Document:

Exhibit 10.2

 

	

	
www.akebia.com
	
Akebia Therapeutics, Inc.

245 First Street

Suite 1100

Cambridge, MA 02142

 

August 5, 2014                         

Robert Shalwitz, M.D. 

2549 Bryden Rd 

Bexley, OH 43209 

Re: Consulting Agreement 

Dear Bob: 

This letter agreement (“Agreement”) will confirm the agreement between you and Akebia Therapeutics, Inc. (the “Company”) concerning your engagement to provide certain consulting services following the conclusion of your full-time employment with the Company on December 31, 2014. 

1.            Services. You agree to provide services as requested by the Company. The services to be provided hereunder shall include advising the Company with respect to its research, pre-clinical and clinical development activities, manufacturing processes, intellectual property portfolio, and such other assistance as specifically requested by your designated Company contact (in the aggregate, the “Services”). Your designated Company contact for this engagement is John P. Butler, Chief Executive Officer. The term of this Agreement shall, subject to your continued full-time employment with the Company through December 31,2014, commence on January 1, 2015 (the “Effective Date”) and continue for a period of twenty-four (24) months, unless extended by mutual agreement of the parties or earlier terminated as provided herein (the “Consulting Period”). You agree to devote as much business time as is necessary to properly perform the Services, but no more than (i) thirty (30) hours per month during the first twelve (12) months of the Consulting Period and (ii) ten (10) hours per month during the second twelve (12) months of the Consulting Period, unless otherwise agreed upon by the parties. If you receive approval to devote more than the maximum hours set forth above to perform the Services, you will receive additional consideration from the Company as set forth in Section 3(b) below. 

2.            Relationship of Parties. It is expressly agreed that, in providing the Services to the Company under this Agreement, you will be an independent contractor and that you will not be an employee or agent of the Company and that nothing herein is intended to create an employment relationship between you and the Company. It is also agreed that you shall have no right to make any commitments on behalf of the Company without the express written consent of your designated contact or a properly authorized Company officer. You are free to accept engagements from others during the Consulting Period, so long as those engagements do not prevent you from performing the Services or otherwise violate your obligations under this Agreement, including those obligations set forth in Sections 6, 7 and 8. In addition to your obligations under this Agreement, you acknowledge your additional obligations set forth in (i) the Employee Agreement (Confidentiality, Non-Solicitation, Non-Competition and Developments Agreement) between you and the Company dated February 10, 2014 (the “Employee Agreement”) and attached hereto as Exhibit A, which shall remain in full force and effect and is incorporated into this Agreement by reference, and (ii) the Separation Agreement between you and the Company dated as of August 5, 2014 (the “Separation Agreement”). For the avoidance of doubt, this Agreement shall be void ab initio if you fail to execute or revoke the Separation Agreement or if you fail to remain employed by the Company through December 31, 2014 in accordance with the terms of the Separation Agreement. 

3.            Consideration. 

(a)            In consideration for the Services provided hereunder, each of your equity awards will remain outstanding during the Consulting Period and each of your equity awards that are unvested as of December 31, 2014 will continue to vest during the Consulting Period, in each case, in accordance with the terms of the applicable equity plan and the equity award agreement between you and the Company and subject to the provisions of this Agreement. Notwithstanding the foregoing or the provisions of Company’s equity plans or any applicable equity award agreement to the contrary, 100% of any outstanding unvested stock options and restricted shares shall immediately vest upon (i) your death during the Consulting Period, (ii) a Change of Control that is consummated during the Consulting Period, (iii) termination of this Agreement by the Company (or any successor in-interest or assignee) other than for Cause (as defined below) or (iv) expiration of this Agreement by its terms at the end of the twenty-four (24) month period beginning on the Effective Date, provided in each case that you have not breached any provisions of this Agreement or the Separation Agreement during the Consulting Period. 

 

 

(b)             In addition, in the event that the time you devote to the Services exceeds the maximum number of hours set forth in Section 1 above, and provided you receive approval for such time in accordance with Section 1 above, the Company will compensate you for those hours in excess of the maximum hours set forth in Section 1, at a rate of $400 per hour, within thirty (30) days of receipt of an invoice for Services rendered. You will keep records of any hours worked under this Agreement, and will make those records available to the Company upon its reasonable request. 

4.            Expenses. The Company will reimburse your reasonable and necessary business expenses directly incurred by you in the performance of the Services under this Agreement during the Consulting Period, subject to prior approval of such expenses and timely submission of such documentation and substantiation as the Company may require. You agree to submit monthly requests for reimbursement of expenses. The Company will pay properly documented expenses within thirty (30) days after receipt of properly documented requests. Any reimbursements provided hereunder that would constitute nonqualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and guidance issued thereunder, including exemptive and transition relief provisions, shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect your right to reimbursement of any other such expense in any other taxable year; (ii) reimbursement of the expense shall be made not later than the end of your taxable year following the taxable year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. 

5.            Taxes, Insurance and Benefits. As an independent contractor, you shall be solely responsible for all insurance including, but not limited to, workers’ compensation insurance and unemployment insurance, if required, and for the withholding and payment of all federal, state and local income taxes, social security and Medicare taxes and other legally-required payments on sums received from the Company under this Agreement. As applicable, the Company will provide you with an IRS Form 1099 evidencing all consideration paid by it to you in connection with this engagement. You will also be solely responsible for any comprehensive general liability, automobile or other insurance which you decide to obtain and keep in effect. 

Because you are an independent contractor, neither you nor any dependent or other individual claiming through you will be eligible to participate in, or receive benefits under, any of the employee benefit plans, programs, agreements or arrangements maintained by the Company, other than as set forth in the Separation Agreement or in Section 3(a) hereof. 

6.            Confidentiality and Related Matters. 

(a)           Confidential Information. Your confidentiality obligations shall be as set forth in the Employee Agreement. The defined term, “Term”, which is defined in Section 1 of the Employee Agreement, shall be amended and restated to replace “employment” with “consulting services”. In addition, any and all other references to “employment” in the Employee Agreement shall be deemed to also include the Services provided hereunder. 

(b)           Protection of Documents. All documents, records and files, in any media of whatever kind and description, relating to the business, present or otherwise, of the Company or any of its Affiliates, and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by you, shall be the sole and exclusive property of the Company. You agree to safeguard all Documents and to surrender to the Company, at the time the Consulting Period terminates or at such earlier time or times as the Company may specify, all Documents then in your possession or control. You also agree to disclose to the Company, at the time the Consulting Period terminates or at such earlier time or times as the Company may specify, all passwords necessary or desirable to obtain access to, or that would assist in obtaining access to, any information which you have password-protected on any computer equipment, network or system of the Company or any of its Affiliates. 

(c)            No Public Comment. During the Consulting Period and thereafter, you shall not give any statement or make any announcement, directly or indirectly, orally or in writing, publicly or to the media (electronic, print or otherwise), about the Company or any of its Affiliates without the prior written consent of the Chief Executive Officer of the Company or his expressly authorized representative. 

7.            Assignment of Rights to Intellectual Property. You shall disclose and assign all rights to Intellectual Property of the Company as set forth in Section 5 of the Employee Agreement. 

 

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8.            Restricted Activities. In consideration of the continued vesting of your equity awards during the Consulting Period, you acknowledge and agree that the following restrictions on your activities during and after the Consulting Period, as well as the restrictions set forth in Sections 6, 7 and 8 of the Employee Agreement, are necessary to protect the goodwill, Confidential Information, trade secrets and other legitimate interests of the Company and its Affiliates: 

(a)            Conflicts of Interest Prohibited. You agree that, during the Consulting Period, you will not undertake any outside activity, whether or not competitive with the business of the Company or its Affiliates that could reasonably give rise to a conflict of interest or otherwise interfere with your performance of the Services. 

(b)            Non-Solicitation of Investors, Business Partners or Vendors. During the Consulting Period, you agree that you will not directly or indirectly solicit or encourage any investor, business partner or vendor of the Company or any of its Affiliates to terminate or diminish its relationship with them. 

