Document:

EX-10.1

 Exhibit 10.1 

Exchange Agreement 

January 6, 2021 
 Apellis
Pharmaceuticals, Inc. 
 3.500% Convertible Senior Notes due 2026 

The undersigned investor (the “Investor”), for itself and on behalf of the beneficial owners listed on Exhibit A hereto
(“Accounts”) for whom the Investor holds contractual and investment authority (each, including the Investor if it is a party exchanging Notes (as defined below), an “Exchanging Investor”), hereby agrees to exchange,
with Apellis Pharmaceuticals, Inc., a Delaware corporation (the “Company”), certain 3.500% Convertible Senior Notes due 2026, CUSIP 03753UAB2 (the “Notes”) for shares (“Shares”) of the
Company’s common stock, $0.0001 par value per share (the “Common Stock”), pursuant to this exchange agreement (the “Agreement”). The Investor understands that the exchange (the “Exchange”) is
being made without registration of the offer or sale of the Shares under the Securities Act of 1933, as amended (the “Securities Act”), or any securities laws of any state of the United States or of any other jurisdiction in a
private placement pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act and that each Exchanging Investor participating in the Exchange is required to be an institutional “accredited investor”
within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that is also a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act. Capitalized terms used but not
defined in this Agreement have the respective meanings set forth in the indenture, dated as of September 16, 2019, (the “Indenture”) between the Company and U.S. Bank National Association, as trustee (the
“Trustee”). 
 1.    Exchange. On the basis of the representations, warranties and agreements herein contained
and subject to the terms and conditions herein set forth, the Investor hereby agrees to exchange for itself and on behalf of the Exchanging Investors, an aggregate principal amount of the Notes set forth on Exhibit A hereto (the
“Exchanged Notes”) for: 
 (a)    a number of Shares per $1,000 principal amount of such
Exchanged Notes equal to 20.7792; plus 
 (b)    an additional number of Shares per $1,000
principal amount of such Exchanged Notes equal to the quotient of (i) $544.07 divided by (ii) the average of the Daily VWAPs (as defined below) over the Reference Period (as defined below) (the aggregate number of Shares under
clause (a) and (b), the “Exchange Consideration”); 
 in each case, as adjusted in good faith by the Company for any
stock dividend, stock split, stock combination, reclassification or similar transaction occurring on or after the date hereof and prior to the Closing Date; provided that the number of Shares to be exchanged for the Exchanged Notes shall be
rounded down to the nearest whole share for each Exchanging Investor. 
 For the avoidance of doubt, no cash will be paid to any Exchanging
Investor in respect of any accrued and unpaid interest on the Exchanged Notes. 
 Notwithstanding the foregoing, in no event shall the number
of shares of Common Stock issuable under this Agreement and in exchange for other Notes pursuant to any other exchange agreement entered into on or about the date of this Agreement (the “Other Exchange Agreements”) between the
Company and holders of such other Notes with respect to the exchange of Notes for Common Stock exceed 19.9% of the Company’s issued and outstanding Common Stock on the 

  
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date hereof (the “Threshold”). If such aggregate amount of shares of Common Stock were to exceed the Threshold, the aggregate number of such shares of Common Stock to be
issued under this Agreement and the Other Exchange Agreements shall be allocated among the Exchanging Investors and the “Exchanging Investors” under the Other Exchange Agreements on a pro rata basis based on the principal amount of Notes
exchanged by each such Exchanging Investor under this Agreement and the Other Exchange Agreements. 
 “Business
Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. 

“Daily VWAP” means, for each Trading Day (as defined below) in the Reference Period (as defined below), the
per share volume-weighted average price of the Common Stock as displayed under the heading “Bloomberg VWAP” on Bloomberg page “APLS <equity> AQR” (or its equivalent successor if such page is not available) in respect of the
period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the Last Reported Sale Price on such day). The “Daily
VWAP” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours. 

“Last Reported Sale Price” of the Common Stock on any date means the closing sale price per share (or if no
closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national
or regional securities exchange on which the Common Stock is traded. 
 “Market Disruption Event” means
(a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (b) the occurrence or existence
prior to 1:00 p.m., New York City time, on any Scheduled Trading Day (as defined in the Indenture) for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock. 

