Document:

EX-10.9

 EXHIBIT 10.9 
  

 
  
  

September 20, 2016 
 Personal & Confidential

 Arthur P. DeCillis, M.D. 
 80 Devonshire Lane 

Madison, CT 06443 
 Dear Arthur: 

It is my pleasure to offer you the position of Chief Medical Officer for Eleven Biotherapeutics, Inc. (“the Company” or “Eleven Bio”)
reporting to Stephen Hurly, President and CEO. This letter agreement summarizes important details about your employment, should you accept this offer. This letter agreement shall be effective only upon the date of the closing (such closing
date, the “Effective Date”) of the acquisition by the Company of Viventia Bio Inc. (“Viventia”) pursuant to a Share Purchase Agreement (the “Agreement”), by and among the Company, Viventia, the shareholders of
Viventia named on the signature pages thereto and, for certain limited purposes, Clairmark Investments Ltd, pursuant to which Agreement, the Company will acquire all of the outstanding equity interests in Viventia and Viventia will become a
wholly-owned subsidiary of the Company (the “Transaction”). If the Transaction does not occur by September 23, 2016, this letter agreement shall be null and void. 

1. Full-Time and Best Efforts: As Eleven Bio’s Chief Medical Officer, which is a full-time position, we expect that you will
devote substantially all of your working time to the performance of your Company duties in a satisfactory manner and to the best of your abilities at all times. You shall not engage in any other business or occupation during your employment here,
including, without limitation, any activity that conflicts with the interests of the Company, interferes with the proper and efficient performance of your duties for the Company, or interferes with your exercise of judgment in the Company’s
best interests. Approval of the CEO and/or Board will be required for you to serve on other outside boards while you are employed by the Company, including any outside for-profit boards, which approval shall not be unreasonably withheld,
delayed or conditioned. Notwithstanding the foregoing, you will be permitted to serve as an officer, director or trustee of any charitable, educational or non-profit organization, without the Company’s prior consent, provided that such services
do not interfere with the performance of your duties to the Company or represent an actual or apparent conflict of interest with your role at the Company. 

2. Compensation: You shall receive an annualized salary of $417,011, paid in accordance with the Company’s standard payroll
practices, and subject to all applicable tax reporting and withholding. You will be considered for a merit review in conjunction with your performance review (which generally is conducted annually) and consistent with the Company’s
compensation practices, as determined by the Board in its sole discretion. 
 3. Annual Bonus: You will be eligible for an annual
target bonus of up to 30% of your base salary, based upon achievement of both corporate and individual goals, and contingent upon your 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

 individual and our Company performance. The determination of whether a bonus will be granted, and the
amount of any such bonus, will be determined by the Company in its reasonable good faith and sole discretion. All annual bonuses, if any, will be payable no later than March 15 of the year following the year in which they were
earned. Please note that you must be employed on the date bonuses, if any, are paid, in order to be eligible for such a payment, as such bonuses also serve as retention incentives. 

4. Stock Option: Subject to and upon approval by the Board, you will be granted a nonstatutory stock option to purchase 100,000 shares of
Common Stock, $0.001 par value per share, of the Company (the “Common Stock”), which option is granted pursuant to the inducement grant exception under Nasdaq Rule 5635(c)(4) and not pursuant to the Company’s 2014 Stock Incentive Plan
(the “Plan”) or any other equity incentive plan of the Company, as an inducement that is material to your employment with the Company (the “Inducement Grant”). The Inducement Grant shall have an exercise price equal to the
closing price of the Common Stock on the NASDAQ Global Market on the date of such grant and shall vest as to 25% of the shares subject to such option on the first anniversary of the date of grant of the option and as to an additional 6.25% of the
shares underlying the option at the end of each successive three-month period thereafter until the fourth anniversary of the date of grant of the option. The Inducement Grant shall be subject to such other terms as are customary for the
Company’s options under the Plan and the previously approved form of stock option agreement under the Plan. The Board will consider annually whether to grant additional equity awards to its employees and you will be eligible to be
considered for such additional annual equity grants. 
 5. Employee Benefits; Expenses: The Company offers a comprehensive
benefit package that includes group health, dental and vision plans as well as life and disability and time-off benefits. Your eligibility to participate in these plans and receive benefits thereunder is subject to the plan documents governing such
benefits. Notwithstanding the foregoing, you understand and agree that nothing contained herein will require the Company to establish or maintain any fringe benefits and any such benefits may be modified, amended, terminated or cancelled at any time
by the Company in its sole and absolute discretion. 
 During your employment, the Company shall pay (or promptly reimburse you) for documented,
out-of-pocket expenses reasonably incurred by you in performing your job, which are consistent with the Company’s policies in effect from time to time with respect to business expenses, subject to the Company’s requirements with respect to
reporting of such expenses. 
 Please also note that all in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be
provided by the Company or incurred by you during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the
taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible
for reimbursement in any other taxable year. Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

