Document:

cimarron_ex105.htm

EXHIBIT 10.5
   
  CONFIDENTIAL TREATMENT REQUESTED [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  STANDARD EXCLUSIVE LICENSE AGREEMENT
   
  WITH KNOW HOW - Agreement No: A9672
   
  TABLE OF CONTENTS
   
    
  	  Section 1.
	   
	  Definitions
	   
	   
	2	   

	 	   
	   
	   
	   
	   
	   

	  Section 2.
	   
	  Grant
	   
	   
	  4
	   

	 	   
	   
	   
	   
	   
	   

	  Section 3.
	   
	  Due Diligence
	   
	   
	  5
	   

	 	   
	   
	   
	   
	   
	   

	  Section 4.
	   
	  Payments
	   
	   
	  6
	   

	 	   
	   
	   
	   
	   
	   

	  Section 5.
	   
	  Certain Warranties and Disclaimers of UFRF
	   
	   
	  9
	   

	 	   
	   
	   
	   
	   
	   

	  Section 6.
	   
	  Record Keeping
	   
	   
	  9
	   

	 	   
	   
	   
	   
	   
	   

	  Section 7.
	   
	  Patent Prosecution
	   
	   
	  10
	   

	 	   
	   
	   
	   
	   
	   

	  Section 8.
	   
	  Infringement and Invalidity
	   
	   
	  10
	   

	 	   
	   
	   
	   
	   
	   

	  Section 9.
	   
	  Term and Termination
	   
	   
	  11
	   

	 	   
	   
	   
	   
	   
	   

	  Section 10.
	   
	  Assignability
	   
	   
	  12
	   

	 	   
	   
	   
	   
	   
	   

	  Section 11.
	   
	  Dispute Resolution Procedures
	   
	   
	  12
	   

	 	   
	   
	   
	   
	   
	   

	  Section 12.
	   
	  Product Liability; Conduct of Business
	   
	   
	  13
	   

	 	   
	   
	   
	   
	   
	   

	  Section 13.
	   
	  Use of Names
	   
	   
	  13
	   

	 	   
	   
	   
	   
	   
	   

	  Section 14.
	   
	  Miscellaneous
	   
	   
	  14
	   

	 	   
	   
	   
	   
	   
	   

	  Section 15.
	   
	  Notices
	   
	   
	  15
	   

	 	   
	   
	   
	   
	   
	   

	  Section 16.
	   
	  Contract Formation and Authority
	   
	   
	  16
	   

	 	   
	   
	   
	   
	   
	   

	  Section 17.
	   
	  Confidentiality
	   
	   
	  16
	   

	 	   
	   
	   
	   
	   
	   

	  Section 18.
	   
	  University Rules and Regulations
	   
	   
	  16
	   

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
      
  
  	 
	1

	  

	 

      
Schedule 1 — Patents and Patent Applications
  Appendix A - Development Plan
  Appendix B - Development Report
  Appendix C - UFRF Royalty Report
  Appendix D - Milestones
  Appendix E - Stockholders Agreement
   
  This Agreement is made effective the 22nd day of December, 2011, (the “Effective Date”) by and between the University of Florida Research Foundation, Inc. (hereinafter called “UFRF”), a nonstock, nonprofit Florida corporation, and Sun BioPharma, Inc. (hereinafter called “Licensee”), a Small Entity corporation organized and existing under the laws of Delaware ;
   
  WHEREAS, UFRF owns certain inventions that are described in the “Licensed Patents” defined below, and UFRF is willing to grant a license to Licensee under all of the Licensed Patents and Licensee desires a license under all of them;
   
  NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties covenant and agree as follows:
   
  Section 1 Definitions
   
    	  1.1
	  “Licensed Patents” means all of the following UFRF intellectual property:

   
    		1.1.1 	  the patent(s)/patent application(s) identified on Schedule 1 hereto;

			
		1.1.2 	  any and all United States and foreign patent applications claiming priority to any of the patent(s), and any patent application(s) identified in Schedule 1; and

			
		1.1.3 	  any and all patents issuing from the patent applications identified in Section 1.1.1 and 1.1.2, including, but not limited to, letters patents, patents of addition, divisionals, continuations, reissues, re-examinations, extensions, restorations, and supplementary protection certificates;

   
  all to the extent owned or controlled by UFRF.
   
    	  1.2
	  “Licensed Product” and “Licensed Process” means:

   
    		1.2.1 	  In the case of a Licensed Product, any product or part thereof, on a country-by-country basis, that:

   
    		   
	(a) 	  is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents, in any country in which such product is made, used, imported or sold;

		   
		
		   
	(b) 	  is manufactured by using a process which is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents, in any country in which any such process is used or in which any such product is used, imported or sold; or

		   
		
		   
	(c) 	  incorporates, utilizes, or was developed utilizing, Know-How, or which is manufactured using Know-How, or using a process developed using Know-How.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
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    		1.2.2 	  In the case of a Licensed Process, any process, on a country-by-country basis:

   
    		   
	(a)	  which is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents in any country in which such process is practiced; or

		   
		
		   
	(b) 	  which incorporates, utilizes, or was developed utilizing, Know-How.

   
    	  1.3
	  “Net Sales” means the total dollar amount invoiced on sales of Licensed Product and/or Licensed Processes by Licensee, Sublicensee or Affiliates, less sales and/or use taxes actually paid, import and/or export duties paid, amounts allowed or credited from previous sales, e.g., returns , and any promotional discounts and rebates customarily allowed and in amounts customary in the distribution and sale of injectible oncolytics.

		
	  1.4
	  “Affiliate” means: (a) any person or entity which controls at least fifty percent (50%) of the equity or voting stock of the Licensee, or (b) any person or entity fifty percent (50%) of whose equity or voting stock is owned or controlled by the Licensee, or (c) any person or entity of which at least fifty percent (50%) of the equity or voting stock is owned or controlled by the same person or entity owning or controlling at least fifty percent (50%) of Licensee.

		
	  1.5
	  “Patent Challenge” means a challenge to the validity, patentability, enforceability and/or non-infringement of any of the Licensed Patents or otherwise opposing any of the Licensed Patents.

		
	  1.6
	  “Sublicense” means, directly or indirectly, to sublicense, grant any other right with respect to, or agree not to assert, any right licensed to Licensee under this Agreement.

		
	  1.7 
	  “Sublicensee” means any third party to whom Licensee grants a Sublicense.

		
	  1.8 
	  “Development Plan” means a written report summarizing the development activities that are to be undertaken by the Licensee to bring Licensed Products and/or Licensed Processes to the market. The Development Plan is attached as Appendix A.

		
	  1.9 
	  “Development Report” means a written account of Licensee’s progress under the Development Plan having at least the information specified on Appendix B to this Agreement, and shall be sent to the address specified on Appendix B.

		
	  1.10 
	  “Initial Capitalization” means the first time after the Effective Date when the Licensee has achieved the raising of at least Two Hundred Thousand ($200,000) Dollars in capital from any and all funding sources.

		
	  1.11 
	  “Licensed Field” shall be all uses.

		
	  1.12 
	  “Licensed Territory” shall be worldwide.

		
	  1.13 
	  “Investigator” means Raymond Bergeron, while employed by the University of Florida.

		
	  1.14 
	  “Know-How” means unpatented technology and/or information that was developed by the Investigator, including without limitation methods, processes, techniques, compounds, cell lines, materials, sequences, drawings, indications, data, results of tests, or studies, plans, and expertise, whether patentable or not, which relates specifically to the Licensed Patents and existing on the date hereof, only to the extent wholly owned and controlled by UFRF, except that Know-How shall not include the Licensed Patents.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
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  Section 2 Grant
   
    	  2.1 
	  License

   
    		2.1.1 	  License under Licensed Patents

   
  Subject to the terms of this Agreement, UFRF hereby grants to Licensee a royalty-bearing, exclusive license, limited to the Licensed Field and the Licensed Territory, under the Licensed Patents and Know-How to make, have made, develop, use, lease, import, export, offer to sell, sell and have sold Licensed Products and Licensed Processes. UFRF reserves to itself and the University of Florida the right under the Licensed Patents and Know-How to make, have made, develop, import and use Licensed Products and Licensed Processes solely for their internal research, clinical (including, but not limited to patient care at Shands Teaching Hospital and University of Florida patient care facilities), and educational purposes. UFRF reserves the right to itself, to the University of Florida and to the Investigator to publish any aspect of the Know-How for academic and educational purposes. In addition, UFRF reserves to itself, as well as to the University of Florida, the right to use materials that are covered under Licensed Patents or Know-How solely for their internal research, educational, and clinical purposes and to meet all applicable governmental requirements governing the ability to transfer materials.
   
    	  2.2 
	  Sublicense

   
    		2.2.1 	  Licensee may grant written Sublicenses to third parties. However, any agreement granting a Sublicense shall state that the Sublicense is subject to the terms and condition of this Agreement. Licensee shall have the same responsibility for the activities of any Sublicensee or Affiliate as if the activities were directly those of Licensee. Licensee shall also include provisions in all sublicenses to provide that in the event that Sublicensee brings a Patent Challenge against UFRF or assists another party in bringing a Patent Challenge against UFRF (except as required under a court order or subpoena) then Licensee may terminate the Sublicense within thirty (30) days.

			
		2.2.2 	  In respect to Sublicenses granted by Licensee under 2.2.1 above, Licensee shall pay to UFRF an amount equal to what Licensee would have been required to pay to UFRF had Licensee sold the amount of Licensed Products or Licensed Processes sold by such Sublicensee. In addition, if Licensee receives any fees or other payments in consideration for any rights granted under a Sublicense, and such payments are not based directly upon the amount or value of Licensed Products or Licensed Processes sold by the Sublicensee, then Licensee shall pay UFRF the following percentage of such consideration, based on when such consideration is received:

   
  Up to 2 years from Effective Date of this Agreement [*]
   
  Between 2 years, 1 day and 4 years from Effective Date [*]
   
  After 4 years from Effective Date [*]
   
  Such payments due to UFRF shall exclude amounts specifically paid for (i) future research and development and (ii) equity and debt instruments at fair market value. Licensee shall not receive from Sublicensees anything of value in lieu of cash payments in consideration for any Sublicense under this Agreement without the express prior written permission of UFRF. If Licensee or any of its Affiliates brings a Patent Challenge against UFRF, or (ii) Licensee or any of its Affiliates assists another party in bringing a Patent Challenge against UFRF (except as required under a court order or subpoena), and (iii) UFRF does not choose to exercise its rights to terminate this Agreement pursuant to Section 9.3 then, in the event that such a Patent Challenge is successful, Licensee will have no right to recoup any consideration, including royalties, paid during the period of challenge. In the event that a Patent Challenge is unsuccessful, Licensee shall reimburse UFRF for all reasonable legal fees and expenses incurred in its defense against the Patent Challenge.
   
    	   
	2.2.3 	  Licensee shall provide UFRF with a final unredacted copy of each sublicense agreement and any agreement which transfers intellectual property rights granted hereunder, within thirty (30) days after the execution of the sublicense agreement and further agrees to forward to UFRF annually a copy of such reports received by Licensee from its sublicensees pertinent to the payments under said sublicense agreements.

