Document:

Unassociated Document

Exhibit 10.4

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (this “Agreement”) is entered into effective as of June 17, 2014 (the “Effective Date”) between Signal Genetics, Inc. (the “Company” or “SG”) and Samuel D. Riccitelli (the “Executive”).  (Executive and the Company are referenced collectively herein as the “Parties.”)

 

RECITALS

 

WHEREAS, the Executive entered into an employment agreement with Signal Genetics LLC, a Delaware limited liability company (“SG LLC”), on October 13, 2012 (the “Prior Employment Agreement”);

 

WHEREAS, on June 17, 2014, SG LLC was converted into the Company pursuant to Section 265 of the Delaware General Corporation Law (the “Conversion”);

 

WHEREAS, SG desires to retain Executive as President and Chief Executive Officer to manage and oversee certain business, financial and administrative aspects of the Company, and Executive desires to be employed by SG, in accordance with the terms and conditions of this Agreement; and

 

WHEREAS, the Parties desire to amend and restate the Prior Employment Agreement to, among other things, acknowledge the Conversion, and set forth the terms and conditions upon which Executive will serve the Company.

 

NOW, THEREFORE, in consideration of the above recitals and the mutual promises contained in this Agreement, the Parties agree as follows:

 

ARTICLE I.

 

EMPLOYMENT AND DUTIES OF EXECUTIVE

 

1.1 Employment.  SG hereby employs Executive as President and Chief Executive Officer (“CEO”) and Executive accepts employment as President and CEO of SG in accordance with the terms and conditions, and for the consideration, provided in this Agreement.

 

1.2 Termination of Prior Employment Agreement.  It is the intention of the Parties and the Parties agree that Executive’s terms and conditions of employment shall be governed exclusively by this Agreement which shall supersede his Prior Employment Agreement.  To the extent that Executive might have any valid right or claim to severance benefits or compensation under the terms of the Prior Employment Agreement, including, without limitation the incentive units that were granted to Executive under the Prior Employment Agreement, Executive is willingly waiving those rights in exchange for the consideration offered by SG in this Agreement.

 

  

 

  

1.3 Employment Period.  The term of this Agreement shall commence on the Effective Date and shall continue until October 31, 2015 (the “Initial Term”), subject to the termination provisions set forth in this Agreement.  On each anniversary of the Effective Date after the Initial Term, this Agreement and Executive’s employment shall be deemed to have been automatically extended for an additional one (1) year term or such other period as mutually agreed to between the Parties unless either Party shall give written notice of non-extension to the other Party at least thirty (30) days before such anniversary date, or unless sooner terminated as provided in this Agreement.  Executive’s total term of employment with the Company under this Agreement during the Initial Term and any extended term is collectively defined and referred to as the “Employment Period.”

 

1.4 Duties of CEO.

 

1.4.1 During the Employment Period, Executive (i) shall have the title of CEO, (ii) shall devote his full business time and attention and expend his best efforts, energies and skills on a full-time basis to the business of the Company, and shall not engage in any other activity that would materially interfere with the performance of his duties under this Agreement (provided that Executive is permitted to continue to serve on the board of directors of Exagen Diagnostics, Inc., as well as any other board of directors to the extent that doing so does not create any conflict of interest with Executive’s obligations or duties under this Agreement, subject to approval of the Board of Directors of the Company, such approval not to be unreasonably withheld, or to engage in endeavors related to the community, his faith, personal finances and effects and other charitable functions that do not materially interfere with the performance of his duties hereunder), and (iii) shall perform such duties, and comply with all reasonable directions and instructions of the Board of Directors.

 

1.4.2 During the Employment Period, (i) Executive will report only to the Board of Directors, (ii) Executive will be the Company’s most senior and highest-ranking executive, and (iii) all other Company senior executives and employees will report to Executive.

 

1.4.3 In performing Executive’s duties hereunder, Executive shall in all material respects (i) abide by and comply with all applicable laws, statutes, orders, rules, regulations, policies or guidelines promulgated, or judgments, decisions or orders entered, by any court, arbitrator tribunal, administrative agency, or commission or other governmental or regulatory body, agency or instrumentality or authority relating to the Company, (ii) abide by and adhere to the Company’s general policies and procedures as may be adopted from time to time and (iii) conduct himself with respect to the Company with the prudence, care, dedication and skill as would be manifested by one in the operation and management of his own assets and properties and in this regard shall owe a fiduciary duty of prudence and dedication and care to the Company.

 

1.5 Principal Employment.

 

1.5.1 Executive agrees that his position as CEO of the Company shall be his principal employment and that he will not subordinate that position to any other employment.

 

1.5.2 Executive agrees that, during his employment with the Company, he will not engage in any matter whatsoever in a business or other endeavor that would or might reasonably interfere with his duties or that is competitive with or similar in nature to the business of the Company.  Nonetheless, Executive shall have the right to own up to 3% of the outstanding shares of a publicly held company if such shares are actively traded on a national stock exchange and he is not involved in the management of such company.  Specifically excluded from the restrictions set forth in this Section, and other provisions of this Agreement, is Executive’s ability (as expressly permitted by the Company hereby) to continue to serve on the board of directors of Exagen Diagnostics, Inc.

 

  

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ARTICLE II.

 

COMPENSATION AND BENEFITS

 

2.1 Compensation.  For all services rendered and required to be rendered by, covenants of and restrictions in respect to, Executive under this Agreement, SG shall compensate Executive as follows:

 

A. CEO Base Salary.  The Company shall pay to Executive during and with respect to the Employment Period, and Executive agrees to accept, annual base salary (“Base Salary”) equal to $450,000, payable on a semi-monthly basis in accordance with the standard payroll practices of the Company.  Base salary will be re-evaluated on an annual basis and subject to a merit increase, pursuant to the normal practices of the Company.

 

B. Incentive Compensation.  During the Employment Period, Executive shall participate in any annual performance-based incentive compensation programs that are established by the Company, on the terms established from time to time by the Compensation Committee or the Board of Directors of the Company.

 

C. Equity Compensation.  During the Employment Period, Executive shall  participate in any long-term incentive compensation programs that are established by the Company, on the terms established from time to time by the Compensation Committee or the Board of Directors of the Company.

