Document:

Exhibit 10.5

 

	
Guarantee and indemnity deed
    

 

Date

 

Parties

 

	
Name
    	
Cortendo   AB, a company incorporated in Sweden
    
	
Short form name
    	
Guarantor
    
	
Notice details
    	
900 Northbrook Drive,   Trevose, Pennsylvania 19053, United States of America

Email:   SLong@Cortendo.com
    
	
 
    	
Attention: Stephen   Long, General Counsel
    

 

	
Name
    	
Antisense   Therapeutics Ltd
    
	
ACN
    	
095 060 745
    
	
Short form name
    	
Licensor
    
	
Notice details
    	
6 Wallace Avenue,   Toorak, Victoria 3142, Australia

Email:   mark.diamond@antisense.com.au
    
	
 
    	
Attention: Mark   Diamond, CEO
    

 

Background

 

A                                    Licensor and Licensee are, simultaneously with the date hereof, entered into that certain technology licence agreement (Licence Agreement) under which Licensor grants to Licensee an exclusive licence to Exploit the Technology in the Territory within the Field for the Purpose (as such terms are defined in the Licence Agreement).

 

B                                    Licensee is a wholly-owned subsidiary of the Guarantor, and the Guarantor is entering this deed to guarantee the performance of Licensee under the Licence Agreement and indemnify the Licensor, as provided in this deed.

 

	
Agreed terms
    

 

1.        Defined terms & interpretation

 

1.1                            Defined terms

 

Capitalised terms used in this deed that are defined in the Licence Agreement have the meanings assigned to such terms in the Licence Agreement.  Other capitalised terms used in this deed have the following meanings:

 

Dollars means the lawful currency of the United States of America.

 

Guarantee means a guarantee, indemnity, letter of credit, legally binding letter of comfort or other obligation of any kind:

 

(a)                              to provide funds (whether by the advance or payment of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment or discharge of;

 

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(b)                              to indemnify any person against the consequences of default in the payment of; or

 

(c)                               to be responsible for,

 

an obligation or monetary liability of another person or the assumption of any responsibility or obligation in respect of the solvency or financial condition of another person.

 

Guarantee and Indemnity means the guarantee and indemnity contained in clause 2.

 

Guaranteed Money means all money and amounts (in any currency) that the Licensee is or may become liable at any time (presently, prospectively or contingently, whether alone or not and in any capacity) to pay to or for the account of the Licensor (whether alone or not and in any capacity) under or in connection with a Licence Document.  It includes money and amounts:

 

(a)                              in the nature of principal, interest, fees, costs, charges, expenses, duties, indemnities, Guarantee obligations or damages;

 

(b)                              whether arising on or after the date of this deed; and

 

(c)                               which an Obligor would be liable to pay but for an Insolvency Event in respect of the Licensee.

 

Insolvency Event means, in respect of an Obligor, any of the following occurring:

 

(a)                              it files in any court or agency pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for reorganisation or for an arrangement or for the appointment of a receiver or trustee of it or of substantially all of its assets;

 

(b)                              it proposes a written agreement of composition or extension of substantially all of its debts;

 

(c)                               it is served with an involuntary petition against it, filed in any insolvency proceeding, and such petition is not dismissed within sixty (60) days after the filing thereof;

 

(d)                              it makes an assignment of substantially all of its assets for the benefit of creditors;

 

(e)                               except with the Licensor’s consent:

 

(i)                                  it is the subject of a Liquidation, or an order or an application is made for its Liquidation; or

 

(ii)                               an effective resolution is passed or meeting summoned or convened to consider a resolution for its Liquidation; or

 

(f)                                it stops or suspends payment to creditors generally.

 

Licence Document means:

 

(a)                              this deed;

 

(b)                              the Licence Agreement;

 

(c)                               any other document that relates to the Guaranteed Money;

 

(d)                              a document that the Guarantor and the Licensor agree in writing is a ‘Licence Document’; and

 

(e)                               a document entered into or given under or in connection with, or for the purpose of amending or novating, any document referred to in paragraphs (a) — (d) of this definition.

 

Liquidation means:

 

(a)                              a winding up, dissolution, liquidation, provisional liquidation, administration, bankruptcy or other proceeding for which a receiver or trustee is appointed; or

 

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(b)                              an arrangement, moratorium, assignment or composition with or for the benefit of creditors or any class or group of them.

 

Licensee means Cortendo Cayman Ltd, a company incorporated in the Cayman Islands, or any of its Affiliates to whom it assigns or novates its rights and obligations under the Licence Agreement.

 

Loss means a loss, claim, action, damage, liability, cost, charge, expense, penalty, compensation, fine or outgoing suffered, paid or incurred.

 

Notice means a notice given in accordance with clause 8.1.

 

Obligor means:

 

(a)                              the Licensee; and

 

(b)                              the Guarantor.

 

Power means any right, power, discretion or remedy of the Licensor under any Licence Document or applicable Law.

 

Security Interest means any:

 

(a)                              security for payment of money, performance of obligations or protection against default (including a mortgage, bill of sale, charge, lien, pledge, trust, power or title retention arrangement, right of set-off, assignment of income, garnishee order or monetary claim and flawed deposit arrangements); and

 

(b)                              thing or preferential interest or arrangement of any kind giving a person priority or preference over claims of other persons or creditors with respect to any property or asset,

 

and includes any agreement to create any of them or allow them to exist.

 

1.2                            Interpretation

 

The provisions of clauses 1.2 (Interpretation) and 1.3 (Headings) of the Licence Agreement are incorporated in, and apply to, this deed as if set out in full with any necessary amendments.

 

2.        Guarantee and Indemnity

 

2.1                            Consideration

 

The Guarantor acknowledges entering this deed in return for the Licensor agreeing to grant an exclusive licence under the Licence Agreement to the Licensee, at the Guarantor’s request, for the entry by the Licensor into the Licence Documents and for other valuable consideration, and that the Licensor relies on the Guarantee and Indemnity.

 

2.2                            Guarantee

 

The Guarantor irrevocably and unconditionally guarantees to the Licensor as primary obligor:

 

(a)                              the payment of the Guaranteed Money in accordance with the Licence Documents; and

 

(b)                              the performance by the Licensee of all its other obligations under the Licence Documents.

 

2.3                            Non-payment or non-performance

 

If the Licensee does not:

 

(a)                              pay any Guaranteed Money (or money which would be Guaranteed Money if its payment was enforceable, valid and not illegal) in accordance with the Licence Documents, the Guarantor must pay that money on demand as if it was the principal obligor; or

 

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(b)                              perform any of its other obligations under a Licence Document, the Guarantor must perform, or procure the performance of, those obligations (without the need for demand by the Licensor) in accordance with the Licence Documents.

