Document:

Exhibit 10.4

 

PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT

 

THIS PRIVATE PLACEMENT WARRANTS
PURCHASE AGREEMENT, dated as of November 19, 2019 (as it may from time to time be amended, this “Agreement”),
is entered into by and between Amplitude Healthcare Acquisition Corporation, a Delaware corporation (the “Company”),
and Amplitude Healthcare Holdings LLC, a Delaware limited liability company (the “Purchaser”).

 

WHEREAS, the Company intends
to consummate a public offering of the Company’s units (the “Public Offering”), each unit consisting of
one share of the Company’s Class A common stock, par value $0.0001 per share (a “Share”), and one-half
of one redeemable warrant, each whole warrant exercisable for one Share at an exercise price of $11.50 per Share, as set forth
in the Company’s registration statement on Form S-1 related to the Public Offering (the “Registration Statement”);
and

 

WHEREAS, the Purchaser has
agreed to purchase from the Company an aggregate of 4,000,000 warrants (the “Firm Sponsor Warrants”)(or up to
4,300,000 warrants if the over-allotment option in connection with the Public Offering is exercised in full) (the “Additional
Sponsor Warrants” and, together with the Firm Sponsor Warrants, ”the “Sponsor Warrants”), each
Sponsor Warrant entitling the holder to purchase one Share at an exercise price of $11.50 per Share.

 

NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:

 

AGREEMENT

 

Section 1. Authorization, Purchase and
Sale; Terms of the Sponsor Warrants.

 

A. Authorization of
the Sponsor Warrants. The Company has duly authorized the issuance and sale of the Sponsor Warrants to the Purchaser.

 

B. Purchase and Sale
of the Sponsor Warrants.

 

(i) As payment in full for
the 4,000,000 Firm Sponsor Warrants being purchased under this Agreement, Purchaser shall pay $4,000,000 (the “Purchase
Price”), by wire transfer of immediately available funds or by such other method as may be reasonably acceptable to the
Company, to the trust account (the “Trust Account”) at a financial institution to be chosen by the Company,
maintained by Continental Stock Transfer & Trust Company, acting as trustee, at least one (1) business day prior to the date
of effectiveness of the Registration Statement.

 

(ii) In the event that the
over-allotment option is exercised in full or in part, Purchaser shall purchase up to an additional 300,000 Additional Sponsor
Warrants, in the same proportion as the amount of the over-allotment option that is exercised, and simultaneously with such purchase
of Additional Sponsor Warrants, as payment in full for the Additional Sponsor Warrants being purchased hereunder, and at least
one (1) business day prior to the closing of all or any portion of the over-allotment option, Purchaser shall pay $1.00 per Additional
Sponsor Warrant, up to an aggregate amount of $300,000, by wire transfer of immediately available funds or by such other method
as may be reasonably acceptable to the Company, to the Trust Account.

 

(iii) The closing of the purchase
and sale of the Firm Sponsor Warrants shall take place simultaneously with the closing of the Public Offering (the “Initial
Closing Date”). The closing of the purchase and sale of the Additional Sponsor Warrants, if applicable, shall take place
simultaneously with the closing of all or any portion of the over-allotment option exercise (such closing date, together with the
Initial Closing Date, the “Closing Dates” and each, a “Closing Date”). The closing of the
purchase and sale of each of the Sponsor Warrants and the Additional Sponsor Warrants shall take place at the offices of EG&S,
1345 Avenue of the Americas, New York, New York, 10105, or such other place as may be agreed upon by the parties hereto. 

 

     

     

    

 

C. Terms of the Sponsor
Warrants.

 

(i) The Sponsor Warrants shall
have their terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent, in connection with the
Public Offering (a “Warrant Agreement”). 

 

(ii) At or prior to the time
of the Initial Closing Date, the Company and the Purchaser shall enter into a registration rights agreement (the “Registration
Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser relating to
the Sponsor Warrants and the Shares underlying the Sponsor Warrants.

 

Section 2. Representations and Warranties
of the Company.  As a material inducement to the Purchaser to enter into this Agreement and purchase the Sponsor Warrants,
the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive the Closing Dates)
that:

 

A. Organization and
Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State
of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be expected
to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses
all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement, the Registration
Rights Agreement and the Warrant Agreement.

 

B. Authorization; No
Breach.

 

(i) The execution, delivery
and performance of this Agreement, the Registration Rights Agreement, the Warrant Agreement and the Sponsor Warrants have been
duly authorized by the Company as of the Closing Dates. Each of this Agreement, the Registration Rights Agreement and the Warrant
Agreement constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms. Upon issuance in
accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement, the Sponsor Warrants will constitute
valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Dates, as the case may
be.

 

(ii) The execution and delivery
by the Company of this Agreement, the Registration Rights Agreement, the Warrant Agreement and the Sponsor Warrants, the issuance
and sale of the Sponsor Warrants, the issuance of the Shares upon exercise of the Sponsor Warrants and the fulfillment of, and
compliance with, the respective terms hereof and thereof by the Company, do not and will not as of the Closing Dates (a) conflict
with or result in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in the
creation of any lien, security interest, charge or encumbrance upon the Company’s capital stock or assets under, (d) result
in a violation of, or (e) require any authorization, consent, approval, exemption or other action by or notice or declaration
to, or filing with, any court or administrative or governmental body or agency pursuant to the certificate of incorporation or
the bylaws of the Company (in effect on the date hereof or as may be amended prior to completion of the contemplated Public Offering),
or any material law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to
which the Company is subject, except for any filings required after the date hereof under federal or state securities laws.

 

C. Title to Securities.
Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Shares issuable upon
exercise of the Sponsor Warrants will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with,
and payment pursuant to, the terms hereof and the Warrant Agreement, the Purchaser will have good title to the Sponsor Warrants
and the Shares issuable upon exercise of such Sponsor Warrants, free and clear of all liens, claims and encumbrances of any kind,
other than (i) transfer restrictions hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions
under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.

 

D. Governmental Consents.
No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required in connection
with the execution, delivery and performance by the Company of this Agreement or the consummation by the Company of any other transactions
contemplated hereby.

 

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Section 3. Representations and Warranties of
the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the Sponsor Warrants
to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties shall survive
the Closing Dates) that:

  

A. Organization and
Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions contemplated
by this Agreement.  

 

B. Authorization; No
Breach.

 

(i) This Agreement constitutes
a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights
and to general equitable principles (whether considered in a proceeding in equity or law).

 

(ii) The execution and delivery
by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser does not and shall
not as of the Closing Dates conflict with or result in a breach by the Purchaser of the terms, conditions or provisions of any
agreement, instrument, order, judgment or decree to which the Purchaser is subject.

 

C. Investment Representations.

 

(i) The Purchaser is acquiring
the Sponsor Warrants and, upon exercise of the Sponsor Warrants, the Shares issuable upon such exercise (collectively, the “Securities”),
for the Purchaser’s own account, for investment purposes only and not with a view towards, or for resale in connection with,
any public sale or distribution thereof.

 

(ii) The Purchaser is an “accredited
investor” as such term is defined in Rule 501(a)(3) of Regulation D.