 

2.2 Benefits.  Commencing on the Effective Date, Executive will be entitled to participate in all of the Company’s benefit plans, as applicable.

 

A. Paid Time Off.  For each calendar year during the Employment Period, Executive shall be entitled to paid time off (“PTO”) at the rate consistent with the SG accrual rate for paid time off for SG senior executives.  As such, Executive shall be entitled to 4 weeks of paid vacation time (which equates to 20 days / 160 hours per year), as well as sick leave and personal leave pursuant to the SG policies applicable to senior executives.  Such PTO will be accrued on a pro-rata basis during the initial calendar year of the Employment Period and will otherwise be subject to the Company’s policies and procedures , as in effect from time to time.

 

B. General Benefits.  Executive shall be entitled to receive the same employee benefits as are provided by the Company to other executive employees.  Such benefits shall include group health insurance, group life insurance, and disability insurance coverage, and also may include such items as retirement plans and similar plans in effect from time to time.  Attached as Exhibit A is a description of applicable employee benefits.  Executive’s participation in the foregoing plans, and applicable perquisites, will be at the highest level and on terms no less favorable than afforded to other senior executives of the Company commensurate with Executive’s level.

 

  

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C. Civic Affairs, Service Clubs and Social Functions.  The Parties agree that Executive’s participation in civic affairs, service clubs, professional organizations, and social functions is appropriate for the proper professional administration of the Company.  The Executive may participate in such affairs, professional organizations, clubs and functions as the Executive determines are appropriate to enhance the operations and professional stature of the Company.  SG shall reimburse Executive for reasonable expenses incurred while representing the Company pursuant to this Agreement.

 

2.3 Reimbursement of Expenses.  During the Employment Period, Executive will be reimbursed for all reasonable business expenses, including travel and entertainment expenses, incurred in the performance of his duties, responsibilities, or services performed for the Company, upon presentation by Executive of the documentation, expense statements, vouchers, and such other supporting information as SG may request or as may be consistent with SG practices.  Executive will comply with the Company’s policies in incurring and seeking reimbursement for such expenses.

 

ARTICLE III.

 

TERMINATION

 

3.1 Termination.  In addition to the expiration of the Employment Period, this Agreement may be terminated in the following circumstances:

 

A. Termination For Cause.  SG may, at any time during the Employment Period by written notice to Executive (the “Termination Notice”), terminate the Employment Period for uncured “Cause” effective immediately.  The Termination Notice shall specify the reason for termination.  In such an event, Executive’s sole remedy shall be to collect all unpaid Base Salary, all accrued PTO and all unreimbursed expenses payable for all periods through the effective date of termination, as well as any amount arising from Executive’s participation in, or benefits under, any employee benefit plan, program or arrangement, payable in accordance with the terms of such SG employee benefit plans, programs or arrangements.  Executive shall not be entitled to earn or accrue any compensation or other amount from the Company after the effective date of termination.  The foregoing amounts shall be paid on the date of termination.

 

For purposes hereof, “Cause” as utilized herein shall mean:

 

(i) Expiration of the term of this Employment Agreement;

 

(ii) A material breach by Executive of his fiduciary duty to SG that results in material harm to the Company;

 

(iii) A material breach by Executive of the terms of this Employment Agreement or any other agreement between Executive and SG, which remains uncured for a period of 30 days following the receipt of written notice specifying the nature of the breach;

 

  

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(iv) The willful commission by Executive of any act of embezzlement, fraud, larceny or theft on or from SG;

 

(v) Substantial and continuing willful neglect or inattention by Executive of the duties of his employment, refusal to perform the lawful and reasonable directives of the Board of Directors or the willful misconduct or gross negligence of Executive in connection with the performance of such duties which remain uncured for a period of 30 days following the receipt of written notice specifying the nature of the breach:

 

(vi) The willful commission by Executive of any crime involving moral turpitude or a felony; and

 

(vii) Executive’s performance or omission of any act which, in the judgment of the Board of Directors, if known to the customers, clients, stockholders or any regulators of SG, would have a material adverse impact on the business of SG.

 

B. Termination Without Cause.  The Company may terminate this Agreement at any time for any reason, by delivering a written notice to Executive, effective thirty (30) days after Executive receives such notice in accordance with the terms hereof.  In such an event, Executive’s sole remedy shall be:

 

(1) to collect all unpaid Base Salary, accrued annual bonus or incentive compensation (including any unpaid, accrued annual bonus or incentive compensation from the immediately preceding year), accrued PTO, and all unreimbursed expenses payable for all periods through the effective date of termination (the foregoing amounts shall be paid on the date of termination of Executive’s employment); plus

 

(2) Executive shall receive, in addition to the amounts specified above, the severance payments outlined below (the “Severance Payments”).  Executive shall not be required to mitigate the amount of any Severance Payments received by seeking other employment during the term of the severance period.  However, should Executive obtain other employment during the term of the severance period, SG shall pay Executive, for the remaining length of the severance period, only the difference between his new salary and his Base Salary (as in effect at the time of termination), if the new salary is less than his Base Salary.  For the avoidance of doubt, the Company shall not be obligated to make any Severance Payments thereafter if the new salary is greater than his applicable Base Salary.

 

The Severance Payments shall be calculated as follows:

 

(a) should the termination occur during the one-year period immediately following the closing of the Company’s initial public offering, Executive shall continue to receive his then-current Base Salary for a period of six (6) months; and

 

(b) should the termination occur at any time during the Employment Period after the one-year period immediately following the closing of the Company’s initial public offering, Executive shall continue to receive his then-current Base Salary for a period of twelve (12) months.

 

  

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The Severance Payment (less all applicable withholdings) will be paid in equal monthly installments over the applicable period immediately following termination of Executive’s employment, as applicable.  The Company shall reimburse Executive for premiums for COBRA coverage for Executive (and to the extent he has family coverage, his family), provided that Executive elects such coverage, during the applicable period when Executive is receiving Severance Payments.  Should Executive obtain other employment during such period of COBRA coverage, and Executive is provided the opportunity to obtain comparable health insurance benefits to those benefits provided by SG, then the Company shall no longer reimburse Executive for premiums for COBRA coverage for Executive (and to the extent he has family coverage, his family), from the date Executive may obtain such health insurance benefits, whether or not Executive elects such coverage.  The Company shall be entitled to discontinue the Severance Payments in the event that Executive violates any of the provisions of Sections 4.9, 4.10 or 4.11.

