Document:

aadi-ex1015_224.htm

Exhibit 10.15

FIRST AMENDMENT TO OFFICE LEASE

This FIRST AMENDMENT TO OFFICE LEASE (“First Amendment”) is made and entered into as of August 30, 2021, by and between BRE SUNSET COAST, LLC, a Delaware limited liability company (“Landlord”), and AADI BIOSCIENCE, INC., a Delaware corporation (“Tenant”).

R E C I T A L S :

A.Landlord and Tenant entered are parties to that certain Office Lease dated April 19, 2019 (the “Lease”), pursuant to which Tenant leases Suite A250, containing approximately 2,760 rentable square feet of space (the “Premises”) on the 2nd floor of the building (the “Building”) located at 17383 Sunset Boulevard, Los Angeles, California.

B.The parties desire to extend the Lease Term and otherwise amend the Lease on the terms and conditions set forth in this First Amendment.

A G R E E M E N T:

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

1.Terms.  All capitalized terms when used herein shall have the same respective meanings as are given such terms in the Lease unless expressly provided otherwise in this First Amendment.

2. Condition of the Premises.  Landlord and Tenant acknowledge that Tenant has been occupying the Premises pursuant to the Lease, and therefore Tenant continues to accept the Premises in its presently existing, “as is” condition.  Except as specifically set forth herein, Landlord shall not be obligated to provide or pay for any improvement work or services related to the improvement of the Premises, other than Landlord’s ongoing maintenance, repair, restoration and replacement obligations as expressly set forth in the Lease.  Notwithstanding the foregoing, Landlord hereby agrees, at Landlord’s sole cost and expense, to apply one (1) coat of paint to the surface of one (1) kitchen wall of the Premises (the “Tenant Improvement”), at a time that Landlord and Tenant mutually agree to.  Such Tenant Improvement shall be completed to Landlord’s “Building standard” condition, using Building standard methods, materials, and procedures, in Building standard color or colors (if applicable).

3.Extended Lease Term.  Pursuant to the Lease, the Lease Term is scheduled to expire on August 31, 2021.  Landlord and Tenant hereby agree to extend the Lease Term for a period of three (3) years and six (6) months, from September 1, 2021, until February 28, 2025 (the “Extended Term”), on the terms and conditions set forth in the Lease, as hereby amended by this First Amendment, unless sooner terminated as provided in the Lease.

 

 

3.1Option to Extend Lease Term.  Landlord and Tenant acknowledge and agree that notwithstanding the extension of the Lease for the Extended Term provided herein, Tenant shall continue to have one (1) option to extend the Lease Term for a period of three (3) years in accordance with, and pursuant to the terms of, Section 2.2 of the Lease, provided that references therein to the expiration of the Lease Term shall be deemed to refer to the expiration of the Extended Term.

4.Rent.

4.1Base Rent.  Prior to September 1, 2021, Tenant shall continue to pay monthly installments of Base Rent for the Premises in accordance with the terms of the Lease.  Commencing on September 1, 2021, and continuing through the Extended Term, Tenant shall pay to Landlord monthly installments of Base Rent for the Premises as follows:

				
	
Period During 
Extended Term
	
Annual 
Base Rent
	
Monthly 
Installment 
of Base Rent
	
Monthly Rental Rate
per Square Foot

	
9/1/21 – 8/31/22
	
$221,738.40
	
$18,478.20
	
$6.695

	
9/1/22 – 8/31/23
	
$228,390.55
	
$19,032.55
	
$6.896

	
9/1/23 – 8/31/24
	
$235,242.27
	
$19,603.52
	
$7.103

	
9/1/24 – 2/28/25
	
$242,299.54
	
$20,191.63
	
$7.316

4.2Abated Base Rent.  Subject to the terms of this Section 4.2, during the (a) three (3) month period commencing on September 1, 2021, and ending on November 30, 2021 (the “Full Base Rent Abatement Period”), Tenant shall not be obligated to pay any Base Rent otherwise attributable to the Premises (the “Full Base Rent Abatement”), and (b) during the six (6) month period commencing on December 1, 2021, and ending on May 31, 2022 (the “Partial Rent Abatement Period,” and referred to collectively with the Full Base Rent Abatement Period as the “Base Rent Abatement Period”), Tenant shall be obligated to pay only fifty percent (50%) of Base Rent attributable to Premises (the “Partial Base Rent Abatement,” and referred to collectively with the Full Base Rent Abatement as the “Base Rent Abatement”).  In no event shall the aggregate amount of all Base Rent Abatement exceed One Hundred Ten Thousand Eight Hundred Sixty Nine and 20/100 Dollars ($110,869.20).

