Document:

Exhibit 10.8

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (the “Agreement”) is made by and between Aptinyx Inc. (the “Company”) and                    (the “Executive”). Except with respect to the Restrictive Covenants Agreement and the Equity Documents (each as defined below), this Agreement supersedes, amends and restates in all respects all prior agreements and understandings between the Executive and the Company regarding the subject matter herein, including without limitation that certain employment agreement dated [DATE] (the “Prior Agreement”).  This Agreement shall be effective as of the closing of the Company’s first underwritten public offering of its equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Effective Date”).

 

1.                                      Employment Term. The Company and the Executive desire that their employment relationship be governed by this Agreement commencing as of the Effective Date and continuing in effect until terminated by either party in accordance with this Agreement (the “Term”). At all times during the Term, the Executive’s employment with the Company will continue to be “at-will,” meaning that the Executive’s employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement. If the Executive’s employment with the Company is terminated for any reason during the Term, the Company shall pay or provide to the Executive (or to his authorized representative or estate) any earned but unpaid Base Salary (as defined below), unpaid expense reimbursements, accrued but unused vacation and any vested benefits the Executive may have under any employee benefit plan of the Company (the “Accrued Benefit”).

 

2.                                      Duties.  The Executive will serve as [title] and will have such powers and duties as may from time to time be prescribed by the [Chairman of the Board of Directors of the Company (the “Board”)](1)[Company’s Chief Executive Officer (the “CEO”) or another designated Company executive](2). The Executive shall devote his full working time and efforts to the business and affairs of the Company and not engage in any other business activities without prior written approval by the [Board](3)[CEO or another designated Company executive](4). Notwithstanding the foregoing, the Executive may engage in religious, charitable or other community activities as long as such services and activities do not interfere with the Executive’s performance of his duties to the Company.

 

3.                                      Compensation and Related Matters.

 

(a)                     Base Salary.  The Executive’s initial annual base salary is $          , which is subject to review and redetermination by the [Board](5)[Company’s Board of Directors (the “Board”)](6) or the Compensation Committee of the Board (the “Compensation Committee”) from time to time. The annual base salary in effect at any given time is referred to

 

(1)  NTD: CEO agreement.

(2)  NTD: Other executive agreements.

(3)  NTD: CEO agreement.

(4)  NTD: Other executive agreements.

(5)  NTD: CEO agreement.

(6)  NTD: Other executive agreements.

 

 

herein as “Base Salary.” The Base Salary will be payable in a manner that is consistent with the Company’s usual payroll practices for senior executives.

 

(b)                     Incentive Bonus.  During the Term, the Executive will be eligible to be considered for annual cash bonus as determined by the Board or the Compensation Committee. Commencing on the Effective Date the Executive’s initial annual target bonus is     % of the Base Salary, subject to review and redetermination by the Board or the Compensation Committee from time to time.  The annual target bonus in effect at any given time is referred to herein as the “Target Bonus” and the actual amount received in a given year shall be a “Bonus”.  The Bonus shall be subject to terms and conditions of any applicable bonus plan as may be adopted from time to time.  The Executive’s Bonus, if any, will be paid by March 15 of the year following the applicable bonus year and to earn a Bonus, the Executive must be employed by the Company on the day such Bonus is paid.

 

(c)                      Employee Benefits.  During the Term, the Executive will be entitled to continue to participate in the Company’s employee benefit plans, subject to the terms and the conditions of such plans and to the Company’s ability to amend and modify such plans. Such benefits may include participation in group medical and dental insurance programs, term life insurance, short and long-term disability insurance and participation in a 401(k) plan.  The benefits made available by the Company, and the rules, terms, and conditions for participation in such benefit plans, may be changed by the Company at any time and from time to time without advance notice and without recourse by Executive.

 

(d)                     Vacation.  During the Term, the Executive will be entitled to earn a maximum of    days of paid vacation per calendar year to accrue at the rate of     days per month and to be taken at such times as may be approved in advance in the sole discretion of the Company.  Vacation days are accrued on the last day of each month.  Pursuant to Company policy, up to a maximum of forty (40) hours of vacation time can be carried over from year to year.

