Document:

ex_325279.htm

Exhibit 4.2(i)

 

FORM OF STOCK PURCHASE WARRANT

 

 

 

Warrant No. ___

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

Date of Issuance: July _____, 2020

 

ELEISON PHARMACEUTICALS INC.

 

WARRANT CERTIFICATE

 

FOR VALUE RECEIVED, Eleison Pharmaceuticals Inc., a Delaware corporation (the “Company”), hereby certifies that _____________________, or his, her or its registered transferees, successors or assigns (each person or entity holding all or a part of this Warrant being referred to as a “Holder”) is the registered holder of this Warrant (the “Warrant”) to subscribe for and purchase  ______________________ of the Company’s Common Stock (as defined below).

 

For purposes of this Warrant the following terms shall have the following meanings:

 

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

 

“Certificate of Incorporation” means the Company’s Certificate of Incorporation, as amended.

 

“Common Stock” means the Common Stock of the Company, and further described in the Company’s Certificate of Incorporation.

 

“Exercise Price” means $5.00 per share.

 

“Expiration Date” means the fifth anniversary of the date of issuance of this Warrant.

 

 

 

“Investor’s Rights Agreement” means that certain Investors’ Rights Agreement by and between the Company and certain stockholders of the Company, as amended.

 

“ROFR and Co-Sale Agreement” means that certain Right of First Refusal and Co-Sale Agreement by and between the Company and certain stockholders of the Company, as amended.

 

“Sale of the Company” means (i) any sale or other disposition of all or substantially all of the assets of the Company, (ii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities, or (iii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

 

“Voting Agreement” means that certain Voting Agreement by and between the Company and certain stockholders of the Company, as amended.

 

1.    DURATION AND EXERCISE OF WARRANTS

 

(a)    Exercise Period. The Holder may exercise this Warrant in whole or in part at any time from and after the Date of Issuance until 5:00 P.M., New York Time on the Expiration Date or (ii) the Early Termination Date (as defined below), (the “Exercise Period”).

 

(b)    Exercise Procedures. Subject to Section 4(b), while this Warrant remains outstanding and exercisable in accordance with Section 1(a), the Holder may exercise this Warrant in whole or in part at any time and from time to time by:

 

(A)    delivery to the Secretary of the Company of a duly executed copy of the Notice of Exercise attached as Exhibit A;

 

(B)    surrender of this Warrant to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder; and

 

(C)    payment of the then-applicable Exercise Price per share multiplied by the number of shares of Common Stock being purchased upon exercise of the Warrant (such amount, as calculated at the time of each exercise, the “Aggregate Exercise Price”) made in the form of cash, or by certified check, bank draft or money order payable in lawful money of the United States of America.

 

 

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(c)    Upon the exercise of this Warrant in compliance with the provisions of Section 1(b), the Company shall promptly issue and cause to be delivered to the Holder a certificate for the Common Stock purchased by the Holder. Each exercise of this Warrant shall be effective immediately prior to the close of business on the date that the conditions set forth in Section 1(b) have been satisfied. On the first Business Day following the date on which the Company has received each of the Notice of Exercise and the Aggregate Exercise Price (the “Exercise Delivery Documents”), the Company shall transmit an acknowledgment of receipt of the Exercise Delivery Documents to the Company’s transfer agent, if other than the Company (the “Transfer Agent”). On or before the third Business Day following the date on which the Company has received all of the Exercise Delivery Documents, the Company shall issue and dispatch by overnight courier to the address as specified in the Notice of Exercise, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Common Stock with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Common Stock.

 

(d)    Partial Exercise. This Warrant shall be exercisable, either in its entirety or, from time to time in part, only for the number of shares of Common Stock available for exercise under this Warrant. If this Warrant is exercised and the number of shares of Common Stock represented by this Warrant submitted for exercise is greater than the actual number of shares of Common Stock being acquired upon such an exercise, then the Company shall, as soon as practicable and in no event later than five (5) Business Days after any such exercise and at its own expense, issue a new Warrant of like tenor representing the right to purchase the remaining number of shares of Common Stock purchasable hereunder after such exercise.

 

(e)    Investor’s Rights Agreement, ROFR and Co-Sale Agreement, Voting Agreement. The Holder hereby agrees that, as a condition to exercise of this Warrant for Common Stock the Holder will execute and deliver a counterpart signature page to the Investor’s Rights Agreement, ROFR and Co-Sale Agreement, and the Voting Agreement.

 

2.    ISSUANCE OF COMMON STOCK

 

(a)    The Company covenants that all shares of Common Stock will, upon issuance in accordance with the terms of this Warrant, be (i) duly authorized, fully paid and non-assessable, and (ii) free from all liens, charges and security interests, with the exception of claims arising through the acts or omissions of any Holder and except as arising from applicable Federal and state securities laws.

 

(b)    The Company shall register this Warrant upon records to be maintained by the Company for that purpose in the name of the record holder of such Warrant from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner thereof for the purpose of any exercise thereof, any distribution to the Holder thereof and for all other purposes.

 

(c)    The Company will not, by amendment of its Certificate of Incorporation, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, and will take all actions consistent with the carrying out of all the provisions of this Warrant.

 

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3.    ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND TYPE OF COMMONT STOCK

 

(a)    The Exercise Price and the Common Stock issuable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 3.

 

(i)    Splits, Dividends, Combinations of Securities. If, at any time after the Date of Issuance and prior to the Expiration Date, outstanding Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If, at any time after the Date of Issuance and prior to the Expiration Date, outstanding Common Stock shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Common Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment. No adjustment, however, on account of cash dividends will be made to the Exercise Price under this Warrant.

 

(ii)    Reclassification, Etc. In case there occurs any reclassification or change of the outstanding securities of the Company or of any reorganization of the Company or any similar corporate reorganization on or after the Date of Issuance, then and in each such case the Holder, upon the exercise hereof at any time after the consummation of such reclassification, change, or reorganization shall be entitled to receive, in lieu of the shares or other securities and property receivable upon the exercise hereof prior to such consummation, the shares. or other securities or property to which such Holder would have been entitled upon such consummation if such Holder had exercised this Warrant immediately prior thereto, all subject to further adjustment pursuant to the provisions of this Section 3; provided, however, that such adjustment shall not be made with respect to, and this Warrant shall terminate if not exercised prior to, the events set forth in Section 4 below. The Exercise Price and the Common Stock issuable upon the exercise of this Warrant, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(a)(ii).

 

(b)    Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 3, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.