 

C. Termination After Disability or Death.

 

(1) In the event Executive becomes totally disabled or disabled such that he is rendered unable to perform substantially all of his usual duties for the Company in a manner consistent with his performance prior to such disability, and if such disability shall persist for a continuous period of one hundred eighty (180) days or more, or an aggregate period in excess of one hundred eighty (180) days in any one fiscal year, the Company shall have the right at any time after the end of such period during continuance of Executive’s disability by the delivery of not less than 30 days’ prior written notice to Executive to terminate Executive’s employment under this Agreement whereupon the applicable provisions of this Section below shall apply.

 

(2) For purposes of this Agreement, if Executive and the Company disagree as to whether Executive is totally disabled, or disabled such that he is rendered unable to perform substantially all of his usual duties for the Company as set forth above, or as to the date at which time such total disability began, the decision of a licensed medical practitioner, mutually agreed upon by the Parties, shall be binding as to both questions.  If the Parties cannot agree as to the identity of the licensed medical practitioner, Executive shall select a licensed medical practitioner of his choice and the Company shall select a licensed medical practitioner of its choice.  The two licensed medical practitioners so selected shall select a third licensed medical practitioner, which third individual shall resolve either or both of the questions referred to above and which resolution shall be binding upon the Parties.  The costs of such a third licensed medical practitioner shall be borne by the Company.

 

  

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(3) If Executive’s employment with the Company is terminated on account of Executive’s disability as provided for in this Section above or on account of Executive’s death, then Executive (or Executive’s estate or personal representative, as applicable) shall be entitled only to receive, and Company shall pay to Executive (or Executive’s estate or personal representative, as applicable) the following amounts:

 

(a) all unpaid Base Salary, accrued annual bonus or incentive compensation (including any unpaid, accrued annual bonus or incentive compensation from the immediately preceding year), accrued PTO, and all unreimbursed expenses payable for all periods through the effective date of termination (the foregoing amounts shall be paid on the date of termination of Executive’s employment); plus

 

(b) in the case of disability only, Executive shall receive, in addition to the amounts specified above, for a period of six months (“Continuation Period”), a series of monthly payments equal to the then-current monthly Base Salary payments he received during his employment (the “Continuation Payments”).  Executive shall be entitled to the Continuation Payments if and only if he does not receive any payments as a result of the short-term and long-term disability insurance benefits that the Company obtains on his behalf, pursuant to Section 2.2(B) of this Agreement (“Insurance Payments”).

 

The Continuation Payments will be paid in equal installments over the applicable period immediately following termination of Executive’s employment.  However, should Executive be provided such Insurance Payments, then SG shall pay Executive, during the Continuation Period, only the difference between the Insurance Payments provided to Executive and his Base Salary, if the payments provided are less than his Base Salary.  In any event, Executive is not entitled to receive more than the full amount of his Base Salary with SG for the time period covered by the Continuation Period.  Accordingly, if Executive obtains such Insurance Payments for any portion of the Continuation Period, then Executive shall inform SG of the amounts of such Insurance Payments so that SG may take an offset of such amounts from any future Continuation Payments, if any.  Moreover, if Executive obtains such Insurance Payments for any portion of the Continuation Period, at any time after SG pays Continuation Payments to Executive, Executive shall make payment to SG of an amount equal to the amount of received Insurance Payments to reimburse SG for such Continuation Payments it previously made or otherwise inform SG of such Insurance Payments so that SG may take an offset of such amounts from any future Continuation Payments, if any.

 

D. Termination by Executive for “Good Reason”.  Executive shall have the right to terminate his employment under this Agreement, and collect all unpaid Base Salary, accrued annual bonus or incentive compensation (including any such unpaid, accrued compensation from the immediately preceding year), accrued PTO and all unreimbursed expenses payable for all periods through the effective date of termination (the foregoing amounts shall be paid on the date of termination of Executive’s employment); plus receive the Severance Payment and the applicable payments for COBRA coverage, as set forth in Section 3.1(B)(3) above, by the delivery of written notice to the Company within 30 days after the initial existence of any of the events herein below defined as Good Reason.

 

  

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For purposes hereof, “Good Reason” as utilized herein shall mean:

 

(i) the Company has materially breached this Agreement and the Company has failed to cure or remedy such breach after 30-days written notice from Executive;

 

(ii) there has occurred any material and substantial diminution or reduction in duties, Base Salary, title, health care coverage (but only if such diminution is disproportionate to a diminution in health care coverage applicable to other employees of the Company), authority or responsibilities of Executive, whether in scope or nature, and the Company has failed to cure or remedy such breach after 30-days written notice from Executive; and

 

(iii) the Company has required that Executive perform any act or refrain from performing any act that would be in violation of applicable law.

 

Notwithstanding anything to the contrary herein, Executive must resign within thirty (30) days after expiration of the 30-day period following written notice without cure or remedy by the Company for such resignation to constitute a Termination for Good Reason.

 

E. Termination by Executive Without “Good Reason.”  Executive shall have the right to terminate his employment under this Agreement at any time for any reason.  However, should Executive terminate his employment with the Company for any reason other than for Good Reason, as defined in Section 3.1(D) above, Executive shall be entitled to collect from the Company only all unpaid Base Salary, all accrued PTO and all unreimbursed expenses payable for all periods through the effective date of termination and Executive shall not be entitled to any compensation or other amount from the Company after the effective date of termination.  The foregoing amounts shall be paid on the date of termination.

 

Under such circumstances, Executive may terminate this Agreement, only by delivering a written notice to the Company, effective no less than 45 days after the Company receives such notice in accordance with the terms hereof.

 

ARTICLE IV.

 

MISCELLANEOUS PROVISIONS

 

4.1 Notice.  All notices, requests, demands, consents, and other communications required or permitted to be given or made hereunder shall be in writing and shall be deemed to have been duly given and received, (i) if delivered by hand, the day it is so delivered, (ii) if mailed via the United States mail, certified or registered first class mail, postage prepaid, return receipt requested, five business days after it is mailed, or (iii) if sent by a nationally recognized overnight courier for next business day delivery, the business day after it is sent, to the Party to whom the same is so given or made, as follows:  (a) to the Company, at its administrative offices and (b) to Executive, at the address maintained on the personnel records of the Company.  Either Party may change the address to which notice is required to be sent by providing notice of the change of address in accordance with this Agreement.