4.3Direct Expenses.  Prior to September 1, 2021, Tenant shall continue to be obligated to pay Tenant’s Share of the Direct Expenses in accordance with the terms of the Lease.  Effective as of September 1, 2021, and continuing throughout the Extended Term, Tenant shall pay Tenant’s Share of the Direct Expenses in accordance with the terms of the Lease; provided that for purposes of calculating the amount of Tenant’s Share of the Direct Expenses, the Base Year shall be calendar year 2021.

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5.Right of First Offer.  Landlord hereby grants to AADI BIOSCIENCE, INC., a Delaware corporation (the “Original Tenant”) a right of first offer with respect to Suite A-210 containing approximately 3,176 RSF on the 2nd floor of the Building (the “First Offer Space”), which First Offer Space is vacant and unleased as of the date of this First Amendment.  Such right of first offer shall expire as of August 31, 2023.  Tenant’s right of first offer shall be on the terms and conditions set forth in this Section 1.2.  

5.1Procedure for Offer.  Prior to Landlord entering into any new lease of the First Offer Space Landlord shall offer to lease to Tenant such First Offer Space (the “First Offer Notice”).

5.2Procedure for Acceptance.  If Tenant wishes to exercise Tenant’s right of first offer with respect to the space described in the First Offer Notice, then within five (5) business days after delivery of the First Offer Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant’s election to exercise its right of first offer with respect to the entire space described in the First Offer Notice (the “First Offer Exercise Notice”).  If Tenant does not so notify Landlord within the five (5) business day period, then Landlord shall be free to lease the space described in the First Offer Notice to anyone to whom Landlord desires on any terms Landlord desires.  Notwithstanding anything to the contrary contained herein, Tenant must elect to exercise its right of first offer, if at all, with respect to all of the space offered by Landlord to Tenant at any particular time, and Tenant may not elect to lease only a portion thereof.

5.3First Offer Rent and Lease Term.  The Rent for the First Offer Space (the “First Offer Rent”) shall be at the same Base Rent per RSF as is payable with respect to the Premises, with the same annual adjustments, and subject to applicable Base Rent Abatement or Partial Base Rent Abatement during the same period as applicable to the Premises under Section 4.2, above, and Tenant shall pay Direct Expenses for the First Offer Space over a 2021 Base Year (with Tenant’s Share for the First Offer Space based on the RSF of the First Offer Space).

5.4Construction In First Offer Space.  Tenant shall take the First Offer Space in its “as is” condition, subject to any improvement allowance granted as a component of the First Offer Rent, and the construction of improvements in the First Offer Space shall comply with the terms of Article 8 of this Lease.

5.5Amendment to Lease.  If Tenant timely exercises Tenant’s right to lease the First Offer Space as set forth herein, Landlord and Tenant shall within fifteen (15) days thereafter execute an amendment to this Lease adding such First Offer Space (and any additional space) to the Premises upon the terms and conditions as set forth in the First Offer Notice and this Section 5.  Tenant shall commence payment of Rent for the First Offer Space, and the term of the First Offer Space shall commence upon the date that is sixty (60) days after Tenant’s delivery of the First Offer Exercise Notice (the “First Offer Commencement Date”) and terminate on the date that is the later of (i) the end of the Extended Term, and (ii) 46 months after the First Offer Commencement Date (the “New Expiration Date”).  If the New Expiration Date is after the end of the Extended Term, then (i) Tenant’s lease of the initial Premises shall be extended through the New Expiration Date, and (ii) as of each of March 1, 2025, and March 1, 2026 (if applicable), the Base Rent payable for the Premises and First Offer Space shall be increased to equal 103% of the Base Rent payable immediately prior to such date.