 

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4.    EARLY TERMINATION.

 

(a)    Early Termination. The Company shall provide to the Holder at least ten (10) days advance written notice of any Sale of the Company and, if this Warrant is not exercised on or prior to the consummation of such Sale of the Company or pursuant to Section 4(b) below, the Warrant shall terminate after the consummation of such Sale of the Company (the date of such termination, the “Early Termination Date”).

 

(b)    Cashless Exercise in connection with Sale of the Company.

 

a.    In addition to and without limiting the rights of the Holder under the terms of this Warrant, but only to the extent this Warrant has not otherwise been exercised, the Holder shall have the right, only in connection with a Sale of the Company, to convert this Warrant or any portion thereof (the “Conversion Right”) into shares of Common Stock as provided in this Section 4(b). Upon exercise of the Conversion Right with respect to a particular number of shares subject to this Warrant (the “Converted Warrant Shares”), the Company shall deliver to the Holder (without payment by the Holder of any exercise price or any cash or other consideration) (X) that number of shares of fully paid and nonassessable Common Stock equal to the quotient obtained by dividing the value of this Warrant (or the specified portion hereof) on the Conversion Date (as defined herein), which value shall be determined by subtracting (A) the aggregate Exercise Price of the Converted Warrant Shares immediately prior to the exercise of the Conversion Right from (B) the aggregate fair market value of the Converted Warrant Shares issuable upon exercise of this Warrant (or the specified portion hereof) on the Conversion Date (as herein defined) by (Y) the fair market value of one share of Common Stock on the Conversion Date (as defined herein). Expressed as a formula, such conversion shall be computed as follows:

 

X = B – A

Y

 

Where:                 X = the number of shares of Common Stock that may be issued to the Holder

Y = the fair market value of one share of Common Stock (at the date of such calculation)

A = the aggregate Exercise Price (i.e., Converted Warrant Shares x Exercise Price)

B = the aggregate fair market value (i.e., fair market value x Converted Warrant Shares)

 

b.    The Conversion Right may be exercised by the Holder by the surrender of this Warrant at the principal office of the Company together with a written statement specifying that the Holder thereby intends to exercise the Conversion Right and indicating the number of shares subject to this Warrant that are being surrendered (referred to in subsection (a) hereof as the Converted Warrant Shares) in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement (the “Conversion Date”). Certificates for the shares issuable upon exercise of the Conversion Right shall be issued as of the Conversion Date and shall be promptly delivered to the Holder.

 

c.    For purposes of this Section 4(b), “fair market value” of a share of Common Stock shall mean the value of the securities and other property received by a holder of the Company’s Common Stock pursuant to the Sale of the Company in exchange for a share of Common Stock held by such holder.

 

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5.    TRANSFERS AND EXCHANGES OF WARRANT AND COMMON STOCK

 

(a)    Registration of Transfers and Exchanges. Subject to Section 5(b) and 5(c), upon the Holder’s surrender of this Warrant, with a duly executed copy of the Form of Assignment attached as Exhibit B, to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder, the Company shall register in the Company’s books and records the transfer of all or any portion of this Warrant. Upon such registration of transfer, the Company shall issue a new Warrant, in substantially the form of this Warrant, evidencing the acquisition rights transferred to the transferee and a new Warrant, in similar form, evidencing the remaining acquisition rights not transferred, to the Holder requesting the transfer.

 

(b)    Restrictions on Transfers. This Warrant may not be transferred at any time unless such transfer is (i) registered under the Securities Act of 1933, as amended (the “Securities Act”), (ii) made in accordance with the requirements of Rule 144 of the Securities Act or (iii) exempt from registration under the Securities Act as evidenced by a written opinion of legal counsel addressed to the Company that the proposed transfer of the Warrant may be effected without registration under the Securities Act, which opinion will be in form and from counsel reasonably satisfactory to the Company.

 

(c)    Permitted Transfers and Assignments. Notwithstanding any provision to the contrary in this Section 5, the Holder may transfer, with or without consideration, this Warrant or any of the shares of Common Stock issued upon an exercise of this Warrant (or a portion thereof) to the Holder’s Affiliates (as such term is defined under Rule 144 of the Securities Act) without obtaining the opinion from counsel that may be required by Section 5(c)(iii), provided, that the Holder delivers to the Company and its counsel certification, documentation, and other assurances reasonably required by the Company’s counsel to enable the Company’s counsel to render an opinion to the Company’s Transfer Agent that such transfer does not violate applicable securities laws.

 

6.    MUTILATED OR MISSING WARRANT CERTIFICATE

 

If this Warrant is mutilated, lost, stolen or destroyed, upon request by the Holder, the Company will, at its expense, issue, in exchange for and upon cancellation of the mutilated Warrant, or in substitution for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the form of this Warrant, representing the right to acquire the equivalent number of shares of Common Stock; provided, that, the Holder provides the Company with an affidavit of loss and an indemnity agreement reasonably satisfactory to the Company.

 

7.    PAYMENT OF TAXES

 

The Company will pay all transfer and stock issuance taxes attributable to the preparation, issuance and delivery of this Warrant and the Common Stock (and replacement Warrants) including, without limitation, all documentary and stamp taxes; provided, however, that the Company shall not be required to pay any tax in respect of the transfer of this Warrant, or the issuance or delivery of certificates for Common Stock or other securities in respect of the Common Stock to any person or entity other than to the Holder.

 

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8.    FRACTIONAL SHARES OF COMMON STOCK

 

No fractional shares of Common Stock shall be issued upon exercise of this Warrant. The Company, in lieu of issuing any fractional shares of Common Stock, shall pay cash equal to the product of such fraction multiplied by the fair market value of one share of Common Stock on the date of exercise, as determined in good faith by the Company’s board of directors.

 

9.    NO STOCKHOLDER RIGHTS AND LEGEND

 

No holder of this Warrant, as such, shall be entitled to vote or be deemed the holder of the Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, the rights of a stockholder of the Company or the right to vote for the election of the board of directors or upon any matter submitted to stockholders at any meeting thereof, or give or withhold consent to any corporate action or to receive notice of meetings or other actions affecting stockholders (except as provided herein), or to receive dividends or subscription rights or otherwise (except as provide herein). Each certificate for Common Stock initially issued upon the exercise of this Warrant, and each certificate for Common Stock issued to any subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”

 

10.    NOTICES

 

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (c) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at (or to such other address as the Company shall have furnished in writing in accordance with the provisions of this Section 10):

 

Eleison Pharmaceuticals Inc.