“Reference Period” means the period of ten consecutive Trading Days commencing on the first Trading Day
following the date hereof. 
 “Trading Day” means a day on which (a) there is no Market Disruption
Event and (b) trading in the Common Stock generally occurs on The Nasdaq Global Select Market or, if the Common Stock is not then listed on The Nasdaq Global Select Market, on the principal other U.S. national or regional securities exchange on
which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading, except that if the
Common Stock is not so listed or admitted for trading, “Trading Day” means a Business Day. 
 The Investor agrees that it and any
Exchanging Investor shall not deliver a Notice of Conversion with respect to any Exchanged Notes and the Investor and each Exchanging Investor shall hold the Exchanged Notes until the Closing (as defined below). In consideration for the performance
of their obligations hereunder (including as described in the immediately preceding sentence), the Company agrees to deliver the Exchange Consideration on the Closing Date (as defined below) to each Exchanging Investor in exchange for its Exchanged
Notes. 

  
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 The Exchange shall occur in accordance with the procedures set forth in Exhibit B.2 hereto (the
“Exchange Procedures”); provided that each of the Company and the Investor acknowledges that the delivery of the Shares to any Exchanging Investor may be delayed due to procedures and mechanics within the system of American
Stock Transfer & Trust Company, LLC, The Depositary Trust Company (“DTC”) or The Nasdaq Global Select Market (“Nasdaq”) (including the procedures and mechanics regarding the listing of the Shares on Nasdaq)
or other events beyond the Company’s control and that such a delay will not be a default under this Agreement so long as (i) the Company is using its reasonable best efforts to effect such delivery, or (ii) such delay arises due to a
failure by Investor to deliver settlement instructions in accordance with Section 3(s); provided, further, that no delivery of Shares will be made until the Exchanged Notes have been properly submitted for exchange in accordance
with the Exchange Procedures and no accrued interest will be payable by reason of any delay in making such delivery. 
 The closing of the Exchange (the
“Closing”) shall take place remotely via the exchange of documents and signatures at 10:00 a.m., New York City time, on January 25, 2021 (the “Closing Date”), or at such other time and place as the Company and
the Investor may mutually agree. On the Closing Date, subject to satisfaction of the conditions precedent specified herein and the prior receipt by the Company from the Investor of the Exchanged Notes, the Company shall deliver the Shares to the DTC
account specified by the Investor for each relevant Exchanging Investor in Exhibit B.1. All questions as to the form of all documents and the validity and acceptance of the Exchanged Notes and the Exchange Consideration will be determined by
the Company, in its sole discretion, which determination shall be final and binding. Subject to the terms and conditions of this Agreement, the Investor hereby, for itself and on behalf of its Accounts, (a) waives any and all other rights with
respect to such Exchanged Notes and (b) releases and discharges the Company from any and all claims the undersigned and its Accounts may now have, or may have in the future, arising out of, or related to, such Exchanged Notes. 

2.    Representations and Warranties and Covenants of the Company. As of the date hereof and the Closing Date, the Company
represents and warrants to, and covenants with, the Exchanging Investors that: 
 (a)    The Company and
each of its subsidiaries are entities duly organized, validly existing and in good standing under the laws of the jurisdiction in which each is formed, and have the requisite power and authority to own their properties and to carry on their business
as now being conducted, except in the case of the Company’s subsidiaries as would not reasonably be expected to have a material adverse effect on the business, properties, assets, liabilities, operations (including results thereof), or
financial condition of the Company or its subsidiaries, taken as a whole. The Company and each of its subsidiaries is duly qualified as a foreign entity to do business (where such concept exists) and is in good standing in every jurisdiction (where
such concept exists) in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be
expected to have a material adverse effect on the business, properties, assets, liabilities, operations (including results thereof), or condition (financial or otherwise) of the Company or its subsidiaries, taken as a whole. The Company has the
power, authority and capacity to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the Exchange contemplated hereby. No consent, approval, order or authorization of, or registration, declaration or filing
with any governmental entity is required on the part of the Company or any of its subsidiaries in connection with the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Exchange, except as
may be required under any state or federal securities laws or that may be made or obtained after the Closing without penalty. 