 

(iii) The Purchaser understands
that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration requirements
of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the
Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.

 

(iv) The Purchaser did not
enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act of 1933, as amended (the “Securities Act”).

 

(v) The Purchaser has been
furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer
and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to ask questions
of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities involves
a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to the acquisition of the Securities.

 

(vi) The Purchaser understands
that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation
or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser nor have such
authorities passed upon or endorsed the merits of the offering of the Securities.

 

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(vii) The Purchaser understands
that: (a) the Securities have not been and are not being registered under the Securities Act or any state securities laws,
and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold
in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement, neither
the Company nor any other person is under any obligation to register the Securities under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder. In this regard, the Purchaser understands that the
Securities and Exchange Commission has taken the position that promoters or affiliates of a blank check company and their transferees,
both before and after an initial business combination, are deemed to be “underwriters” under the Securities Act when
reselling the securities of a blank check company. Based on that position, Rule 144 adopted pursuant to the Securities Act
would not be available for resale transactions of the Securities despite technical compliance with the certain requirements of
such Rule, and the Securities can be resold only through a registered offering or in reliance upon another exemption from the registration
requirements of the Securities Act. 

 

(viii) The Purchaser has such
knowledge and experience in financial and business matters, knowledge of the high degree of risk associated with investments in
the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment
in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder
for an indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies
and will have no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities.
The Purchaser can afford a complete loss of its investments in the Securities.

 

Section 4. Conditions of the Purchaser’s
Obligations. The obligations of the Purchaser to purchase and pay for the Sponsor Warrants are subject to the fulfillment,
on or before the Closing Dates, of each of the following conditions:

 

A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at
and as of the Closing Dates as though then made.

 

B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing Dates.

 

C. No Injunction.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.

 

D. Warrant Agreement.
The Company shall have entered into a Warrant Agreement with a warrant agent on terms set forth in the Registration Statement and
satisfactory to the Purchaser (the “Warrant Agreement”).

 

Section 5. Conditions of the Company’s
Obligations. The obligations of the Company to the Purchaser under this Agreement are subject to the fulfillment, on or
before the Closing Dates, of each of the following conditions:

 

A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at
and as of the Closing Dates as though then made.

 

B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before the Closing Dates.

 

C. No Injunction.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.

 

D. Warrant Agreement
and Registration Rights Agreement. The Company shall have entered into the Warrant Agreement and the Registration Rights Agreement
on terms set forth in the Registration Statement.

 

Section 6. Termination. This Agreement
may be terminated at any time after December 31, 2019 upon the election by either the Company or a Purchaser entitled to purchase
a majority of the Sponsor Warrants upon written notice to the other parties if the closing of the Public Offering does not occur
prior to such date.

 

Section 7. Survival of Representations
and Warranties. All of the representations and warranties contained herein shall survive the Closing Dates.

 

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Section 8. Definitions. Terms
used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Registration Statement. 

 

Section 9. Miscellaneous.

 

A. Successors and Assigns.
Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any
of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether so expressed
or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement, other than
assignments by the Purchaser to affiliates thereof.

 

B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

 

C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need to contain the signatures of more
than one party, but all such counterparts taken together shall constitute one and the same agreement.

 

D. Descriptive Headings;
Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive
part of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather than by
limitation.

 

E. Governing Law.
This Agreement shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be construed
in accordance with the internal laws of the State of Delaware.

 

F. Amendments.
This letter agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed
by all parties hereto.

 

[Signature page follows]

 

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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement to be effective as of the date first set forth above.

 

	 	COMPANY: 
	 	 
	 	AMPLITUDE HEALTHCARE ACQUISITION CORPORATION
	 	 	 
	 	By:	/s/ Bala Venkataraman
	 	Name:	Bala Venkataraman
	 	Title:	Chief Executive Officer

 

	
        AMPLITUDE HEALTHCARE HOLDINGS
        LLC

         

        By: Metalmark Amplitude Healthcare Holdings LLC, its managing member

         

        By: Metalmark Capital Partners III GP, L.P., its sole member
	 
	
         

        By: Metalmark Capital Holdings LLC, its general partner 

        
	 

 

	By:	
        /s/ Howard I. Hoffen
	 
	 	
        Name: Howard I. Hoffen

        Title:   Authorized Signatory
	 

 

 6dzsi-ex101_6.htm

 

EXHIBIT 10.1

 

 

EMPLOYMENT AGREEMENT 

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of December 2, 2019 (the “Effective Date”), by and between DASAN Zhone Solutions, Inc., a Delaware corporation (the “Company”), and Tom Cancro (“Executive”). 

 

WHEREAS, the Company desires to engage Executive as Chief Financial Officer and Corporate Treasurer of the Company and Executive desires to be so engaged by the Company in such positions, on the terms and conditions set forth and described herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties agree as follows: 

 

1. Employment. 

 

(a)Position and Duties.  The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of this Agreement, as an employee of the Company in the positions Chief Financial Officer and Corporate Treasurer.  Executive shall perform all services and acts necessary to fulfill the duties and responsibilities of his position and shall render such services on the terms set forth herein and shall report to the Company’s Chief Executive Officer (the “Supervising Officer”).  In the event of the Supervising Officer's unavailability or incapacity, Executive shall report to the Company's Board of Directors (the “Board of Directors”).  In addition, Executive shall have such other executive and managerial powers and duties with respect to the Company as may reasonably be assigned to him by the Supervising Officer, to the extent consistent with his positions and status as set forth above. Executive hereby consents to serve as an officer and/or director of the Company or any subsidiary or affiliate thereof without any additional salary or compensation, if so requested by the Supervising Officer.  

 

(b)Time Commitment.  Executive agrees to devote substantially all of his business time, attention and energies to the performance of the duties assigned hereunder, and to perform such duties diligently, faithfully and to the best of his abilities. Subject to the terms of Section 11 below, this shall not preclude Executive from devoting time to personal and family investments or serving on community and civic boards, or participating in industry associations, provided such activities do not interfere with his duties to the Company, as determined in good faith by the Supervising Officer or the Board of Directors.  Executive agrees that he will not join any additional boards, other than community and civic boards (which do not interfere with his duties to the Company), without the prior approval of the Supervising Officer or the Board of Directors.  Executive shall be subject to and comply with the policies and procedures generally applicable to officers of the Company to the extent the same are not inconsistent with any term of this Agreement.

 

2. Place of Performance.  Executive shall perform his duties and conduct his business at the principal executive offices of the Company, except for required travel on the Company’s business. 

 

3. Compensation. 

 

(a) Salary. The Company shall pay to Executive a base salary of $275,000 per year (the “Annual Salary”); provided, however, that the Annual Salary shall be automatically increased on April 1, 2020 to $300,000 per year.  Executive’s Annual Salary shall be reviewed on at least an annual basis by the Board of Directors or its Compensation Committee, and shall be payable in accordance with the Company’s regular payroll practices. 