  
    
CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
      
  	 
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  Section 3 Due Diligence
   
    	3.1 	  Development

   
    		3.1.1 	  Licensee agrees to and warrants that:

   
    		   
	(a) 	  it has, or will obtain, the expertise necessary to independently evaluate the inventions of the Licensed Patents;

		   
		
		   
	(b) 	  it will establish and will actively and diligently pursue the Development Plan (see Appendix A) to the end that the inventions of the Licensed Patents will be utilized to provide Licensed Products and/or Licensed Processes for sale in the retail market within the Licensed Field;

		   
		
		   
	(c) 	  it will provide to UFRF a written 3-year rolling Development Plan with respect to the exploitation of the Licensed Patents and describe the development activities and related regulatory activities to be undertaken by or on behalf of Licensee with respect to Licensed Product or licensed process;

		   
		
		   
	(d) 	  it will diligently develop markets for Licensed Products and Licensed Processes;

		   
		
		   
	(e) 	  and until the date of first commercial sale of Licensed Products or Licensed Processes, it will supply UFRF with a written Development Report annually fifteen (15) days after the end of the calendar year (see Appendix B) as well as any updates to its Development Plan; and

		   
		
		   
	(f) 	  approximately six months before commencement of manufacturing or commercial production, Licensee will include in the Development Report specifics of planned manufacturing or production.

 
    		3.1.2 	  Licensee agrees that the first commercial sale of products to the retail customer shall occur on or before December 31, 2020, or UFRF shall have the right to terminate this Agreement pursuant to Section 9.3 hereto. In addition, Licensee will meet the milestones shown in Appendix D or UFRF shall have the right to terminate the Agreement pursuant to Section 9.3. Licensee will notify UFRF promptly in writing as each milestone is met. If Licensee fails to achieve its first commercial sale on or before December 31, 2020, or fails to meet one or more milestones shown in Appendix D, Licensee shall provide an explanation to UFRF as to factors causing such failure(s) and UFRF at its sole discretion may grant Licensee a period of up to one hundred and eighty (180) days to cure the deficiency.

			
		3.1.3 	  At any time after the expiration of 36 months following the Effective date, if Licensee has not pursued a market or territory other than the United States, with the exceptions of India and the Peoples Republic of China, respecting the Licensed Patents, and UFRF has received notice that a third party wishes to negotiate a license for such market or territory, UFRF may terminate the Grant with respect to such market or territory upon sixty (60) days written notice to Licensee. During the notice period, Licensee may provide UFRF with a revised Development Plan with respect to the market or territory. UFRF may consider the revised Development Plan and determine, in UFRF’s sole discretion, whether the revised Development Plan will be accepted or whether the license will terminate with respect to such market or territory upon expiration of the notice period.

			
		3.1.4 	  University of Florida policies may require approval of clinical trials at the University of Florida involving technology invented at the University. Accordingly Licensee will notify UFRF prior to commencing any clinical trials at the University of Florida or its affiliated medical facilities.

      	3.2 	  Licensee shall accomplish its Initial Capitalization within Fifteen (15) months of the Effective Date of this License Agreement and raise a cumulative total of Three Million Dollars ($3,000,000) in external funding from any and all external sources within thirty-six (36) months of the Effective Date, or UFRF shall, as its sole and exclusive remedy, have the right to terminate this Agreement.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
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  Section 4 Payments
   
    	4.1 	  License Issue Fee

   
  Licensee agrees to pay to UFRF a non-refundable license issue fee of [*] dollars, within thirty (30) days of the Licensee’s Initial Capitalization or one hundred and eighty (180) days after the Effective Date of the License Agreement, whichever comes first.
   
    	4.2 	  Annual License Maintenance Fee

   
  Licensee will pay an annual license maintenance fee of [*], each year on the anniversary of the Effective Date of this Agreement. The annual license maintenance fee is payable within thirty (30) days following such date each year until the first commercial sale of a Licensed Product or Licensed Process occurs, after which time minimum royalties instead of the annual license maintenance fee will be due.
   
    	4.3 	  Issuance of Equity

   
  As further consideration for the rights granted to Licensee by this Agreement, as of the Effective Date, Licensee will issue to UFRF that number of shares of common stock of Licensee equal to Ten (10%) percent of the total number of issued and outstanding shares of Licensee on the Effective Date.
   
    		4.3.1 	  lf, at any time after the Effective Date of this Agreement and before Licensee receives a total of Two Million dollars ($2,000,000) cash in exchange for the issuance of Licensee’s equity securities or securities that are convertible into Licensee’s equity securities (“Equity Securities”) Licensee issues any Equity Securities, then Licensee shall issue additional shares or class A units to UFRF such that immediately after such issuance to UFRF the total number of shares issued to UFRF under this Section constitutes Ten percent (10%) of the total number of issued and outstanding shares of Licensee calculated on a Fully Diluted Basis. “Fully Diluted Basis” means assuming the conversion of all outstanding convertible securities and the exercise of all outstanding options, warrants and other similar securities, regardless of whether such securities, units, options or warrants are then convertible or exercisable.

			
		4.3.2 	  If Licensee proposes to sell any Equity Securities in a financing, then UFRF and/or any entity to which UFRF has assigned the right to exercise UFRF’s preemptive rights will have the right to purchase up to that portion of the Equity Securities that equals UFRF’s then current percentage ownership of the Licensee on a Fully Diluted Basis on the same terms as are offered with respect to such Equity Securities sold in such financing, pursuant to the terms of the Stockholders Agreement attached hereto as Appendix E.

			
		4.3.3 	  The issuance of common stock to UFRF under this Section 4.3 shall be made in accordance with that certain Stockholders Agreement by and among UFRF, Licensee and all other stockholders of Licensee, a copy of which is attached hereto as Appendix E and incorporated by reference herein. Such Stockholders Agreement includes certain pre-emptive rights for the stockholders of Licensee, including UFRF, as provided in Appendix E.

   
    	4.4 	  Royalty

   
  Royalty on Licensed Patents: Licensee agrees to pay to UFRF as earned royalties a royalty calculated as a percentage of Net Sales. The royalty is deemed earned as of the date the Licensed Product and/or Licensed Process is actually sold by Licensee, its Affiliate or Sublicensee, and paid for, or the date a Licensed Product and/or Licensed Process is transferred to a third party for any promotional reason. Licensee shall pay to UFRF royalties as follows:
   
    		(i) 	  [*] for Net Sales of Licensed Products, for each product, on a country-by-country basis, that is (a) covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents, in the country in which such product is made, imported, exported, used or sold or (b) is manufactured using a process which is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents, in the country in which such process is used or in which such product is imported, used or sold.

			
		(ii) 	  [*] for Net Sales of Licensed Processes, for each process, on a country-by-country basis, that is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents in the country in which such process is practiced.

			
		(iii) 	  [*] for Net Sales of Licensed Products, for each product, on a country-by-country basis, that is sold during a period of regulatory exclusivity for such product in the country in which such product is sold.

			
		(iv) 	  [*] for Net Sales of all other Licensed Products and Licensed Processes.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
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  Royalties are payable for the longer of (a) the last to expire of the claims in the Licensed Patents pursuant to sections (i) and (ii) above, or (b) ten (10) years from the first commercial sale of a Licensed Product or Licensed Process in each country in which the Licensed Product or Licensed Process is sold pursuant to sections (iii) and (iv) above. Royalties are payable based on the largest applicable rate calculated per this section and such royalties based on Licensed Patents and Know-How shall not be additive.
   
  Amounts owing to UFRF under Section 4.4 shall be paid on a quarterly basis after the amount of minimum royalties paid is exceeded, with such amounts due and received by UFRF on or before the first business day following the thirtieth (30th) calendar day following the end of the calendar quarter ending on March 31, June 30, September 30 or December 31 in which such amounts were earned.
   
    	4.5 	  Minimum Royalty

   
    		4.5.1 	  Licensee agrees to pay UFRF minimum royalty payments, as follows:

   
    
  	  Amount
	   
	  Date of Payment

	  [*]
	   
	  270 days after occurrence of first commercial sale

	  [*]
	   
	  First anniversary date of first payment

	  [*]
	   
	  Second anniversary date of first payment

	  [*]
	   
	  Third anniversary date of first payment and subsequent anniversary dates for every year thereafter, for the life of this Agreement.

  
 
  The minimum royalty shall be paid in advance on a quarterly basis on March 31, June 30, September 30, and December 31 for the following quarters, for each year in which this Agreement is in effect. The first minimum royalty payment shall be due in accordance with the table above after the first occurrence of a commercial sale of a marketed product and shall be in the amount of [*] dollars. Any minimum royalty paid in a calendar year will be credited against the earned royalties for that calendar year. It is understood that the minimum royalties will be applied to earned royalties on a calendar year basis, and that sales of Licensed Products and/or Licensed Processes requiring the payment of earned royalties made during a prior or subsequent calendar year shall have no effect on the annual minimum royalty due UFRF for other than the same calendar year in which the royalties were earned.
   
    	4.6 	  Milestone Payments

   
  Licensee agrees to pay UFRF milestone payments with thirty (30) days of the first achievement of such milestone per indication, as follows:
   
    
  	  Event
	   
	  Milestone Payment

	  Enrollment of first subject in a Phase I trial
	   
	  [*]

	  Enrollment of first subject in a Phase II clinical trial
	   
	  [*]

	  Approval of NDA
	   
	  [*]

	  Approval of MMA in either EU or Japan (one time only)
	   
	  [*]

  
 
  In addition, the following two milestone payments will be due regardless of the number of indications for which Licensed Product is developed and regardless of whether a Licensed Product is sold in a different dosage form or formulation.
   
    
  	  First time annual Net Sales of a Licensed Product or Licensed Process by Company reaches $100 million
	   
	  [*]

	   
	   
	   

	  First time annual Net Sales of a Licensed Product or Licensed Process by Company reaches $500 million
	   
	  [*]

  
 
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
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    	4.7 	  Sublicense Fees

   
  Licensee shall pay sublicense fees to UFRF per Section 2.2.2 of this Agreement within thirty days (30) of the receipt of any such fees from Sublicensee,
   
    	4.8 	  Accounting for Payments

   
    		4.8.1 	  Any amount which remain unpaid after the date they are due to UFRF under this Section 4, Section 2, Section 7 or any other section of this Agreement shall accrue interest from the due date at the rate of [*] per month. However, in no event shall this interest provision be construed as a grant of permission for any payment delays. Licensee shall also be responsible for repayment to UFRF of any attorney, collection agency, or other out-of-pocket UFRF expenses required to collect overdue payments due from this Section 4, Section 2, Section 7 or any other applicable section of this Agreement.

			
		4.8.2 	  Except as otherwise directed, all amounts owing to UFRF under this Agreement shall be paid in U.S. dollars to UFRF at the following address:

   
  University of Florida Research Foundation, Inc. 
  223 Grinter Hall 
  PO Box 115500 
  Gainesville, Florida 32611-5500 
  Attention: Business Manager
  All monies owing stated in currencies other than U.S. dollars shall be converted at the rate shown in the Federal Reserve Noon Valuation - Value of Foreign Currencies on the day preceding the payment due date.
   
