Document:

Exhibit 10.10

 

Sale and Purchase Agreement

 

This Sale and Purchase Agreement (the “Agreement”), entered into on September 13, 2013 (the “Effective Date”), by Life Sciences Management Group, Inc. (a Maryland Corporation, the “Purchaser) with offices at 7272 Wisconsin Ave, Suite 300, Bethesda, MD 20814, and Acino Pharma AG, with offices at Dornacherstrasse 114, CH-4147 Aesch, Switzerland, (the “Company”)

 

WHEREAS, the Company owns and/or has licensed certain assets pertaining to the pharmaceutical product lclaprim (the “Product”),

 

WHEREAS, Purchaser desires to purchase, and the Company agrees to sell such assets pertaining to the Product (the “Assets”),

 

WHEREAS, Purchaser performed a due diligence analysis with respect to the Assets, by reviewing a set of electronic files received from the Company on March 28, 2013 (the “Dossier”),

 

NOW THEREFORE, the parties agree to enter into the Agreement under the following terms and conditions:

 

1.                                      Purchase and Sale of Assets, Completion

 

1.1                               The Company agrees to sell, and the Purchaser agrees to purchase, with effect from Completion Date (as defined hereinafter in clause 1.3), the Assets as defined in Exhibit A, including all rights and obligations related thereto.

 

1.2                               The Company agrees to sell, and the Purchaser agrees to purchase, over a period ending December 31, 2017, all or parts of the remaining 613 kg of drug substance lclaprim.  After December 31, 2017, the Company shall be entitled to dispose of and/or destroy any and all inventories of lclaprim in its warehouse at the cost of the Purchaser, after giving Purchaser 60 days’ prior notice, and provided it has not received other instructions by Purchaser on where to ship such inventories.

 

1.3                               The Completion Date of this transaction shall be the date when all Conditions Precedent will have been met in accordance with clause 3.1.

 

1.4                               After Completion Date, the Purchaser shall be free in its decisions pertaining to the Assets (e.g. whether or not to develop any of the Assets, including the use of the Assets in any other additional indication, or any other compounds).

 

 

2.                                      Consideration

 

2.1                               The total initial consideration payable for the Assets shall be ten thousand US dollars (US $10,000.00), payable within thirty (30) days after the Effective Date.

 

2.2                               The Purchaser shall compensate the Company for all costs incurred with respect to the transfer of the Assets (shipping, registration, etc.), at cost.  The parties agree that all costs related to the Product and incurring after the Effective Date, e.g. but not limited to requalifying any drug product, shall be borne by the Purchaser.

 

2.3                               Purchaser shall pay to Company, for the storage of the drug substance lclaprim, a fee of 4,800 EUR per year, starting October 1st 2013, and payable in two (2) installments of 2,400 EUR each in advance on the 1st of October and 1st of April of each year.  The purchase price of lclaprim shall be 600 EUR per kg, plus the cost of shipment, insurance and handling.

 

2.4                               Upon completion of any phase Ill clinical study for the Product in any indication, Purchaser shall notify Company within 30 days, and pay to Company an additional consideration of five hundred thousand US dollars (US $500,000.00).

 

3.                                      Conditions Precedent, Rescindment

 

3.1                               The Agreement will be subject to the following conditions being fulfilled:

 

(i)            the transaction evidenced by this Agreement to be authorized and approved by the Board of Directors (or other authorizing body) of each party.

 

(ii)           the initial consideration to be paid in accordance with clause 2.1.

 

(iii)          F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. to provide consent to the assignment of the agreement listed in Exhibit B/1. in writing.

 

3.2                               If such Conditions Precedent have not been fulfilled by December 31, 2013, and the parties have not agreed to extend such timeline in writing, the parties hereby expressly agree that in such event this Agreement shall be rescinded and considered null and void, without further action by the parties.  In such case, to the extent applicable, the Company agrees to reimburse the initial consideration, and the Purchaser agrees to re-assign the Agreements to Company.

 

4.                                      Warranties, Limitation of Liability, Indemnification

 

4.1                               Each party entering into this Agreement warrants that it has, subject to clause 3.1(i), the right and authority to enter into this Agreement.

 

4.2                               The Company hereby represents and warrants to Purchaser as follows:

 

(i)                                     subject to contrary information contained in the Dossier, and to the best of the Company’s knowledge, no third party (except the parties to the Agreements listed in Exhibit B) has any right, title or interest in the Assets;

 

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(ii)           there is no action or claim pending or threatened against the Company or the directors of the Company preventing the sale of the Assets;

 

(iii)          the Company is the legal successor to Arpida Ltd.’s rights with respect to the sale and purchase agreement with F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc., dated June 1”, 2001(as listed in Exhibit B/1.).