 

(e)                      Equity.  The equity awards  held by the Executive shall be governed by the terms and conditions of the Company’s applicable equity incentive plan(s) and the applicable award agreement(s) governing the terms of such equity awards held by the Executive (collectively, the “Equity Documents”); provided, however, and notwithstanding anything to the contrary in the Equity Documents, Section 5(c) of this Agreement shall apply in the event of a Terminating Event (as defined below) within the Sale Event Period (as defined below).

 

(f)                       Reimbursement of Business Expenses.  The Company shall reimburse the Executive for travel, entertainment, business development and other expenses reasonably and necessarily incurred by the Executive in connection with the Company’s business.  Expense reimbursement shall be subject to such policies the Company may adopt from time to time, included with respect to pre-approval.

 

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4.                                      Certain Definitions.

 

(a)                     Sale Event.  “Sale Event” means the consummation of (i) the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (iii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the surviving or resulting entity (or its ultimate parent, if applicable), (iv) the acquisition of all or a majority of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a Person or group of Persons, or (v) any other acquisition of the business of the Company, as determined by the Board; provided, however, that the Company’s Initial Public Offering, any subsequent public offering or another capital raising event, or a merger effected solely to change the Company’s domicile shall not constitute a “Sale Event.” Notwithstanding the foregoing, where required to avoid extra taxation under Section 409A of the Internal Revenue Code, a Sale Event must also satisfy the requirements of Treas. Reg. Section 1.409A-3(a)(5).

 

(b)                     Sale Event Period.  “Sale Event Period” means the period beginning on the date of a Sale Event and ending on the one year anniversary of the Sale Event.

 

(c)                      Terminating Event.  A “Terminating Event” means termination of the Executive’s employment by the Company under the circumstances set forth in Section 4(c)(i) or Section 4(c)(ii) below.

 

(i)                                     Termination by the Company Other Than For Cause.  Termination by the Company of the Executive’s employment for any reason other than for Cause, death or Disability.  For purposes of this Agreement, “Cause” means: (A) conduct by the Executive constituting a material act of misconduct in connection with the performance of his duties, including, without limitation, misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes; (B) the Executive is convicted of a felony involving moral turpitude, deceit, dishonesty, fraud, or engages in any conduct that would reasonably be expected to result in material injury or reputational harm to the Company or any of its subsidiaries and affiliates if he were retained in his position; (C) continued non-performance by the Executive of his duties hereunder (other than by reason of the Executive’s physical or mental illness, incapacity or Disability) which has continued for more than 30 days following written notice of such non-performance from the Board; (D) a breach by the Executive of any of the provisions contained this Agreement or the Restrictive Covenants Agreement; (E) a material violation by the Executive of the Company’s written employment policies; or (F) failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

 

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(ii)                                  The Executive’s Resignation for Good Reason. The Executive’s resignation of his employment with the Company for Good Reason.  For purposes of this Agreement, “Good Reason” means that the Executive has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events: (A) a material diminution in the Executive’s responsibilities, authority or duties; (B) a material diminution in the Executive’s Base Salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company; or (C) within the Sale Event Period, the relocation of the Executive’s principal place of business more than fifty (50) miles from the location as of the Effective Date; or (D) the material breach of this Agreement by the Company. “Good Reason Process” means that (i) the Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) the Executive notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Executive terminates his employment within 60 days after the end of the Cure Period.  If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

A Terminating Event shall not be deemed to have occurred pursuant to this Section 4(c)  if:  (i) the ending of the Executive’s employment is due to the Executive’s death or Disability, (ii) the Executive resigns for any reason, other than for Good Reason, (iii) the Company terminates the employment relationship for Cause; (iv) the Executive is offered a comparable position and/or accepts employment with any direct or indirect successor to the business or assets of the Company (rather than continuing as an employee of the Company) following a Sale Event, a spin-out, spin-off or other transaction.  For purposes hereof, the Executive will be considered “Disabled” if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from his duties to the Company on a full-time basis for 120 calendar days in the aggregate in any 12-month period, excluding absences resulting from ordinary transitory illnesses or injury.

