnings actually earned in the applicable calendar year of service, in Canadian dollars. Any bonus payable will be paid in Canadian dollars. The payment and amount of the annual bonus is within the sole discretion of the Board of Directors (the “Board”) and will be evaluated in the first quarter of each year in relation to the achievement of corporate objectives for the previous year. Such objectives will be established annually by the Board in its sole discretion. Bonuses are not earned until paid.

 

C.Annual Review. The Company will conduct an annual review of your compensation package, including your salary and bonus percentage, in accordance with its policies. Any adjustment to the same is at the sole discretion of the Company provided that the Base Salary benchmarked in US dollars will not be reduced without your consent and subject to Sections L and M of this Agreement. You will be paid in Canadian dollars, but the Company may, at its sole discretion, benchmark your compensation in US dollars based on the peer group that is identified from time to time. You hereby agree and acknowledge that the Company has no control over the applicable foreign currency exchange rate and that your compensation in Canadian dollars may be reduced compared to the previous year because of such applicable exchange rate. You further agree and acknowledge that such lower compensation will not constitute constructive dismissal if solely due to the then applicable foreign currency exchange rate. 

 

 

 

D.Expense Reimbursement. In accordance with its expense policy, as amended from time to time, the Company will reimburse any authorized expenses actually and reasonably incurred in the course of performing your employment duties. The Company will also provide to you, for the duration of your employment, any necessary work tools, such as a laptop computer and mobile phone. Subject to approval by the Company, you will also be reimbursed for out-of-pocket expenses incurred for attending courses or workshops related to your employment duties. 

 

E.Reporting Structure/Responsibilities. You will report to the Board of Directors. You agree that the Company may change the reporting structure, including the person and position to whom you report, and the people and positions who report to you. You will perform the responsibilities and duties of your position, as described in Schedule A, and subject to Sections L and M, such other responsibilities and duties as may be reasonably requested by the Company from time to time. You will at all times: (i) conform to the reasonable and lawful directions of the Company and the Board; (ii) adhere to all applicable Company policies; (iii) give the Company the full benefit of your knowledge, expertise, skill and ingenuity; (iv) well and faithfully serve the Company; (v) devote your best efforts to furthering the interests of the Company; and (vi) exercise the degree of care, diligence and skill that a prudent executive would exercise in comparable circumstances. 

 

You will not during your employment with the Company, be employed by, or provide products or services of any nature whatsoever to, any other person, company, organization or other entity without prior written permission from the Company. This does not restrict you from performing reasonable volunteer activities; however, you must obtain the consent of the Company if you wish to serve on a board of directors or advisory board, or if you perform any paid work or services for other organizations. Schedule B contains a description of all such appointments and positions that you currently occupy, and all paid work and services you currently provide to outside organizations, to which the Company confirms that it provides its permission.

 

F.Vacation and Sick Days. In accordance with the Company’s policies, you will earn twenty (20) days of paid vacation per calendar year on a pro rata basis. You may also be entitled to other leaves, including without limitation, an additional allotment of paid sick days and statutory holidays, as provided in the Company’s policies during the applicable period. Accrued but unused paid time off and sick days will expire in accordance with the Company’s policies, as amended from time to time. 

 

G.Non-Disclosure, Non-Solicitation & Non-Competition Agreement. The Employee Non-Disclosure, Non-Solicitation and Non-Competition Agreement that you signed dated October 3, 2014 continues to be in full force and effect. Please note that this agreement also deals with confidentiality and the ownership of intellectual property developments. You continue to agree that compliance with its provisions is reasonable and a necessary requirement in our highly competitive industry, and may be required by our agreements with our suppliers, customers, and distributors.

 

H.Stock Options. You will continue to be eligible to participate in Xenon’s 2014 Equity Incentive Plan, a copy of which is attached. Nothing in this Agreement will affect in any way the stock options granted to you by the Company to date, all of which will, except as expressly provided in this Agreement, continue to vest and be exercisable in accordance with their terms while you are employed by the Company.  

 

I.Benefits. You will continue to be eligible to participate in the Company’s employee group benefit plans, as amended from time to time, subject to the Company’s policies, eligibility rules, and terms established by the service providers, as amended from time to time. You will continue to be eligible to participate in the Company’s current Group RRSP Plan, under which the Company will match your contributions up to a maximum of 5% of your Base Salary, in the same currency in which your Base Salary is paid. 

