Document:

Exhibit 10.2

 

Foamix Pharmaceuticals Ltd.

2019 Employee Share Purchase Plan

Adopted by the Board of Directors: February 28, 2019

 Approved by the Shareholders: April 10, 2019

 

1.             General; Purpose.

 

(a)          The Plan provides a means by which Eligible Employees of the Company and certain designated Related Corporations may be given an opportunity to purchase Shares.  The Plan permits the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Share Purchase Plan.

 

(b)          The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations.

 

2.             Administration.

 

(a)          The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c).

 

(b)          The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

 

(i)            To determine how and when Purchase Rights will be granted and the provisions of each Offering (which need not be identical).

 

(ii)          To designate from time to time which Related Corporations of the Company will be eligible to participate in the Plan.

 

(iii)         To construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration.  The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it deems necessary or expedient to make the Plan fully effective.

 

(iv)          To settle all controversies regarding the Plan and Purchase Rights granted under the Plan.

 

(v)           To suspend or terminate the Plan at any time as provided in Section 12.

 

(vi)          To amend the Plan at any time as provided in Section 12.

 

(vii)         Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Share Purchase Plan.

 

(viii)       To adopt such rules, procedures and sub-plans relating to the operation and administration of the Plan as are necessary or appropriate under applicable local laws, regulations and procedures to permit or facilitate participation in the Plan by Employees who are foreign nationals or employed or located outside the United States.

 

(c)          Subject to the provisions of Applicable Law, the Board may delegate some or all of the administration of the Plan to a Committee or Committees.  If administration is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee (and references in this Plan to the Board will thereafter be to the Committee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.  The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.  Whether or not the Board has delegated administration of the Plan to a Committee, the Board will have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.

 

(d)          All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

 

3.             Shares Subject to the Plan.

 

(a)          Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the maximum number of Shares that may be issued under the Plan will not exceed 5,400,000 Shares.

 

(b)          If any Purchase Right granted under the Plan terminates without having been exercised in full, the Shares not purchased under such Purchase Right will again become available for issuance under the Plan.

 

(c)          The Shares purchasable under the Plan will be authorized but unissued or reacquired Shares, including Shares repurchased by the Company on the open market.

 

4.             Grant of Purchase Rights; Offering.

 

(a)          The Board may from time to time grant or provide for the grant of Purchase Rights to Eligible Employees under an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board.  Each Offering will be in such form and will contain such terms and conditions as the Board will deem appropriate, and will comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights will have the same rights and privileges.  The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan.  The provisions of separate Offerings need not be identical, but each Offering will include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering will be effective, which period will not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 5 through 8, inclusive.

 

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(b)          If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in forms delivered to the Company: (i) each form will apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) will be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) will be exercised.

 

(c)          The Board will have the discretion to structure an Offering so that if the Fair Market Value of a Share on the first Trading Day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of a Share on the Offering Date for that Offering, then (i) that Offering will terminate immediately as of that first Trading Day, and (ii) the Participants in such terminated Offering will be automatically enrolled in a new Offering beginning on the first Trading Day of such new Purchase Period.

 

5.             Eligibility.

 

(a)          Purchase Rights may be granted only to Employees of the Company or, as the Board may designate in accordance with Section 2(b), to Employees of a Related Corporation.  Except as provided in Section 5(b), an Employee will not be eligible to be granted Purchase Rights unless, on the Offering Date, the Employee has been in the employ of the Company or the Related Corporation, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event will the required period of continuous employment be equal to or greater than two years.  In addition, the Board may (unless prohibited by law) provide that no Employee will be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company or the Related Corporation is more than 20 hours per week and more than five months per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code. The Board may also exclude from participation in the Plan or any Offering Employees who are "highly compensated employees" (within the meaning of Section 414(q) of the Code) of the Company or a Related Corporation or a subset of such highly compensated employees.

 

(b)          The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right will thereafter be deemed to be a part of that Offering.  Such Purchase Right will have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that:

 

(i)            the date on which such Purchase Right is granted will be the “Offering Date” of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right;

 

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(ii)          the period of the Offering with respect to such Purchase Right will begin on its Offering Date and end coincident with the end of such Offering; and

 

(iii)         the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Purchase Right under that Offering.

 

(c)          No Employee will be eligible for the grant of any Purchase Rights if, immediately after any such Purchase Rights are granted, such Employee owns shares possessing five percent or more of the total combined voting power or value of all classes of shares of the Company or of any Related Corporation.  For purposes of this Section 5(c), the rules of Section 424(d) of the Code will apply in determining the share ownership of any Employee, and shares which such Employee may purchase under all outstanding Purchase Rights and options will be treated as shares owned by such Employee.

 

(d)          As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights only if such Purchase Rights, together with any other rights granted under all Employee Share Purchase Plans of the Company and any Related Corporations, do not permit such Eligible Employee’s rights to purchase shares of the Company or any Related Corporation to accrue at a rate which, when aggregated, exceeds US $25,000 of Fair Market Value of such shares (determined at the time such rights are granted, and which, with respect to the Plan, will be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time.

 

(e)          Officers of the Company and any designated Related Corporation, if they are otherwise Eligible Employees, will be eligible to participate in Offerings under the Plan.  Notwithstanding the foregoing, the Board may (unless prohibited by law) provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code will not be eligible to participate.

 

6.             Purchase Rights; Purchase Price.

 

(a)          On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, will be granted a Purchase Right to purchase up to that number of Shares purchasable either with a percentage or with a maximum dollar amount, as designated by the Board, but in either case not exceeding 15% of such Employee’s earnings (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date will be no later than the end of the Offering.

 

(b)          The Board will establish one or more Purchase Dates during an Offering on which Purchase Rights granted for that Offering will be exercised and Shares will be purchased in accordance with such Offering.

 

(c)          In connection with each Offering made under the Plan, the Board may specify (i) a maximum number of Shares that may be purchased by any Participant on any Purchase Date during such Offering, (ii) a maximum aggregate number of Shares that may be purchased by all Participants pursuant to such Offering and/or (iii) a maximum aggregate number of Shares that may be purchased by all Participants on any Purchase Date under the Offering.  If the aggregate purchase of Shares issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata (based on each Participant’s accumulated Contributions) allocation of the Shares (rounded down to the nearest whole share) available will be made in as nearly a uniform manner as will be practicable and equitable.