9.            Enforcement. In signing this Agreement, you give the Company assurance that you have carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed on you under Sections 6, 7 and 8 hereof and Sections 6, 7 and 8 of the Employee Agreement (the “Restrictive Covenants”). You agree without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its Affiliates, and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. You further agree that, were you to breach any of the Restrictive Covenants, the damage to the Company and its Affiliates would be irreparable. You therefore agree that if you breach any of the Restrictive Covenants, the Company, in addition to any other remedies available to it including those set forth in Section 10 hereof, shall be entitled to (i) immediately cease all consideration provided under this Agreement (including, without limitation, continued vesting of your equity awards pursuant to Section 3(a) of this Agreement) and all compensation and benefits provided under the Separation Agreement (including, without limitation, any severance payments, benefits and equity) and (ii) preliminary and permanent injunctive relief against any breach or threatened breach by you of any of those covenants, without having to post bond, together with an award of its reasonable attorney’s fees incurred in enforcing its rights hereunder. So that the Company may enjoy the full benefit of the Restrictive Covenants, you further agree that the restricted period shall be tolled, and shall not run, during the period of any breach by you of any of the Restrictive Covenants. You and the Company further agree that, in the event that any provision of the Restrictive Covenants are determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, that provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law. It is also agreed that each of the Company’s Affiliates shall have the right to enforce all of your obligations to that Affiliate under this Agreement including, without limitation, pursuant to the Restrictive Covenants. Finally, no claimed breach of this Agreement or other violation of law attributed to the Company, or change in the nature or scope of your relationship with the Company, shall operate to excuse you from the performance of your obligations under the Restrictive Covenants. 

10.            Termination. 

(a)            This Agreement and your Services may be terminated by you or the Company upon thirty (30) days’ written notice to the other, except that the Company may terminate this Agreement immediately for Cause. For purposes of this Agreement, and in each case as determined by the Compensation Committee of the Company’s Board of Directors in its sole and reasonable discretion, the following will constitute “Cause”: (i) your indictment or conviction for either any felony offense or any other crime involving dishonesty; (ii) your participation in any fraud, theft, embezzlement or other misconduct or act of dishonesty involving the Company or any of its subsidiaries; (iii) your intentional damage to any property of the Company or any of its subsidiaries; (iv) your breach of the duty of good faith and fair dealing that you owe to the Company or any of its subsidiaries; (v) your breach or violation of any agreement with the Company or any of its subsidiaries, including, without limitation, your Employee Agreement; (vi) any conduct by you that in the good faith and reasonable determination of the Board of Directors demonstrates gross unfitness to serve; (vii) your failure to comply with the code of conduct of the Company or any of its subsidiaries or any other policies of the Company that have been approved by the Board of Directors or its authorized delegate; (viii) your insubordination or failure to follow the directions of the Board of Directors or of the Chief Executive Officer of the Company; or (ix) any other conduct by you that could be expected to be harmful to the business, interests or reputation of the Company or any of its subsidiaries. Upon termination of this Agreement by you for convenience or by the Company for Cause, the unvested portions of your equity awards shall immediately terminate without payment of consideration therefor and any and all other consideration provided under this Agreement (including, without limitation, continued vesting of your equity awards pursuant to Section 3(a) of this Agreement) and all compensation and benefits provided under the Separation Agreement (including, without limitation, any severance payments, benefits and equity) shall immediately cease. Upon termination of this Agreement, the Consulting Period shall end and the Company shall have no further obligation to you, other than for payment of un-reimbursed expenses that were pre-approved and are satisfactorily documented. 

 

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(b)            Notwithstanding the provisions of the Company’s equity plans or any applicable equity award to the contrary, the following rules will apply to your equity awards upon the termination of this Agreement, the Consulting Period and your Services. All equity awards that are unvested on the date this Agreement ends shall, after giving effect to any accelerated vesting pursuant to Section 3(a) above, immediately terminate without payment of consideration therefor. 

(i)            Subject to (ii) and (iii) below, each stock option that is vested and exercisable on the date this Agreement and the Consulting Period ends upon termination by the Company other than for Cause or upon expiration of the Agreement by its terms at the end of the twenty-four (24) month period beginning on the Effective Date (after giving effect to the accelerated vesting in Section 3(a) above) will remain exercisable until the earlier of (i) the last day of the twelve (12)-month period beginning on the last day of the Consulting Period or (ii) the expiration of the term of the stock option as set forth in the applicable stock option agreement, and will thereupon terminate. 

(ii)            Each stock option that is vested and exercisable on the date of your death (after giving effect to the accelerated vesting in Section 3(a) above) will remain exercisable by your estate or a person who acquired the right to exercise such stock option by bequest or inheritance until the earlier of (i) the last day of the one (1)-year period ending with the first anniversary of your death or (ii) the expiration of the term of the stock option as set forth in the applicable stock option agreement, and will thereupon terminate. 

(iii)            Each stock option that is vested and exercisable on the date the Consulting Period ends upon termination of this Agreement by you for convenience or by the Company for Cause will remain exercisable until the earlier of (i) the last day of the ninety (90)-day period beginning on the last day of the Consulting Period or (ii) the expiration of the term of the stock option as set forth in the applicable stock option agreement, and will thereupon terminate. 

11.              Survival. Provisions of this Agreement shall survive any termination if so provided herein or if necessary or desirable to accomplish the purposes of other surviving provisions. 

12.              Governing Law/Dispute Resolution. This Agreement shall be governed and construed, and the rights and obligations of the parties hereto shall be determined, in accordance with the laws of the State of Ohio, without regard to its conflicts of law principles. 

13.             Notices. Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person, consigned to a reputable national courier service or deposited in the United States mail, postage prepaid, registered or certified, and addressed as follows: 

Consultant: 

Robert Shalwitz, M.D. 

2549 Bryden Rd 

Bexley, OH 43209 

Company: 

Akebia Therapeutics, Inc. 

Attention: Chief Executive Officer 

245 First Street, Suite 1100 

Cambridge, MA 02142 

with a copy to: 

Akebia Therapeutics, Inc. 

Attention: General Counsel 

245 First Street, Suite 1100 

Cambridge, MA 02142 

 

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14.             Definitions. Words or phrases which are initially capitalized or are within quotation marks shall have the meanings provided in this Section and as provided elsewhere herein. For purposes of this Agreement, the following definitions apply: 

(a)             “Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under common control with the Company, where control may be by management authority, equity interest or otherwise. 

(b)             “Confidential Information” shall have the definition set forth in the Employee Agreement. 

(c)             “Intellectual Property” shall have the definition set forth in the Employee Agreement.

(d)             “Change of Control” means the occurrence of any of the following events other than in connection with the consummation of an initial public offering of the Company’s securities: 

(i)             any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) who is not a shareholder of the Company as of the date of this Agreement or an affiliate thereof is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; 

(ii)             a change in the composition of the Board occurring within a two-year period, as a result of which less than a majority of the directors are Incumbent Directors. “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the remaining Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); 

(iii)             the date of the consummation of a merger, scheme of arrangement or consolidation of the Company with any other corporation that has been approved by the stockholders of the Company, other than a merger, scheme of arrangement or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or 

(iv)             the date of the consummation of the sale or disposition by the Company of all or substantially all the Company’s assets. 

Notwithstanding the foregoing, a transaction will not constitute a Change in Control if: (a) its sole purpose is to change the domicile of the Company’s incorporation; or (b) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. In all respects, the definition of Change in Control shall be interpreted to comply with Code Section 409A, and any successor statute, regulation and guidance thereto. 

15.            Severability. If any portion or provision 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.             Miscellaneous. This Agreement contains the entire agreement between you and the Company, and replaces all prior agreements between you and the Company, whether written or oral, other than the Employee Agreement, the Separation Agreement and, except as otherwise explicitly modified herein or in the Separation Agreement, the award agreements evidencing all prior equity awards, with respect to the Services to be provided by you to the Company pursuant to this Agreement. This Agreement may not be amended and no breach will be waived unless agreed in a signed writing by you and an authorized officer of the Company. 

 

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If the terms of this Agreement are acceptable to you, please sign, date and return it to me. The Agreement will take effect as a legally-binding agreement between you and the Company as of the Effective Date. 