 

2.4                            Indemnity

 

The Guarantor indemnifies the Licensor against, and must pay to the Licensor on demand amounts equal to, any Loss of the Licensor as a result of or in connection with:

 

(a)                              any obligation or liability of, or obligation or liability guaranteed by, the Guarantor under this clause 2 (or which would be such an obligation or liability if enforceable, valid and not illegal) being or becoming unenforceable, invalid or illegal;

 

(b)                              an Obligor failing, or being unable, to pay any Guaranteed Money or to perform any of its other obligations in accordance with the Licence Documents;

 

(c)                               any Guaranteed Money (or money which would be Guaranteed Money if it were recoverable) not being recoverable from the Licensee; or

 

(d)                              an Insolvency Event in respect of any Obligor (but only to the extent that Loss relates to the Guaranteed Money),

 

in each case, for any reason and whether or not the Licensor knew or ought to have known anything about those matters.

 

2.5                            Demands

 

A demand under this clause 2 may be made at any time and from time to time.  A demand for any Guaranteed Money need only specify the amount owing, and need not specify how that amount is calculated.

 

3.        Extent of guarantee and indemnity

 

3.1                            Immediate recourse

 

The Guarantor waives any right it may have to require the Licensor to proceed against, or enforce any other rights or claim payment from, any other person before claiming from the Guarantor under the Guarantee and Indemnity.  This waiver applies irrespective of any law or any provision of a Licence Document to the contrary.

 

3.2                            Continuing obligations

 

The Guarantee and Indemnity:

 

(a)                              extends to the present and future balance of all the Guaranteed Money (including in respect of any contingent liability of the Licensee in connection with the Licence Documents) as varied from time to time, including as a result of:

 

(i)                                  the creation or designation of any new Licence Document after the date of this document;

 

(ii)                               any amendment to, or waiver under, any Licence Document; or

 

(iii)                            the provision of new or further accommodation to the Licensee,

 

and whether or not with the consent of, or notice to, the Guarantor;

 

(b)                              is not wholly or partially discharged by the payment of any Guaranteed Money, the performance of any obligation under the Licence Documents or anything else; and

 

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(c)                               continues until, subject to clause 8.2 or clause 8.3, all Guaranteed Money has been paid in full and the Guarantor has completely performed its obligations under the relevant Licence Documents.

 

3.3                            Liability not affected

 

The Guarantor’s liability under each Licence Document is not adversely affected by anything which would otherwise reduce or discharge that liability (whether or not any Obligor or the Licensor is aware of it and despite any legal rule to the contrary).

 

3.4                            Principal and independent obligation

 

Each guarantee, indemnity and other obligation of the Guarantor in this deed is a principal and independent obligation and is not ancillary, collateral or limited by reference to any other obligation of any Obligor.

 

3.5                            Deferral of certain rights

 

Until all Guaranteed Money has been received and the Licensor is satisfied that it will not have to repay any money received by it, the Guarantor may not (either directly or indirectly) without the Licensor’s prior written consent:

 

(a)                              claim, exercise or attempt to exercise a right of set-off, counterclaim or any other right or raise any defence against an Obligor which might reduce or discharge the Guarantor’s liability under the Guarantee and Indemnity; or

 

(b)                              claim or exercise a right of subrogation or contribution or otherwise claim the benefit of:

 

(i)                                  a Guarantee in favour of the Guarantor relating to the Guaranteed Money; or

 

(ii)                               any Security Interest or Guarantee in favour of the Guarantor which would rank in priority or preference to a Security Interest or Guarantee relating to the Guaranteed Money,

 

and if the Guarantor receives any money in breach of this clause 3.5(b) the Guarantor must promptly pay that money to the Licensor.

 

3.6                            Prove in Liquidation

 

The Guarantor irrevocably authorises the Licensor to prove in the Liquidation of any Obligor for all money that the Guarantor can claim against the Obligor on any account.  The Licensor need only account to the Guarantor for dividends it receives in excess of the Guaranteed Money, without interest.

 

3.7                            Variations and replacements

 

The Guarantor acknowledges that the Licence Documents may be varied or replaced from time to time.  The Guarantor confirms that the Guaranteed Money includes any amount payable under any Licence Document which is relevant to the Guaranteed Money as varied or replaced.  The Guarantor confirms that this applies regardless of:

 

(a)                              how a Licence Document is varied or replaced;

 

(b)                              the reasons for the variation or replacement; and

 

(c)                               whether the Guaranteed Money decreases or increases or a Licence Document is otherwise more onerous as a result of the variation or replacement.

 

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4.        Representations and warranties

 

4.1                            Representations and warranties

 

The Guarantor represents and warrants to the Licensor that:

 

(a)                              (status) it is properly registered and incorporated as a corporation and validly exists under the laws of its jurisdiction of incorporation;

 

(b)                              (capacity) it acts on its own behalf on entering into the Licence Documents and it is not a trustee of any trust;

 

(c)                               (power and authority) it has the power, right and necessary corporate authority to own its assets, carry on its current and contemplated business, and to enter into, and exercise its rights and observe and perform its obligations under, each Licence Document to which it is expressed to be a party;

 

(d)                              (no immunity) neither it nor any of its assets is immune from suit or execution;

 

(e)                               (Licence Documents) each Licence Document to which it is expressed to be a party is (subject to equitable principles and insolvency laws generally affecting creditors’ rights and applicable stamping and registration) valid, binding and enforceable against it in accordance with the terms of those documents, and the transactions contemplated by those documents are for its commercial benefit;

 

(f)                                (foreign entity) in the case of any Licence Document entered into by the Guarantor that was not incorporated or otherwise created in an Australian jurisdiction, both the governing law of the Licence Document, and any judgement obtained against the Guarantor in the jurisdiction of that governing law, will be recognised and enforced in the Guarantor’s jurisdiction of incorporation or creation;

 

(g)                               (no conflicts) its execution and performance of each Licence Document to which it is expressed to be a party do not and will not conflict with or contravene any other law or a judgment, ruling, order, document or agreement applying to it or its assets or its constituent documents; or

 

(h)                              (solvency) it is solvent and there are no reasonable grounds to suspect that it is unable to pay its debts as and when they become due and payable.

 

4.2                            Repetition

 

The Guarantor repeats each representation and warranty in this clause 4 with reference to the facts and circumstances at the time on each day while any Guaranteed Money exists.