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5.6Termination of Right of First Offer.  The rights contained in this Section 5 shall be personal to the Original Tenant and any transferee pursuant to Section 14.7 of the Lease (a “Permitted Transferee”), and may only be exercised by the Original Tenant or any Permitted Transferee (and not any other assignee, sublessee or other transferee of the Original Tenant’s interest in this Lease) if the Original Tenant or such Permitted Transferee occupies the entire Premises.  The right of first offer granted herein shall terminate on August 31, 2023, or upon any earlier failure by Tenant to exercise its right of first offer with respect to First Offer Space as offered by Landlord.  Tenant shall not have the right to lease First Offer Space, as provided in this Section 1.2, if, as of the date of the attempted exercise of any right of first offer by Tenant, or as of the scheduled date of delivery of such First Offer Space to Tenant, Tenant is in default under the Lease beyond applicable notice and cure periods, or Tenant has previously been in default beyond applicable notice and cure periods under this Lease more than once.

6.Brokers.  Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this First Amendment other than NAI Capital and Cushman & Wakefield of California, Inc.  (collectively, the “Brokers”), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this First Amendment.  Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under the indemnifying party.  The terms of this Section shall survive the expiration or earlier termination of the term of the Lease, as hereby amended.

7.California Accessibility Disclosure.  For purposes of Section 1938 of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges that the Common Areas and the Premises have not undergone inspection by a Certified Access Specialist (CASp).

8.Miscellaneous.  This First Amendment, together with the Lease, constitutes the entire agreement between Landlord and Tenant regarding the Lease and the subject matter contained herein and supersedes any and all prior and/or contemporaneous oral or written negotiations, agreements or understandings.  This First Amendment shall be binding upon and inure to the benefit of Landlord and Tenant and their respective heirs, legal representatives, successors and assigns.  No subsequent change or addition to this First Amendment shall be binding unless in writing and duly executed by both Landlord and Tenant.  This First Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute one document.  To facilitate execution of this First Amendment, the parties may execute and exchange, by electronic mail PDF, counterparts of the signature pages.  Signature pages may be detached from the counterparts and attached to a single copy of this First Amendment to physically form one document.  In addition, the parties hereto consent and agree that this First Amendment may be signed using electronic signature technology (e.g., via DocuSign or similar electronic signature technology), and that such signed electronic record shall be valid and as effective to bind the party so signing as a paper copy bearing such party’s handwritten signature.

9.No Further Modification.  Except as specifically set forth in this First Amendment, all of the terms and provisions of the Lease shall remain unmodified and in full force and effect and are hereby ratified and confirmed.

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IN WITNESS WHEREOF, this First Amendment has been executed as of the day and year first above written.

 

	
“Landlord”:

	
BRE SUNSET COAST, LLC,

	
a Delaware limited liability company

	
 
	
 
	
 
	
 

	
 
	
By:
	
 
	
/s/ Michael Esquenazi

	
 
	
 
	
 
	
Name: Michael Esquenazi

	
 
	
 
	
 
	
Its: Treasurer

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
“Tenant”:

	
AADI BIOSCIENCE INC.,

	
a Delaware limited liability company

	
 
	
 
	
 
	
 

	
 
	
By:
	
 
	
/s/ Neil Desai

	
 
	
 
	
 
	
Name: Neil Desai

	
 
	
 
	
 
	
Its: CEO

 

 

 

 

 

 

 

Exhibit A

First Offer Spaceaadi-ex1017_330.htm

Exhibit 10.17

AADI BIOSCIENCE, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the “Agreement”) is entered into as of October 19, 2021 by and between Aadi Bioscience, Inc. (“Aadi”), and Loretta Itri, M.D. (“Executive”).  This Agreement will be effective October 21, 2021 (the “Effective Date”).  As you know, Aadi recently consummated a merger (with the parent company of the merger being formerly known as Aerpio Pharmaceuticals, Inc. (“Aerpio”)) and Aerpio changed its name to Aadi Bioscience, Inc. as part of the merger. Aadi, together with any other subsidiaries, including the entity employing you, shall be referred to in this letter as the “Company”.