 

	
Very truly yours,

	
 

/s/ John P. Butler

	
John P. Butler

	
President and Chief Executive Officer

 

	
Accepted and agreed:

	
 

/s/ Robert Shalwitz

	
Robert Shalwitz, M.D.

 

	
Date:
	
 
	
August 5, 2014

 

 

 

 

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Exhibit A 

Employee Agreement 

 

 

 

 

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EMPLOYEE AGREEMENT 

CONFIDENTIALITY, NON-SOLICITATION, 

NON-COMPETITION AND DEVELOPMENTS AGREEMENT 

In consideration of my employment and/or continued employment by Akebia Therapeutics, Inc. (“Akebia” or “the Company”), my access to Akebia confidential and proprietary business information, and the discretionary grant to me of equity in the Company, I hereby covenant and agree with the Company as follows: 

1.            Term of Agreement: The term of this Agreement shall be for a period com-mencing on the date hereof and ending twelve (12) months after the date on which my employment with the Company terminates for any reason, whether voluntarily or involuntarily (hereafter, the “Term”). 

2.            Exclusivity of Services: During the period of my employment by the Company, I shall devote my full time and best efforts to the business of the Company and I shall neither pursue, directly or indirectly, alone or as a partner, joint venturer, officer, director, employee, consultant, agent, independent contractor or stockholder of any company or business, any business opportunity outside the Company, nor take any position with any organization other than the Company, without the written approval of the Chief Executive Officer of the Company. 

3.            Confidentiality / Non-Disclosure 

(a)             During the term of my employment by the Company and at any time following the termination of my employment by the Company for any or no reason, whether voluntary or involuntary, with or without cause, I will not, without the express prior written consent of the Company, disclose to others, use or publish (other than as may be required by my duties while employed by the Company in the ordinary course of the Company’s business) any proprietary, secret or confidential information of the Company (“Confidential Information”), which for the purposes hereof shall include, without limitation, information designated by the Company as “proprietary,” “secret,” or “confidential” (or otherwise similarly designated) or information which is not generally known to those outside of the Company detailing, listing, describing or otherwise relating to: 

(i)             the business, conduct or operations of the Company or any of the Company’s customers, licensors, licensees, collaborators, suppliers, vendors, or consultants, including (without limitation) customer lists and customer contact information; manufacturing, development and other technical methodologies, processes and applications; production schedules; financial plans, information and data; pricing information; business and/or product development plans; marketing plans; drug formulations; and clinical trial data (including, without limitation, the identity of and information about trial participants; trial results; and related regulatory actions or inactions); 

(ii)             any materials, devices, processes, methods, know-how, ways of business, programs, formulae, compositions, compounds, technology, intellectual property, inventions, research, development and the like, used in organizing, researching, developing, promoting, managing or exploiting the Company’s products or product candidates; or 

(iii)             the existence or betterment of, or possible new uses or applications for, any of the Company’s products or product candidates. 

I acknowledge that the obligations of confidentiality set forth in this Section 3 extend to any proprietary information of any third parties contracting with the Company, whether or not the Company has undertaken an express obligation of confidentiality with regard to such parties. 

(b)             I acknowledge that the Company is now and may hereafter be subject to non-disclosure or confidentiality agreements with third persons pursuant to which the Company must protect or refrain from use of proprietary information which is the property of such third persons. I hereby agree upon the direction of the Company to be bound by the terms of such agreements in the event I have access to the proprietary information protected thereunder to the same extent as if I was an original individual signatory thereto. 

4.            Return of Property: Upon the termination of my employment (and regardless of whether such termination is voluntary or involuntary), I will promptly return to the Company all of its property, including but not limited to all Confidential Information, documents, data and files (whether in electronic or hard copy form, and all copies and drafts thereof); keys, access card or badges; Company-issued credit cards; computers, cell phones or PDAs; and any other tangible equipment. By signing below, I authorize the Company to deduct from my final paycheck the cost of replacing any property that I fail to return. 

 

 

5.            Assignment of Rights to Intellectual Property 

(a)             I agree that during my employment I shall not make, use or permit to be used any notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, intellectual property, data, documentation or other materials of any nature relating to any matter within the scope of the business of the Company or concerning any of its dealings or affairs other than for the benefit of the Company. I further agree that I shall not, after the termination of my employment (regardless of whether such termination is voluntary or involuntary), use or permit to be used any such notes, memoranda, reports, lists, records, drawings, sketches, specifications, software and/or hardware programs, intellectual property, data, documentation or other materials, it being agreed that all of the foregoing shall be and remain the sole and exclusive property of the Company and that immediately upon the termination of my employment I shall deliver all of the foregoing, and all copies thereof, to the Company, at its main office or at my assigned work location. 

(b)             If at any time or times during my employment I shall (either alone or with others) develop intellectual property (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection; hereinafter “Intellectual Property”), such Intellectual Property and the benefits thereof shall immediately become the sole and absolute property of the Company and its assigns, and I shall promptly disclose to the Company (or any persons designated by it) such Intellectual Property and hereby assign any rights I may have or acquire in the Intellectual Property and benefits and/or rights resulting therefrom to the Company and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereof (with all necessary plans and models) to the Company. 

(c)             Upon disclosure of such Intellectual Property to the Company, I will, during my employment and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require to: 

(i)             apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and 

(ii)             defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection. 

In the event the Company is unable, after reasonable effort, to secure my signature on any letters patent, copyright or other analogous protection relating to Intellectual Property, whether because of my physical or mental incapacity or for any other reason whatsoever, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney-in-fact, to act for and in my behalf and stead to execute and file any such application or applications and to do all other lawfully permitted acts and to further the prosecution and insurance of letters patent, copyright or other analogous protection thereon with the same legal force and effect as if executed by me. 

(d)             I represent that the Intellectual Property identified in Exhibit A hereto comprises all the Intellectual Property which I have developed prior to my employment by the Company, which Intellectual Property is excluded from this Agreement (“Prior Development”). I understand that it is only necessary to list the title and purpose of such Intellectual Property but not details thereof. 

(e)             If, in the course of my employment with the Company, I incorporate a Prior Development into any product or service offered or sold by the Company, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, import, modify, use, offer to sell, and sell such Prior Development. Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, Prior Developments in any Products without the Company’s prior written consent. 

6.             Non-Competition: During the Term, I will not, without the Company’s prior written consent, directly or indirectly: (a) become employed by or render any service to any person or entity that competes with the Business of the Company; or (b) alone or as a partner, joint venturer, officer, director, employee, consultant, agent, independent contractor or stockholder of any company or business, engage in any business activity that directly or indirectly competes with any of the products being developed, marketed, distributed, planned, sold or otherwise provided by the Company at such time. For the purpose of this Agreement, the “Business of the Company” means the research, development, licensing and/or commercialization of one or more products (i) related to the treatment of anemia and related conditions and/or (ii) based on hypoxia-inducible factor (HIF) biology or hypoxia-inducible factor prolyl hydoxylase (HIF-PH) biology. The foregoing, however, shall not prevent (A) your passive ownership of two percent (2%) or less of the equity securities of any publicly traded company or (B) your provision of consulting services to Aerpio Therapeutics, Inc., but only to the extent your provision of such services does not otherwise violate the provisions of this Agreement. 

 

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7.            Non-Solicitation of Employees: During the Term, I will not, directly or indirectly, in any way encourage, induce or solicit (or attempt to encourage, induce or solicit) any employee, consultant or independent contractor to terminate his, her or its relationship with the Company. 

8.             Non-Solicitation of Certain Third Parties: I understand and agree that the relationship between the Company and certain third parties constitutes a valuable asset of the Company and may not be converted to my own use. Accordingly, during the Term, I will not, directly or indirectly (i) call-on, solicit, divert, take away or do business with (or in any manner attempt to call-on, solicit, divert, take away or do business with) any past, present or prospective customer, account, collaborator, licensee or other business relation of the Company with whom I interacted or learned of during my employment with the Company; (ii) in any way interfere with the relationship between any such customer, account, collaborator, licensee or business relation and the Company; or (iii) solicit or encourage any customer, account, collaborator, licensee or other business relation of the Company to terminate or diminish its relationship with the Company. 