    		4.8.3 	  A certified full accounting statement showing how any amounts payable to UFRF under Section 4.4 have been calculated shall be submitted to UFRF on the date of each such payment. In addition to being certified, such accounting statements shall contain a written representation signed by an executive officer of Licensee that states that the statements are true, accurate, and fairly represent all amounts payable to UFRF pursuant to this Agreement. Such accounting shall be on a per-country and product line, model or trade name basis and shall be summarized on the form shown in Appendix C — UFRF Royalty Report of this Agreement.

			
		4.8.4 	  In the event no payment is owed to UFRF because the amount of minimum royalties paid has not been exceeded or otherwise, an accounting demonstrating that fact shall be supplied to UFRF.

			
		4.8.5 	  UFRF is exempt from paying income taxes under U.S. law. Therefore, all payments due under this Agreement shall be made without deduction for taxes, assessments, or other charges of any kind which may be imposed on UFRF by any government outside of the United States or any political subdivision of such government with respect to any amounts payable to UFRF pursuant to this Agreement. All such taxes, assessments, or other charges shall be assumed by Licensee.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
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  Section 5 Certain Warranties and Disclaimers of UFRF
   
    	5.1 	  UFRF represents that its employees have assigned or are obligated to assign to University their entire right, title and interest in the Licensed Patents and that UFRF has authority to grant the rights and licenses set forth in this Agreement. However, nothing in this Agreement shall be construed as:

   
    		5.1.1 	  a warranty or representation by UFRF as to the validity or scope of any right included in the Licensed Patents;

			
		5.1.2 	  a warranty or representation that anything made, used, sold or otherwise disposed of under the license granted in this Agreement will or will not infringe patents of third parties;

			
		5.1.3 	  an obligation to bring or prosecute actions or suits against third parties for infringement of Licensed Patents;

			
		5.1.4 	  an obligation to furnish any services other than those specified in this Agreement; or

			
		5.1.5 	  a warranty or representation by UFRF that it will not grant licenses to others to make, use or sell products not covered by the claims of the Licensed Patents which may be similar and/or compete with products made or sold by Licensee.

   
    	5.2 	  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, UFRF MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING. UFRF ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER DISPOSITION BY LICENSEE, ITS SUBLICENSEE(S), OR THEIR VENDEES OR OTHER TRANSFEREES OF PRODUCT INCORPORATING OR MADE BY USE OF INVENTIONS LICENSED UNDER THIS AGREEMENT.

   
  Section 6 Record Keeping
   
    	6.1 	  Licensee, its Affiliates and its Sublicensee(s) shall keep books and records sufficient to verify the accuracy and completeness of Licensee’s, its Affiliates’ and its Sublicensee(s)’s accounting referred to above, including without limitation, inventory, purchase and invoice records, manufacturing records, sales analysis, general ledgers, financial statements, and tax returns relating to the Licensed Products and/or Licensed Processes. Such books and records shall be preserved for a period not less than six years after they are created or as required by federal law, both during and after the term of this Agreement.

		
	6.2 	  Licensee, its Affiliates and its Sublicensee(s) shall take all steps necessary so that UFRF may, within thirty (30) days of its written request, audit, review and/or copy all of the books and records at a single U.S. location to verify the accuracy of Licensee’s, its Affiliates and its Sublicensee(s)’s accounting. Such review may be performed by any authorized employees of UFRF as well as by any attorneys and/or accountants designated by UFRF, upon reasonable notice and during regular business hours. If a deficiency with regard to any payment hereunder is determined, Licensee and its Sublicensee(s) shall pay the deficiency within thirty (30) days of receiving notice thereof along with applicable interest as described in Section 4.8. If a royalty payment deficiency for a calendar year exceeds three percent (3%) of the royalties paid for that year, then Licensee and its Sublicensee(s) shall be responsible for paying UFRF’s out-of-pocket expenses incurred with respect to such review.

  
    
CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
    	 
	9

	  

	 

   
  Section 7 Patent Prosecution
   
    	7.1 	  UFRF shall prosecute and maintain the Licensed Patents using counsel of its choice. UFRF shall provide Licensee with copies of all documents sent to and received from the United States Patent and Trademark Office and foreign patent offices relating to Licensed Patents. Licensee agrees to keep such information confidential.

		
		  Licensee shall pay to UFRF the sum of [*] dollars, to reimburse any and all expenses associated with preparation, filing, prosecution, issuance, maintenance, defense, and reporting of the Licensed Patents incurred prior to the Effective Date. Such payments shall be made within thirty (30) days after the Licensee’s Initial Capitalization, or one hundred and eighty (180) days after the Effective Date of the License Agreement, whichever occurs first. Additionally, such reimbursement of patent costs is non-refundable.

		
	7.2 	  Licensee shall be responsible for and pay all costs and expenses incurred by UFRF related to the preparation, filing, prosecution (including interferences), issuance, maintenance, defense (including oppositions) and reporting of the Licensed Patents subsequent to and separate of those expenses cited in Section 7.1 within thirty (30) days of receipt of an invoice from UFRF. It shall be the responsibility of Licensee to keep UFRF fully apprised of the “small entity” status of Licensee and all Sublicensees with respect to the U.S. patent laws and with respect to the patent laws of any other countries, if applicable, and to inform UFRF of any changes in writing of such status, within thirty (30) days of arty such change. In the event that additional licenses are granted to licensees for alternate fields-of-use, patent expenses associated with Licensed Patents will be divided proportionally between the number of existing licensees.

		
	7.3 	  Licensee shall file and maintain the Licensed Patents at least in the following countries: [*], if foreign rights are available. Additionally, the parties would reasonably cooperate to enable the company to seek any patent term extensions available for Licensed Products.

   
  Section 8 Infringement and Invalidity
   
    	8.1 	  Licensee shall inform UFRF promptly in writing of any alleged infringement of the Licensed Patents by a third party and of any available evidence thereof.

		
	8.2 	  During the term of this Agreement, UFRF shall have the right, but shall not be obligated, to prosecute at its own expense any such infringements of the Licensed Patents. If UFRF prosecutes any such infringement, Licensee agrees that UFRF may include Licensee as a co-plaintiff in any such suit, without expense to Licensee.

		
	8.3 	  If within six (6) months after having been notified of any alleged infringement, UFRF shall have been unsuccessful in persuading the alleged infringer to desist and shall not have brought an infringement action against the alleged infringer, or if UFRF shall notify Licensee at any time prior thereto of its intention not to bring suit against the alleged infringer, then, and in those events only, Licensee shall have the right, but shall not be obligated, to prosecute at its own expense any infringement of the Licensed Patents, and Licensee may, for such purposes, use the name of UFRF as party plaintiff. No settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the consent of UFRF, which consent shall not be unreasonably withheld. Licensee shall indemnify UFRF against any order for costs that may be made against UFRF in such proceedings.

		
	8.4 	  In the event that a declaratory judgment action is brought against UFRF or Licensee by a third party alleging invalidity, unpatentability, unenforceability, or non-infringement of the Licensed Patents, UFRF, at its option, shall have the right within twenty (20) days after commencement of such action to take over the sole defense of the action at its own expense. If UFRF does not exercise this right, and assuming that Licensee is the sole licensee of the Licensed Patents, Licensee shall be responsible for the sole defense of the action at Licensee’s sole expense, subject to Sections 8.5 and 8.6.

		
	8.5 	  In the event that Licensee shall undertake the enforcement by litigation and/or defense of the Licensed Patents by litigation, UFRF shall have the right, but not the obligation, to voluntarily join such litigation, represented by its own counsel at its own expense. In the event that Licensee shall undertake the enforcement by litigation and/or defense of the Licensed Patents by litigation, any recovery of damages by Licensee for any such suit shall be applied first in satisfaction of any unreimbursed expenses and legal fees of Licensee relating to the suit, and next toward reimbursement of UFRF for any legal fees, and unreimbursed expenses. The balance remaining from any such recovery shall be divided (75%/25%) between Licensee and UFRF in favor of the party taking the lead in such enforcement.

		
	8.6 	  In any suit in which either party is involved to enforce or defend the Licensed Patents pursuant to this Agreement, the other party hereto shall, at the request and expense of the party initiating such suit, cooperate in all respects and, to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

		
	8.7 	  In the event Licensee contests the validity of any Licensed Patents, unless and until UFRF terminates this Agreement pursuant to Section 9.3.9, Licensee shall continue to pay royalties and make other payments pursuant to this Agreement with respect to that patent as if such contest were not underway until the patent is adjudicated invalid or unenforceable by a court of last resort.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
	10

	  

	 

   
  Section 9 Term and Termination
   
    	9.1 	  The term of this license shall begin on the Effective Date of this Agreement and continue until the later of the date that no Licensed Patent remains an enforceable patent and the date on which Licensee’s obligation to pay royalties expires pursuant to Section 4.4 above.

		
	9.2 	  Licensee may terminate this Agreement at any time by giving at least sixty (60) days written notice of such termination to UFRF. Such a notice shall be accompanied by a statement of the reasons for termination.

		
	9.3 	  UFRF may terminate this Agreement by giving Licensee at least thirty (30) days written notice if Licensee:

   
    		9.3.1 	  is delinquent on any report or payment or required documents as specified in any other section of this Agreement;

			
		9.3.2 	  is not diligently developing and commercializing Licensed Products and Licensed Processes pursuant to the terms in section 3.1.1;

			
		9.3.3 	  is in material breach of any provision;

			
		9.3.4 	  willfully provides any false report;

			
		9.3.5 	  goes into bankruptcy, liquidation or has a receiver appointed to control any assets;

			
		9.3.6 	  commits a violation of any material laws or regulations of applicable government entities;

			
		9.3.7 	  shall cease to carry on its business pertaining to Licensed Patents;

			
		9.3.8 	  if payments of earned royalties under Section 4.4 once begun, for more than three (3) consecutive calendar quarters; or

			
		9.3.9 	  If Licensee or any of its Affiliates brings a Patent Challenge against UFRF, or assists others in bringing a Patent Challenge against UFRF (except as required under a court order or subpoena), then UFRF may immediately terminate this Agreement and/or the license granted hereunder. If a Sublicensee brings a Patent Challenge or assists another party in bringing a Patent Challenge (except as required under a court order or subpoena), then UFRF may send a written demand to Licensee to terminate such sublicense. If Licensee fails to so terminate such sublicense within forty-five (45) days after UFRF’s demand, UFRF may immediately terminate this Agreement and/or the license granted hereunder.

  
    
Termination under this Section 9.3 will take effect thirty (30) days after written notice by UFRF unless Licensee remedies the problem in that thirty (30) day period.
      
  	9.4 	  UFRF may immediately terminate this Agreement upon the occurrence of the second separate default by Licensee within any-one year period for failure to pay royalties, patent or any other expenses when due.

		
	9.5 	  Upon the termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such termination. Licensee shall remain obligated to provide an accounting for and to pay royalties earned to the date of termination, and any minimum royalties shall be prorated as of the date of termination by the number of days elapsed in the applicable calendar year. Licensee may, however, after the effective date of such termination, sell all Licensed Products, and complete Licensed Products in the process of manufacture at the time of such termination and sell the same, provided that Licensee shall remain obligated to provide an accounting for and to pay running royalties thereon.

