Document:

EX-10.3

 Exhibit 10.3 

SECURITY AGREEMENT 

THIS SECURITY AGREEMENT (this “Agreement”), dated as of October 22, 2019,
is executed by Myomo, Inc., a Delaware corporation (“Debtor”), in favor of Iliad Research and Trading, L.P., a Utah limited partnership (“Secured Party”). 

A. Debtor has issued to Secured Party a certain Secured Promissory Note of even date herewith, as may be amended from time to time, in the
original face amount of $3,300,000.00 (the “Note”). 
 B. In order to induce Secured Party to extend the credit evidenced
by the Note, Debtor has agreed to enter into this Agreement and to grant Secured Party a security interest in the Collateral (as defined below). 

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Debtor hereby agrees with Secured Party as follows: 
 1. Definitions and Interpretation. When used in this
Agreement, the following terms have the following respective meanings: 
 “Collateral” has the meaning given to that term
in Section 2 hereof. 
 “Intellectual Property” means all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses (software or otherwise), information, know-how, inventions, discoveries, published and unpublished works of authorship, processes, any and all other proprietary rights, and all rights
corresponding to all of the foregoing throughout the world, now owned and existing or hereafter arising, created or acquired. 

“Lien” shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or other
encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional sale agreement, capital lease or other title retention agreement, or any agreement to provide any
of the foregoing, and the filing of any financing statement or similar instrument under the UCC or comparable law of any jurisdiction. 

“Obligations” means (a) all loans, advances, future advances, debts, liabilities and obligations, howsoever arising,
owed by Debtor or any of its affiliates and/or subsidiaries to Secured Party or any affiliate of Secured Party of every kind and description, now existing or hereafter arising, created by the Note, this Agreement, that certain Note Purchase
Agreement of even date herewith, entered into by and between Debtor and Secured Party (the “Purchase Agreement”), any other Transaction Documents (as defined in the Purchase Agreement), any other agreement between Debtor or any
affiliate or subsidiary of Secured Party) and Secured Party (or any affiliate of Secured Party) or any other promissory note issued by Debtor (or any affiliate or subsidiary of Debtor) in favor of Secured Party (or any affiliate of Secured Party),
any modification or amendment to any of the foregoing, guaranty of payment or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred or owed directly to Secured Party or as an affiliate of Secured Party or
acquired by Secured Party or an affiliate of Secured Party by purchase, pledge or otherwise, (b) all costs and expenses, including attorneys’ fees, reasonably incurred by Secured Party or any affiliate of Secured Party in connection with
the Note or in connection with the collection or enforcement of any portion of the indebtedness, liabilities or obligations described in the foregoing clause (a), (c) the payment of all other sums, with interest thereon, advanced in accordance
herewith to protect the security of this Agreement, and (d) the performance of the covenants and agreements of Debtor (or any of its affiliates or subsidiaries) contained in this Agreement and all other Transaction Documents. 

  
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 “Permitted Liens” means (a) Liens for taxes not yet delinquent or
Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been established, (b) purchase money Liens incurred in connection with the acquisition of any Collateral in the ordinary course of
business, (c) licenses of intellectual property in connection with joint ventures and other strategic transactions, (d) leases entered into in the ordinary course of business, and (e) Liens in favor of Secured Party. 

“UCC” means the Uniform Commercial Code as in effect in the jurisdiction whose laws would govern the security interest in,
including without limitation the perfection thereof, and foreclosure of the applicable Collateral. 
 Unless otherwise defined herein, all terms defined in
the UCC have the respective meanings given to those terms in the UCC. 
 2. Grant of Security Interest. As security for the
Obligations, Debtor hereby pledges to Secured Party and grants to Secured Party a security interest in all right, title, interest, claims and demands of Debtor in and to the property described in Schedule A hereto, and all replacements,
proceeds, products, and accessions thereof (collectively, the “Collateral”). 
 3. Authorization to File Financing
Statements. Debtor hereby irrevocably authorizes Secured Party at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction or other jurisdiction of Debtor or its subsidiaries any financing
statements or documents having a similar effect and amendments thereto that provide any other information required by the Uniform Commercial Code (or similar law of any non-United States jurisdiction, if
applicable) of such state or jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including whether Debtor is an organization, the type of organization and any organization identification number
issued to Debtor. Debtor agrees to furnish any such information to Secured Party promptly upon Secured Party’s request. 
 4. General
Representations and Warranties. Debtor represents and warrants to Secured Party that (a) Debtor is the owner of the Collateral and that no other person has any right, title, claim or interest (by way of Lien or otherwise) in, against or to
the Collateral, other than Permitted Liens, (b) upon the filing of UCC-1 financing statements with the appropriate state office (or an equivalent in the appropriate foreign office), Secured Party shall
have a perfected first-position security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing, except for Permitted Liens, (c) Debtor has received at least a reasonably equivalent
value in exchange for entering into this Agreement, (d) Debtor is not insolvent, as defined in any applicable state or federal statute, nor will Debtor be rendered insolvent by the execution and delivery of this Agreement to Secured Party; and
(e) as such, this Agreement is a valid and binding obligation of Debtor. 
 5. Additional Covenants. Debtor hereby agrees: 