 

  

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4.2 Headings.  All descriptive headings in this Agreement are inserted for convenience only and shall be disregarded in construing or applying any provision of this Agreement.

 

4.3 Counterparts.  This Agreement may be executed in counterparts (including via e-mail with scan attachment or by facsimile transmission), and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute one Agreement, which shall be binding upon and effective as to all Parties.

 

4.4 Severability.  In the event that any term or provision of this Agreement, or part thereof, is held to be invalid, such invalidation shall not affect the validity of the remainder of this Agreement.  Further, the invalid provision shall be modified by the minimum amount legally required to make the provision valid and enforceable and to carry out the purposes of this Agreement.  Moreover, the remainder of such provision and this Agreement, as the case may be, shall nevertheless remain in full force and effect.

 

4.5 Entire Agreement.  This Agreement contains the entire agreement and understanding among and between the Parties with respect to the subject matter hereof, and supersedes any prior agreement and understanding among them with respect to the subject matter of this Agreement.  Except as otherwise provided herein, this Agreement cannot be changed or terminated except by an instrument in writing signed by the Parties hereto.  Any oral representations, modifications or amendments concerning this Agreement shall be of no force or effect unless contained in a subsequent written modification signed by the Executive and a duly authorized representative of the Company.

 

4.6 Personal Services Contract.  This contract is a personal services contract and Executive may not assign any portion of his responsibilities under this Agreement.  However, Executive shall have the right, after consultation with the Board of Directors, to reasonably delegate appropriate administrative duties to any person who is an employee of the Company.

 

4.7 Binding on Successors.  This Agreement shall be binding upon, and inure to the benefit of, each Party’s successors, transferees, heirs and assigns, only to the extent that such is permitted by this Agreement.  It shall be binding on the Company and its officers, directors, and employees and shall not be affected by any change of name, change of geographical location, change of form, or acquisition by or merger with any other entity.

 

4.8 Indemnification.  The Company recognizes that the activities within the scope of Executive’s employment create the potential in some jurisdictions of civil or even criminal actions being brought against Executive.  To the fullest extent provided by applicable Delaware law and the Company’s organizational and controlling documents, and consistent with any indemnification provided to other Company executive employees under any applicable insurance policies, including its professional liability coverage for directors and officers and for acts and omissions relating to employees’ administrative duties, the Company shall indemnify, defend, protect and hold harmless Executive, from and against all claims, demands, causes of action, actions, suits, costs, damages, penalties, fines, liabilities, losses and expenses, whether civil or criminal, including, without limitation, reasonable attorneys’ fees and expenses, arising out of or resulting from the performance of Executive’s duties within the course and scope of Executive’s employment with the Company.

 

  

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4.9 Confidentiality; Disclosure of Information.

 

(a) Executive recognizes and acknowledges that he will have access to Confidential Information (as defined below) relating to the business or interests of the Company or of persons with whom the Company may have business relationships.  Except as permitted herein or as may be approved by the Company from time to time, Executive will not during the Employment Period or for a period of 12 months thereafter, use or disclose to any other person or entity, any Confidential Information of the Company (except as required by applicable law or in connection with performance of Executive’s duties and responsibilities hereunder or to Executive’s legal and financial advisors so long as such advisors agree to be bound by the terms and conditions of this Paragraph 4.9(a)).  Executive may disclose the existence of the obligations under this Paragraph 4.9(a) to future employers.  If Executive is requested or becomes legally compelled to disclose any of the Confidential Information, he, if permitted by applicable law, will give prompt notice of such request or legal compulsion to the Company.  The Company may waive compliance with this Paragraph 4.9(a) or will provide Executive with legal counsel at no cost to Executive to seek an appropriate remedy; provided however Executive may disclose any Confidential Information in the event notwithstanding all such efforts of the Company and such legal counsel if compelled by court order to do so.

 

The term “Confidential Information” shall mean information relating to the Company’s business affairs, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies and forecasts, competitive analyses, pricing policies, executive lists, employment agreements (other than this Employment Agreement), personnel policies (including compensation paid to employees and consultants), the substance of agreements with patients, customers, suppliers, and others, marketing arrangements, patient lists, customer lists, commercial arrangements, or any other information relating to the Company’s business which is treated as confidential or proprietary by the Company in accordance with its policies.  Notwithstanding the immediately preceding sentence, the provisions of this Paragraph 4.9(a) shall not apply to any information that:  (1) is in the public domain; (2) is or becomes available to the public other than as a result of a disclosure by Executive in violation of this Paragraph 4.9(a); (3) was available to Executive on a non-confidential basis prior to the date of this Employment Agreement; or (4) becomes available to Executive on a non-confidential basis from a source other than the Company (other than through a known breach of a confidentiality obligation).  This obligation shall continue until such Confidential Information becomes publicly available, other than pursuant to a breach of this Paragraph 4.9(a) by the Executive, regardless of whether the Executive continues to be employed by the Company.

 

  

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(b) It is further agreed and understood by and between the Parties to this Agreement that all “Company Materials,” which include, but are not limited to, computers, computer software, computer disks, tapes, printouts, source, HTML and other codes, flowcharts, schematics, designs, graphics, drawings, photographs, charts, graphs, notebooks, patient lists, customer lists, sound recordings, other tangible or intangible manifestation of content, and all other documents whether printed, typewritten, handwritten, electronic, or stored on computer disks, tapes, hard drives, or any other tangible medium, as well as samples, prototypes, models, products and the like shall be the exclusive property of the Company and, upon termination of Executive’s employment with the Company, and/or upon the written request of the Company, all Company Materials, including copies thereof, as well as all other property of the Company then in Executive’s possession or control, shall be returned to and left with the Company.