		
	9.6 	  Licensee shall be obligated to deliver to UFRF, within ninety (90) days of the date of termination of this Agreement a comprehensive summary of all documentation prepared for or submitted for all regulatory approvals of Licensed Products or Licensed Processes as well as a summary of results obtained.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
	11

	  

	 

   
  Section 10 Assignability
   
    	10.1 	  This Agreement may be transferred or, assigned by Licensee with the prior written consent of UFRF, which shall not be unreasonably withheld. Any attempted assignment in contravention of this Section 10.1 shall be null and void and shall constitute a material breach of this Agreement.

		
	10.2 	  The new assignee assumes all responsibilities under this license and must agree in writing to UFRF to be bound by this Agreement.

   
  Section 11 Dispute Resolution Procedures
   
    	11.1 	  Mandatory Procedures

   
  In the event either party intends to file a lawsuit against the other with respect to any matter in connection with this Agreement, compliance with the procedures set forth in this Section shall be a condition precedent to the filing of such lawsuit, other than for injunctive relief. Either party may terminate this Agreement as provided in this Agreement without following the procedures set forth in this section.
   
    		11.1.1 	  When a party intends to invoke the procedures set forth in this section, written notice shall be provided to the other party. Within thirty (30) days of the date of such notice, the parties agree that representatives designated by the parties shall meet at mutually agreeable times and engage in good faith negotiations at a mutually convenient location to resolve such dispute.

			
		11.1.2 	  If the parties fail to meet within the time period set forth in Section 11.1.1 above or if either party subsequently determines that negotiations between the representatives of the parties are at an impasse, the party declaring that the negotiations are at an impasse shall give notice to the other party stating with particularity the issues that remain in dispute.

			
		11.1.3 	  Not more than fifteen (15) days after the giving of such notice of issues, each party shall deliver to the other party a list of the names and addresses of at least three individuals, any one of whom would be acceptable as a neutral advisor in the dispute (the “Neutral Advisor”) to the party delivering the list. Any individual proposed as a Neutral Advisor shall have experience in determining, mediating, evaluating, or trying intellectual property litigation and shall not be affiliated with the party that is proposing such individual.

			
		11.1.4 	  Within ten (10) days after delivery of such lists, the parties shall agree on a Neutral Advisor. If they are unable to so agree within that time, within five (5) days, they shall each select one individual from the lists. Within five (5) days, the individuals so selected shall meet and appoint a third individual from the lists to serve as the Neutral Advisor. Within thirty (30) days after the selection of a Neutral Advisor:

   
    		   
	(a) 	  The parties shall each provide a written statement of the issues in dispute to the Neutral Advisor.

		   
		
		   
	(b) 	  The parties shall meet with the Neutral Advisor in Gainesville, Florida on a date and time established by the Neutral Advisor. The meeting must be attended by persons authorized to make final decisions on behalf of each party with respect to the dispute. At the meeting, each party shall make a presentation with respect to its position concerning the dispute. The Neutral Advisor will then discuss the issues separately with each party and attempt to resolve all issues in the dispute. At the meeting, the parties will enter into a written settlement agreement with respect to all issues that are resolved. Such settlement agreement shall be final and binding with respect to such resolved issues and may not be the subject of any lawsuit between the parties, other than a suit for enforcement of the settlement agreement.

   
    		11.1.5 	  The expenses of the neutral advisor shall be shared by the parties equally. All other out-of-pocket costs and expenses for the alternative dispute resolution procedure required under this Section shall be paid by the party incurring the same.

			
		11.1.6 	  Positions taken and statements made during this alternative dispute resolution procedure shall be deemed settlement negotiations and shall not be admissible for any purpose in any subsequent proceeding.

   
    	11.2 	  Failure to Resolve Dispute

   
  If any issue is not resolved at the meeting with the Neutral Advisor, either party may file appropriate administrative or judicial proceedings with respect to the issue that remains in dispute. No new issues may be included in the lawsuit without the mandatory procedures set forth in this section having first been followed.   
  
 
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
    	 
	12

	  

	 

   
  Section 12 Product Liability; Conduct of Business
   
    	12.1 	  Licensee, Affiliates and Sublicensee(s) shall, at all times during the term of this Agreement and thereafter, indemnify, defend and hold UFRF, the Florida Board of Governors, the University of Florida Board of Trustees, the University of Florida, and each of their directors, officers, employees, and agents, and the inventors of the Licensed Patents, regardless of whether such inventors are employed by the University of Florida at the time of the claim, harmless against all claims and expenses, including legal expenses and reasonable attorneys fees, whether arising from a third party claim or resulting from UFRF’s enforcing this indemnification clause against Licensee, arising out of the death of or injury to any person or persons or out of any damage to property and against any other claim, proceeding, demand, expense and liability of any kind whatsoever resulting from the development, production, manufacture, sale, use, lease, consumption, marketing, or advertisement of Licensed Products or Licensed Process(es) or arising from any right or obligation of Licensee hereunder. Notwithstanding the above, UFRF at all times reserves the right to retain counsel of its own to defend UFRF’s, the Florida Board of Governors’, the University of Florida Board of Trustees’, the University of Florida’s, and the inventor’s interests.

		
	12.2 	  Licensee warrants that it will acquire and maintain liability insurance coverage appropriate to the risk involved in development, producing, manufacturing, clinical trials, selling, marketing, using, leasing, consuming, or advertising the products subject to this Agreement and that such insurance coverage lists UFRF, the Florida Board of Governors, the University of Florida Board of Trustees, the University of Florida, and the inventors of the Licensed Patents as additional insureds. Within ninety (90) days after the execution of this Agreement and thereafter annually between January 1 and January 31 of each year, Licensee will present evidence to UFRF that the appropriate coverage is in the process of being obtained (before development of Licensed Products or Licensed Processes commences), or already in place ( after development commences), with UFRF, the University of Florida, and its inventors listed as additional insureds. In addition, Licensee shall provide UFRF with at least thirty (30) days prior written notice of any change in or cancellation of the insurance coverage.

   
  Section 13 Use of Names
   
  Licensee and its Sublicensee(s) shall not use the names of UFRF, or of the University of Florida, nor of any of either institution’s employees, agents, or affiliates, nor the name of any inventor of Licensed Patents, nor any adaptation of such names, in any promotional, advertising or marketing materials or any other similar form of publicity, or to suggest any endorsement by the such entities or individuals, without the prior written approval of UFRF in each case.   
  
 
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
    	 
	13

	  

	 

   
  Section 14 Miscellaneous
   
    	14.1 	  This Agreement shall be construed in accordance with the internal laws of the State of Florida.

		
	14.2 	  The parties hereto are independent contractors and not joint venturers or partners.

		
	14.3 	  Licensee shall ensure that it applies patent markings that meet all requirements of U.S. law, 35 U.S.C. §287, with respect to all Licensed Products subject to this Agreement.

		
	14.4 	  This Agreement constitutes the full understanding between the parties with reference to the subject matter hereof, and no statements or agreements by or between the parties, whether orally or in writing, shall vary or modify the written terms of this Agreement. Neither party shall claim any amendment, modification, or release from any provisions of this Agreement by mutual agreement, acknowledgment, or otherwise, unless such mutual agreement is in writing, signed by the other party, and specifically states that it is an amendment to this Agreement.

		
	14.5 	  Licensee shall not encumber or otherwise grant a security interest in any of the rights granted hereunder to any third party.

		
	14.6 	  Licensee acknowledges that it is subject to and agrees to abide by the United States laws and regulations (including the Export Administration Act of 1979 and Arms Export Control Act) controlling the export of technical data, computer software, laboratory prototypes, biological material, and other commodities. The transfer of such items may require a license from the cognizant agency of the U.S. Government or written assurances by Licensee that it shall not export such items to certain foreign countries and/or foreign persons without prior approval of such agency. UFRF neither represents that a license is or is not required or that, if required, it shall be issued.

		
	14.7 	  Licensee is responsible for any and all wire/bank fees associated with all payments due to UFRF pursuant to this Agreement.

		
	14.8 	  Survival

   
  The provisions of this Section shall survive termination of this Agreement. Upon termination of the Agreement for any reason, the following sections of the Agreement will remain in force as non-cancelable obligations:
   
    		·	  Section 6 Record Keeping

			
		·	  Section 9 Requirement to pay royalties on sale of Licensed Products made, and in process, at the time of-Agreement termination

			
		·	  Section 12 Product Liability; Conduct of Business

			
		·	  Section 13 Use of Names

			
		·	  Section 17 Confidentiality

			
		·	  Appendix E Stockholders Agreement

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
	14

	  

	 

   
  Section 15 Notices
   
  Any notice required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given
   
    
  	   
	  ·
	  when delivered personally, or

	   
	  ·
	  if sent by facsimile transmission, when receipt thereof is acknowledged at the facsimile number of the recipient as set forth below, or

	   
	  ·
	  the second day following the day on which the notice has been delivered prepaid to a courier service, or

	   
	  ·
	  five (5) business days following deposit in the U.S. mail if sent certified mail, (return receipt acknowledgement is not required to certify delivery).

  
    
  	15.1 	  If to the University of Florida Research Foundation, Inc.:

   
  President
  University of Florida Research Foundation, Inc.
  223 Grinter Hall
  University of Florida
  Post Office Box 115500
  Gainesville, FL 32611-5500
  Facsimile Number: 352-846-0505
   
  with a copy to:
  Office of Technology Licensing
  Attn: Director
  747 SW 2nd Avenue
  University of Florida
  Post Office Box 115575
  Gainesville, FL 32611-5575
  Facsimile Number: 352-392-6600
      	15.2 	  If to Licensee:

   
  Paul M. Herron
  President & CEO
  Sun BioPharma , Inc.
  105 Cypress Lagoon Ct.
  Ponte Vedra Beach, Florida 32082
  (954) 980-5285
   
  with a copy to:
  Jeffrey R, Harder, Esq.
  Winstead PC
  24 Waterway Avenue, Suite 500
  The Woodlands, TX 77380
  (281) 681-5931
   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
      
  
  	 
	15

	  

	 

   
  Section 16 Contract Formation and Authority
   
  The submission of this Agreement does not constitute an offer, and this document shall become effective and binding only upon the execution by duly authorized representatives of both Licensee and UFRF. Copies of this Agreement that have not been executed and delivered by both UFRF and Licensee shall not serve as a memorandum or other writing evidencing an agreement between the parties. This Agreement shall automatically terminate and be of no further force and effect, without the requirement of any notice from UFRF to Licensee, if UFRF does not receive the certificates representing shares issued to UFRF pursuant to this Agreement within thirty (30) days of the Effective Date.
   
    	16.1 	  UFRF and Licensee hereby warrant and represent that the persons signing this Agreement have authority to execute this Agreement on behalf of the party for whom they have signed.