1.Duties and Scope of Employment.

(a)Positions and Duties.  Effective as of the Effective Date, Executive will serve as the Company’s Chief Medical Officer.  Executive will render such business and professional services in the performance of Executive’s duties, consistent with Executive’s position within the Company, as will reasonably be assigned to Executive by the Company’s Board of Directors (the “Board”) and the Chief Executive Officer.  The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”

(b)Obligations.  During the Employment Term, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability and will devote Executive’s full business efforts and time to the Company.  For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Board, except as provided in Schedule 1; provided, however, that Executive may manage personal investments, participate in civic, charitable, educational and professional activities. In the event of any conflict between any policy of the Company and the terms of this Agreement, the terms of this Agreement shall govern and control.

(c)Principal Location of Services.  Executive shall perform his duties during the Employment Term principally out of offices located in the New Jersey or New York Metropolitan area and shall undertake such travel within or outside of the United States as is necessary or advisable for the efficient operations of the Company.  

2.At-Will Employment.  The parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time with or without Cause or notice.  Executive understands and agrees that neither Executive’s job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of Executive’s employment with the Company.  However, as described in this Agreement, Executive may be entitled to severance benefits depending on the circumstances of Executive’s termination of employment with the Company.

	

	
 

3.Compensation.

(a)Base Salary.  Effective as of the Effective Date and for the remainder of the Employment Term, the Company will pay Executive an annual salary of $500,000 as compensation for Executive’s employment services to the Company (the “Base Salary”).  The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and be subject to the usual, required withholdings.  Executive’s salary will be subject to review at least annually and adjustments will be made based upon the Company’s normal performance review practices.

(b)Target Bonus.  Effective as of the Effective Date and for the remainder of the Employment Term, Executive will be eligible to receive an annual bonus of up to 45% of Executive’s Base Salary upon achievement of performance objectives to be determined by the Board or its authorized committee (the “Committee”) in its sole discretion, with reasonable input from Executive (the “Target Bonus”).  For calendar year 2021, the achieved Target Bonus will be pro-rated for the portion of the calendar year that Executive is actually employed by the Company under the terms of this Agreement. The achieved portion of Executive’s Target Bonus will be paid, less applicable withholdings, as soon as practicable after the Board or Committee determines that the Target Bonus has been earned, but in no event shall the Target Bonus be paid after the later of (i) the fifteenth (15th) day of the third (3rd) month following the close of the Company’s fiscal year in which the Target Bonus is earned or (ii) March 15 following the calendar year in which the Target Bonus is earned. 

(c)Stock Option.  Executive will be granted a nonstatutory stock option to purchase 185,000 shares of the Company’s common stock at an exercise price per share equal to the fair market value of the Company’s common stock on the date of grant, which will be the closing price of the Company’s common stock as reported by the Nasdaq Stock Market on the Effective Date  (the “Option”). Subject to the accelerated vesting provisions set forth herein, the Option will vest as to twenty-five percent (25%) of the shares subject to the Option one (1) year after the Effective Date, and as to 1/48th of the shares subject to the Option monthly thereafter on the same day of the month as the Effective Date (and if there is no corresponding day, the last day of the month), so that the Option will be fully vested and exercisable four (4) years from the Effective Date, subject to Executive continuing to provide services to the Company through the relevant vesting dates. Except as provided herein, the Option will be subject to the terms and conditions of an equity incentive plan and related stock option agreement approved by the Board or Committee, including vesting requirements (collectively, the “Equity Documents”) and will be granted in accordance with the Company’s equity grant policy.

(d)Equity.  During the Employment Term, Executive will be eligible to receive equity awards pursuant to any plans or arrangements the Company may have in effect from time to time. The Board or Committee will determine in its discretion whether Executive will be granted any equity awards and the terms of any equity award in accordance with the terms of any applicable plan or arrangement that may be in effect from time to time.

4.Employee Benefits.  During the Employment Term, Executive will be entitled to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company.  The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.  Executive shall also be entitled to four weeks of vacation, accruing annually, and participation in any 401(k) or 

	

	
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employee benefit plan established by the Company, each as subject to the terms and conditions of such plans or programs adopted by the Company.

