Document:

Exhibit 10.4

 

4th AMENDMENT TO COMMERCIAL LEASE AGREEMENT

 

This 4th AMENDMENT TO COMMERCIAL LEASE AGREEMENT

(“4th Amendment”) is made as of the 30th day of January, 2015, (the “Effective Date”) by and between PIOS GRANDE KOP BUSINESS CENTER, L.P., a Delaware limited partnership (“Landlord”), and TREVENA, INC., a Delaware corporation (“Tenant”).

 

RECITALS:

 

A.                                    Pursuant to the Commercial Lease Agreement dated August 4, 2008, between Landlord’s predecessor-in-interest, KOPBC, L.P., and Tenant, as amended by the First Amendment to Commercial Lease dated December 8, 2008 (the “First Amendment”), as amended by the Second Amendment to Commercial Lease Agreement dated July 3, 2013 (the “Second Amendment”), and as further amended by the Third Amendment to Commercial Lease Agreement dated February 21, 2014 (the “Third Amendment,” together with the First Amendment and Second Amendment, the “Lease”), Tenant currently leases premises consisting of approximately 14,557 rentable square feet (as further described in the Lease, the “Demised Premises”) in the King of Prussia Business Center located on the first floor at 1018 West Eighth Avenue (the “Building”), King of Prussia, Pennsylvania.

 

B.                                    Landlord and Tenant desire to amend the Lease to (i) provide for Tenant’s lease from Landlord of an additional 2,157 rentable square feet of space adjacent to Tenant’s existing space, which additional space is currently leased to Innovation Tap LLC, and commonly referred to as Suite H as reflected on Exhibit A hereto (the “New Expansion Premises”), subject to the terms, covenants and conditions set forth below; and (ii) otherwise modify the Lease as set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant, intending to be legally bound, covenant and agree as follows:

 

1.                                      Incorporation of Recitals; Definitions. The foregoing recitals are incorporated herein by this reference as if set forth in full herein.  All capitalized terms not defined herein shall have the meaning ascribed them in the Lease.

 

2.                                      [RESERVED]

 

3.                                      Demised Premises. On the “New Expansion Commencement Date,” which is expected to be on June 1, 2015, but in no event later than August 1, 2015, and continuing throughout the Lease Term, the Demised Premises hereinafter shall be comprised of the New Expansion Premises, the Expansion Premises, and the Original Demised Premises. On the Effective Date, the Demised Premises shall consist of 16,714 rentable square feet, and “Tenant’s Proportionate Share” shall be 9.93%. Tenant accepts the Demised Premises, including the New Expansion Premises, in their “AS IS” condition as of the Effective Date of this 4th Amendment.  Tenant acknowledges that neither Landlord nor Landlord’s agents, representatives, employees,

 

 

servants or attorneys have made any representations or promises, whether express or implied, concerning the condition of the Demised Premises, including the New Expansion Premises.  In the event that Innovation Tap LLC does not vacate the New Expansion Premises by August 1, 2015, Tenant shall have the sole option to: (i) extend its right to occupy the New Expansion Premises in accordance with the terms of this 4th Amendment, or (ii) terminate this 4th Amendment, at which time this 4th Amendment shall be null and void and of no further force or effect, and Tenant shall have no further liability hereunder.  If Tenant elects to extend this 4th Amendment until Innovation Tap LLC vacates the New Expansion Premises, Tenant shall pay Rent in accordance with Schedule A (discussed in Paragraph 4 below), in the amount reflected in the column entitled “TOTAL LESS NEW EXPANSION.”  If Tenant terminates this 4th Amendment as provided in this Paragraph 3, then the Right of First Offer option provided in Paragraph 5 of the Third Amendment automatically shall be revived and continue in full force and effect.

 

Promptly after the New Expansion Commencement Date, Landlord and Tenant shall, at the request of either, execute an acknowledgment in the form set forth in Exhibit B specifying said New Expansion Commencement Date.  The failure of either party to execute or deliver such instrument shall not modify the New Expansion Commencement Date.