9.            No Conflicting Obligations: I hereby represent that, except as I have disclosed in writing to the Company, I am not a party to, or bound by the terms of, any agreement with or obligation to any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of my employment with the Company or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party. I further represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement or obligation to keep in confidence proprietary information, knowledge or data acquired by me in confidence or in trust prior to or during my employment with the Company, and I will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or others. By signing below, I acknowledge that the Company has instructed me not to bring to the Company’s premises, install on any Company computer, use, or disclose any confidential information belonging to a third party during my employment with the Company. 

10.            Remedies for Breach: I agree that my breach of any covenant in this Agreement will cause irreparable damage to the Company and that, in the event of such breach, the Company shall have, in addition to any and all remedies of law, the right to an injunction, specific performance or other equitable relief to prevent the violation of my obligations hereunder. I understand and agree that in the event I breach any of the covenants contained herein during the Term, the Term shall be extended automatically. The duration of such extension shall equal the period of time between the date I began such violation and the date I permanently cease such violation. I further understand and agree that in the event I breach or fail to honor any term of this Agreement, and the Company is successful in whole or in part in any legal or equitable action to defend its rights under or to enforce any terms of this Agreement, I shall be required to reimburse the Company for all costs, expenses and reasonable attorneys’ fees associated with such action. 

11.            Employment at Will: I acknowledge and agree that this Agreement does not constitute an express or implied employment contract and that my employment with the Company will be on an “at-will” basis. Accordingly, I understand that this Agreement does not create an obligation on the Company or any other person or entity to continue my employment and that either the Company or I may terminate my employment at any time, for any or no reason, with or without cause. 

12.            Modification and Waiver: Any amendment to or modification of this Agreement, and any waiver of any provision hereof, shall be valid only if set forth in a writing signed by the Chief Executive Officer of the Company. Any waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach hereof. 

13.            Severability: I hereby agree that each provision herein shall be treated as a separate and independent clause, and the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with applicable law. 

14.            Applicable Law / Jurisdiction / Jury Waiver: This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the conflicts of laws principles thereof. In addition, I acknowledge that because I will have regular interaction with Company representatives based in Massachusetts, any dispute concerning this Agreement shall be heard by a court of competent jurisdiction within Massachusetts. By signing below, I acknowledge that I am subject to the personal jurisdiction of the Massachusetts courts in any county where the Company has operations or facilities. Both parties further agree that any such dispute shall be tried by a judge alone, and both parties hereby waive and forever renounce the right to a trial before a civil jury in any such dispute. 

15.            Successors and Assigns: The term “Company” shall include Akebia Therapeutics, Inc. and any of its subsidiaries, subdivisions or affiliates. The Company shall have the right to assign this Agreement to its successors and assigns, and all covenants and agreements hereunder shall inure to the benefit of and be enforceable by said successors or assigns. 

 

-3-

 

16.            Survival / Changes in Role or Title: I acknowledge that my covenants in this Agreement are given in exchange for, among other things, my employment and the terms and conditions of such employment. My covenants are not tied to my present role, title or responsibilities. Therefore, the covenants in this Agreement shall survive any change in my role, title, responsibilities, compensation, benefits, or any other term or condition of my employment. 

17.            Notification of New Employers: During the Term I hereby agree to provide a copy of this Agreement to any employer or prospective employer, and I hereby authorize the Company to provide copies of this Agreement to any person or entities that may or does employ or do business with, or consider employing or doing business with, me in the future. 

18.            Entire Agreement: This Agreement supersedes any and all prior oral and/or written agreements, and sets forth the entire agreement, between you and the Company with respect to the subject matter hereof. 

 

	
Very truly yours,

	
 

/s/ John P. Butler

	
John P. Butler

	
Chief Executive Officer

Intending to be legally bound hereby, I have signed this Agreement under seal as of the day and year written below. 

AGREED TO AND ACCEPTED 

 

	
By:
	
 
	
/s/ Robert Shalwitz
	
  
	
Date:
	
 
	
February 10, 2014

	
 

Name:
	
 
	
Robert Shalwitz
	
  
	
 
	
 
	
 

 

 

 

 

-4-

 

Alternative to Exhibit A 

Employee Agreement 

TO: Akebia Therapeutics 

FROM: Robert Shalwitz, MD 

DATE: February 9, 2014 

Subject: Previous and Ongoing Inventions 

Dr. Shalwitz is involved with extensive previous and ongoing discovery and invention at Robert’s Remedies, LLC and Aerpio Therapeutics, Inc. 

Robert’s Remedies, LLC focuses on the areas of yeast and probiotic extracts for various cosmetic and therapeutic purposes. There is no existing or known overlap between the research for Robert’s Remedies and Akebia Therapeutics, Inc. 

Aerpio Therapeutics, Inc. focuses on research on HPTPβ, TIE-2, and HIF-lα. There is potential overlap between the companies on the HIF research, though the compounds used to achieve HIF stabilization are distinct between the two companies. Dr. Shalwitz is actively involved in research on Aerpio’s AKB-4924 for which there is presently active patenting in the areas of topical therapy for various indications. The research for these discoveries is funded directly by Aerpio Therapeutics, Inc. or indirectly by the US National Institutes for Health and/or the US Department of Defense. 

 

	
Acknowledged:
	
  
	
 

	
 

/s/ Robert Shalwitz
	
  
	
/s/ John Butler

	
Robert Shalwitz, Sr. VP and CMO
	
  
	
John Butler, CEO

	
Akebia Therapeutics, lnc.
	
  
	
Akebia Therapeutics, lnc.

 

 

 

 

 

EXHIBIT A 

PREVIOUS INVENTIONS 

 

	
TO:
	
  
	
Akebia Therapeutics, Inc.
	
 
	
 

	
 

FROM:
	
  
	
 
	
 
	
 

	
 

DATE:
	
  
	
 
	
 
	
 

	
 

SUBJECT:
	
  
	
Previous Inventions
	
 
	
 

l.             Except as listed in Section 2 below, the following is a complete list of all inventions, copyrighted works or improvements relevant to the subject matter of my employment by Akebia Therapeutics, Inc. (the “Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company: 

 

	
 ̈
	
  
	
 
	
No inventions or improvements.

	
 

 ̈
	
  
	
 
	
See below:

	
 
	
  
	
 
	
 

	
 
	
  
	
 
	
 

	
 
	
  
	
 
	
 

 

	
 ̈
	
Additional sheets attached.

2.             Due to a prior confidentiality agreement, I cannot complete the disclosure under Section 1 above with respect to inventions or improvements generally listed below, the proprietary rights and duty of confidentiality with respect to which I owe to the following party(ies): 

 

	
 
	
  
	
Invention or Improvement
	
  
	
Party(ies)
	
  
	
Relationship

	
 

1.
	
  
	
 
	
  
	
 
	
  
	
 

	
 

2.
	
  
	
 
	
  
	
 
	
  
	
 

	
 

3.
	
  
	
 
	
  
	
 
	
  
	
 

	
 

 ̈
	
  
	
Additional sheets attached.
	
  
	
 
	
  
	
 

 

-5-Exhibit 10.12

 

Execution Version

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (this “Agreement”) is made as of [Please refer to “Date” in Annex A] by and between:

 

(1)         eHi Car Services Limited, a company incorporated in the Cayman Islands (the “Company”); and

 

(2)         [Please refer to “Purchaser” in Annex A] (the “Purchaser”).  The Purchaser and the Company are sometimes each referred to herein as a “Party,” and collectively as the “Parties.”