5.Expenses.  The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.

6.Severance.

(a)Termination for other than Cause, Death or Disability Apart from a Change of Control.  If, outside of the Change of Control Period, (i) the Company (or any parent or subsidiary or successor of the Company) terminates Executive’s employment with the Company other than for Cause, death or Disability, or (ii) the Executive resigns from such employment for Good Reason, then, subject to Section 7, Executive will be entitled to receive:

(i)continuing payments of severance pay for a period of 12 months at a rate equal to the sum of (A) (x) one hundred percent (100%) of Executive’s Base Salary rate, as then in effect, plus (y) Executive’s Target Bonus for the fiscal year in which Executive’s termination occurs, prorated based on the number of days Executive is employed by the Company during such fiscal year and subject to satisfaction of the applicable performance conditions as reasonably determined by the Company, divided by (B) 12. The severance will be paid, less applicable withholdings, in installments over the severance period described herein with the first payment to commence on the sixty-first (61st) day following Executive’s termination of employment (and include any severance payments that otherwise would have been paid to Executive within the sixty (60) days following Executive’s termination date), with any remaining payments paid in accordance with the Company’s normal payroll practices for the remainder of the severance period following Executive’s termination of employment (subject to any delay as may be required by Section 7(b)). 

(ii)if Executive elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, then the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) until the earlier of (A) a period of twelve (12) months from the date of termination or (B) the date upon which Executive and/or Executive’s eligible dependents are no longer eligible for COBRA continuation coverage. The reimbursements will be made by the Company to Executive consistent with the Company’s normal expense reimbursement policy. Notwithstanding the first sentence of this Section 6(a)(ii), if the Company determines in its sole discretion that it cannot provide the foregoing benefit without potentially violating, or being subject to an excise tax under, applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company will in lieu thereof provide to Executive a taxable monthly payment, payable on the last day of a given month (except as provided by the following sentence), in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue the group health coverage for Executive and/or Executive’s eligible dependents in effect on the termination of employment date (which amount will be based on the premium for the first month of COBRA coverage), which payments will be made regardless of whether Executive and/or Executive’s eligible dependents elect COBRA continuation coverage and will commence on the month following 

	

	
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Executive’s termination of employment and will end on the earlier of (x) the date upon which Executive obtains other employment with comparable health insurance coverage as that provided by Employer to Executive, or (y) the date the Company has paid an amount equal to twelve (12) payments. Any such taxable monthly payments that otherwise would have been paid to Executive within the sixty (60) days following Executive’s termination date instead will be paid on the sixty-first (61st) day following Executive’s termination of employment, with any remaining payments paid as provided in the prior sentence (subject to any delay as may be required by Section 7(b)). For the avoidance of doubt, the taxable payments in lieu of COBRA reimbursements may be used for any purpose, including, but not limited to continuation coverage under COBRA, and will be subject to all applicable tax withholdings.

(iii)If, following the termination of Executive’s employment with the Company other than for Cause, death or Disability, or the Executive’s resignation from such employment for Good Reason, the sale of any shares received on exercise of a Company stock option would violate the Company’s insider trading policy or Rule 10b5-1(a) under the Exchange Act (as defined in the Plan), then such Company stock option will remain exercisable until the earlier of (a) the later of (i) three (3) months following the date of your termination of employment or (ii) thirty (30) days following the earliest date the sale of the shares received upon exercise of such Company stock option would not be in violation of the Company’s insider trading policy or Rule 10b5-1(a) under the Exchange Act, or (b) the expiration of the term of such Company stock option as set forth in the applicable Company stock option.  

