Document:

Exhibit 10.5

 

Bpifrance Sud-Est

186 avenue Thiers

69465 Lyon Cedex 06

 

CONTRACT no. A1308020 V

 

Between:

 

1.              Bpifrance Financing

A public corporation with a share capital of 750,860,784 euros

Trade & Corporate Register (RCS) of Créteil number 320 252 489

Headquartered at 27-31, avenue du General Leclerc - 94710 MAISONS-ALFORT Cedex

Represented by Corinne PERRET-HONEGGER, as Head of the Innovation and Intangibles

Department, hereinafter referred to as “Bpifrance Financement”

 

Party of the first part,

 

and:

 

2.              ALIZE PHARMA

A private corporation with a share capital of 110,894,00 euros

SIRET no.: 49757562100022

ESPACE EUROPÉEN

15 CHEMIN DU SAQUIN

69130 ECULLY

Represented by SARL TAB CONSULTING, as CEO, in turn represented by THIERRY

ABRIBAT, in his capacity as Manager

Hereinafter referred to as the “BENEFICIARY”

 

Party of the second part,

 

Having regard to Decree no. 97-682 of May 31, 1997, pertaining to aid for innovation;

 

Having regard to order no. 2005-722 of June 29, 2005, amended, pertaining to the creation of the public establishment OSEO and the public corporation named OSEO;

 

Having regard to community framework for state aid for research, development and innovation no. 2006/C 323/01 published in the Official Journal of the European Union (OJEU) of December 30, 2006;

 

Having regard to the State aid system N408/2007 of intervention of OSEO innovation for research, development and innovation dated January 17, 2008;

 

Having regard to Articles 60 to 64 of Law no. 2010-1249 of October 22, 2010 pertaining to banking and financial regulations;

 

Having regard to Decree no. 2010-1672 of December 28, 2010, approving the articles of association of the public corporation named OSEO and bearing various provisions relating to its operation;

 

Having regard to the decision of the Shareholders’ Meeting of OSEO SA dated July 12, 2013, changing the name from OSEO SA to Bpifrance Financement SA;

 

Having regard to decree no. 2013-637 of July 12, 2013 approving the articles of association of the corporation of Bpifrance Financement;

 

 

A1397929 V / AE AN AO 00

 

Having regard to the request for innovation aid submitted by the BENEFICIARY and registered on 07/18/2013 number A1308020 V;

 

Having regard to the technical and financial instructions carried out in accordance with Article 7 of decree no. 97-682 referred to above;

 

2

 

SPECIAL TERMS AND CONDITIONS FOR GRANTING AID

 

ARTICLE 1 - AMOUNT, OBJECT AND FORM OF THE AID

 

1.1.                            Bpifrance Financement grants to the BENEFICIARY, under the payment terms and conditions provided for in Article 2, an innovation aid of € 750,000.00.

This aid is allocated to the program referred to in the introduction made by the BENEFICIARY and aimed at:

 

Phase 1b clinical trial in type 2 diabetic patients for AZP - 531.

 

1.2.                            In return for this aid, the BENEFICIARY agrees to carry out the program presented within 18 months, from 07/18/2013, and to implement all human, technical, financial and commercial means necessary for the success of its execution and the commercial exploitation of its results.

 

1.3.                            The estimated total amount of the program presented is € 1,917,162.40 excluding taxes.

The innovation program expenditure included in the aid base amounts to: € 1,917,162.40 excluding taxes, according to the attached estimate.

As a result, the amount provided for above represents 39.12% of the total expenditure, excluding taxes, included in the innovation aid base. This aid is granted to the BENEFICIARY in the form of a reimbursable advance.

 

ARTICLE 2 — PAYMENT TERMS AND CONDITIONS OF THE AID

 

2.1. The funds will be made available to the BENEFICIARY in 2 installments:

 

·                  an amount of € 500,000.00 after the date this contract is signed,

 

·                  the balance upon completion of the work, upon request of the BENEFICIARY and after transmission of the Summary Statement of Expenses Paid (Article 3.2) in accordance with the estimate mentioned in Article 1.3.

 

2.2.                            The amount of each payment will be credited to account number FR7613907000008116818921548, opened in the name of the BENEFICIARY at the Banque Populaire Loire et Lyonnais after this contract is signed by the parties, in accordance with the provisions of Article I of the General Terms and Conditions.

 

ARTICLE 3 - END OF DEFERRED REIMBURSEMENT PERIOD

 

3.1.                            The end date of the deferred reimbursement period is 03/31/2016

 

3.2.                            By this date at the latest, the BENEFICIARY must send to Bpifrance Financement a Summary Statement of Expenses Paid, certified as accurate, dated and signed by the BENEFICIARY’s accountant or the designated accountant. A summary statement form is attached to this contract.

 

3.3.                            In the event the documents and vouchers provided by the BENEFICIARY reveal expenses less than the expenditure set down in the aid base, the amount of the aid will automatically be reduced to 39.12% of the total expenses effectively substantiated and determined by Bpifrance Financement; the BENEFICIARY agrees to immediately reimburse any money paid without just cause that is observed.