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, the Company has submitted a registration statement on Form F-1 (as may be amended from time to time, the “Registration Statement”) with the United States Securities and Exchange Commission (the “SEC”) in connection with the initial public offering (the “Offering”) by the Company of American Depositary Shares (“ADS”) representing Class A common shares (“Class A Common Shares”) of the Company as specified in the Registration Statement; and

 

WHEREAS, the Purchaser wishes to invest in the Company by acquiring Class A Common Shares in the Company in a private transaction with the Company exempt from registration pursuant to Regulation S (“Regulation S”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”);

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the Parties hereto agree as follows:

 

ARTICLE I

 

PURCHASE AND SALE

 

Section 1.1 Issuance, Sale and Purchase of Class A Common Shares. Upon the terms and subject to the conditions of this Agreement, at the Closing (as defined below), the Purchaser hereby agrees to purchase, and the Company hereby agrees to issue, sell and deliver to the Purchaser, subject to and concurrent with the Offering, at a price per Class A Common Share equal to the Offer Price (as defined below), that certain number (as such number is determined pursuant to Section 1.2(a) below) of Class A Common Shares (the “Purchased Shares”), free and clear of all liens or encumbrances (except for restrictions arising under the Securities Act or created by virtue of this Agreement or the Lock-up Agreement (as defined below)).  The “Offer Price” means the price per ADS set forth on the cover of the Company’s final prospectus in connection with the Offering (the

 

 

“Final Prospectus”) divided by the number of Class A Common Shares represented by one ADS.  The purchase, issuance, sale and delivery of the Purchased Shares shall be made pursuant to and in reliance upon Regulation S.

 

Section 1.2 Closing.

 

(a) Closing.  Subject to Section 1.3, the closing (the “Closing”) of the sale and purchase of the Class A Common Shares pursuant to Section 1.1 shall take place concurrently with the closing of the Offering at the same offices for the closing of the Offering or at such other place as the Company and the Purchaser may mutually agree.  The total number of the Class A Common Shares that the Purchaser shall purchase as Purchased Shares at the Closing shall be equal to the aggregate purchase price of [Please refer to “Purchase Price” in Annex A] (the “Purchase Price”) divided by the Offer Price; provided, however, that (i) no fractional shares of Class A Common Shares will be issued as Purchased Shares, (ii) any fractions shall be rounded down to the nearest whole number of Class A Common Shares, and (iii) the Purchase Price will be reduced by the value of any such fractional share (as calculated on the basis of the Offer Price).  The date and time of the Closing are referred to herein as the “Closing Date.”

 

(b)  Payment and Delivery.  At the Closing, the Purchaser shall pay and deliver the total consideration to the Company in U.S. dollars by wire transfer, or by such other method mutually agreeable to the parties, of immediately available funds to such bank account designated in writing by the Company, and the Company shall deliver one or more duly executed share certificates in original form, registered in the name of the Purchaser, together with a certified true copy of the register of members of the Company, evidencing the Purchased Shares being issued and sold to the Purchaser.

 

(c) Restrictive Legend. Each certificate representing the Purchased Shares shall be endorsed with the following legend:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (AS AMENDED, THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS SECURITY MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED: (A) IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (2) AN EXEMPTION OR QUALIFICATION UNDER APPLICABLE SECURITIES LAWS OR (3) DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED; AND (B) WITHIN THE UNITED STATES OR TO ANY U.S. PERSON, AS EACH OF THOSE TERMS IS DEFINED IN REGULATION S UNDER THE ACT, DURING THE 40 DAYS FOLLOWING CLOSING OF THE PURCHASE. ANY ATTEMPT TO TRANSFER, SELL, PLEDGE OR

 

2

 

HYPOTHECATE THIS SECURITY IN VIOLATION OF THESE RESTRICTIONS SHALL BE VOID.

 

Section 1.3 Closing Conditions.

 

(a) Conditions to Purchaser’s Obligations to Effect the Closing. The obligation of the Purchaser to purchase and pay for the Purchased Shares as contemplated by this Agreement is subject to the satisfaction, on or before the Closing Date, of the following conditions, any of which may be waived in writing by the Purchaser in its sole discretion:

 

(i) All corporate and other actions required to be taken by the Company in connection with the issuance and sale of the Purchased Shares shall have been completed.

 

(ii) The representations and warranties of the Company contained in Section 2.1 of this Agreement shall have been true and correct on the date of this Agreement and true and correct in all material respects on and as of the Closing Date; and the Company shall have performed and complied in all material respects with all, and not be in breach or default in any material respects under any agreements, covenants, conditions and obligations contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing Date.

 

(iii) No governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins, prevents, prohibits or otherwise makes illegal the consummation of the transactions contemplated by this Agreement, or imposes any damages or penalties in connection with the transactions contemplated by this Agreement that are substantial in relation to the Company; and no action, suit, proceeding or investigation shall have been instituted by a governmental authority of competent jurisdiction or threatened that seeks to restrain, enjoin, prevent, prohibit or otherwise make illegal the consummation of the transactions contemplated by this Agreement, or imposes any damages or penalties in connection with the transactions contemplated by this Agreement that are substantial in relation to the Company.

 

(iv) The Offering shall have been, or shall concurrently with the Closing be, completed.

 

(v) The ADSs shall have been listed on the New York Stock Exchange subject to official notice of issuance.

 

(vi) The underwriting agreement relating to the Offering shall have been entered into and have become effective.

 

3

 

(b) Conditions to Company’s Obligations to Effect the Closing. The obligation of the Company to issue and sell the Purchased Shares to the Purchaser as contemplated by this Agreement are subject to the satisfaction, on or before the Closing Date, of each of the following conditions, any of which may be waived in writing by the Company in its sole discretion:

 

(i) The Lock-up Agreement shall have been executed and delivered by the Purchaser to the representatives of the underwriters for the Offering.

 

(ii) All corporate and other actions required to be taken by the Purchaser in connection with the purchase of the Purchased Shares shall have been completed.

 

(iii) The representations and warranties of the Purchaser contained in Section 2.2 of this Agreement shall have been true and correct on the date of this Agreement and true and correct in all material respects on and as of the Closing Date; and the Purchaser shall have performed and complied in all material respects with all, and not be in breach or default in any material respect under any agreements, covenants, conditions and obligations contained in this Agreement that are required to be performed or complied with by the Purchaser on or before the Closing Date.

 

(iv) No governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins, prevents, prohibits or otherwise makes illegal the consummation of the transactions contemplated by this Agreement, or imposes any damages or penalties in connection with the transactions contemplated by this Agreement that are substantial in relation to the Company; and no action, suit, proceeding or investigation shall have been instituted by a governmental authority of competent jurisdiction or threatened that seeks to restrain, enjoin, prevent, prohibit or otherwise make illegal the consummation of the transactions contemplated by this Agreement, or imposes any damages or penalties in connection with the transactions contemplated by this Agreement that are substantial in relation to the Company.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

 

Section 2.1 Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, as follows:

 

4

 

(a) Due Formation. The Company is a company duly incorporated as an exempted company with limited liability, validly existing and in good standing under the laws of the Cayman Islands. The Company has all requisite power and authority to carry on its business as it is currently being conducted.

 

(b) Authority. The Company has full power and authority to enter into, execute and deliver this Agreement and each agreement, certificate, document and instrument to be executed and delivered by the Company pursuant to this Agreement and to perform its obligations hereunder. The execution and delivery by the Company of this Agreement and the performance by the Company of its obligations hereunder have been duly authorized by all requisite actions on its part.

 

(c) Valid Agreement. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

(d) Due Issuance of the Purchased Shares. The Purchased Shares have been duly authorized and, when issued and delivered to and paid for by the Purchaser pursuant to this Agreement, will be validly issued, fully paid and non-assessable and free and clear of any lien or encumbrances, except for restrictions arising under the Securities Act or created by virtue of this Agreement or the Lock-up Agreement and upon delivery and entry into the register of members of the Company will transfer to the Purchaser good and valid title to the Purchased Shares.

 

(e) Capitalization. (i) The share capital of the Company shall be as set forth in Schedule I setting forth, as of the date hereof, the aggregate number of issued and outstanding shares of capital stock of the Company (including the common shares and each series of preferred shares (the “Preferred Shares”)). All issued and outstanding common shares and all issued and outstanding Preferred Shares are validly issued, fully paid and non-assessable.  (ii) All outstanding shares of capital stock of the Company and all outstanding shares of capital stock of each of the Company’s subsidiaries and consolidated affiliated entity (each a “Subsidiary” and collectively “Subsidiaries”) have been issued and granted in compliance with (x) all applicable Securities Laws and other applicable laws and (y) all requirements set forth in applicable contracts, without violation of any preemptive rights, rights of first refusal or other similar rights. “Securities Laws” means the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the listing rules of, or any listing agreement with the New York Stock Exchange and any other applicable law regulating securities or takeover matters. (iii) The rights of the Class A Common Shares to be issued to such Purchaser as Purchased Shares are as stated in the Ninth Amended and Restated

 

5

 

Memorandum and Articles of Association of the Company (the “Amended Articles”) as set out in the exhibit 3.2 of the Registration Statement.