		
	16.2 	  Force Majeure

   
  No default, delay, or failure to perform on the part of Licensee or UFRF shall be considered a default, delay or failure to perform otherwise chargeable hereunder, if such default, delay or failure to perform is due to causes beyond either party’s reasonable control including, but not limited to: strikes, lockouts, or inactions of governmental authorities, epidemics, war, embargoes, fire, earthquake, hurricane, flood, acts of God, or default of common carrier. In the event of such default, delay or failure to perform, any date or times by which either party is otherwise scheduled to perform shall be extended automatically for a period of time equal in duration to the time lost by reason of the excused default, delay or failure to perform.
   
    

  Section 17 Confidentiality
   
    	17.1 	  Each Party shall maintain all information of the other Party which is treated by such other Party as proprietary or confidential (referred to herein as “Confidential Information”) in confidence, and shall not disclose, divulge or otherwise communicate such confidential information to others, or use it for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this Agreement, which may include the disclosure of certain confidential information to potential Sublicensees (in which case the appropriate Confidential Disclosure Agreements will be obtained prior to such disclosures). Each party hereby agrees to exercise every reasonable precaution to prevent and restrain the unauthorized disclosure of such confidential information by any of its Affiliates, directors, officers, employees, consultants, subcontractors, Sublicensees or agents. The parties agree to keep the terms of this Agreement confidential, provided that each party may disclose this Agreement to their authorized agents and investors who are bound by similar confidentiality provisions. Notwithstanding the foregoing, Confidential Information of a party shall not include information which: (a) was lawfully known by the receiving party prior to disclosure of such information by the disclosing party to the receiving party; (b) was or becomes generally available in the public domain, without the fault of the receiving party; (c) is subsequently disclosed to the receiving party by a third party having a lawful right to make such disclosure; (d) is required by law, rule, regulation or legal process to be disclosed, provided that the receiving party making such disclosure shall take all reasonable steps to restrict and maintain to the extent possible confidentiality of such disclosure and shall provide reasonable notice to the other party to allow such party the opportunity to oppose the required disclosure; or (e) has been independently developed by employees or others on behalf of the receiving party without access to or use of disclosing party’s information as demonstrated by written record. Each party’s obligations under this Section 17 shall extend for a period of five (5) years from termination or expiration of this Agreement.

    
Section 18 University Rules and Regulations
   
    	18.1 	  Licensee understands and agrees that University of Florida personnel who are engaged by Licensee, whether as consultants, employees or otherwise, or who possess a material financial interest in Licensee, are subject to the University of Florida’s rule regarding outside activities and financial interests set forth in University of Florida Regulation 1.011 , the University of Florida’s Intellectual Property Policy, and a monitoring plan which addresses conflicts of interests associated therewith. Any term or condition of an agreement between Licensee and such University of Florida personnel which seeks to vary or override such personnel’s obligations to the University of Florida may not be enforced against such personnel, the University of Florida or UFRF, without the express written consent of an individual authorized to vary or waive such obligations on behalf of the University of Florida and UFRF. Furthermore, should an interest of Licensee conflict with the interest of the University of Florida, University of Florida personnel are obligated to resolve such conflicts according to the guidelines and policies set forth by the University of Florida.

   
  [Remainder of this page left intentionally blank]
   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
    	 
	16

	  

	 

   
  IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the dates indicated below.
      	   
	UNIVERSITY OF FLORIDA RESEARCH FOUNDATION, INC.	   

	 	 	 	 
	Date: December 22, 2011	By:	/s/ David L. Day 	   

	   
	   
	David L. Day	   

	   
	   
	Director of Technology Licensing	   

   
    	   
	SUN BIOPHARMA, INC.	   

	 	 	 	 
	Date: December 22, 2011	By:	/s/ Paul M. Herron	   

	   
	   
	Paul M. Herron	   

	   
	   
	President & CEO	   

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
	17

	  

	 

   
   
  Schedule 1 - Patents and Patent Applications
   
  [*]
   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
	18

	  

	 

   
  Appendix A - Development Plan
   
  A Development Plan of the scope outlined below shall be submitted to UFRF by Licensee prior to the execution of this agreement. In general, the plan should provide UFRF with a summary overview of the activities that Licensee believes are necessary to bring products to the marketplace.
   
  I. Development Program
   
    		A. 	  Development activities to be undertaken

   
  (Please break activities into subunits with the date of completion of major milestones)
   
    		   
	1. 	  Completion of pre-clinical IND-enabling toxicology activities, 30 months after Effective Date of License.

		   
		
		   
	2. 	  Completion of pre-clinical IND-enabling pharmacology activities, 30 months after Effective Date of License.

		   
		
		   
	3. 	  Completion of pre-clinical IND-enabling CMC activities, 36 months after Effective Date of License.

		   
		
		   
	4. 	  Submission of IND to US FDA 36 months after Effective Date of License.

		   
		
		   
	5. 	  Initiation of Phase 1 clinical trial 6 months after FDA acceptance for filing of IND.

		   
		
		   
	6. 	  Initiation of Phase 2 clinical trial 18 months after completion of Phase 1 study report.

		   
		
		   
	7. 	  Submission of NDA - 18 months after completion of Pivotal trial(s) study report.

		   
		
		   
	8. 	  Commercial launch of approved product in U.S. - 6 months after NDA approval.

    
  
    
  		B. 	  Estimated total development time 7 years after Effective Date of license to NDA submission.

   
  II. Governmental Approval
   
    		A. 	  Types of submissions required: IND and NDA

			
		B. 	  Government agency, FDA

   
    
  
III. Proposed Market Approach: traditional US oncology drug reimbursement, distribution, sales and marketing effort with medical education, presentations and publications
   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
    	 
	19

	  

	 

   
  IV. Competitive Information
   
    		A. 	  Potential competitors: gemcitabine, TarcevaÒ and nab-paclitaxel (likely)

   
  GemzarÒ injection (Gemcitabine hydrochloride)
   
  Current treatment options for patients with cancer of the pancreas are limited, and little clinically significant progress has been made since US FDA approval of gemcitabine in 1996. GemzarÒ, a cytidine analog, was approved for the treatment of locally advanced or metastatic pancreatic cancer. The Phase 3 study of gemcitabine involved 126 pancreatic cancer subjects - 63 of these received gemcitabine therapy and the other 63 subjects received treatment with 5-FU1. Of these subjects, more than 70% entered the study with metastatic disease, the most advanced stage of pancreatic cancer.
   
  Gemcitabine demonstrated a statistically significant advantage in survival over 5-FU. Gemcitabine subjects had a 5.7 month median survival compared with 4.2 months for 5-FU subjects, a six-week advantage in median survival. Based on this trial, the six-month probability estimate for survival of subjects treated with gemcitabine was 46% (30 patients), compared with 29% (19 subjects) for 5-FU subjects. After one year, the survival probability estimate was 18% (9 subjects) for gemcitabine, compared with 2% (two subjects) for 5-FU.
   
  The most frequent reason for reducing or limiting the dose of gemcitabine was neutropenia, which was observed in 63% of subjects, (with NCI Common Toxicity Criteria Severity Grade III/IV in 25% of subjects). Other common adverse effects in gemcitabine clinical trials included nausea and vomiting (69%), fever (41%), edema or fluid retention (up to 34%), rash (30%), and flu-like symptoms (19%). Reversible alopecia was reported in 15% of subjects. About 10% of all subjects participating in gemcitabine clinical trials discontinued therapy due to side effects2.
   
  TarcevaÒ tablets (erlotinib hydrochloride)
   
  In November 2005 the FDA approved erlotinib hydrochloride, a kinase inhibitor (TarcevaÒ tablets, made by OSI Pharmaceuticals Inc.) in combination with gemcitabine for the treatment of patients with locally advanced, unresectable or metastatic pancreatic carcinoma. This combination therapy approval was based upon a single Phase 3 randomized trial of 569 patients in which the median overall survival of the erlotinib/gemcitabine group vs. the gemcitabine alone group was 6.24 months vs. 5.91 months. The 10-day improvement was a statistically, although not a particularly clinically, significant difference. The overall response rate (ORR, defined as complete plus partial response) was 8.6% for the erlotinib/gemcitabine combination and 8.0% for gemcitabine alone, and the median duration of response was 163 days in each group.   
  
 
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
    	 
	20

	  

	 

   
  Newly recognized severe adverse reactions observed with the erlotinib hydrochloride/gemcitabine combination included stroke, syncope, microangiopathic anemia with thrombocytopenia, myocardial infarction/ischemia, arrhythmias, renal insufficiency, ileus, pancreatitis and neuropathy. Patients in the erlotinib/gemcitabine group experienced more frequent rash, diarrhea, infection, stomatitis, interstitial lung disease and deaths on protocol3.
  ______________   
  
1 Burris HA, Moore MJ, Andersen J: Improvements in Survival and Clinical Benefit With Gemcitabine as First-Line Therapy for Patients With Advanced Pancreas Cancer: A Randomized Trial. J Clin Oncol 1997 15:2403-2413
   
  2 Center Watch Gemzar FDA Approval Notice, referenced 30 November 2010 at: http://www.centerwatch.com/drug-information/fda-approvals/drug-details.aspx?DrugID=108
   
  3 Moore, MJ, Goldstein D, Hamm J, et al: Erlotinib Plus Gemcitabine Compared With Gemcitabine Alone in Patients With Advanced Pancreatic Cancer: A Phase III Trial of the National Cancer Institute of Canada Clinical Trials Group. J Clin Oncol 2007, 25:1960-196
   
  4 AbraxaneÒ package inserted dated June 2011, referenced on 2 August 2011 at: http://www.abraxane.com/professional/PDF/Abraxane_Healthcare_Professional_Information.pdf
   
  AbraxancÒ (ABI-007, nabÒ-paclitaxel)
   
  In April 2010 Abraxis BioScience (subsequently acquired by Celgene Corporation) announced a median survival of 12.2 months in a 44-patient Phase 1/2 study of nabÒ-paclitaxel (AbraxaneÒ) 125/mg/M2 in combination with gemcitabine 1000 mg/M2 in patients with advanced pancreatic cancer. The overall response rate was 50%, compared with response rates on the order of 10% in most other trials in this population. Neutropenia, sensory neuropathy, fatigue, thrombocytopenia and fatal sepsis were reported adverse events. Dr. Daniel Von Hoff, Principal Investigator, noted a 100% tumor marker reduction of at least 20% for CA-19-9, a surrogate indicator for improved survival in pancreatic cancer. Dr. Von Hoff presented these study results at the annual American Association for Cancer Research (AACR) conference in Washington, DC. AbraxaneÒ represents the most promising agent currently in clinical development for pancreatic cancer.
   
  Currently enrolling in a Phase 3 trial with an Overall Survival (OS) primary endpoint at 133 sites in the USA, Canada, Australia, the Russian Federation, and the Ukraine, with Dr. Von Hoff as the Principal Investigator, this trial is expected to complete enrollment in 2013. US FDA approval of nab-paclitaxel is unlikely prior to 2014.
   
    
  
  		  B.
	  Potential competitive devices/compositions: radiation therapy, intra-arterial drug delivery devices are potential competitors: no specific devices currently known to Licensee .