 

3

 

ARTICLE 4 - BENEFICIARY’S OBLIGATIONS

 

4.1.                            The BENEFICIARY agrees to reimburse Bpifrance Financement the sum of 750,000.00 € according to the following schedule:

 

4.1.1.                  Schedule:

 

€ 17,500.00 by 12/31/2016

€ 17,500.00 by 03/31/2017

€ 17,500.00 by 06/30/2017

€ 17,500.00 by 09/30/2017

€ 35,000.00 by 12/31/2017

€ 35,000.00 by 03/31/2018

€ 35,000.00 by 06/30/2018

€ 35,000.00 by 09/30/2018

€ 40,000.00 by 12/31/2018

€ 40,000.00 by 03/31/2019

€ 40,000.00 by 06/30/2019

€ 40,000.00 by 09/30/2019

€ 45,000.00 by 12/31/2019

€ 45,000.00 by 03/31/2020

€ 45,000.00 by 06/30/2020

€ 45,000.00 by 09/30/2020

€ 50,000.00 by 12/31/2020

€ 50,000.00 by 03/31/2021

€ 50,000.00 by 06/30/2021

€ 50,000.00 by 09/30/2021

 

4.1.2. and, if applicable, no later than 03/31 of each year, starting from 01/01/2016, a reimbursement annuity equal to:

 

a) - 20.00% of the proceeds, excluding taxes, from assignments or concessions of licenses, patents or know-how collected during the previous calendar year when the said assignments or concessions relate to all or part of the results of the program being aided;

b) 20.00% of the product, excluding taxes, generated by the marketing and in particular the sale to a third party or the use by the BENEFICIARY for its own needs prototypes, pre-series, models, made under the program being aided.

 

The sums owed to Bpifrance Financement pursuant to paragraphs a) and b) of this Article 4.1.2, will be charged in priority and as owed on the last amount owed to Bpifrance Financement pursuant to Article 4.1.1 and, if applicable, on the penultimate installment.

 

The application of this Article 4.1.2 cannot lead the BENEFICIARY to reimburse Bpifrance Financement a sum greater in principal than the amount of the aid that it has received.

 

4.2.                            In addition, in the event the amount of the advance actually paid by Bpifrance Financement is less than the sum indicated in Article 1, the reimbursements stipulated in Article 4.1.1 and Article 4.3 will be reduced in proportion to the sums paid.

 

4.3.                            Due to the nature of the work planned for the program being aided, the BENEFICIARY will benefit from the partial or indirect results of the program for an improvement of its products or more generally of the technologies implemented in their manufacture and/or their design.

 

4

 

Consequently, notwithstanding the failure or partial success of the program, the BENEFICIARY will in any case reimburse Bpifrance Financement a lump sum of € 300,000.00 payable according to the following terms and conditions:

 

€ 17,500.00 by 12/31/2016

€ 17,500.00 by 03/31/2017

€ 17,500.00 by 06/30/2017

€ 17,500.00 by 09/30/2017

€ 35,000.00 by 12/31/2017

€ 35,000.00 by 03/31/2018

€ 35,000.00 by 06/30/2018

€ 35,000.00 by 09/30/2018

€ 40,000.00 by 12/31/2018

€ 40,000.00 by 03/31/2019

€ 10,000.00 by 06/30/2019

 

4.4.                            The BENEFICIARY may refund the amount of the advance payment aid.

 

4.5.                            The BENEFICIARY will be released from all its commitments and obligations incumbent on it under this contract as soon as it has paid in full the amount provided for in 4.1, subject to the following:

 

in the event that, during the performance of this contract, it appears that the amount of the aid allocated exceeds the aid intensity authorized by Community Framework 2006/C 323/01 published in the JOUE of December 30, 2006, the BENEFICIARY agrees to reimburse Bpifrance Financement, at its request, the money paid without just cause thus received.

 

ARTICLE 5 - TECHNICAL FAILURE, PARTIAL TECHNICAL SUCCESS

 

5.1.                            A statement of technical failure or partial technical success of the program may be requested by the BENEFICIARY from Bpifrance Financement. The possible financial difficulties of the BENEFICIARY cannot be grounds for requesting a declaration of technical failure or partial technical success of the program.

 

The BENEFICIARY’s request, which must be sent to Bpifrance Financement no later than the date of the end of the payment deferred period established in Article 3, must be accompanied by the following documents:

 

·                  a technical end-of-program report providing an account of its execution and results.

·                  a summary statement of the expenses paid, certified as accurate by the accountant or the designated accounting officer of the beneficiary, dated and signed by the BENEFICIARY. A summary statement form is attached to this contract,

·                  its latest financial statements, profit and loss accounts and schedules since the date of the application for aid is registered.

 

5.2.                            In the context of a request for a technical failure or a partial technical success report made by the BENEFICIARY, and in view of the information provided by the BENEFICIARY, supplemented by all the explanatory information that Bpifrance Financement considers appropriate, Bpifrance Financement will determine either technical success or partial technical success, or the failure of the program.

 

5.3.                            a) In the event of a technical failure determined by Bpifrance Financement, the BENEFICIARY will not be released from all commitments and obligations incumbent on it under this contract, with the exception of Articles II.6, II.7 and VI of the General Terms and Conditions provided it has fulfilled all the commitments and obligations incumbent upon it up until the date of the determination of failure and that it has fulfilled the obligations set out in Article 4.3.

 

b) In the event of a partial technical success of the program determined by Bpifrance Financement, the reimbursement conditions of the aid referred to in Article 4 may, if applicable, be adapted by Bpifrance Financement by amendment.

 

5

 

c) The cost of internal and external expenditure and expert assessments, which may be requested by Bpifrance Financement to process the BENEFICIARY’s claim for failure, will be charged to the amount of the aid, or reinvoiced to the BENEFICIARY, that agrees to pay it.

 

5.4.                            In the absence of a request for a determination of technical failure or a partial technical success report accompanied by the support documents provided for in Article 5.1 above before the end of the deferred reimbursement period set in Article 3, the total technical success of the program shall be considered to have been acquired and the reimbursement of the aid shall be made in accordance with the provisions of Article 4.

 

ARTICLE 6 — SEPA LEVIES

 

All aid-related amounts owed by the BENEFICIARY will be paid by SEPA Direct Debit Order on behalf of Bpifrance Financement from the BENEFICIARY’s bank or postal account.