  
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 (b)    This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (b) general principles of equity, whether such enforceability is considered in a proceeding at
law or in equity. 
 (c)    This Agreement and consummation of the Exchange will not violate, conflict
with or result in a breach of or default under (i) the charter or bylaws of the Company, (ii) any agreement or instrument to which the Company is a party or by which the Company or any of its assets or subsidiaries are bound, or
(iii) assuming the truth and accuracy of the representations and warranties and compliance with the covenants of the Investor and each Exchanging Investor herein, any laws, regulations or governmental or judicial decrees, injunctions or orders
applicable to the Company and its subsidiaries, except in the case of clauses (ii) or (iii), where such violations, conflicts, breaches or defaults as would not, individually or in the aggregate, materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement. 
 (d)    When issued, delivered and paid for
in the manner set forth in this Agreement, the Shares will (i) be validly issued, fully paid and non-assessable, (ii) be free and clear of any Liens (as defined in Section 3(c) below), option,
equity or other adverse claim thereto, including claims or rights under any voting trust agreements, shareholder agreements or other agreements to which the Company is a party, and (iii) will not be subject to any preemptive, participation,
rights of first refusal or other similar rights under the General Corporation Law of the State of Delaware or any to which the Company is a party (other than any such rights that will be waived prior to the Closing). Assuming the accuracy of the
Investor’s and each Exchanging Investor’s representations and warranties hereunder, the Shares (a) will be issued in the Exchange in reliance on the exemption from the registration requirements of the Securities Act pursuant to
4(a)(2) of the Securities Act and (b) when issued will be free of any restrictive legend and will not be subject to restrictions on transfer under Rule 144 promulgated under the Securities Act. 

(e)    The execution of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby does not require the consent, approval, authorization, order, registration or qualification of, or filing with, any governmental authority, non-governmental regulatory
authorities (including Nasdaq, other than the filing with Nasdaq of a Listing of Additional Shares notification which the Company will so file prior to the issuance of Shares on the Closing Date), except as may be required under any state or federal
securities laws or that may be made or obtained after the Closing without penalty. 
 (f)    From
January 1, 2020 to the date of this Agreement, the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the Securities and Exchange Commission (the
“SEC”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or timely filed notifications of late filings for any of the foregoing (all of the foregoing
filed prior to the date hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC
Documents”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents. 

  
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 (g)    Without the prior written consent of the
Investor, the Company shall not disclose the name of the Investor or any Exchanging Investor in any filing or announcement, unless such disclosure is required by applicable law, rule, regulation or legal process based on advice of counsel. 

(h)    There is no action, lawsuit, arbitration, claim or proceeding pending or, to the knowledge of the
Company, threatened, against the Company that would reasonably be expected to impede the consummation of the Exchange. 

(i)    The Company agrees that it shall, upon request, execute and deliver any additional documents deemed
by the Trustee or transfer agent to be reasonably necessary to complete the Exchange. 
 (j)    The
Company hereby agrees to publicly disclose on or before 8:30 a.m., New York City time, on the first Business Day after the date hereof, the exchange of the Exchanged Notes as contemplated by this Agreement in a press release. The Company hereby
acknowledges and agrees that any press release or Current Report on Form 8-K will disclose all confidential information communicated by the Company to the Investor or any Exchanging Investor in connection with
the Exchange to the extent the Company believes such confidential information constitutes material non-public information, if any, with respect to the Exchange or otherwise. 

3.    Representations and Warranties and Covenants of the Investor. As of the date hereof and as of the Closing Date (except as
otherwise set forth below), the Investor hereby, for itself and on behalf of the Exchanging Investors, represents and warrants to, and covenants with, the Company that: 

(a)    The Investor and each Exchanging Investor is a corporation, limited partnership, limited liability
company or other entity, as the case may be, duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation. 