(b)Termination for other than Cause, Death or Disability or Resignation by Executive for Good Reason Related to a Change of Control.  If, within the Change of Control Period (i) the Company (or any parent or subsidiary or successor of the Company) terminates Executive’s employment with the Company other than for Cause, death or Disability, or (ii) the Executive resigns from such employment for Good Reason, then, subject to Section 8, Executive will be entitled to receive:

(i)a lump sum payment equal to one hundred percent (100%) of the sum of: (A) Executive’s Base Salary, as then in effect, or if greater, at the level in effect immediately prior to the Change of Control, plus (B) Executive’s Target Bonus in effect for the fiscal year in which Executive’s termination of employment occurs. The severance will be paid, less applicable withholdings, on the sixty-first (61st) day following Executive’s termination of employment in accordance with the Company’s normal payroll practices (subject to any delay as may be required by Section 7(b)).  For the avoidance of doubt, if (x) Executive incurred a termination of employment prior to a Change of Control that qualifies Executive for severance payments under Section 6(a)(i); and (y) a Change of Control occurs within the three (3)-month period following Executive’s termination of employment that qualifies Executive for the superior benefits under this Section 6(b)(i), then Executive shall be entitled to a lump-sum payment of the amount calculated under this Section 6(b)(i), less amounts already paid under Section 6(a)(i).

(ii)if Executive elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, then the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) until the earlier of (A) a period of twelve (12)  months from the date of termination or (B) the date upon which Executive and/or 

	

	
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Executive’s eligible dependents are no longer eligible for COBRA continuation coverage. The reimbursements will be subject to the same conditions, limitations, and restrictions as the COBRA benefits described in Section 6(a)(ii).  For the avoidance of doubt, if (x) Executive incurred a termination of employment prior to a Change of Control that qualifies Executive for COBRA benefits under Section 6(a)(ii); and (y) a Change of Control occurs within the three (3)-month period following Executive’s termination of employment that qualifies Executive for the benefits under this Section 6(b)(ii), then Executive’s benefits under this Section 6(b)(ii) shall be offset by the benefits already provided to Executive under Section 6(b)(i); and

(iii)accelerated vesting as to one hundred percent (100%) of Executive’s then-outstanding and unvested equity awards to acquire Company common stock.

(c)Termination for Cause, Death or Disability; Resignation without Good Reason.  If Executive’s employment with the Company (or any parent or subsidiary or successor of the Company) terminates voluntarily by Executive (except upon resignation for Good Reason), for Cause by the Company or due to Executive’s death or Disability, then (i) all vesting will terminate immediately with respect to Executive’s outstanding equity awards, (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned), and (iii) Executive will only be eligible for severance benefits in accordance with the Company’s established policies, if any, as then in effect.

(d)Termination for Any Reason.  Upon termination of Executive’s employment for any reason, Executive (or his estate) shall be entitled to receive (i) his Base Salary accrued through the date of termination, (ii) earned but unused vacation and paid time off as of the date of termination, (iii) reimbursement of expenses properly incurred prior to termination and properly documented in accordance with the Company’s policy, (iv) all benefits, including continuation and conversion rights, provided upon termination of employment under the Company’s employee benefit plans and policies in accordance with the terms of such plans and policies, and (v) except in the case of termination for Cause or resignation without Good Reason, Executive’s Target Bonus actually earned for the fiscal year ending prior to the date of termination to the extent not yet paid on the date of termination (collectively the “Accrued Obligations”). For avoidance of doubt, upon termination for Cause or resignation without Good Reason, Executive shall not be entitled to any payments or benefits other than the Accrued Obligation.

(e)Exclusive Remedy.  In the event of a termination of Executive’s employment with the Company (or any parent or subsidiary or successor of the Company), the provisions of this Section 7 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement, including any prior employment agreements entered into between the Company and Executive.  Executive will be entitled to no severance or other benefits upon termination of employment with respect to acceleration of award vesting or severance pay other than those benefits expressly set forth in this Section 7.

7.Conditions to Receipt of Severance; No Duty to Mitigate.  

(a)Separation Agreement and Release of Claims.  The receipt of any severance pursuant to Section 6(a) or (b) will be subject to Executive signing and not revoking a separation 

	

	
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agreement and release of claims in a form reasonably satisfactory to the Company (the “Release”) and provided that such Release becomes effective and irrevocable no later than sixty (60) days following the termination date (such deadline, the “Release Deadline”).  If the Release does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to severance or benefits under this Agreement.  In no event will severance payments or benefits be paid or provided until the Release becomes effective and irrevocable.

(b)Section 409A.  