 

4.                                      Rent. Commencing on the New Expansion Commencement Date and continuing throughout the Lease Term, Tenant shall pay to Landlord Minimum Rent for the Original Demised Premises, Expansion Premises and the New Expansion Premises (a total of 16,714 rentable square feet) as provided under the column labeled TOTAL in Schedule A attached hereto and made a part hereof.

 

As of the New Expansion Commencement Date, the Rent schedules recited in Paragraph 4(b) of the Second Amendment and in Paragraph 3 of the Third Amendment hereby are superseded and replaced in their entirety by Schedule A attached to this 4th Amendment.

 

The methodology for the calculation and payment of Additional Rent remains unchanged.

 

5.                                      Termination Option. Paragraph 4 of the Third Amendment hereby is deleted in its entirety and replaced with the following:

 

(a)                                 Entire Demised Premises.  At any time after May 31, 2018, Tenant shall have the right to terminate this Lease, and the 4th Amendment (“Total Termination Option”) by giving Landlord written notice that it is terminating the Lease and the 4th Amendment with respect to the entire Demised Premises and vacating the Demised Premises on or before the termination date stated in the written notice (the “Total Termination Date”). The written termination notice shall be provided to Landlord at least nine (9) months prior to the Total Termination Date and in no event shall the Total Termination Date be earlier than June 1, 2018. Together with said written notice of termination, Tenant shall pay Landlord by certified check or wire transfer of immediately available funds, a termination fee in the amount of One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00) (the “Total Termination Fee”).  If Tenant shall fail to pay the Total Termination Fee, as provided above, this Total Termination Option and any notice given under this Paragraph 5(a) shall be void and of no further force or effect.

 

2

 

(b)                                 New Expansion Premises Only.  At any time after May 31, 2018, Tenant shall have the right to partially terminate this 4th Amendment to the Lease (“Partial Termination Option”) by giving Landlord written notice that it is terminating the Lease with respect to the New Expansion Premises only and vacating the New Expansion Premises on or before the termination date stated in the written notice (the “Partial Termination Date”). The written termination notice shall be provided to Landlord at least nine (9) months prior to the Partial Termination Date and in no event shall the Partial Termination Date be earlier than June 1, 2018. Together with said written notice of termination, Tenant shall pay Landlord by certified check a termination fee in the amount of Twenty Thousand and 00/100 Dollars ($20,000.00) (the “Partial Termination Fee”).  If Tenant shall fail to pay the Partial Termination Fee, as provided above, this Partial Termination Option and any notice given under this Paragraph 5(b) shall be void and of no further force or effect.

 

(c)                                  Minimum Rent to Be Adjusted.  If Tenant complies in all respects with the requirements of Paragraph 5(b) and effects the Partial Termination Option, Minimum Rent for the Original Demised Premises and the Expansion Premises shall be remitted to Landlord in the amounts recited under the column labeled “TOTAL LESS NEW EXPANSION” on Schedule A.

 

(d)                                 Tenant’s Proportionate Share.  In the event Tenant effects the Partial Termination Option, Tenant’s Proportionate Share shall be 8.64%.

 

(e)                                  Second Amendment Termination Option.  The deletion of Paragraph 4 of the Third Amendment as stated in the first paragraph of this Paragraph 5 of the 4th Amendment shall not revive or reinstate Paragraph 18 of the Second Amendment.

 

6.                                      Brokers. Landlord and Tenant each represents and warrants to the other that neither it nor its officers or agents nor anyone acting on its behalf has dealt with any real estate broker in the negotiating or making of this 4th Amendment other than, for the Landlord, Cushman & Wakefield of Pennsylvania, Inc. Each party agrees to indemnify and hold harmless the other from any claim or claims, and costs and expenses, including reasonable attorneys’ fees, incurred by the indemnified party in conjunction with any such claim or claims of any other broker or brokers to a commission in connection with this 4th Amendment as a result of the actions of the indemnifying party.