 

4.3                               The Assets and the drug substance lclaprim are sold by the Company on a strict “as is” basis.  Except as expressly set forth in clause 4.2, the Company makes no guarantee or warranty, express or implied, statutory or otherwise, (a) with respect to the Assets sold, including the assignability of the agreements listed in Exhibit B, and (b) with respect to the quality of the drug substance lclaprim, and the Company shall not be liable to the Purchaser for Assets or the drug substance lclaprim not meeting the expectations of the Purchaser, or for any other damages of any kind.  In addition, the Company will not indemnify the Purchaser for any claims, suits, actions, proceedings, damages, loss or liability, costs or expenses claimed by a third party for any economical or property loss or damage, or personal injury or death or damage to physical property, including for infringement of third party intellectual property rights, which are related to the Assets or the Product.

 

4.4                               The Purchaser agrees to indemnify the Company and hold it harmless from and against all claims, suits, actions, proceedings, damages, loss or liability, costs or expenses (including reasonable attorney’s fees) claimed by a third party relating to the Assets and/or the Product for any economical or property loss or damage (including infringement of intellectual property), or personal injury or death or damage to physical property to the extent such arise out of and are determined attributable to the Purchaser’s fault, willful or criminal wrongdoing or negligence.

 

5.                                      Confidentiality

 

Both parties shall treat as confidential the contents of this Agreement, and any other information, documents or data disclosed by either party to the other party relating to or in connection with this Agreement which is marked “confidential” or which should be reasonably understood to be confidential (“Confidential Information”).  Either party may disclose Confidential Information to its employees, directors, personnel and Affiliates as well as regulatory authorities, service providers, consultants, non-clinical and clinical investigators, manufacturers and distributors to the extent required to exercise its rights and to fulfill its obligations under this Agreement provided that same shall be bound by confidentiality and non-use obligations materially no less stringent than those set forth under this Agreement.  The duty of confidentiality as per this clause does not apply to

 

a)                                     information which was already in the public domain at the time of signing of this Agreement;

 

b)                                     information which becomes a part of the public domain by publication or otherwise during the term of this Agreement, except by breach of this Agreement;

 

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c)                                      information which the receiving party can establish was in its possession before signing of this Agreement and which was not acquired directly or indirectly from the disclosing party;

 

d)                                     information which the receiving party can establish was acquired from a third party, such third party, to the best belief of the receiving party, having acquired the information neither directly nor indirectly from the disclosing party; and

 

e)                                      information which has to be disclosed by law, a court decision or an administrative order.

 

6.                                      Taxes

 

6.1                               Any consideration payable or to be given pursuant to this Agreement for the sale of the Assets is stated exclusive of VAT.  If any VAT is or becomes chargeable in respect of the sale of the Assets, the Purchaser shall, subject to the receipt of a valid VAT invoice in respect thereof, pay to the Company (in addition to, and at the same time as, the consideration) an amount equal to such VAT.  All sums payable pursuant to this Agreement by way of reimbursement of costs and/or expenses and/or pursuant to any covenant or indemnity shall include any VAT incurred in respect of such costs and/or expenses or in respect of the indemnified matter or the matter to which the covenant relates.

 

6.2                               Any transfer taxes and/or registration or similar taxes or duties payable in respect of the purchase or transfer of the Assets shall be borne solely by the Purchaser.

 

6.3                               All sums payable by the Purchaser under this Agreement shall be paid in cleared funds free and clear of any deduction or withholding whatsoever save only as may be required by applicable law.  If any such deduction or withholding in respect of tax is required by applicable law, the Purchaser shall be obliged to pay such sum as will, after such deduction or withholding has been made, leave the same amount as the recipient would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.  If any sum payable by the Purchaser under this Agreement (other than the consideration) is otherwise subject to tax in the hands of the recipient the same obligation to make an increased payment shall apply in relation to such liability to tax as if it were a deduction or withholding required by applicable Law.

 

7.                                      Miscellaneous

 

7.1                               Applicable law and venue.  This Agreement is subject to Swiss law excluding its conflict of law provisions.  All disputes shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one arbitrator appointed in accordance with said Rules.  The arbitration proceedings shall be held in Basel, Switzerland, and the language used therein shall be English.  The arbitrator’s award shall be final and binding and shall be enforceable in any court with competent jurisdiction.

 

7.2                               Notices and other Communications.  Any and all notices, requests or other communication required or permitted to be made or given under or in connection with

 

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this Agreement or the subject matter hereof by either of the parties hereto shall be in writing and in English and shall be deemed to be sufficiently served for all purposes hereof at the date of certified receipt by the receiving party, if sent by registered mail postage prepaid, or by fax, to the party to be notified at the following addresses or such other address as a party may relocate its headquarters to:

 

	
To Company:
    	
To Purchaser:
    
	
 
    	
 
    
	
Acino Pharma AG
    	
Life Sciences   Management Group, Inc.
    