 

To this end, the BENEFICIARY agrees to maintain on behalf of Bpifrance Financement, throughout the reimbursement period of the amount provided for in Article 4.1, the ability to make the SEPA direct debit of all amounts owed in the bank or postal account designated on the order given prior to the signing of this innovation aid contract; the BENEFICIARY acknowledges and agrees that the first withdrawal may be submitted by Bpifrance Financement, subject to compliance with a minimum period of 5 (five) working days from the date this contract is signed.

 

If the bank or postal account information changes, Bpifrance Financement must be informed thereof at least one month before the date of the next due date and attach a new bank account statement to this request.

 

ARTICLE 7 — CONTRACT DOCUMENTS

 

The contract documents that the BENEFICIARY acknowledges having read and to which it adheres are: these Special Terms and Conditions, the General Terms and Conditions of granting the aid, the estimate of the program excluding taxes, the summary statement form of the expenses and the SEPA Direct Debit order.

 

ARTICLE 8 - APPLICABLE LAW

 

The law applicable to this contract is French law.

 

ARTICLE 9 - JURISDICTION

 

The Courts of Paris will have sole jurisdiction for any dispute relating to this contract.

 

6

 

	
Alizé Pharma
    	
 
    	
 
    	
Executed in Lyon
    
	
Alizé Pharma SAS
    	
 
    	
 
    	
In two copies,   on 01/24/2014
    
	
15, chemin du   Saquin — Building
    	
 
    	
 
    
	
G
    	
 
    	
 
    
	
F — 69130 Ecully
    	
 
    	
 
    
	
NCS Lyon 497 575   621
    	
 
    	
 
    

 

	
The BENEFICIARY
    	
 
    	
Bpifrance Financement
    
	
Represented by Sari TAB
    	
 
    	
Corinne Perret-Honegger
    
	
CONSULTING Acting as
    	
 
    	
Acting in her capacity as Innovation and Intangibles
    
	
President, represented herself by
    	
 
    	
Department Manager
    
	
Mr. THIERRY ABRIBAT, acting
    	
 
    	
 
    
	
as Managing Director
    	
 
    	
 
    

 

Exhibits:

 

·                  Estimate of the program before taxes

·                  General terms and conditions for granting aid

·                  Summary of Expenses form

·                  SEPA debit order

 

7

 

	
OSEO Innovation
    	
 
    	
Beneficiary:   Alizé   Pharma I
    	
 
    	
Contract   no.:    A1308020V
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Duration of the   program anticipated by the beneficiary 
    	
18
    
	
Aid to Corporate   Innovation
    	
 
    	
Innovation program   estimate — Amounts in Euros before tax
    	
 
    	
(in months)
    	
 
    

 

	
 
    	
 
    	
 
    	
 
    	
Phase 1
    	
 
    	
Phase 2
    	
 
    	
Phase 3
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
From   01-Oct.-13 To 31-May-14
    	
 
    	
From   01-June-14 To 31-March -15
    	
 
    	
From             To            
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Price/hour
    	
 
    	
RI
    	
 
    	
DE
    	
 
    	
RI
    	
 
    	
DE
    	
 
    	
RI
    	
 
    	
DE
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Description
    	
 
    	
(1)
    	
 
    	
Hours
    	
 
    	
Amount
    	
 
    	
Hours
    	
 
    	
Amount
    	
 
    	
Hours
    	
 
    	
Amount
    	
 
    	
Hours
    	
 
    	
Amount
    	
 
    	
Hours
    	
 
    	
Amount
    	
 
    	
Hours
    	
 
    	
Amount
    	
 
    	
 
    	
 
    	
 
    	
 
    	
TOTAL
    	
 
    
	
Costs   for existing staff
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Engineering   (Business and project manager)
    	
 
    	
48.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
429
    	
 
    	
20,592.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
536
    	
 
    	
25,728.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
46,320.00
    	
 
    	
46,320.00
    	
 
    
	
Engineer   (pharmacology)
    	
 
    	
42.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
161
    	
 
    	
6,762.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
201
    	
 
    	
8,442.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
15,204.00
    	
 
    	
15,204.00
    	
 
    
	
Manager
    	
 
    	
50.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
536
    	
 
    	
26,800.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
670
    	
 
    	
33,500.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
60,300.00
    	
 
    	
60,300.00
    	
 
    
	
Manager
    	
 
    	
88.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
643
    	
 
    	
56,584.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
804
    	
 
    	
70,752.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
127,336.00
    	
 
    	
127,336.00
    	
 
    
	
Costs   of staff recruited for the project
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Engineer   (clinical project manager)
    	
 
    	
56.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
643
    	
 
    	
36,008.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
804
    	
 
    	
45,024.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
81,032.00
    	
 
    	
81,032.00
    	
 
    
	
PERSONNEL   COSTS EXCLUDING TAX
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
146,746.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
183,446.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
330,192.00
    	
 
    	
330,192.00
    	
 
    
	
General   lump-sum costs (20% of staff costs)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
29,349.20
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
36,689.20
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
66,038.40
    	
 
    	
66,038.40
    	
 
    
	
GENERAL   COSTS AND PURCHASES EXCLUDING TAX
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
29,349.20
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
36,689.20
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
66,038.40
    	
 
    	
66,038.40
    	
 
    
	
Atlantic
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
42,750.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
49,375.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
92,125.00
    	
 
    	
92,125.00
    	
 
    
	
BERTIN
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
57,704.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
64,167.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
121,871.00
    	
 
    	
121,871.00
    	
 
    
	
Companies   (Quitiles CRO phase 1)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
562,514.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
744,422.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
1,306,936.00
    	
 
    	
1,306,936.00
    	
 
    