 

(b) Bonus.  In addition to Executive’s Annual Salary, Executive shall be eligible to participate in a performance-based annual bonus program, to be earned and paid quarterly in equal installments.  Executive’s target bonus at full accomplishment of the Company’s goals will be $22,500 per quarter.  Executive’s actual bonus will be based upon the overall results of the Company compared to the quarterly performance metris as set forth in the annual operating plan approved by the Board of Directors for each year.  The annual bonus plan and the final payout will be approved by the Board of Directors or its Compensation Committee and is subject to change.  

1

 

 

(c)Relocation Expenses.

 

(i)In connection with the Company's planned relocation of its headquarters (the "Headquarters Relocation"), and in furtherance of Executive’s relocation of his principal place of residence to the location to which the Company's headquarters is so relocated, the Company shall pay for or reimburse Executive in accordance with the Company’s written expense reimbursement policies and procedures for up to a total amount to be agreed upon at the time the headquarters office has been identified, which shall include (A) the movement of Executive’s reasonable household goods, (B) reimbursement for round trip tickets for house hunting trips for Executive, his spouse and/or his dependent children, (C) reimbursement for transportation for Executive, his spouse and his dependent children, and (D) reasonable and customary realtor costs incurred by Executive in connection with the purchase of Executive’s residence (collectively, the “Relocation Reimbursement”).  In addition, the Company shall pay to Executive a tax gross-up (the “Tax Gross-Up”) for any federal, state, local or foreign income and employment taxes Executive is required to pay resulting from the Relocation Reimbursement and from the Tax Gross-Up, which Tax Gross-Up shall be paid in accordance with Treasury Regulation Section 1.409A-3(i)(1)(v).  All amounts eligible for the Relocation Reimbursement must be incurred by and paid to Executive during the term of his employment and within twelve (12) months following the completion of the Headquarters Relocation.  The Relocation Reimbursement and the Tax Gross-Up shall be paid to Executive within thirty (30) days following the Company’s receipt of a written request for such reimbursement, but subject to receipt by the Company of supporting receipts and/or documentation and/or receipts in form and substance reasonably acceptable to the Company.  If Executive voluntarily terminates his employment without Good Reason prior to the first anniversary of the Headquarters Relocation, Executive shall repay to the Company a pro rata portion of the Relocation Reimbursement and any Tax Gross-Up based on the number of days elapsed in the one-year period ending on the first anniversary of the Effective Date.  The Company will have the right to offset such amounts against any compensation otherwise payable to Executive on the date of Executive’s termination of employment.

 

(d)Housing and Automobile Allowance.  During the term of Executive's employment and until the earlier to occur of (i) the Headquarter Relocation or (ii) one year from the effective date of this agreement, the Company shall pay for or reimburse Executive in accordance with the Company’s written expense reimbursement policies and procedures for reasonable housing and automobile expenses in the San Francisco Bay Area per month.

 

(e)Equity Award.  On the Effective Date, Executive will be granted 160,000 options to purchase shares of the Company’s stock (the “Option”).   The Option will vest over a four year vesting schedule as follows: twenty five percent (25%) of the Option will vest on the first (1st) anniversary of Executive’s commencement of employment, and the remainder will vest in thirty-six (36) monthly installments thereafter, subject to Executive’s continued employment through each such vesting date.  The Option shall granted pursuant to the Company’s 2017 Incentive Award Plan (the “2017 Plan”). In addition, in the event Executive’s employment is terminated pursuant to Section 7(a)(iv) or (v) following a “Change in Control” (as such term is defined in the 2017 Plan), the vesting of the Option shall accelerate on the date of such termination.  The Option shall be subject to the terms and conditions of the 2017 Plan and/or any stock option agreement pursuant to which the Option is granted.  The Company will periodically review Executive's equity incentives in the future.

 

4. Business Expenses. During the term of Executive's employment, the Company will reimburse Executive for all ordinary and necessary business expenses incurred by him in connection with his employment upon timely submission by the Executive of receipts and other documentation in conformance with the Company’s normal procedures.  This includes monthly cell phone expenses.

 

5. Vacation, Holidays and Sick Leave. During the term of Executive's employment, Executive shall be entitled to paid vacation, paid holidays and sick leave in accordance with the Company’s standard policies for its officers. 

 

6. Benefits. During the term of Executive's employment, Executive shall be eligible to participate fully in all health benefits, insurance programs, pension and retirement plans and other employee benefit and compensation arrangements (collectively, the “Employee Benefits”) available to officers of the Company generally. 

 

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7. Termination of Employment. 

 

(a) Notwithstanding any provision of this Agreement to the contrary, the employment of Executive hereunder shall terminate on the first to occur of the following dates: 

 

(i) the date of Executive’s death or adjudicated incompetency; 

 

(ii) the date on which Executive shall have experienced a Disability (as defined below), and the Company terminates Executive’s employment on account of Disability; 

 

(iii) the date on which Executive’s employment is terminated by the Company for Cause (as defined below); 

 

(iv) the date on which Executive’s employment is terminated by the Company for any reason other than the reasons set forth in (i) through (iii) above; 

 

(v) the date on which Executive resigns his employment for Good Reason (as defined below); or 

 

(vi) the date on which Executive resigns his employment for a reason other than Good Reason. 

 

(b) For purposes of this Agreement, “Disability” shall mean an illness, injury or other incapacitating condition as a result of which Executive is substantially unable to perform the services required to be performed under this Agreement for (i) one hundred eighty (180) consecutive days; or (ii) a period or periods aggregating more than two hundred forty (240) days in any period of twelve (12) consecutive months. In the event the Company seeks to terminate Executive’s employment due to Disability, the Company shall give notice to Executive of the termination of Executive’s employment for Disability. Executive agrees to submit to such medical examinations as may be necessary to determine whether a Disability exists, pursuant to such reasonable requests made by the Company from time to time. Any determination as to the existence of a Disability shall be made by a physician approved by the Board of Directors and by Executive (or, if Executive is unable to give such approval, by Executive’s representative), which approval shall not be unreasonably withheld by the Board of Directors or Executive. 

 

(c) For purposes of this Agreement, “Cause” shall mean the occurrence of any of the following events: 

 

(i) Executive’s willful or continual failure to substantially perform his duties with the Company or any subsidiary or affiliate, or any failure to carry out, or comply with, in any material respect any lawful and reasonable directive of the Supervising Officer or the Board of Directors consistent with the terms of this Agreement, which failure continues for fifteen (15) days following Executive’s receipt of written notice from the Supervising Officer or the Board of Directors stating with specificity the duties the Supervising Officer or the Board of Directors has reasonably determined Executive to have willfully or continually failed to substantially perform or such failure; 

 

(ii) Executive’s conviction of, guilty plea to, or entry of a nolo contendere plea to a felony or a crime of moral turpitude or commission of an act of fraud, embezzlement or misappropriation against the Company or any subsidiary or affiliate; 

 

(iii) Executive’s engagement in willful or reckless misconduct that has caused or is reasonably likely to cause demonstrable and material financial injury to the Company or any subsidiary or affiliate; or 

 

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(iv) Executive’s willful and material breach of this Agreement, which breach remains uncured (if capable of being cured) for fifteen (15) days following Executive’s receipt of written notice from the Supervising Officer or the Board of Directors stating with specificity those provisions of this Agreement which Executive has breached. 