 

 

 

J.Taxes. Any taxes applicable to your employment compensation package with the Company will be deducted and remitted to the appropriate authorities in accordance with the Company’s standard policies and the law. 

 

If you work in a second tax jurisdiction at the Company’s request, the Company will cover the reasonable costs for you to use the services of the Company’s tax adviser or another adviser mutually agreed upon by the Parties to prepare your home and host country tax returns for any year during which you are required to file tax returns in more than one country as a result of your employment with the Company. 

 

K.Insurance and Indemnification. As a corporate and/or executive officer of the Company, during your employment with the Company, you will be covered by its Directors’ and Officers’ Liability Insurance Policy and such other indemnity policy, agreement or commitment established by the Company, subject to the terms of the Insurance Policy and other policy, agreement or commitment and any amendments made from time to time at the Board’s discretion provided that no amendment will substantially reduce your entitlements. Your coverage under such Insurance Policy and any other policy, agreement, or commitment, will continue after your employment ends in respect of your employment. The Indemnification Agreement that you signed dated November 4, 2014 continues to be in full force and effect.

 

L.Change of Control. In this Agreement:

 

	
a.
	
“Average Bonus” means an amount that is (i) the sum of the annual bonus awards (expressed as a percentage of the applicable year’s Base Salary) that you earned in each of the three (3) completed calendar years preceding the date your employment with the Company terminates, divided by (ii) three (3), multiplied by (iii) your Base Salary at the time your employment with the Company terminates [for example: (15%+5%+10%)/3 = 10% of Base Salary]. If you have been employed for more than one (1) but fewer than three (3) completed calendar years of service, then your “Average Bonus” will be the average of the annual bonus awards (as expressed as a percentage of the applicable year’s Base Salary) that you have received for the completed calendar year(s) preceding the date of your employment with the Company terminates. 

 

	
b.
	
“Change of Control” means: 

 

	
 
	
(i)
	
the acquisition by any person or persons acting jointly or in concert (as determined by the Securities Act) (“Person”), whether directly or indirectly, of voting securities of the Company that, together with all other voting securities of the Company held by such Person, constitute in the aggregate more than 50% of all outstanding voting securities of the Company; provided, however, that for purposes of this subsection, the acquisition of additional securities by any one Person, who owns more than 50% of all outstanding voting securities of the Company will not be a Change of Control;

 

	
 
	
(ii)
	
an amalgamation, arrangement or other form of business combination of the Company with another corporation that results in the holders of voting securities of that other corporation holding, in the aggregate, more than 50% of all outstanding voting securities of the corporation resulting from the business combination; provided, however, that for purposes of this subsection, the acquisition of additional securities by any one Person, who owns more than 50% of all outstanding voting securities of the Company will not be a Change of Control; or

 

 

 

	
 
	
(iii)
	
a change in the ownership of a substantial portion of the Company’s assets, including the sale, lease, transfer or exchange of a substantial portion of the Company’s assets, to another Person, other than in the ordinary course of business of the Company, which occurs on the date that such Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to a Related Entity, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity of which the Company has Control, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the all outstanding voting securities of the Company, or (4) an entity of which a Person described in this subsection (iii)(B)(3) has Control. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets;

 

provided, however, that a Change in Control will not be deemed to have occurred if such Change in Control results solely from the issuance, in connection with a bona fide public offering, financing or series of financings by the Company, of voting securities of the Company or any rights to acquire voting securities of the Company which are convertible into voting securities.

 

Further and for the avoidance of doubt, a transaction will not constitute a Change of Control if: (x) its sole purpose is to change the state or jurisdiction of the Company’s incorporation, or (y) its sole purpose is to create a holding company the voting securities of which will be owned in substantially the same proportions by the persons who held the Company’s voting securities immediately before such transaction.

 

	
c.
	