	
SERVICES   AND SUBCONTRACTING EXCLUDING TAX
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
662,968.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
857,964.00
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
1,520,932.00
    	
 
    	
1,520,932.00
    	
 
    
	
TOTAL   per phase: RI then DE
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
839,063.20
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
1,078,099.20
    	
 
    	
 
    	
 
    	
—
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
1,917,162.40
    	
 
    	
1,917,162.40
    	
 
    
	
TOTAL   per phase
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Phase   1:
    	
 
    	
839,063.20
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Phase   2:
    	
 
    	
1,078,099.20
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Phase   3:
    	
 
    	
—
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(1) Direct hourly rate = (gross annual salaries (according to DAS) + social contributions) / 1607 hours

 

 

General Terms and Conditions for granting aid Bipfrance Financement July 2013

 

GENERAL TERMS AND CONDITIONS FOR GRANTING AID

 

ARTICLE I - PAYMENT OF THE AID

 

I.1.                              Payment of the funds will be sufficiently recorded by the accounting records of Bpifrance Financement.

 

I.2.                              Bpifrance Financement will not be required to pay all or part of the amount of the aid if any of the cases referred to in Article VI below occurs or if Bpifrance Financement considers that the evolution of the technical and/or financial capacity of the BENEFICIARY does not enable it to carry out the program.

 

In addition, Bpifrance Financement will not be responsible for any payment in the event the BENEFICIARY fails to fulfill the commitments signed under other contracts it has entered into with Bpifrance Financement.

 

Moreover, if events of Force Majeure jeopardize the economic interest of the program which is the object of the aid, or if fundamental changes occur in the status (see Article II.9) or the control of the BENEFICIARY (see Article II.8), the situation thus created will be examined by Bpifrance Financement, which may modify the initial decisions.

 

I.3.                              Bpifrance Financement will only be responsible for the payment of aid amounts within the limits of the available payment appropriations made available by the State to manage the Innovation Aid procedure. If necessary, Bpifrance Financement will inform the BENEFICIARY of this situation as soon as possible.

 

I.4.                              The BENEFICIARY will pay Bpifrance Financement a 3% commission of risk (not subject to VAT) of the reimbursable advance granted. This settlement will be maintained in full at the time of the first payment of the aid. This commission will remain fully acquired by Bpifrance Financement, regardless of the total amount of aid disbursed. It will be paid back to the intervention fund.

 

ARTICLE II. MISCELLANEOUS OBLIGATIONS OF THE BENEFICIARY

 

The BENEFICIARY hereby certifies that it is in good standing with respect to its tax and social obligations pursuant to Article 4 of Decree no. 97-682 of May 31, 1997, and further agrees:

 

II.1.                         to exclusively allocate the aid granted hereby to the expenses provided for in the innovation program and carried out after the date of registration of the request; to this end, the BENEFICIARY agrees to spend all the sums incumbent upon it in accordance with the attached estimate,

 

II.2.                         not to suspend or abandon the implementation of the program without first informing Bpifrance Financement,

 

II.3.                         to immediately inform Bpifrance Financement of the difficulties or serious and unforeseen events likely to delay or even interrupt the performance of the program,

 

II.4.                         to provide, at the request of Bpifrance Financement, any additional information on the exploitation of the results of the program,

 

II.5.                         to submit to the technical and financial audit conducted by Bpifrance Financement, or all representatives accredited by Bpifrance Financement, and to provide total assistance in for the exercise of this audit, in particular with regard to on-site and document checks. In the event of an association, the BENEFICIARY agrees to ensure the compliance of its partners with this clause,

 

II.6.                         to inform Bpifrance Financement of any patent taken out in France and abroad relating to the assisted innovation program and not to abandon the aforementioned patents without having enabled Bpifrance Financement to assume them at no charge in his name at least two months before the expiration. If Bpifrance Financement assumes said patents, they will not be enforceable against the BENEFICIARY,

 

II.7.                         not to proceed with the assignment, transfer, concession, contribution or transmission for any purpose, directly or indirectly, free of charge, for consideration or even by way of reciprocity, of the necessary means either for the performance of the program being aided, especially patents, manufacturing processes or various technical results, or the marketing of the products of this program, without having obtained the prior agreement of Bpifrance Financement,

 

II.8.                         to communicate to Bpifrance Financement, as soon as they occur, any changes in the distribution of the BENEFICIARY’s share capital, as soon as they result in a change in the BENEFICIARY’s control, as well as any planned merger or split,

 

II.9.                         to communicate to Bpifrance Financement, as soon as they occur, any changes in the status of the BENEFICIARY (including its legal form, corporate purpose, amount of share capital), as well as to inform Bpifrance Financement of any procedure announcing the court-ordered protection, reorganization or liquidation of the BENEFICIARY,

 

II.10.                  to make known the aid granted by Bpifrance Financement whenever the BENEFICIARY makes a press campaign on the program and its results. After five years from the date the aid contract is signed, Bpifrance Financement may publish the information on the program being aided, unless this is opposed by the BENEFICIARY in writing.

 

1

 

ARTICLE III — ACCOUNTING

 

III.1.                    The BENEFICIARY will keep accounts containing all information necessary for the precise evaluation of the expenses and revenues referred to in this agreement, i.e.:

 

·                  expenditure made in accordance with the basis of the aid (external invoices or internal analytical documents),

 

·                  receipts collected for the payment of annuities owed to Bpifrance Financement (proceeds from sales or licensing of patents or know-how, marketing of prototypes - mock-ups - pre-series).

 

This accounts as well as the related general accounting items will be made available to Bpifrance Financement or a representative accredited thereby within 15 days of the request made by Bpifrance Financement for ten years from the last payment of the aid.

 

III.2.                    All sums due for the purpose of this aid will be withdrawn by Bpifrance Financement from the bank account of the BENEFICIARY.