  
 
    
  
  		  C.
	  Known competitor’s plans, developments, technical achievements: nab-paclitaxel is in Phase 3 clinical development for pancreatic cancer indication. Currently FDA approved for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within 6 months of adjuvant chemotherapy4.

  
 
    
  
  		  D.
	  Anticipated date of SUN-101 product launch: approximately 6 months following NDA approval.

  
 
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
	21

	  

	 

   
  Appendix B - Development Report
   
  When appropriate, indicate estimated start date and finish date for activities.
   
  Full Development Plan completed and attached to this Agreement; no development activities to be reported on prior to execution of License Agreement.
   
  I. Date Development Plan Initiated and Time Period Covered by this Report.
   
  II. Development Report (4-8 paragraphs).
   
    
  
  		  A.
	  Activities completed since last report including the object and parameters of the development, when initiated, when completed and the results.

		  B.
	  Activities currently under investigation, i.e., ongoing activities including object and parameters of such activities, when initiated, and projected date of completion.

  
 
  III. Future Development Activities (4-8 paragraphs).
   
    
  
  		  A.
	  Activities to be undertaken before next report including, but not limited to, the type and object of any studies conducted and their projected starting and completion dates.

		  B.
	  Estimated total development time remaining before a product will be commercialized.

  
  
  
  		  C.
	  Date by which manufacture of a commercial product is expected to begin (include specifics of planned manufacturing of product, i.e., build facility or outsource manufacturing).

  
 
  IV. Changes to Initial Development Plan (2-4 paragraphs)
   
    		A. 	  Reasons for change.

			
		B. 	  Variables that may cause additional changes.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
	22

	  

	 

   
  V. Items to be Provided if Applicable:
   
    
  
  		  A.
	  Information relating to Licensed Products or Licensed Processes that has become publicly available, e.g., published articles, competing products, patents, etc.

		  B.
	  Development work being performed by third parties, other than Licensee, to include name of third party, reasons for use of third party, planned future uses of third parties including reasons why and type of work.

  
  
  
  		  C.
	  Update of competitive information trends in industry, government compliance (if applicable) and market plan.

		  D.
	  Information and copies of relevant materials evidencing the status of any patent applications or other protection relating to Licensed Products, or Licensed Processes or the Licensed Patents.

  
  
  
  		  E.
	  One year before commencement of manufacturing or commercial production, Licensee will include in the Development Report specifics of planned manufacturing or production.

  
 
  PLEASE SEND DEVELOPMENT REPORTS TO:
   
  University of Florida Research Foundation, Inc.
  Attn: Director
  747 SW 2nd Avenue
  University of Florida
  Post Office Box 115575
  Gainesville, FL 32611-5575
  Facsimile: 352-392-6600
      
  
CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
    	 
	23

	  

	 

   
  Appendix C - UFRF Royalty Report
   
  Company Name:_________________
   
  If multiple license agreements are required to generate this product, indicate what percentage of the royalty is attributable to each agreement.
   
   
    	  UFRF Agreement No.:_____________
	   
	  Percentage:____________

	  UFRF Agreement No.:_____________
	   
	  Percentage:____________

	  Period Covered: From: / /2
	   
	  Through: / /2 

	   
	   
	   

	  Prepared By:__________________
	   
	  Date:______________________

	  Print Preparer Name:
	   
	   

	   
	   
	   

	  Preparer Email Address:_____________
	   
	  Phone No.:____________________

	   
	   
	   

	  Approved By:_______________________________________
	   
	  Date:_______________________

	  (Requires Executive Officer Signature)
	   
	   

   
  Print Officer Name:
   
  If license covers multiple product lines, please prepare a separate spreadsheet for each product line, and a summary report for all products combined.
   
  The spreadsheet should include the following information:
   
    		·	  Product Name

			
		·	  Country(ies) of Sales (List each country. If royalties vary by country, provide a breakdown of specified information for each country.)

			
		·	  Unit Sales

			
		·	  Gross Sales

			
		·	  Less Allowances (On a separate page, please indicate the reasons for returns or other adjustments if significant.)

			
		·	  Net Sales

			
		·	  Royalty Rate (Please note any unusual occurrences that affected royalty amounts during this period. To assist UFRF’s forecasting, please comment on any market variables that would impact future royalties).

			
		·	  Total Royalty due this period

			
		·	  Total Royalty paid last period

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  	 
	24

	  

	 

   
  Appendix D - Milestones
   
  Sun BioPharma, Inc. Performance Milestones
   
    	1. 	  Completion of pre-IND FDA teleconference — 30 months after the Effective Date of License Agreement.

		
	2. 	  Submission of IND for filing by FDA — 36 months after the Effective Date of License Agreement.

		
	3. 	  Enrollment of first subject in a Phase 1 clinical trial — 6 months after Acceptance of IND for Filing by FDA.

		
	4. 	  Enrollment of first subject in a Phase 2 clinical trial — 18 months after the completion of the Phase 1 trial study report.

		
	5. 	  Submission of NDA — 18 months after completion of Pivotal trial(s) study report.

		
	6. 	  Commercial launch of approved product in U.S. — 6 months after NDA approval.

   
  CONFIDENTIAL
  [*] = Certain confidential information contained in this document, marked with brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to, as applicable, Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and Rule 406 of the Securities Act of 1933, as amended.
   
  25EXHIBIT 10.1

 

 

Each of the Stock Plan Subcommittee of the Compensation Committee and the Compensation Committee of the Board of Directors of The Estée Lauder Companies Inc. reserves the right to change provisions of this Agreement to comply with applicable laws or regulations.

 

Performance Share Unit Award Agreement Under

The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (the “Plan”)

 

This PERFORMANCE SHARE UNIT AWARD AGREEMENT (“Agreement”) provides for the granting of performance share unit awards by The Estée Lauder Companies Inc., a Delaware corporation (the “Company”), to the participant, an employee of the Company or one of its subsidiaries (the “Participant”), representing a notional account equal to a corresponding number of shares of the Company’s Class A Common Stock, par value $0.01 (the “Shares”), subject to the terms below (the “Performance Share Units”).  The name of the “Participant,” the “Grant Date,” the target number of Shares, the “Service Period,” the “Performance Period” and the Plan Achievement (as defined below) goals are stated in the “Notice of Grant” attached or posted electronically together with this Agreement and are incorporated by reference.  The other terms of this Performance Share Unit Award are stated in this Agreement and in the Plan. Terms not defined in this Agreement are defined in the Plan, as amended.

 

1.                                     Award Grant.  The Company hereby awards to the Participant a target award of Performance Share Units in respect of the number of Shares set forth in the Notice of Grant (the “Target Award”), representing Stock Unit and Performance-Based Awards under the terms of the Plan.

 

2.                                     Right to Payment of Performance Share Units.  It is understood that the percentage of the Target Award earned and paid will be established by the Subcommittee based on the plan achievement (the “Plan Achievement”) during the Performance Period(s) specified in the Notice of Grant (the “Award Period” or “Performance Period”).  Except as otherwise provided in paragraph 3, 4 or 5 below, at the end of a Performance Period, the number of Shares earned in respect of the Performance Share Units will be determined in accordance with the Notice of Grant.

 

3.                                     Payment of Awards.  Payments under this Agreement will be made in the number of Shares that is equivalent to the number of Performance Share Units earned and payable to the Participant pursuant to paragraph 2 above. Except as otherwise provided in paragraph 4 or 5 below, payments, if any, with respect to a Tranche will be made on the third anniversary of the last day of the Performance Period with respect to such Tranche. For the avoidance of doubt, except as otherwise provided in paragraph 4 or 5 below, any payment with respect to the First Tranche shall be made on June 30, 2021, any payment with respect to the Second Tranche shall be made on June 30, 2022, and any payment with respect to the Third Tranche shall be made on June 30, 2023. The form of payout will be in Shares.  In addition, each Performance Share Unit that becomes earned and payable pursuant to paragraph 2 above carries a Dividend Equivalent Right, payable in cash at the same time as the payment of Shares in accordance with this paragraph 3 and paragraph 4 or 5. For the avoidance of doubt, with respect to each Tranche, such Dividend Equivalent Right shall not attach to, and no payment shall be made as a result of, dividends (a) the record date for which is prior to the grant date with respect to such Tranche or (b) paid with respect to Performance Share Units that are not ultimately earned.

 

4.                                     Change in Control.

 

(a)         Upon a Change in Control, each of the Plan Achievement Goals with respect to each Tranche ending after the Change in Control shall be deemed met in full, and one hundred percent (100%) of the Number of Target Shares granted with respect to each such Tranche shall be paid in accordance with paragraph 3 or, if earlier, in accordance with this paragraph 4.

 

(b)        If on or after a Change in Control, the Participant terminates for Good Reason (as defined below), dies, becomes disabled as described in paragraph 5(b), or is terminated by the Company without Cause in accordance with paragraph 5(c), the following provisions shall apply:

 

 

(i)             For the avoidance of doubt, One hundred percent (100%) of the Number of Target Shares granted with respect to each Tranche Performance Period ending after the Change in Control but not yet paid in accordance with paragraph 3 will vest and be paid in accordance with this paragraph 4, and

 

(ii)          The number of Performance Share Units earned and payable pursuant to paragraph 2 with respect to any Tranche Performance Period ending on or prior to the Change in Control but not yet paid in accordance with paragraph 3 will be paid in accordance with this paragraph 4.

 

(iii)       If any such termination occurs within two years following a Change in Control that constitutes a “change in control event” within the meaning of Section 409A of the Code or the Participant dies or becomes disabled as described in paragraph 5(b), payments under this paragraph will be made within two weeks following the date on which Participant terminates employment or dies or becomes disabled as described in paragraph 5(b); provided such termination (excluding Participant’s death or disability as described in paragraph 5(b)) constitutes a “separation from service” for purposes of section 409A of the Code; provided further that if such termination (excluding Participant’s death or disability as described in paragraph 5(b)) does not constitute a “separation from service” for purposes of section 409A of the Code or such “separation from service” does not occur within two years following a Change in Control that constitutes a “change in control event” within the meaning of Section 409A of the Code, such payments shall be made in accordance with paragraph 3. If the Shares cease to be outstanding immediately after the Change in Control (e.g., due to a merger with and into another entity), then the amount and type of consideration to be received in respect of each Share earned under a Performance Share Unit will be based on the consideration paid to each stockholder per Share generally upon the Change in Control as determined by the Subcommittee. Notwithstanding anything herein to the contrary, the Subcommittee shall have the right to terminate and payout any amounts hereunder in accordance with Section 409A-3(j)(4)(ix). In the event that a Change in Control occurs after the Participant’s termination of employment, each Performance Share Unit shall be converted into the right to receive an amount in cash based on the consideration paid to each stockholder per Share generally upon the Change in Control as determined by the Subcommittee.

 

(iv)      For purposes hereof, “Good Reason” means the occurrence of any of the following, without the express written consent of the Participant:

 

(a)         the assignment to the Participant of any duties inconsistent in any material adverse respect with the Participant’s position, authority or responsibilities immediately prior to the Change in Control, or any other material adverse change in such position, including title, authority or responsibilities;

 

(b)        any failure by the Company to pay any amounts for compensation or benefits owed to the Participant or a material reduction of the overall amounts of compensation and benefits in effect prior to the Change in Control, other than an insubstantial or inadvertent failure remedied by the Company promptly after receipt of notice thereof given by the Participant;

 

(c)         the Company’s requiring the Participant to be based at any office or location more than fifty (50) miles from that location at which he performed his or her services for the Company immediately prior to the Change in Control, except for travel reasonably required in the performance of the Participant’s responsibilities; or

 

(d)        any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor, unless such assumption occurs by operation of law.