 

5.                                      Severance and Accelerated Vesting if a Terminating Event Occurs within the Sale Event Period.  In the event a Terminating Event occurs within the Sale Event Period, subject to the Executive signing and complying with a separation agreement in a form and manner satisfactory to the Company containing, among other provisions, a general release of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement and reaffirmation of the Restrictive Covenants Agreement (the “Separation Agreement and Release”) and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release), the following shall occur:

 

(a)                     the Company shall pay to the Executive an amount equal to the sum of     (7) months of the Executive’s Base Salary in effect immediately prior to the Terminating

 

(7)  NTD: CEO — 18 months; C-level — 12 months; VP-level — 9 months.

 

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Event (or the Executive’s Base Salary in effect immediately prior to the Sale Event, if higher) plus   (8)% of the Target Bonus;

 

(b)                     if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment for    (9) months or the Executive’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company, based on the premiums as of the Date of Termination; and

 

(c)                      100% of all time-based equity awards held by the Executive shall immediately accelerate and become fully exercisable as of the Date of Termination.

 

The amounts payable under Section 5(a) and (b) shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over   (10) months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the severance shall begin to be paid in the second calendar year by the last day of such 60-day period; provided further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

6.                                      Severance if a Terminating Event Occurs Outside the Sale Event Period.  In the event a Terminating Event occurs at any time other than during the Sale Event Period, subject to the Executive signing the Separation Agreement and Release and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release), the following shall occur:

 

(a)                     the Company shall pay to the Executive an amount equal to the sum of    (11) months of the Executive’s annual Base Salary in effect immediately prior to the Terminating Event; and

 

(b)                     if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment for    (12) months or the Executive’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company, based on the premiums as of the Date of Termination.

 

(8)  NTD: CEO — 150%; C-level — 100%; VP-level — 75%.

(9)  NTD: CEO — 18 months; C-level — 12 months; VP-level — 9 months.

(10)  NTD: CEO — 18 months; C-level — 12 months; VP-level — 9 months.

(11)  NTD: CEO — 12 months; C-level — 9 months; VP-level — 6 months.

(12)  NTD: CEO — 12 months; C-level — 9 months; VP-level — 6 months.

 

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The amounts payable under Section 6(a) and (b) shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over    (13) months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the severance shall begin to be paid in the second calendar year by the last day of such 60-day period; provided further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

7.                                      Restrictive Covenants Agreement.  The terms of the Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement dated [DATE] (the “Restrictive Covenants Agreement”) between the Company and the Executive, attached hereto as Exhibit A, shall continue to be in full force and effect, subject to the modifications contained herein.  The Executive agrees that the term “Company,” as used in the Restrictive Covenants Agreement, shall mean the Company, its subsidiaries and other affiliates, and its and their successors and assigns.  The Executive hereby reaffirms the terms of the Restrictive Covenants Agreement, as modified herein, as material terms of this Agreement and acknowledges that such terms are incorporated by reference herein.

 

(a)                                 Third-Party Agreements and Rights.  The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party that restricts in any way the Executive’s use or disclosure of information or the Executive’s engagement in any business.  The Executive represents to the Company that the Executive’s execution of this Agreement, the Executive’s employment with the Company and the performance of the Executive’s proposed duties for the Company will not violate any obligations the Executive may have to any such previous employer or other party.  In the Executive’s work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

 

(b)                                 Litigation and Regulatory Cooperation.  During and after the Executive’s employment, the Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company.  The Executive’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.  During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company.  The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 7(b).  For the avoidance of doubt, nothing in this Agreement shall be interpreted or applied to prohibit the Executive from

 

(13)  NTD: CEO — 12 months; C-level — 9 months; VP-level — 6 months.