100 Overlook Center, 2nd Floor

Princeton, NJ 08540

 

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All communications shall be sent to the Holder at (or to such other address as the Holder shall have furnished in writing in accordance with the provisions of this Section 10):

__________________________

__________________________

__________________________

 

11.    SEVERABILITY

 

If a court of competent jurisdiction holds any provision of this Warrant invalid or unenforceable, the other provisions of this Warrant will remain in full force and effect. Any provision of this Warrant held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

12.    BINDING EFFECT

 

This Warrant shall be binding upon and inure to the sole and exclusive benefit of the Company, its successors and assigns, the registered Holder or Holders from time to time of this Warrant and the Common Stock.

 

13.    SURVIVAL OF RIGHTS AND DUTIES

 

This Warrant shall terminate and be of no further force and effect on the earlier of the expiration of the Exercise Period or the date on which this Warrant has been exercised in full.

 

14.    GOVERNING LAW

 

This Warrant will be governed by and construed under the laws of the State of Delaware without regard to conflicts of laws principles that would require the application of any other law.

 

15.    REPRESENTATIONS AND WARRANTIES OF HOLDER. The Holder represents, warrants and covenants to the Company as follows:

 

(a)    This Warrant is being acquired for its own account, for investment and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act. Upon exercise of this Warrant, the Holder shall, if so requested by the Company, confirm in writing, in a form reasonably satisfactory to the Company, that the Common Stock issuable upon exercise of this Warrant are being acquired for investment and not with a view toward distribution or resale that would violate the Securities Act.

 

(b)    The Holder understands that the Warrant and the Common Stock issuable hereunder have not been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act pursuant to Section 4(2) thereof, and that they must be held by the Holder indefinitely, and that the Holder must therefore bear the economic risk of such investment indefinitely, unless a subsequent disposition thereof is registered under the Securities Act or is exempted from such registration.

 

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(c)    The Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of this Warrant and the Common Stock purchasable pursuant to the terms of this Warrant and of protecting its interests in connection therewith.

 

(d)    The Holder is an “accredited investor” as defined in Rule 501 of Regulation D of the Securities Act. The Holder is able to bear the economic risk of the purchase of the Common Stock issuable pursuant to the terms of this Warrant.

 

16.    NOTICES OF RECORD DATE

 

Upon (a) any establishment by the Company of a record date of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or right or option to acquire securities of the Company, or any other right, or (b) any capital reorganization, reclassification, recapitalization, merger or consolidation of the Company with or into any other corporation, any transfer of all or substantially all the assets of the Company, or any voluntary or involuntary dissolution, liquidation or winding up of the Company, or the sale, in a single transaction, of a majority of the Company’s voting shares. (whether newly issued, or from treasury, or previously issued and then outstanding, or any combination thereof), the Company shall mail to the Holder at least five (5) Business Days, or such longer period as may be required by law, prior to the record date specified therein, a notice specifying (i) the date established as the record date for the purpose of such dividend, distribution, option or right and a description of such dividend, option or right, (ii) the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up, or sale is expected to become effective and (iii) the date, if any, fixed as to when the holders of record of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, transfer, consolation, merger, dissolution, liquidation or winding up.

 

17.    RESERVATION OF COMMON STOCK

 

Prior to the expiration of the Exercise Period, the Company shall reserve and keep available out of its authorized but unissued Common Stock for issuance upon the exercise of this Warrant, free from pre-emptive rights, such number of Common Stock for which this Warrant shall from time to time be exercisable. The Company will take all such reasonable action as may be necessary to assure that such Common Stock may be issued as provided herein without violation of any applicable law or regulation. Without limiting the generality of the foregoing, the Company covenants that it will use its best efforts to take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Common Stock upon the exercise of this Warrant and use its best efforts to obtain all such authorizations, exemptions or consents, including but not limited to consents from the Company’s stockholders or board of directors or any public regulatory body, as may be necessary to enable the Company to perform its obligations under this Warrant.

 

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18.    NO THIRD PARTY RIGHTS

 

This Warrant is not intended, and will not be construed, to create any rights in any parties other than the Company and the Holder, and no person or entity may assert any rights as third-party beneficiary hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the date first set forth above.

 

ELEISON PHARMACEUTICALS INC.

 

By:                                                       

 

Name: Edwin Thomas

Title: President

 

 

 

 

FORM OF STOCK PURCHASE WARRANT

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

(To be executed by the Holder of Warrant if such Holder desires to exercise Warrant)

 

To Eleison Pharmaceuticals Inc.:

 

The undersigned hereby irrevocably elects to exercise this Warrant and to purchase thereunder, ___________________ shares of Common Stock issuable upon exercise of the Warrant and delivery of: ___________________ (in cash as provided for in the foregoing Warrant) and any applicable taxes payable by the undersigned pursuant to such Warrant;

 

The undersigned requests that certificates for such shares be issued in the name of:

 

___________________________________________________

 

___________________________________________________

 

___________________________________________________

(Please print name, address and social security or federal employer identification number (if applicable))

 

If the shares. issuable upon this exercise of the Warrant are not all of the Common Stock which the Holder is entitled to acquire upon the exercise of the Warrant, the undersigned requests that a new Warrant evidencing the rights not so exercised be issued in the name of and delivered to:

 

___________________________________________________

 

___________________________________________________

 

___________________________________________________

(Please print name, address and social security or federal employer identification number (if applicable))

 

The undersigned hereby represents and warrants that (i) the undersigned meets the requirements of at least one of the suitability standards for an “accredited investor” as that term is defined in Regulation D as promulgated by the United States Securities and Exchange Commission; (ii) the undersigned is acquiring the Common Stock solely for the undersigned’s account for investment purposes only and not with a view to or intent of resale or distribution thereof, in whole or in part, in violation of the Securities Act of 1933, as amended (the “Act”), and the undersigned has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Act, without prejudice, however, to the undersigned’s right at all times to sell or otherwise dispose of all or any part of the Common Stock in compliance with applicable federal and state securities laws and in compliance with any transfer restriction to which the applicable Common Stock may be subject at any time or from time to time; and (iii) the undersigned has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it in connection with the Offering to evaluate the merits and risks of an investment in the Company and the Common Stock and to make an informed investment decision with respect thereto.