5.1. to perform all acts that may be necessary to maintain, preserve, protect and perfect in the Collateral, the Lien granted to Secured Party
therein, and the perfection and priority of such Lien; 
 5.2. to procure, execute (including endorse, as applicable), and deliver from time
to time any endorsements, assignments, financing statements, certificates of title, and all other instruments, documents and/or writings reasonably deemed necessary or appropriate by Secured Party to perfect, maintain and protect Secured
Party’s Lien hereunder and the priority thereof; 

  
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 5.3. to provide at least fifteen (15) days prior written notice to Secured Party of any
of the following events: (a) any changes or alterations of Debtor’s name, (b) any changes with respect to Debtor’s address or principal place of business, (c) the formation of any subsidiaries of Debtor; or (d) any
changes in the location of the Collateral; 
 5.4. upon the occurrence of an Event of Default (as defined in the Note) under the Note and,
thereafter, at Secured Party’s request, to endorse (up to the outstanding amount under such promissory notes at the time of Secured Party’s request), assign and deliver any promissory notes and all other instruments, documents, or writings
included in the Collateral to Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as Secured Party may from time to time specify; 

5.5. to the extent the Collateral is not delivered to Secured Party pursuant to this Agreement, to keep the Collateral at the principal office
of Debtor (unless otherwise agreed to by Secured Party in writing), and not to relocate the Collateral to any other locations without the prior written consent of Secured Party; 

5.6. not to sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein (other than
(a) inventory in the ordinary course of business, (b) the disposition in the ordinary course of business of obsolete, worn-out or surplus equipment (c) licenses of intellectual property in
connection with joint ventures and other strategic transactions and (d) leases entered into in the ordinary course of business); 
 5.7.
not to, directly or indirectly, allow, grant or suffer to exist any Lien upon any of the Collateral, other than Permitted Liens; and 
 5.8.
at any time amounts paid by Secured Party under the Transaction Documents are used to purchase Collateral, Debtor shall perform all acts that may be necessary, and otherwise fully cooperate with Secured Party, to cause (a) any such amounts paid
by Secured Party to be disbursed directly to the sellers of any such Collateral, (b) all certificates of title pertaining to such Collateral (as applicable) to be properly filed and reissued to reflect Secured Party’s Lien on such
Collateral, and (c) all such reissued certificates of title to be delivered to and held by Secured Party. 
 6. Authorized Action by
Secured Party. Debtor hereby irrevocably appoints Secured Party as its attorney-in-fact (which appointment is coupled with an interest) and agrees that Secured Party
may perform (but Secured Party shall not be obligated to and shall incur no liability to Debtor or any third party for failure so to do) any act which Debtor is obligated by this Agreement to perform, and to exercise such rights and powers as Debtor
might exercise with respect to the Collateral, including the right to (a) collect by legal proceedings or otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums and property now or hereafter
payable on or on account of the Collateral; (b) enter into any extension, reorganization, deposit, merger, consolidation or other agreement pertaining to, or deposit, surrender, accept, hold or apply other property in exchange for the
Collateral; (c) make any compromise or settlement, and take any action Secured Party deems advisable, with respect to the Collateral; (d) file a copy of this Agreement with any governmental agency, body or authority, at the sole cost and
expense of Debtor; (e) insure, process and preserve the Collateral; (f) pay any indebtedness of Debtor relating to the Collateral; (g) execute and file UCC financing statements and other documents, certificates, instruments and
agreements with respect to the Collateral or as otherwise required or permitted hereunder; and (h) take any and all appropriate action and execute any and all documents and instruments that may be necessary to accomplish the purposes of this
Agreement; provided, however, that Secured Party shall not exercise any such powers granted pursuant to clauses (a) through (c) and (e) through (f) above prior to the occurrence of an Event of Default and shall only exercise such
powers during the continuance 