	
Attn. Head of R&D
    	
Attn. R. Michael Floyd
    
	
Dornacherstrasse 114
    	
7272 Wisconsin Ave,   Suite 300
    
	
CH-4147 Aesch,   Switzerland
    	
Bethesda, MD 20814, USA
    

 

7.3                               Entire Understanding.  This Agreement and the Exhibits annexed hereto embody the entire understanding of the parties and override or supersede all or any prior representations, understandings or implications made by either party at any prior time whether orally or in writing related to the subject matter hereof.

 

7.4                               Amendments.  The parties may during the term of this Agreement modify, vary, or alter any of the provisions of this Agreement by mutual agreement.  Any amendment or supplementary arrangement to this Agreement shall be deemed invalid unless ma de in writing and signed by both parties; the same applies for any modification of this requirement of written form.

 

7.5                               Modification and Waiver.  None of the terms of this Agreement (including all Exhibits provided for herein) shall be deemed to be waived or modified except by a written document drawn expressly for such purpose and executed by the party against whom enforcement of such waiver or modification is sought.  Failure or delay of either party hereto to enforce any of its rights under this Agreement shall not be deemed a modification or a continuing waiver by such party of any of its rights under this Agreement.

 

7.6                               Severability.  If any provision of this Agreement should be or become invalid or unenforceable, the validity of the remaining provisions hereof shall not be affected thereby.  Such invalid or unenforceable provision shall be converted by mutual consent of the parties, to the extent possible, to a valid and enforceable provision which comes as close as possible to the business object of the original provision.  This provision shall also apply if this Agreement should be incomplete.

 

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Purchaser and the Company have executed this Agreement as of the Effective Date.

 

 

	
Acino Pharma AG
    
	
 
    	
 
    
	
Signature:
    	
/s/ Peter Burema
    	
 
    	
/s/ Dr. Jean-Daniel   Bonny
    
	
 
    	
 
    	
 
    
	
Name   Printed:
    	
Peter Burema
    	
Dr. Jean-Daniel Bonny
    
	
 
    	
CEO Acino Group
    	
Head of R&D Acino   Group
    
	
 
    	
 
    	
 
    
	
Place:
    	
Aesch, Switzerland
    	
Aesch, Switzerland
    

 

	
Life Sciences Management   Group, Inc.
    
	
 
    	
 
    
	
Signature:
    	
/s/ R. Michael Floyd
    	
 
    	
 
    
	
 
    	
 
    
	
Name   Printed: 
    	
R.   Michael Floyd, President
    
	
 
    	
 
    
	
Place:
    	
Bethesda, MD, USA
    

 

 

Exhibit A

 

Assets

 

Assets shall consist of any tangible and intangible assets pertaining to the Product, owned or licensed by the Company as per the Effective Date, and which shall consist of, subject to clause 4.3:

 

i.              patents (abandoned), as listed in Exhibit C

 

ii.             information, know-how and goodwill, as contained in the Dossier;

 

iii.            available health and regulatory registrations and/or applications, as contained in the Dossier;

 

iv.            documentation, records, and work product a contained in the Dossier;

 

v.             agreements (including its pertaining rights and obligations) with third parties as listed in Exhibit B.

 

For the sake of clarity, Assets shall not include any trademarks.

 

 

Exhibit B

 

Agreements

 

1.                                      Sales and Purchase Agreements between F. Hoffman-LaRoche and Arpida Ltd. dated June 1st, 2001.

 

2.                                      other agreements pertaining to the Product, as contained in the Dossier.

 

 

Exhibit C

 

Patents

 

List of Product related patents as per the Effective Date.  All patents are abandoned.

 

	
Patent-Number
    	
 
    	
Title
    	
 
    	
Legal Status
    
	
AU708578
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
BRPI9611871-7
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
CA2,238,521
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
CNZL96198783.9
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
EP866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
EP1149834
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
AT866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions. ..
    	
 
    	
Abandoned
    
	
BE866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions. ..
    	
 
    	
Abandoned
    
	
CH866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions. ..
    	
 
    	
Abandoned
    
	
DE866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
DK866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
ES866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
Fl866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
FR866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
GB866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
GR866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
IE866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
IT866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
LU866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    

 

 

	
Patent-Number
    	
 
    	
Title
    	
 
    	
Legal Status
    
	
NL866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
PT866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
SE866791
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
JP3309340
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions. ..
    	
 
    	
Abandoned
    
	
KR10-0417207
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
MX205442
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
TR   1998 01014 8
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
US   5,773,446
    	
 
    	
Diaminopyrimidines,   pharaceutical compositions...
    	