 

Name of Holder (print): ________________________

(Signature): ___________________________________

(By:) _________________________________________

(Title:) ________________________________________

Dated: ________________________________________

 

 

 

 

 

FORM OF STOCK PURCHASE WARRANT

 

EXHIBIT B

 

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED, ___________________________________ hereby sells, assigns and transfers to each assignee set forth below all of the rights of the undersigned under the Warrant (as defined in and evidenced by the attached Warrant) to acquire the number of shares of Common Stock set opposite the name of such assignee below and in and to the foregoing Warrant with respect to said acquisition rights and the shares. issuable upon exercise of the Warrant:

 

 

	
			Name of Assignee

				
			Address

				
			Number of Shares of Common Stock

			
	 	 	 
	 	 	 
	 	 	 

 

If the total of the Common Stock shares are not all of the Common Stock shares evidenced by the foregoing Warrant, the undersigned requests that a new Warrant evidencing the right to acquire the Common Stock not so assigned be issued in the name of and delivered to the undersigned.

 

Name of Holder (print): ________________________

(Signature): ___________________________________

(By:) _________________________________________

(Title:) ________________________________________

Dated: ________________________________________ex_325095.htm

Exhibit 10.7

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement ("Agreement") dated as of February 24, 2012 (the "Effective Date") is made and entered into by and between Eleison Pharmaceuticals LLC, a Delaware limited liability company (the "Company"), and Edwin Thomas ("Executive") (the Company and Executive together, the "Parties," and each of them a "Party").

 

WHEREAS, Executive is presently an at-will employee of the Company and the Parties wish to establish the terms and conditions of Executive's continued employment with the Company; and

 

WHEREAS, as of the Effective Date, the Company is issuing $2,000,000 of Class A Units to Eleison Investors, L.P. ("Investor") and the execution and delivery of this Agreement is a condition precedent to the purchase of such Units by the Investor.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

A.          Employment.

 

1.          The Company hereby employs Executive to serve as the Chief Executive Officer of the Company. In such capacity, Executive shall report directly to the Company's Board of Managers (the "Board"), shall be responsible for the day-to-day operations of the Company, and shall have such other duties and authorities as are commonly within the scope of the duties and authorities of persons holding similar offices of a corporation, or as may otherwise be assigned to Executive by the Board.

 

2.          Executive agrees to be so employed by the Company, to devote Executive's best efforts to advance the interests of the Company and to devote all of Executive's business time to performing Executive's duties hereunder. Executive shall be entitled to serve on the board of directors of other companies, and to engage in other business interests as described on Schedule A, provided such service and business interests do not interfere with his duties and responsibilities to the Company including but not limited to Executive's obligations under Section F.1 of this Agreement. Executive shall comply with all policies and procedures of the Company as may be adopted from time to time. In the event of any conflict between such Company policies and procedures and the terms of this Agreement, the terms of this Agreement shall control and take precedence.

 

B.          Term. The employment of the Executive and his obligation to perform the duties described above for the Company shall continue for a period of three (3) years commencing on the Effective Date (the "Initial Term"). If the Company elects not to renew Executive's employment as of the end of the Initial Term, or any additional one-year term as provided below, the Company shall provide written notice of such election ("Non-Renewal Notice") to Executive at least six (6) months prior to the expiration of the Initial Term, or the then current one-year term, as applicable. If the Company does not timely deliver a Non-Renewal Notice, the term of Executive's employment under this Agreement shall continue for successive, additional terms of one-year each, on the terms and conditions in effect as of the end of the Initial Term, or each such subsequent one-year term, subject to such amendments as agreed by the Parties. The Initial Term, together with all such additional, one-year terms, are referred to herein as, the "Term". Notwithstanding the foregoing, the Executive's employment with the Company may be terminated in accordance with Section D below.

 

 

 

 

 

C.          Compensation. The Company agrees to provide to the Executive the following compensation.

 

1.         Salary. As compensation for services to the Company pursuant to this Agreement, the Company shall pay to Executive a base salary at the gross rate of $325,000 annually, payable at such times as the Company normally pays its employees, and subject to all payroll deductions and/or withholdings (the "Base Salary"); provided, however, that $95,000 of each year's Base Salary amount shall be deferred and not paid to Executive, subject to the terms and conditions of this Agreement.  In addition, if, based on the Company's budgets and cash flow projections the Board determines that the Company has, or will have, insufficient cash available to meet its obligations, the Company may defer an additional amount of Executive's Base Salary, up to 100% ofthe total Base Salary amount. The total amount of Base Salary deferred under this Section C.l is referred to herein as the "Deferred Salary." The Company shall pay the amount of the Deferred Salary to Executive upon the earlier of (i) the sale or liquidation of substantially all of the assets of the Company or (ii) the approval of the Board and the holders of at least a majority of the Company's outstanding Class A Units, or as otherwise provided in this Agreement. Company and Executive agree to re-evaluate the Base Salary amount at the first anniversary of the Effective Date to determine whether to increase or decrease the Base Salary amount based on the Company's cash position and progress in achieving the Company's goals, provided that any such adjustment shall require the approval of both Company and Executive.

 

2.          Bonus. In addition to the Base Salary, for each fiscal year of the Company ending during the Term, Executive shall have the opportunity to receive a bonus based upon Executive's performance and the Company 's actual financial results as compared to budget for such fiscal year. The target bonus opportunity and the bonus formula for the first fiscal year of the Term shall be determined on or prior to July 1 , 2012. The target bonus opportunity and the bonus formula for each subsequent fiscal year of the Term will be determined within thirty (30) days following the delivery of the Company's audited financial statements for the prior year. Any bonus amount earned shall be determined and paid within thirty (30) days following the delivery of the Company's audited financial statements for the year for which the bonus was earned.

 

3.          Benefits. Executive will be entitled to receive medical and dental insurance coverage, long term disability insurance coverage and such other benefits as are provided by the Company for its other executive officers, provided, however, that all such insurance coverage will be provided on such terms as the coverage provided to the other senior executive employees of the Company. In addition, at the Company's expense:

 

(a)          The Company shall reimburse Executive for all reasonable expenses incurred by Executive in connection with the Company 's employment hereunder in accordance with the Compan y's standard policies. Reimbursement for such expenses shall be made by the Company promptl y after submission by Executive of appropriate vouchers itemizing such expenses in a form consistent with the Company 's policy;

 

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(b)          Executive shall be entitled to four weeks of vacation time annually during the Term.