  
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of an Event of Default. The powers conferred on Secured Party under this Section 6 are solely to protect its interests in the Collateral and shall not impose any duty upon it to exercise any
such powers. Secured Party shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither Secured Party nor any of its stockholders, directors, officers, managers, employees or agents
shall be responsible to Debtor for any act or failure to act, except with respect to Secured Party’s own gross negligence or willful misconduct. Nothing in this Section 6 shall be deemed an authorization for Debtor to take any action that
it is otherwise expressly prohibited from undertaking by way of other provision of this Agreement. 
 7. Default and Remedies. 

7.1. Default. Debtor shall be deemed in default under this Agreement upon the occurrence and during the continuance of an Event of
Default. 
 7.2. Remedies. Upon the occurrence and during the continuance of any such Event of Default, Secured Party shall have the
rights of a secured creditor under the UCC, all rights granted by this Agreement and by law, including, without limiting the foregoing, (a) the right to require Debtor to assemble the Collateral and make it available to Secured Party at a place
to be designated by Secured Party that is reasonably convenient to Secured Party and Debtor, and (b) the right to peaceably take possession of the Collateral, and for that purpose Secured Party may peaceably enter upon premises on which the
Collateral may be situated and remove the Collateral therefrom. Debtor hereby agrees that fifteen (15) days’ notice of a public sale of any Collateral or notice of the date after which a private sale of any Collateral may take place is
reasonable. In addition, Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of Secured Party’s rights and remedies hereunder, including, without limitation, Secured Party’s right
following an Event of Default to take immediate possession of Collateral and to exercise Secured Party’s rights and remedies with respect thereto. Secured Party may also have a receiver appointed to take charge of all or any portion of the
Collateral and to exercise all rights of Secured Party under this Agreement. Secured Party may exercise any of its rights under this Section 7.2 without demand or notice of any kind. The remedies in this Agreement, including without limitation
this Section 7.2, are in addition to, not in limitation of, any other right, power, privilege, or remedy, either in law, in equity, or otherwise, to which Secured Party may be entitled. No failure or delay on the part of Secured Party in
exercising any right, power, or remedy will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. All of Secured Party’s rights
and remedies, whether evidenced by this Agreement or by any other agreement, instrument or document shall be cumulative and may be exercised singularly or concurrently. 

7.3. Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on Secured Party to exercise
remedies in a commercially reasonable manner, Debtor acknowledges and agrees that it is not commercially unreasonable for Secured Party (a) to fail to incur expenses reasonably deemed significant by Secured Party to prepare Collateral for
disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to fail to remove liens or encumbrances on or any adverse claims against Collateral,
(d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not in the same business as Debtor, for expressions of interest in acquiring all or any portion of
the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, 

  
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(h) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that
match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, (k) to purchase insurance or credit enhancements to insure Secured Party against risks of
loss, collection or disposition of Collateral or to provide to Secured Party a guaranteed return from the collection or disposition of Collateral, or (l) to the extent deemed appropriate by Secured Party, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist Secured Party in the collection or disposition of any of the Collateral. Debtor acknowledges that the purpose of this Section is to provide
non-exhaustive indications of what actions or omissions by Secured Party would fulfill Secured Party’s duties under the UCC in Secured Party’s exercise of remedies against the Collateral and that
other actions or omissions by Secured Party shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section. Without limitation upon the foregoing, nothing contained in this Section shall be construed to
grant any rights to Debtor or to impose any duties on Secured Party that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section. 

7.4. Marshalling. Secured Party shall not be required to marshal any present or future Collateral for, or other assurances of payment
of, the Obligations or to resort to such Collateral or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such Collateral and other assurances of payment shall be cumulative and in
addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, Debtor hereby agrees that it will not invoke any law relating to the marshalling of Collateral which might cause delay in or impede the
enforcement of Secured Party’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is
secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, Debtor hereby irrevocably waives the benefits of all such laws. 