 

5.        Enforcement costs general indemnity

 

5.1                            Enforcement costs and expenses

 

The Guarantor must pay or reimburse on demand all costs and expenses of the Licensor (and any of its respective officers, employees and agents) in connection with enforcing a Licence Document, or exercising, enforcing or protecting a Power, or preparing or attempting to do so.  This includes legal costs and expenses (on a full indemnity basis).

 

5.2                            General indemnity

 

The Guarantor indemnifies the Licensor (and its officers, employees and agents) against, and must pay to the Licensor on demand amounts equal to, any Loss arising as a result of or in connection with:

 

(a)                              any payment required under a Licence Document not being made in accordance with clause 6;

 

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(b)                              the exercise or attempted exercise of any Power;

 

(c)                               any enquiry, investigation, subpoena (or similar order) or litigation with respect to the Guarantor or with respect to the transactions contemplated under any Licence Document; and

 

(d)                              the Licensor acting or relying in good faith on any Notice or other communication from, or genuinely believed to be from, the Guarantor,

 

including any legal costs and expenses (on a full indemnity basis).

 

6.        Payments

 

6.1                            Payment requirements

 

All payments by the Guarantor under this deed must be made to an account nominated by the Licensor.  Payments must be made in Dollars, in immediately available funds and in full without set-off, counterclaim or, subject to clause [22] (Withholding Tax) of the Licence Agreement, deduction or withholding.

 

6.2                            Insufficient payments

 

The Licensor may apply all money received from the Guarantor under the Licence Documents (even if insufficient to discharge all of the Guarantor’s obligations at that time) to reduce the Guaranteed Money in the order, and to satisfy any part of the Guaranteed Money, as the Licensor sees fit.  An application by the Licensor will override any appropriation made by the Guarantor.

 

7.        Assignment

 

(a)                              The Guarantor may not assign, transfer, novate or otherwise deal with all or any of its rights, interests or obligations under any Licence Document without the Licensor’s prior written consent (not to be unreasonably withheld, conditioned or delayed); provided, however, that, subject to clause 7(b), in the event that the Licence Agreement is being assigned to a Third Party pursuant to clause [26.3(a)(ii)] (Assignment by Cortendo) of the Licence Agreement, and if:

 

(i)                                  at the time of such assignment, such Third Party is a publicly listed entity on NASDAQ or a comparable internationally recognised stock exchange and has a market capitalisation of at least $100 million (based on its average market capitalisation over the three month period immediately preceding the assignment), then the Guarantee and Indemnity under this deed, and this deed, shall terminate upon the consummation of such transaction; or

 

(ii)                               at the time of such assignment, such Third Party does not meet the requirements in paragraph (i), then either:

 

(A)                            the Guarantee and Indemnity provided under this deed shall continue in full force and effect; or

 

(B)                            the Guarantor shall provide a substitute guarantee and indemnity to the Licensor, on equivalent terms to those provided in this deed, from a Third Party that does meet the requirements in paragraph (i); or

 

(C)                            the Guarantor shall obtain the Licensor’s prior written consent (not to be unreasonably withheld, conditioned or delayed) to the termination of the Guarantee and Indemnity pursuant to this deed, in which case then the Guarantee and Indemnity under this deed, and this deed, shall terminate upon the consummation of such transaction.

 

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(b)                              The Guarantor acknowledges and agrees that:

 

(i)                                  it may not assign, transfer or novate this deed; and

 

(ii)                               the Guarantee and Indemnity, and this deed, will continue in full force and effect,

 

if the Licensee novates or assigns the Licence Agreement to a Third Party incorporated in Ireland as part of the Guarantor’s proposed corporate restructuring as disclosed by Guarantor to Licensor prior to executing this deed.

 

(c)                               The Licensor may assign, transfer, novate or otherwise deal with all or any of its rights and obligations under any Licence Document (other than the Licence Agreement, to which clause [26.4] (Assignment by ATL) of the Licence Agreement applies) without the consent of any person.

 

8.        Other provisions

 

8.1                            Notices, demands and communications

 

Clause [25] (Notices and other communications) of the Licence Agreement applies to the giving of any notice, demand, consent, approval or communication in connection with this deed.

 

8.2                            Reinstating avoided transaction

 

The Guarantor agrees that if a payment or other transaction relating to the Guaranteed Money is void, voidable, unenforceable or defective for any reason or a related claim is upheld, conceded or settled, other than any defence or claim against the Licensor by the Licensee under the Licence Agreement (each an Avoidance), then even though the Licensor knew or should have known of the Avoidance:

 

(a)                              each Power and the Guarantor’s liability under each Licence Document will be what it would have been, and will continue, as if the payment or transaction that is the subject of the Avoidance had not occurred; and

 

(b)                              the Guarantor will immediately execute and do anything necessary or required by the Licensor to restore the Licensor to its position immediately before the Avoidance.

 

This clause survives any termination or full or partial discharge or release of any Licence Document.

 

8.3                            Term of obligations

 

The Guarantor agrees that its obligations in the Licence Documents continue from the date of the relevant document until, subject to clause 8.2, the Guaranteed Money is fully and finally repaid; provided that that this deed may be terminated upon an assignment of the Licence Agreement as provided in clause 7(a).

 

8.4                            Incorporated provisions

 

Clauses [13] (Confidential Information), [21] (Goods and services taxes), [22] (Withholding Tax), [26.8] (Costs), [26.9] (Set-off), [26.12] (No merger), [26.13] (Further action), [26.14] (Severability) and [26.15] (Waiver) of the Licence Agreement are incorporated in, and apply to, this deed as if set out in full with any necessary amendments.

 

8.5                            Indemnities and reimbursement obligations

 

The Licensor need not incur an expense or make a payment before enforcing an indemnity or reimbursement obligation in a Licence Document.  Unless otherwise stated, each such indemnity or reimbursement obligation is separate and independent of each other obligation of the party giving it, is absolute, irrevocable, unconditional and payable on demand and continues despite any settlement of account, termination of any Licence Document or anything else.

 

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8.6                            Notices or demands as evidence

 

A notice or certificate from or demand by the Licensor stating that a specified sum of money is owing or payable under a Licence Document or stating any other fact or determination relevant to the rights or obligations of the Licensor or an Obligor under a Licence Document, is taken to be correct unless proved incorrect.

 

8.7                            Law and legislation

 

To the extent permitted by Law:

 

(a)                              each Licence Document prevails to the extent of inconsistency with any Law; and

 

(b)                              any present or future legislation operating to reduce the Guarantor’s obligations under a Licence Document or the effectiveness of any Power is excluded.