 

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(d)          The purchase price of Shares acquired pursuant to Purchase Rights will be not less than the lesser of:

 

(i)           an amount equal to 85% of the Fair Market Value of the Shares on the Offering Date; or

 

(ii)          an amount equal to 85% of the Fair Market Value of the Shares on the applicable Purchase Date.

 

7.             Participation; Withdrawal; Termination.

 

(a)          An Eligible Employee may elect to participate in an Offering and authorize payroll deductions as the means of making Contributions by completing and delivering to the Company, within the time specified in the Offering, an enrollment form provided by the Company. The enrollment form will specify the amount of Contributions not to exceed the maximum amount specified by the Board. Each Participant’s Contributions will be credited to a bookkeeping account for such Participant under the Plan and will be deposited with the general funds of the Company except where applicable law or regulations requires that Contributions be deposited with a third party. If permitted in the Offering, a Participant may begin such Contributions with the first payroll occurring on or after the Offering Date (or, in the case of a payroll date that occurs after the end of the prior Offering but before the Offering Date of the next new Offering, Contributions from such payroll will be included in the new Offering).  If permitted in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions.  If required under applicable law or regulations or if specifically provided in the Offering, in addition to or instead of making Contributions by payroll deductions, a Participant may make Contributions through the payment by cash, check or wire transfer prior to a Purchase Date.

 

(b)          During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company a withdrawal form provided by the Company.  The Company may impose a deadline before a Purchase Date for withdrawing.  Upon such withdrawal, such Participant’s Purchase Right in that Offering will immediately terminate and the Company will distribute as soon as practicable to such Participant all of his or her accumulated but unused Contributions and such Participant’s Purchase Right in that Offering shall thereupon terminate.  A Participant’s withdrawal from that Offering will have no effect upon his or her eligibility to participate in any other Offerings under the Plan, but such Participant will be required to deliver a new enrollment form to participate in subsequent Offerings.

 

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(c)          Unless otherwise required by applicable law or regulations, Purchase Rights granted pursuant to any Offering under the Plan will terminate immediately if the Participant either (i) is no longer an Employee for any reason or for no reason (subject to any post-employment participation period required by law) or (ii) is otherwise no longer eligible to participate. The Company will distribute as soon as practicable to such individual all of his or her accumulated but unused Contributions.

 

(d)          During a Participant’s lifetime, Purchase Rights will be exercisable only by such Participant.  Purchase Rights are not transferable by a Participant, except by will, by the laws of descent and distribution, or, if permitted by the Company, by a beneficiary designation as described in Section 10.

 

(e)          Unless otherwise specified in the Offering or required by applicable law or regulations, the Company will have no obligation to pay interest on Contributions.

 

8.             Exercise of Purchase Rights.

 

(a)          On each Purchase Date, each Participant’s accumulated Contributions will be applied to the purchase of Shares, up to the maximum number of Shares permitted by the Plan and the applicable Offering, at the purchase price specified in the Offering.  No fractional shares will be issued unless specifically provided for in the Offering.

 

(b)          Unless otherwise provided in the Offering, if any amount of accumulated Contributions remains in a Participant’s account after the purchase of Shares on the final Purchase Date of an Offering, then such remaining amount will not roll over to the next Offering and will instead be distributed in full to such Participant after the final Purchase Date of such Offering without interest (unless otherwise required by applicable law or regulations).

 

(c)          No Purchase Rights may be exercised to any extent unless the Shares to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable federal, state, foreign and other securities and other laws applicable to the Plan.  If on a Purchase Date the Shares are not so registered or the Plan is not in such compliance, no Purchase Rights will be exercised on such Purchase Date, and the Purchase Date will be delayed until the Shares are subject to such an effective registration statement and the Plan is in material compliance, except that the Purchase Date will in no event be more than 27 months from the Offering Date.  If, on the Purchase Date, as delayed to the maximum extent permissible, the Shares are not registered and the Plan is not in material compliance with all applicable laws and regulations, no Purchase Rights will be exercised and all accumulated but unused Contributions will be distributed to the Participants without interest.

 

9.             Covenants of the Company.

 

The Company will seek to obtain from each federal, state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Purchase Rights and issue and sell Shares thereunder unless the Company determines, in its sole discretion, that doing so would cause the Company to incur costs that are unreasonable.  If, after commercially reasonable efforts, the Company is unable to obtain the authority that counsel for the Company deems necessary for the grant of Purchase Rights or the lawful issuance and sale of Shares under the Plan, and at a commercially reasonable cost, the Company will be relieved from any liability for failure to grant Purchase Rights and/or to issue and sell Shares upon exercise of such Purchase Rights.

 

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10.          Designation of Beneficiary.

 

(a)          The Company may, but is not obligated to, permit a Participant to submit a form designating a beneficiary who will receive any Shares and/or Contributions from the Participant’s account under the Plan if the Participant dies before such shares and/or Contributions are delivered to the Participant.  The Company may, but is not obligated to, permit the Participant to change such designation of beneficiary. Any such designation and/or change must be on a form approved by the Company.

 

(b)            If a Participant dies, and in the absence of a valid beneficiary designation, the Company will deliver any Shares and/or Contributions to the executor or administrator of the estate of the Participant.  If no executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such Shares and/or Contributions, without interest, to the Participant’s spouse, dependents or relatives, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

 

11.          Adjustments upon Changes in Shares; Corporate Transactions.

 

(a)          In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding Offerings and Purchase Rights, and (iv) the class(es) and number of securities that are the subject of the purchase limits under each ongoing Offering.  The Board will make these adjustments, and its determination will be final, binding and conclusive.

 

(b)          In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue outstanding Purchase Rights or may substitute similar rights (including a right to acquire the same consideration paid to the shareholders in the Corporate Transaction) for outstanding Purchase Rights, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such Purchase Rights or does not substitute similar rights for such Purchase Rights, then the Participants’ accumulated Contributions will be used to purchase Shares (rounded down to the nearest whole share) within ten business days prior to the Corporate Transaction under the outstanding Purchase Rights, and the Purchase Rights will terminate immediately after such purchase.

 

12.          Amendment, Termination or Suspension of the Plan.

 

(a)          The Board may amend the Plan at any time in any respect the Board deems necessary or advisable.  However, except as provided in Section 11(a) relating to Capitalization Adjustments, shareholder approval will be required for any amendment of the Plan for which shareholder approval is required by applicable law, regulations or listing requirements.

 

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(b)          The Board may suspend or terminate the Plan at any time.  No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated.