(b)    The Investor has all requisite corporate (or other applicable entity) power and authority to execute
and deliver this Agreement for itself and on behalf of the Exchanging Investors and to carry out and perform its obligations under the terms hereof and the transactions contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Investor and constitutes the legal, valid and binding obligation of the Investor and each Exchanging Investor, enforceable in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (b) general principles of equity, whether such enforceability is considered in a proceeding at
law or in equity. If the Investor is executing this Agreement on behalf of an Account, (i) the Investor has all requisite discretionary and contractual authority to enter into this Agreement on behalf of, and, bind, each Account, and
(ii) Exhibit A attached to the Exchange Agreement contains a true, correct and complete list of (A) the name of each Account and (B) the principal amount of each Account’s Exchanged Notes, as applicable. 

(c)    As of the date hereof and as of the Closing, each of the Exchanging Investors is the current sole
legal and beneficial owner of the Exchanged Notes set forth on Exhibit A attached to the Agreement. When the Exchanged Notes are exchanged, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens,
mortgages, pledges, security 

  
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interests, restrictions, charges, encumbrances or adverse claims, rights or proxies of any kind (“Liens”). None of the Exchanging Investors has, nor prior to the Closing, will
have, in whole or in part, other than pledges or security interests that an Exchanging Investor may have created in favor of a prime broker under and in accordance with its prime brokerage agreement with such broker, (x) assigned, transferred,
hypothecated, pledged, exchanged, submitted for conversion pursuant to the Indenture or otherwise disposed of any of its Exchanged Notes (other than to the Company pursuant hereto), or (y) given any person or entity any transfer order, power of
attorney or other authority of any nature whatsoever with respect to its Exchanged Notes. 
 (d)    The
execution, delivery and performance of this Agreement by the Investor and compliance by the Investor and each Exchanging Investor with all provisions hereof and the consummation of the transactions contemplated hereby, including the Exchange, will
not (i) require any consent, approval, authorization or other order of, or qualification with, any court or governmental body or agency (except as may be required under the securities or Blue Sky laws of the various states), (ii) constitute a
breach or violation of any of the terms or provisions of, or result in a default under, (x) the organizational documents of any of the Investor or any Exchanging Investor or (y) any material indenture, loan agreement, mortgage, lease or
other agreement or instrument to which the Investor or any of the Exchanging Investors is a party or by which such Investor or Exchanging Investor is bound, or (iii) violate or conflict with any applicable law or any rule, regulation, judgment,
decision, order or decree of any court or any governmental body or agency having jurisdiction over the Investor or any of the Exchanging Investors. 

(e)    The Investor and each Exchanging Investor will comply with all applicable laws and regulations in
effect necessary for each Exchanging Investor to consummate the transactions contemplated hereby and obtain any consent, approval or permission required for the transactions contemplated hereby and the laws and regulations of any jurisdiction to
which the Investor and each such Exchanging Investor is subject, and the Company shall have no responsibility therefor. 

(f)    The Investor and each Exchanging Investor acknowledges that no person has been authorized to give
any information or to make any representation or warranty concerning the Company or the Exchange other than the information set forth herein in connection with the Investor’s and each Exchanging Investor’s examination of the Company and
the terms of the Exchange and the Shares, and the Company does not take, and J. Wood Capital Advisors LLC (the “Placement Agent”) does not take any responsibility for, and neither the Company nor the Placement Agent can provide any
assurance as to the reliability of, any other information that others may provide to the Investor or any Exchanging Investor. 

(g)    The Investor and each Exchanging Investor has such knowledge, skill and experience in business,
financial and investment matters so that it is capable of evaluating the merits and risks with respect to the Exchange and an investment in the Shares. With the assistance of the Investor’s and each Exchanging Investor’s own professional
advisors, to the extent that the Investor and Exchanging Investor has deemed appropriate, such Exchanging Investor has made its own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the Shares and the
consequences of the Exchange and this Agreement and the Investor and Exchanging Investor has made its own independent decision that the investment in the Shares is suitable and appropriate for the Investor and Exchanging Investor. The Investor and
each Exchanging Investor has considered the suitability of the Shares as an investment in light of the Investor and such Exchanging Investor’s circumstances and financial condition and is able to bear the risks associated with an investment in
the Shares. 