 6. Vacation Time: As a full time employee of the Company, you are eligible for up to
fifteen (15) paid vacation days that are accrued on a monthly basis at a rate of 1.25 days (10 hours) per month of full time employment. The use of vacation is governed by the Company’s vacation pay policy. 

7. Term of Employment; Restrictive Covenant Agreement: It is important for you to understand that you are an employee “at
will”. This means that you have the right to terminate your employment relationship with Eleven Bio at any time for any or no reason. Similarly, the Company has the right to terminate its employment relationship with you at any time for any or
no reason. As a condition of your employment with the Company, you will be required to execute the enclosed Employee Non-Competition, Non-Solicitation, Confidentiality, and Assignment Agreement. Your employment and this letter will be
governed by the laws of Massachusetts. 
 8. Severance Benefits: Notwithstanding the foregoing, in the event that Eleven Bio terminates
your employment without “Cause” or you resign with “Good Reason” (each term as defined below and in either case a “Qualifying Termination”), you will be eligible for the benefits outlined in sub-paragraphs A or B (the
“Severance Benefits”), subject to the terms set forth in this letter agreement: 
  

	 	A.	If a Qualifying Termination occurs: (i) Eleven Bio will pay you severance in the form of continuation of your base salary for a total of twelve (12) months, such amount to be paid in accordance with the Company’s
then current payroll practices, except as otherwise specified in this letter, beginning on the Company’s first regular payroll date that occurs after the Payment Date (as defined below) and (ii) subject to the terms and conditions provided for
in COBRA, and subject to your timely election of COBRA and copayment of premium amounts at the active employee’s rate, the Company shall pay its then current share of premium payments for group health and dental insurance after the termination
date through (1) your severance period as outlined above, or (2) the date you become employed with benefits substantially comparable to the benefits provided under the corresponding Company plan, or (3) the date you become ineligible for COBRA
benefits; provided, however, that such Company-paid premiums may be recorded as additional income pursuant to Section 6041 of the Internal Revenue Code of 1986, as amended (the “Code”) and not entitled to any tax qualified treatment
to the extent necessary to comply with or avoid the discriminatory treatment prohibited by the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 or Section 105(h) of the Code. You shall
be responsible for the entire COBRA premium should you elect to maintain this coverage after the earlier of the dates specified in sections 8.A.(ii)(1)-(3) above. 

 

	 	B.	If a Qualifying Termination occurs within twelve (12) months after a Change in Control Transaction (as defined below), then: (i) you will be eligible for the same severance payments and COBRA premium assistance as set
forth in sections 8.A.i-A.ii above, subject to the same terms, conditions, and limitations as described therein; and (ii) the vesting of 100% of your then outstanding unvested equity grants shall be accelerated, such that all unvested equity grants
vest and become fully exercisable or non-forfeitable as of the termination date. 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

 For the sake of clarity, it shall not be a “Qualifying Termination” if your employment terminates
because of your death or due to your suffering a Disability (as defined below). 
  