 

ARTICLE IV - COMMERCIAL FAILURE, PARTIAL COMMERCIAL SUCCESS

 

IV.1         —  The acknowledgment of commercial failure or partial commercial success of the program may be requested by the BENEFICIARY from Bpifrance Financement.

 

It shall be the BENEFICIARY’s responsibility to communicate, in particular, the human, technical, financial and commercial resources it has deployed during a reasonable period of time to successfully market the results of the program, with it being specified that:

 

·                  the financial difficulties of the BENEFICIARY do not justify the request;

 

·                  the summary statement of expenditure produced by the BENEFICIARY shall be certified by the Commissioner of accounts, an accountant or his accounting agent.

 

Bpifrance Financement may, on the basis of the information provided by the BENEFICIARY, either pronounce the commercial failure of the program or its partial commercial success.

 

IV.2.                     a) In the event of a commercial failure pronounced by Bpifrance Financement, the BENEFICIARY will be released from all commitments and obligations incumbent on it hereunder, with the exception of Articles II.6 and II.7 of the General Terms and Conditions, provided it has fulfilled all the commitments and obligations incumbent upon it as of the date the failure is ascertained. Sums already paid or owed by the BENEFICIARY pursuant to Article 4 of the Special Terms and Conditions will remain with Bpifrance Financement in any event and definitively.

 

b) In the event of partial commercial success of the program pronounced by Bpifrance Financement, the conditions of reimbursement of the aid referred to in Article 4 of the Special Terms and Conditions may, if necessary, be adapted by Bpifrance Financement.

 

c) The cost of internal and external expenditure and expert report audits, which may be requested by Bpifrance Financement to process the BENEFICIARY’s claim for failure, will be charged to the amount of the aid, or reinvoiced to the BENEFICIARY, that agrees to pay them.

 

ARTICLE V - RESUMPTION OF THE PROGRAM

 

In the event of failure or partial success, abandonment or non-exploitation of the results of the program being aided within 4 years of the date this contract is signed, and insofar as it has not repaid the entirety of the aid, the BENEFICIARY may not oppose the acquisition by Bpifrance Financement, or a third party designated by Bpifrance Financement, of all or part of the industrial property, results of any kind, models or prototypes made under of the program being aided and, in general, the BENEFICIARY cannot oppose the takeover of the program by other companies. The application of this clause will be made in a spirit of consultation in order to best preserve the interests of the BENEFICIARY and the general interest.

 

ARTICLE VI. DISBURSEMENT OF AID AND RESTITUTION OF MONEY PAID WITHOUT JUST CAUSE

 

VI.1.                     This aid will automatically give rise to the reimbursement of the aid in case of transfer - total or partial - as well as in case of termination of activity, dissolution or amicable liquidation of the BENEFICIARY.

 

In the event of solidarity among several BENEFICIARIES, the decision to initiate a legal procedure of court-ordered protection, reorganization or liquidation pronounced against one of the BENEFICIARIES will automatically involve the reimbursement of the aid by the other BENEFICIARIES. This will also hold true in the event of termination of business, dissolution or amicable liquidation of one of the BENEFICIARIES.

 

VI.2.                     At the sole initiative of Bpifrance Financement, this aid will result in the reimbursement of the aid for the entire amount in one of the following cases:

 

a.                   failure of the BENEFICIARY to comply with any of its obligations arising here from

b.                   failure by the BENEFICIARY to fulfill its social and tax obligations,

c.                    inaccurate or misleading statements by the BENEFICIARY,

d.                   incompletion or abandonment of the program noted by Bpifrance Financement

 

2

 

e.                    early termination, for whatever reason, of any contract granting the BENEFICIARY operating rights on techniques, products or processes implemented for the performance of the program being aided, and/or necessary for the marketing of the results deriving there from

 

VI.3.                     If the documents and support documents provided by the BENEFICIARY show expenditures lower than the expenditures included in the aid base, the amount of the aid will automatically be reduced in proportion to the total actual expenditure. justified and determined by Bpifrance Financement; the BENEFICIARY agrees to immediately pay back any money paid without just cause that is observed.

 

Recovery will be immediate in accordance with the law, if so required by Bpifrance Financement, with no court-ordered or other formalities; the amount to be paid will accordingly be equal to the outstanding amount of the assistance plus any late penalties, if applicable, at the rate laid down in Article VIII.

 

ARTICLE VII. INFORMATION OF THE WORKS COUNCIL

 

Where the aid granted in the form of a loan or repayable advance is more than € 1,500,000 or in the form of a subsidy of more than € 200,000, the BENEFICIARY agrees to inform and consult its Works Council in accordance with the provisions of Article R 2323-7-1 of the Labor Code.

 

The information and the consultation shall relate to the nature, object, amount and conditions of payment of the aid granted.

 

The BENEFICIARY will provide Bpifrance Financement with the following support documents: convocation of the Works Council, information provided to the Works Council and a report from the said Works Council.

 

The BENEFICIARY is informed that the recurrent or persistent failure to fulfill the above obligations is likely to lead Bpifrance Financement to demand partial or total reimbursement of the aid.

 

ARTICLE VIII. LATE PENALTIES

 

Any amount not paid within the contract terms will be increased by late payment penalties at the rate of 0.7% (zero point seven percent) per calendar month of delay.

 

ARTICLE IX-AUTHORIZATION TO TRANSMIT INFORMATION

 

The BENEFICIARY authorizes Bpifrance Financement to transmit to the other entities of the Bpifrance group, as well as to the State and the Local Authorities and in general to all donors, directly or indirectly involved in the financing of this request for assistance, information about the BENEFICIARY, the program being aided, and the amount of the aid granted. This information, along with information on the intensity of the aid and the sector of business activity concerned will also be provided to the European Commission, as part of the annual reports that must be provided. In general, Bpifrance Financement is authorized by the BENEFICIARY to convey to the European Commission all information necessary for the exercise of its control of State aid.