“Good Reason” means any of the following:

 

	
 
	
(i)
	
any unilateral change or series of changes to your employment responsibilities, reporting relationship, or status within the Company, such that immediately after such a change or series of changes to your responsibilities, reporting relationship, and status, taken as a whole, and taking into account the size and complexity of the business of the Company at that time, are substantially less than those assigned to you immediately prior to such change or series of changes; or

 

	
 
	
(ii)
	
a material reduction by the Company in your Base Salary or other compensation as in effect prior to the Change of Control that would constitute a constructive dismissal at common law; or

 

	
 
	
(iii)
	
the taking of any action by the Company, or the failure by the Company to take any action, that would materially and adversely affect your participation in, or materially reduce your aggregate benefits under, the total package of long-term incentive, bonus, compensation, RRSP, life insurance, health, accidental disability and other similar plans in which you are participating prior to the action by the Company or the failure by the Company to take any action; or

 

	
 
	
(iv)
	
the unilateral requirement that you relocate to a new location that is both (a) more than 60 kilometers from your previous work location and (b) more than 60 kilometers from your primary residence; or

 

 

 

	
 
	
(v)
	
failure or refusal of the Successor Company to offer you terms and conditions of employment, including the provisions of Section M of this Agreement, that are substantially the same as the provisions of this Agreement; or

 

	
 
	
(vi)
	
subject to the terms of this Agreement, any reason which would be considered to amount to constructive dismissal by an arbitrator under the laws applicable in British Columbia; 

 

provided that any change or series of changes in reporting relationships alone will not constitute good reason.

 

	
d.
	
“Successor Company” means, in connection with a Change of Control, the surviving or acquiring company or entity. 

 

M.Termination Without Cause or Resignation for Good Reason in Connection With or Following A Change of Control. 

 

In the event of (i) a termination without cause or (ii) resignation for Good Reason, in either case, occurring within three (3) months prior to a Change of Control and related or connected to that Change of Control or occurring within twelve (12) months after a Change of Control, your employment will end on the date it is terminated without cause by the Company or Successor Company or the date terminated by you for Good Reason, in which case the Company or Successor Company will provide you with the notice or pay in lieu of notice to which you are entitled under the British Columbia Employment Standards Act (the “Statutory Notice”). In exchange for and conditional upon you signing and returning a full and final Release of all claims in the form attached hereto as Schedule C, the Company or Successor Company will provide you with the following:

 

	
a.
	
payment equal to twenty-four (24) months Base Salary (the “COC Payment Period”). The COC Payment Period is inclusive of, and not in addition to, the Statutory Notice;

 

	
b.
	
payment of 100% of your then-applicable bonus eligibility calculated on your then-applicable annual Base Salary (i.e. not prorated for the partial year worked), less statutory and other applicable deductions as required.

 

	
c.
	
the contributions to your retirement savings plan the Company would have paid on your behalf during the COC Payment Period;

 

	
d.
	
notwithstanding any provision in the Company’s Amended and Restated Stock Option Plan (the “Pre-IPO Equity Plan”), the Equity Incentive Plan and any subsequent deferred compensation plan to the contrary:

 

	
 
	
(i)
	
immediate vesting of all unvested stock options and other deferred compensation awards granted to you by the Company or the Successor Company; and 

 

	
 
	
(ii)
	
with respect to stock options granted pursuant to the Pre-IPO Equity Plan and any prior stock option plan, continued exercise rights up to ninety (90) days after the end of the Payment Period, at which time, such rights will be null and void; and

 

	
 
	
(iii)
	
continued exercise rights for the longer of the period stipulated in the applicable plan or grant and six (6) months after the date your employment actually terminates (i.e. the last day you are actually at work); and 

 

 

 

	
e.
	
subject to the applicable insurer’s terms of coverage, at the Company’s discretion, the Company will arrange for you to continue to receive group benefits insurance coverage up to the earlier of (i) the end of the COC Payment Period, or (ii) the date you commence new work or employment with comparable coverage. In the event the insurer does not continue coverage, the Company will pay you an amount equivalent to the cost of the monthly premiums the Company would have paid on your behalf for the group benefits insurance coverage that are terminated.

 

In the case of Good Reason, you must within three (3) months after the occurrence of Good Reason provide the Company or Successor Company with thirty (30) days’ written notice of Good Reason during which you will continue to provide services to the Company or Successor Company. Where the Good Reason is based in whole or in part on a series of changes, the notice period will commence on the occurrence of the last change in the series. Within your thirty (30) day working notice, the Company or the Successor Company may correct, reverse, rectify or otherwise resolve the change or series of changes that constitute Good Reason, in which case your employment with the Company or Successor Company will continue. 

 

The payments described above are inclusive of any termination or severance pay owing to you under applicable employment standards legislation. You further agree that you will not be eligible for any additional payment pursuant to the termination sections below (e.g. you will not be entitled to receive both the payments described in this Section M and the Termination Without Cause payments or notice described below in Section P).