 

For purposes of Sections 7(c)(i), (iii) and (iv), an act on Executive’s part shall not be deemed “willful,” “reckless,” or “continual” if done by Executive in good faith and with reasonable belief that the act was in the best interest of the Company. 

 

(d) For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following events without the Executive’s consent: 

 

(i) a material diminution in Executive’s base compensation; 

 

(ii) a material diminution in Executive’s authority, duties or responsibilities; 

(iii) a material change in the geographic location at which Executive must perform his duties; provided that the requirement that Executive relocate to the San Francisco Bay Area in connection with his commencement of employment or to another location within the United States in connection with the Headquarters Relocation shall not constitute “Good Reason” for purposes of this Agreement; or

(iv) any other action or inaction that constitutes a material breach by the Company of its obligations to Executive under this Agreement. 

Notwithstanding the foregoing, Good Reason shall only exist if Executive shall have provided the Company with ninety (90) days written notice of the initial occurrence of any of the foregoing events or conditions, and the Company fails to eliminate the conditions constituting Good Reason within thirty (30) days after receipt of written notice of such event or condition from Executive. Executive’s termination by reason of resignation from employment with the Company for Good Reason shall be treated as involuntary.  Executive’s resignation from employment with the Company for Good Reason must occur within six (6) months following the initial existence of the act or failure to act constituting Good Reason.  

 

8. Compensation in Event of Termination.  The Company and Executive acknowledge that Executive’s employment is and shall continue to be at-will, as defined under applicable law, and that Executive’s employment with the Company may be terminated by either party at any time for any or no reason, with or without notice.  If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided in this Agreement.  Executive’s employment under this Agreement shall be terminated immediately on the death of Executive.  Upon termination of Executive's employment for any reason, the Company shall have no further obligation to Executive except to pay the amounts set forth in this Section 8. 

 

(a) In the event Executive’s employment is terminated pursuant to Sections 7(a)(i), (ii), (iii) or (vi), Executive or his estate, conservator or designated beneficiary, as the case may be, shall be entitled to payment of any earned but unpaid Annual Salary through the date of termination, as well as any accrued vested benefits and unreimbursed business expenses to which Executive is entitled. Following any such termination, neither Executive nor his estate, conservator or designated beneficiary shall be entitled to receive any other payment provided for hereunder with respect to any period after such termination, except as Executive may otherwise be entitled pursuant to any employee benefit plan. 

 

(b) In the event Executive’s employment is terminated pursuant to Section 7(a)(iv) or (v), Executive shall be entitled to receive, as his sole and exclusive remedy, (i) payment of any earned but unpaid Annual Salary through the date of termination, as well as any accrued vested benefits and unreimbursed business expenses to which Executive is entitled and (ii) a lump sum payment equal to the sum of (x) the greater of (A) six (6) months of Executive’s Annual Salary as in effect immediately prior to the date of termination, or (B) $150,000, plus (y) an amount equal to the bonus earned by Executive pursuant to Section 4(b) for the calendar quarter in which the date of termination occurs to be determined based on actual performance for such quarter, which amount shall be 

4

 

paid in exchange for a standard release of claims.  Executive will not receive the severance in this Section 8(b) if he does not sign the release of claims within fifty (50) days following his date of termination, or he revokes the release.  The severance will be paid on the eighth (8th) day following the effective date of the release; provided that, subject to Section 8(d), in no event will the severance be paid beyond the date specified in the first section of Section 8(c) below. 

 

(c)This Agreement is not intended to provide for any deferral of compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and, accordingly, the severance payments payable under Section 8(b)(ii) shall be paid no later than the later of:  (i) the fifteenth (15th) day of the third month following Executive’s first taxable year in which such severance benefit is no longer subject to a substantial risk of forfeiture, and (ii) the fifteenth (15th) day of the third month following the first taxable year of the Company in which such severance benefit is no longer subject to a substantial risk of forfeiture, as determined in accordance with Code Section 409A and any Treasury Regulations and other guidance issued thereunder.  To the extent applicable, this Agreement shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder.  To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner that no payments payable under this Agreement shall be subject to an “additional tax” as defined in Section 409A(a)(1)(B) of the Code.  Each series of installment payments made under this Agreement is hereby designated as a series of “separate payments” within the meaning of Section 409A of the Code.  For purposes of this Agreement, all references to Executive’s “termination of employment” shall mean Executive’s “separation from service” (as defined in Treasury Regulation Section 1.409A-1(h)).

(d)Notwithstanding anything to the contrary in this Agreement, if at the time of Executive’s termination of employment with the Company Executive is a “specified employee” as defined in Code Section 409A, as determined by the Company in accordance with Code Section 409A, to the extent that the payments or benefits under this Agreement are subject to Code Section 409A and the delayed payment or distribution of all or any portion of such amounts to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i), then such portion shall be paid or distributed to Executive during the thirty (30) day period commencing on the earlier of (i) the date that is six (6) months following Executive’s termination of employment with the Company, (ii) the date of Executive’s death, or (iii) the earliest date as is permitted under Code Section 409A.

9. Representations. 

 

(a) The Company represents and warrants that this Agreement has been authorized by all necessary corporate action of the Company and is a valid and binding agreement of the Company enforceable against the Company in accordance with its terms.  

 

(b) The Executive represents and warrants that he is not a party to any agreement or instrument which would prevent him from entering into or performing his duties in any way under this Agreement. 

 

10. Confidentiality; Assignment of Inventions.  Executive has entered into the Company’s standard Employee Innovations and Proprietary Rights Assignment Agreement, a copy of which is attached hereto as Exhibit A (the “Proprietary Rights Agreement”), which Proprietary Rights Agreement is incorporated herein by reference, and hereby agrees to comply with the terms and conditions thereof during the term of Executive's employment and thereafter in accordance with its terms. 

 

11. Noncompetition; Nonsolicitation. 

 

(a)Noncompetition.  Except as may otherwise be approved by the Supervising Officer or the Board of Directors, during the term of Executive's employment, Executive shall not have any ownership interest (of record or beneficial) in, or have any interest as an employee, salesman, consultant, officer or director in, or otherwise aid or assist in any manner, any firm, corporation, partnership, proprietorship or other business that engages in any county, city or part thereof in the United States and/or any foreign country in a business which competes directly or indirectly (as determined by the Supervising Officer or the Board of Directors) with the Company’s business or the business of its subsidiaries and affiliates in such county, city or part thereof, so long as 

5

 

the Company, its subsidiaries or affiliates, or any successor in interest of the Company to the business and goodwill of the Company or its subsidiaries or affiliates, remains engaged in such business in such county, city or part thereof or continues to solicit customers or potential customers therein; provided, however, that Executive may own, directly or indirectly, solely as an investment, securities of any entity which are traded on any national securities exchange if Executive (i) is not a controlling person of, or a member of a group which controls, such entity; or (ii) does not, directly or indirectly, own one percent (1%) or more of any class of securities of any such entity. 