 

ARTICLE X - PROTECTION OF PERSONAL DATA

 

The information regarding names collected in the context of this document is mandatory for the processing and management of the transaction in question and in particular for its computer processing carried out under the responsibility of Bpifrance Financement. The information may also, by express agreement and in the absence of opposition, be used or communicated for the same purposes to other legal entities of the Group, its partners, intermediaries, brokers and insurers or even to third parties or subcontractors within the limit necessary for the performance of the services concerned. You may object, free of charge, to the data concerning you being used for prospecting purposes, including marketing purposes. In accordance with the provisions of Law no. 78-17 of January 6, 1978 and subsequent laws relating to data, files and freedoms, you have the right to access, rectify, delete and object to information about you; you can exercise this right by sending a letter to Bpifrance Financement, Information Systems Office, SIAQ Department, at 27/31 Avenue General Leclerc - 94710-Maisons-Alfort Cedex.

 

ARTICLE XI. PREVALENCE OF SPECIAL TERMS AND CONDITIONS

 

In the event of a conflict between these general and Special Terms and Conditions, the Special Terms and Conditions shall take precedence.

 

3

 

A1397929 V / AE AN AO 00

 

FORM TO BE INITIALED

 

	
Bpi
    	
 
    	
SUMMARY OF EXPENSES PAID AND STATEMENT OF GOOD   STANDING WITH REGARD TO TAXES AND SOCIAL SECURITY
    
	
 
    	
 
    	
 
    
	
Beneficiary company:
    	
 
    	
0
    	
 
    
	
Contract no.:
    	
 
    	
0
    	
 
    
	
Date of receipt of the request for aid:
    	
 
    	
01/00/1900
    	
 
    
	
Date of recording of expenses:
    	
 
    	
01/00/1900
    	
 
    
	
Date of end of reimbursement deferment or date of   end of program (cf. contract):
    	
 
    	
01/00/1900
    	
 
    

 

Below is the summary by category of expenses paid, per the estimate attached to the aid contract

 

	
 
    	
 
    	
Phase 1
    	
 
    	
Phase 1
    	
 
    	
Phase 2
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
from
    	
 
    	
from
    	
 
    	
from
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
to
    	
 
    	
to
    	
 
    	
to
    	
 
    	
Total
    	
 
    
	
Internal   expenses:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Costs of staff
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
General one-time   costs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Purchases and   consumables before tax
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUB-TOTAL   INTERNAL EXPENSES
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
External   services and subcontracts before tax
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUB-TOTAL   EXTERNAL SERVICES
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Investments,   depreciations, etc. before tax:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Non-recoverable   investments
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Recoverable   depreciation, investments
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other specific   costs (substantiated)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUB-TOTAL   INVESTMENTS, ETC.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GRAND TOTAL
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
 
    	
Amount of expenses provided in the estimate attached   to the aid contract:
    
	
 
    	
 
    
	
 
    	
Amount of expenses paid by the beneficiary (in   euros):
    

 

	
Company seal
    	
o   The undersigned certifies on his honor that the beneficiary of the   aforementioned aid contract is in a regular situation with regard to his   fiscal and social obligations.
    
	
 
    	
o   The undersigned certifies on his honor the accuracy of the information given   in this statement of expenses.
    
	
 
    	
 
    
	
 
    	
Executed in:
    
	
 
    	
Date:
    
	
 
    	
Name and title of person signing this form who is   authorized to contract:
    
	
 
    	
Signature
    

 

Certification by the accounting expert or by the accountant designated by the public beneficiaries

 

	
 
    	
o   The undersigned certifies the accuracy of the information given in this   statement of expenses.
    
	
 
    	
 
    
	
 
    	
Executed in:
   Date:
   Name and title of person signing this form who is authorized to contract:
   Signature
    

 

This information is set down in a computer file intended for the internal use of OSEO. It has been declared to the National Commission of Information Technology and Freedoms (CNIL) in accordance with current law.

 

Note: This summary of the expenses paid as part of the innovation program conducted by the Beneficiary and supported by Bpifrance Financement, is derived from a computer file consisting of several tabs to complete, listing the different cost categories, according to the quote attached to the contract:

 

·                       Personnel costs tab (including fixed overhead costs)

·                       Purchases and Consumables tab

·                       External services and Subcontracting tab

·                       Tab for investments, depreciation, etc.

 

This computer tool will allow you to track the expenditures made under this innovation program and to establish the summary of expenses. The electronic version of this computer tool will be sent to you upon request by e-mail to the contact person of the Innovation and Intangibles Management Service in charge of the management and follow-up of your aid file.Exhibit 10.6

 

ATTEROCOR, INC.

 

JULIA C. OWENS EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is entered into as of July 25, 2012 (the “Effective Date”) by and between Atterocor, Inc. (the “Company”), and Julia C. Owens (“Executive”).

 

RECITALS

 

WHEREAS, Executive has been engaged by the Company as a consultant to serve as the Company’s acting Chief Executive Officer pursuant to that certain Consulting Agreement dated January 23, 2012 (the “Consulting Agreement”);

 

WHEREAS, pursuant to that certain Restricted Stock Purchase Agreement dated January 23, 2012, and as amended July 25, 2012 (the “RSPA”), the Company issued to Executive 700,000 shares of common stock of the Company (“Common Stock”); and

 

WHEREAS, the Company and Executive desire to terminate the Consulting Agreement as of the date hereof and enter into this new employment agreement to memorialize the terms and conditions of Executive’s arrangement with the Company as an employee serving as the Company’s Chief Executive Officer.