 

(c)          The Company shall have the right to maintain, during the term of Executive's employment hereunder "key man" term life insurance on the life of the Executive. The amount of such insurance coverage shall be determined by the Company, and the Company shall be the sole beneficiary of such coverage. Executive hereby agrees to submit to such medical examinations, supply such information and execute such documents as may reasonably be required by the insuring company in order to maintain such policy.

 

D.          Termination. Executive's employment hereunder may be terminated without any breach of this Agreement only under the following circumstances:

 

1.          Death. Executive's employment hereunder shall terminate automatically upon Executive's death.

 

2.          Total Disability. The Company may terminate Executive's employment hereunder in the event of Executive's Total Disability. As used herein, "Total Disability" means a mental or physical condition confirmed by a physician and which in the reasonable opinion of the Company renders Executive unable or incompetent to perform Executive's duties hereunder that continues for a period of 120 consecutive days or 180 days in any 12-month period.

 

3.          Discharge for Cause. The Company may terminate Executive's employment hereunder for Cause. For purposes of this Agreement "Cause" shall mean: (i) the willful failure of Executive to perform any reasonable business directive of the Board but shall not mean or include Executive's failure to achieve perfmmance objectives or goals; (ii) the material breach by Executive of any of his commitments, duties, or obligations under this Agreement; (iii) the embezzlement or conversion of any funds or other property of the Company or of any business opportunity of the Company by Executive; (iv) the conviction or indictment of, or guilty plea or plea of no contest by, Executive with respect to a felony; or (v) Executive's habitual intoxication, addiction to a controlled substance or use of an illegal substance in the workplace or while performing duties for the Company; provided, however, that in the event of a termination under subparagraphs (i) or (ii) of this Section D.3, Executive will have the right for a period of thirty (30) days after he has been provided written notice from the Company, to cure any condition giving rise to the Company 's termination of his employment for Cause, to the reasonable satisfaction of the Company. In addition, the Company shall not have the right to terminate Executive's employment pursuant to this Section D.3 as a result of Executive's illness, disability or incapacity (in which event the provisions of Section D.2 shall control).

 

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4.          Discharge without Cause. The Company may terminate Executive's employment hereunder at any time other than for Cause with sixty (60) days written notice and subject to the obligations set forth in this Agreement; provided, however, that during such 60 day notice period, Executive shall not act as an executive officer, shall delegate all authority as an executive officer as directed by the Board, shall immediately vacate the Company 's premises and shall thereafter not enter on or otherwise access the property (including computer networks) of the Company, except as directed by the Board . Payments made to the Executive during this period of notice shall not be construed to waive any rights of Employer under this section.

 

5.          Termination by Executive for Good Reason. Executive may terminate Executive's employment hereunder for Good Reason. "Good Reason" for purposes of this Agreement shall mean the occurrence of any of (i) a material reduction in Executive's duties, responsibilities and authority as set forth in Section A.l , or (ii) a material breach by the Company of any material provision ofthis Agreement, or (iii) a reduction in Executive's Base Salary, or (iv) the relocation of Executive's principal place of employment to a location that increases Executive's commute by 50 or more miles; provided, however, that in any such event the Company will have the right for a period of thirty (30) days after receipt of written notice from the Executive, to cure any condition giving rise to Executive's termination ofhis employment for Good Reason, to the reasonable satisfaction of the Executive.

 

6.          Termination by Executive without Good Reason. Executive may terminate Executive's employment under this Agreement without Good Reason upon at least 60 days prior written notice to the Company, in accordance with Sections D.7 and D.8 hereof.

 

7.          Notice of Termination. Any termination of Executive's employment by the Company or by Executive pursuant to Section D hereof shall be communicated by written Notice of Termination to the other party in accordance with Section G.6 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances, if any, claimed to provide a basis for termination of the Executive's employment under the provision so indicated.

 

8.          Date of Termination. "Date of Termination" shall mean (i) if Executive's employment is term inated by Executive's death, the date of Executive's death, (ii) if Executive's employment is terminated pursuant to Section D.2, 10 days after a Notice of Termination is given (provided that Executive shall not have returned to the performance of Executive's duties on a full-time basis during such 10-day period), (iii) if Executive's employment is terminated pursuant to Section D.6 or Section D.4, the date specified in the Notice of Termination, which shall not be earlier than 60 days following the date on which the Notice of Termination is given, (iv) if Executive's employment is terminated by reason ofthe expiration of the Term pursuant to Section B, the date of such expiration, and (v) if Executive's employment is terminated for any other reason, the date specified in the Notice of Termination, which shall not be earlier than the date on which the Notice of Termination is given.

 

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E.         Executive's Compensation Upon Termination.

 

1.         Death. If Executive's employment is terminated as a result of Executive's death, the Company shall have no further obligation or liability hereunder except that the Company shall pay to Executive's estate the portion, if any, of (i) the Base Salary, bonus (including any unpaid bonus for any fiscal year prior to the fiscal year in which such termination occurred and the bonus payable to Executive in respect of the portion ofthe fiscal year in which such termination occurred during which Executive was employed by the Company), (ii) the Deferred Salary amount, to be paid in such intervals as the Company is reasonably able to pay based on its then cash needs, as determined by the Board, or upon the sale or liquidation of substantially all of the assets of the Company, if earlier and (iii) any other amounts due and unpaid hereunder for the period through the Date of Termination. The payment of amounts in respect of any bonus shall be made at such time or times as such amounts would have been paid had Executive's employment not been terminated. The payment of all other amounts (excluding bonus and Deferred Salary) under this Section E.l shall be made in one lump sum promptly after the Date of Termination.

 

2.          Total Disability. If Executive's employment is terminated as a result of Executive's Total Disability, the Company shall have no further obligation or liability hereunder except that the Company shall pay to Executive the portion, if any, of (i) the Base Salary, bonus (including any unpaid bonus for any fiscal year prior to the fiscal year in which such termination occurred and the bonus payable to Executive in respect of the portion of the fiscal year in which such termination occurred during which Executive was employed by the Company), (ii) the Deferred Salary amount, to be paid in such intervals as the Company is reasonably able to pay based on its then cash needs, as determined by the Board, or upon the sale or liquidation of substantially all of the assets of the Company, if earlier, and (iii) any other amounts due and unpaid hereunder for the period through the Date of Termination. The payment of amounts in respect of any bonus shall be made at such time or times as such amounts would have been paid had Executive's employment not been tem1inated. The payment of all other amounts (excluding bonus and Deferred Salary) under this Section E.2 shall be made in one lump sum promptly after the Date of Termination.