(b)Customers and Suppliers.  Executive recognizes that he will possess Proprietary Information (as such term is defined in the Proprietary Rights Agreement) about the customers or suppliers of the Company and its subsidiaries and affiliates.  Executive recognizes that the Proprietary Information he will possess about these customers or suppliers may not be generally known, is of substantial value to the Company and its subsidiaries in developing its business and in securing and retaining customers, and will be acquired by him because of his business position with the Company and its subsidiaries and affiliates.  Executive agrees that, during the term of Executive's employment and for a period of nine (9) months beyond the termination of Executive's employment, he will not, directly or indirectly, influence or attempt to influence customers or suppliers of the Company or any of its subsidiaries or affiliates to divert their business to any competitor of the Company, and that he will not convey any such Proprietary Information or trade secrets about the customers or suppliers of the Company and its subsidiaries or affiliates to any other person.

 

(c) Employees.  Executive recognizes that he will possess Proprietary Information about other employees of the Company and its subsidiaries and affiliates relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customers of the Company and its subsidiaries and affiliates.  Executive recognizes that the Proprietary Information he will possess about these other employees is not generally known, is of substantial value to the Company and its subsidiaries in developing its business and in securing and retaining customers, and will be acquired by him because of his business position with the Company and its subsidiaries and affiliates.  Executive agrees that, during the term of Executive's employment and for a period of nine (9) months beyond termination of Executive's employment, he will not, directly or indirectly, induce, solicit or recruit any employee of the Company or its subsidiaries or affiliates for the purpose of being employed by him or by any competitor of the Company on whose behalf he is acting as an agent, representative or employee, and that he will not convey any such Proprietary Information or trade secrets about other employees of the Company and its subsidiaries or affiliates to any other person. 

 

(d) Reasonableness of Relief; Blue Penciling. Executive acknowledges and agrees that the covenants and agreements contained herein are reasonable and valid in geographic and temporal scope and in all other respects and are reasonably necessary to protect the Company.  If any court determines that any of the covenants and agreements contained herein, or any part thereof, is unenforceable because of the duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable to the maximum extent permitted by applicable law. 

 

12. Rights and Remedies upon Breach. In the event Executive breaches, or threatens to commit a breach of, any of the provisions of this Agreement, the Company and its subsidiaries, affiliates, successors or assigns shall have the following rights and remedies, each of which shall be independent of the others and severally enforceable, and each of which shall be in addition to, and not in lieu of, any other rights or remedies available to the Company or its subsidiaries, affiliates, successors or assigns at law or in equity under this Agreement or otherwise: 

 

(a) Specific Performance. The right and remedy to have each and every one of the covenants in this Agreement specifically enforced and the right and remedy to obtain injunctive relief, it being agreed that any breach or threatened breach of any of the nonsolicitation or other restrictive covenants and agreements contained herein would cause irreparable injury to the Company and its subsidiaries, affiliates, successors or assigns and that money damages would not provide an adequate remedy at law to the Company and its subsidiaries, affiliates, successors or assigns. 

 

6

 

(b) Accounting. The right and remedy to require Executive to account for and pay over to the Company and its subsidiaries, affiliates, successors or assigns, as the case may be, all compensation, profits, monies, accruals, increments or other benefits derived or received by Executive that result from any transaction or activity constituting a material breach of this Agreement, except that Executive shall be required to account for and pay over the aforementioned compensation, profits, monies, accruals, increments or other benefits only pursuant to an award rendered by an arbitrator and entered in a court of competent jurisdiction, as set forth in Paragraph 22 herein, which finds that Executive materially breached this Agreement and owes the Company such amounts as a result of the material breach.

(c) Cessation of Payments.  The right to cease all severance payments to Executive hereunder.

 

(d)Enforceability in all Jurisdictions.  Executive intends to and hereby confers jurisdiction to enforce each and every one of the covenants and agreements contained herein upon the courts of any jurisdiction within the geographic scope of such covenants and agreements. If the courts of any one or more of such jurisdictions hold any such covenant or agreement unenforceable by reason of the breadth or such scope or otherwise, it is the intention of Executive and the Company that such determination shall not bar or in any way affect the Company’s or any of its subsidiaries’, affiliates’, successors’ or assigns’ right to the relief provided above in the courts of any other jurisdiction within the geographic scope of such covenants and agreements, as to breaches of such covenants and agreements in such other respective jurisdictions, such covenants and agreements as they relate to each jurisdiction being, for this purpose, severable into diverse and independent covenants and agreements. 

(e)Whistleblower Provision. Nothing herein is intended to or shall prevent Executive from communicating directly with, cooperating with, or providing information to, any federal, state or local government regulator, including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, or the U.S. Department of Justice. Executive acknowledges that the Company has provided Employee with the following notice of immunity rights in compliance with the requirements of the Defend Trade Secrets Act: (i) Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of proprietary information of the Company that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, (ii) Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of proprietary information of the Company that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and (iii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the proprietary information to my attorney and use the proprietary information in the court proceeding, if Executive files any document containing the proprietary information under seal, and does not disclose the proprietary information, except pursuant to court order.

 

13. Binding Agreement. This Agreement is a personal contract and the rights and interests of the Executive hereunder may not be sold, transferred, assigned, pledged, encumbered, or hypothecated by him. This Agreement shall inure to the benefit of and be enforceable by the Executive and his personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amount would still be payable to him hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there is no such designee, to his estate. This Agreement shall be binding upon and shall by its terms automatically be assigned to any successor in interest to the Company in a change in control, including but not limited to any entity that acquires substantially all of the assets, capital stock or operations of the Company.

 

14. Return of Company Property. Executive agrees that following the termination of his employment for any reason, he shall return all property of the Company, its subsidiaries, affiliates and any divisions thereof he may have managed which is then in or thereafter comes into his possession, including, but not limited to, documents, contracts, agreements, plans, photographs, books, notes, electronically stored data and all copies of the foregoing as well as any materials or equipment supplied by the Company to Executive. 

 

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15. Entire Agreement. This Agreement, together with the Proprietary Rights Agreement, contains all the understandings between the parties hereto pertaining to the matters referred to herein, and supersedes all undertakings and agreements, whether oral or in writing, previously entered into by them with respect thereto. Executive represents that, in executing this Agreement, he does not rely and has not relied upon any representation or statement not set forth herein made by the Company with regard to the subject matter, bases or effect of this Agreement or otherwise. 

 

16. Amendment or Modification, Waiver. No provision of this Agreement may be amended or waived unless such amendment or waiver is agreed to in writing, signed by Executive and by a duly authorized officer of the Company. The failure of either party to this Agreement to enforce any of its terms, provisions or covenants shall not be construed as a waiver of the same or of the right of such party to enforce the same. Waiver by either party hereto of any breach or default by the other party of any term or provision of this Agreement shall not operate as a waiver of any other breach or default. 

 

17. Notices. Any notice to be given hereunder shall be in writing and shall be deemed given when delivered personally, sent by courier or fax or registered or certified mail, postage prepaid, return receipt requested, addressed to Executive at the most recent address on the Company’s payroll records and to the Company at the address indicated below or to such other address as either party may subsequently give notice of hereunder in writing: 

 

	
 
	
To the Company at: 

	
 
	
 

	
 
	
DASAN Zhone Solutions, Inc.