7.5. Application of Collateral Proceeds. The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the
avails of any remedy hereunder (as well as any other amounts of any kind held by Secured Party at the time of, or received by Secured Party after, the occurrence of an Event of Default) shall be paid to and applied as follows: 

(a) First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral, of
foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by
Secured Party; 
 (b) Second, to the payment to Secured Party of the amount then owing or unpaid on the Note (to be applied first to accrued
interest and fees and second to outstanding principal) and all amounts owed under any of the other Transaction Documents or other documents included within the Obligations; and 

(c) Third, to the payment of the surplus, if any, to Debtor, its successors and assigns, or to whosoever may be lawfully entitled to receive
the same. 
 In the absence of final payment and satisfaction in full of all of the Obligations, Debtor shall remain liable for any deficiency. 

  
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 8. Miscellaneous. 

8.1. Notices. Any notice required or permitted hereunder shall be given in the manner provided in the subsection titled
“Notices” in the Purchase Agreement, the terms of which are incorporated herein by this reference. 
 8.2. Non-waiver. No failure or delay on Secured Party’s part in exercising any right hereunder shall operate as a waiver thereof or of any other right nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right. 
 8.3. Amendments and Waivers. This Agreement may not be amended
or modified, nor may any of its terms be waived, except by written instruments signed by Debtor and Secured Party. Each waiver or consent under any provision hereof shall be effective only in the specific instances for the purpose for which given.

 8.4. Assignment. This Agreement shall be binding upon and inure to the benefit of Secured Party and Debtor and their respective
successors and assigns; provided, however, that Debtor may not sell, assign or delegate rights and obligations hereunder without the prior written consent of Secured Party. 

8.5. Cumulative Rights, etc. The rights, powers and remedies of Secured Party under this Agreement shall be in addition to all rights,
powers and remedies given to Secured Party by virtue of any applicable law, rule or regulation of any governmental authority, or the Note, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or
concurrently without impairing Secured Party’s rights hereunder. Debtor waives any right to require Secured Party to proceed against any person or entity or to exhaust any Collateral or to pursue any remedy in Secured Party’s power. 

8.6. Partial Invalidity. If any part of this Agreement is construed to be in violation of any law, such part shall be modified to
achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect. 

8.7. Expenses. Debtor shall pay on demand all reasonable fees and expenses, including reasonable attorneys’ fees and expenses,
incurred by Secured Party in connection with the custody, preservation or sale of, or other realization on, any of the Collateral or the enforcement or attempt to enforce any of the Obligations which are not performed as and when required by this
Agreement. 
 8.8. Entire Agreement. This Agreement and the other Transaction Documents, taken together, constitute and contain the
entire agreement of Debtor and Secured Party with respect to this particular matter and supersede any and all prior agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting
the subject matter hereof. 
 8.9. Governing Law; Venue. Except as otherwise specifically set forth herein, the parties expressly
agree that this Agreement shall be governed solely by the laws of the State of Utah, without giving effect to the principles thereof regarding the conflict of laws; provided, however, that enforcement of Secured Party’s rights and
remedies against the Collateral as provided herein will be subject to the UCC. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference. 

8.10. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY
APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL BY JURY. 

  
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 8.11. Purchase Agreement; Arbitration of Disputes. By executing this Agreement, each
party agrees to be bound by the terms, conditions and general provisions of the Purchase Agreement and the other Transaction Documents, including without limitation the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an
exhibit to the Purchase Agreement. 
 8.12. Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which together shall constitute one instrument. Any electronic copy of a party’s executed counterpart will be deemed to be an executed original. 

8.13. Further Assurances. Debtor shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as Secured Party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby. 
 8.14. Time of the Essence. Time is expressly made of the essence with respect to each and every provision of
this Agreement. 
 [Remainder of page intentionally left blank; signature page follows] 

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

			
	SECURED PARTY:
	
	ILIAD RESEARCH AND TRADING, L.P.
	
	By: Iliad Management, LLC, its General Partner
		
	    By:	 	Fife Trading, Inc., its Manager
		
	        By:	 	 /s/ John M. Fife

		 	John M. Fife, President
	
	DEBTOR:
	
	MYOMO, INC.
		