 

Termination:

 

N.Resignation. If for any reason you should wish to leave the Company, you will provide the Company with three (3) months’ prior written notice of your intention (the “Resignation Period”). You agree that the Company may, in its sole and unfettered discretion, waive the Resignation Period in whole or in part and end your employment immediately by delivering to you a written notice promptly followed by payment of the Base Salary due to you during the remainder of the Resignation Period and any pay accrued and owing under this Agreement up to the date of such notice. It is further expressly agreed that you will not be entitled to any bonus or pro rata bonus after you give notice of resignation. For example, if you give notice of resignation partway during the calendar year, or any time prior to the bonus payment date following that calendar year, you will not be entitled to any bonus for that calendar year. 

 

O.Termination for Cause. The Company may terminate your employment at any time for cause, effective upon delivery by the Company to you of a written notice of termination of your employment for cause. You will not be entitled to receive any further pay or compensation (except for pay, if any, accrued and owing under this Agreement up to the date of termination of your employment), severance pay, notice, payment in lieu of notice, benefits or damages of any kind, and for clarity, without limiting the foregoing, you will not be entitled to any bonus or pro rata bonus payment that has not already been awarded by the Company.

 

P.Termination Without Cause. 

 

(This Section P does not apply to a termination without cause that occurs within three (3) months prior to a Change of Control and in relation or connection to that Change of Control or within twelve (12) months after a Change of Control – such terminations are covered by Section M). 

 

 

 

The Company may terminate your employment without cause at any time upon providing you with the notice or pay in lieu of notice to which you are entitled under the Statutory Notice. In exchange for and conditional upon you signing and returning a full and final Release of all claims in the form attached hereto as Schedule C, the Company will provide you with notice or pay in lieu of notice beyond that required by the Statutory Notice – in particular, the Company will provide you with working notice of termination (in which case all of your terms and conditions of employment including compensation and benefits, subject to the applicable insurer’s terms of coverage, will continue during the working notice period, or Base Salary continuance, or a lump sum payment of Base Salary, or an equivalent combination of any of the foregoing, in the amount of twelve (12) months plus one (1) additional month for every one (1) year of consecutive service with the Company, up to a combined maximum of eighteen (18) months (the “Notice Period”). 

 

It is within the Company’s sole discretion to decide whether to provide working notice, Base Salary Continuance, or a lump sum payment of Base Salary, or a combination of the foregoing, for the Notice Period. 

 

The Notice Period is inclusive of, and not in addition to, the Statutory Notice. If the Company elects to provide Base Salary Continuance or a lump sum payment of Base Salary for all or part of the Notice Period, the portion of the Notice Period covered by such payment(s) shall be defined as the “Payment Period”. 

 

The parties further agree as follows, also conditional upon you signing and returning a full and final Release of all claims in the form attached hereto as Schedule C: 

 

	
 
	
(i)
	
subject to the applicable insurer’s terms of coverage, the Company will arrange for you to continue to receive group benefits insurance coverage up to the earlier of (i) the end of the Notice Period, or (ii) the date you commence full-time employment. In the event the insurer does not continue coverage, the Company will pay you an amount equivalent to the cost of the monthly premiums the Company would have paid on your behalf for the group benefits insurance coverage that are terminated;

 

	
 
	
(ii)
	
you will receive an Average Bonus pro-rated for the period of the calendar year that you actually worked, up to your last day at work, less statutory and other applicable deductions as required. For example, if your last day of work is March 31, you will receive 3 months of your Average Bonus. Payment of your pro-rated Average Bonus will be within four (4) weeks of the termination date provided that if a bonus has not yet been determined for the preceding completed calendar year, the Company will first make that determination in the ordinary course using relevant criteria in a manner consistent with prior practice so that the Average Bonus can then be determined and paid. For clarity, it is expressly agreed that you will not be entitled to any bonus whatsoever for any period of time after your last actual day at work, including during the Payment Period; 

 

	
 
	
(iii)
	
the Company will pay the contributions to your retirement savings plan the Company would have paid on your behalf during the Notice Period; and 

 

 

 

	
 
	
(iv)
	
notwithstanding any provision in this Agreement or in the Pre-IPO Equity Plan, the Equity Incentive Plan and any subsequent incentive compensation plan to the contrary, the Company will extend the vesting and exercise rights of your vested and unvested options and other deferred compensation as follows: 