	 	C.	The Severance Benefits will be subject to the following terms: 

 i. Solely for purposes of
Section 409A of the Code, each salary continuation payment is considered a separate payment. 
 ii. Any severance or other benefits under
this offer letter will begin only upon the date of your “separation from service” (as defined under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h)) which occurs on or after the date of termination of the employment.
To the extent that the termination of your employment does not constitute a separation from service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be
provided by you to the Company, or any of its parents, subsidiaries or affiliates, at the time your employment terminates), any severance benefits payable that constitute deferred compensation under Section 409A of the Code shall be delayed until
after the date of a subsequent event constituting a separation from service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this section shall not cause any forfeiture of benefits on your
part, but shall only act as a delay until such time as a “separation from service” occurs. 
 Further, if you are a “specified employee”
(as that term is used in Section 409A of the Code and regulations and other guidance issued thereunder) on the date your separation from service becomes effective, any severance benefits payable hereunder that constitute non-qualified deferred
compensation under Section 409A of the Code shall be delayed until the earlier of (i) the business day following the six-month anniversary of the date your separation from service becomes effective, and (ii) the date of your death, but only to the
extent necessary to avoid such penalties under Section 409A of the Code. On the earlier of (A) the business day following the six-month anniversary of the date your separation from service becomes effective, and (B) your death, the Company shall pay
you in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid you prior to that date as described above. Neither the Company nor you shall have the right to accelerate or defer the
delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A of the Code. The Company makes no representation or warranty and shall have no liability to you or any other person if any provision of
this Agreement is determined to constitute deferred compensation subject to Section 409A of the Code, but do not satisfy an exemption from, or the conditions of, Section 409A of the Code. 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

 iii. Eleven Bio’s obligations to make the above payments and provide the above benefits
will be contingent upon your execution of and compliance with a release of claims (the “Release”), which Release must be signed and any applicable revocation period with respect thereto must have expired by the sixtieth (60th ) day following your termination of employment. The severance payments and benefits shall be paid or commence on the first payroll period following the date the waiver and release becomes
effective (the “Payment Date”). Notwithstanding the foregoing, if the 60th day following the date of termination occurs in the calendar year following the termination, then
the Payment Date shall be no earlier than January 1 of such subsequent calendar year. In addition, you must comply with all post-employment obligations, including those in the Employee Non-Competition, Non- Solicitation, Confidentiality
and Assignment Agreement that you shall sign as a condition of employment. 
 iv. The Company’s obligations to pay or provide the
Severance Benefits will be contingent upon your having tendered your resignation from the Board (and any other boards on which you serve at the request of the Company), effective as of the date of termination. 

v. You agree to give prompt written notice of any reemployment during the Severance Period that results in eligibility for comparable medical
and dental benefits. If the Company makes any overpayment of COBRA Benefits, you agree to promptly return any such overpayment to the Company. The foregoing shall not create any obligation on your part to seek reemployment after the date of
termination of your employment. 
 9. Definitions: For purposes of this letter agreement, “for Cause” shall mean the Company
has complied with the “Cause Process”, as defined below, following your committing one or more of the following (each a “Cause Condition”): (i) an act of material dishonesty involving the Company, embezzlement, or
misappropriation of assets or property of the Company; (ii) gross negligence or willful misconduct in connection with the performance of your duties, theft, fraud or breach of fiduciary duty to the Company; (iii) your willful, sustained, or repeated
failure to substantially perform the duties or obligations of your position (other than due to illness or injury); (iv) a violation of federal or state securities law; (v) the conviction of a felony or any crime involving moral turpitude, including
a plea of nolo contendere; (vi) a material breach of any of the Company’s written policies related to conduct or ethics; or (vii) a material breach of your Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement. 

“Cause Process” shall mean that (i) the Company reasonably determines, in good faith, that one of the Cause Conditions has occurred; (ii) the
Company notifies you in writing of the first occurrence of the Cause Condition within thirty (30) days of the Board becoming aware of such condition; (iii) the Company cooperates in good faith with your efforts, for a period not less than thirty
(30) days following such notice (the “Cause Cure Period”), to remedy the Cause 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

 Condition; (iv) notwithstanding such efforts, the Cause Condition continues to exist; and (v) the Company
terminates your employment within thirty (30) days after the end of the Cause Cure Period, provided that the Company will not be required to provide a Cause Cure Period in the event that a Cause Condition (x) is of the type described in clauses (iv)
or (v) of the first sentence of this Section 9; (y) is incapable of being cured; or (z) is required to be publicly disclosed under applicable securities law. 