 

(f) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any provision of the organizational documents of the Company or its Subsidiaries or violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental entity or court to which the Company or its Subsidiaries is subject, or (ii) in any material respect, conflict with, result in a breach of, constitute a default under, result in the acceleration of or creation of an encumbrance under, or create in any party the right to accelerate, terminate, modify, or cancel, any material agreement, contract, lease, license, instrument, or other material arrangement to which the Company or its Subsidiaries is a party or by which the Company or its Subsidiaries is bound or to which any of the Company’s or its Subsidiaries’ assets are subject. There is no action, suit or proceeding, pending or threatened against the Company or its Subsidiaries that questions the validity of this Agreement or the right of the Company to enter into this Agreement or to consummate the transactions contemplated hereby.

 

(g) Consents and Approvals. Neither the execution and delivery by the Company of this Agreement, nor the consummation by the Company of any of the transactions contemplated hereby, nor the performance by the Company of this Agreement in accordance with its terms requires the consent, approval, order or authorization of, or registration with, or the giving notice to, any governmental or public body or authority or any third party, except such as have been or will have been obtained, made or given on or prior to the Closing Date.

 

(h) Compliance with Laws. Except, as of the date hereof, as disclosed in the Registration Statement, and as of the Closing Date, as disclosed in the Registration Statement in the form then declared effective by the SEC, the business of the Company or its Subsidiaries is not being conducted in violation of any law or government order applicable to the Company except for violations which do not and would not have a Material Adverse Effect. As used herein, “Material Adverse Effect” shall mean any event, fact, circumstance or occurrence that, individually or in the aggregate with any other events, facts, circumstances or occurrences, results in or would reasonably be expected to result in a material adverse change in or a material adverse effect on any of (i) the financial condition, assets, liabilities, results of operations, business, or operations of the Company or its Subsidiaries taken as a whole, except to the extent that any such Material Adverse Effect results from (x) changes in generally accepted accounting principles that are generally applicable to comparable companies after the date of this Agreement, or (y) changes in general economic and market conditions; or (ii) the ability of the Company to consummate the transactions contemplated by this Agreement and to timely perform its obligations under the Agreement.

 

6

 

(i) SEC Filings. The Registration Statement, if and when declared effective by the SEC, will conform in all material respects to the requirements of the Securities Act and the rules and regulations of the SEC thereunder and will not (except for the absence of pricing related information), as of the applicable effective date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(j) Investment Company. The Company is not and, after giving effect to the offering and sale of the Purchased Shares, the consummation of the Offering and the application of the proceeds hereof and thereof, will not be an “investment company,” as such term is defined in the U.S. Investment Company Act of 1940, as amended.

 

(k) Regulation S.  No directed selling efforts (as defined in Rule 902 of Regulation S under the Securities Act) have been made by any of the Company, any of its affiliates or any person acting on its behalf with respect to any Purchased Shares that are not registered under the Securities Act; and none of such persons has taken any actions that would result in the sale of the Purchased Shares to the Purchaser under this Agreement requiring registration under the Securities Act; and the Company is a “foreign issuer” (as defined in Regulation S).

 

(l) Events Subsequent to Most Recent Fiscal Period. Since June 30, 2014 until the date hereof and to the Closing Date, there has not been any events that, to the Company’s knowledge, has had or will have a Material Adverse Effect.

 

(m) Litigation. There are no actions by or against the Company or its Subsidiaries or affecting the business or any of the assets of the Company or itsSubsidiaries pending before any governmental authority, or, to the Company’s knowledge, threatened to be brought by or before any governmental authority, that would reasonably be expected to have a Material Adverse Effect.

 

(n) Solicitation. Neither the Company nor any person acting on its behalf has offered or sold the Purchased Shares by any form of general solicitation or general advertising or directed selling efforts.

 

Section 2.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as of the date hereof and as of the Closing Date, as follows:

 

(a) Due Formation. The Purchaser is duly formed, validly existing and in good standing in the jurisdiction of its organization. The Purchaser has all requisite power and authority to carry on its business as it is currently being conducted.

 

7

 

(b) Authority. The Purchaser has full power and authority to enter into, execute and deliver this Agreement and each agreement, certificate, document and instrument to be executed and delivered by the Purchaser pursuant to this Agreement and to perform its obligations hereunder. The execution and delivery by the Purchaser of this Agreement and each agreement, certificate, document and instrument to be executed and delivered by the Purchaser pursuant to this Agreement and the performance by the Purchaser of its obligations hereunder have been duly authorized by all requisite actions on its part.

 

(c) Valid Agreement. This Agreement has been duly executed and delivered by the Purchaser and constitutes the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

(d) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any provision of the organizational documents of the Purchaser or violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental entity or court to which the Purchaser is subject, or (ii) in any material respect, conflict with, result in a breach of, constitute a default under, result in the acceleration of or creation of an encumbrance under, or create in any party the right to accelerate, terminate, modify, or cancel, any material agreement, contract, lease, license, instrument, or other material arrangement to which the Purchaser is a party or by which the Purchaser is bound or to which any of the Purchaser’s assets are subject. There is no action, suit or proceeding, pending or threatened against the Purchaser that questions the validity of this Agreement or the right of the Purchaser to enter into this Agreement or to consummate the transactions contemplated hereby.

 

(e) Consents and Approvals. Neither the execution and delivery by the Purchaser of this Agreement, nor the consummation by the Purchaser of any of the transactions contemplated hereby, nor the performance by the Purchaser of this Agreement in accordance with its terms requires the consent, approval, order or authorization of, or registration with, or the giving notice to, any governmental or public body or authority or any third party, except such as have been or will have been obtained, made or given on or prior to the Closing Date and except for any filings required to be made under the Exchange Act.

 

(f) Status and Investment Intent.

 

(i) Experience. The Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Purchased Shares. The Purchaser has

 

8

 

conducted its own due diligence and investigations with respect to the Purchased Shares. The Purchaser is capable of bearing the economic risks of such investment, including a complete loss of its investment.

 

(ii) Purchase Entirely for Own Account. The Purchaser is acquiring the Purchased Shares that it is purchasing pursuant to this Agreement for investment for its own account for investment purposes only and not with the view to, or with any intention of, resale, distribution or other disposition thereof. The Purchaser does not have any direct or indirect arrangement, or understanding with any other persons to distribute, or regarding the distribution of the Purchased Shares in violation of the Securities Act or any other applicable state securities law.

 

(iii) Solicitation. The Purchaser (x) was not identified or contacted through the marketing of the Offering and (y) did not contact the Company as a result of any general solicitation.

 

(iv) Restricted Securities. The Purchaser acknowledges that the Purchased Shares are “restricted securities” that have not been registered under the Securities Act or any applicable state securities law. The Purchaser further acknowledges that, absent an effective registration under the Securities Act, the Purchased Shares may only be offered, sold or otherwise transferred (x) to the Company, (y) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act or (z) pursuant to an exemption from registration under the Securities Act.

 

(v) Information. The Purchaser has been furnished access to all materials and information such Purchaser has requested relating to the Company and its affiliates and other due diligence documents in order to evaluate the transactions contemplated by this Agreement, and has received all the information that it considers necessary and appropriate to decide whether to acquire the Purchased Shares hereunder.  The Purchaser has consulted to the extent deemed appropriate by such Purchaser with such Purchaser’s own advisers as to the financial, tax, legal and related matters concerning an investment in the Purchased Shares and on that basis believes that an investment in the Purchased Shares is suitable and appropriate for such Purchaser.

 

(vi) Status of Purchaser. The Purchaser is not a U.S. Person (as defined in the Regulation S) and is purchasing the Purchased Shares in an offshore transaction in reliance upon the exemption from registration provided by Regulation S under the Securities Act.