 

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making any good faith report to any governmental agency or other governmental entity concerning any act or omission that the Executive reasonably believes constitutes a possible violation of federal or state law or making other disclosures that are protected under the anti-retaliation or whistleblower provisions of applicable federal or state law or regulation.

 

(c)                                  Relief.  The Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Executive of the promises set forth in this Section 7, and that in any event money damages would be an inadequate remedy for any such breach.  Accordingly, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.  In addition, in the event the Executive breaches the Restrictive Covenants Agreement during a period when he is receiving severance payments pursuant to Sections 5 or 6, the Company shall have the right to suspend or terminate such severance payments.  Such suspension or termination shall not limit the Company’s other options with respect to relief for such breach and shall not relieve the Executive of his duties under this Agreement.

 

(d)                                 Protected Disclosures and Other Protected Action.  Nothing in this Agreement shall be interpreted or applied to prohibit the Executive from making any good faith report to any governmental agency or other governmental entity (a “Government Agency”) concerning any act or omission that the Executive reasonably believes constitutes a possible violation of federal or state law or making other disclosures that are protected under the anti-retaliation or whistleblower provisions of applicable federal or state law or regulation.  In addition, nothing contained in this Agreement limits the Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including the Executive’s ability to provide documents or other information, without notice to the Company.  In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, the Executive shall not be held criminally or civilly liable under any federal or state trade secret law or under this Agreement or the Restrictive Covenants Agreement for the disclosure of a trade secret that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

 

8.                                      Additional Limitation.

 

(a)                     Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in

 

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the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction.  In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code:  (i) cash payments not subject to Section 409A of the Code; (ii) cash payments subject to Section 409A of the Code; (iii) equity-based payments and acceleration; and (iv) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

 

(b)       For purposes of this Section 8(b), the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executive’s receipt of the Aggregate Payments.  For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

 

The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 8(b)(i) shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

 

9.             Section 409A.

 

(a)       Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s “separation from service” within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (i) six months and one day after the Executive’s separation from service, or (ii) the Executive’s death.

 

(b)       The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.  To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.  The

 

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parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

 

(c)       All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement.  All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred.  The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year.  Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(d)       To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

(e)       The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

10.          Withholding.  All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law. Nothing herein shall be construed to require the Company to structure any compensation arrangement in a way that is most tax-favorable to the Executive.

 

11.          Notice and Date of Termination.

 

(a)       Notice of Termination.  The Executive’s employment with the Company may be terminated by the Company or the Executive at any time and for any reason.  During the Term, any termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with this Section 11.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

 

(b)       Date of Termination.  “Date of Termination” shall mean:  (i) if the Executive’s employment is terminated by his death, the date of the Executive’s death; (ii) if the Executive’s employment is terminated on account of Executive’s Disability or by the Company for Cause or without Cause, the date on which Notice of Termination is given, unless another

 

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date is specified by the Company; (iii) if the Executive’s employment is terminated by the Executive for any reason except for Good Reason, 30 days after the date on which a Notice of Termination is given, and (iv) if the Executive’s employment is terminated by the Executive for Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period.  Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

 

12.          Consent to Jurisdiction.  The parties hereby consent to the jurisdiction of the state and federal courts in the State of Illinois. Accordingly, with respect to any such court action with respect to this Agreement or the Restrictive Covenants Agreement the Executive (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

 

13.          Integration.  This Agreement constitutes the entire agreement between the parties with respect to compensation, severance pay, benefits and accelerated vesting and supersedes in all respects all prior agreements between the parties concerning such subject matter, including without limitation the Prior Agreement and any offer letter, employment agreement or severance agreement relating to the Executive’s employment relationship with the Company and/or the ending of that employment relationship.  Notwithstanding the foregoing, the Restrictive Covenants Agreement, the Equity Documents, and any other agreement relating to confidentiality, noncompetition, nonsolicitation or assignment of inventions shall not be superseded by this Agreement and the Executive acknowledges and agrees that any such agreements remain in full force and effect.