 

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Executive hereby agree as follows:

 

1.                                      Duties and Scope of Employment.

 

(a)             Positions and Duties. As of July 25, 2012 (the “Start Date”), Executive, as a Company employee, will serve as the Company’s Chief Executive Officer. Executive will render such business and professional services in the performance of her duties, consistent with Executive’s position within the Company, as will reasonably be assigned to her by the Company’s Board of Directors (the “Board”). The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”

 

(b)             Board Membership. Executive will serve as a director of the Board, in the capacity of common holder representative, subject to any required Board and/or stockholder approval.

 

(c)              Obligations. During the Employment Term, Executive will perform her duties faithfully and to the best of her ability and will devote her 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.

 

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 her 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 her 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. During the Employment Term, the Company will pay Executive an annual salary of $300,000 as compensation for her services (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 and adjustments at the discretion of the Board based upon the Company’s normal performance review practices.

 

(b)         Target Bonus. Executive will be eligible to receive an annual bonus (which shall be prorated for the first year of the Employment Term) up to a maximum of 30% of Executive’s Base Salary, as then in effect, less applicable withholdings, with any such bonus to be determined at the sole discretion of the Board upon consideration of achievement of performance objectives to be agreed upon by the Board and Executive within two (2) months of employment (the “Target Bonus”). The Target Bonus, or any portion thereof, will be paid as soon as practicable after the Board 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. For clarification, the Target Bonus will not be deemed earned until determined so by the Board.

 

(c)          Stock Option. At the first meeting of the Board following the Effective Date, it will be recommended that Executive be granted a nonstatutory stock option to purchase 708,867 shares of Common Stock at an exercise price equal to the fair market value on the date of grant (the “Option”). The number of shares subject to the Option (excluding the 700,000 shares of Common Stock previously issued to Executive pursuant to the RSPA (the “RSPA Shares”) represents approximately five percent (5%) of the Company’s fully diluted common stock (on an as-converted basis) as of July 25, 2012, calculated as if the Option were granted and outstanding as of such date. Subject to the accelerated vesting provisions set forth herein, the Option will vest as to 25% of the shares subject to the Option one (1) year after the Start Date, and as to 1 /48th of the shares subject to the Option monthly thereafter on the same day of the month as the Start 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 Start Date, subject to Executive continuing to provide services to the Company in her capacity as Chief Executive Officer through the relevant vesting dates. The Option will be subject to the terms, definitions and provisions of the Company’s 2012 Stock Plan (the “Option Plan”) and the stock option agreement by and between Executive and the Company (the “Option Agreement”), both of which documents are incorporated herein by reference. The vesting of the RSPA Shares will continue to be governed by the terms of the RSPA and such vesting shall be independent of that of the Option.

 

 

4.                                      Employee Benefits. During the Employment Term, Executive will be entitled to participate in the employee benefit plans, which are as yet to be established and maintained by the Company, of general applicability to other employees of the Company, which shall include standard medical and dental benefits, subject to possible employee contribution of a portion of the cost thereof consistent with that required of employee participants (“Health Care Benefits”) and vacation accrual, provided, however, until the time that the Company establishes such Health Care Benefits, the Company will reimburse Executive for Executive and her covered dependants reasonable medical and dental health care premiums. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

 

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. If prior to a Change of Control or after twelve (12) months following a Change of Control, 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, then, subject to Section 7, Executive will be entitled to: (i) receive continuing payments of severance pay at a rate equal to Executive’s Base Salary, as then in effect, for six (6) months (plus an additional month of severance for each full year of Employment Term (up to a maximum of twelve (12) months of severance pay)) from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (ii) if Executive timely elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for Executive and Executive’s dependents, within the time period prescribed pursuant to COBRA, the Company will reimburse Executive for the COBRA premiums for such coverage for Executive and her covered dependents for six (6) months (plus an additional month of reimbursement for COBRA coverage for each full year of Employment Term (up to a maximum of twelve (12) months of reimbursement), in each case less the amount of monthly employee contribution that applied to Executive prior to the effective date of Executive’s termination of employment) from the date of Executive’s termination of employment or such earlier date if Executive no longer constitutes a “Qualified Beneficiary” (as such term is defined in Section 4980B(g) of the Code); and (iii) accelerated vesting of such number of shares subject to Executive’s Option as would have vested had Executive’s employment continued for an additional six (6) months (plus an additional month of vesting for each full year of Employment Term (up to a maximum of twelve (12) months of vesting)) following such termination of employment. In the event the Company does not qualify for COBRA, the benefits received by Executive under (ii) above shall instead be equal to the corresponding amounts of independently obtained health insurance coverage premiums of Executive.

 

(b)         Termination in the Event of a Change of Control. If upon or within twelve (12) months following a Change of Control (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 in each such event, subject to Section 7, Executive will be entitled to: (A) receive the

 

 

continuing payments of severance pay as described in Section 6(a)(i) above; (B) receive the reimbursements for Executive’s COBRA premiums as described in Section 6(a)(ii) above; and (C) if Executive’s Option is assumed or an equivalent option is substituted by the Company (or any parent or subsidiary or successor of the Company) following a Change of Control (a “Continuing Option”), accelerated vesting as to 100% of the Continuing Option.

 

(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 upon or within twelve (12) months following a Change of Control), 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)         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 6 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. 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 6.

 

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 standard separation agreement and release of claims with 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)         Nonsolicitation. The receipt of any severance benefits pursuant to Section 6(a) or (b) will be subject to Executive not violating the provisions of Section 10. In the event Executive breaches the provisions of Section 10, all continuing payments and benefits to which Executive may otherwise be entitled pursuant to Section 6(a) or (b) will immediately cease.