 

3.         Cause. If Executive's employment is terminated by the Company for Cause, the Company shall have no further obligation or liability hereunder except that the Company shall pay to Executive the portion, if any, of (i) the Base Salary, (ii) the Deferred Salary amount, to be paid in such intervals as the Company is reasonably able to pay based on its then cash needs, as determined by the Board, or upon the sale or liquidation of substantially all ofthe assets ofthe Company, if earlier, and (iii) any other amounts due and unpaid hereunder (not including any bonus not then paid, for any period) for the period through the Date of Termination. The payment of all amounts except Deferred Salary under this Section E.3 shall be made in one lump sum promptly after the Date of Termination.

 

4.          Without Good Reason. If Executive's employment is terminated by the Executive without Good Reason, the Company shall have no further obligation or liability hereunder except that the Company shall pay to Executive the portion, if any, of (i) the Base Salary, (ii) the amount of, if any, unpaid bonus for the fiscal year prior to the fiscal year in which such termination occurred, (iii) the Deferred Salary amount to be paid in such intervals as the Company is reasonably able to pay based on its then cash needs, as determined by the Board, or upon the sale or liquidation of substantially all ofthe assets ofthe Company, if earlier, and (iv) any other amounts due and unpaid hereunder for the period through the Date of Termination. The payment of amounts in respect of any bonus shall be made at such time or times as such amounts would have been paid had Executive's employment not been terminated. The payment of all other amounts (excluding bonus and Deferred Salary) under this Section E.4 shall be made in one lump sum promptly after the Date of Termination.

 

5

 

 

5.          Without Cause or With Good Reason. If the Company shall terminate Executive's employment other than for Cause, or if Executive shall terminate Executive's employment for Good Reason, then Executive will be entitled to (i) his then current Base Salary for twelve (12) months (the "E.5 Severance Payments"), in the same intervals as such Base Salary would have been payable if Executive remained employed by the Company hereunder during such period and (ii) the Deferred Salary amount, to be paid in such intervals as the Company is reasonably able to pay based on its then cash needs, as determined by the Board or upon the sale or liquidation of substantially all of the assets of the Company, if earlier. In addition, the Company shall pay to Executive any amounts due for any bonus (including any unpaid bonus for any fiscal year prior to the fiscal year in which such termination occurred and the bonus payable to Executive in respect of the portion of the fiscal year in which such termination occurred during which Executive was employed by the Company), and any other amounts due and unpaid hereunder, for the period through the Date of Termination. The payment of amounts in respect of any bonus shall be made at such time or times as such amounts would have been paid had Executive's employment not been te1minated. The payment of all other amounts under this Section E.S (excluding bonus, the E.S Severance Payments and any Deferred Salary Amount), shall be made in one lump sum promptly after the Date of Termination.

 

6.          Company Failure to Extend. If the Company makes a timely delivery of a Non-Renewal Notice and the Term of Executive's employment under this Agreement expires, then Executive will be entitled to (i) his then current Base Salary for six (6) months (the "E.6 Severance Payments"), in the same intervals as such Base Salary would have been payable if Executive remained employed by the Company hereunder during such period and (ii) the Deferred Salary amount, to be paid in such intervals as the Company is reasonably able to pay based on its then cash needs, as determined by the Board or upon the sale or liquidation of substantially all of the assets of the Company, if earlier. In addition, the Company shall pay to Executive any amounts due for any bonus (including any unpaid bonus for any fiscal year prior to the fiscal year in which such termination occurred and the bonus payable to Executive in respect of the portion of the fiscal year in which such termination occurred during which Executive was employed by the Company), and any other amounts due and unpaid hereunder, for the period through the Date of Termination. The payment of amounts in respect of any bonus shall be made at such time or times as such amounts would have been paid had Executive's employment not been terminated. The payment of all other amounts under this Section E.6 (excluding bonus, the E.6 Severance Payments and any Deferred Salary Amount), shall be made in one lump sum promptly after the Date of Termination.

 

7.          Release. As a condition to the payment by the Company of the first severance payment to be made under Section E.S or Section E65, Executive shall execute and deliver to the Company simultaneously therewith a release in form and substance reasonably satisfactory to the Company, releasing the Company and its affiliates from any claims Executive may have relating to his employment with the Company, provided that such release shall not release the Company from its obligations under this Section E.

 

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F.          Executive Covenants. In exchange for consideration received under this Agreement, Executive agrees to the following covenants to the Company, as a term and condition of his employment, and acknowledges that but for his agreement to the following covenants, the Company would not make this offer of employment:

 

1.          Confidentiality; Nondisclosure and Non-competition.

 

(a)          Confidentiality. Executive covenants and agrees that he shall not, except as required for the performance of his duties, (i) use for any purpose, (ii) disclose to any person or (iii) keep or make copies in any form of documents, tapes, discs, programs or other information storage media containing, any Confidential Information (as hereinafter defined). For purposes hereof, "Confidential Information" shall mean all confidential and proprietary information of Company and shall include, without limitation, all information, observations, and data concerning trade secrets, inventions, or know-how of proprietary processes, together with all marketing, sales, fmancial, regulatory, manufacturing and research information; information concerning products, product candidates or projects in research and development, or marketing plans for any products or projects; customer and vendor lists and related information; information concerning intellectual property owned or licensed by the Company, the technology, software, hardware, configuration information, or computer systems and programs of Company; and other information not generally known to the public concerning the business practices, activities, and business affairs of the Company or the vendors, licensees or customers of the Company as well as prospective vendors, licensees, or customers to which the Company has devoted substantial effort to develop.

 

(i)          All Confidential Information, together with all notes, drawings, and records relating thereto, all computer disks containing any Confidential Information, and all copies or records of any of the foregoing (in any media), in Executive's possession are the exclusive property ofthe Company. Executive will not remove from the Company's premises any notes or records relating to Confidential Information or copies or facsimiles thereof (on any media) or any other property of the Company or any vendor, licensee or Customer of the Company, except in the furtherance of the business of the Company, and as reasonably required to review and study such Confidential Information while he is away from the Company's offices. Executive will promptly, upon termination of Executive's employment hereunder for any reason, deliver to the Company, and will not keep in Executive's possession, or recreate or deliver to any other person, any or all of such Confidential Information or other property, in any form or format.