 

14.          Successor to the Executive.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees.  In the event of the Executive’s death after a Terminating Event but prior to the completion by the Company of all payments due to the Executive under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to his death (or to the Executive’s estate, if the Executive fails to make such designation).

 

15.          Enforceability.  If any portion or provision of this Agreement (including, without limitation, any portion or provision of any Section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

16.          Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this

 

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Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

17.          Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight currier service of by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company, or to the Company at its main office, attention of the Board of Directors.

 

18.          Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

 

19.          Effect on Other Plans and Agreements.  An election by the Executive to resign for Good Reason under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Company’s benefit plans, programs or policies.  Nothing in this Agreement shall be construed to limit the rights of the Executive under the Company’s benefit plans, programs or policies except as otherwise provided in Section 7 hereof, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise.  In the event that the Executive is party to an agreement with the Company providing for payments or benefits under such agreement and this Agreement, the terms of this Agreement shall govern and the Executive may receive payment under this Agreement only and not both.  Further, Section 5 and Section 6 of this Agreement are mutually exclusive and in no event shall the Executive be entitled to payments or benefits pursuant to Section 5 and Section 6 of this Agreement.

 

20.          Governing Law.  This is an Illinois contract and shall be construed under and be governed in all respects by the laws of the State of Illinois, without giving effect to the conflict of laws principles.

 

21.          Successor to Company.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no succession had taken place.  Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a material breach of this Agreement.

 

22.          Gender Neutral.  Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

 

23.          Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the Effective Date.

 

	
 
    	
APTINYX INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Name]
    
	
 
    	
[Title]
    

 

[Signature Page to the Employment Agreement]

 

 

EXHIBIT A

 

EXECUTED RESTRICTIVE COVENANTS AGREEMENTExhibit 10.1

 

FIRST MODIFICATION TO
LOAN AGREEMENT

 

This FIRST
MODIFICATION TO LOAN AGREEMENT (this "Agreement") is made as of the 6th day of June, 2018, by and
between RANOR, INC., a Delaware corporation (the "Borrower"), and BERKSHIRE BANK, a savings bank organized and
existing under the laws of the Commonwealth of Massachusetts ("Lender"), successor by merger to Commerce Bank
& Trust Company, in the following circumstances:

 

A. Lender has made a
term loan to Borrower in the original principal amount of $2,850,000.00 (the "Term Loan"), which Term Loan is evidenced
by that certain Promissory Note dated December 20, 2016 made by Borrower in favor of Lender in the stated principal amount of $2,850,000.00
(the "Term Note") and has made a revolving line of credit loan to the Borrower in the maximum principal amount of $1,000,000.00
(the "Line of Credit" and together with the Term Loan, collectively, the "Loans"), which Line of Credit is
evidenced by that certain Promissory Note dated December 20, 2016 made by Borrower in favor of Lender in the stated principal amount
of $1,000,000.00 (the "Line of Credit Note" and together with the Term Note, collectively, the "Notes"). The
Notes are governed by the Loan Agreement by and between Borrower and Lender dated December 20, 2016 (the "Loan Agreement").
Any capitalized terms used but not expressly defined herein shall be given the same meaning given to such term in the Loan Agreement.

 

B. The Notes are secured
by a lien on the assets of Borrower pursuant to that certain Security Agreement by and between Borrower and Lender dated December
20, 2016 (the "Security Agreement"). The Notes are further secured by that certain Mortgage, Security Agreement and Financing
Statement dated December 20, 2016 made by Borrower in favor of Lender (the "Mortgage"). The Notes are further secured
by the unlimited guaranty of TechPrecision Corporation, a Delaware corporation ("Guarantor") pursuant to that certain
Unlimited Guaranty dated as of December 20, 2016 made by Guarantor in favor of Lender (the "Guaranty").

 

C. Borrower has failed
to maintain the required minimum Debt Service Coverage Ratio for the period ending March 31, 2018, in violation of Section 6.10
of the Loan Agreement (the "Existing Default").

 

D. Borrower has requested
that Lender waive the Existing Default and Lender has agreed on the condition that the Loan Agreement be modified as set forth
herein.