 

(c)          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)                               Any severance payments or benefits under this Agreement that would be considered Deferred Payments will be paid on, or, in the case of installments, will not commence until, the sixtieth (60th) day following Executive’s separation from service, or, if later, such time as required by Section 7(c)(iii). Any installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’s separation from service but for the preceding sentence will be paid to Executive on the sixtieth (60th) day following Executive’s separation from service and the remaining payments shall be made as provided in this Agreement.

 

(iii)                               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.

 

(iv)                              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.

 

(v)                              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.

 

(vi)                              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 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.

 

 

(d)         Proprietary 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 Proprietary Information Agreement (as defined in Section 9).

 

(e)          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) an act of dishonesty made by Executive in connection with Executive’s responsibilities as an employee, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (iii) Executive’s gross misconduct, (iv) Executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive’s relationship with the Company; (v) Executive’s willful breach of any obligations under any written agreement or covenant with the Company; or (vi) Executive’s continued failure to perform her employment duties after Executive has received a written demand of performance from the Company which specifically sets forth the factual basis for the Company’s belief that Executive has not substantially performed her duties and has failed to cure such non-performance to the Company’s satisfaction within 10 business days after receiving such notice.

 

(b)         Change of Control. For purposes of this Agreement, “Change of Control” of the Company is defined as any of the following, whether accomplished through one or a series of related transactions:

 

(i)                               a merger or acquisition in which the Company is not the surviving entity, except for a transaction where, (1) the principal purpose of which is to change the State in which the Company is incorporated or (2) the Company’s stockholders of record immediately prior to such transaction or series of related transactions hold, immediately after such transaction or series of related transactions, at least 50% of the voting power of the surviving or acquiring entity (provided that the sale by the Company of its securities for the purposes of raising additional funds shall not constitute a Change of Control hereunder);

 

(ii)                               the sale, transfer or other disposition of all or substantially all of the assets of the Company; or

 

(iii)                               any transaction by which 50% or more of the Company’s outstanding voting stock is transferred to individuals or entities different from the holders of such stock immediately prior to such transaction (other than affiliates of such holders), including without limitation, any reverse or other merger in which the Company is the surviving entity (provided that the transfer of outstanding voting stock for the purposes of, or in connection with, raising additional funds shall not constitute a Change of Control hereunder).

 

Notwithstanding the foregoing provisions of this definition, a transaction will not be deemed a Change of Control unless the transaction qualifies as a “change in control event” within the meaning of Section 409A.

 

 

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

 

(d)         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 reduction of Executive’s duties, position or responsibilities, or the removal of Executive from such position and responsibilities, either of which results in a material diminution of Executive’s authority, duties or responsibilities, unless Executive is provided with a comparable position (i.e., a position of equal or greater organizational level, duties, authority, compensation and status); provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Chief Executive Officer of the Company retains a similar position with respect to the Company following a Change of Control but is not made the Chief Executive Officer of the acquiring corporation) will not constitute “Good Reason”; (ii) a material reduction in Executive’s Base Salary (in other words, a reduction of more than ten percent (10%) of Executive’s Base Salary in any one year); or (iii) a material change in the geographic location of Executive’s primary work facility or location; provided, that a relocation of less than fifty (50) miles from Executive’s then present location will not be considered a material change in geographic location. 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 of such notice.

 

(e)          Section 409A Limit. For purposes of this Agreement, “Section 409A Limit” will mean the lesser of two (2) times: (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 her termination of employment as determined under Treasury Regulation Section 1.409A-l(b)(9)(iii)(A)(l) 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 40l(a)(17) of the Internal Revenue Code for the year in which Executive’s employment is terminated.

 

9.                                      Proprietary Information. Executive agrees to enter into a Proprietary Information and Inventions Agreement (the “Proprietary Information Agreement”) in the form attached hereto as Exhibit A upon commencing employment hereunder.

 

10.                               Non-Solicitation. Until the date one (1) year after the termination of Executive’s employment with the Company for any reason, Executive agrees not, either directly or indirectly, to solicit, induce, attempt to solicit, recruit, or encourage any employee of the Company (or any parent or subsidiary of the Company) to leave his or her employment either for Executive or for any other entity or person. Executive represents that she (i) is familiar with the foregoing covenant not to solicit, and (ii) is fully aware of her obligations hereunder, including, without limitation, the reasonableness of the length of time, scope and geographic coverage of these covenants.

 

11.                               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 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.

 

12.                               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:

 

Atterocor, Inc.

Attn: Chief Financial Officer at the time

820 Heatherway

Ann Arbor, MI 48104

 

If to Executive:

 

at the last residential address of Executive known by the Company.

 

13.                               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.

 

14.                               Integration. This Agreement, together with the RSPA, Option Plan, Option Agreement and the Proprietary Information 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. 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.

 

15.                               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.

 

16.                               Indemnification. Subject to Board approval, the Company will enter into an agreement with Executive providing for indemnification of Executive to the extent she is made or is threatened to be made a party to any proceeding by reason of her position with the Company, on terms and conditions approved by the Board.

 

 

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

 

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

 

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

 

20.                               Acknowledgment. Executive acknowledges that she has had the opportunity to discuss this matter with and obtain advice from her 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.

 

21.                               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.

 

[Signature Page Follows]

 

 

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:
    	
 
    
	
 
    	
 
    
	
ATTEROCOR, INC.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Raili Kerppola
    	
 
    	
Date:
    	
July 25,   2012
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Raili Kerppola
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Treasurer and   Secretary
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
EXECUTIVE:
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Julia Owens
    	
 
    	
Date:
    	
July 25,   2012
    
	
Julia Owens
    	
 
    

 

[SIGNATURE PAGE TO JULIA OWENS EMPLOYMENT AGREEMENT]

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