 

(ii)          The foregoing confidentiality obligations shall not apply to any portion of Confidential Information that: (i) is at the time of disclosure or thereafter becomes generally available to the public other than as a result of disclosure by Executive, (ii) becomes available to Executive on a non-confidential basis from a source other than the Company that has represented to Executive, and regarding which Executive reasonably believes, that such source is entitled to disclose it, (iii) was known to or in the possession of Executive immediately prior to the time of disclosure as shown by Executive's written records and files at such time, or (iv) is independently developed or acquired by Executive without use of or reference to Confidential Information and not in connection with the performance of any of his duties hereunder, as shown by documentation or other evidence in Executive's possession.

 

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(b)          Ownership. During and after the Term, Executive shall have no right, title, or interest in any of the Confidential Information or any patent, trademark, trade name, or character names, copyright or other intellectual property rights belonging to or used by the Company, or any material or matter of any sort prepared for or used in connection with the manufacture, distribution, advertising, broadcasting, or promotion of the products or services provided by the Company, whether manufactured prepared, published, or broadcast in whole or in part by Executive, nor shall Executive make any claims with respect thereto. Executive recognizes that the Company has and shall continue to have and retain the sole and exclusive rights in any and all of the aforementioned trademarks, trade names, patents, character names, copyrights, material , or matter.

 

(c)          Non-competition.

 

(i)          During the Restricted Period (as defined below), Executive shall not, directly or indirectly except with the written consent of the Company:

 

(1)          encourage, induce, or assist others in inducing any employee or any other person employed by the Company to terminate his or her employment with the Company, or hire any person who was an employee of the Company within the prior twelve (12) months, or in any way interfere with the Company's relationship with its employees;

 

(2)          encourage, induce or assist others in inducing any customers, suppliers, licensees, licensors or other associates of the Company to terminate business activities with the Company;

 

(3)          communicate in any manner with any customer, supplier, licensee, licensor or other associate of the Company, any information regarding the Company, its employees, managers, members or Affiliates, or the business as conducted by the Company, other than in performance of his duties under this Agreement;

 

(4)         engage in any diversion of good-will regarding the business as conducted by the Company;

 

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 (5)         establish or acquire a company that engages in the Business (as defined below); or

 

 (6)         otherwise engage in the Business or assist any person or entity that engages in the Business, whether as an owner, manager, employee, consultant, director or officer, or otherwise.

 

provided, however, that the foregoing shall not prohibit the ownership of securities of companies that are listed on a national securities exchange or traded in the national over-the-counter market in an amount not exceeding 5% of the outstanding shares of any such corporation.

 

(ii)          Business. For the purposes of Section F.l (c), the term "Business" shall mean the research, development, manufacturing, marketing distribution, sale or other commercialization of any products that compete, are intended to compete, or are reasonably likely to compete with any of the Company 's products or services product or service candidates, or products or services under development or which the Company has identified as development targets.

 

(iii)          Territorial Scope. For the purposes ofSection F.l(c), Executive agrees that, since the scope ofthe Business and the business of the Company is being, and will continue to be, carried on throughout the United States, the geographic scope of this covenant not to compete shall extend throughout the United States. Additionally the geographic scope of this covenant will be expanded to include any country outside of the United States in which the Company conducts the Business during the term ofExecutive's employment or has made substantial preparations to conduct the Business as of the Date of Termination.

 

(iv)          Restricted Period. As used herein, "Restricted Period" means the period beginning on the Effective Date and ending on the date that is eighteen (18) months following the termination of Executive's employment with the Company, for whatever reason.

 

(d)                Inventions. Executive hereby assigns to the Company Executive's entire right to all Company Inventions (as hereinafter defined), which shall be the sole and exclusive property of the Company whether or not subject to patent, copyright, trademark, or trade secret protection. Executive also acknowledges that all original works of authorship that are made by Executive (solely or jointly with others), within the scope of Executive's employment with the Company, and that are protectable by copyright, are "works made for hire," as that term is defined in the United States Copyright Act (17 U.S.C. §§ 101, et seq.). To the extent that any such works, by operation of law, cannot be "works made for hire," Executive hereby assigns to the Company all right, title, and interest in and to such works and to any related copyrights. "Company Inventions" means all ideas, processes, trademarks and service marks, inventions, discoveries, and improvements to any of the foregoing, that Executive learned alone or with others during his term of employment with the Company, that directly or indirectly arise from or relate to (A) the business, products, or services of the Company or any predecessor or affiliate, or any successor thereof, (B) work performed for the Company by Executive or any other employee, agent, or contractor of the Company or any predecessor or affiliate, or any successor thereof, (C) the use of the time of the Company or any predecessor or affiliate, or any successor thereof, or (D) access to the Confidential Information of the Company or any predecessor or affiliate, or any successor thereof.

 

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(e)          Further Assurances. Executive shall promptly execute, acknowledge and deliver to the Company all additional instruments or documents deemed at any time by the Company in its reasonable discretion to be necessary to carry out the intentions of this Section F.1.

 

(f)          Acknowledgments. Executive acknowledges and agrees that the Confidential Information and the Company Inventions have substantial value to the Company, that the Confidential Information and the Company Inventions would be susceptible to immediate competitive application by those outside of the Company, that the covenants set forth in this Section F. l are given in exchange for the consideration mentioned above and the continuation of Executive's employment with the Company and are intended to protect, among other things, the goodwill and trade secrets for which the Company paid a substantial sum, and that, under these circumstances, the provisions of this Section F.1 are fair and reasonable.

 

(g)          Survival. Executive's obligations under this Section F.l shall survive the termination of Executive's employment with the Company and shall thereafter be enforceable whether or not such termination is claimed or found to constitute or result in a breach of any contract or of any other duty owed or claimed to be owed to Executive by the Company or any employee, agent, or contractor of the Company.

 

2.          Remedies. Executive acknowledges that his compliance with the covenants in Section F hereof is necessary to protect the goodwill, Confidential Information and other proprietary interests of the Company, that such covenants are supported by adequate and sufficient consideration, and that, in the event of any violation by Executive of any provision of Section F hereof, the Company may sustain serious, irreparable and substantial harm to its business. Accordingly, Executive agrees that, in the event of such violation or threatened violation, the Company and its successors and assigns shall be entitled to request an injunction from a court of competent jurisdiction prior to instituting, or prior to completing, of the dispute resolution process set forth in Section G.9. Executive acknowledges that any claim or cause of action he may have against the Company shall not constitute a defense to the enforcement by the Company of his covenants in Section F of this Agreement (e.g., these covenants are independent of any other provision in this Agreement). Executive also acknowledges that his experience and capabilities are such that he can obtain suitable employment otherwise than in violation of the covenants in this Agreement and that the enforcement of these covenants will not prevent the earning of a livelihood nor cause undue hardship. Without limiting the foregoing, if the Company reasonably believes that it has suffered a loss or damages as a result of a breach by Executive of any provision of Section F of this Agreement, the Company shall have the right to cease making any additional payments to Executive under this Agreement, subject to Executive's rights to dispute the Company's position pursuant to the provisions of Section G.9 hereof, provided that this provision shall not limit the Company's right to seek injunctive or other equitable relief to remedy such asserted breach.