If you cure to the Company’s satisfaction any Cause Condition during the applicable Cause Cure Period, Cause shall be deemed not to have occurred. If the
Company is not required to provide a Cause Cure Period, the Cause Process will be satisfied if the Company notifies you in writing of the first occurrence of the Cause Condition within thirty (30) days of the Board becoming aware of such condition
and terminates your employment within thirty (30) days of such notice. You are eligible for no more than two “cure” opportunities during your employment. 

“Change in Control Transaction” shall mean (i) a merger or consolidation of the Company with or into another corporation under circumstances where
the stockholders of the Company immediately prior to such merger or consolidation do not own after such merger or consolidation shares representing at least fifty percent (50%) of the voting power of the Company or the surviving, resulting or parent
corporation, as the case may be, (ii) a transfer of shares representing fifty percent (50%) or more of the voting power of the Company to any person who was not, on the Effective Date, a holder of stock of any class or preference or any stock option
of the Company, (iii) a liquidation of the Company, or (iv) a sale or other disposition of all or substantially all of the Company’s assets. 

“Good Reason” shall mean you have complied with the “Good Reason Process” as defined below, following the occurrence of one or more of the
following events: (i) any material diminution in your duties, authority or responsibilities, (ii) any material diminution in your base compensation; (iii) the relocation of your primary place of work more than fifty (50) miles from your primary
place of work for the Company on the Effective Date of this Agreement, or (iv) the material breach by the Company of any provision of this letter agreement or any other employment-related agreement between the Company and you (as defined below).

 “Good Reason Process” shall mean that (i) you reasonably determine in good faith that one of the foregoing “Good Reason” conditions
has occurred; (ii) you notify the Company in writing of the first occurrence of the Good Reason condition within thirty (30) days of the first occurrence of such condition; (iii) you cooperate in good faith with the Company’s efforts, for a
period not less than thirty (30) days following such notice (the “Cure Period”) to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) you terminate your employment within thirty
(30) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred. 

“Disability” shall mean your inability (as determined by the Company in good faith) to perform the essential functions of your position due to
physical or mental disability (after taking into 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

 account the Company’s obligation to provide reasonable accommodations in accordance with the Americans
with Disabilities Act of 1990 or analogous state law), which continues for a period of 90 days (whether or not consecutive) during any 12-month period. In connection with any determination regarding your possible Disability, you shall have the
right to provide to the Company, and the Company shall consider in good faith, any physical or mental evaluation performed by a competent physician of your selection. 

10. Modified Section 280G Cutback: Notwithstanding any other provision of this Agreement, except as set forth in Section 10.B, in
the event that the Company undergoes a “Change in Ownership or Control” (as defined below), the following provisions shall apply: 
  

	 	A.	The Company shall not be obligated to provide to you any portion of any “Contingent Compensation Payments” (as defined below) that you would otherwise be entitled to receive to the extent necessary to
eliminate any “excess parachute payments” (as defined in Section 280G(b)(1) of the Code) for you. For purposes of this Section 10, the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated
Payments” and the aggregate amount (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated
Amount.” 

  

	 	B.	Notwithstanding the provisions of Section 10.A, no such reduction in Contingent Compensation Payments shall be made if (1) the Eliminated Amount (computed without regard to this sentence) exceeds (2) 100% of the
aggregate present value (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of the amount of any additional taxes that would be incurred by you if the Eliminated Payments (determined
without regard to this sentence) were paid to you (including, state and federal income taxes on the Eliminated Payments, the excise tax imposed by Section 4999 of the Code payable with respect to all of the Contingent Compensation Payments in excess
of your “base amount” (as defined in Section 280G(b)(3) of the Code), and any withholding taxes). The override of such reduction in Contingent Compensation Payments pursuant to this Section 10.B shall be referred to as a “Section
10.B Override.” For purpose of this paragraph, if any federal or state income taxes would be attributable to the receipt of any Eliminated Payment, the amount of such taxes shall be computed by multiplying the amount of the Eliminated
Payment by the maximum combined federal and state income tax rate provided by law. 