 

8.8                            Variation

 

A variation of this deed must be in writing and signed by or on behalf of each party to it.

 

8.9                            Governing law, jurisdiction and service of process

 

This deed is governed by the laws of England and Wales, and each party irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of London, England.

 

8.10                     Counterparts

 

This deed may be executed in any number of counterparts.  All executed counterparts constitute one document.

 

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Signing page
    

 

EXECUTED as a deed

 

 

Guarantor

 

Executed by Cortendo AB

 

 

	
/s/ Matthew Pauls
    	
 
    
	
Signature of   authorised officer  
    	
 
    
	
 
    	
 
    
	
Matthew Pauls
    	
 
    
	
Name of authorised   officer (print)
    	
 
    
	
 
    	
 
    
	
President &   Chief Executive Officer
    	
 
    
	
Title of authorised   officer (print)
    	
 
    

 

 

Licensor

 

	
Executed by Antisense Therapeutics   Ltd
   ACN 095 060 745
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
¬
    	
 
    	
¬
    
	
Signature of director
    	
 
    	
Signature of   director/company secretary
 (Please delete as applicable)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name of director   (print)
    	
 
    	
Name of   director/company secretary (print)
    	
 
    

 

10

 

	
Signing page
    

 

EXECUTED as a deed

 

 

Guarantor

 

Executed by Cortendo AB

 

 

	
 
    	
 
    
	
Signature of authorised   officer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name of authorised   officer (print)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Title of authorised   officer (print)
    	
 
    

 

 

Licensor

 

	
Executed by Antisense Therapeutics   Ltd
   ACN 095 060 745
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ Mark Diamond
    	
¬
    	
/s/ Phillip Hains
    	
¬
    
	
Signature of director
    	
 
    	
Signature of   director/company secretary
 (Please delete as applicable)  
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Mark Diamond
    	
 
    	
Phillip Hains
    	
 
    
	
Name of director   (print)
    	
 
    	
Name of company   secretary (print)
    	
 
    

 

11Exhibit 10.6

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by and between Cortendo AB, a Swedish limited liability company registered with the Company Registry (Sw. Bolagsverket) with organization no. 556537-6554 (the “Company”), and Matthew Pauls (“Executive”) as of August 23, 2014 (the “Effective Date”).

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, the Company and Executive entered into an offer letter agreement dated July 23, 2014 (the “Offer Letter”);

 

WHEREAS, the Company desires to continue to retain the services of Executive as set forth in this Agreement, and Executive desires to serve the Company in such capacity, subject to the terms and conditions of this Agreement; and

 

WHEREAS, the Company and Executive intend for this Agreement to replace with Offer Letter except as otherwise set forth herein.

 

NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

 

ARTICLE I

 

EMPLOYMENT AND DUTIES

 

Section 1.01                            Employment and Term.  The Executive shall be employed by the Company for the period commencing on the Effective Date and expiring on the second anniversary of the Effective Date, unless sooner terminated as set forth in this Agreement (the “Term”); provided, however, that the Term shall thereafter be automatically extended for additional one-year periods unless, at least 90 days prior to expiration of the Term, either (a) the Company gives notice to Executive not to extend the Term or (b) Executive gives notice to the Company not to extend the Term.

 

Section 1.02                            Position and Duties.  Executive shall serve as Chief Executive Officer of the Company, or in such other positions as the parties may agree and shall report directly to the Board of Directors of the Company (the “Board”).  Executive shall have the duties and responsibilities customarily associated with such position and will perform such other duties as reasonably directed by the Board consistent with such position(s).

 

Section 1.03                            Scope.  Executive will devote substantially all of his business time, attention, skills and efforts to the performance of his duties.  Executive acknowledges that his duties and responsibilities require Executive’s full-time business efforts and agrees to not engage in any other business activity or interests which materially interfere or conflict with the performance of Executive’s duties.  Notwithstanding the foregoing, Executive may (a) upon receipt of prior written approval by the Board, serve on for profit corporate boards that do not compete with the Company, (b) serve on civic or charitable boards or committees of entities that

 

 

do not compete with the Company, (c) deliver a reasonable number of lectures or fulfill speaking engagements or (d) manage personal investments, so long as such activities do not significantly interfere with the performance of Executive’s duties and so long as Executive does not own more than five percent (5%) of the voting stock of any publicly held corporation.

 

ARTICLE II

 

COMPENSATION AND BENEFITS

 

Section 2.01                            Base Salary.  During the Term, the Company will pay Executive a base salary (the “Base Salary”) at an initial rate of $400,000 per year in accordance with the Company’s standard payroll practices.  Base Salary will be reviewed at least annually by the Board of Directors of the Company (the “Board”) or a committee thereof and may be adjusted (in which case such adjusted amount shall be the “Base Salary”).

 

Section 2.02                            Annual Incentive.  During Executive’s employment with the Company, and as determined by the Board in its sole discretion, Executive shall be eligible for an annual cash incentive (the “Annual Incentive”) of up to 50% of Base Salary (such percentage, the “Target Annual Incentive”). The Annual Incentive shall be based on the achievement of predetermined performance goals as determined annually by Executive and the Board, which shall be provided to the Executive in writing no later than thirty (30) days following the beginning of the year to which they relate.  The actual Annual Incentive earned in any particular year may be as low as zero and as high as 50% of Executive’s Annual Base Salary, depending on the level of achievement of the applicable performance goals. The Annual Incentive shall be paid to Executive as soon as practicable, but in no event later than the date that is two-and-one-half months following the end of the taxable year (of Executive, or the Company, whichever is later) in which such incentive is earned. For the 2014 fiscal year, in consideration of Executive’s acceptance of employment with the Company, Executive shall be eligible to receive the full Target Annual Incentive provided that (i) the Company achieves a successful initial public offering during 2014 (or realizes fundraising goals through other means in a manner that meets the needs of the Company and deemed satisfactory to the Board) and (ii) the number of investigator sites that are active for NormoCort by the end of 2014 is twenty-five (25) or more.

 

Section 2.03                            Long Term Incentive Plans.  Executive shall be eligible to receive grants under the Company’s long term incentive plans (including stock option, restricted stock and other equity compensation plans and any other long-term incentive plans) at the discretion of the Company’s Board.