 

(viii) FINRA.  The Purchaser does not, directly or indirectly, own more than five percent of the outstanding common stock (or other voting securities) of any member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or a holding company for a FINRA member, and is not otherwise a

 

9

 

“restricted person” for the purposes of the Free-Riding and Withholding Interpretation of FINRA.

 

ARTICLE III

 

COVENANTS

 

Section 3.1 Lock-up.  The Purchaser shall, before the Company files the Registration Statement with price range with the SEC, enter into a lock-up agreement (the “Lock-up Agreement”) in the form and substance to the reasonable satisfaction of the Company and/or the underwriters in the Offering.

 

Section 3.2 Distribution Compliance Period.  The Purchaser agrees not to resell, pledge or transfer any Purchased Shares within the United States or to any U.S. Person, as each of those terms is defined in Regulation S, during the 40 days following the Closing Date.

 

Section 3.3 Further Assurances. From the date of this Agreement until the Closing Date, the Parties shall in good faith fulfill or obtain the fulfillment of the conditions precedent to the consummation of the transactions contemplated hereby; provided, however, that notwithstanding the foregoing, if the Company determines that it is not in the interest of the Company to complete the Offering (within any particular period of time or at all), the Parties’ sole obligation under this Section 3.3 shall be to re-negotiate the terms of the Purchaser’s proposed investment in the Company pursuant to Section 5.13 hereof.

 

ARTICLE IV

 

INDEMNIFICATION

 

Section 4.1 Indemnification. Each of the Company and the Purchaser (an “Indemnifying Party”) shall indemnify and hold each other and its directors, officers, employees, advisors and agents (collectively, the “Indemnified Party”) harmless from and against any losses, claims, damages, liabilities, judgments, fines, obligations, expenses and liabilities of any kind or nature whatsoever, including but not limited to any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any pending or threatened legal action or proceeding, and any taxes or levies that may be payable by such person by reason of the indemnification of any indemnifiable loss hereunder (other than taxes that would have been payable notwithstanding the event giving rise to indemnification) (collectively, “Losses”) resulting from or arising out of: (i) the breach of any representation or warranty of such Indemnifying Party contained in this Agreement or in any schedule or exhibit hereto; or (ii) the violation or nonperformance, partial or total, of any covenant or

 

10

 

agreement of such Indemnifying Party contained in this Agreement for reasons other than gross negligence or willful misconduct of such Indemnified Party.  In calculating the amount of any Losses of an Indemnified Party hereunder, there shall be subtracted the amount of any insurance proceeds and third-party payments received by the Indemnified Party with respect to such Losses, if any.

 

Section 4.2 Third Party Claims.

 

(a) If any third party shall notify any Indemnified Party in writing with respect to any matter involving a claim by such third party (a “Third Party Claim”) which such Indemnified Party believes would give rise to a claim for indemnification against the Indemnifying Party under this Article IV, then the Indemnified Party shall promptly (i) notify the Indemnifying Party thereof in writing within thirty (30) days of receipt of notice of such claim and (ii) transmit to the Indemnifying Party a written notice (“Claim Notice”) describing in reasonable detail the nature of the Third Party Claim, a copy of all papers served with respect to such claim (if any), and the basis of the Indemnified Party’s request for indemnification under this Agreement.

 

(b) Upon receipt of a Claim Notice with respect to a Third Party Claim, the Indemnifying Party shall have the right to assume the defense of any Third Party Claim by, within thirty (30) days of receipt of the Claim Notice, notifying the Indemnified Party in writing that the Indemnifying Party elects to assume the defense of such Third Party Claim, and upon delivery of such notice by the Indemnifying Party, the Indemnifying Party shall have the right to fully control and settle the proceeding, provided, that, any such settlement or compromise shall be permitted hereunder only with the written consent of the Indemnified Party.

 

(c) If requested by the Indemnifying Party, the Indemnified Party shall, at the sole cost and expense of the Indemnifying Party, cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim which the Indemnifying Party elects to contest, including the making of any related counterclaim against the person asserting the Third Party Claim or any cross complaint against any person. The Indemnified Party shall have the right to receive copies of all pleadings, notices and communications with respect to any Third Party Claim, other than any privileged communications between the Indemnifying Party and its counsel, and shall be entitled, at its sole cost and expense, to retain separate co-counsel and participate in, but not control, any defense or settlement of any Third Party Claim assumed by the Indemnifying Party pursuant to Section 4.2(b).

 

(d) In the event of a Third Party Claim for which the Indemnifying Party elects not to assume the defense or fails to make such an election within thirty (30) days of receipt of the Claim Notice, the Indemnified Party may, at its option, defend, settle, compromise or pay such action or claim at the expense of the Indemnifying Party; provided, that, any such settlement or compromise shall be

 

11

 

permitted hereunder only with the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

 

Section 4.3 Other Claims. In the event any Indemnified Party should have a claim against the Indemnifying Party hereunder which does not involve a Third Party Claim, the Indemnified Party shall promptly transmit to the Indemnifying Party a written notice (the “Indemnity Notice”) describing in reasonable detail the nature of the claim, the Indemnified Party’s best estimate of the amount of Losses attributable to such claim and the basis of the Indemnified Party’s request for indemnification under this Agreement. If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days from its receipt of the Indemnity Notice that the Indemnifying Party disputes such claim, the Indemnifying Party shall be deemed to have accepted and agreed with such claim.

 

Section 4.4 Limitations on Indemnification. Notwithstanding the foregoing, except in cases involving fraud or intentional misconduct of the Indemnifying Party the Indemnifying Party shall in any event have no liability (for indemnification or otherwise) with respect to any Losses in excess of the Purchase Price in the aggregate.  The amount of any Loss for which indemnity is provided under this Agreement shall be determined without duplication of recovery by reason of the events, circumstances or facts giving rise to such liability constituting a breach of more than one representations, warranties, covenants or agreements.

 

ARTICLE V

 

MISCELLANEOUS

 

Section 5.1 Survival of the Representations and Warranties. All representations and warranties made by any Party shall survive for two(2) years and shall terminate and be without further force or effect on the second anniversary of the date hereof, except as to (i) any claims thereunder which have been asserted in writing pursuant to Section 4.1 against the Party making such representations and warranties on or prior to such second anniversary and (ii) the Company’s representations contained in Section 2.1(a), (b), (c) and (d) hereof, each of which shall survive indefinitely.

 

Section 5.2 Governing Law; Arbitration.  This Agreement shall be governed and interpreted in accordance with the internal laws of the State of New York.  Any dispute arising out of or relating to this Agreement, including any question regarding its existence, validity or termination (“Dispute”) shall be referred to and finally resolved by arbitration at the Hong Kong International Arbitration Centre in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules then in force.  There shall be three arbitrators.  Each Party has the right to appoint one arbitrator and the third

 

12

 

arbitrator shall be appointed by the Hong Kong International Arbitration Centre. The language to be used in the arbitration proceedings shall be English.  Each of the Parties irrevocably waives any immunity to jurisdiction to which it may be entitled or become entitled (including without limitation sovereign immunity, immunity to pre-award attachment, post-award attachment or otherwise) in any arbitration proceedings and/or enforcement proceedings against it arising out of or based on this Agreement or the transactions contemplated hereby.

 

Section 5.3 Amendment. This Agreement shall not be amended, changed or modified, except by another agreement in writing executed by the Parties hereto.

 

Section 5.4 Binding Effect. This Agreement shall inure to the benefit of, and be binding upon, each of the Company and the Purchaser and their respective heirs, successors and permitted assigns and legal representatives.

 

Section 5.5 Assignment. Neither this Agreement nor any of the rights, duties or obligations hereunder may be assigned by the Company or the Purchaser without the express written consent of the other Party, except that the Purchaser may assign all or any part of its rights and obligations hereunder to any affiliate of Purchaser without the consent of the Company, provided that no such assignment shall relieve the Purchaser of its obligations hereunder if such assignee does not perform such obligations. Any purported assignment in violation of the foregoing sentence shall be null and void.