 

	
 
	
a.
	
for stock options granted under the Pre-IPO Equity Plan and any prior stock option plan, the stock options will continue vesting until the end of the Notice Period, at which time all unvested options will be null and void, and all vested stock options will be exercisable until the earlier of the original expiry date of the options and the date that is three (3) months following the end of the Notice Period; and

 

	
 
	
b.
	
for stock options and other deferred compensation granted under the 2014 Equity Incentive Plan and any subsequent incentive compensation plan, the stock options and other deferred compensation will continue to vest for a period of three (3) months after the date your employment terminates and all vested stock options and other deferred compensation will be exercisable until the earlier of the original expiry date of the stock options and deferred compensation and the date that is six (6) months after the date your employment terminates.

 

Any payment in lieu of notice provided to you will be inclusive of any termination or severance pay owing to you under applicable employment standards legislation and subject to statutory withholdings and other regular payroll deductions. You will not be entitled to receive any further pay or compensation except (i) as expressly set out in this Agreement, and (ii) the pay, if any, accrued and owing under this Agreement up to the date of termination of your employment.

 

Q.Work Permit. As a condition of your employment, you may become required to work in other jurisdictions where the Company or the Company’s affiliates maintain an office. In that event, the continuance of your employment with the Company will become contingent upon your signing and complying with an Employee Secondment Agreement Letter, receiving authorization to work in that or those other jurisdiction(s), and to your maintaining such status. The Company will support your application for any such authorization(s).

 

R.FDA Debarment. As a condition of your employment, you must certify that you are not under investigation by the FDA for debarment action, have not been debarred under the Generic Drug Enforcement Act of 1992 (21 U.S.C. 301 et seq.), and are not otherwise being investigated, restricted or disqualified from performing services relating to clinical trials by the FDA or any other regulatory authority or professional body in any other jurisdiction. If, during the course of your employment with Xenon, you become subject to such investigation or otherwise are restricted or disqualified, you will promptly inform Xenon’s Legal Department of such event. 

 

S.Miscellaneous

 

No Implied Entitlement. Other than as expressly provided herein or in any of the Company’s policies, as amended from time to time at the Company’s sole discretion, you will not be entitled to receive any further pay or compensation, severance pay, notice, payment in lieu of notice, incentives, bonuses, benefits or damages of any kind. 

 

Continued Effect. Notwithstanding any changes in the terms and conditions of your employment which may occur in the future, including any changes in position, duties or compensation, the termination provisions in this Agreement will continue to be in effect for the duration of your employment with the Company unless otherwise amended in writing and signed by the Company. 

 

 

 

Authorization to Deduct Debts. If, on the date you leave employment, you owe the Company any money, you hereby authorize the Company to deduct any such debt from your final pay or any other payment due to you to the extent permitted by the BC Employment Standards Act if applicable. Any remaining debt will be immediately payable to the Company and you agree to satisfy such debt within fourteen (14) days after any demand for repayment.

 

Dispute Resolution. In the event of a dispute arising out of or in connection with this Agreement, or in respect of any legal relationship associated with it or from it, which does not involve the Company seeking a court injunction or other injunctive or equitable relief to protect its business, confidential information or intellectual property, or enforce the covenants hereunder, that dispute will be resolved confidentially as follows:

 

	
a.
	
Amicable Negotiation – The parties agree that, both during and after the performance of their responsibilities under this Agreement, each of them will make bona fide efforts to resolve any disputes arising between them by amicable and expeditious negotiations.

 

	
b.
	
Mediation – If the parties are unable to negotiate resolution of a dispute, either party may with the agreement of the other party refer the dispute to mediation by providing written notice to the other party. If the parties cannot agree on a mediator within fifteen (15) days after receipt of the notice to mediate, then either party may make application to the British Columbia Arbitration and Mediation Society to have one appointed. The mediation will be held in Vancouver, BC, in accordance with the British Columbia International Commercial Arbitration Centre’s (the “BCICAC”) Commercial Mediation Rules, and each party will bear its own costs, including one-half share of the mediator’s fees.

 

	
c.
	