  

	 	C.	For purposes of this Section 10 the following terms shall have the following respective meanings: 

i. “Change in Ownership or Control” shall mean a change in the ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in accordance with Section 280G(b)(2) of the Code. 
 ii. “Contingent
Compensation Payment” shall mean any payment (or benefit) in the nature of compensation that is made or made available (under this Agreement or otherwise) to a “disqualified individual” (as defined in Section 280G(c) of the Code) and
that is contingent (within the meaning of Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company. 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

	 	D.	 Any payments or other benefits otherwise due to you following a Change in Ownership or Control that could
reasonably be characterized (as determined by the Company) as Contingent Compensation Payments (the “Potential Payments”) shall not be made until the dates provided for in this Section 10.D. Within 30 days after each date on which you
first become entitled to receive (whether or not then due) a Contingent Compensation Payment relating to such Change in Ownership or Control, the Company shall determine and notify you (with reasonable detail regarding the basis for its
determinations) (1) which Potential Payments constitute Contingent Compensation Payments, (2) the Eliminated Amount and (3) whether the Section 10.B Override is applicable. Within 30 days after delivery of such notice to you, you shall deliver
a response to the Company (the “Executive Response”) stating either (A) that you agree with the Company’s determination pursuant to the preceding sentence or (B) that you disagrees with such determination, in which case you shall set
forth (x) which Potential Payments should be characterized as Contingent Compensation Payments, (y) the Eliminated Amount, and (z) whether the Section 10.B Override is applicable. In the event that you fail to deliver an Executive Response on
or before the required date, the Company’s initial determination shall be final. If you state in the Executive Response that you agree with the Company’s determination, the Company shall make the Potential Payments to you within three
(3) business days following delivery to the Company of the Executive Response (except for any Potential Payments which are not due to be made until after such date, which Potential Payments shall be made on the date on which they are due). If
you state in the Executive Response that you disagree with the Company’s determination, then, for a period of sixty (60) days following delivery of the Executive Response, you and the Company shall use good faith efforts to resolve such
dispute. If such dispute is not resolved within such 60-day period, such dispute shall be settled exclusively by arbitration in Cambridge, Massachusetts, in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The Company shall, within three (3) business days following delivery to the Company of the Executive Response, make to you those Potential
Payments as to which there is no dispute between the Company and you regarding whether they should be made (except for any such Potential Payments which are not due to be made until after

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

	 	
such date, which Potential Payments shall be made on the date on which they are due). The balance of the Potential Payments shall be made within three (3) business days following the
resolution of such dispute.

  

	 	E.	The Contingent Compensation Payments to be treated as Eliminated Payments shall be determined by the Company by determining the “Contingent Compensation Payment Ratio” (as defined below) for each Contingent
Compensation Payment and then reducing the Contingent Compensation Payments in order beginning with the Contingent Compensation Payment with the highest Contingent Compensation Payment Ratio. For Contingent Compensation Payments with the same
Contingent Compensation Payment Ratio, such Contingent Compensation Payment shall be reduced based on the time of payment of such Contingent Compensation Payments with amounts having later payment dates being reduced first. For Contingent
Compensation Payments with the same Contingent Compensation Payment Ratio and the same time of payment, such Contingent Compensation Payments shall be reduced on a pro rata basis (but not below zero) prior to reducing Contingent Compensation Payment
with a lower Contingent Compensation Payment Ratio. The term “Contingent Compensation Payment Ratio” shall mean a fraction the numerator of which is the value of the applicable Contingent Compensation Payment that must be taken into
account by you for purposes of Section 4999(a) of the Code, and the denominator of which is the actual amount to be received by you in respect of the applicable Contingent Compensation Payment. For example, in the case of an equity grant that
is treated as contingent on the Change in Ownership or Control because the time at which the payment is made or the payment vests is accelerated, the denominator shall be determined by reference to the fair market value of the equity at the
acceleration date, and not in accordance with the methodology for determining the value of accelerated payments set forth in Treasury Regulation Section 1.280G-1Q/A-24(b) or (c)). 