 
    	
Abandoned
    
	
AU   2006215788
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
BG109937   A
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
BR   PI 0607797-8
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
CA   2, 596,669
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
CN   ZL101115743A
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
CN102140094A
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
CNZL2011100324952
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
CZ   PV2007-536
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
EE200700051   A
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    

 

10

 

	
Patent-Number
    	
 
    	
Title
    	
 
    	
Legal Status
    
	
EP1856106
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
EP10184131
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
HK1111997
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
HU   P 07 00604
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
IL   184404
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
IN   3617/CHENP/2007
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
JP   2007-555597
    	
 
    	
Novel processes for   preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
KR   2007-7021394
    	
 
    	
Novel   processes for preparation of preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
MX/A/2007/009282
    	
 
    	
Novel   processes for preparation of 2H-Chromene
    	
 
    	
Abandoned
    
	
NO   2007 3701
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
NZ556800
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
RO122912
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
RU2397980
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
TR2007   05187 B
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
TW095105426
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
US2008   0221324-A1
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
ZA2007/06421
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
AU2008354622
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    

 

11

 

	
Patent-Number
    	
 
    	
Title
    	
 
    	
Legal Status
    
	
CA   2,721,014
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
IN7118/CHENP/2010
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
WO2009124586
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
EP2280688
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
BR   PI 0822580-0
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
CNZL   102112108A
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
JP   2011-503341
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
KR   10-2010-7023886
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
MX/A/2010/011117
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
TW097112657
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
US   7,947,293
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
ZA2010/07185
    	
 
    	
Aqueous   pharmaceutical formulation
    	
 
    	
Abandoned
    
	
CN   ZL200480022787.6
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
CN   ZL2010101517568
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
EP1656369
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
HU   P 06 00231
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
In   478/CHENP/2006
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
JP   2006-522311
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
KR   10-2006-7002680
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
NO   2006 0643
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    
	
US   7,893,262
    	
 
    	
Novel   processes for preparation of a 2H-Chromene
    	
 
    	
Abandoned
    

 

12ex10-1.htm

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into effective November 1, 2015 (the “Effective Date”), by and between Aegis Identity Software, Inc., a Colorado corporation (the “Company”), and Robert Lamvik (“Executive”) (collectively, referred to as the “Parties”).

RECITALS

WHEREAS, Executive is employed by the Company as its President and Chief Executive Officer;

WHEREAS, the Company recognizes the important role that Executive plays in the success and continued success of the Company;

WHEREAS, the Company and Executive recognize the need for this Employment Agreement to clarify the Executive’s and the Company’s respective rights and obligations and to assure the services of Executive for the Company; and

WHEREAS, Executive is willing and desires to continue to be employed by the Company, and the Company is willing to continue to employ Executive, upon the terms, covenants and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the Parties do hereby agree as follows:

1.           Employment. The Company hereby employs Executive as President and Chief Executive Officer of the Company.  Executive will have such duties, responsibilities, power and authority as assigned to him by the Chairman (“Chairman”) of the Company’s Board of Directors (“Board”).  During his employment by the Company, he will devote substantially all his entire working time, attention and energies to the business of the Company and will not, without the prior written consent of the Board undertake any other business activities.

 

2.           Term of Employment. The term of this Agreement shall be for an initial period of fourteen (14) months commencing on the Effective Date and subject to termination as provided in Sections 7 or 8, will end on December 31, 2016; provided, that on December 31, 2016 and each subsequent December 31st, the term of Executive’s employment will automatically be extended by an additional year unless the Company or Executive gives the other party written notice, at least 60 days prior to the expiration of the then existing term, that it or he does not want the term to be so extended.  Such employment period, as may be so extended, will hereinafter be referred to as the “Term.”

 

3.           Base Salary.  During the Term, the Company will pay Executive a minimum base salary at the annual rate of $180,000, payable in accordance with the Company's regular payroll practices. Upon the Company’s receipt of funding from an Initial Stock Offering (“ISO”), the Company will pay Executive a minimum base salary of $200,000, payable in accordance with the Company’s regular payroll practices.  The Board’s Compensation Committee will review Executive’s base salary annually and may, in its sole discretion, increase his base salary based on his performance and the Company's performance. Such base salary, as may be increased, will hereinafter be referred to as his “Base Salary.”

 

  

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4.           Quarterly Bonus. During the Term, Executive will be eligible to receive a quarterly bonus of $10,000 for each quarter beginning in 2016 and each year thereafter in which the Company experiences positive earnings before interest, taxes, depreciation and amortization (“EBITDA”) (the “Quarterly Bonus”). If earned, the Company shall pay Executive his Quarterly Bonus within 30 days of the end of each quarter.