	
 
	
7195 Oakport Street 

	
 
	
Oakland, CA 94621 

	
 
	
Attention:  Chief Executive Officer

	
 
	
Fax: (510) 777-7001 

 

Any notice delivered personally or by courier under this Section 17 shall be deemed given on the date delivered and any notice sent by telecopy or registered or certified mail, postage prepaid, return receipt requested, shall be deemed given on the date telecopied or mailed. 

 

18. Severability. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of the Agreement shall not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Agreement shall be held to be excessively broad as to duration, activity or subject, such provisions shall be construed by limiting and reducing them so as to be enforceable to the maximum extent allowed by applicable law. 

 

19. Survivorship. The respective rights and obligations of the parties hereunder, including but not limited to Executive’s obligations under Sections 10, 11 and 12, shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations. 

 

20. Each Party the Drafter. This Agreement and the provisions contained in it shall not be construed or interpreted for or against any party to this Agreement because that party drafted or caused that party’s legal representative to draft any of its provisions. 

 

21. Governing Law; Venue. This contract shall be governed by the laws of the State of California as they are applied to contracts between California residents to be performed completely within California.  The parties irrevocably submit to the non-exclusive jurisdiction of the Superior Court of the State of California, Santa Clara County, and the United States District Court for the Northern District of California, Branch nearest to Palo Alto, California, in any action to enforce an arbitration award or any other suit brought hereunder.  Each party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of process in any manner authorized by California law.

 

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22. Binding Arbitration.  Except as provided in Section 12(a) of this Agreement, any dispute, claim or controversy based on, arising out of or relating to Executive’s employment or this Agreement shall be settled by final and binding arbitration in Palo Alto, California, before a single neutral arbitrator in accordance with the employment arbitration rules (the “Rules”) of the Judicial Arbitration and Mediation Services/Endispute (“JAMS”), and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction.  Arbitration may be compelled pursuant to the California Arbitration Act (Code of Civil Procedure §§ 1280 et seq.).  If the parties are unable to agree upon an arbitrator, one shall be appointed by the AAA in accordance with its Rules.  Subject to Section 23 below, each party shall pay the fees of its own attorneys, the expenses of its witnesses and all other expenses connected with presenting its case.  Other costs of the arbitration, including the cost of any record or transcripts of the arbitration, JAMS’s administrative fees, the fee of the arbitrator, and all other fees and costs, shall be borne by the Company.  This Section 22 is intended to be the exclusive method for resolving any and all claims by the parties against each other for payment of damages under this Agreement or relating to Executive’s employment; provided, however, that Executive shall retain the right to file administrative charges with or seek relief through any government agency of competent jurisdiction, and to participate in any government investigation, including but not limited to (a) claims for workers’ compensation, state disability insurance or unemployment insurance; (b) claims for unpaid wages or waiting time penalties brought before the California Division of Labor Standards Enforcement; provided, however, that any appeal from an award or from denial of an award of wages and/or waiting time penalties shall be arbitrated pursuant to the terms of this Agreement; and (c) claims for administrative relief from the United States Equal Employment Opportunity Commission and/or the California Department of Fair Employment and Housing (or any similar agency in any applicable jurisdiction other than California); provided, further, that Executive shall not be entitled to obtain any monetary relief through such agencies other than workers’ compensation benefits or unemployment insurance benefits.  This Agreement shall not limit either party’s right to obtain any provisional remedy, including, without limitation, injunctive or similar relief, from any court of competent jurisdiction as may be necessary to protect their rights and interests pending the outcome of arbitration, in any court of competent jurisdiction pursuant to California Code of Civil Procedure § 1281.8 or any similar statute of an applicable jurisdiction.  Seeking any such relief shall not be deemed to be a waiver of such party’s right to compel arbitration.  Both Executive and the Company expressly waive their right to a jury trial.

 

23. Attorney Fees. In the event that any dispute between the Company and Executive should result in arbitration, the arbitrator may award to one or more of the Prevailing Persons (as defined below) such reasonable attorney fees, costs and expenses, as determined by the arbitrator. Any judgment or order enforcing such arbitration may, in the discretion of the court entering such judgment or order contain, a specific provision providing for the recovery of attorney fees and costs incurred in enforcing such judgment or order and an award of prejudgment interest from the date of the breach at the maximum rate of interest allowed by law. For the purposes of this Section 23: 

 

(a) “attorney fees” shall include, without limitation, attorney fees incurred in the following: 

 

(i) arbitration; 

 

(ii) post-arbitration order or judgment motions; 

 

(iii) contempt proceedings; 

 

(iv) garnishment, levy, and debtor and third party examinations; 

 

(v) discovery; and 

 

(vi) bankruptcy litigation; 

 

(b) “Prevailing Person” shall mean any person who is determined by the arbitrator in the proceeding to have prevailed or who prevails by dismissal, default or otherwise. 

 

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24. Headings. All descriptive headings of sections and paragraphs in this Agreement are intended solely for convenience, and no provision of this Agreement is to be construed by reference to the heading of any section or paragraph. 

 

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

 

26.Code Section 409A.  

(a)Any reimbursement of expenses or in-kind benefits payable under this Agreement shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv) and shall be paid on or before the last day of Executive’s taxable year following the taxable year in which Executive incurred the expenses.  The amount of expenses reimbursed or in-kind benefits payable in one year shall not affect the amount eligible for reimbursement or in-kind benefits payable in any other taxable year of Executive’s, and Executive’s right to reimbursement for such amounts shall not be subject to liquidation or exchange for any other benefit.

(b)In the event that the amounts payable under Section 8(b)(ii) are subject to Section 409A of the Code and the timing of the delivery of Executive’s release could cause such amounts to be paid in one or another taxable year, then notwithstanding the payment timing set forth in such Section, such amounts shall not be payable until the later of (i) the payment date specified in such section or (ii) the first business day of the taxable year following the Executive’s “separation from service.”

27.Withholding.  All applicable withholding taxes shall be deducted from any payments to Executive hereunder.  

(Signature Page Follows)

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. 

 

	
DASAN Zhone Solutions, Inc.
	
 
	
EXECUTIVE

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ IL YUNG KIM
	
 
	
By:
	
 
	
/s/ THOMAS J CANCRO

	
Name:
	
 
	
Il Yung Kim
	
 
	
Name:
	
 
	
Tom Cancro

	
Title:
	
 
	
Chief Executive Officer
	
 
	
 
	
 
	
 

 

 

 

11

 

EXHIBIT A

Employee Innovations and Proprietary Rights Assignment Agreement

[Attached]

 

1

	
	
DASAN Zhone Solutions, Inc. CONFIDENTIAL

Version 09.2016

 

 

DASAN ZHONE SOLUTIONS, INC.

 

EMPLOYEE INNOVATIONS AND PROPRIETARY RIGHTS

ASSIGNMENT AGREEMENT

 

 

This Agreement is intended to formalize in writing certain understandings and procedures which have been in effect since the time I was initially employed by DASAN Zhone Solutions, Inc.  ("Company").  In return for my new or continued employment by Company and other good and valuable consideration, the receipt and sufficiency of which I hereby acknowledge, I acknowledge and agree that:

 

1.Duties; At‐Will Employment; No Conflict.  I will perform for Company such duties as may be designated by Company from time to time.  I agree that my employment with Company is for no specified term, and may be terminated by Company at any time, with or without cause, and with or without notice.  Similarly, I may terminate my employment with Company at any time, with or without cause, and with or without notice.  During my period of employment by Company, I will devote my best efforts to the interests of Company and will not engage in other employment or in any activities determined by Company to be detrimental to the best interests of Company without the prior written consent of Company.