 

(c)          Any benefits, privileges, entitlements and obligations under any outstanding Purchase Rights granted before an amendment, suspension or termination of the Plan will not be materially impaired by any such amendment, suspension or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to comply with any laws, listing requirements, or governmental regulations (including, without limitation, the provisions of Section 423 of the Code and the regulations and other interpretive guidance issued thereunder relating to Employee Share Purchase Plans) including without limitation any such regulations or other guidance that may be issued or amended after the date the Plan is adopted by the Board, or (iii) as necessary to obtain or maintain favorable tax, listing, or regulatory treatment.  To be clear, the Board may amend outstanding Purchase Rights without a Participant’s consent if such amendment is necessary to ensure that the Purchase Right and/or the Plan complies with the requirements of Section 423 of the Code.

 

13.          Effective Date of Plan.

 

The Plan will become effective on April 10, 2019, if approved by the shareholders of the Company .  No Purchase Rights will be exercised unless and until the Plan has been approved by the shareholders of the Company, which approval must be within 12 months before or after the date the Plan is adopted (or if required under Section 12(a) above, materially amended) by the Board.

 

14.          Miscellaneous Provisions.

 

(a)          Proceeds from the sale of Shares pursuant to Purchase Rights will constitute general funds of the Company.

 

(b)          A Participant will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, Shares subject to Purchase Rights unless and until the Participant’s Shares acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent).

 

(c)          The Plan and Offering do not constitute an employment contract.  Nothing in the Plan or in the Offering will in any way alter the at will nature of a Participant’s employment, if applicable, or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related Corporation, or on the part of the Company or a Related Corporation to continue the employment of a Participant.

 

(d)          The provisions of the Plan will be governed by the laws of the State of Delaware without resort to that state’s conflicts of laws rules.

 

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(e)          If any particular provision of the Plan is found to be invalid or otherwise unenforceable, such provision will not affect the other provisions of the Plan, but the Plan will be construed in all respects as if such invalid provision were omitted.

 

(f)          If any provision of the Plan does not comply with applicable law or regulations, such provision shall be construed in such a manner as to comply with applicable law or regulations.

 

15.          Definitions.

 

As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

 

(a)          “Applicable Law” means the legal requirements applicable to the administration of equity incentive plans, any applicable laws, rules and regulations in Israel and in any country or jurisdiction where Awards are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time including any Stock Exchange rules or regulations;

 

(b)          “Board” means the Board of Directors of the Company.

 

(c)          “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Shares subject to the Plan or subject to any Purchase Right after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, share dividend, dividend in property other than cash, large nonrecurring cash dividend, share split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto).  Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

 

(d)          “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

 

(e)          “Committee” means a committee of one or more members of the Board to whom authority has been delegated by the Board in accordance with Section 2(c).

 

(f)           “Company” means Foamix Pharmaceutics Ltd., an Israeli company.

 

(g)          “Contributions” means the payroll deductions and other additional payments specifically provided for in the Offering that a Participant contributes to fund the exercise of a Purchase Right. A Participant may make additional payments into his or her account if specifically provided for in the Offering, and then only if the Participant has not already had the maximum permitted amount withheld during the Offering through payroll deductions.

 

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(h)          “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(i)           a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

 

(ii)          a sale or other disposition of more than 50% of the outstanding securities of the Company;

 

(iii)         a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

 

(iv)          a merger, consolidation or similar transaction following which the Company is the surviving corporation but the Shares outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

 

(i)           “Director” means a member of the Board.

 

(j)           “Eligible Employee” means an Employee who meets the requirements set forth in the document(s) governing the Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.

 

(k)          “Employee” means any person, including an Officer or Director, who is “employed” for purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation.  However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

 

(l)           “Employee Share Purchase Plan” means a plan that grants Purchase Rights intended to be options issued under an “employee share purchase plan,” as that term is defined in Section 423(b) of the Code.

 

(m)         “Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.

 

(n)          “Fair Market Value” means, as of any date, the value of the Shares determined as follows:

 

(i)           If the Shares are listed on any established share exchange or traded on any established market, the Fair Market Value of a Share will be the closing sales price for such shares as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Shares) on the date of determination, as reported in such source as the Board deems reliable.  Unless otherwise provided by the Board, if there is no closing sales price for the Shares on the date of determination, then the Fair Market Value will be the closing sales price on the last preceding date for which such quotation exists.

 

(ii)          In the absence of such markets for the Shares, the Fair Market Value will be determined by the Board in good faith in compliance with applicable laws and regulations and in a manner that complies with Sections 409A of the Code.

 

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(o)           “Offering” means the grant to Eligible Employees of Purchase Rights, with the exercise of those Purchase Rights automatically occurring at the end of one or more Purchase Periods. The terms and conditions of an Offering will generally be set forth in the “Offering Document” approved by the Board for that Offering.

 

(p)          “Offering Date” means a date selected by the Board for an Offering to commence.

 

(q)          “Officer” means a person who is an officer of the Company or a Related Corporation within the meaning of Section 16 of the Exchange Act.

 

(r)          “Participant” means an Eligible Employee who holds an outstanding Purchase Right.

 

(s)          “Plan” means this Foamix Pharmaceutics, Ltd. 2019 Employee Share Purchase Plan.

 

(t)           “Purchase Date” means one or more dates during an Offering selected by the Board on which Purchase Rights will be exercised and on which purchases of Shares will be carried out in accordance with such Offering.

 

(u)          “Purchase Period” means a period of time specified within an Offering, generally beginning on the Offering Date or on the first Trading Day following a Purchase Date, and ending on a Purchase Date.  An Offering may consist of one or more Purchase Periods.

 

(v)           “Purchase Right” means an option to purchase Shares granted pursuant to the Plan.

 

(w)          “Related Corporation” means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

 

(x)          “Securities Act” means the Securities Act of 1933, as amended.

 

(y)          “Share” means an ordinary share, NIS 0.16 par value each, of the Company.

 

(z)          “Trading Day” means any day on which the exchange(s) or market(s) on which Shares are listed, including but not limited to the NYSE, Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or any successors thereto, is open for trading.

 

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Foamix Pharmaceuticals Ltd.

 

2019 Employee Share Purchase Plan

Sub-Plan for Israeli Participants

 

1.             General

 

(a)          This sub-plan (the “Sub-Plan”) shall apply only to Eligible Employees who are residents of the State of Israel upon the Purchase Date (collectively, “Israeli Eligible Employees”). The provisions specified hereunder shall form an integral part of the Foamix Pharmaceuticals Ltd. 2019 Employee Share Purchase Plan (hereinafter the “Plan”).