 

	 	F.	The provisions of this Section 10 are intended to apply to any and all payments or benefits available to you under this Agreement or any other agreement or plan of the Company under which you receive Contingent
Compensation Payments. 

 11. General: By signing below, you represent that you are not bound by any employment contract,
restrictive covenant or other restriction preventing or limiting you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter. You also agree that you
will not disclose to anyone at the Company, bring onto Company premises, or use in the course of your employment at the Company, any confidential information or trade secrets belonging to any former employer (with the exception of Viventia) or to
any other entity. 
 After the Effective Date, this letter (and the plans, documents, and policies referenced herein) shall constitute our entire agreement
regarding the terms and conditions of your employment 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911 

 

 
  
  

 

 with the Company and shall supersede any prior agreements or other promises or statements (whether oral or
written) regarding the terms of your employment, including, without limitation, your Employment Agreement with Viventia Bio USA Inc. dated August 10, 2015. The terms described herein cannot be modified except in writing by you and the Company.
Failure of either party to this letter agreement to insist upon strict compliance with any of the terms, covenants or conditions hereof will not be deemed a waiver of such terms, covenants or conditions. In the event of any inconsistency between
this letter agreement and any other contract between the Company and you, including the Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement, the provisions of this letter agreement will prevail. 

We are thrilled to have you join the leadership team at Eleven. Please contact me if you have any questions or need more information. 

 

	
	Sincerely,
	  
 John McCabe

	Chief Financial Officer

 I accept the above terms of employment as stated: 
  

					
	 /s/ Arthur P. DeCillis
	 		 	 September 20, 2016

	Arthur P. DeCillis, M.D.	 		 	Date

 Enclosure: 
  

	•	 	Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement 

  
  

215 First Street, Suite 400, Cambridge, MA 02142 PHONE: 617-871-9911 

FAX: 617-858-0911Exhibit 10.1

 

 

September 7, 2016

Sense Technologies, Inc.

Bruce Schreiner

2535 N. Carleton Avenue

Grand Island, NE  68803

 

STRICTLY CONFIDENTIAL

Dear Sirs:

This letter serves as a binding letter of intent between R and D USA, LLC a Nebraska Limited Liability Company d/b/a Scribner Natural Products (collectively "we" or the "Investor") and Sense Technologies, Inc. ( "the Company" or “Sense”), a corporation established under the laws of British Columbia, Canada and having a place of business at 2535 N. Carleton Avenue, Grand Island, Nebraska, United States whereby the Investor hereby proposes to the company to acquire a portion of the issued share capital in the Company, by way of subscription of new shares and/or (if thought desirable) derivative instruments convertible into shares of the Company, together with all rights, benefits and interest thereof or arising therefrom or in connection thereto, and free from liens, charges, encumbrances or third party rights, in consideration for which we shall transfer and assign all of our beneficial interests ("Business Interests") in Scribner's' soy meal and soy oil products and Soy non-GMO products, certified Soy organic products, refined Soy oils, agricultural Soy oils, and other related Soy Based specialty fertilizer crop products, including all intellectual property, the last being inclusive of all present and future patents and/or patent applications of Scribner’s Soy Based Products .