 

7.                                      Estoppel. Tenant represents and warrants that it is the sole owner and holder of the Tenant’s interest in the Lease, and it has not assigned, mortgaged, hypothecated, sublet, or otherwise alienated all or any part of its interest in the Lease or the Demised Premises.  Except as herein expressly amended, modified and supplemented, all of the terms, conditions and provisions of the Lease remain in full force and effect as heretofore written and, as hereby amended, modified and supplemented, are hereby ratified and confirmed in every respect.  Tenant takes the occasion of the execution of this 4th Amendment to confirm that, to the best of Tenant’s knowledge: (i) neither Landlord nor Tenant is in default under the Lease; and (ii) Tenant has no right to any rent credit, free rent, offset, set-off or any other such claim against Landlord under the Lease.

 

3

 

8.                                      Authority. The parties hereto represent and warrant to each other that each has full right and authority to enter into this 4th Amendment and that the person signing this 4th Amendment on behalf of Landlord and Tenant, respectively, has the requisite authority for such act.

 

9.                                      Counterparts. This 4th Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all such counterparts shall constitute one agreement.

 

10.                               No Other Modifications; Ratification; Conflicts.  (a)  Except as expressly amended hereby, the Lease remains unmodified and in full force and effect. In the event of a conflict between the terms of this 4th Amendment and the Lease, the terms of this 4th Amendment shall control.  Except as provided in Paragraph 3 above, Paragraph 5 of the Third Amendment (Right of First Offer) having been exercised, Tenant has no further rights under said Paragraph 5, which shall hereinafter be of no further force or effect.

 

11.                               Confession of Judgment. LANDLORD SHALL HAVE THE FOLLOWING RIGHTS TO CONFESS JUDGMENT AGAINST TENANT AND ALL PERSONS CLAIMING THROUGH TENANT, FOR POSSESSION OF THE DEMISED PREMISES:

 

(i)                                     AFTER AN EVENT OF DEFAULT WHICH REMAINS UNCURED AND IS CONTINUING FOLLOWING NOTICE TO TENANT AS PROVIDED IN THE LEASE, OR WHEN THIS LEASE SHALL BE TERMINATED BY REASON OF A DEFAULT BY TENANT, EITHER DURING THE ORIGINAL TERM OF THIS LEASE OR ANY RENEWAL OR EXTENSION THEREOF, AND ALSO WHEN THE TERM HEREBY CREATED OR ANY EXTENSION THEREOF SHALL HAVE EXPIRED, IT SHALL BE LAWFUL FOR ANY ATTORNEY TO APPEAR FOR TENANT IN ANY AND ALL SUITS OR ACTIONS WHICH MAY BE BROUGHT FOR POSSESSION AND/OR EJECTMENT; AND AS ATTORNEY FOR TENANT TO CONFESS JUDGMENT IN EJECTMENT AGAINST TENANT AND ALL PERSONS CLAIMING UNDER TENANT FOR THE RECOVERY BY LANDLORD OF POSSESSION OF THE DEMISED PREMISES, FOR WHICH THIS LEASE SHALL BE LANDLORD’S SUFFICIENT WARRANT. UPON SUCH CONFESSION OF JUDGMENT FOR POSSESSION, IF LANDLORD SO DESIRES, A WRIT OF EXECUTION OR OF POSSESSION MAY ISSUE FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDINGS WHATSOEVER. IF FOR ANY REASON AFTER SUCH ACTION SHALL HAVE BEEN COMMENCED, THE SAME SHALL BE DETERMINED AND THE POSSESSION OF THE DEMISED PREMISES SHALL REMAIN IN OR BE RESTORED TO TENANT, THEN LANDLORD SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT OR CONTINUING DEFAULT OR DEFAULTS, OR AFTER EXPIRATION OF THE LEASE, OR UPON THE TERMINATION OF THIS LEASE AS HEREINBEFORE SET FORTH, TO BRING ONE OR MORE FURTHER ACTIONS AS HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE DEMISED PREMISES.