	By:	 	 /s/ David Henry

	Name:	 	David Henry
	Title:	 	Chief Financial Officer

 [Signature Page to Security Agreement] 

 SCHEDULE A 

TO SECURITY AGREEMENT 
 All right,
title, interest, claims and demands of Debtor in and to all of Debtor’s assets owned as of the date hereof and/or acquired by Debtor at any time while the Obligations are still outstanding, including without limitation, the following property:

 1. All equity interests in all wholly- or partially-owned subsidiaries of Debtor; 

2. All customer accounts; 
 3. All
goods and equipment now owned or hereafter acquired, including, without limitation, all laboratory equipment, growing equipment, computer equipment, office equipment, machinery, containers, fixtures, vehicles, and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located; 

4. All inventory now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such inventory as is temporarily out of Debtor’s custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Debtor’s books relating to any of the foregoing; 

5. All accounts receivable, contract rights, general intangibles, healthcare insurance receivables, legal claims, payment intangibles and
commercial tort claims, now owned or hereafter acquired, including, without limitation, all software and computer programs including source code, methods, goodwill, license agreements, information, any and all other proprietary rights, franchise
agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and
rights to payment of any kind and whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media, and all rights corresponding to all of the foregoing throughout the world, now owned
and existing or hereafter arising, created or acquired; 
 6. All now existing and hereafter arising accounts, contract rights, royalties,
license rights and all other forms of obligations owing to Debtor arising out of the sale or lease of goods, the rendering of services by Debtor (subject, in each case, to the contractual rights of third parties to require funds received by Debtor
to be expended in a particular manner), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Debtor and Debtor’s books relating
to any of the foregoing; 
 7. All documents, cash, deposit accounts, letters of credit, letter of credit rights, supporting obligations,
certificates of deposit, instruments, chattel paper, electronic chattel paper, tangible chattel paper and investment property, including, without limitation, all securities, whether certificated or uncertificated, security entitlements, securities
accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, now owned or hereafter acquired and Debtor’s books relating to the foregoing; 

 8. All other assets, goods and personal property of Debtor, wherever located, whether
tangible or intangible, and whether now owned or hereafter acquired; and 
 9. Any and all claims, rights and interests in any of the above
and all substitutions for, additions and accessions to and proceeds and products thereof, including, without limitation, insurance, condemnation, requisition or similar payments and the proceeds thereof. 

Notwithstanding the foregoing, and for the avoidance of doubt, the foregoing shall expressly exclude (a) all Intellectual Property of
Debtor and (b) any permit, license or other agreement in which Debtor is prohibited by the terms thereof or by applicable law, from granting a Lien therein to Secured Party.embi_ex1053.htm

EXHIBIT 10.53

 
EMERALD BIOSCIENCE, INC.
 
August 16th, 2019
 
Dr. Dennis D. Kim, MD, MBA
 
Dear Dennis: 
 
We are pleased to confirm our offer to have you join Emerald Bioscience, Inc. (the “Company”) in the position of Chief Medical Officer, considered an exempt position, effective on August 21st, 2019. You will report directly to Dr. Brian Murphy, Chief Executive Officer, and perform the duties and responsibilities as are normally related to such position in accordance with the standards of the industry within which the Company operates, including responsibility for all clinical development and functioning areas supporting product development (i.e. Regulatory and CMC subparts that would enable THCVHS for clinical success), and any additional duties now or hereafter assigned to you. You shall abide by the Company’s rules, regulations and practices as adopted or modified from time to time in the Company’s sole discretion.
 
Your initial annualized salary will be USD$330,000, paid on a bi-weekly basis subject to deductions for taxes, as required by law, and other applicable withholdings. Your compensation will be reviewed from time to time by either management or the Board of Directors of the Company. 
 
In addition, upon acceptance of our offer, I will recommend that the Board of Directors of the Company grant you an option to purchase an aggregate of 736,541 shares of Common Stock of the Company at a per share exercise price equal to the market price on closing on the employment commencement date. The options will be governed by the Company’s 2014 Omnibus Incentive Plan, as amended. The stock option agreement will provide, among other things, that, subject to your continued employment with the Company, your options shall vest 25% 90 days after the employment commencement date; with remaining 75% to vest 1/33rd on each of the next 33 months thereafter.
 