1.   Structure.  At present, we are structuring the transaction as a sale of the business assets and interests to the Company, in consideration for which the Company shall raise $1,000,000 for the purpose of working capital for the soybean processing mill, and assist with acquiring an $800,000 real estate, equipment loan and working capital loan to settle all accounts with current lien holders for the facility and equipment located at 137 Pebble St. Scribner, NE 68057, loan and issue and allot to the Investor, or as we direct, (i) common shares and (ii) convertible preferred shares, which shares will be identical to the common shares of the Company except that they will have a conversion feature permitting the holder of such shares to convert them into an aggregate number of common shares.  Such process will commence at the date of the signing of this agreement. The shares will be issued in two tiers of 1,000,000 common shares to each David Dennis and Richard Bell or their respective assignees. 1,000,000 shares split between them upon signing this agreement and 1,000,000 split between them upon getting the plant in Scribner, Nebraska, to be currently producing products.  In addition there will be $7,000,000 in Preferred convertible shares in the quantity of 700,000 preferred shares that will be convertible at 20 common shares to one preferred share to result in 14 million shares of common stock, and will have voting rights of that many shares of common stock whether the shares have been converted or not.  The common preferred convertible shares may be issued to more than one assigned entity or person as designated by David Dennis and Richard Bell. The Execution of this transition will in no way be impeded by the Company. We may, however, opt for another form of transaction, based upon a review of the proposed tax, financial, corporate and legal structures, and other legitimate considerations of the Investor (and such transaction, in any form whatsoever, being referred to herein as an "acquisition").  No commissions or investment fees will be paid regarding this transaction. In addition upon signing of this agreement by all parties, Richard W. Bell and David E. Dennis will be appointed to the Board of Sense Technologies, Inc., and will each be given the title of Executive Vice President or other title as determined by the board of the company and/or Bruce Schreiner.

2.   Transition Period.  Upon your execution of this Agreement, During the Transition Period (Expected to take 4 weeks), the Company will allow us, the investor, and our agents, lawyers, accountants and advisors ("Advisors") full and complete access to the Company's books, records, information and data relating to the business affairs, financial legal, structural and regulatory conditions of the Company and its current business of developing and marketing automotive backing awareness products (Existing Company Business").  You will use your best endeavors to ensure that any information provided to Investor or our Advisors is accurate and not misleading. During the Transition Period, we will use our reasonable endeavors to procure the Company's access to the financial, legal and operational affairs of the Investor.

 

3.   Binding Agreement.  This Agreement is a Definitive Agreement between the parties as outlined herein. Closing will occur subject to the events listed in Annexure A hereto and such other conditions customary to the nature of the acquisition.

If any party shall be in breach of the obligations above, then the breaching party shall be liable to indemnify the non-breaching party against all claims, liabilities, costs and expenses suffered or incurred therefore.  The Company shall promptly advise Richard Bell, David Dennis and the Investor of all the material terms and conditions of any inquiries or proposals relating to an Acquisition Transaction and the identity of the party making any such inquiry or proposal or on whose behalf such inquiry or proposal is being made. 

4.   Operation of the Business.  The proposed terms and conditions set forth herein are based upon the assumption that (i) the Company will continue to maintain its status as a public reporting company, with its shares available for quotation and trading on the OTC, (ii) it will continue to carry Existing Company Business in the ordinary course of business consistent with its practice, and (iii) its financial position shall not materially deteriorate from that as at February 28, 2016 or its latest SEC filing of its financial information.  Without prejudice to the generality of the foregoing, the Company shall (a) not enter into or amend any existing agreements and contracts (otherwise than in the ordinary course of business) including but not limited to agreements with its directors or officers or employees, or (b) enter into any new transaction or arrangement other than in the ordinary course of business

5.   Confidentiality

5.1  Each of the parties, Richard Bell, David Dennis and the Investor and the Company (each, a "Party") shall not, without the prior written approval of the other Party, disclose or use for any purpose as contemplated in this Agreement, the other Party's Confidential Information.

5.2   Each party shall take reasonable steps to ensure that its employees, servants and agents and any contractors or sub-contractors engaged for the purpose of the transactions in this Agreement, do not make public, disclose or use for any other purpose the other Party's Confidential Information.

5.3   Each Party (in this paragraph, "recipient Party") shall on demand from the other Party return to the other Party, or, at the option of the other Party, destroy, any documents, records or material s supplied by the other Party to the recipient Party in connection with the transactions contemplated by this Agreement.