 

(b)          This Sub-Plan is adopted pursuant to the authority of the Board under section 2(b)(viii) of the Plan. This Sub-Plan is to be read as a continuation of the Plan and modifies Purchase Rights granted to Israeli Eligible Employees only to the extent necessary to comply with the requirements set by the Israeli law in general, and in particular, with the provisions of the Israeli Income Tax Ordinance [New Version] 1961, as may be amended or replaced from time to time and in order to comply with any approval or ruling received by the Company in relation thereof.  This Sub-Plan does not add to or modify the Plan in respect of any other category of Eligible Employees.

 

(c)          The purpose of this Sub-plan is to provide a method whereby Israeli Eligible Employees may be offered an opportunity to purchase Shares that qualify for favorable tax treatment under Section 102 of the Ordinance, as defined in Section 2.

 

(d)          The Plan and this Sub-Plan are complimentary to each other and shall be deemed as one. In the event of any conflict, whether explicit or implied, between the provisions of this Sub-Plan and the Plan, the provisions set out in the Sub-Plan shall prevail.

 

(e)          Any capitalized term not specifically defined in this Sub-Plan shall be construed according to the interpretation given to it in the Plan.

 

2.             Definitions

 

(a)          “102 Purchase Right” means any Purchase Right issued to an Approved Israeli Eligible Employee pursuant to Section 102 of the Ordinance.

 

(b)          “Approved Israeli Eligible Employee” means an Israeli Eligible Employee who is not a Controlling Share Holder of the Company.

 

(c)          “Capital Gain Purchase Right” or “CGA” means a Trustee 102 Purchase Right elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(2) of the Ordinance.

 

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(d)           “Controlling Share Holder” shall have the meaning ascribed to it in Section 32(9) of the Ordinance.

 

(e)          “ITA” means the Israeli Tax Authority.

 

(f)           “Israeli Purchase Right Agreement” means the enrollment form completed by the Israeli Eligible Employee electing to participate in the Plan and receive Purchase Rights.

 

(g)          “Non-Trustee 102 Purchase Right” means a 102 Purchase Right granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.

 

(h)          “Ordinary Income Purchase Right” or “OIA” means a Trustee 102 Purchase Right elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance.

 

(i)           “Ordinance” means the Israeli Income Tax Ordinance [New Version] – 1961, as now in effect or as hereafter amended.

 

(j)           “Section 102” means Section 102 of the Ordinance and any regulations, rules, orders or procedures promulgated thereunder as now in effect or as hereafter amended.

 

(k)          “Tax” means any applicable tax and other compulsory payments such as social security and health tax contributions under any applicable law.

 

(l)           “Trustee” means any person or entity appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance, as may be replaced from time to time.

 

(m)          "Trustee 102 Purchase Right” means a 102 Purchase Right granted to an Approved Israeli Eligible Employee pursuant to Section 102(b) of the Ordinance and held in trust by a Trustee for the benefit of an Approved Israeli Eligible Employee.

 

(n)          "Unapproved Israeli Eligible Employee” means an Israeli Eligible Employee who is a Controlling Share Holder of the Company.

 

3.             Issuance of Purchase Rights

 

(a)          The Company may designate Purchase Rights granted to Approved Israeli Eligible Employees pursuant to Section 102 as Trustee 102 Purchase Rights or Non-Trustee 102 Purchase Rights.

 

(b)          The grant of Trustee 102 Purchase Rights shall be subject to this Sub-Plan and shall not become effective prior to the lapse of 30 days from the date the Plan has been submitted for approval by the ITA and shall be conditioned upon the approval of the Plan and this Sub-Plan by the ITA and the provisions of the tax ruling received in relation to the Plan.

 

(c)          Trustee 102 Purchase Rights may either be classified as Capital Gain Purchase Rights (CGAs) or Ordinary Income Purchase Rights (OIAs).

 

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(d)          No Trustee 102 Purchase Right may be granted under this Sub-Plan to any Approved Israeli Eligible Employee, unless and until the Company has filed with the ITA its election regarding the type of Trustee 102 Purchase Rights, whether CGAs or OIAs, that will be granted under the Plan and this Sub-Plan (the “Election”). Such Election shall become effective beginning the first date of grant of a Trustee 102 Purchase Right under this Sub-Plan and shall remain in effect at least until the end of the year following the year during which the Company first granted Trustee 102 Purchase Rights. The Election shall obligate the Company to grant only the type of Trustee 102 Purchase Right it has elected, and shall apply to all Israeli Eligible Employees who are granted Trustee 102 Purchase Rights during the period indicated herein, all in accordance with the provisions of Section 102(g) of the Ordinance. For the avoidance of doubt, the Election shall not prevent the Company from granting Non-Trustee 102 Purchase Rights simultaneously.

 

(e)          All Trustee 102 Purchase Rights must be held in trust by the Trustee, as described in Section 4 below.

 

(f)           Any Trustee 102 Purchase Rights shall be subject to any tax ruling received by the Company or any Employing Company in relation to the Plan and the Sub-plan (“Tax Ruling”).

 

(g)          The designation of Non-Trustee 102 Purchase Rights and Trustee 102 Purchase Rights shall be subject to the terms and conditions set forth in Section 102 and the Tax Ruling.

 

(h)          Purchase Rights granted to Unapproved Israeli Eligible Employees shall be subject to tax according to the provisions of the Ordinance and shall not be subject to the Trustee arrangement detailed herein.

 

4.             Trustee

 

(a)          Trustee 102 Purchase Rights which shall be granted under this Sub-Plan and/or any Share issued upon exercise of a Trustee 102 Purchase Right and/or other Shares received following any realization of rights under the Plan, shall be allocated or issued to the Trustee for the benefit of the Approved Israeli Eligible Employees, in accordance with the provisions of Section 102. In the event that the requirements for Trustee 102 Purchase Rights are not met, the Trustee 102 Purchase Rights may be regarded as Non-Trustee 102 Purchase Rights or as Purchase Rights which are not subject to Section 102, all in accordance with the provisions of Section 102. 