  
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 (h)    The Investor confirms that it and each Exchanging
Investor is not relying on any communication (written or oral) of the Company, the Placement Agent or any of their respective affiliates or representatives as investment advice or as a recommendation to acquire the Shares in the Exchange. It is
understood that information provided by the Company, the Placement Agent or any of their respective affiliates and representatives shall not be considered investment advice or a recommendation to participate in the Exchange, and that none of the
Company, the Placement Agent or any of their respective affiliates or representatives is acting or has acted as an advisor to the Investor or any Exchanging Investor in deciding to participate in the Exchange. 

(i)    The Investor confirms that the Company has not (i) given the Investor or any Exchanging
Investor any guarantee, representation or warranty as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Shares or (ii) made any representation or
warranty to the Investor or any Exchanging Investor regarding the legality of an investment in the Shares under applicable legal investment or similar laws or regulations. The Investor confirms that it and each Exchanging Investor is not relying and
has not relied, upon any statement, advice (whether accounting, tax, financial legal or other), representation or warranty by the Company or any of its affiliates or representatives, including, without limitation, the Placement Agent, except for the
representations and warranties made by the Company in this Agreement, and that the Investor has made its own independent decision that the investment in the Shares is suitable and appropriate for the Investor and the Exchanging Investors. 

(j)    The Investor and each Exchanging Investor is familiar with the business and financial condition and
operations of the Company and the Investor and each Exchanging Investor has had the opportunity to conduct its own investigation of the Company and the Shares. The Investor and each Exchanging Investor has had access to the SEC filings of the
Company and such other information concerning the Company and the Shares as it deems necessary to enable it to make an informed investment decision concerning the Exchange. The Investor and each Exchanging Investor has been offered the opportunity
to ask such questions of the Company and its representatives and received answers thereto, as it deems necessary to enable it to make an informed investment decision concerning the Exchange. 

(k)    Each Exchanging Investor is an institutional “accredited investor” as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act and a “qualified institutional buyer” as defined in Rule 144A under the Securities Act. The Investor agrees to furnish any additional information regarding the Investor or any
Exchanging Investor reasonably requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the Exchange. 

(l)    The Investor and each Exchanging Investor is not, and has not been during the consecutive three
month period preceding the date hereof and as of the Closing, will not be, a director, officer or “affiliate” within the meaning of Rule 144 promulgated under the Securities Act (an “Affiliate”) of the Company. To the
Investor’s knowledge, no Exchanging Investor acquired any of the Exchanged Notes, directly or indirectly, from an Affiliate of the Company. 

(m)    Neither the Investor nor any Exchanging Investor is directly, or indirectly through one or more
intermediaries, controlling or controlled by, or under direct or indirect common control with, the Company. 

(n)    Each Exchanging Investor is acquiring the Shares solely for its own beneficial account, for
investment purposes, and not with a view to, or for resale in connection with, any 

  
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distribution of the Shares. The Investor and each Exchanging Investor understands that the offer and sale of the Shares have not been registered under the Securities Act or any state securities
laws and are being issued without registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act, which exemption depends in part upon the investment intent of the Exchanging Investors and the accuracy of the other
representations and warranties made by the Investor or behalf of the Exchanging Investors in this Agreement. The Investor and the Exchanging Investors understand that the Company is relying upon the representations, warranties and agreements
contained in this Agreement (and any supplemental information provided to the Company by the Investor or the Exchanging Investors) for the purpose of determining whether this transaction meets the requirements for such exemption(s) and to issue the
Shares without legends as set forth herein. 
 (o)    The Investor acknowledges that the terms of the
Exchange have been mutually negotiated between the Investor and the Company. The Investor was given a meaningful opportunity to negotiate the terms of the Exchange. 

(p)    The Investor acknowledges that it and each Exchanging Investor had a sufficient amount of time to
consider whether to participate in the Exchange and that neither the Company nor the Placement Agent has placed any pressure on the Investor or any Exchanging Investor to respond to the opportunity to participate in the Exchange. The Investor
acknowledges that neither it nor any Exchanging Investor become aware of the Exchange through any form of general solicitation or advertising within the meaning of Rule 502 under the Securities Act or otherwise through a “public offering”
under Section 4(a)(2) of the Securities Act. 
 (q)    The Investor acknowledges it and each
Exchanging Investor understands that the Company intends to pay the Placement Agent a fee in respect of the Exchange. 