 

Section 5.6 Notices. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of actual delivery if delivered personally to the Party to whom notice is to be given, on the date sent if sent by telecopier, tested telex or prepaid telegram, on the next business day following delivery to Federal Express properly addressed or on the day of attempted delivery by the U.S. Postal Service if mailed by registered or certified mail, return receipt requested, postage paid, and properly addressed as follows:

 

	
If to the   Purchaser, at:
    	
[Please refer to “Correspondence Details for   Notices” in Annex A]
    
	
 
    	
 
    
	
If to the Company,   at:
    	
eHi Car Services   Limited
    
	
 
    	
Unit 12/F,   Building No. 5, Guosheng
    
	
 
    	
Center, 388 Daduhe   Road
    
	
 
    	
Shanghai, 200062
    
	
 
    	
People’s Republic   of China
    
	
 
    	
Attn: Chief   Financial Officer
    

 

13

 

	
With copy to:
    	
O’Melveny &   Myers LLP
    
	
 
    	
37/F Plaza 66,   1266 Nanjing Road W
    
	
 
    	
Shanghai, 200040
    
	
 
    	
People’s Republic of China
    
	
 
    	
Attn: Portia Ku
    

 

Any Party may change its address for purposes of this Section 5.6 by giving the other Parties hereto written notice of the new address in the manner set forth above.

 

Section 5.7 Entire Agreement. This Agreement constitutes the entire understanding and agreement between the Parties with respect to the matters covered hereby, and all prior agreements and understandings, oral or in writing, if any, between the Parties with respect to the matters covered hereby are merged and superseded by this Agreement.

 

Section 5.8 Severability. If any provisions of this Agreement shall be adjudicated to be illegal, invalid or unenforceable in any action or proceeding whether in its entirety or in any portion, then such provision shall be deemed amended, if possible, or deleted, as the case may be, from the Agreement in order to render the remainder of the Agreement and any provision thereof both valid and enforceable, and all other provisions hereof shall be given effect separately therefrom and shall not be affected thereby.

 

Section 5.9 Fees and Expenses. Except as otherwise provided in this Agreement, the Company and the Purchaser will bear their respective expenses incurred in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated hereby, including fees and expenses of attorneys, accountants, consultants and financial advisors.

 

Section 5.10 Confidentiality. Each Party shall keep in confidence, and shall not use (except for the purposes of the transactions contemplated hereby) or disclose, any non-public information disclosed to it or its affiliates, representatives or agents in connection with this Agreement or the transactions contemplated hereby.  Each Party shall ensure that its affiliates, representatives and agents keep in confidence, and do not use (except for the purposes of the transactions contemplated hereby) or disclose, any such non-public information.

 

Section 5.11 Specific Performance. The Parties agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

 

Section 5.12 Termination. In the event that the Closing shall not have occurred by December 31, 2014, this Agreement shall be terminated unless the

 

14

 

Parties mutually agree to renegotiate; except for the provisions of Sections 5.10 and 5.13 hereof, which shall survive any termination under this Section 5.12.

 

Section 5.13 Renegotiation. In the event that the Offering shall not have been successfully completed by December 31, 2014 and as a result the Closing shall not have occurred by that date, the Parties shall use their commercially reasonable efforts to renegotiate the purchase price per share for the Purchased Shares and other material terms of the Purchaser’s proposed investment in the Company.

 

Section 5.14 Purchaser Description.

 

(a) The Company shall afford the Purchaser a reasonable opportunity in which to review and comment on any description of the Purchaser and/or the transactions contemplated by this Agreement with respect to the Purchaser that is to be included in the Registration Statement filed after the date hereof.

 

(b) The Purchaser hereby consents and undertakes to promptly provide a description of its organization and business activities to the Company (the “Purchaser Description”), and hereby represents that the Purchaser Description will be true and accurate in all material respects and will not be misleading in any material respect, as may be reasonably required by the Company for the purpose of satisfying the disclosure obligations in connection with the Registration Statement and the prospectus therein under applicable laws, regulations and listing rules. The Purchaser also consents to the inclusion of the Purchaser Description, the Purchaser’s name as well as the matters relating to the Purchaser’s subscription of the Purchased Shares in the Registration Statement and the prospectus therein, and in press releases and other marketing materials for the Offering (subject to the Purchaser’s reasonable opportunity to review and comment on such press release and marketing materials as applicable).  Additionally, the Purchaser hereby consents to the filing of this Agreement as an exhibit to the Registration Statement.

 

(c) The Purchaser acknowledges that the Company will rely upon the truth and accuracy of the Purchaser Description, and it agrees to notify the Company promptly in writing if any of the content contained therein ceases to be accurate and complete or becomes misleading.

 

Section 5.15 Headings.  The headings of the various articles and sections of this Agreement are inserted merely for the purpose of convenience and do not expressly or by implication limit, define or extend the specific terms of the section so designated.

 

Section 5.16 Execution in Counterparts.  For the convenience of the Parties and to facilitate execution, this Agreement may be executed in one or

 

15

 

more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

16

 

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

 

 

	
 
    	
eHi Car Services   Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Colin Chitnim Sung
    
	
 
    	
Title:
    	
Chief Financial   Officer
    

 

 

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

 

	
 
    	
PURCHASER
    
	
 
    	
 
    
	
 
    	
 
    	
By:   [Please refer to “Name of Purchaser” in Annex A]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   [Please refer to “Signatory Name” in Annex A]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/[Please refer to “Signatory Name” in Annex A]
    
	
 
    	
 
    	
 
    	
[Please refer to “Signatory Title” in Annex A]
    

 

 

Schedule I

 

Authorized share capital as of the date of the Agreement

 

	
Common Shares
    	
 
    	
420,628,011
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Preferred Shares
    	
 
    	
79,371,989
    	
 
    	
Consisting of
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Class A preferred shares 10,427,373
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series A preferred shares 5,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series B preferred shares 12,123,314
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series C preferred shares 18,721,302
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series D preferred shares 10,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series E preferred shares 23,100,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
500,000,000
    	
 
    	
 
    	
 
    

 

Issued and outstanding as of the date of the Agreement

 

	
Common Shares
    	
 
    	
6,546,842
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Preferred Shares
    	
 
    	
77,999,069
    	
 
    	
Consisting of
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Class A preferred shares 10,427,373
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series A preferred shares 5,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series B preferred shares 12,123,314
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series C preferred shares 17,348,382
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series D preferred shares 10,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Series E preferred shares 23,100,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
84,545,911
    	
 
    	
 
    	
 
    

 

 

Annex A

 

Details of the Particulars to the Form of Subscription Agreement executed by the Company and the Purchaser defined therein

 

	
Date
    	
 
    	
Purchaser
    	
 
    	
Purchase
   Price
    	
 
    	
Correspondence
   Details for
   Notices
    	
 
    	
Name of
   Purchaser
    	
 
    	
Signatory
   Name
    	
 
    	
Signatory
   Title
    
	
November   10, 2014
    	
 
    	
China   Universal Asset Management Co., Ltd., a company incorporated in Shanghai,   China
    	
 
    	
US$10   million
    	
 
    	
China Universal   Asset Management Co., Ltd.

Aurora Plaza 22/F,   99 Fucheng Road, Pudong

Shanghai 200120

People’s Republic   of China

Attn: Chief  Executive Officer
    	
 
    	
China   Universal Asset Management Co., Ltd.
    	
 
    	
Lin Lijun
    	
 
    	
Chief   Executive Officer
    
	
October 14,   2014
    	
 
    	
Ctrip   Investment Holding Ltd., a company incorporated in the

Cayman   Islands
    	
 
    	
US$10   million
    	
 
    	
Ctrip Investment   Holding Ltd.

99 Fu Quan Road

Shanghai 200335

People’s Republic   of China

Attn: Chief   Financial Officer
    	
 
    	
Ctrip   Investment Holding Ltd.
    	
 
    	
Liang   Jianzhang

Wu Wenjie
    	
 
    	
Director
    
	
October 1,   2014
    	
 
    	
Dongfeng   Asset Management Co., Ltd., a company incorporated in the People’s   Republic of China
    	
 
    	
US$30   million
    	
 
    	
Special No. 1   Dongfeng Road, Wuhan

Economic and   Technology Development

Zone

Wuhan, Hubei

People’s Republic   of China

Attention: WANG   You
    	
 
    	
Dongfeng   Asset Management Co., Ltd.
    	
 
    	
Lu Feng
    	
 
    	
General   Manager

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