 

(b)          With respect to any Trustee 102 Purchase Right, subject to the provisions of Section 102, an Approved Israeli Eligible Employee shall not sell or release from trust any Share received upon the exercise of a Trustee 102 Purchase Right and/or any Share received following any realization of rights, including, without limitation, stock dividends, under the Plan at least until the lapse of the period of time required under Section 102 or any shorter period of time determined by the ITA (the “Holding Period”). Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 shall apply to and shall be borne by such Approved Israeli Eligible Employee. In the event a stock dividend is declared and/or other rights are granted with respect to Shares issued upon exercise of Trustee 102 Stock Purchase Rights, such stock dividend and/or other rights shall also be deposited with the Trustee and will be subject to the provisions of this Section 4.  The Holding Period for Shares and/or rights shall be measured from the commencement of the Holding Period for the Trustee 102 Stock Purchase Rights and Share with respect to which the stock dividend was declared and/or other rights were granted

 

14

(c)          In the event a cash dividend is paid on the Shares, the Trustee shall transfer the dividend proceeds to the Approved Israeli Eligible Employee after deduction of taxes and mandatory payments in compliance with applicable withholding requirements, and subject to any other requirements imposed by the ITA.

 

(d)          Notwithstanding anything to the contrary, the Trustee shall not release or sell any Shares allocated or issued upon exercise of a Trustee 102 Purchase Right unless the Company and the Trustee are satisfied that the full amounts of Tax due have been paid or will be paid.

 

(e)          Upon receipt of any Trustee 102 Purchase Right, the Approved Israeli Eligible Employee will consent to the grant of the Purchase Right under Section 102 and undertake to comply with the terms of Section 102 and the trust arrangement between the Company and the Trustee.

 

5.             The Purchase Rights

 

Purchase Rights which are Trustee 102 Purchase Rights will not be satisfied using reacquired shares unless approved by the ITA.

 

6.             Assignability, Designation and Sale of Purchase Rights

 

(a)          In addition to section 7(d) of the Plan no Purchase Right or any right with respect thereto, or purchasable hereunder, whether fully paid or not, shall be assignable, transferable or given as collateral, or any right with respect to any Purchase Right given to any third party whatsoever, and during the lifetime of the Israeli Eligible Employee, each and all of such Israeli Eligible Employee’s rights with respect to an Purchase Right shall belong only to the Israeli Eligible Employee. Any such action made directly or indirectly, for an immediate or future validation, shall be void.

 

(b)          As long as Purchase Rights or Shares issued or purchased hereunder are held by the Trustee on behalf of the Israeli Eligible Employee, all rights of the Israeli Eligible Employee over the Shares cannot be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution.

 

7.             Integration of Section 102 and Approvals from the ITA

 

(a)          With regard to Trustee 102 Purchase Rights, the provisions of the Plan and/or the Sub-Plan and/or the Israeli Purchase Right Agreement shall be subject to the provisions of Section 102, the Tax Ruling and any approval issued by the ITA and the said provisions shall be deemed an integral part of the Plan, the Sub-Plan and the Israeli Purchase Right Agreement.

 

15

(b)          Any provision of Section 102 and/or the Tax Ruling and/or any approval issued by the ITA which must be complied with in order to receive and/or to maintain any tax benefit pursuant to Section 102, which is not expressly specified in the Plan, the Sub-Plan or the Israeli Purchase Right Agreement, shall be considered binding upon the Company and the Israeli Eligible Employees.

 

8.             Tax Consequences

 

(a)          Any tax consequences arising from the grant, exercise, or sale of any Purchase Right or Shares or from any other event or act (of the Company, and/or its Related Corporations, and the Trustee or the Israeli Eligible Employee), hereunder, shall be borne solely by the Israeli Eligible Employee. The Company and/or its Related Corporations, and/or the Trustee shall withhold Tax according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Israeli Eligible Employee agrees to indemnify the Company and/or its Related Corporations and/or the Trustee and hold them harmless against and from any and all liability for any such Tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such Tax from any payment made to the Israeli Eligible Employee. All taxes shall be in accordance with the Tax Ruling.

 

(b)          The Company and/or, when applicable, the Trustee shall not be required to release any Share to an Israeli Eligible Employee until all required Tax payments have been fully made.

 

(c)          Approved Purchase Rights and any applicable Shares that do not comply with the requirements of Section 102 and the Tax Ruling shall be considered Non-Approved 102 Purchase Rights or Purchase Rights subject to tax under Section 3(i) or 2 of the Ordinance.

 

(d)          With respect to Non-Trustee 102 Purchase Rights, if the Israeli Eligible Employee ceases to be employed by the Company or any Related Corporation, or otherwise if so requested by the Company or the Related Corporation, the Israeli Eligible Employee shall extend to the Company and/or the Related Corporation a security or guarantee for the payment of Tax due at the time of sale of Shares, in accordance with the provisions of Section 102.

 

(e)          Should any provision in the Plan and/or Sub-Plan disqualify the Plan and/or Sub-Plan and/or the Purchase Rights granted thereunder from beneficial tax treatment pursuant to the provisions of Section 102, such provision shall be considered invalid either permanently or until the ITA provides approval of compliance with Section 102.

 

9.             One Time Benefit

 

(a)          The Purchase Rights and underlying Shares are extraordinary, one-time benefit granted to the Eligible Employees, and are not and shall not be deemed a salary component for any purpose whatsoever, including in connection with calculating severance compensation under applicable law.

 

16Blueprint

  Exhibit
10.17

SUBLEASE

 

This
SUBLEASE, dated effective as of January 1, 2019, is made by and
between BlueWater Federal Solutions, Inc., a Delaware corporation
("Sublessor"), and AOC Key Solutions, Inc., a Delaware corporation
("Subtenant").

 

WHEREAS,
pursuant to that certain Lease Agreement dated as of December 3,
2018 ("Prime Lease"), by and between Sublessor, as tenant, and EB
Albemarle, LLC, as landlord ("Prime Landlord"), Sublessor leases
approximately 18,574 rentable square feet of space ("Prime Lease
Premises"), constituting Suite 200 on the 2nd floor of the building
located at 14420 Albemarle Pointe Place, Chantilly, VA 20151
("Building"); and

 

WHEREAS,
Subtenant desires to lease a portion of the Prime Lease Premises
from Sublessor (to be referred to under this Sublease as the
"Sublet Premises") on the terms and conditions set forth in this
Sublease; and

 

WHEREAS,
prior to the date hereof, Subtenant, as tenant, leased the Prime
Lease Premises from Prime Landlord, as successor in interest to
Dalton Ventures, L.L.C., pursuant to a Deed of Lease dated June 24,
2009 (“Prior Lease”), and Subtenant subleased a portion
of the Prime Lease Premises to Sublessor, as subtenant thereunder,
pursuant to a Sublease dated December 4, 2009 (“Prior
Sublease”); and

 

WHEREAS,
effective as of the date hereof, Prime Landlord and Subtenant have
terminated the Prior Lease pursuant to a Lease Termination
Agreement, and Sublessor and Subtenant hereby terminate the Prior
Sublease; and

 

WHEREAS,
any capitalized terms that are not defined in this Sublease shall
have the meanings set forth in the Prime Lease.