(r)    The Investor will, upon request, execute and deliver, for itself and on behalf of any Exchanging
Investor, any additional documents deemed by the Company and the Trustee or the transfer agent to be reasonably necessary to complete the transactions contemplated by this Agreement. 

(s)    No later than one (1) business day after the date hereof, the Investor agrees to deliver to the
Company settlement instructions substantially in the form of Exhibit B.1 attached to the Exchange Agreement for each of the Exchanging Investors. 

(t)    The Investor acknowledges and agrees that it and each Exchanging Investor has not disclosed, and
will not disclose, to any third party any information regarding the Exchange, and has not transacted, and will not transact in any securities of the Company, including, but not limited to, any hedging transactions, from the time the Investor was
first contacted by the Company or the Placement Agent with respect to the transactions contemplated by this Agreement until after the confidential information (as described in the confirmatory wall-crossing email received by the Investor from the
Placement Agent) is made public. 
 (u)    The Investor and each Exchanging Investor understands that the
Company, the Placement Agent and others will rely upon the truth and accuracy of the foregoing representations, warranties and covenants and agrees that if any of the representations and warranties deemed to have been made by it or the Exchanging
Investors are no longer accurate, the Investor shall promptly notify the Company and the Placement Agent prior to the Closing. The Investor understands that, unless the Investor notifies the Company in writing to the contrary before the Closing,
each of the Investor’s and Exchanging Investors’ representations and warranties 

  
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contained in this Agreement will be deemed to have been reaffirmed and confirmed as of the Closing. If the Investor is exchanging any Exchanged Notes and acquiring the Shares as a fiduciary or
agent for one or more accounts (including for purposes of this Section 3(u), the Accounts which are Exchanging Investors), it represents that (i) it has sole investment discretion with respect to each such
account, (ii) it has full power to make the foregoing representations, warranties and covenants on behalf of such account and (iii) it has contractual authority with respect to each such account. 

(v)    The Investor and each Exchanging Investor acknowledges and the Investor agrees that the Placement
Agent has not acted as a financial advisor or fiduciary to the Investor or any Exchanging Investor and that the Placement Agent and its directors, officers, employees, representatives and controlling persons have no responsibility for making, and
have not made, any independent investigation of the information contained herein or in the Company’s SEC filings and make no representation or warranty to the Investor or any Exchanging Investor, express or implied, with respect to the Company,
the Exchanged Notes or the Shares or the accuracy, completeness or adequacy of the information provided to the Investor or any Exchanging Investor or any other publicly available information, nor shall any of the foregoing persons be liable for any
loss or damages of any kind resulting from the use of the information contained therein or otherwise supplied to the Investor or any Exchanging Investor. 

(w)    The Investor and each Exchanging Investor acknowledges and understands that at the time of the
Closing, the Company may be in possession of material non-public information not known to the Investor or any Exchanging Investor that may impact the value of the Notes, including the Exchanged Notes, and the
Shares (“Information”) that the Company has not disclosed to the Investor or any Exchanging Investor. The Investor and each Exchanging Investor acknowledges that they have not relied upon the
non-disclosure of any such Information for purposes of making their decision to participate in the Exchange. The Investor and each Exchanging Investor understands, based on its experience, the disadvantage to
which the Investor and each Exchanging Investor is subject due to the disparity of information between the Company, on the one hand, and the Investor and each Exchanging Investor, on the other hand. Notwithstanding this, the Investor and each
Exchanging Investor has deemed it appropriate to participate in the Exchange. The Investor agrees that the Company and its directors, officers, employees, agents, stockholders and affiliates shall have no liability to the Investor or any Exchanging
Investor or their respective beneficiaries whatsoever due to or in connection with the Company’s use or non-disclosure of the Information or otherwise as a result of the Exchange, and the Investor hereby
irrevocably waives any claim that it or any Exchanging Investor might have based on the failure of the Company to disclose the Information. 

(x)    The Investor and each Exchanging Investor understands that no federal, state, local or foreign
agency has passed upon the merits or risks of an investment in the Shares or made any finding or determination concerning the fairness or advisability of this investment. 