 

	
 
    	
 
    	
(Tenant   initials)
    

 

4

 

(ii)                                  In any action of ejectment, Landlord shall cause to be filed in such action an affidavit made by Landlord or someone acting for Landlord setting forth the facts necessary to authorize the entry of judgment, of which facts such affidavit shall be conclusive evidence.  If a true copy of this Lease shall be filed in such action (and the truth of the copy as asserted in the affidavit of Landlord shall be sufficient evidence of same), it shall not be necessary to file the original Lease as a warrant of attorney, any rule of court, custom or practice to the contrary notwithstanding.

 

(iii)                               Tenant expressly agrees, to the extent not prohibited by law, that any judgment, order or decree entered against it by or in any court or magistrate by virtue of the powers of attorney contained in this Lease shall be final, and that Tenant will not take an appeal, certiorari, writ of error, exception or objection to the same, or file a motion or rule to strike off or open or to stay execution of the same, and releases to Landlord and to any and all attorneys who may appear for Tenant all errors in such proceedings and all liability therefor.

 

(iv)                              The right to enter judgment against Tenant and to enforce all of the other provisions of this Lease herein provided for, at the option of any assignee of this Lease, may be exercised by any assignee of Landlord’s right, title and interest in this Lease in Tenant’s own name, notwithstanding the fact that any or all assignments of such right, title and interest may not be executed and/or witnessed in accordance with the Act of Assembly of May 28, 1715, 1 Sm. L. 94, and all supplements and amendments thereto that have been or may hereafter be passed. Tenant hereby expressly waives the requirements of such Act of Assembly and any and all laws regulating the manner and/or form in which such assignments shall be executed and witnessed.

 

(v)                                 Tenant acknowledges that it has been represented by counsel in connection with the negotiation of this Lease, that it has read and discussed with such counsel the provisions herein relating to confession of judgment, and that it understands the nature and consequences of such provisions.

 

[SIGNATURES ON NEXT PAGE]

 

5

 

IN WITNESS WHEREOF, the parties have executed this 4th Amendment as of the date first above written.

 

 

	
LANDLORD:
    	
 
    	
WITNESSES:
    
	
 
    	
 
    	
 
    
	
PIOS GRANDE KOP BUSINESS CENTER, L.P.,
    	
 
    	
 
    
	
a Delaware limited partnership
    	
 
    	
 
    
	
By: PIOS GRANDE, LLC, its general partner
    	
 
    	
/s/   Jenn Shepelu
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Vincent T. Abessinio
    	
 
    	
/s/   Diane Witeak
    
	
Name:
    	
Vincent   T. Abessinio
    	
 
    	
 
    
	
Title:
    	
Executive   Vice President
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TENANT:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TREVENA, INC.,
    	
 
    	
 
    
	
a Delaware corporation
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Roberto Cuca
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   John M. Limongelli
    	
 
    	
 
    
	
Name:
    	
John   M. Limongelli 
    	
 
    	
/s/   Michael W. Lark
    
	
Title:
    	
SVP,   General Counsel & Corp. Secretary
    	
 
    	
 
    

 

6

 

EXHIBIT A

 

(DIAGRAM OF NEW EXPANSION PREMISES)

 

7

 

EXHIBIT B

 

NEW EXPANSION COMMENCEMENT DATE ACKNOWLEDGMENT

 

This New Expansion Commencement Date Acknowledgment is made and entered into this            day of                         , 2015, by and between Pios Grande KOP Business Center, L.P., a Delaware limited partnership (“Landlord”), and Trevena, Inc. a Delaware corporation (“Tenant”).

 

WITNESSETH:

 

WHEREAS, the parties hereto are respectively Landlord and Tenant in a certain 4th Amendment to Commercial Lease Agreement (“4th Amendment”) made as of the        day of January, 2015, adding certain New Expansion Premises of approximately 2,157 rentable square feet to the existing Expansion Premises and Original Demised Premises consisting of approximately 14,577 rentable square feet located at 1018 West Eighth Avenue, King of Prussia, Pennsylvania, for a total Demised Premises of approximately 16,714 rentable square feet;

 

AND WHEREAS, the parties wish to avoid any subsequent controversy as to the exact date of the New Expansion Commencement Date of the 4th Amendment;

 

THEREFORE, Landlord and Tenant do hereby agree that the New Expansion Commencement Date of the 4th Amendment is the        day of                           , 2015.