 

5.           Existing Stock Options.  The Company expressly acknowledges that it will honor Executive’s previously awarded stock options, which are set forth as follows:

  

	Options Awarded	 	Date Awarded	 	Vesting Date	 	Strike Price
	 	 	 	 	 	 	 
	125,000 	 	10/1/2011   	 	9/30/2014  	 	$0.60
	 	 	 	 	 	 	 
	125,000 	 	8/8/2012  	 	8/7/2015   	 	$2.00
	 	 	 	 	 	 	 
	225,000  	 	10/22/2013 	 	10/21/2016	 	$2.00
	 	 	 	 	 	 	 
	225,000  	 	2/18/2015  	 	2/17/2018  	 	$2.00

                                                                                                 

The terms and conditions of the stock options awards addressed above shall remain in full force and effect independent of any ISO.

6.           Housing Allowance and the Right to Commute.  Executive intends to own a residence in California, beginning effective July 1, 2016, Executive will be provided a monthly housing allowance of $2,500 (“Housing Allowance”) and grant the Executive the right to commute to Denver from California.  The Housing Allowance will be paid to the Executive monthly.

7.           Other Benefits.

 

(a)           Employee Benefits. Executive will be eligible to participate in the employee benefit plans, programs and arrangements maintained by the Company.

 

(b)           Vacation. Executive will be entitled to not less than 15 days of paid vacation per calendar year in accordance with the Company's vacation policy as in effect from time to time.

 

(c)           Reimbursement. The Company will reimburse Executive for all reasonable expenses and disbursements in carrying out his duties and responsibilities under this Agreement in accordance with Company policy for executive officers as in effect from time to time.

 

(d)           Automobile Allowance. The Company will continue to provide the Executive with an automobile consistent with the Parties’ existing arrangement during the Term of this Agreement.

 

  

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8.           Termination of Employment (Non-Change in Control). Subject to Sections 10 and 14:

 

(a)           Resignation for Good Reason or Termination Without Cause. If Executive terminates his employment for Good Reason (as defined below) or he is terminated by the Company without Cause (as defined below) at any time during the Term, including by the Company giving him notice that it does not want the Term to be extended as provided in Section 1, Executive will receive a lump-sum cash payment equal to the sum of:

 

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination; and

 

(ii)           an amount equal to 1.5 times the sum of (x) his then Base Salary and (y) his Quarterly Bonuses for the fiscal year of such termination, prorated for the number of days that have elapsed during such year.

 

(iii)           In addition to the foregoing lump-sum payment:

 

(iv)           the Company will continue Executive’s participation in the Company's medical, dental and vision plans (or if Executive is ineligible to continue to participate under the terms thereof, in substitute arrangements adopted by the Company providing substantially comparable benefits) for the 18 month period following the date of such termination;

 

(v)           outplacement services during the 6-month period following such termination provided by a service provider selected by the Company for the benefit of the Executive; and

 

(b)           Termination Other than for Good Reason or Termination for Cause. If Executive terminates his employment other than for Good Reason (including if Executive gives notice that he does not want to extend the Term as provided in Section 1) or if Executive is terminated by the Company for Cause, Executive will receive no further payments, compensation or benefits under this Agreement, except he will be eligible to receive, immediately upon the effectiveness of such termination, amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing prior to the effectiveness of Executive’s termination and such compensation or benefits that have been earned and will become payable without regard to future services.

 

(c)           Death, Disability or Retirement. If Executive’s employment terminates by reason of death, disability or retirement (as defined in the Company's equity compensation plan then in effect), Executive or his beneficiaries will receive a lump-sum cash payment equal to the sum of:

 

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination; and

 

  

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(ii)           Executive’s Quarterly Bonus for such year, prorated for the number of days that have elapsed during such year.

If Executive’s employment terminates by reason of Executive’s retirement, then in addition to benefits to which Executive may be entitled pursuant to this Agreement, his entitlements in connection with a termination of his employment pursuant to his retirement under the Company's otherwise applicable employee benefit and retirement plans and programs (including without limitation under the Company's equity compensation plans), will be determined in accordance with such applicable plans and programs.

 

For purposes of this Agreement, “Good Reason” means the Company's breach of any of its material obligations under this Agreement, excluding immaterial actions (or failures of action) not taken (or omitted to be taken) in bad faith and which, if capable of being remedied, are remedied by the Company within 30 days of receipt of notice thereof given by Executive. For purposes of this Agreement, “Cause” means any of the following: (i) conviction of or pleading guilty to a felony, (ii) commission of intentional acts of misconduct that materially impair the goodwill or business of the Company or cause material damage to its property, goodwill or business, or (iii) willful refusal or willful failure to perform Executive’s material duties under this Agreement after written demand that Executive does so. Termination of Executive’s employment shall not be deemed to be for Cause hereunder unless and until (A) written notice has been delivered to Executive by the Company that specifically identifies the Cause, which is the basis of the termination and, if the Cause is capable of cure, Executive has failed to cure or remedy the act or omission so identified within 14 calendar days after written notice of such breach. For purposes of this provision, no act or failure to act on Executive’s part shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause without reasonable notice to Executive setting forth the reasons, facts and circumstances for the Company's intention to terminate for Cause and an opportunity for Executive, together with his counsel, to be heard before the Board.