(y)    The operations of the Investor and each Exchanging Investor have been conducted in material
compliance with the applicable rules and regulations administered or conducted by the U.S. Department of Treasury Office of Foreign Assets Control (“OFAC”), the applicable rules and regulations of the Foreign Corrupt Practices Act
(“FCPA”) and the applicable Anti-Money Laundering (“AML”) rules in the Bank Secrecy Act. The Investor has performed due diligence necessary to reasonably determine that the Exchanging Investors are not named on the
lists of denied parties or blocked persons administered by OFAC, resident in or organized under the laws of a country that is the subject of comprehensive economic sanctions and embargoes administered or conducted by OFAC
(“Sanctions”), are not otherwise the subject of Sanctions and have not been found to be in violation or under suspicion of violating OFAC, FCPA or AML rules and regulations. 

  
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 (z)    The Investor acknowledges that the Company may
issue appropriate stop-transfer instructions to its transfer agent, if any, and may make appropriate notations to the same effect in its books and records to ensure compliance with the provisions of this Section 3. 

(aa)    The Investor and each Exchanging Investor is a resident of the jurisdiction set forth on Exhibit
B.1 attached to this Agreement. 
 4.    Conditions to Obligations of the Investor and the Company. The obligations of the
Investor and the Exchanging Investors and of the Company under this Agreement are subject to the satisfaction at or prior to the Closing of the following conditions precedent: (a) the representations and warranties of the Company contained in
Section 2 hereof (with respect to the Investor and Exchanging Investors) and of the Investor contained in Section 3 hereof (with respect to the Company) shall be true and correct as of the Closing
in all respects with the same effect as though such representations and warranties had been made as of the Closing and (b) no provision of any applicable law or any judgment, ruling, order, writ, injunction, award or decree of any governmental
authority shall be in effect prohibiting or making illegal the consummation of the transactions contemplated by this Agreement. 

5.    Waiver, Amendment. Neither this Agreement nor any provisions hereof or thereof shall be modified, changed or discharged,
except by an instrument in writing, signed by the Company and the Investor. 
 6.    Assignability. Neither this Agreement nor
any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or the Investor without the prior written consent of the other. 

7.    Waiver of Jury Trial. EACH OF THE COMPANY AND THE INVESTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. 
 8.    Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to such state’s rules concerning conflicts of laws that might provide for any other choice of law. 

9.    Submission to Jurisdiction. Each of the Company and the Investor: (a) agrees that any legal suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby shall be instituted exclusively in the courts of the State of New York located in the City and County of New York or in the United States District Court for the
Southern District of New York; (b) waives any objection that it may now or hereafter have to the venue of any such suit, action or proceeding; and (c) irrevocably consents to the jurisdiction of the aforesaid courts in any such suit,
action or proceeding. Each of the Company and the Investor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 10.    Venue. Each of the Company and the Investor irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 9.
Each of the Company and the Investor irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 

  
 10 

 11.    Service of Process. Each of the Company and the Investor irrevocably
consents to service of process in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of the Company or the Investor to serve process in any other manner permitted by law. 

12.    Notices. All notices and other communications to the Company provided for herein shall be in writing and shall be deemed to
have been duly given if delivered personally, sent by prepaid overnight courier (providing written proof of delivery) or sent by confirmed facsimile transmission or electronic mail and will be deemed given on the date so delivered (or, if such
day is not a business day, on the first subsequent business day) to the following addresses, or in the case of the Investor, the address provided on Exhibit B.1 attached to the Exchange Agreement (or such other address as the Company or the
Investor shall have specified by notice in writing to the other): 
  

			
	If to the Company:	 	 Apellis Pharmaceuticals, Inc.
 100 5th
Avenue
 Waltham, MA 02451
 Attention: General
Counsel

		
	with a copy to (which shall not constitute notice):	 	 WilmerHale
 60 State Street