 

IN WITNESS THEREOF, the parties hereto have duly executed this New Expansion Commencement Date Acknowledgement as of the day and year first above written.

 

	
 
    	
LANDLORD:
    
	
 
    	
Pios   Grande KOP Business Center, L.P.,
    
	
 
    	
a   Delaware limited partnership,
    
	
 
    	
By:   Pios Grande, LLC, its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TENANT:
    
	
 
    	
Trevena, Inc.,   a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

8Exhibit 10.5

 

TREVENA, INC.
 FORM OF STOCK OPTION GRANT NOTICE
 (2013 EQUITY INCENTIVE PLAN)

 

Trevena, Inc. (the “Company”), pursuant to its 2013 Equity Incentive Plan (the “Plan”), hereby grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set forth below.  This option is subject to all of the terms and conditions as set forth in this notice, in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety.  Capitalized terms not explicitly defined herein but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms in this notice and the Plan, the terms of the Plan will control.

 

	
Optionholder:
    	
 
    
	
Date   of Grant:
    	
 
    
	
Vesting   Commencement Date:
    	
 
    
	
Number   of Shares Subject to Option:
    	
 
    
	
Exercise   Price (Per Share):
    	
$
    
	
Total   Exercise Price:
    	
$
    
	
Expiration   Date:
    	
Ten   (10) years measured from Date of Grant.
    

 

	
Type   of Grant:
    	
o Incentive   Stock Option(1)
    	
o  Nonstatutory   Stock Option
    
	
 
    	
 
    	
 
    
	
Exercise   Schedule:
    	
x Same as   Vesting Schedule
    	
o  Early   Exercise Permitted
    
	
 
    	
 
    	
 
    
	
Vesting   Schedule:
    	
See   “Annex A — Vesting Provisions”
    	
 
    
	
 
    	
 
    	
 
    
	
Payment:
    	
By   one or a combination of the following items (described in the Option   Agreement):
    
	
 
    	
 
    
	
 
    	
x          By cash, check, bank draft or money order   payable to the Company
    
	
 
    	
o            Pursuant to a   Regulation T Program if the shares are publicly traded
    
	
 
    	
o            By delivery   of already-owned shares if the shares are publicly traded
    
	
 
    	
o            If and only   to the extent this option is a Nonstatutory Stock Option, and subject to the   Company’s consent at the time of exercise, by a “net exercise” arrangement
    

 

Additional Terms/Acknowledgements:  Optionholder acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan.  Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except as provided in the Plan.  Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of (i) options previously granted and delivered to Optionholder, (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) any written employment or severance arrangement that would provide for vesting acceleration of this option upon the terms and conditions set forth therein.  By accepting this option, Optionholder consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

(1)  If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year.  Any excess over $100,000 is a Nonstatutory Stock Option.

 

 

	
TREVENA, INC.
    	
 
    	
OPTIONHOLDER:
    
	
 
    	
 
    	
 
    
	
By:   
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    

 

ATTACHMENTS:  Option Agreement, 2013 Equity Incentive Plan and Notice of Exercise

 

ANNEX A

VESTING PROVISIONS

 

FOR EMPLOYEE STOCK OPTION AWARDS MADE PRIOR TO JANUARY 1, 2015 (ONE OF THE FOLLOWING):

 

(1)         Standard Vesting: On a quarterly basis (i.e., every three months) measured from the Vesting Commencement Date, the option shall become vested with respect to one-sixteenth (1/16) of the total number of shares of stock subject to the option, until such time as the option is vested with respect to all the shares subject to the option, subject to the Optionholder’s Continuous Service (as defined in the Plan) as of each such date. 

 

(2)         Six month Cliff Vesting: On the date six months after the Vesting Commencement Date (the “vesting semi-anniversary date”), the option shall become vested with respect to the one-eighth (1/8) of the total number of shares of stock subject to the option.  Thereafter, on a quarterly basis (i.e., every three months) measured from the vesting semi-anniversary date, the option shall become vested with respect to an additional one-sixteenth (1/16)  of the total number of shares subject to the option, until such time as the option is vested with respect to all the shares subject to the option, subject to Optionholder’s Continuous Services (as defined in the Plan) as of each such  date. 