 

4.10 Intellectual Property:  Definition.  Intellectual Property means any of the following that are conceived of, developed, reduced to practice, created, modified, or improved by Executive, either solely or with others, in whole or in part, in the course of, or as a result of, the Executive’s employment by the Company in any capacity, whether at the Company’s place of business or otherwise, and whether on the Company’s time or on the Executive’s own time:  (i) writings (including notes, reports, manuals and instructions), software, source code, algorithms, works and copyrightable subject matter and rights, title and interest in copyrights and copyright registrations, (ii) rights, title and interest in know-how, technical information, processes, practices and systems, whether or not protectable by patent, copyright or trade secret law, (iii) trademarks, trade names, service marks, emblems, logos, symbols and insignia and rights with respect thereto, including registrations and registration rights, (iv) all developments, including trade secrets of any kind, discoveries, improvements, and ideas directly relating to or useable in the Company business and (v) licenses granted by third parties of rights to use any of the foregoing.

 

(a) Intellectual Property shall be the exclusive property of the Company, and Executive shall have no right, title, or interest in, or to, the Intellectual Property.  The Company shall have the sole and exclusive right, title, and interest in, and to, the Intellectual Property, which right shall continue notwithstanding the cessation of Executive’s employment.  Executive also hereby irrevocably waives any “moral rights” that Executive may have in the Intellectual Property, and confirms that the Company shall have the right, in addition to the other rights granted hereunder and notwithstanding the termination of Executive’s employment for any reason, to make or have made, and own, enhancements, derivative works, and other modifications to any part of the Intellectual Property.

 

(b) Executive hereby assigns to the Company any right, title, and interest that Executive may have in, and to, the Intellectual Property in any patent, copyright, industrial design, trademark registration, and any other similar right pertaining to the Intellectual Property which Executive may have.

 

(c) Executive acknowledges that the assignments in (b) above are undertaken in part as a contingency against the possibility that any Intellectual Property, by operation of law, may not be considered a work made for hire by the Executive for the Company.  The Company and its successors and assigns, shall have the right to obtain and hold in their own name all copyright registrations, patents, and other evidence of rights that may be available for the Intellectual Property and/or any portion thereof.  Executive further acknowledges that all United States copyrights and all other intellectual property rights in the Intellectual Property (including any and all patents that may issue with respect thereto) shall be exclusively owned by the Company and shall be considered “works made for hire,” as such term is defined in the United States Copyright Act, by Executive for the Company.

 

  

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(d) Executive hereby covenants and binds Executive and Executive’s successors, assigns and legal representatives to cooperate fully and promptly with the Company and its designees, successors, and assigns, at the Company’s reasonable expense, and to do all acts necessary or requested by the Company and its designee, successors, and assigns, to secure, maintain, enforce, and defend the Company’s rights in the Intellectual Property.  Without limitation to the foregoing, Executive shall execute on demand, and bind Executive and Executive’s successors, assigns and legal representatives, whether during Executive’s employment or at any time following the cessation of Executive’s employment, to any applications, transfers, assignments, and other documents as the Company may consider necessary for the purpose of:  (i) obtaining, maintaining, vesting in, or assigning to, the Company absolute title to, (ii) applying for, prosecuting, obtaining, or protecting, or (iii) maintaining, enforcing, and/or defending the Company’s rights in, any patent, copyright, industrial design, trademark registration, or any other right pertaining to the Intellectual Property in any countries in the world.  Executive further agrees, and binds Executive and Executive’s successors, assigns and legal representatives, to cooperate fully and assist the Company in every way possible in the application for, or prosecution of, such rights pertaining to the Intellectual Property and not developed during Executive’s employment with the Company.

 

(e) Executive shall promptly disclose to the Company any patent application filed within one (1) year after termination of Executive’s employment with the Company.  Executive shall have the burden of proving that any invention that relates, or pertains, to the Company’s business, and which is conceived less than one (1) year after the effective date of the termination of Executive’s employment relationship, was in fact made after such termination and not developed during Executive’s employment with the Company.  Executive agrees that, during his employment with the Company, he will disclose to the Company all ideas, proposals, and plans, invented or developed by him, which relate to the business of the Company and its subsidiaries.

 

4.11 Non-Competition and Non-Solicitation.  Executive acknowledges that the Company has invested substantial time, money and resources in the development and retention of its Confidential Information (including trade secrets), customers, patients, accounts and business partners, and further acknowledges that, during the course of Executive’s employment with the Company, Executive will have access to the Company’s Confidential Information (including trade secrets), and will be introduced to existing and prospective customers and patients that are being targeted, vendors, accounts and business partners of the Company.  Executive acknowledges and agrees that any and all “goodwill” associated with any existing or prospective customer or patient that is being targeted, vendor, account or business partner belongs exclusively to the Company, including, but not limited to, any goodwill created as a result of direct or indirect contacts or relationships between Executive and any existing or prospective customers or patients that are being targeted, vendors, accounts or business partners.  Additionally, the Parties acknowledge and agree that Executive possesses skills that are special, unique or extraordinary and that the value of the Company depends upon his use of such skills on its behalf.  Executive acknowledges that as a result of the foregoing the restrictions contained herein and elsewhere in this Agreement are reasonably necessary to protect the Company from unfair competition by the Executive.

 

  

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In recognition of this, Executive covenants and agrees that:

 

(a) During Executive’s employment with the Company and for one year after the termination of Executive’s employment for any reason, Executive shall not be employed by, or render any services to, any person, firm or corporation engaged in any business which is directly or indirectly in competition with the Company anywhere in the world where the Company performs services for its clients (“Competitive Business”), (ii) engage in any Competitive Business for his or its own account; (iii) be associated with or interested in any Competitive Business (whether as an executive, agent, servant, owner, partner, consultant, independent contractor, representative, stock or equity holder, lender or in any other capacity whatsoever).  Specifically excluded from the restrictions set forth in this Section, and other provisions of this Agreement, is Executive’s ability (as expressly permitted by the Company hereby) to continue to serve on the board of directors of Exagen Diagnostics, Inc.  However, the non-compete aspects of this Section 4.11(a) will remain in effect only during the applicable time period when Executive is receiving a Severance Payment.  As such, the non-compete aspects of this Section 4.11(a) shall not apply to any period that follows the cessation of Severance Payments to Executive.  For the avoidance of doubt the non-solicitation provisions of Sections 4.11(b) and (c) are in effect and shall apply for the specified time periods irrespective of whether Executive is receiving a Severance Payment.