 

NOW,
THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as
follows:

 

1. Premises.
Sublessor hereby subleases to
Subtenant on the terms and conditions set forth in this Sublease a
portion of the Prime Lease Premises consisting of approximately
7,725 RSF square feet, as depicted on Exhibit A attached hereto. In
the event the rentable area of the Building is increased or
decreased, the Subtenant's proportionate share will be recalculated
and adjusted.

 

2. Warranty
by Sublessor. Sublessor warrants and represents to Subtenant
that the Prime Lease has not been amended or modified except as
expressly set forth herein, that Sublessor is not now, and as of
the commencement of the Sublease Term hereof will not be, in
default or breach of any of the provisions of the Prime
Lease.

 

3. Term.
The term of this Sublease (“Sublease Term”) shall
commence on the date hereof ("Commencement Date") and end on June
30, 2024 ("Termination Date"), unless earlier terminated in
accordance with the terms hereof In the event that the Sublessor
exercises the Right

 

 

1

 

 

of Renewal, Subtenant shall have the option to renew this Sublease
for the Renewal Term. Subtenant shall provide to Sublessor, within
thirty (30) days after Sublessor’s exercise of the Right of
Renewal, a written notice of the exercise of the option to extend
the Sublease for the Renewal Term, time being of the essence. If
notification of the exercise of this option is not timely given and
received, the option granted hereunder shall automatically expire.
On the first day of the Renewal Term and on the first day of each
subsequent year during the Renewal Term, the Basic Annual Rent shall be increased by two and
75/100 percent (2.75%) of the preceding year’s Basic Annual
Rent. Possession of the Sublet Premises shall be
delivered to Subtenant on the commencement of the Sublease
Term.

 

4. Rent.

 

4.1 Minimum
Rent. Subtenant shall pay to Sublessor as minimum rent
(“Basic Annual Rent”), without deduction, setoff,
notice or demand, at 14420 Albemarle Pointe Place, Suite 200,
Chantilly, VA 20151 Attn: BlueWater Federal Solutions, Inc;
Accounts Receivable, or at such other place as Sublessor shall
designate from time to time by notice to Subtenant, the sum of
$11,909 per month, in advance on the first day of each month of the
Sublease Term starting on the Commencement Date and ending on the
day prior to the first anniversary of the Commencement Date.
Commencing on the first anniversary of the Commencement Date, and
each anniversary thereafter, the Basic
Annual Rent shall be increased by two and 75/100 percent (2.75%) of
the preceding year’s Basic Annual Rent.  If
rental is not received by the 5th day of any month, Sublessor shall
have the right to assess a 10% late fee upon Subtenant. Any rent
not received within 5 days of Sublessor’ s notice shall deem
Subtenant in default. If the Sublease Term begins or ends on a day
other than the first or last day of a month, the rent for the
partial months shall be prorated on a per diem
basis.

 

4.2 Additional
Costs. The Subtenant agrees to pay for all additional
expenses that are directly caused by the Subtenant's occupancy of
the Sublet Premises. Such expenses include, but are not limited to,
after hours HVAC and special cleaning services. Commencing January
1, 2020, the Subtenant shall be required to pay for its pro rata
share of any increases in the Building's Operating Charges and Real
Estate Taxes which exceed the actual 2019 Operating Charges and
Real Estate Taxes. Controllable Operating Charges shall be capped
to the same extent set forth in the Prime Lease. Sublessor agrees
to provide Subtenant with all supporting documentation for
Operating Charges and Real Estate Taxes, to the extent received by
Sublandlord from Prime Landlord.

 

5. Security
Deposit. Subtenant shall deposit with Sublessor on or
before the Commencement Date the sum of $11,909 as security for
Subtenant's faithful performance of Subtenant's obligations
hereunder ("Security Deposit"). If Subtenant fails to pay rent or
other charges when due under this Sublease, or fails to perform any
of its other obligations hereunder, Sublessor may use or apply all
or any portion of the Security Deposit for the payment of any rent
or other amount then due hereunder and unpaid for the payment of
any other sum for which Sublessor may become obligated by reason of
Subtenant's default or breach. If Sublessor so uses any portion of
the Security deposit, Subtenant shall, within ten (10) days after
written demand by Sublessor, restore the Security Deposit to the
full amount originally deposited, and Subtenant's failure to do so
shall constitute a default under this Sublease. Sublessor shall not
be required to

 

 

2

 

 

keep the Security Deposit separate from its general accounts, and
shall have no obligation or
liability for payment of interest on the Security Deposit. Once the
Subtenant has vacated the Sublet Premises and the condition of the
Sublet Premises has been approved by the Prime Landlord, and
provided Subtenant is not then in default of any of its obligations
hereunder, the Security Deposit, or so much thereof as had not
theretofore been applied by Sublessor, shall be returned to
Subtenant or to the last assignee, if any, of Subtenant's interest
hereunder.

 

6. Use
of Premises. The Sublet
Premises shall be used and occupied only for general office use,
and for no other purpose.

 

7. Termination.
Sublessor and Subtenant shall have the ongoing right to terminate
the Sublease provided that Sublessor or Subtenant delivers written
notice ("Termination Notice") of such termination upon ninety (90)
days prior written notice to the effective date of the termination,
free of charge with no additional termination penalties and/or
damages.

 

8. Other
Provisions of Sublease. All
applicable terms and conditions of the Prime Lease are incorporated
into and made a part of this Sublease, except for the
following:

The obligation to pay rent to Prime Landlord under the Prime Lease
shall be considered performed by Subtenant to the extent and in the
amount rent is paid to Sublessor in accordance with this Sublease.
Subtenant shall not commit or suffer any act or omission that will
violate any of the provisions of the Prime Lease. If the Prime
Lease terminates, this Sublease shall terminate and the parties
shall be relieved of any further liability or obligation under this
Sublease.