 

2.Prior Work.  All previous work done by me for Company relating in any way to the conception, reduction to practice, creation, derivation, design, development, manufacture, sale or support of products or services for Company is the property of Company, and I hereby assign to Company all of my right, title and interest in and to such previous work.

 

3.Proprietary Information.  My employment creates a relationship of confidence and trust between Company and me with respect to any information:

 

(a)Applicable to the business of Company; or

 

(b)Applicable to the business of any client or customer of Company, which may be made known to me by Company or by any client or customer of Company, or learned by me in such context during the period of my employment.

 

All such information has commercial value in the business in which Company is engaged and is hereinafter called "Proprietary Information."  By way of illustration, but not limitation, Proprietary Information includes any and all technical and non‐technical information including patent, copyright, trade secret, and proprietary information, techniques, sketches, drawings, models, inventions, know‐how, processes, apparatus, equipment, algorithms, software programs, software source documents, and formulae related to the current, future and proposed products and services of Company, and includes, without limitation, respective information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing manufacturing, customer lists, business forecasts, sales and merchandising and marketing plans and information.  "Proprietary Information" also includes proprietary or confidential information of any third party who may disclose such information to Company or to me in the course of Company's business.

 

4.Ownership and Nondisclosure of Proprietary Information.  All Proprietary Information is the sole property of Company, Company’s assigns, and Company’s customers, and Company, Company’s assigns and Company’s customers shall be the sole and exclusive owner of all patents, copyrights, mask works, trade secrets and other rights in the Proprietary Information.  I hereby do and will assign to 

2

	
	
DASAN Zhone Solutions, Inc. CONFIDENTIAL

Version 09.2016

 

 

Company all rights, title and interest I may have or acquire in the Proprietary Information.  At all times, both during my employment by Company and after termination of such employment, I will keep in confidence and trust all Proprietary Information, and I will not use or disclose any Proprietary Information or anything directly relating to Proprietary Information without the written consent of Company, except as may be necessary in the ordinary course of performing my duties as an employee of Company.

 

I will maintain Proprietary Information in my possession as necessary and shall return to the appropriate person or location or other wise properly dispose of Proprietary Information once that need to know no longer exists.  I will not make copies of or otherwise reproduce Proprietary Information unless there is a legitimate business need for reproduction. 

 

5.Ownership and Return of Materials.  All materials (including, without limitation, documents, drawings, models, apparatus, sketches, designs, lists, and all other tangible media of expression) furnished to me by Company shall remain the property of Company.  Upon termination of my employment, or at any time on the request of Company before termination, I will promptly (but no later than five (5) days after the earlier of my employment’s termination or Company’s request) destroy or deliver to Company, at Company’s option, (a) all materials furnished to me by Company, (b) all tangible media of expression which are in my possession and which incorporate any Proprietary Information or otherwise relate to Company’s business, and (c) written certification of my compliance with my obligations under this sentence.

 

6.Innovations.  As used in this Agreement, the term "Innovations" means all processes, machines, manufactures, compositions of matter, improvements, inventions (whether or not protectable under patent laws), works of authorship, information fixed in any tangible medium of expression (whether or not protectable under copyright laws), moral rights, mask works, trademarks, trade names, trade dress, trade secrets, know-how, ideas (whether or not protectable under trade secret laws), and all other subject matter protectable under patent, copyright, moral right, mask work, trademark, trade secret or other laws, and includes without limitation all new or useful art, combinations, discoveries, formulae, manufacturing techniques, technical developments, discoveries, artwork, software, and designs.  “Innovations” includes “Inventions,” which is defined to mean any inventions protected under patent laws.

 

7.Disclosure of Prior Innovations.  I have identified on Exhibit A ("Prior Innovations") attached hereto all Innovations, applicable to the business of Company or relating in any way to Company's business or demonstrably anticipated research and development or business, which were conceived, reduced to practice, created, derived, developed, or made by me prior to my employment with Company (collectively, the "Prior Innovations"), and I represent that such list is complete.  I represent that I have no rights in any such Innovations other than those Prior Innovations specified in Exhibit A ("Prior Innovations").  If there is no such list on Exhibit A ("Prior Innovations"), I represent that I have neither conceived, reduced to practice, created, derived, developed nor made any such Prior Innovations at the time of signing this Agreement.

 

8.Assignment of Innovations; License of Prior Innovations.  I hereby agree promptly to disclose and describe to Company, and I hereby do and will assign to Company or Company’s designee my entire right, title, and interest in and to, (a) each of the Innovations (including Inventions), and any associated intellectual property rights, which I may solely or jointly conceive, reduce to practice, create, derive, develop or make during the period of my employment with Company, which either (i) relate, at the time of conception, reduction to practice, creation, derivation, development, or making of such Innovation, to Company's business or actual or demonstrably anticipated research or development, or (ii) were developed on any amount of Company's time or with the use of any of Company's equipment, 

3

	
	
DASAN Zhone Solutions, Inc. CONFIDENTIAL

Version 09.2016

 

 

supplies, facilities or trade secret information, or (iii) resulted from any work I performed for Company, and (b) each of the Innovations which is not an Invention (as demonstrated by me by evidence meeting the clear and convincing standard of proof), and any associated intellectual property rights, which I may solely or jointly conceive, develop, reduce to practice, create, derive, develop, or make during the period of my employment with Company, which are applicable to the business of Company (collectively, the Innovations identified in clauses (a) and (b) are hereinafter the "Company Innovations").  To the extent any of the rights, title and interest in and to Company Innovations cannot be assigned by me to Company, I hereby grant to Company an exclusive, royalty-free, transferable, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to practice such non-assignable rights, title and interest.  To the extent any of the rights, title and interest in and to Company Innovations can be neither assigned nor licensed by me to Company, I hereby irrevocably waive and agree never to assert such non-assignable and non-licensable rights, title and interest against Company or any of Company’s successors in interest to such non-assignable and non-licensable rights.  I hereby grant to Company or Company’s designees a royalty free, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to practice all applicable patent, copyright, moral right, mask work, trade secret and other intellectual property rights relating to any Prior Innovations which I incorporate, or permit to be incorporated, in any Company Innovations.  Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, any Prior Innovations in any Company Innovations without Company's prior written consent.

 

9.Future Innovations.  I recognize that Innovations or Proprietary Information relating to my activities while working for Company and conceived, reduced to practice, created, derived, developed, or made by me, alone or with others, within three (3) months after termination of my employment may have been conceived, reduced to practice, created, derived, developed, or made, as applicable, in significant part while employed by Company.  Accordingly, I agree that such Innovations and Proprietary Information shall be presumed to have been conceived, reduced to practice, created, derived, developed, or made, as applicable, during my employment with Company and are to be promptly assigned to Company unless and until I have established the contrary by written evidence satisfying the clear and convincing standard of proof.