 

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3.          Remedies Cumulative and Concurrent. The rights and remedies of the Company as provided in this Section F shall be cumulative and concurrent and may be pursued separately, successively or together, at the sole discretion of the Company, and may be exercised as often as occasion therefor shall arise. The failure to exercise any right or remedy shall in no event be construed as a waiver or release thereof.

 

G.          Miscellaneous.

 

1.          Enforceability. If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, then the parties agree that the court shall have, and the parties will request that the court exercise, the power to modify or restrict any such provision to the extent and in a manner necessary to render the same valid and enforceable, or, if such a modification or restriction is not possible, to excise from this Agreement the provision(s) at issue, and this Agreement shall be construed and enforced to the maximum extent permitted by law as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be.

 

2.          Entire Agreement and Modifications. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and no promises or representations were made or relied upon by either party other than those expressly set forth herein. This Agreement may only be amended in a writing signed by both parties hereto and, if required, has the prior written consent of the Lenders.

 

3.          Governing Law. This Agreement shall be governed by, and all questions relating to its validity, interpretation, enforcement and performance (including, without limitation, provisions concerning limitations of actions) shall be construed in accordance with,the laws of the State of Delaware. This Agreement shall be construed without the aid of any canon, custom or rule of law required in construction against the draftsman.

 

4.          Successors and Assigns. This Agreement, including, but not limited to, the provisions of Section F, shall inure to the benefit of, and be binding upon, the heirs, executors, administrators, successors and assigns of the respective parties hereto, but in no event may Executive assign or delegate to any other party his rights, duties or obligations under this Agreement. Executive further hereby consents and agrees that the Company may assign this Agreement (including, but not limited to Section F) and any of the rights or obligations hereunder to any third party in connection with the sale, merger, consolidation, reorganization, liquidation or transfer, in whole or in part, of Company 's control and/or ownership of its assets or business. In such event, Executive agrees to continue to be bound by the terms of this Agreement.

 

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5.          Waivers. No claim or right arising out of a breach or default under this Agreement can be discharged in whole or in part by a waiver of that claim or right unless the waiver is supported by consideration and is in writing and executed by the aggrieved party hereto. A waiver of a breach or default of any provision of this Agreement shall not be deemed a waiver of future compliance therewith, and such provision shall remain in full force and effect.

 

6.          Notice. All notices, requests and other communications hereunder shall be in writing and shall be deemed to have been dul y given if personally delivered, delivered by courier or mailed, registered or certified mail, postage prepaid, at the addresses set forth below:

 

	
			If to the Company:

			Eleison Pharmaceuticals, LLC

			103 Carnegie Center, Suite 300

			Princeton, NJ 08540

			 

			
	
			With a copy to:

			Capital Solutions, Inc.

			Union Meeting Corporate Center

			910 Harvest Drive, Suite 105

			Blue Bell, Pennsylvania 19422

			Attention: Frank Seidman

			 

			If to Executive:  Executive's home address as maintained in the Company 's records.

			

 

7.          Review. Executive acknowledges that he has carefully read the foregoing Agreement, that he fully understands the meaning and intent of this document, that he has signed this Agreement voluntarily and knowingly, that he had a full opportunity to consult with his family and advisors and to seek such independent advice as he requires, including legal counsel, prior to executing this Agreement, and that the he intends to be legally bound by the promises contained in this Agreement.

 

8.          Construction. The headings in this Agreement are solely for the convenience of reference and shall be given no effect in the construction or interpretation ofthis Agreement. Whenever applicable, mascul.ine and neutral pronouns shall equally apply to the feminine gender, the singular shall include the plural, and the plural shall include the singular. The parties have reviewed and understand this Agreement, and each has had a full opportunity to negotiate this Agreement's terms. Therefore, the parties expressly waive all applicable common law and statutory rules of construction that any provision of this Agreement should be construed against this Agreement's drafter, and agree that this Agreement and all amendments hereto shall be construed as a whole, according to the fair meaning of the language used.

 

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9.          Dispute Resolution. The parties agree that should any dispute arise out of this Agreement, a phased dispute resolution process shall resolve the dispute. If a dispute arises, the aggrieved party shall, within thirty (30) business days of the date on which the aggrieved party first becomes aware of the dispute, document the issue for resolution in a notification to the other party (a "Dispute Notice") with sufficient particularity to identify the dispute, the support for the dispute and the requested resolution. The parties will then promptly meet, but in no event more than ten (10) business days after delivery ofthe Dispute Notice. The parties will meet in good faith to attempt resolution. If the dispute is not resolved to the satisfaction of the parties within 45 days following delivery of the Dispute Notice, either party may arrange at the parties' joint expense for the prompt mediation of the matter by agreeing to a mediator with the other party or requesting the appointment of a mediator from the American Arbitration Association. If the dispute is not resolved by mediation, then within 60 days after the appointment of mediator, a party may then submit the dispute to binding arbitration before a single arbitrator appointed by the American Arbitration Association, with the proceeding being conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association as then in effect. Any award by the arbitrator shall be final and binding upon the parties and may be confirmed by any court of competent jurisdiction. Venue for the arbitration shall be Philadelphia, Pennsylvania. The arbitrator in the exercises of discretion may award a reasonable attorney fee and costs to the prevailing party. With respect to a dispute primarily involving an alleged violation of Section F, an arbitrator or court ruling on the dispute shall award reasonable attorney fees and costs to the prevailing party. Notwithstanding any other provision of this Agreement to the contrary, the Company shall have the right to seek injunctive or other equitable relief from a court of competent jurisdiction in connection with any alleged breach by Executive of any of the provisions of Section F.

 

10.         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

 

IN WITNESS WHEREOF, and intending to be legally bound, the parties have signed, or caused their duly authorized corporate officers to sign, this Agreement.

 

 

 

Schedule A

 

Real estate investment via Aquila Capital

Real estate investment via Thomas Properties III, LLC

Interim consulting/directorship services for Provid Phannaceuticals, Inc.

 

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