In addition to your salary and stock option, you will be entitled to the benefits of similarly situated employees as those policies are developed and amended by the Company, including an annual bonus opportunity of up to 35% of your annual salary, prorated in your first year of employment. All bonuses are discretionary and subject to approval by the Board of Directors of the Company.
 
Notwithstanding your employment with the Company, you may take on advisory and consulting roles for up to 20% of your time so long as such roles do not conflict with the performance of your duties and responsibilities with the Company.
 
	 
	1
	
 
	 

 
Additional terms and conditions of employment are set forth in Schedule A, which shall constitute an integral part of this Agreement.
 
This offer of employment is valid until the close of business on August 20th, 2019. Please let us know of your decision to join the Company by signing a copy of this offer letter and returning it to us not later than August 20th, 2019. This offer is contingent upon (1) your signing of the enclosed Employee Proprietary Information and Invention Assignment Agreement and (2) your signing the Company’s Employee Handbook Acknowledgement Form and Code of Business Conduct and Ethics Policy and Insider Trading Compliance Policy Certificate of Compliance; (3) your providing proof of your eligibility to work in the United States and (4) standard background and reference checks.
 
No one other than an officer of the Company has the authority to alter this arrangement, to enter into an agreement for employment for a specified period of time, or to make any agreement contrary to this policy, and any such agreement must be in writing and must be signed by an officer of the Company and by the affected employee.
 
You also must establish your identity and authorization to work as required by the Immigration Reform and Control Act of 1986 (“IRCA”). Enclosed is a copy of the Employment Verification Form (I-9), with instructions required by IRCA. Please review this document and bring the appropriate original documentation on your first day of work.
 
The Company is an organization that is building an outstanding reputation for exciting, innovative and quality technology. Credit for this goes to every one of our employees. We look forward to you accepting our offer and becoming part of the Company’s team.
 
	 
	 
	Sincerely,
	 

	 
	 
	 
	 

	 
	 
	EMERALD BIOSCIENCE, INC.
	 

	 	 	 	 
			/s/ Dr. Brian Murphy 	
	 
	 
	Dr. Brian Murphy, Chief Executive Officer	 

 
This offer is acknowledged, accepted and agreed to by, 
 
	/s/ Dr. Dennis D. Kim 	 
	 
	
	Dr. Dennis D. Kim, MD, MBA	 
	 
	 
		 
	 
	 
	August 16, 2019 	 
	 
	 
	Date
	 
	 
	 

 
	 
	2
	
 
	 

 
SCHEDULE A
 
Additional Terms and Conditions of Employment
 
1. AT-WILL EMPLOYMENT; TERMINATION BY COMPANY
 
Executive’s employment with the Company shall be “at will” at all times. The Company may terminate Executive’s employment with the Company at any time, without any advance notice, for any reason or no reason at all, notwithstanding anything to the contrary contained in or arising from this Agreement or any statements, policies or practices of the Company relating to the employment, discipline or termination of its employees. Upon and after such termination, all obligations of the Company under this Agreement shall cease, except as otherwise provided herein.
 
Except in situations where the employment of Executive is terminated for Cause, by death or by Disability (as such terms are defined below), in the event that (i) the Company terminates Executive’s employment, then Executive will be entitled to payment by the Company of an amount equal to six (6) months of Executive’s then-current Base Salary for the first full year of continuous employment with the Company and twelve (12) months after the first year of continuous employment with the Company, less applicable statutory deductions and withholdings (“Severance”). Severance will be paid as salary continuation (and not as a lump sum) over the applicable period and in accordance with the Company’s standard payroll practices. Executive’s eligibility for the foregoing Severance is conditioned on Executive’s execution, delivery and non-revocation of a general release of claims in favor of the Company and its affiliates within forty-five (45) days following the termination date (and non-revocation thereof within seven (7) days thereafter).
 
Executive shall not be entitled to any Severance if Executive’s employment is terminated for Cause, by death or by Disability, if Executive has not satisfied the length of service requirements for Severance or if Executive’s employment is terminated by Executive. 
 