 

NOW, THEREFORE, in consideration
of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:

 

1. The Loan Agreement
is hereby amended as follows:

 

1.1 Section
6.10 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in place thereof and substituted therefor:

 

"6.10 Debt Service Coverage Ratio. Borrower
agrees to maintain the ratio of the Cash Flow of the Guarantor to the Total Debt Service of the Guarantor of not less than 1.20
to 1.00, measured quarterly on the last day of each fiscal quarter-annual period of Guarantor on a trailing twelve (12) month basis.
Calculations will be based on the audited (year-end) and unaudited (quarterly) consolidated financial statements of the Guarantor.
Quarterly tests will be measured based on the 10-Q reports within sixty (60) days of the end of each quarter, and annual tests
will be measured based on 10 K reports within one hundred twenty days (120) after the end of each fiscal annual period. "Cash
Flow" means an amount, without duplication, equal to the sum of net income of Guarantor plus (i) interest expense, (ii) taxes,
(iii) depreciation and amortization, (iv) stock based compensation expense taken by the Guarantor, (v) non-cash losses and charges
and one time or nonrecurring expenses at the Bank's discretion, less (vi) the amount of cash distributions, if any, made to shareholders
or owners of Guarantor, (vii) less cash taxes paid by the Guarantor, all as determined in accordance with generally accepted accounting
principles applied on a consistent basis. "Total Debt Service" shall mean an amount, without duplication, equal to the
sum of (i) all amounts of cash interest paid on liabilities, obligations and reserves of Guarantor paid by Guarantor, and (ii)
all amounts expended by Guarantor in connection with current maturities of long-term debt and preferred dividends, all as determined
in accordance with generally accepted accounting principles applied on a consistent basis."

 

     

     

    

 

2. Lender hereby waives
the Existing Default.

 

3. All security for the
Loans and Notes now existing or hereafter granted to Lender, including without limitation all security evidenced, granted or governed
by the Loan Agreement as amended hereby, the Security Agreement, the Guaranty, and the Mortgage shall be security for the Loans,
as amended hereby, and the Notes and for all obligations of Borrower under this Agreement, under the Notes and under the Loan Agreement,
as amended by this Agreement.

 

4. All references to
the Loan Agreement, wherever, whenever or however made or contained, are hereby deemed to be references to the Loan Agreement,
as modified by this Agreement. By signing this Agreement in the space indicated below, Borrower hereby affirms and restates all
of the representations, warranties, covenants, and agreements made and set forth in the Loan Agreement, except to the extent a
representation or warranty is made as of a specific date in which case the borrower affirms such representation and warranty was
true as of such date. ALL OF THE PROVISIONS OF THE LOAN AGREEMENT, AS AMENDED HEREBY, REMAIN IN FULL FORCE AND EFFECT.

 

5. By signing this Agreement
on behalf of the Borrower in the space designated below, the individual so signing represents and warrants to Lender that he or
she has full power and authority to execute this Agreement and to bind Borrower, and that all corporate actions necessary to authorize
and approve execution of this Agreement, and by such individual, have been taken prior to the execution hereof.

 

6. Concurrently with
the execution and delivery of this Agreement, Borrower agrees to pay to Lender all reasonable and documented expenses incurred
in connection with this Agreement, including without limitation all reasonable legal fees and expenses.

 

7. This Agreement shall
be binding upon and shall inure to the benefit of Borrower and Lender, and their respective successors and assigns. This Agreement
has been made in the Commonwealth of Massachusetts and shall be governed, construed, applied and enforced in accordance with the
laws of said Commonwealth without resort to its conflict of laws rules. Wherever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable law; should any portion of this Agreement be declared
invalid for any reason in any jurisdiction, such declaration shall have no effect upon the remaining portions of this Agreement;
furthermore, the entirety of this Agreement shall continue in full force and effect in all jurisdictions and said remaining portions
of this Agreement shall continue in full force and effect in the subject jurisdiction as if this Agreement had been executed with
the invalid portions thereof deleted.