 

9.           Change in Control. Subject to Sections 10 and 14:

 

(a)           General. If there is a Change in Control (as defined below) and, within 18 months of such Change in Control, Executive terminates his employment for CIC Good Reason (as defined below) or he is terminated by the Company without Cause, Executive will receive a lump-sum cash payment equal to the sum of:

 

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination;

 

(ii)           an amount equal to 2 times the sum of (x) his then Base Salary; and

 

(iii)           Executive’s Quarterly Bonuses for the fiscal year of such termination, prorated for the number of days that have elapsed during such year.

 

(iv)           In addition to the foregoing lump-sum payment:

 

  

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(v)           the Company will continue Executive’s participation in the Company's medical, dental and vision plans (or if Executive is ineligible to continue to participate under the terms thereof, in substitute arrangements adopted by the Company providing substantially comparable benefits), for the 24-month period following the date of such termination; and

 

(vi)           all unvested stock options, restricted stock and other equity awards then held by Executive will fully vest and become exercisable as of the effective date of such termination.

For purposes of this Agreement, “Change in Control” shall mean the first to occur of:

(i) the acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as from time to time amended) of the beneficial ownership of securities of the Company possessing more than 50% of the total combined voting power of all outstanding securities of the Company;

 

(ii) a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold, in the aggregate, securities possessing more than 50% of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation;

(iii) a reverse merger in which the Company is the surviving entity but in which securities possessing more than 50% of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding directly or indirectly those securities immediately prior to such merger;

 

(iv) the sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company;

 

(v) the approval by the shareholders of a plan or proposal for the liquidation or dissolution of the Company; or

 

(vi) as a result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who are members of the board of directors of the Company before the Transaction will cease to constitute a majority of the board of directors of the Company or any successor thereto.

 

  

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Notwithstanding the foregoing, in no event will a Change in Control be considered to have occurred as a result of (i) the distribution by the Company to its stockholders of stock in an Affiliate; (ii) the contribution by the Company of some or all of its assets in a transaction governed by Section 351 of the Code; (iii) any inter-company sale or transfer of assets between the Company and any Affiliate; (iv) a dividend distribution by the Company; (v) a loan by the Company to any third party or an Affiliate; (vi) a Transaction, or series of Transactions, after which an Affiliate of the Company before such Transaction or series of Transactions, is either directly or indirectly in control of the Company thereafter; (vii) if the controlling shareholder is a trust, the acquisition, directly or indirectly, of the beneficial ownership of securities of the Company by any beneficiary of such trust if such beneficiary has a greater than 25% interest in such trust, or any descendants, spouse, estate or heirs of any such beneficiary, or a trust established for such beneficiary or for any descendants, spouse or heirs of such beneficiary; or (viii) the first underwritten primary public offering of the shares of common stock of the Company pursuant to an effective registration statement (other than a registration statement on Form S-4 or Form S-8 or any similar or successor form) under the Securities Act of 1933, as from time to time amended (an ISO). For purposes of this Agreement, “Affiliate” means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the Company, including, without limitation, any member of an affiliated group of which the Company is a common parent corporation as provided in Section 1504 of the Internal Revenue Code of 1986, as from time to time amended (the "Code").

 

For purposes of this Agreement, “CIC Good Reason” means any of:

 

(i) the material diminution of Executive’s position (including titles and reporting relationships), duties or responsibilities, excluding immaterial actions not taken in bad faith;

 

(ii) the breach by the Company of any of its material obligations under this Agreement, excluding immaterial actions (or failures or action) not taken (or omitted to be taken) in bad faith and which, if capable of being remedied, are remedied by the Company within 30 days after receipt of notice thereof given by Executive;

(iii) any requirement by the Company that Executive relocate to the Denver metropolitan area or any restriction on Executive’s ability to commute from California as set forth in Section 6 above.