 

Section 2.04                            Equity Awards.  On August 23, 2014, the Company granted Executive options to purchase 2,500,000 shares of common stock of the Company (the “Options”) in connection with his initial hiring.  The Options vest and become exercisable in accordance with the following:

 

(a)                                 800,000 Options with an exercise price of 6 NOK shall vest and become exercisable on August 23, 2015 (provided Executive is employed on such date);

 

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(b)                                 800,000 Options with an exercise price of 8 NOK shall vest and become exercisable on August 23, 2016 (provided Executive is employed on such date); and

 

(c)                                  900,000 Options with an exercise price of 10 NOK shall vest and become exercisable on August 23, 2017 (provided Executive is employed on such date).

 

The Options shall be subject to the terms of this Agreement and the award agreements into which Executive and the Company entered evidencing the grant of the Options.

 

If at any time prior to August 23, 2016, the Company stock price reaches 12 NOK and remains at such for one month (30 day average), 800,000 unvested Options with the lowest remaining exercise price will vest and become exercisable immediately upon expiration of such period, provided Executive is employed on such date.  The Options shall fully vest and become exercisable upon a Change in Control of the Company, provided Executive is employed on the date of the Change in Control.  The Options shall have a term of five (5) years, thereby expiring on August 23, 2019.

 

Section 2.05                            Business and Entertainment Expenses. Subject to the Company’s standard policies and procedures for expense reimbursement as applied to its executive employees generally, the Company shall reimburse Executive for, or pay on behalf of Executive, reasonable out-of-pocket business expenses incurred by Executive on behalf of the Company.

 

Section 2.06                            Other Company Benefits.  Executive shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company and made available to its similarly situated executives.  During the Term, Executive shall be eligible to earn on a pro-rated basis four (4) weeks paid vacation and 5 personal days per calendar year. Executive shall also be entitled to paid time-off for all holidays in the U.S. in accordance with the applicable Company policy.  Executive shall agree to comply with a reasonable application process to permit the Company to insure his life under a standard “key man” insurance policy upon request from the Board.

 

ARTICLE III

 

TERMINATION

 

Section 3.01                            General.  The Company may terminate Executive’s employment for any reason or no reason, and Executive may terminate his employment for any reason or no reason, in either case subject only to the terms of this Agreement.  For purposes of this Agreement, the following terms have the following meanings:

 

(a)                                 “Accrued Obligations” shall mean (i) Executive’s earned but unpaid Base Salary through the Termination Date; (ii) payment of any annual, long-term, or other incentive award which relates to a completed fiscal year or performance period, as applicable, and is payable (but not yet paid) on or before the Termination Date; (iii) a lump-sum payment in respect of accrued but unused vacation days at Executive’s per-business-day Base Salary rate in effect as of the Termination Date; and (iv) any unpaid expense or other reimbursements due pursuant to Section 2.05 hereof.

 

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(b)                                 “Cause” shall mean (i) Executive’s conviction of, or plea of guilty or nolo contendere to, any felony or any crime involving theft, embezzlement, dishonesty or moral turpitude; (ii) any act by Executive constituting willful misconduct, deliberate malfeasance, dishonesty, unethical conduct or gross negligence in the performance of his duties; (iii) Executive’s willful and continued failure to perform any of the duties of his position (which has not been cured within thirty (30) days following the first written notice from the Company describing such failure in reasonable detail); or (iv) any material breach (which has not been cured within 30 days following the first written notice from the Company describing such breach in reasonable detail) by Executive of this Agreement or any other agreement between Executive and the Company or any of its affiliates.

 

(c)                                  “Change in Control” shall mean that (i) a new entity becomes the owner of at least 9/10 of the issued shares of the Company (a “Trade Sale”) or (ii) the Company is merged pursuant to chapter 12 of the Public Limited Liabilities Act 1 (a “Statutory Merger”) whereby the Company is not the surviving entity, and Company shareholders are no longer majority owners.

 

(d)                                 “Disability” shall mean Executive’s becoming incapacitated for a period of at least 180 days by accident, sickness or other circumstance that renders Executive mentally or physically incapable of performing the material duties and services required of Executive hereunder on a full-time basis during such period.  A termination of Executive’s employment due to a Disability shall be effective only if the party terminating Executive’s employment first gives at least 15 days’ written notice of such termination to the other party.

 

(e)                                  “Good Reason” shall mean, without Executive’s express written consent, the occurrence of any one or more of the following: (i) a material diminution by the Company of Executive’s Base Salary, other than any diminution that is also applicable in a substantially similar manner and proportion to the other senior executives of the Company; (ii) the assignment to Executive of duties or responsibilities which are materially inconsistent with Executive’s position; (iii) a change in the principal location at which Executive performs his duties for the Company to a new location that is more than fifty (50) miles from the prior location; or (iv) an action or inaction that constitutes a material breach of this Agreement by the Company.

 

A termination of employment by Executive for Good Reason shall be effectuated by giving the Company written notice (“Notice of Termination for Good Reason”), not later than 30 days following the occurrence of the circumstance that constitutes Good Reason, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provision(s) of this Agreement on which Executive relied.  The Company shall be entitled, during the 45-day period following receipt of a Notice of Termination for Good Reason, to cure the circumstances that gave rise to Good Reason, provided that the Company shall be entitled to waive its right to cure or reduce the cure period by delivery of written notice to that effect to Executive (such 45-day or shorter period, the “Cure Period”).  If, during the Cure Period, such circumstance is remedied, Executive will not be permitted to terminate employment for Good Reason as a result of such circumstance.  If, at the end of the Cure Period, the circumstance that constitutes Good Reason has not been remedied, Executive will be entitled to terminate employment for Good Reason during the 30-day period that follows the end of the Cure Period.  If Executive does not terminate employment during such 30-day period, Executive will not be permitted to terminate employment for Good Reason as a result of such event.

 

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(f)                                   “Pro-Rata Annual Incentive” shall mean an amount equal to (i) the Annual Incentive that Executive would have been entitled to receive for the calendar year that includes the Termination Date if his employment hereunder had continued (as determined by the Board of Directors based upon the actual achievement of the applicable performance goals), multiplied by (ii) a fraction, the numerator of which is the number of days he was employed hereunder during such year and the denominator of which is the number of days in such year.

 

(g)                                  “Termination Date” shall mean the date on which Executive’s employment hereunder terminates (which, in the case of a notice of non-renewal of the Term in accordance with Article I hereof, shall mean the date on which the Term expires, provided that Executive’s employment is terminated on such date due to the non-renewal of the Term).