 

(b) During Executive’s employment with the Company and for one year thereafter, Executive may not directly or indirectly induce, attempt to induce, solicit, attempt to solicit or encourage any employee, consultant, or contractor to leave the employment or engagement with the Company or any affiliate of the Company.

 

(c) During Executive’s employment with the Company and for one year thereafter, Executive may not, directly or indirectly, induce, attempt to induce, solicit, attempt to solicit or encourage any customer, client, subscriber or supplier of the Company to change its relationship with the Company, or interfere with the Company’s business, relationships or prospective relationships with any person or entity that was or is expected to become a customer or client of the Company.  As such, Executive agrees that he will not divert or take advantage of any actual or potential business opportunities of the Company in which it has a current interest or is actively pursuing.

 

4.12 Non-Disparagement; Non-Disclosure.  Executive and the Company hereby agree that during the Employment Period and at all times thereafter, neither Executive nor the Company will make any public statement, or engage in any conduct, that is disparaging, derogatory, or otherwise is a negative or false statement about the other Party or, in the case of the Company, about any of its executives, officers, directors, or shareholders, including, but not limited to, any statement that disparages the products, services, finances, financial condition, capabilities or any other aspect of the business of the Company and the capabilities of Executive.  Notwithstanding any term to the contrary herein, neither Executive nor the Company shall be in breach of this Paragraph 4.12 for the making of any truthful statements under oath or in a judicial or other proceeding.

 

  

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4.13 Representation.  Executive represents and warrants to the Company that (i) Executive is able to enter into this Agreement with the Company, and Executive’s ability to enter into this Agreement and to fully perform Executive’s anticipated duties for the Company is not limited or restricted by any agreements, understandings, instruments, orders, judgments or decrees to which Executive is a party or by which Executive is bound and (ii) Executive’s performance of such duties for the Company will not directly or indirectly violate any contractual or common law obligations he has or had to other employers or entities.  Executive agrees that he will not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any former or concurrent employer or other person or entity.  Executive agrees that he will not bring onto the premises of the Company or transfer onto the Company’s technology systems any unpublished document, proprietary information or trade secrets belonging to any such employer, person or entity unless consented to in writing by both the Company and such employer, person or entity.

 

4.14 Applicable Law.  This Agreement shall be governed by, and construed and enforced in accordance with, the substantive and procedural laws of the State of New York; provided that after Initial Capital Raise the substantive and procedural laws of the State of California shall apply.  Each Party hereto hereby irrevocably submits to the jurisdiction of the state and federal courts located in New York County, New York, and San Diego County, California and waives any claim based upon forum non-conveniens or lack of jurisdiction; provided that after the Initial Capital Raise the state and federal courts located in San Diego County, shall have exclusive jurisdiction.

 

  

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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the date first written above.

 

	
EXECUTIVE:

	 	
EMPLOYER:

	 	 	 
	Samuel D. Riccitelli	 	

Signal Genetics, Inc.

	 	 	 
	 	 	 
	/s/ Samuel D. Riccitelli	 	

By: /s/ Bennett S. LeBow

	 	 	

Name: Bennett S. LeBow

	

June 17, 2014

	 	

Title: Chairman of the Board of Directors

	

Date

	 	

 

	 	 	June 17, 2014 
	 	 	

Date

 

 

 

  

 

  

Exhibit A

 

Benefits

 

 

Health and Dental Insurance

 

401(k) Retirement Plan

 

Vision Insurance

 

Group Term Life Insurance

 

 Disability Insuranceexh_108.htm

Exhibit 10.8

 

EXCHANGE AGREEMENT

 

This Exchange Agreement (this “Agreement”) is dated as of June 17, 2014, by and among SIGNAL GENETICS LLC, a Delaware limited liability company (the “Company”), LEBOW ALPHA LLLP, a Delaware limited liability limited partnership (“Alpha”), LEBOW GAMMA LIMITED PARTNERSHIP, a Delaware limited partnership (“Gamma”), BSL CAPITAL, INC., a Nevada corporation (“BSL” and, together with Alpha and Gamma, the “Lenders”), BENNETT S. LEBOW, an individual, the LEBOW 2012 NEVADA TRUST and the LFIT-A TRUST (together with the LeBow 2012 Nevada Trust, the “Trusts,” and, together with Alpha, the “Recipients”).

 

WHEREAS, on December 31, 2013, the Company issued an Amended and Restated Secured Demand Promissory Note (the “Note”) in the amount of $25,000,000 to Alpha, which bears interest at an annual interest rate of 8.0%, which Note includes all of the principal and interest then owed to Alpha and the other Lenders;

 

WHEREAS, as of June 17, 2014, the total amount of indebtedness under the Note (including principal and accrued but unpaid interest) is $28,326,287 (the “Note Amount”);

 

WHEREAS, Alpha holds 10,000 Class B Units of Myeloma Health LLC, a subsidiary of the Company (the “Myeloma Units”);

 

WHEREAS, the Company intends to convert (the “Conversion”) from a Delaware limited liability company to a Delaware corporation (the “Corporation”) immediately prior to its initial public offering (“IPO”);

 

WHEREAS, the Company intends that, for U.S. federal income tax purposes, the Conversion and the IPO shall collectively qualify as an integrated transaction described in Internal Revenue Code Section 351, followed immediately by a liquidation of the Company;

 

WHEREAS, the Lenders have agreed to transfer an aggregate principal amount of $7,000,000 of the Note Amount to the Trusts;

 

WHEREAS, in connection with the Conversion and the IPO, the Lenders and the Recipients have agreed to exchange $27,326,287 of the Note Amount (the “Exchange Amount”) for a number of Class C units (the “Class C Units”) of the Company to be issued to the Lenders and the Recipients, in the amounts set forth on Appendix A attached hereto (the “Class C Exchange”), with the aggregate number of Class C Units being equal to the Exchange Amount divided by the initial public offering price of the shares of common stock, par value $0.01 per share, of the Corporation (the “Common Stock”) to be offered and sold in the IPO, and which Class C Units shall automatically convert into an equal number of shares of Common Stock (the “Shares”) of the Corporation at the time of the Conversion, and immediately prior to the IPO;

 

WHEREAS, in connection with the Conversion and the IPO, Alpha has also agreed to withdraw as a member of Myeloma Health LLC and to relinquish all of its right, title and interest in and to the Myeloma Units, such that following such relinquishment the Corporation will be the sole member of Myeloma Health LLC; and

 

  

 

  

WHEREAS, it is the intention of the Company that, for U.S. federal income tax purposes, the Class C Exchange shall be treated as the Company satisfying the Exchange Amount with an amount of money equal to the fair market value of the Class C Units issued pursuant to this Agreement, as described in Section 108(e)(8) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

	
1.  