 

8.1 Liability
Insurance: Subtenant's Property. Subtenant shall maintain a policy or
policies of commercial general liability insurance with the
premiums thereon fully paid on or before the due dates, issued by
and binding upon a responsible and financially sound insurance
company reasonably acceptable to Prime Landlord. Such insurance
shall name Sublessor as an additional insured and shall afford
protection in the combined single limit of not less than the
requirements set forth in the Prime Lease.

 

8.2. Waiver.
Sublessor and Subtenant for themselves and for their respective
insurers agree to and do hereby release each other of and from any
and all claims, demands, actions and causes of action that each may
have or claim to have against the other for loss or damage to the
property of the other, both real and personal, caused by or
resulting from fire and all other casualties insured against under
fire and extended coverage insurance policies, notwithstanding that
any such loss or damage may be due to or result from the negligence
of either of the parties hereto or their respective officers,
employees or agents, but only to the extent of any recovery
collectible under such insurance. Subtenant and Sublessor, if
applicable, will endeavor to secure an appropriate clause in, or
endorsement on, any fire and extended coverage insurance policy
covering Sublessor’ s and Subtenant's respective interests,
pursuant to which the respective insurance policies waive
subrogation; provided, however, that a failure on the part of
Sublessor or Subtenant, if applicable, to secure such appropriate
clause or endorsement as aforesaid shall not in any manner affect
or restrict the provisions of the above and foregoing mutual
release.

 

3

 

 

9. Indemnification
of Sublessor.

 

9.1
Subtenant shall defend, indemnify and hold harmless Sublessor from
and against any and all claims, including costs, reasonable
attorney's fees, expenses and liabilities incurred in the defense
of any such claim or any action or proceedings brought thereon,
arising from (i) Subtenant's use of the Sublet Premises, or from
the conduct of Subtenant's business in or about the Sublet
Premises, (ii) any breach or default in the performance of any
obligations on Subtenant's part to be performed under the terms of
this Sublease; or (iii) the negligence of the Subtenant, or any of
Subtenant's agents, contractors or employees. In no event, however,
shall Sublessor be entitled to indemnification under this Section
if such claim arises from any breach or default in the performance
of any obligation on Sublessor’s part to be performed under
the terms of this Sublease, or arising from any negligence of the
Sublessor, or any of Sublessor’s agents, contractors or
employees. This indemnification shall survive the termination of
this Sublease.

 

9.2
Sublessor shall defend, indemnify and hold harmless Subtenant from
and against any and all claims arising from any breach or default
in the performance of any obligation on Sublessor’ s part to
be performed under the terms of this Sublease, or arising from the
negligence of the Sublessor, or any of Sublessor’s agents,
contractors or employees, and from and against all costs,
reasonable attorney's fees, expenses and liabilities incurred in
the defense of any such claim or any action or proceeding brought
thereon. In no event, however, shall Subtenant be entitled to
indemnification under this Section if such claim arises from any
breach or default in the performance of any obligation on
Subtenant's part to be performed under the terms of this Sublease,
or arising from any negligence of the Subtenant, or any of
Subtenant's agents, contractors or employees. This indemnification
shall survive the termination of this Sublease.

 

10. Hazardous
Substances.

 

10.1
Prior to the date hereof, Subtenant and Sublessor have been in
possession of the Prime Lease Premises or portions thereof,
pursuant to the Prior Lease and Prior Sublease. Each of Subtenant
and Sublessor affirms, represents and warrants, to the best of its
knowledge, that it has not created any hazardous conditions upon
the Prime Lease Premises and has received no notice of violation of
such. Each of Subtenant and Sublessor shall indemnify, defend and
hold harmless the other party from and against any and all claims,
liabilities and damages suffered or incurred by the other party as
a result of the breach of the foregoing representation and warranty
by the indemnifying party.

 

10.2
Subtenant agrees that no part of the Sublet Premises will be used
in any way for, and Subtenant shall not suffer, permit or allow the
use of the Sublet Premises or any part thereof, either directly or
indirectly, for treatment, preparation, generation, manufacture,
use, refining, production, storage, maintenance, handling,
transfer, transporting, processing, disposal, burial, dispersal,
release or placement of any Hazardous Substance (as hereinafter
defined), petroleum products, pollutants or contaminants, and the
Subtenant shall not release, suffer or permit the release of any
Hazardous Substance, petroleum products, pollutants or contaminants
onto the Sublet Premises or Building into the subsurface thereof or
onto any property whatsoever,

 

 

4

 

 

including without limitation, surface water and ground waters
unless in compliance with all applicable law(s), permit(s),
order(s) or other valid governmental approval(s), whether now in
effect or hereafter enacted. Furthermore, Subtenant shall not cause
or permit to occur any violation of any federal, state or local
law, ordinance, regulation or order now or hereafter enacted,
related to environmental conditions on, under or about the Sublet
Premises, or arising from Subtenant's use or occupancy of the
Sublet Premises, including, but not limited to, soil and ground
water conditions. Subtenant shall, at Subtenant's own expense,
comply with all laws regulating the treatment, preparation,
generation, manufacture, use, refining, production, storage,
maintenance, handling, transfer, transporting, processing,
disposal, burial, dispersal, release or placement of any Hazardous
Substance, petroleum products, pollutants or contaminants.
Furthermore, Subtenant shall, at Subtenant's own expense, make all
submissions to, provide all information required by, and comply
with all requirements of all governmental authorities under all
present and future laws. The term “Hazardous Substance”
means, without limitation, any pollutant, contaminant, toxic or
hazardous waste, dangerous substance, potentially dangerous
substance, noxious substance, toxic substance, flammable,
explosive, combustible, radioactive material, urea formaldehyde
foam insulation, asbestos, PCB's, chemicals known to cause cancer
or reproductive toxicity, or any manufacture, preparation,
production, generation, use, maintenance, treatment, storage,
transfer, handling or ownership of which is restricted, prohibited,
regulated, penalized by any and all federal, state, local, county
or municipal statutes, laws or orders now or at any time hereafter
in effect, including but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
§§ 9601 et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. §§ 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. §§ 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C.
§§ 1251 et seq.), the Clean Air Act (42 U.S.C.
§§ 7401 et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. §§ 2601 et seq.) the Occupational
Safety and Health Act (29 U.S.C. §§ 651 et seq.) as these
laws have been or may be amended or supplemented, and any
substances declared to be hazardous or toxic under any law or
regulation now or hereafter enacted or promulgated by any
governmental authority. Failure of Subtenant to abide by all of the
foregoing obligations shall be a default under this Sublease which,
if not cured within five (5) days of Sublessor’s notice, or
sooner if an emergency, dangerous, or hazardous conditions exists
in, at, on, upon or about the Sublet Premises, shall entitle
Sublessor to pursue all remedies available in law, at equity and/or
under the Sublease. All payments due from Subtenant hereunder shall
be due and payable as additional rent within ten (10) days of
presentation of a statement therefor by Sublessor.