 

 

5.                                     Termination of Employment. If the Participant’s employment terminates, except as otherwise provided in paragraph 4, payouts will be as follows:

 

(a)         Death.  If the Participant dies prior to the end of the Service Period for a Tranche, a pro rata portion of such Tranche will be paid.  As to each such Tranche, the pro rata portion will be determined by multiplying the Target Number of Shares subject to such Tranche by a fraction, the numerator of which is the number of full calendar months of service completed during the Service Period for such Tranche through the Participant’s death and the denominator of which is the number of full calendar months in the Service Period for such Tranche. Payment thereof will be made on the 75th day following the Participant’s death. If the Participant dies on or after the last

 

 

day of the Service Period for a Tranche, the full Target Number of Shares with respect to such Tranche, if otherwise earned and vested in accordance with the Notice of Grant but not yet paid, will be paid. Payment thereof will be made on the earlier of (i) the 75th day following the Participant’s death, and (ii) the date such payment would otherwise be made in accordance with paragraph 3 of this Agreement.   All payments under this paragraph 5(a) shall be made in accordance with any applicable laws or Company procedures regarding such payments.

 

(b)        Disability.  If the Participant becomes “disabled” (within the meaning of Treasury Regulation 1.409A-3(i)(4)) prior to the end of the Service Period for a Tranche, a pro rata portion of such Tranche will be paid. As to each such Tranche, the pro rata portion will be determined by multiplying the Target Number of Shares subject to such Tranche by a fraction, the numerator of which is the number of full calendar months of service completed during the Service Period for such Tranche through the date the Participant becomes disabled and the denominator of which is the number of full calendar months in the Service Period for such Tranche. Payment thereof will be made within two weeks following the date on which the Participant becomes disabled. If the Participant becomes disabled on or after the last day of the Service Period for a Tranche, the Shares, if any, otherwise earned and vested with respect to such Tranche in accordance with the Notice of Grant but not yet paid, will be paid.  Payment thereof will be made within two weeks following the date on which Participant becomes disabled or, if earlier, the date such payment would otherwise be made in accordance with paragraph 3 of this Agreement.

 

(c)         Termination of Employment Without Cause.  If the Participant’s employment is terminated at the instance of the Company or relevant subsidiary without Cause (as defined below), each Tranche Performance Period that has not ended will continue through the end of such Performance Period, and the Participant will earn and vest in the Relevant Portion of such Tranche subject to actual achievement of the Plan Achievement Goals for such Tranche and the 162(m) Goal. As to each such Tranche, the “Relevant Portion” will be determined by multiplying (i) the Target Number of Shares otherwise earned and vested in accordance with the Notice of Grant, if any, and (ii) a fraction, the numerator of which is the sum of (A) the number of full calendar months of service completed during the Service Period for such Tranche through the Participant’s termination of employment and (B) the lesser of (x) 12 months or (y) the number of full calendar months remaining in the Service Period for such Tranche after the Participant’s termination of employment and the denominator of which is the number of full calendar months in the Service Period for such Tranche. If such termination occurs after the end of a Tranche Performance Period, the Shares, if any, otherwise earned and vested with respect to such Tranche in accordance with the Notice of Grant but not yet paid, will be paid.  Payment hereunder will be made the date(s) such payment would otherwise be made in accordance with paragraph 3 of this Agreement.

 

(d)        Termination of Employment By Employee.  If the Participant terminates his or her employment (e.g., by retiring or by voluntary resigning), any unearned, unvested Tranche will be forfeited, and any earned and vested Tranche will be paid in accordance with paragraph 3 of this Agreement.

 

(e)         Termination of Employment With Cause.  If the Participant is terminated for Cause, all Tranches of the Award will be forfeited, regardless of whether a Tranche has been otherwise earned and vested.  If the Participant is (a) no longer employed by the Corporation for any reason, (b) payment of a Tranche has not previously been made, and (c) it is determined that Participant’s behavior while he was employed would have constituted Cause, then each Tranche not previously paid will be forfeited, regardless of whether such Tranche has been otherwise earned and vested.  For this purpose, “Cause” is defined in the employment agreement in effect between the Participant and the Company or any subsidiary, including any employment agreement entered into after the Grant Date.  In the absence of an employment agreement, “Cause” means any breach by the Participant of any of his or her material obligations under any Company policy or procedure, including, without limitation, the Code of Conduct.

 

(f)           Post Employment Conduct.  Payout of any Performance Share Unit Award after termination of employment is subject to satisfaction of the conditions precedent that the Participant neither (i) competes with, takes employment with, or renders services to a competitor of the Company, its subsidiaries, or affiliates without the Company’s written consent, for the lesser of (A) 24 months following termination of employment or (B) the period remaining until date of payment for the Tranche as described in paragraph 4, nor (ii) conducts himself in a manner adversely affecting the Company.  The term “competitor” means any business that is engaged in, or is preparing to become engaged in, the makeup, skin care, hair care, toiletries or fragrance business or other business in which the Company is engaged or preparing to become engaged, or that otherwise competes with, or is preparing to compete with, the Company. If the Participant’s employment terminates after the expiration of the Award Period but prior to payout, payout will be subject to this paragraph 5(f).

 

 

6.                                     No Rights of Stock Ownership. This grant of Performance Share Units does not entitle the Participant to any interest in or to any voting or other rights normally attributable to Share ownership other than the Dividend Equivalent Rights granted under paragraph 3 above.

 

7.                                     Clawback.  Shares earned or delivered under any Performance Share Unit Award shall be subject to any recoupment policy for awards under the Plan adopted by the Company as such policy exists from time to time.

 

8.                                     Withholding. Regardless of any action the Company or the Participant’s employer (the “Employer”) takes with respect to any or all income tax, social security, payroll tax, or other tax-related withholding (“Tax-Related Items”), Participant acknowledges that the ultimate liability for all Tax-Related Items legally due by Participant is and remains his or her responsibility.  Furthermore, Participant acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Share Units, including the grant of the Performance Share Units, the vesting of the Performance Share Units, the delivery of Shares, the subsequent sale of Shares acquired under the Plan and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant of the Performance Share Units or any aspect of Participant’s participation in the Plan to reduce or eliminate his or her liability for Tax-Related Items.

 

Prior to the relevant taxable event, Participant shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy the minimum withholding obligations of the Company and/or the Employer.  In this regard, Participant authorizes the Company and/or the Employer to withhold the minimum applicable Tax-Related Items legally required to be paid by Participant from his or her wages or other cash compensation paid by the Company and/or the Employer or from proceeds of the sale of the Shares acquired under the Plan.  Alternatively, or in addition, the Company may (i) sell or arrange for the sale of Shares that Participant acquires under the Plan to meet such withholding obligation for the Tax-Related Items, and/or (ii) withhold such amount in Shares, provided that the Company only withholds the amount of Shares necessary to satisfy the minimum withholding amount.  If the Company satisfies the Tax-Related Item withholding obligation by withholding a number of Shares as described herein, Participant will be deemed to have been issued the full number of Shares due to Participant at vesting, notwithstanding that a number of the Shares is held back solely for purposes of such Tax-Related Items.

 

Finally, Participant shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of his or her participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to issue Shares under the Plan and refuse to deliver the Shares if Participant fails to comply with his or her obligations in connection with the Tax-Related Items as described in this paragraph.

 

9.                                     Nonassignability. This award may not be assigned, pledged, or transferred except, if the Participant dies, to a designated beneficiary or by will or by the laws of descent and distribution. The foregoing restrictions do not apply to transfers under a court order, including, but not limited to, any domestic relations order.

 

10.                              Effect Upon Employment. The Participant’s right to continue to serve the Company or any of its subsidiaries as an officer, employee, or otherwise, is not enlarged or otherwise affected by an award under this Agreement.  Nothing in this Agreement or the Plan gives the Participant any right to continue in the employ of the Company or any of its subsidiaries or to interfere in any way with any right the Company or any subsidiary may have to terminate his or her employment at any time.  Payment of Shares is not secured by a trust, insurance contract or other funding medium, and the Participant does not have any interest in any fund or specific asset of the Company by reason of this Award or the account established on his or her behalf.  A Performance Share Unit confers no rights as a shareholder of the Company until Shares are actually delivered to the Participant.

 

11.                              Notices.  Any notice required or permitted under this Performance Share Unit Award Agreement is deemed to have been duly given if delivered, telecopied, mailed (certified or registered mail, return receipt requested), or sent by internationally-recognized courier guaranteeing next day delivery (a) to the Participant at the address on file in the Company’s (or relevant subsidiary’s) personnel records or (b) to the Company, attention Stock Plan Administration at its principal executive offices, which are currently located at 767 Fifth Avenue, New York, NY 10153.

 

 

12.                Disclosure and Use of Information.

 

(a)        By acknowledging and agreeing to or signing and returning the attached Notice of Grant, and as a condition of the grant of the Performance Share Units, the Participant hereby expressly and unambiguously consents to the collection, use, and transfer of personal data, including sensitive data, as described in this paragraph and below by and among, as necessary and applicable, the Employer, the Company and its subsidiaries and by any agent of the Company or its subsidiaries for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.

 

(b)       The Participant understands that the Employer, the Company and/or its other subsidiaries holds, by means of an automated data file or otherwise, certain personal information about the Participant, including, but not limited to, name, home address and telephone number, date of birth, social insurance number, salary, nationality, job title, any shares or directorships held in the Company, details of all Performance Share Units or other entitlement to shares awarded, canceled, exercised, vested, unvested, or outstanding in the Participant’s favor, for purposes of managing and administering the Plan (“Data”).

 

(c)        The Participant also understands that part or all of his or her Data may be held by the Company or its subsidiaries in connection with managing and administering previous award or incentive plans, pursuant to a prior transfer made with the Participant’s consent in respect of any previous grant of performance share units or other awards.

 

(d)       The Participant further understands that the Employer may transfer Data to the Company or its subsidiaries as necessary to implement, administer, and manage his or her participation in the Plan.  The Company and its subsidiaries may transfer data among themselves, and each, in turn, may further transfer Data to any third parties assisting the Company in the implementation, administration, and management of the Plan (“Data Recipients”).

 

(e)        The Participant understands that the Company, its subsidiaries, and the Data Recipients are or may be located in his or her country of residence, the United States or elsewhere. The Participant authorizes the Employer, the Company, its subsidiaries, and such Data Recipients to receive, possess, use, retain, and transfer Data in electronic or other form to implement, administer, and manage his or her participation in the Plan, including any transfer of Data that the Administrator deems appropriate for the administration of the Plan and any transfer of Shares on his or her behalf to a broker or third party with whom the Shares may be deposited.

 

(f)           The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative.