(i)Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to Executive, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Code Section 409A, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until Executive has a “separation from service” within the meaning of Section 409A.  Similarly, no severance payable to Executive, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive has a “separation from service” within the meaning of Section 409A.

(ii)Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination (other than due to death), then the Deferred Payments that are payable within the first six (6) months following Executive’s separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service.  All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(iii)Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

(iv)Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Payments for purposes of clause (i) above. 

(v)The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  The Company and Executive agree to work together in good faith to consider 

	

	
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amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A. Executive agrees and acknowledges that the Company makes no representations or warranties with respect to the application of Section 409A and other tax consequences to any payments hereunder and, by the acceptance of any such payments, Executive agrees to accept the potential application of Section 409A and the other tax consequences of any payments made hereunder.

(c)Confidential Information Agreement.  Executive’s receipt of any payments or benefits under Section 6 will be subject to Executive continuing to comply with the terms of Confidential Information Agreement (as defined in Section 10).  In the event Executive breaches any material provision of the Confidential Information Agreement, all continuing payments and benefits to which Executive may otherwise be entitled pursuant to Section 6(a) or (b) will immediately cease.

(d)No Duty to Mitigate.  Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment.

8.Definitions.

(a)Cause.  For purposes of this Agreement, “Cause” is defined as (i) the willful failure, disregard, or refusal by Executive to perform the services hereunder or follow the reasonable instructions of the Board; provided, however, that any willful failure, disregard, or refusal by Executive to perform the services hereunder shall not constitute Cause unless cure is not effected within thirty (30) days after notice thereof is received by the Executive from the Company; (ii) any willful or grossly negligent act by the Executive having the effect of injuring, in a material way (whether financial or otherwise), the business or reputation of the Company or any of its subsidiaries or affiliates; (iii) Executive’s conviction of, guilty plea, or plea of nolo contendere to any felony or a misdemeanor involving moral turpitude; (iv) engagement by Executive in some form of harassment prohibited by law (including, without limitation, age, sex, disability, or race discrimination) unless Executive’s actions were specifically directed by the Board; or (v) material breach by the Executive of any material provision of this Agreement or any Confidential Information Agreement; provided, however, that any such breach by Executive to perform the services hereunder shall not constitute Cause unless cure is not effected within thirty (30) days after notice thereof is received by the Executive from the Company.

(b)Change of Control.  For purposes of this Agreement, “Change of Control” means the occurrence of any of the following events:

(i)a change in the ownership of the Company which occurs on the date that any one person (as defined in Section 13(d) and Section 14(d) of the Exchange Act), or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change in Control; provided, further, that any change in the ownership of the stock of the Company as a result of a private financing 

	

	
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of the Company that is approved by the Board also will not be considered a Change of Control. Further, if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, direct or indirect beneficial ownership of fifty percent (50%) or more of the total voting power of the stock of the Company or of the ultimate parent entity of the Company, such event shall not be considered a Change of Control under this subsection (i). For this purpose, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities; 

(ii)A change in the effective control of the Company which occurs on the date that a majority of members of the Board of Directors of the Company is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.  For purposes of this subsection (ii), if any person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same person will not be considered a Change in Control;  or

(iii)a change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (8)(b)(ii).  For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

	

	
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Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

(c)Change of Control Period.  For purposes of this Agreement, “Change of Control Period” means the period that begins three (3) months prior to a Change of Control and ends twelve (12) months following a Change of Control.

(d)Code.  For purposes of this Agreement, “Code” means the Internal Revenue Code of 1986, as amended.

(e)Disability.  For purposes of this Agreement, “Disability” means that Executive has been unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment for a period of ninety (90) consecutive days or more, or more than one hundred and eighty (180) days within any twelve (12)-month period, in each case, determined by the Board.  This provision shall be subject to compliance with all federal, state and local disability laws.