 

11. Additions/Alterations.
All alterations and/or additions shall be completed by Subtenant at
its sole cost and expense with Sublessor’s and Lessor's prior
written approval. All alterations and additions, at
Sublessor’s option, shall be removed upon the expiration of
the Sublease Term, except for those alterations which Sublessor and
Lessor at the time of approval, have agreed to remain with the
Sublet Premises at the expiration of this Sublease. Any addition
and/or alteration which require approval from appropriate
governmental agencies shall be obtained by Subtenant at its
expense. Subtenant shall remove all of its signage at
subtenant’s expense upon expiration of the Sublease
Term.

 

5

 

 

12. Attorney's
Fees. If Sublessor or Subtenant
shall commence an action against the other arising out of or in
connection with the Sublease, the prevailing party shall be
entitled to recover its costs of suit and reasonable attorney's
fees.

 

13. Agency
Disclosure. Sublessor and
Subtenant each warrant that they have dealt with no other real
estate broker in connection with this transaction except Savills
Studley.

 

14. Notices.
All notices and demands which may or are to be required or
permitted to be given by either party on the other hereunder shall
be in writing. All notices and demands by the Sublessor to
Subtenant shall be sent by overnight courier or hand delivered or
by certified or registered mail, return receipt requested,
addressed to the Subtenant at the Sublet Premises, and to the
address herein below, or to such other place as Subtenant may from
time to time designate in a notice to the Sublessor. All notices
and demands by the Subtenant to Sublessor shall be sent by
overnight courier or hand delivered or by certified or registered
mail, return receipt requested, addressed to the Sublessor at the
Prime Lease Premises, and to the address herein below, or to such
other place as Sublessor may from time to time designate in a
notice to the Subtenant.

 

	
 

	

To Subtenant:

	

Gregory S. McCarthy, CEO

	
 

	

Address:

	

14420 Albemarle Point Pl, Suite 200, Chantilly, VA
20151

 

	
 

	

To Sublandlord:

	

Jada Brink, Director of Contracts

	
 

	

Address:

	

14420 Albemarle Point Pl, Suite 200, Chantilly, VA
20151

 

15. Compliance.
The parties hereto agree to comply
with all applicable federal, state and local laws, regulations,
codes, ordinances and administrative orders having jurisdiction
over the parties, property or the subject matter of this Sublease,
including, but not limited to, the 1964 Civil Rights Act and all
amendments thereto, the Foreign Investment in Real Property Act,
the Comprehensive Environmental Response Compensation and Liability
Act, and the Americans with Disabilities Act.

 

16. Quiet
Enjoyment. Subtenant, upon paying the minimum rent and other
charges herein provided for, and performing all the other terms of
this Sublease, shall quietly have and enjoy the Sublet Premises
during the term of this Sublease, subject to the terms hereof and
the terms of the Prime Lease.

 

17. Furniture,
Fixtures and Equipment. Subtenant shall provide its pro rata share of
kitchen and common area supplies. Subtenant shall provide its own
office supplies, postage, machine and FedEx account. Subtenant
shall provide its own furniture, fixtures and equipment consistent
with the general appearance of the Prime Lease
Premises.

 

18. Security
Cards. Subtenant shall retain up to eight (8) security
cards that it currently has in its possession and shall return all
other security cards to Sublessor on the date
hereof.

 

19. Parking.
Subtenant shall have free parking as
provided in the Prime Lease which is 3.8 spaces per 1,000 rentable
square feet of the Sublet Premises. Subtenant's parking rights are
personal to Subtenant and non-transferable. Subtenant shall abide
by all applicable rules and

 

 

6

 

 

regulations of Prime Landlord related to the parking spaces
provided under this Section, and shall hold Sublessor,
Sublessor’ s agents, contractors and employees harmless from
and against all losses and liabilities, if any, arising from the
use of such spaces.

 

20. LEED
Certification. Subtenant shall
comply with any office wide regulations pertaining to LEED
Certification, including but not limited to: recycling, light bulb
wattage, etc.

 

21. Building
Core Factor. The core factor
for the 2nd floor is 1.136.

 

22. Roof
Rights. Omitted.

 

23. Operating
Hours. The Building operating
hours are as set forth in the Prime Lease. Subtenant shall have
access to the Building and Sublet Premises 24 hours per day, 365
days per year, subject to the terms of the Prime Lease. Should the
Subtenant require heating, air conditioning or ventilation outside
regular Building operating hours, it agrees to pay the actual costs
thereof as determined by the Prime Landlord (Sublessor will apply
no markup, burden or fee/profit). Subtenant shall pay Sublessor
separately for the cost of utilities for any room(s) containing
supplemental HVAC unit(s) or system(s) and for heavier than normal
office use of electricity, including the cost of a sub-meter. The
charge for afterhours HVAC service shall be paid directly to the
Sublessor, who will then pass the fee through to the Prime Landlord
without markup, burden or fee/profit.

 

24. Cleaning.
Sublessor shall provide
office-cleaning services and common area maintenance Monday through
Friday, government and legal holidays excluded. Such services shall
be consistent with comparable office buildings within the
Chantilly, VA submarket.

 

25. Connectivity
Rights. To the extent
practicable or desirable, Subtenant shall have the right to use
existing telecom conduits or construct new conduits, install
cables, equipment and other related telecommunications facilities
for Subtenant's network into the Building.

 

26. Telecom
Services. Subtenant agrees to
share in the cost of telecommunications services proportionate to
total sublease area.

 

7

 

 

IN
WITNESS WHEREOF the parties have executed this Sublease as of the
date first above written.

 

	
 

	

SUBLESSOR:

	
 

	

SUBTENANT:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

BLUEWATER FEDERAL SOLUTIONS, INC.

	
 

	

AOC KEY SOLUTIONS, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By: /s/ Jada
Brink

	
 

	

By: /s/ Gregory S.
McCarthy

	
 

	
 

	

Name: Jada
Brink

	
 

	

Name: Gregory S. McCarthy

	
 

	
 

	

Title: Director,
Contracts

	
 

	

Title: CEO

	
 

 

8

 

EXHIBIT A

SUBLET PREMISES

 

 

9

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