5.4   For the purpose of this Clause 6, "Confidential Information" means the confidential information of a Party which related to the subject matter of this Agreement and the Due Diligence Exercise and includes information relating to:

	
(a)

	
 the business, financial and operational information and plans of the Company;

	
(b)

	
 the business, financial and operational information of the Investor;

	
(c)

	
 any information proprietary to, or otherwise designated in writing as confidential by, the  disclosing Party; and

 

	
(d)

	
the subject matter of this Agreement to be entered into between the Parties (if any) and the identity of the Parties but excluding any information which:

 

	
(a)

	
 is in or comes into public domain prior to the disclosure by the disclosing Party thereof;

	
(b)

	
is independently developed by the disclosing Party without breach of this paragraph;

	
(c)

	
is received by the disclosing Party without confidentiality limitation from a third party, or

	
(d)

	
is required to be disclosed pursuant to a statutory obligation, the rules and regulations of applicable stock exchanges, any other federal, state or foreign regulatory agency, FINRA and/or any stock exchange where the securities of the Company is or may become listed, the order of a court or competent jurisdiction or that of a competent regulatory body.

Notwithstanding Clause 5.4(d), the Company acknowledges and agrees that it will, if required by the Investor and/or the Business Interests, enter into separate confidentiality agreements with them on such terms as they may require agreeing to keep confidential, and use only for the purposes of assessing whether to proceed with the transactions contemplated herein, al information supplied by them relating to their business affairs, financial, legal and other conditions of their business, or of which the Company may become aware, pursuant to the Due Diligence exercise to be carried out by the Company.

6.   Notices.  Notices regarding this Agreement should be sent to:

		R and D, USA, LLC	Sense Technologies, Inc.

		Richard W. Bell	Bruce Schreiner

		137 Pebble Street	2535 N. Carleton Avenue

		Scribner, NE  68057	Grand Island, NE  68803

7.   Governing Law.  This  agreement shall be governed by, and construed in accordance with the laws of Nebraska without regard to the principles of conflicts of laws applied thereby, and shall supersede any and all prior written or oral agreements between the parties hereto.  No change, modification, alteration, or addition to any provision of this Letter of Intent shall be binding unless in writing and signed by an authorized representative of each of the parties hereto.

 8.   Counterparts.  Acceptance of this agreement may be executed in any number of counterparts, each of which when delivered shall be deemed an original and all of which together shall constitute one and the same document.  Signatures may be made by facsimile transmission.

We, the undersigned hereby acknowledge and confirm our acceptance of this agreement.

Yours sincerely,

For and on behalf of

R and D USA, LLC

d/b/a Scribner Natural Products

__________________________ ________________________

/s/ Richard W. Bell                            /s/ David E. Dennis

Name: Richard W. Bell                      Name: David E. Dennis

Title: Member/Manager                   Title: Member/Manager

Date: September 7, 2016                   Date: September 7, 2016

For and on behalf of

Sense Technologies, Inc.

/s/ Bruce Schreiner                                

Name: Bruce Schreiner

Title: President

Date: September 7, 2016

ANNEX A

Conditions Precedent

	
 (i)

	
All necessary regulatory approvals to enter into and consummate the transactions provided in this shall have been obtained, and all applicable publication and other requirements under the applicable laws, rules and regulations have been fully satisfied or complied with, as applicable; and

	
(ii)

	
Employment contracts with the key people on terms satisfactory to the Investor and the Company (and which include customary confidentiality, irrevocable assignment of intellectual property as outlined above, non-solicitation and non-competition covenants) will be executed, and compensation for each of Richard Bell and David Dennis will be set at $180,000 annualized each for a three-year period, with an increase for inflation only during that three-year period. Compensation for each of Brian Bangs and Bruce Schreiner will be set at $90,000 annualized each for a three year period with an increase for inflation only during that three year period. Compensation may be deferred based upon availability of funds but in that case the compensation will continue to accrue as outlined above.

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