	
ISSUE AND EXCHANGE OF SECURITIES.

 

1.1 Authorization of Class C Units. Prior to the Closing (as defined below), the Company shall have amended and restated its current Amended and Restated Limited Liability Company Agreement, as amended (the “Operating Agreement, and as further amended and restated as contemplated herein, the “New Operating  Agreement”) to authorize a new class of units of the Company to be designated the “Class C Units” and shall have authorized the Class C Exchange and the Conversion, pursuant to which the Class C Units shall be automatically converted into the Shares.

 

1.2 Exchange and Issuance of Class C Units. The Lenders and the Recipients agree to exchange the Exchange Amount for the Class C Units to be issued to the Lenders and the Recipients and the Company agrees to issue to the Lenders and the Recipients the Class C Units, in the amounts set forth on Appendix A attached hereto, in exchange for the Exchange Amount.

 

	
2.  

	
CLOSING; DELIVERY.

 

2.1 Closing. The Class C Units shall be issued to the Lenders and the Recipients immediately after the pricing of the IPO and immediately prior to the execution of the Underwriting Agreement as part of the Class C Exchange and immediately thereafter exchanged for the Shares upon the Conversion on the date hereof (the “Closing”).

 

2.2 Cancellation and Conversion; Delivery. At the Closing, the Lenders shall deliver to the Company the Note, which shall be cancelled and all obligations thereunder shall be released and discharged, and the Company shall deliver the Shares to the Lenders and the Recipients, as set forth on Appendix A attached hereto, and, at the Company’s discretion, either (i) a new Secured Demand Promissory Note for a principal amount equal to the difference between the Note Amount and the Exchange Amount (the “Debt Balance Amount”) or (ii) preferred stock of the Corporation, par value $0.01 per share, with a liquidation preference equal to the Debt Balance Amount (the “Preferred Stock”), to Alpha or another entity as determined by Mr. LeBow.

 

2.3 Transfer of Class C Units to Alpha. Following the issuance of Class C Units to Gamma and BSL and prior to the Conversion, each of Gamma and BSL shall transfer its Class C Units to Alpha.

 

  

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2.4 Surrender of Myeloma Units. At the Closing, Alpha shall deliver to the Company any certificate(s) representing the Myeloma Units.

 

	
3.  

	
REPRESENTATIONS AND WARRANTIES OF THE LENDERS AND THE RECIPIENTS. The Lenders and the Recipients, as applicable, make the following representations and warranties as of the date hereof:

 

3.1 Requisite Power and Authority. Each of the Lenders and the Recipients has all of the necessary power, authority and capacity under all applicable provisions of law to execute and deliver this Agreement and to carry out its provisions. All actions on the part of the Lenders and the Recipients required for the lawful execution and delivery of this Agreement have been or will be effectively taken prior to the Closing. Upon its execution and delivery, this Agreement will be a valid and binding obligation of the Lenders and the Recipients, enforceable in accordance with its terms.

 

3.2 Investment Representations. Each of the Lenders and the Recipients understand that neither the Class C Units to be issued in the Class C Exchange nor the Shares into which the Class C Units shall be automatically converted at the time of the Conversion nor any Preferred Stock that may be issued to the Lenders and Recipients hereunder in exchange for the Debt Balance Amount (collectively referred to hereinafter interchangeably as the “Securities”), have been registered under the Securities Act of 1933, as amended (the “Act”). Each of the Lenders and the Recipients also understand that the Securities are being offered and exchanged pursuant to an exemption from registration contained in the Act based in part upon his representations provided in this Agreement. The Lenders and the Recipients, as applicable, hereby represent and warrant as follows:

 

3.2.1 Acquisition Entirely for Own Account. The Lenders and the Recipients are acquiring the Securities for their own account, for investment only, not as nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Lenders and the Recipients have no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Lenders and the Recipients further represent that they do not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Securities.

 

3.2.2 Disclosure of Information. The Lenders and the Recipients have received all of the information they consider necessary or appropriate for deciding whether to exchange the Exchange Amount in consideration for the Securities. Each of the Lenders and the Recipients further represent that it has had an opportunity to discuss the Company’s business, management and financial affairs (including without limitation its currently anticipated requirement for capital) with the Company and to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and have concluded that such terms and conditions are fair to the Lenders and the Recipients.

 

  

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3.2.3 Ability to Bear Economic Risk. The Lenders and the Recipients have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of an investment in the Company (and the Corporation following the Conversion) and have the capacity to protect their own interests in connection with the transactions contemplated in this Agreement. In determining whether to make the Class C Exchange, the Lenders and the Recipients have relied solely on their own knowledge and understanding of the Company and its business based upon his own due diligence investigations and the information furnished by the Company to them. Each of the Lenders and the Recipients understands that it must bear the economic risk of the Class C Exchange indefinitely unless the Securities are registered pursuant to the Act, or an exemption from registration is available. The Lenders and the Recipients understand that the Company has no present intention of registering the Securities. The Lenders and the Recipients also understand that there is no assurance that any exemption from registration under the Act will be available and that, even if available, such exemption may not allow the Lenders and the Recipients to transfer all or any portion of the Securities under the circumstances, in the amounts or at the times the Lenders and the Recipients might propose. Further, the Lenders and the Recipients are not aware of any publication or any advertisement in connection with the transactions contemplated in this Agreement.