2. OTHER TERMINATIONS BY COMPANY
 
For purposes of this Agreement, “For Cause” shall mean: (i) Executive commits a crime involving dishonesty, breach of trust, or physical harm to any person; (ii) Executive willfully engages in conduct that is in bad faith and materially injurious to the Company, including but not limited to, misappropriation of trade secrets, fraud or embezzlement; (iii) Executive commits a material breach of this Agreement, which breach is not cured within thirty (30) days after written notice to Executive from the Company; (iv) Executive willfully refuses to implement or follow a reasonable and lawful policy or directive of the Company, which breach is not cured within thirty (30) days after written notice to Executive from the Company; or (v) Executive engages in misfeasance or malfeasance demonstrated by a pattern of failure to perform job duties diligently and professionally which misfeasance or malfeasance is not cured within thirty (30) days after written notice to Executive from the Company. The Company may terminate Executive’s employment For Cause at any time, without any advance notice. The Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, subject to any other rights or remedies of the Company under law; and thereafter all obligations of the Company under this Agreement shall cease.
 
	 
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Executive’s employment shall terminate automatically upon Executive’s death. The Company shall pay to Executive’s beneficiaries or estate, as appropriate, (i) any earned but unpaid Base Salary, and (ii) within a reasonable time following submission of all applicable documentation, the Company shall pay any expense reimbursement payments owed to Executive for expenses incurred prior to the date of termination (collectively, “Accrued Obligations”), and thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section shall affect any entitlement of Executive’s heirs or devisees to the benefits of any life insurance plan or other applicable benefits.
 
If Executive becomes eligible for the Company’s long term disability benefits or if, in the sole opinion of the Company, Executive is unable to carry out the responsibilities and functions of the position held by Executive by reason of any physical or mental impairment for more than ninety (90) consecutive days or more than one hundred and twenty (120) days in any twelve (12)-month period (“Disability”), then, to the extent permitted by law, the Company may terminate Executive’s employment. The Company shall pay to Executive the Accrued Obligations, and thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section shall affect Executive’s rights under any disability plan in which Executive is a participant. 
 
3. TERMINATION BY EXECUTIVE
 
Executive may terminate employment with the Company at any time for any reason or no reason at all, upon four (4) weeks’ advance written notice. During such notice period Executive shall continue to diligently perform all of Executive’s duties hereunder. The Company shall have the option, in its sole discretion, to make Executive’s termination effective at any time prior to the end of such notice period as long as the Company pays Executive all compensation to which Executive is entitled up through the last day of the four (4) week notice period. Thereafter all obligations of the Company shall cease.
 
4. TERMINATION OBLIGATIONS
 
Executive agrees that all property (including without limitation all equipment, tangible proprietary information, documents, records, notes, contracts and computer- generated materials) furnished to or created or prepared by Executive incident to Executive’s employment belongs to the Company and shall be promptly returned to the Company upon termination of Executive’s employment.
 
Upon termination of Executive’s employment, Executive shall be deemed to have resigned from all offices and directorships then held with the Company. Following any termination of employment, Executive shall cooperate with the Company in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees. Executive shall also cooperate with the Company in the defense of any action brought by any third party against the Company that relates to Executive’s employment by the Company.
 
	 
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5. ARBITRATION
 
The Company and Executive agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof shall be settled by arbitration to be held in San Diego, California, in accordance with the Judicial Arbitration and Mediation Service/Endispute, Inc. (“JAMS”) rules for employment disputes then in effect (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator shall award the prevailing party all reasonable costs and attorneys’ fees incurred during any such proceeding, to the extent available under applicable law. The arbitrator shall apply California law to the merits of any dispute or claim. Executive hereby expressly consents to the personal jurisdiction of the state and federal courts located in San Diego, California for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants. The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary, without breach of this arbitration agreement and without abridgment of the powers of the arbitrator. EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH EXECUTIVE’S EMPLOYMENT OR TERMINATION THEREOF, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, DISCRIMINATION CLAIMS.
 
6. RESPONSIBILITIES
 
Except upon the prior written consent of an authorized representative of the Company, you will not (i) accept any other employment (except for the advisory/consulting work provided for in this Agreement), or (ii) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that is or may be in conflict with, or that might place you in a conflicting position to that of, the Company.
 
The Company has a firm policy against its employees using any trade secrets or other proprietary information of third parties in the course of performing their duties for the Company. During your employment with the Company, you may not disclose to the Company or use, or induce the Company to use, any trade secrets or other proprietary information of others, including your prior employers. 
 
	 
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