 

10.Cooperation in Perfecting Rights to Proprietary Information and Innovations.

 

(a)I agree to perform, during and after my employment, all acts deemed necessary or desirable by Company to permit and assist Company, at Company’s expense, in obtaining and enforcing the full benefits, enjoyment, rights and title throughout the world in the Proprietary Information and Innovations assigned or licensed to, or whose rights are irrevocably waived and shall not be asserted against, Company under this Agreement.  Such acts may include, but are not limited to, execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, mask work, or other applications, (ii) in the enforcement of any applicable patents, copyrights, mask work, moral rights, trade secrets, or other proprietary rights, and (iii) in other legal proceedings related to the Proprietary Information or Innovations.

 

(b)In the event that Company is unable for any reason to secure my signature to any document required to file, prosecute, register, or memorialize the assignment of any patent, copyright, mask work or other applications or to enforce any patent, copyright, mask work, moral right, trade secret or other proprietary right under any Proprietary Information (including improvements thereof) or any Innovations (including derivative works, improvements, renewals, extensions, continuations, divisionals, continuations in part, continuing patent applications, reissues, and reexaminations thereof), I hereby irrevocably designate and appoint Company and Company’s duly authorized officers and agents as my agents and attorneys‐in‐fact to act for and on my behalf and instead of me, (i) to execute, file, prosecute, 

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register and memorialize the assignment of any such application, (ii) to execute and file any documentation required for such enforcement, and (iii) to do all other lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance, and enforcement of patents, copyrights, mask works, moral rights, trade secrets or other rights under the Proprietary Information, or Innovations, all with the same legal force and effect as if executed by me.

 

11.No Violation of Rights of Third Parties.  My performance of all the terms of this Agreement and as an employee of Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me prior to my employment with Company, and I will not disclose to Company, or induce Company to use, any confidential or proprietary information or material belonging to any previous employer or others.  I am not a party to any other agreement which will interfere with my full compliance with this Agreement.  I agree not to enter into any agreement, whether written or oral, in conflict with the provisions of this Agreement.

 

12.Survival.  This Agreement (a) shall survive my employment by Company; (b) does not in any way restrict my right or the right of Company to terminate my employment at any time, for any reason or for no reason; (c) inures to the benefit of successors and assigns of Company; and (d) is binding upon my heirs and legal representatives.

 

13.Nonassignable Inventions.  This Agreement does not apply to an Invention which qualifies fully as a nonassignable invention under the provisions of Section 2870 of the California Labor Code. I acknowledge that a condition for an Invention to qualify fully as a non-assignable invention under the provisions of Section 2870 of the California Labor Code is that the invention must be protected under patent laws.  I have reviewed the notification in Exhibit B ("Limited Exclusion Notification") and agree that my signature acknowledges receipt of the notification.  However, I agree to disclose promptly in writing to Company all Innovations (including Inventions) conceived, reduced to practice, created, derived, developed, or made by me during the term of my employment and for three (3) months thereafter, whether or not I believe such Innovations are subject to this Agreement, to permit a determination by Company as to whether or not the Innovations should be the property of Company.  Any such information will be received in confidence by Company.

 

14.No Solicitation of Employees.  During the term of my employment with Company and for a period of two (2) years thereafter, I will not directly or indirectly, for myself or on behalf of or in conjunction with any other persons, solicit, encourage, or cause others to solicit or encourage any employees of Company to terminate their employment with Company.

 

15.Injunctive Relief.  A breach of any of the promises or agreements contained herein will result in irreparable and continuing damage to Company for which there will be no adequate remedy at law, and Company shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate).

 

16.Attorneys’ Fees.  In any legal action or other proceeding brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs.

 

17.Notices.  Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows, with notice deemed given as indicated:  (a) by personal delivery, when delivered personally; (b) by overnight courier, upon written verification of receipt; (c) by telecopy or facsimile transmission, upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon verification of receipt.  Notices to me shall be sent to any address in Company's records or such other address as I may specify in writing.  Notices to Company shall be sent to Company's Human Resources Department or to such other address as Company may specify in writing.

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18.Governing Law.  This Agreement shall be governed in all respects by the laws of the United States of America and by the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents.  Each of the parties irrevocably consents to the exclusive personal jurisdiction of the federal and state courts located in California, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to enforce any order or any judgment of such federal or state courts located in California, such personal jurisdiction shall be nonexclusive.

 

19.Severability.  If any provision of this Agreement is held by a court of law to be illegal, invalid or unenforceable, (i) that provision shall be deemed amended to achieve as nearly as possible the same economic effect as the original provision, and (ii) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.

 

20.Waiver; Amendment; Modification.  The waiver by Company of a term or provision of this Agreement, or of a breach of any provision of this Agreement by me, shall not be effective unless such waiver is in writing signed by Company.  No waiver by Company of, or consent by Company to, a breach by me, will constitute a waiver of, consent to or excuse of any other or subsequent breach by me.  This Agreement may be amended or modified only with the written consent of both me and Company.  No oral waiver, amendment or modification shall be effective under any circumstances whatsoever.

 

21.Entire Agreement.  This Agreement represents my entire understanding with Company with respect to the subject matter of this Agreement and supersedes all previous understandings, written or oral.

 

22.Interpretation.  This Agreement shall be construed as a whole, according to its fair meaning, and not in favor or against any party.  By way of example and not in limitation, this Agreement shall not be construed in favor of the party receiving a benefit nor against the party responsible for any particular language in this Agreement.  Captions are used for reference purposes only and should be ignored in the interpretation of the Agreement.

 

I certify and acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions.

 

 

 

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Exhibit A

 

PRIOR INNOVATIONS

 

 

 

 

Exhibit B

 

LIMITED EXCLUSION NOTIFICATION

 

 

THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and Company does not require you to assign or offer to assign to Company any invention that you developed entirely on your own time without using Company's equipment, supplies, facilities or trade secret information except for those inventions that either:

 

(1)Relate at the time of conception or reduction to practice of the invention to Company's business, or actual or demonstrably anticipated research or development of Company; or

 

(2)Result from any work performed by you for Company.

 

To the extent a provision in the foregoing Agreement purports to require you to assign an invention otherwise excluded from the preceding paragraph, the provision is against the public policy of this state and is unenforceable.

 

This limited exclusion does not apply to any patent or invention covered by a contract between Company and the United States or any of its agencies requiring full title to such patent or invention to be in the United States.

 

I ACKNOWLEDGE RECEIPT of a copy of this notification.

 

	
EMPLOYEE:

	
 
	
 
	
 

	
By:
	
 
	
/s/ THOMAS J CANCRO

	
Name:
	
 
	
Tom Cancro

	
Dated:
	
 
	
November 25, 2019

 

	
Witnessed by:

	
 
	
 
	
 

	
DASAN Zhone Solutions, Inc.

	
 
	
 
	
 

	
By:
	
 
	
/s/ IL YUNG KIM

	
Name:
	
 
	
Il Yung Kim

	
Title:
	
 
	
Chief Executive Officer

	
Dated:
	
 
	
November 25, 2019

 

 

 

US-DOCS\111681083.1

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