 

(3)         Twelve month Cliff Vesting: On the date twelve months after the Vesting Commencement Date (the “vesting semi-anniversary date”), the option shall become vested with respect to the one-fourth (1/4) of the total number of shares of stock subject to the option.  Thereafter, on a quarterly basis (i.e., every three months) measured from the vesting semi-anniversary date, the option shall become vested with respect to an additional one-sixteenth (1/16)  of the total number of shares subject to the option, until such time as the option is vested with respect to all the shares subject to the option, subject to Optionholder’s Continuous Services (as defined in the Plan) as of each such  date.

 

FOR ALL EMPLOYEE STOCK OPTION AWARDS MADE ON OR AFTER JANUARY 1, 2015:

 

On an annual basis (i.e., every twelve months) measured from the Vesting Commencement Date, the option shall become vested with respect to one-fourth (1/4) of the total number of shares subject to the option, until such time as the option is vested with respect to all the shares subject to the option, subject to the Optionholder’s Continuous Service (as defined in the Plan) as of each such vesting date.

 

FOR ALL NON-EMPLOYEE BOARD OF DIRCTOR STOCK OPTION AWARDS:

 

(1)         Initial Award Vesting: On a quarterly basis (i.e., every three months) measured from the Vesting Commencement Date, the option shall become vested with respect to one-twelfth (1/12) of the total number of shares subject to the option, until such time as the option is vested with respect to all the shares subject to the option, subject to the Optionholder’s Continuous Service (as defined in the Plan) as of each such vesting date.

 

(2)         Annual Grant Vesting: The option shall become vested with respect to the total number of shares subject to the option on the day immediately prior to the date of the next annual stockholders’ meeting occurring after the Vesting Commencement Date, subject to the Optionholder’s Continuous Service (as defined in the Plan) as of such vesting date.

 

 

ATTACHMENT I

 

TREVENA, INC.
 2013 EQUITY INCENTIVE PLAN

 

OPTION AGREEMENT
 (INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

 

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement, Trevena, Inc. (the “Company”) has granted you an option under its 2013 Equity Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice.  The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “Date of Grant”).  If there is any conflict between the terms in this Option Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.

 

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows:

 

1.                                      VESTING.  Subject to the provisions contained herein, your option will vest as provided in your Grant Notice.  Vesting will cease upon the termination of your Continuous Service.

 

2.                                      NUMBER OF SHARES AND EXERCISE PRICE.  The number of shares of Common Stock subject to your option and your exercise price per share in your Grant Notice will be adjusted for Capitalization Adjustments.

 

3.                                      EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES.  If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month anniversary in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your “retirement” (as defined in the Company’s benefit plans).

 

4.                                      EXERCISE PRIOR TO VESTING (“EARLY EXERCISE”). You may not exercise your option prior to vesting.

 

5.                                      METHOD OF PAYMENT.  You must pay the full amount of the exercise price for the shares you wish to exercise.  You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted by your Grant Notice, which may include one or more of the following:

 

 

(a)                                 Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds.  This manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to cover”.

 

(b)                                 Provided that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise.  “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company.  You may not exercise your option by delivery to the Company of Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.

 

(c)                                  If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.  You must pay any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted form of payment.  Shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.

 

6.                                      WHOLE SHARES.  You may exercise your option only for whole shares of Common Stock.

 

7.                                      SECURITIES LAW COMPLIANCE.  In no event may you exercise your option unless the shares of Common Stock issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance of the shares would be exempt from the registration requirements of the Securities Act.  The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable).