 

(b)           Tax Indemnity. If it is determined that any payments and benefits that Executive receives from the Company or an Affiliate as a result of the Change in Control will result in him being subject to an excise tax under Section 4999 of the Code, then the Company will make a Gross-Up Payment (as defined below) to or on his behalf as and when any such determination is made; provided, Executive takes such action (other than waiving his right to any payments or benefits) as the Company reasonably requests under the circumstances to mitigate or challenge such tax. Any such determination will be made in accordance with Sections 280G and 4999 of the Code and any other applicable law, regulations, rulings or case law. If the Company reasonably requests that Executive take action to avoid assessment of, or to mitigate or challenge, any such tax or assessment, including restructuring his right to receive any payments or benefits to which he is entitled (other than under this paragraph), Executive agrees to consider such request (but in no event

 

  

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to waive or limit his right to any payments or benefits in a manner that would not be neutral to him from a financial point of view), and in connection with any such consideration, the Company will provide such information and advice as Executive may reasonably request and will pay for all reasonable expenses incurred in effecting his compliance with such request and any related taxes, fines, penalties, interest and other assessments. The term “Gross-Up Payment” means an additional amount such that he will, on an after-tax basis (including any income tax, payroll tax, further excise tax, interest, penalties and other assessments levied on any payment or benefit) receive the full amount of the payments and benefits for which the Company is liable, as if there was no excise tax under Section 4999 of the Code on any of his payments or benefits. To the extent permitted by applicable law, Executive agrees to return to the Company the excess of any Gross-Up Payment made to him over the payment that would have been sufficient to put Executive in such same after-tax position. Nothing in this Section 9 is intended to violate the Sarbanes-Oxley Act and to the extent that any advance or payment obligation hereunder would do so, such obligation will be modified so as to make the advance a nonrefundable payment to him and the payment obligation null and void. This Section 9 will continue in effect until Executive agrees that all of the Company's obligations to him under this Section 9 have been satisfied in full or a court of competent jurisdiction makes a final determination that the Company has no further obligations to him under this Section 9, whichever comes first.

 

10.           Release. Other than if Executive’s employment terminates by reason of death or disability, any payment or benefit that he is eligible to receive under Sections 8 or 9 will be contingent on Executive’s execution of a release prior to or concurrently with the provision of such payment or benefit. The payments or benefits Executive is eligible to receive under Sections 8 or 9 are in lieu of any termination payments or benefits which he might otherwise be eligible to receive under any standard severance policy maintained by the Company and/or its Affiliates.

 

11.           Covenants. In exchange for the remuneration outlined above, in addition to providing service to the Company as set forth in this Agreement, Executive agrees to the following covenants:

 

(a)           Confidentiality. Executive acknowledges that during his employment, he will occupy a position of trust and confidence. Accordingly, Executive agrees that following any termination of his employment, he will keep confidential any trade secrets and confidential or proprietary information of the Company and its affiliates which are now known to him or which hereafter may become known to Executive as a result of his employment or association with the Company and will not at any time directly or indirectly disclose any such information to any person, firm or corporation, or use the same in any way other than in connection with the business of the Company during, and at all times after, the termination of his employment. For purposes of this Agreement, “trade secrets and confidential or proprietary information” means information unique to the Company or an affiliate of the Company which has a significant business purpose and is not known or generally available from sources outside the Company or typical of industry practice, but will not include any of the foregoing (i) that becomes a matter of public record or is published in a newspaper, magazine or other periodical available to the general public, other than as a result of any act or omission of Executive, or (ii) that is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency; provided that Executive gives prompt notice of such requirement to the Company to enable the Company to seek an appropriate protective order or confidential treatment.

 

  

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(b)           Non-Competition. Executive further covenants that during his employment and during the Restricted Period (as defined below), he will not, for himself or on behalf of any other person, partnership, company or corporation, in the United States of America, directly or indirectly, engage in, acquire any financial or beneficial interest in (except as provided in the next sentence), be employed by, or own, manage, operate or control any entity which is engaged in, any business in competition with any business of the Company or any subsidiary of the Company. Notwithstanding the preceding sentence, (i) Executive will not be prohibited from owning less than 1% of any publicly traded corporation, whether or not such corporation is in competition with the Company, and (ii) will not be prohibited during the Restricted Period from being employed by or providing services to a company with multiple product-lines and/or service lines where one or more of its product-lines or service-lines is in competition with the Company so long as Executive has no direct or indirect contact with the units(s) involved with the competitive products/services. For purposes of this Agreement, “Restricted Period” means the longer of (i) the 1-year period following termination of Executive’s employment, or (ii) in the event Executive receives payments pursuant to Sections 8(a), the 18-month period following termination of Executive’s employment, or (iii) in the event he receives payments pursuant to Section 9(a), the 2-year period following termination of Executive’s employment.

 

(c)           Non-Solicitation of Employees. Executive further covenants that during his employment and during the Restricted Period, Executive will not, directly or indirectly, hire, or cause to be hired by an employer with whom he may ultimately become associated, any employee of the Company or a subsidiary of the Company at the time of termination of Executive’s employment with the Company.

 

(d)           Equitable Relief and Other Remedies. Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of this Section 10 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, will be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available.

 

(e)           Reformation. If it is determined by a court of competent jurisdiction that any restriction in this Section 11 is excessive in duration or scope or is unreasonable or unenforceable under the law of that jurisdiction, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that jurisdiction.