Arbitration – If, after mediation, the parties have been unable to resolve a dispute or at any time if mediation is not undertaken, either party may refer the dispute for final and binding arbitration by providing written notice to the other party. If the parties cannot agree on an arbitrator within fifteen (15) days after receipt of the notice to arbitrate, then either party may make application to the British Columbia Arbitration and Mediation Society to appoint one. The arbitration will be held in Vancouver, BC, in accordance with the BCICAC’s Shorter Rules for Domestic Commercial Arbitration. Each party will bear its own costs, including one-half share of the arbitrator’s fees, provided that the arbitrator will have discretion to award costs against either party. 

 

Legal Counsel. You have been advised by the Company to retain independent legal advice with respect to this Employment Agreement.

 

Employment Standards Act. The parties hereby agree that if any provision in this Employment Agreement, in any circumstance, provides for less than what is required by the BC Employment Standards Act, such provision shall be replaced with the minimum provision(s) of the BC Employment Standards Act. 

 

Currency. Except as otherwise specifically indicated, all monetary amounts referenced herein are in Canadian dollars. 

 

Severability. If any part, article, section, clause, paragraph or subparagraph of this Agreement is held to be indefinite, invalid, illegal or otherwise voidable or unenforceable for any reason, the entire Agreement will not fail on the account thereof and the validity, legality and enforceability of the remaining provisions will in no way be affected or impaired thereby. 

 

 

 

Entire Understanding. We also confirm that this Agreement and the other agreements, documents, and plans that are referred to in this Agreement (including the Non-Disclosure, Non-Solicitation and Non-Competition Agreement) set forth our entire understanding of the terms of your employment with the Company, and cancels and supersedes all previous invitations, proposals, letters, correspondence, negotiations, promises, agreements (including your former employment agreement), covenants, conditions, representations and warranties with respect to the subject matter of this Agreement. Any modifications to these employment terms must be made in writing and signed by both you and the Company.

 

Fresh Consideration. The Company is hereby providing you with one hundred dollars ($100) as fresh consideration for you entering into this Employment Agreement. You hereby accept the receipt and sufficiency of this fresh consideration.

 

Governing Law. This Agreement and all matters arising hereunder will be governed by and construed in accordance with the laws of the Province of British Columbia. 

 

If you have any questions or concerns regarding the above, please do not hesitate to contact me.

 

To accept this Agreement on the terms set out herein, please sign where indicated below, and return a signed copy of this Agreement to me before March 21, 2019.

 

Yours sincerely,

 

XENON PHARMACEUTICALS INC.

 

/s/ Ian Mortimer

Ian Mortimer

President & CFO

 

 

 

Attachments: 

1) Xenon Employee Non-Disclosure, Non-Solicitation and Non-Competition Agreement

 

 

I hereby confirm that I have read, understand and voluntarily accept the terms of this Agreement:

 

 

			
	
/s/ Simon Pimstone
	
 
	
19/03/2019

	
Simon Pimstone
	
 
	
DD/MM/YYYY

 

 

 

 

 

SCHEDULE A

 

Duties and Responsibilities

 

Your duties and responsibilities in this position will include those listed below:

	
1.
	
Reporting to the Board of Directors, the Chief Executive Officer (“CEO”) is responsible for overseeing all aspects of the business, include directing the organization to ensure the attainment of strategic and financial goals, maximizing return on invested capital.  

	
2.
	
The CEO provides corporate leadership and vision, overseeing the Company’s scientific and technology research; product and clinical development; commercialization; in-licensing, out-licensing and partnering plans; and financial and organizational matters with and through the Senior Executive team.  

	
3.
	
The CEO is a key Company spokesperson, regularly interacting with the Company’s Board of Directors, investors, bankers and others in the financial community, partners and potential partners, scientific and medical key opinion leaders, and all levels of internal staff. 

	
4.
	
At all times, act in the best interest of the Company and its shareholders.

	
5.
	
Travel for meetings, conferences, and other applicable business.

	
6.
	
Other duties as required from time to time.

	
7.
	
Strictly adhere to all Xenon corporate policies, particularly those concerning confidentiality, intellectual property, and safety.

 

 

 

SCHEDULE B

 

Disclosure of Volunteer, Board and Other External Commitments

 

			
	
Position
	
Organization
	
Length of Appointment/ Engagement

	
 
	
 
	
 

	
Founder and Co-PI
	
SAVE BC
	
2015 - present

	
Clinical Associate Professor
	
UBC
	
2014 - present

	
Consultant Physician
	
UBC Hospital
	
2012 - present

	
Director, Chair
	
Eupraxia Pharmaceuticals Inc.
	