 

8.                                      TERM.  You may not exercise your option before the Date of Grant or after the expiration of the option’s term.  The term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:

 

(a)                                 immediately upon the termination of your Continuous Service for Cause;

 

 

(b)                                 three (3) months after the termination of your Continuous Service for any reason other than Cause, your Disability or your death (except as otherwise provided in Section 8(d) below); provided, however, that if during any part of such three (3) month period your option is not exercisable solely because of the condition set forth in the section above relating to “Securities Law Compliance,” your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service; provided further, if during any part of such three (3) month period, the sale of any Common Stock received upon exercise of your option would violate the Company’s insider trading policy, then your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service during which the sale of the Common Stock received upon exercise of your option would not be in violation of the Company’s insider trading policy.  Notwithstanding the foregoing, if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six (6) months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until the earlier of (x) the later of (A) the date that is seven (7) months after the Date of Grant, and (B) the date that is three (3) months after the termination of your Continuous Service, and (y) the Expiration Date;

 

(c)                                  twelve (12) months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 8(d)) below;

 

(d)                                 eighteen (18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates for any reason other than Cause;

 

(e)                                  the Expiration Date indicated in your Grant Notice; or

 

(f)                                   the day before the tenth (10th) anniversary of the Date of Grant.

 

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability.  The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate terminates.

 

9.                                      EXERCISE.

 

(a)                                 You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by (i) delivering a Notice of Exercise (in a form designated by the Company) or completing such other documents and/or procedures designated by the Company for exercise and (ii) paying the exercise price and any

 

 

applicable withholding taxes to the Company’s Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional documents as the Company may then require.

 

(b)                                 By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.

 

(c)                                  If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the Date of Grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option.

 

(d)                                 By accepting your option you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472-or any successor or similar rules or regulation–(the “Lock-Up Period”); provided, however, that nothing contained in this section will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period.  You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto.  In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period.  You also agree that any transferee of any shares of Common Stock (or other securities) of the Company held by you will be bound by this Section 9(d).  The underwriters of the Company’s stock are intended third party beneficiaries of this Section 9(d) and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

10.                               TRANSFERABILITY.  Except as otherwise provided in this Section 10, your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.

 

(a)                                 Certain Trusts.  Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust.  You and the trustee must enter into transfer and other agreements required by the Company.

 

 

(b)                                 Domestic Relations Orders.  Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer.  You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement.  If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

 

(c)                                  Beneficiary Designation.  Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common Stock or other consideration resulting from such exercise.  In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration resulting from such exercise.

 

11.                               OPTION NOT A SERVICE CONTRACT.  Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment.  In addition, nothing in your option will obligate the Company or an Affiliate, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

 

12.                               WITHHOLDING OBLIGATIONS.

 

(a)                                 At the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.

 

(b)                                 If this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes).  If the date of determination of any tax withholding obligation is deferred to a date later than the

 

 

date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option.  Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise.  Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

 

(c)                                  You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied.  Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein, if applicable, unless such obligations are satisfied.

 

13.                               TAX CONSEQUENCES. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there is no other impermissible deferral of compensation associated with the option.

 

14.                               NOTICES.  Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.  The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means.  By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

15.                               GOVERNING PLAN DOCUMENT.  Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan.  If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control.  In addition, your option (and any compensation paid or shares issued under your option) is subject to recoupment in accordance with The Dodd—Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law.

 

 

16.                               OTHER DOCUMENTS.  You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus.  In addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time.

 

17.                               EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.  The value of this option will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

 

18.                               VOTING RIGHTS.  You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this option until such shares are issued to you.  Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company.  Nothing contained in this option, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

 

19.                               SEVERABILITY.  If all or any part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid.  Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

 

20.                               MISCELLANEOUS.

 

(a)                                 The rights and obligations of the Company under your option will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns.

 

(b)                                 You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your option.

 

(c)                                  You acknowledge and agree that you have reviewed your option in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your option, and fully understand all provisions of your option.

 

(d)                                 This Option Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

(e)                                  All obligations of the Company under the Plan and this Option Agreement will be binding on any successor to the Company, whether the existence of such successor is the

 

 

result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

 

*                                         *                                         *

 

This Option Agreement will be deemed to be signed by you upon the signing by you of the Stock Option Grant Notice to which it is attached.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}]]