 

(f)           Survival of Provisions. Without effect as to the survival of other provisions of this Agreement intended to survive the termination or expiration of Executive’s employment, the obligations contained in this Section 11 will survive the termination or expiration of Executive’s employment with the Company and will be fully enforceable thereafter.

12.           Indemnification. The Company will indemnify and make permitted advances to Executive to the fullest extent permitted by applicable law, if Executive is made or threatened to be made a party to a proceeding by reason of his being or having been an officer, director or employee of the Company or any of its subsidiaries or affiliates or his having served on any other enterprise as a director, officer or employee at the request of the Company. In addition, the Company will maintain insurance, at its expense, to protect Executive against any such expense, liability or loss to which Executive would be entitled to indemnification or reimbursement under the foregoing sentence.

 

  

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13.           Representations. By signing this Agreement, Executive represents that he is not subject to any employment agreement or non-competition agreement that could subject the Company or any of its affiliates to any future liability or obligation to any third party as a result of the execution of this Agreement and his employment by the Company.

 

14.           Timing and Form of Payments under Sections 8 and 9. All payments due to Executive under Sections 8 and 9 above shall be made no later than two and one-half months following his separation from service unless the following provisions pertaining to specified employees is applicable. Executive is likely to be a specified employee (as defined in Treas. Reg. § 1.409A-l(i)) as of the date of a separation from service. All payments to be made to Executive under Sections 8 or 9 may not be made before the date that is six months after the date of separation from service (or, if earlier than the end of the six-month period, the date of Executive’s death). For this purpose, if Executive is not a specified employee as of the date of a separation from service, he will not be treated as subject to this requirement even if Executive would have become a specified employee if he had continued to provide services through the next specified employee effective date. Similarly, if Executive is treated as a specified employee as of the date of a separation from service, he will be subject to this requirement even if he would not have been treated as a specified employee after the next specified employee effective date had Executive continued providing services through the next specified employee effective date.

 

15.           Miscellaneous Provisions.

 

(a)           This Agreement may not be amended or terminated without the prior written consent of the Executive and the Company.

 

(b)           This Agreement may be executed in any number of counterparts, which together will constitute but one agreement.

 

(c)           This Agreement will be binding on and inure to the benefit of the Parties’ respective successors and permitted assigns and Executive’s heirs and other legal representatives. If Executive should die while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein, will be paid in accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there is no such designee, to his estate. The rights and obligations described in this Agreement may not be assigned by either party without the prior written consent of the other party; provided, however, the Company may assign its rights and obligations described in this Agreement without Executive’s consent upon the transfer of all or substantially all of the business and/or assets of the Company (whether by purchase, merger, consolidation or otherwise).

 

(d)           Subject to Section 10, all disputes arising under or related to this Agreement will be resolved by arbitration under the Commercial Arbitration Rules of the American Arbitration Association then in effect, with such arbitration to be conducted by the Judicial Arbitration Group, 1801 Blake Street, Suite 400, Denver, Colorado 80202, as the sole and exclusive remedy of either party.

 

(e)           All notices under this Agreement will be in writing and will be deemed effective when delivered in person, by email, by overnight mail, or 5 days after deposited in the U.S. mail, postage prepaid, for delivery and registered or certified mail, addressed to the respective party at the address or email address set forth below or to such other address or email address as may later be designated by the Parties.  Unless otherwise notified, notice will be sent to each party as follows:

 

  

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To Executive:

Robert Lamvik

750 W Hampden Ave Ste. 500

Englewood, CO 80110

e-mail: bob.lamvik@aegisidentity.com

To Company:

Aegis Identity Software, Inc.

990 S Broadway #420

Denver, CO 80209

Attn:  Ralph Armijo

Chairman of the Board

e-mail: ralph.armijo@aegisidentity.com

 

(f)           This Agreement will be governed by and construed and entered in accordance with the laws of the State of Colorado without reference to rules relating to conflict of laws.

 

(g)           This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereto and supersedes all prior agreements and understandings, both written and oral, between the Company (or its affiliates) and Executive with respect to the subject matter hereof.  This Agreement further supersedes any inconsistent provisions of any plan, policies or arrangements that would otherwise be applicable to Executive to the extent such provisions would limit any rights granted to Executive hereunder or expand any restrictions imposed upon Executive.  Notwithstanding the foregoing to the contrary, Executive’s prior agreements relating to his stock options identified in Section 5 and Executive’s Benefits identified in Section 6 above, shall remain in full force and effect.

IN WITNESS THEREOF, the Parties hereto have caused this Employment Agreement to be executed as of the Effective Date.

EMPLOYEE

By: /s/ Robert D. Lamvik

      Robert D. Lamvik

Aegis Identity Software, Inc.,

a Colorado corporation

By: /s/ J. Ralph Armijo

       J. Ralph Armijo, Executive Chairman of the Board

 

 

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