 

3.2.4 Restricted Securities. The Lenders and the Recipients understand that the Securities may not be sold, transferred, or otherwise disposed of without registration under the Act, or an exemption therefrom, and that in the absence of an effective registration statement covering the offer and sale of the Securities or an available exemption from registration under the Act, the Securities must be held indefinitely. In particular, the Lenders and the Recipients are aware of the provisions of Rule 144 promulgated under the Act and that the Securities may not be sold pursuant to Rule 144 unless all of the conditions of that Rule are met. Among the conditions for use of Rule 144 may be the availability of certain current information to the public about the Company.

 

3.2.5 Accredited Investor. Each of the Lenders and the Recipients is an “accredited investor” as such term is defined in Rule 501 of Regulation D under the Act.

 

3.2.6 Counsel. The Lenders and the Recipients acknowledge that they have had the opportunity to review this Agreement, and the transactions contemplated by this Agreement, with their own legal counsel. The Lenders and the Recipients are relying solely on such counsel and not on any statements or representations of the Company or its agents for legal advice with respect to this investment or the transactions contemplated by this Agreement.

 

3.2.7 Tax Advisors. The Lenders and the Recipients have reviewed with their own tax advisors the U.S. federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. With respect to such matters, the Lenders and the Recipients rely solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Lenders and the Recipients understand that they (and not the Company) shall be responsible for their own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

 

  

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3.3 Representations Related to Myeloma Units. Alpha represents and warrants that the Myeloma Units are owned solely by it, free and clear of any and all liens, encumbrances, pledges, mortgages, hypothecations, assignments, preferences, covenants, conditional sales, leases, security interests, claims, charges, assessments, options, rights of first refusal, transfer or voting restrictions or any other restrictions of any kind or nature whatsoever. The Myeloma Units constitute 100% of the economic or other interests in Myeloma Health LLC owned by Alpha or in which Alpha has any interest.

 

	
4.  

	
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company makes the following representations and warranties as of the date hereof:

 

4.1 Organization and Standing. The Company is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware. The Company and each direct or indirect subsidiary of the Company has all requisite power and authority to carry out their respective businesses as presently conducted and proposed to be conducted.

 

4.2 Authorization. The execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite action and this Agreement constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms.

 

4.3 Compliance. The Company is not in violation or default of any term of its Certificate of Formation or its Operating Agreement. The execution, delivery, and performance of and compliance with this Agreement, and the issuance and exchange of the Securities pursuant hereto will not, with or without the passage of time or giving of notice, result in any violation of, or be in conflict with or constitute a default under any term of the Certificate of Formation, the Operating Agreement or the New Operating Agreement, or result in the creation or imposition of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company.

 

4.4 Capitalization. All of the outstanding units of the Company have been duly authorized, validly issued and fully paid and are not subject to any preemptive right, right of first refusal or similar right on the part of the Company or any other person and all such capital stock has been (or will have been) offered, issued and sold in all material respects in accordance with all applicable laws. The Securities, when issued in accordance with the terms of this Agreement, shall be duly authorized, validly issued, fully paid and non-assessable.

 

  

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5.  

	
MISCELLANEOUS.

 

5.1 Legend. Any certificate representing the Securities shall bear an appropriate legend indicating that such Securities are “restricted securities” for purposes of the Securities Act of 1933, as amended, and subject to restrictions on transfer.

 

5.2 Survival of Warranties. The warranties and representations of the Company and the other parties made herein shall survive the execution and delivery of this Agreement and the closing of the transaction contemplated hereby and shall in no way be affected by any investigation or lack of investigation of the subject matter thereof made by or on behalf of the other parties or the Company.

 

5.3 Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

5.4 Notice. All notices, requests, consents, claims, demands, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed to have been given: (a) when delivered by hand; (b) when received by the addressee if sent by overnight courier; (c) on the date sent by facsimile or e-mail if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth on the signature pages hereto, or as notified to the Company in writing, or as subsequently modified by written notice.

 

5.5 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent necessary, shall be severed from this Agreement, and the balance of this Agreement shall be enforceable in accordance with its terms.

 

5.6 Governing Law. All issues and questions concerning the application, construction, validity, interpretation and enforcement of this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule.

 

5.7 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

  

- 6 -

  

5.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[Remainder of page intentionally left blank; Signature Page follows]

 

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and the year first written.

 

SIGNAL GENETICS LLC

 

 

By: /s/ Samuel D. Riccitelli                            

Name:  Samuel D. Riccitelli

Title:  President and CEO

 

 

/s/ Bennett S. LeBow                                    

BENNETT S. LEBOW

 

 

LEBOW ALPHA LLLP

 

By: /s/ Bennett S. LeBow                            

Name: Bennett S. LeBow

 

 

LEBOW GAMMA LIMITED PARTNERSHIP

 

 

By: /s/ Bennett S. LeBow                            

Name: Bennett S. LeBow

 

 

BSL CAPITAL, INC.

 

 

By: /s/ Bennett S. LeBow                            

Name: Bennett S. LeBow

 

 

[Signal Genetics LLC Exchange Agreement]

 

  

  

  

LFIT-A TRUST

 

By: /s/ Seth R. Kaplan                                  

Name: Seth R. Kaplan, as Trustee of the LIFT-A Trust u/a/d June 13, 2014

 

 

LEBOW 2012 NEVADA TRUST

 

By: /s/ Stephen Danner                               

Name: Stephen Danner, Family Trustee

 

 

 

PREMIER TRUST, INC., Independent Trustee and Administrative Trustee

 

By: /s/ Brian Simmons                                  

Name: Brian Simmons

Title: VP/Trust Officer

 

 

 

 

 

 [Signal Genetics LLC Exchange Agreement]

 

  

  

  

Appendix A

 

	
Name

	
Exchange Amount

	
Class C Units of Signal Genetics LLC

	
Shares of Common Stock of Signal Genetics, Inc.

	
Lenders

	
$20,326,287

	
2,032,629*

	
2,032,629*

	
LFIT-A Trust

	
$3,500,000

	
350,000

	
350,000

	
LeBow 2012 Nevada Trust

	
$3,500,000

	
350,000

	
350,000

	
TOTAL:

	
$27,326,287

	
2,732,629

	
2,732,629

 

* Following the transfer of Class C Units from Gamma and BSL to Alpha, and prior to the Conversion, Alpha will hold all 2,032,629 Class C Units, which will be converted into 2,032,629 shares of common stock of Signal Genetics, Inc. in connection with the Conversion.

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