 

Section 3.02                            Termination Without Cause or by Executive With Good Reason.  If the Company terminates Executive’s employment without Cause, or the Executive terminates for Good Reason, the Term shall expire on the Termination Date and Executive shall be entitled to: (a) the Accrued Obligations; (b) an amount equal to the sum of (i) 18 months of the annual Base Salary as in effect immediately prior to the Termination Date and (ii) one (1) times the Target Annual Incentive, paid in equal installments on the normal payroll cycle over the 18-month period that begins on the sixtieth (60th) day following the Termination Date; (c) the Pro-Rata Annual Incentive, payable in a cash lump sum to Executive on the date Company pays its annual incentive compensation bonuses for the year that includes the Termination Date if Executive’s employment continued; and (d) medical, dental benefits provided by the Company to Executive and Executive’s spouse and dependents (in each case, as provided in any applicable plan) at least equal to the levels of benefits provided to other similarly situated active employees of the Company and its subsidiaries until the earlier of (i) the 18-month anniversary of the Termination Date or (ii) the date that Executive becomes covered under a subsequent employer’s medical and dental plans.

 

Section 3.03                            Termination Due to Non-Renewal of the Term by the Company. If Executive’s employment is terminated due to the non-renewal of the Term by the Company pursuant to Section 1.01, Executive shall be entitled to: (a) the Accrued Obligations; (b) an amount equal to the sum of (i) 12 months of the annual Base Salary as in effect immediately prior to the Termination Date and (ii) the Target Annual Incentive, paid in equal installments on the normal payroll cycle over the 12-month period that begins on the sixtieth (60th) day following the Termination Date; (c) the Pro-Rata Annual Incentive, payable in a cash lump sum to Executive on the date Company pays its annual incentive compensation bonuses for the year that includes the Termination Date if Executive’s employment had continued; and (d) medical, dental benefits provided by the Company to Executive and Executive’s spouse and dependents (in each case, as provided in any applicable plan) at least equal to the levels of benefits provided to other similarly situated active employees of the Company and its subsidiaries until the earlier of (i) the 12-month anniversary of the Termination Date or (ii) the date that Executive becomes covered under a subsequent employer’s medical and dental plans.

 

Section 3.04                            Termination Without Cause, by Executive With Good Reason, or Due to the Non-Renewal of the Term by the Company following a Change in Control of the Company.  If the Company terminates Executive’s employment without Cause, or the Executive terminates for Good Reason, or Executive’s employment is terminated due to the non-renewal of

 

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the Term by the Company pursuant to Section 1.01, in any case, within twenty-four (24) months following the occurrence of Change in Control, the Term shall expire on the Termination Date and the Executive shall be entitled to the acceleration of vesting of all unvested equity or equity-based awards held by Executive as of the Termination Date in addition to the benefits set forth in Section 3.02 or 3.03 above, as applicable.

 

Section 3.05                            Other Terminations.  If Executive’s employment hereunder is terminated (a) by Executive without Good Reason, (b) by the Company for Cause; (c) due to non-renewal of the Term by Executive; or (d) due to Executive’s death or Executive’s Disability, the Term shall expire as of the Termination Date and Executive and/or Executive’s estate or beneficiaries shall be entitled to the Accrued Obligations.

 

Section 3.06                            Release.  Executive’s entitlement to the payments (other than the Accrued Obligations) and benefits described in this Article III is expressly contingent upon Executive providing the Company with a signed release that is attached hereto as Attachment A (the “Release”).  To be effective, such Release must be delivered by Executive to the Company no later than 45 days following the Termination Date and must not be revoked during the seven (7) days following such delivery.  If such Release is not executed in a timely manner or is revoked, all such payments and benefits shall immediately cease and the Executive shall be required to repay to the Company any such payments that have already been paid to the Executive.

 

Section 3.07                            Resignation from Positions. Upon the termination of Executive’s employment for any reason, Executive shall immediately resign from each position held with the Company and its affiliates as of the Termination Date, including any position on the board of directors, if requested to do so by the Company.

 

ARTICLE IV

 

RESTRICTIVE COVENANTS

 

Section 4.01                            Confidentiality.

 

(a)                                 Company Information.  Executive agrees at all times during the Term of this Agreement and thereafter, to hold in strictest confidence, and not to use, except in connection with the performance of Executive’s duties, and not to disclose to any person or entity without written authorization of the Company, any Confidential Information of the Company.  As used herein, “Confidential Information” means any Company proprietary or confidential information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, marketing, distribution and sales methods and systems, sales and profit figures, finances and other business information disclosed to Executive by the Company, either directly or indirectly in writing, orally or by drawings or inspection of documents or other tangible property.  However, Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of Executive.

 

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(b)                                 Executive-Restricted Information.  Executive agrees that during the Term of this Agreement Executive will not improperly use or disclose any proprietary or confidential information or trade secrets of any person or entity with whom Executive has an agreement or duty to keep such information or secrets confidential.

 

(c)                                  Third Party Information.  Executive recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  Executive agrees at all times during the Term of this Agreement and thereafter, to hold in strictest confidence, and not to use, except in connection with the performance of Executive’s duties, and not to disclose to any person or entity, or to use it except as necessary in performing the Executive’s duties, consistent with the Company’s agreement with such third party.

 

Section 4.02                            Non-Competition.

 

(a)                                 Executive acknowledges that, during the Term, Executive has had access to information concerning the Company’s critical business strategies, engineering and technology development plans, competitive analyses, organizational structure. Accordingly, in consideration of the compensation provided under this Agreement, Executive agrees that during the Term and for the one (1) year period thereafter, Executive will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, or be employed by, any person or entity engaged in any business that is (i) located in or provides services or products to a region in which the Company does business, and (ii) competitive with the business activities of the Company as they existed during the period that Executive provided services to the Company.

 

(b)                                 Executive acknowledges that the restrictions contained under this Section 4.02 are reasonable and necessary to protect the legitimate interests of the Company, that the Company would not have executed this Agreement in the absence of such restrictions, and that any violation of any provision of this paragraph will result in irreparable injury to the Company.  In the event the provisions under this Section 4.02 shall ever be deemed to exceed the time, scope or geographic limitations permitted by applicable laws, then such provisions shall be reformed to the maximum time, scope or geographic limitations, as the case may be, permitted by applicable laws.

 

Section 4.03                            Injunctive Relief.  Executive agrees that it is impossible to measure in money the damages which will accrue to the Company by reason of a failure by Executive to perform any of Executive’s obligations under this Article IV.  Accordingly, if Company or any of its affiliates institutes any action or proceeding to enforce its rights under this Article IV, to the extent permitted by applicable law, Executive hereby waives the claim or defense that the Company or its affiliates has an adequate remedy at law, and Executive shall not claim that any such remedy at law exists.