(f)Good Reason.  For the purposes of this Agreement, “Good Reason” means Executive’s resignation within thirty (30) days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without Executive’s express written consent: (i) a material breach of any provision of this Agreement by the Company; (ii) any material reduction by the Company of Executive’s duties, responsibilities, or authority which causes Executive’s position to become materially of less responsibility or authority than Executive’s position as of immediately following the Effective Date; (iii) a material relocation of the Company’s principal place of business of Executive more than 35 miles from Executive’s residence in Manhattan; or (iv) a material diminution in Executive’s base salary (other than in the context of salary or consideration reductions applied in identical percentages to all executive officers of the Company).  Executive will not resign for Good Reason without first providing the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within ninety (90) days of the initial existence of the grounds for “Good Reason” and a reasonable cure period of not less than thirty (30) days following the date the Company receives such notice during which such condition must not have been cured.

(g)Section 409A Limit.  For purposes of this Agreement, “Section 409A Limit” will mean two (2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Executive’s taxable year preceding the Executive’s taxable year of Executive’s separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which Executive’s separation from service occurred.

9.Limitation on Payments.  In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 9, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance benefits will be either:

	

	
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(a)delivered in full, or

(b)delivered as to such lesser extent which would result in no portion of  such severance benefits being subject to the excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code.  If a reduction in the severance and other benefits constituting “parachute payments” is necessary so that no portion of such severance benefits is subject to the excise tax under Section 4999 of the Code, the reduction shall occur in the following order: (1) reduction of the cash severance payments; (2) cancellation of accelerated vesting of equity awards; and (3) reduction of continued employee benefits.  In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive’s equity awards.  

A nationally recognized certified professional services firm selected by the Company, the Company’s legal counsel or such other person or entity to which the parties mutually agree (the “Firm”) shall perform the foregoing calculations related to the Excise Tax. The Company shall bear all expenses with respect to the determinations by the Firm required to be made hereunder. For purposes of making the calculations required by this Section, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. The Firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to the severance benefits or other payments is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive. Any good faith determinations of the Firm made hereunder shall be final, binding, and conclusive upon the Company and Executive. 

10. Confidential Information.  Executive agrees to execute the Company’s Confidential Information and Invention Assignment Agreement (the “Confidential Information Agreement”) concurrently with the execution of this Agreement.

11.Indemnification Agreement.  The Company and Executive shall enter into an Indemnification Agreement (the “Indemnification Agreement”) in substantially the form attached as Exhibit 10.11 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2021. In the event that the Company adopts a more favorable form of Indemnification Agreement, or amendments to the form of Indemnification Agreement, for other executives or Board members in the future, Executive shall be given the opportunity to enter into a new or amended Indemnification Agreement on the same terms

12.Assignment.  This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company 

	

	
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under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

13.Notices.  All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a well established commercial overnight service, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:

Aadi Bioscience, Inc.

17383 Sunset Boulevard, Suite A250

Pacific Palisades, CA 90272

Attn: Chief Executive Officer

 

If to Executive:

at the last residential address known by the Company.

14.Severability.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

15.Arbitration.  Executive agrees that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, stockholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from Executive’s service to the Company, shall be subject to arbitration in accordance with the provisions of the Confidential Information Agreement.

16.Integration.  This Agreement, along with the Confidential Information Agreement, Equity Documents and Indemnification Agreement, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral.  With respect to equity awards granted on or after the date of this Agreement, the acceleration of vesting provisions provided herein will apply to such equity awards except to the extent the applicable equity award agreement expressly supersedes this Agreement.  This Agreement may be modified only by agreement of the parties by a written instrument executed by the parties that is designated as an amendment to this Agreement.

17.Waiver of Breach.  The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

	

	
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18.Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

19.Tax Withholding.  All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

20.Governing Law.  This Agreement will be governed by the laws of the State of New Jersey (with the exception of its conflict of laws provisions).

21.Acknowledgment.  Executive acknowledges that Executive has had the opportunity to discuss this matter with and obtain advice from Executive’s private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

22.Counterparts.  This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

	

	
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year first above written.

COMPANY:

AADI BIOSCIENCE, INC.

By: /s/ Neil DesaiDate: October 19, 2021

Name: Neil Desai, Ph.D.

Title: President and Chief Executive Officer

 

EXECUTIVE:

/s/ Loretta ItriDate: October 20, 2021

Loretta Itri, M.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO EXECUTIVE EMPLOYMENT AGREEMENT]

	

	
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Schedule 1

 

None

	

	
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