 

8. All notices and communications
provided for herein shall be in writing and shall be deemed effective when deposited in the United States mail, sent by certified
mail, return receipt requested, postage prepaid, at Lender's and Borrower's respective addresses set forth in the Loan Agreement,
as amended hereby.

 

9. IN THE EVENT THAT
LENDER BRINGS ANY ACTION OR PROCEEDING IN CONNECTION HEREWITH IN ANY COURT OF RECORD OF MASSACHUSETTS OR THE UNITED STATES IN MASSACHUSETTS,
BORROWER HEREBY IRREVOCABLY CONSENTS TO AND CONFERS PERSONAL JURISDICTION OF SUCH COURT OVER BORROWER BY SUCH COURT. IN ANY SUCH
ACTION OR PROCEEDING, BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS AND AGREES THAT SERVICE
THEREOF MAY BE MADE UPON BORROWER BY MAILING A COPY OF SUCH SUMMONS, COMPLAINT OR OTHER PROCESS BY CERTIFIED MAIL TO BORROWER AT
ITS ADDRESS REFERENCED IN THE LOAN AGREEMENT. BORROWER AND LENDER HEREBY WAIVE TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED IN CONNECTION HEREWITH,
OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING
BETWEEN BORROWER AND LENDER.

 

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IN WITNESS WHEREOF, the
parties hereto, by their duly authorized representatives, have executed this Agreement on the date first above written.

 

	 	RANOR, INC.	 
	 	 	 	 	 
	 	By: 	/s/ 	Thomas Sammons	 
	 	Name: 	Thomas Sammons	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 
	 	 	 	 	 
	 	BERKSHIRE BANK	 
	 	 	 	 	 
	 	By: 	/s/ Thomas McCarthy	 
	 	Name:	Thomas McCarthy	 
	 	Title:	Vice President	 

 

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CONSENT OF GUARANTOR

 

The undersigned Guarantor
of the obligations of the Borrower as further described in the Loan Agreement and the Guaranty (hereinafter the "Obligations")
hereby consents to the execution of the foregoing Agreement, hereby waives any claims, offsets or defenses which might otherwise
arise by reason of the execution of the foregoing, and hereby ratifies and affirms the Guaranty, and all agreements securing such
Guaranty, all of which shall remain in full force and effect until Borrower's Obligations have been paid and performed in full
to Lender's satisfaction. The undersigned Guarantor hereby agrees that, as of the date hereof, it has no claim or defense of any
kind by way of offset or otherwise to the payment and satisfaction in full of Borrower's or the Guarantor's obligations under
said documents or to the extent that such a claim or defense may exist, the undersigned hereby waives it in consideration of the
execution of the Agreement. The Guarantor further waives any and all defenses arising by reason of (a) any and all amendments
or modifications of any documents or instrument, (b) any and all alterations, accelerations, extensions or other changes in the
time or manner of payment or performance of Obligations, ( c) the release, substitution or addition of any collateral or any guarantees,
( d) any failure of the Lender to give notice of default to Borrower or Guarantor, (e) any failure of the Lender to pursue Borrower
or any of its property with due diligence, (t) any failure of the Lender to resort to collateral or to remedies which may be available
to it, (g) any and all defenses arising out of the relationship of the undersigned to Borrower, and none of the defenses shall
operate to release the undersigned as guarantor, (h) all rights of Borrower, and (i) the benefit of all other principles or provisions
of law, statutory or otherwise, which are or might be in conflict with the terms hereof.

 

The failure or refusal of the Guarantor
to execute this Consent of Guarantor shall not void such Guarantor's Obligations, nor shall such failure or refusal be grounds
for any relief of Guarantor from its Obligations. 

 

Dated as of date first above written.

 

GUARANTOR: 

 

TECHPRECISION CORPORATION

 

	By: 	/s/ 	Thomas Sammons	 
	Name: 	Thomas Sammons	 
	Title:	Chief Financial Officer	 

 

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