 

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ARTICLE V

 

MISCELLANEOUS

 

Section 5.01                            Withholding.  The Company shall withhold all applicable federal, state and local taxes, social security and workers’ compensation contributions and other amounts as may be required by law with respect to compensation payable to Executive.

 

Section 5.02                            Modification of Payments. In the event it shall be determined that any payment, right or distribution by the Company or any other person or entity to or for the benefit of Executive pursuant to the terms of this Agreement or otherwise, in connection with, or arising out of, his employment with the Company or a change in ownership or effective control of the Company or a substantial portion of its assets (a “Payment”) is a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) on account of the aggregate value of the Payments due to Executive being equal to or greater than three times the “base amount,” as defined in Section 280G(b)(3) of the Code, (the “Parachute Threshold”) so that Executive would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”) and the net after-tax benefit that Executive would receive by reducing the Payments to the Parachute Threshold is greater than the net after-tax benefit Executive would receive if the full amount of the Payments were paid to Executive, then the Payments payable to Executive shall be reduced (but not below zero) so that the Payments due to Executive do not exceed the amount of the Parachute Threshold, reducing first any Payments under Section 3.02(b) hereof.

 

Section 5.03                            Section 409A.

 

(a)                                 Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payment of the benefits set forth herein either shall either be exempt from the requirements of Section 409A of the Code (“Section 409A”) or shall comply with the requirements of such provision.

 

(b)                                 Notwithstanding any provision of this Agreement to the contrary, if Executive is a “specified employee” within the meaning of Section 409A, any payments or arrangements due upon a termination of Executive’s employment under any arrangement that constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A and which do not otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1 (including without limitation, the short-term deferral exemption or the permitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)), shall be delayed and paid or provided, without interest, on the earlier of (i) the date which is six months after Executive’s “separation from service” (as such term is defined in Section 409A and the regulations and other published guidance thereunder) for any reason other than death, and (ii) the date of Executive’s death.

 

(c)                                  After any Termination Date, Executive shall have no duties or responsibilities that are inconsistent with having a “separation from service” within the meaning of Section 409A and, notwithstanding anything in the Agreement to the contrary, distributions upon termination of employment of nonqualified deferred compensation may only be made upon a “separation from service” as determined under Section 409A and such date shall be the

 

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Termination Date for purposes of this Agreement.  Each payment under this Agreement or otherwise shall be treated as a separate payment for purposes of Section 409A.  In no event may Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement which constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A and to the extent an amount is payable within a time period, the time during which such amount is paid shall be in the discretion of the Company.

 

Section 5.04                            Merger Clause.  Except as provided in Section 2.04 herein, effective as of the Effective Date, this Agreement contains the complete, full, and exclusive understanding of Executive and the Company as to its subject matter and shall, on such date, and supersede any prior employment agreement between Executive and the Company (and its affiliates), including the Offer Letter. Any amendments to this Agreement shall be effective and binding on Executive and the Company only if any such amendments are in writing and signed by both Parties.

 

Section 5.05                            Assignment.

 

(a)                                 This Agreement is personal to Executive and, without the prior written consent of the Company, shall not be assigned by Executive otherwise than by will or the laws of descent and distribution, and any assignment in violation of this Agreement shall be void.

 

(b)                                 Notwithstanding the foregoing Section 5.05(a), this Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If Executive should die while any amounts would still be payable to him or her hereunder if he or she had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, should there be no such designee, to Executive’s estate.

 

(c)                                  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company (a “Successor”) to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place.  As used in this Agreement, (i) the term “Company” shall mean the Company as hereinbefore defined and any Successor and any permitted assignee to which this Agreement is assigned and (ii) the term “Board” shall mean the Board as hereinbefore defined and the board of directors or equivalent governing body of any Successor and any permitted assignee to which this Agreement is assigned.

 

Section 5.06                            Dispute Resolution.  Except for any proceeding brought pursuant to Section 5.05 above, the parties agree that any dispute arising out of or relating to this Agreement or the formation, breach, termination or validity thereof, will be settled by binding arbitration by a panel of three arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association.  The arbitration proceedings will be located in Philadelphia, Pennsylvania.  The arbitrators are not empowered to award damages in excess of compensatory damages and each party irrevocably waives any damages in excess of compensatory damages.  Judgment upon any arbitration award may be entered into any court having jurisdiction thereof

 

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and the parties consent to the jurisdiction of any court of competent jurisdiction located in the Eastern District of Pennsylvania.

 

Section 5.07                            GOVERNING LAW.  THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN THE COMMONWEALTH OF PENNSYLVANIA, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECT SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.

 

Section 5.08                            Amendment; No Waiver.  No provision of this Agreement may be amended, modified, waived or discharged except by a written document signed by Executive and duly authorized officer of the Company.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered as a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.  No failure or delay by any party in exercising any right or power hereunder will operate as a waiver thereof, nor will any single or partial exercise of any other right or power.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party, which are not set forth expressly in this Agreement.

 

Section 5.09                            Severability.  If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable law or public policy, all other conditions and provisions of this Agreement shall nonetheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party.  Upon any such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

Section 5.10                            Survival.  The rights and obligations of the parties under the provisions of this Agreement that relate to post-termination obligations shall survive and remain binding and enforceable, notwithstanding the expiration of the term of this Agreement, the termination of Executive’s employment with the Company for any reason or any settlement of the financial rights and obligations arising from Executive’s employment hereunder, to the extent necessary to preserve the intended benefits of such provisions.

 

Section 5.11                            Notices.  All notices and other communications required or permitted by this Agreement will be made in writing and all such notices and communications will be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed, if to the Company, at its principal office, and if to Executive, at Executive’s last address on file with the Company.  Either party may change such address from time to time by notice to the other.

 

Section 5.12                            Headings and References.  The headings of this Agreement are inserted for convenience only and neither constitute a part of this Agreement nor affect in any way the

 

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meaning or interpretation of this Agreement.  When a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.

 

Section 5.13                            Counterparts.  This Agreement may be executed in one or more counterparts (including via facsimile), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

[signature page follows]

 

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IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date first written above.