 

(g)       The Participant understands that Data will be held as long as is reasonably necessary to implement, administer and manage his or her participation in the Plan and he or she may oppose the processing and transfer of his or her Data and may, at any time, review the Data, request that any necessary amendments be made to it, or withdraw his or her consent by notifying the Company in writing. The Participant further understands that withdrawing consent may affect his or her ability to participate in the Plan.

 

13.                Discretionary Nature and Acceptance of Award.  The Participant agrees to be bound by the terms of this Agreement and acknowledges that:

 

(a)         The Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement;

 

(b)        The award of Performance Share Units is voluntary and occasional, and does not create any contractual or other right to receive future awards of Performance Share Units, or benefits in lieu of Performance Share Units, even if Performance Share Units have been awarded repeatedly in the past;

 

(c)         All decisions with respect to future awards, if any, will be at the sole discretion of the Company;

 

(d)        Participant’s participation in the Plan is voluntary;

 

(e)         Participant’s participation in the Plan shall not create a right to further employment with the Employer and shall

 

 

not interfere with the ability of the Company or the Employer to terminate Participant’s employment at any time;

 

(f)           The Award of the Performance Share Units will be deemed accepted unless the Award is declined by way of written notice by the Participant within 30 days of the Grant Date to the Equity Based Compensation Department of the Company in New York;

 

(g)        Performance Share Units are an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or any subsidiary, and which is outside the scope of Participant’s employment or service contract, if any;

 

(h)         The Performance Share Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any subsidiary;

 

(i)             In the event the Participant is not an employee of the Company, the Performance Share Units and Participant’s participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company; and furthermore, the Performance Share Units and Participant’s participation in the Plan will not be interpreted to form an employment or service contract with any subsidiary of the Company;

 

(j)             The future value of the underlying Shares is unknown and cannot be predicted with certainty;

 

(k)         The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan or Participant’s acquisition or sale of the underlying Shares; and

 

(l)             Participant is hereby advised to consult with Participant’s own personal tax, legal and financial advisors regarding Participant’s participation in the Plan before taking any action related to the Plan.

 

14.                              Failure to Enforce Not a Waiver.  The Company’s failure to enforce at any time any provision of this Agreement does not constitute a waiver of that provision or of any other provision of this Agreement.

 

15.                              Governing Law.  The Performance Share Unit Award Agreement is governed by and is to be construed according to the laws of the State of New York that apply to agreements made and performed in that state, without regard to its choice of law provisions.  For purposes of litigating any dispute that arises under the Performance Share Units or this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of New York, and agree that such litigation will be conducted in the courts of New York County, New York, or the federal courts for the United States for the Southern District of New York, and no other courts, where the Performance Share Units are made and/or to be performed.

 

 

16.                              Partial Invalidity.  The invalidity or illegality of any provision of the Agreement will be deemed not to affect the validity of any other provision.

 

17.                              Section 409A Compliance.  This Agreement is intended to comply with section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations, rulings, or guidance provided thereunder.  Each payment under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code.  In no event may the Participant, directly or indirectly, designate the calendar year of any payment to be made under this Agreement.  The Company reserves the unilateral right to amend this Agreement upon written notice to the Participant to prevent taxation under Code section 409A, in a manner that is intended to preserve the economic benefits of this award.

 

18.                              Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Performance Share Units awarded under the Plan or future Performance Share Units that may be awarded under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

	
 
    	
The Estée Lauder   Companies Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	

    	
 
    
	
 
    	
 
    	
Michael   O’Hare
    
	
 
    	
 
    	
Executive   Vice President,
    
	
 
    	
 
    	
Global   Human Resources
    

 

 

NOTICE OF GRANT

UNDER

THE ESTÉE LAUDER COMPANIES INC.

AMENDED AND RESTATED FISCAL 2002 SHARE INCENTIVE PLAN (The “Plan”)

 

This Notice of Grant is incorporated by reference into the Agreement and made a part thereof.

 

This is to confirm that you were awarded a grant of Performance Share Units at the most recent meeting of the Stock Plan Subcommittee of the Compensation Committee of the Board of Directors (the “Subcommittee”) representing the right to receive shares of Class A Common Stock of The Estée Lauder Companies Inc. (the “Shares”), subject to the terms of the Plan and the Performance Share Unit Award Agreement.  This award was made in recognition of the significant contributions you have made as a key employee of the Company, and to motivate you to achieve future successes by aligning your interests more closely with those of our stockholders.  This Performance Share Unit Award is granted under and governed by the terms and conditions of the Plan and the Performance Share Unit Award Agreement (the “Agreement”) which are made a part hereof.  Please read these documents and the Summary Plan Description and keep them for future reference.  The specific terms of your award are as follows:

 

Participant:                                                     Fabrizio Freda

 

Grant Date:                                                    September 4, 2015

 

Target Number of Shares: There are three separate Awards granted hereby.  Each is a “Tranche,” and will be separately, the “First Tranche”, the “Second Tranche”, and the “Third Tranche,” respectively. The Target Number of Shares subject to the First Tranche is 129,282, the Second Tranche is 129,283 and the Third Tranche is 129,283. For the avoidance of doubt, except as provided in paragraph 3 of the Agreement, it is understood that a Participant’s rights, if any, with respect to any one Tranche shall be determined independently of the Participant’s rights, if any, with respect to any other Tranche.

 

Service Period: For the First Tranche: July 1, 2015 to June 30, 2018 (the “First Tranche Service Period”); for the Second Tranche: July 1, 2015 to June 30, 2019 (the “Second Tranche Service Period”); and for the Third Tranche: July 1, 2015 to June 30, 2020 (the “Third Tranche Service Period”).

 

Performance Period: For the First Tranche: July 1, 2015 to June 30, 2018 (the “First Tranche Performance Period’); for the Second Tranche: July 1, 2016 to June 30, 2019 (the “Second Tranche Performance Period”); and for the Third Tranche: July 1, 2017 to June 30, 2020 (the “Third Tranche Performance Period”).

 

Type of Award:   Stock Unit and Performance-Based Award (referred to herein as a “PSU”)

 

Plan Achievement Goals:

 

(a)         Section 162(m) Goal.

 

(i)       Except as otherwise provided in Section 4 or 5 of the Agreement:

 

No tranche shall vest and no Shares shall be delivered (or any amount paid) unless and until the Subcommittee certifies in writing that the Company has achieved positive Net Earnings, as defined below, for the period from July 1, 2015 through June 30, 2016 (the “162(m) Goal”). If the 162(m) Goal is not achieved, the Tranches shall be immediately forfeited, and the Participant shall have no further rights with respect thereto.

 

(ii)    Once the Subcommittee certifies that the 162(m) Goal has been achieved, the Participant shall be eligible to earn the target number of Shares allocated to the Participant in the Committee’s resolution approving the establishment of the 162(m) Goal; however the Participant’s entitlement to payment in respect of a Tranche shall be determined by exercise of the Subcommittee’s negative discretion in accordance with the terms of this Notice of Grant, including but not limited to the following section (b), and the Agreement of which this Notice of Grant is a part.  In no event shall the Participant receive payment in respect of a

 

 

Tranche in an amount that exceeds the target number of Shares allocated to the Participant in the Committee’s resolution approving the establishment of the 162(m) Goal.

 

For purposes of this PSU Award Agreement, “Net Earnings” has the meaning utilized by the Company in its consolidated financial statements in accordance with generally accepted accounting principles as in effect on July 1, 2015.

 

(b)        Cumulative Operating Income Goal

 

(i)                     Subject to Section (a) above, and once the Subcommittee certifies that the Cumulative Operating Income Goal has been achieved, except as otherwise provided in Section 4 or 5 of the Agreement:

 

The Target Number of Shares subject to the First Tranche shall be earned and vested upon the conclusion of the First Tranche Performance Period, provided that the Company has achieved positive Cumulative Operating Income, as defined below, for the First Tranche Performance Period (the “First Tranche Plan Achievement Goal”). If the First Tranche Plan Achievement Goal is not achieved, the First Tranche shall be immediately forfeited, and the Participant shall have no further rights with respect thereto.

 

The Target Number of Shares subject to the Second Tranche shall be earned and vested upon the conclusion of the Second Tranche Performance Period, provided that the Company has achieved positive Cumulative Operating Income, as defined below, for the Second Tranche Performance Period (the “Second Tranche Plan Achievement Goal”). If the Second Tranche Plan Achievement Goal is not achieved, the Second Tranche shall be immediately forfeited, and the Participant shall have no further rights with respect thereto.

 

The Target Number of Shares subject to the Third Tranche shall be earned and vested upon the conclusion of the Third Tranche Performance Period, provided that the Company has achieved positive Cumulative Operating Income, as defined below, for the Third Tranche Performance Period (the “Third Tranche Plan Achievement Goal”). If the Third Tranche Plan Achievement Goal is not achieved, the Third Tranche shall be immediately forfeited, and the Participant shall have no further rights with respect thereto.

 

(ii)                  For purposes of this PSU Award Agreement, “Cumulative Operating Income” means the sum of operating income for each fiscal year in a Performance Period.  Operating income of the Company shall have the meaning utilized by the Company in its consolidated financial statements in accordance with generally accepted accounting principles as in effect on July 1, 2015, calculated without regard to the following:

 

·                  Changes in accounting principles (i.e., cumulative effect of GAAP changes)

·                  Extraordinary items as defined in accordance with US GAAP or which are the result of a change in the law or the Company’s response thereto

·                  Income/loss from discontinued operations and income/loss on sale of discontinued operations or adjustments to previously disposed businesses

·                  Impairment of intangibles and goodwill related to acquisitions

·                  The impact of an acquired business’ income statement not included in the Long-Range Plan (LRP) coincident with the performance period of the PSU, whether dilutive or accretive.  For the sake of clarity, the LRP will be adjusted to include the expected performance of the acquired business(es) (i.e., the income statement acquisition Model used to support the purchase decision). The adjustment includes due diligence fees, investment banking fees, the operating performance of business and any transition and/or integration costs as reflected on the income statement of the acquired brand, as well as any fair value accounting charges or credits to the statement of earnings.

·                  Non-recurring operating income/expenses that are separately stated and disclosed in the financial statements and/or related notes thereto – e.g., restructuring charges, legal settlement charges

 

 

(c)         If the Participant’s employment is terminated by reason of, or pursuant to, Paragraph 5(a) or 5(b) of the Agreement, then in determining the “% of Performance Shares Earned,” the Performance Period shall end on the date of termination. If there is a Change in Control, then evaluation of performance and payout shall be in accordance with Paragraph 4 of the Agreement and the Performance Period shall end on the date of the Change in Control.

 

Questions regarding the award can be directed to Patricia Zakrzewski at (212) 572-6953.

 

If you wish to accept this grant, please sign this Notice of Grant and return it immediately to:

 

Compensation Department

767 Fifth Avenue, 43rd Floor

New York, New York 10153

Attention: Patricia Zakrzewski

 

The undersigned hereby accepts, and agrees to, all terms and provisions of the Agreement, including those contained in this Notice of Grant.

 

 

 

	
By
    	
/s/ Fabrizio Freda
    	
 
    	
Date
    	
September 4, 2015

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