2012 - present

	
Director, Chair
	
Accuro Technologies Inc.
	
2012 - present

	
Advisory Board Member
	
BC Health Research Strategy Advisory Board, Michael Smith Foundation for Health Research
	
2012 - present

	
 
	
 
	
 

 

 

 

SCHEDULE C

 

Form of Release

 

 

IN CONSIDERATION OF the terms and conditions set out in the [DATE] letter from Xenon Pharmaceuticals Inc. (hereinafter called “Xenon”) to me, [NAME], and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledge, I do hereby remise, release and forever discharge Xenon, its officers, directors, servants, employees and agents, and their heirs, executors, administrators, successors and assigns, as the case may be (defined collectively as the “Releasees”), of and from any and all manner of actions, causes of action, suits, contracts, claims, damages, costs and expenses of any nature or kind whatsoever, whether in law or in equity, which as against Xenon or such persons as aforesaid or any of them, I have ever had, now have, or at any time hereafter I or my personal representatives can, shall or may have, by reason of or arising out of the termination of my employment with Xenon on or about [DATE], without limiting the generality of the foregoing, any and all claims for damages for termination of my employment, constructive termination of my employment, loss of position, loss of status, loss of future job opportunity, loss of opportunity to enhance my reputation, the timing of the termination and the manner in which it was effected, loss of bonuses, loss of shares and/or share options, loss of benefits, including life insurance and short and long-term disability benefit coverage, and any other type of damages arising from the above.  

 

IT IS UNDERSTOOD AND AGREED that this Release includes any and all claims arising under the Employment Standards Act, Human Rights Code, or other applicable legislation as it relates to the termination of my employment and that the consideration provided includes any amount that I may be entitled to under such legislation.

 

IT IS FURTHER UNDERSTOOD AND AGREED that this Release is subject to compliance by Xenon with the said conditions as stipulated in the aforementioned employment agreement entered into between the undersigned and Xenon.

 

 

 

IT IS FURTHER UNDERSTOOD AND AGREED THAT XENON will withhold and remit income tax and other statutory deductions from the aforesaid consideration and I agree to indemnify and hold harmless Xenon from any further assessments for income tax, repayment of any employment insurance benefits received by me, or other statutory deductions which may be made under statutory authority.

 

IT IS FURTHER UNDERSTOOD AND AGREED that this is a compromise and is not to be construed as an admission of liability on the part of Xenon. The terms of this Release set out the entire agreement between Xenon and me with respect to the matters described herein and are intended to be contractual and not a mere recital. If the facts on which this Release is made prove to be other than or different from the facts in that connection now know or believed to be true by the parties or either of them, the parties and each of them expressly accept and assume the risk of the facts being different and agree that all the terms of this Release shall be in all respects effective and not subject to termination, variation, or rescission by any discovery of any difference in the facts. If any party of provision of this Release or its application to any circumstance is restricted, prohibited or unenforceable, such part or provision will be ineffective only to the extent of such restriction, prohibition or unenforceability, and the remainder of the Release will remain in full force and effect.

 

IT IS FURTHER UNDERSTOOD AND AGREED that I will keep the contents of this settlement and all communication relating thereto confidential except to Revenue Canada or as is required to obtain legal and tax advice, or to enforce my rights hereunder in a court of law, or as is required by law.

 

IT IS FURTHER UNDERSTOOD AND AGREED that the law governing this Release is that of British Columbia, and the parties will resolve any disputes they have under this Release in the courts of British Columbia, provided that if, contrary to this Release, I commence, pursue, or maintain any such proceedings against any of the Releasees, I hereby irrevocably consent to such Releasee(s) relying on this Release to obtain a stay or dismissal or such proceedings. 

 

IT IS FURTHER UNDERSTOOD AND AGREED that the consideration described herein was voluntarily accepted by me for the purpose of making a full and final settlement of all claims described above and that prior to agreeing to the settlement, I was advised by Xenon of my right to receive independent legal advice.

 

 

 

IN WITNESS WHEREOF this Release has been executed effective the ___________________ (please insert date of signature).

 

 

 

			
	
SIGNED, SEALED AND DELIVERE

By [NAME] in the presence of:
	
 
	
 

	
 

 
	
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Signature of Witness
	
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[NAME]

	
 
	
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Name of Witness
	
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Address
	
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Occupation
	
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