 

	
 
    	
CORTENDO   AB
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   H. Joseph Reiser
    
	
 
    	
Name:
    	
H.   Joseph Reiser
    
	
 
    	
Title:
    	
Chairman
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Matthew Pauls
    
	
 
    	
Name:
    	
Matthew   Pauls
    
	
 
    	
Title:
    	
Chief   Executive Officer & President
    

 

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ATTACHMENT A

 

GENERAL RELEASE

 

1.                                      Matthew Pauls (“Executive”), for and in consideration of the commitments of Cortendo AB (the “Company”) as set forth in Article III of the Employment Agreement dated October 6, 2014 (the “Employment Agreement”), and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company and its present and former divisions, subsidiaries, parents, predecessor and successor corporations, officers, directors, and their respective successors, predecessors, assigns, heirs, executors, and administrators (collectively, “Releasees”) from all causes of action, suits, debts, claims and demands whatsoever in law or in equity, which Executive ever had, now has, or hereafter may have, whether known or unknown, or which Executive’s heirs, executors, or administrators may have, by reason of any matter, cause or thing whatsoever, up to the date of Executive’s execution of this General Release, particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to Executive’s employment relationship with the Company and Releasees, the terms and conditions of that relationship, and the termination of that relationship, including, but not limited to, any claims arising under any applicable Company employee benefit plan(s), the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, Title VII of The Civil Rights Act of 1964, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act, Pennsylvania employment laws, and any other federal, state and local employment laws, as amended, and any other claims under any federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized, and any claims for attorneys’ fees and costs.  This General Release is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort.

 

2.                                      To the fullest extent permitted by law, and subject to the provisions of Paragraph 3 below, Executive represents and affirms that (i) Executive has not filed or caused to be filed on Executive’s behalf any claim for relief against the Company or any Releasee and, to the best of Executive’s knowledge and belief, no outstanding claims for relief have been filed or asserted against the Company or any Releasee on Executive’s behalf; and (ii) Executive has no knowledge of any improper, unethical or illegal conduct or activities that Executive has not already reported to any supervisor, manager, department head, human resources representative, agent or other representative of the Company, to any member of the Company’s legal or compliance departments, or to the ethics hotline; and (iii) Executive will not file, commence, prosecute or participate in any judicial or arbitral action or proceeding against the Company or any Releasee based upon or arising out of any act, omission, transaction, occurrence, contract, claim or event existing or occurring on or before the date of execution of this General Release.

 

3.                                      The release of claims described in Paragraph 1 of this General Release does not preclude Executive from filing a charge with the U.S. Equal Employment Opportunity Commission.  However, Executive agrees and hereby waives any and all rights to any monetary relief or other personal recovery from any such charge, including costs and attorneys’ fees.

 

4.                                      Subject to the provisions of Paragraph 3 of this General Release, in further consideration of the commitments of the Company as described in the Employment Agreement, Executive agrees that Executive will not file, claim, sue or cause or permit to be filed, any civil

 

 

action, suit or legal proceeding seeking equitable or monetary relief (including damages, injunctive, declaratory, monetary or other relief) for himself involving any matter released in Paragraph 1.  In the event that suit is filed in breach of this release of claims, it is expressly understood and agreed that this release of claims shall constitute a complete defense to any such suit.  In the event any Releasee is required to institute litigation to enforce the terms of this paragraph, Releasees shall be entitled to recover reasonable costs and attorneys’ fees incurred in such enforcement.  Executive further agrees and covenants that should any person, organization, or other entity file, claim, sue, or cause or permit to be filed any civil action, suit or legal proceeding involving any matter occurring at any time in the past, Executive will not seek or accept personal equitable or monetary relief in such civil action, suit or legal proceeding. Nothing in this General Release shall prohibit or restrict Executive from: (i) making any disclosure of information required by law; (ii) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by any federal regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s designated legal, compliance or human resources officers; or (iii) filing, testifying, participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud, or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization.

 

5.                                      Executive understands and agrees that the payments, benefits and agreements provided in the Employment Agreement are being provided to Executive in consideration for Executive’s acceptance and execution of, and in reliance upon Executive’s representations in, the Employment Agreement and this General Release, and that they are greater than the payments, benefits and agreements, if any, to which Executive would have received if Executive had not executed the Employment Agreement and this General Release.  In addition, Executive acknowledges and agrees that Executive has been paid all amounts owed to Executive as of the date of Executive’s signing of this General Release.

 

6.                                      Executive and the Company agree and acknowledge that the agreement by the Company described in the Employment Agreement, and the settlement and termination of any asserted or unasserted claims against the Releasees, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by any of the Releasees to Executive.

 

7.                                      This General Release and the obligations of the parties hereunder shall be construed, interpreted and enforced in accordance with and be governed by the laws of Pennsylvania without reference to its conflicts of laws principles.

 

8.                                      Executive certifies and acknowledges as follows:

 

a.              that Executive has read the terms of this General Release, and that Executive understands its terms and effects, including the fact that Executive has agreed to RELEASE AND FOREVER DISCHARGE the Company and each and every one of its affiliated entities from any legal action arising out of Executive’s relationship with the Company and the termination of that relationship;

 

b.              that Executive has signed this Release voluntarily and knowingly in exchange for the consideration described herein and in the Employment Agreement,

 

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which Executive acknowledges is adequate and satisfactory to Executive and to which Executive acknowledges that Executive would not otherwise be entitled;

 

c.               that Executive has been and is hereby advised in writing to consult with an attorney prior to signing this General Release;

 

d.              that Executive does not waive rights or claims that may arise after the date this General Release is executed;

 

e.               that the Company has provided Executive with at least 21 (twenty-one) days within which to consider this General Release, that any modifications, material or otherwise, made to this General Release have not restarted or affected in any manner the original 21 (twenty-one) day consideration period, and that Executive has signed on the date indicated below after concluding that this General Release is satisfactory to Executive;

 

f.                that Executive acknowledges that this General Release may be revoked by Executive within seven (7) days after Executive’s execution, and it shall not become effective until the expiration of such seven day revocation period.  If the last day of the revocation period is a Saturday, Sunday, or legal holiday in the state in which Executive resides, then the revocation period shall not expire until the next following day which is not a Saturday, Sunday, or legal holiday.  In the event of a timely revocation by Executive, this General Release and the Employment Agreement will be deemed null and void and the Company will have no obligations hereunder; and

 

g.               that this General Release may not be signed prior to the third calendar day before the last day of the Term of the Employment Agreement.   If this General Release is signed prior to the last day of the Term of the Employment Agreement, the Company reserves the right to have Executive ratify the General Release on or after the last day of the Term.

 

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Intending to be legally bound hereby, Executive executed the foregoing General Release on the date indicated below.

 

 

	
 
    	
Matthew   Pauls
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Matthew Pauls
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Date:
    	
10/28/14
    

 

17

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