Boston, MA 02109
 Attention: Stuart Falber

 13.    Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the
benefit of the Company, the Investor and the Exchanging Investors and their respective heirs, legal representatives, successors and assigns. This Agreement constitutes the entire agreement between the Company and the Investor with respect to the
subject matters hereof. This Agreement may be executed by one or more of the parties hereto in any number of separate counterparts (including by facsimile or other electronic means, including telecopy, email or otherwise), and all of said
counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other transmission (e.g., “pdf” or “tif” format) shall be
effective as delivery of a manually executed counterpart hereof. 
 14.    Notification of Changes. After the date of this
Agreement, each of the Company and the Investor hereby covenants and agrees to notify the other upon the occurrence of any event prior to the Closing of the Exchange pursuant to this Agreement that would cause any representation, warranty or
covenant of the Company or the Investor, as the case may be, contained in this Agreement to be false or incorrect. 
 15.    Reliance
by the Placement Agent. The Placement Agent may rely on each representation and warranty of the Company and the Investor made herein or pursuant to the terms hereof with the same force and effect as if such representation or warranty were made
directly to the Placement Agent. The Placement Agent shall be a third-party beneficiary of this Agreement to the extent provided in this Section 15. 

16.    Severability. If any term or provision of this Agreement (in whole or in part) is invalid, illegal or unenforceable in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. 

  
 11 

 17.    Survival. The representations and warranties of the Company and the
Investor contained in this Agreement or made by or on behalf of the Exchanging Investors pursuant to this Agreement shall survive the consummation of the transactions contemplated hereby. 

18.    Termination. This Agreement may be terminated and the transactions contemplated hereby abandoned (a) by mutual
agreement of the Company and the Investor in writing or (b) by either the Company or the Investor if the conditions to such party’s obligations set forth herein have not been satisfied (unless waived by the party entitled to the benefit
thereof), and the Closing has not occurred on or before January 28, 2021 without liability of either the Company or the Investor or the Exchanging Investors, as the case may be; provided that neither the Company nor the Investor shall be
released from liability hereunder if the Agreement is terminated and the transactions abandoned by reason of the failure of the Company or the Investor or the Exchanging Investors, as the case may be to have performed its obligations hereunder.
Except as provided above, if this Agreement is terminated and the transactions contemplated hereby are not concluded as described above, the Agreement will become void and of no further force and effect. 

19.    Taxation. The Investor acknowledges that, if an Exchanging Investor is a United States person for U.S. federal income tax
purposes, either (i) the Company must be provided with a correct taxpayer identification number (“TIN,” generally a person’s social security or federal employer identification number) and certain other information on a
properly completed and executed Internal Revenue Service (“IRS”) Form W-9, or (ii) another basis for exemption from backup withholding must be established. The Investor further
acknowledges that, if an Exchanging Investor is not a United States person for U.S. federal income tax purposes, the Company must be provided with a properly completed and executed IRS Form W-8BEN, IRS Form W-8BEN-E, IRS Form W-8IMY (and all required attachments) or other applicable IRS Form W-8,
attesting to that non-U.S. Exchanging Investor’s foreign status and certain other information, including information establishing an exemption from withholding under Sections 1471 through 1474 of the
Internal Revenue Code of 1986, as amended (the “Code”). The Investor further acknowledges that any Exchanging Investor may be subject to 30% U.S. federal withholding or 24% U.S. federal backup withholding on certain payments made to
such Exchanging Investor unless such Exchanging Investor properly establishes an exemption from, or a reduced rate of, such withholding or backup withholding. See Exhibit C for certain additional information. The Company and its agents shall
be entitled to deduct and withhold from any consideration payable pursuant to this Agreement such amounts as are required to be deducted or withheld under applicable law. To the extent any such amounts are withheld and remitted to the appropriate
taxing authority, such amounts shall be treated for all purposes as having been paid to the Exchanging Investor to whom such amounts otherwise would have been paid. 

20.    Section and Other Headings. The section and other headings contained in Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement. 
 [SIGNATURE PAGE FOLLOWS] 

  
 12 

 
			
	Very truly yours,

 
			
	
	APELLIS PHARMACEUTICALS, INC.

 
			
		
	By	 	  

		 	 Name: Timothy Sullivan
 Title: Chief
Financial Officer

  
 13 

 Please confirm that the foregoing correctly sets forth the agreement between the Company and the Investor by
signing in the space provided below for that purpose. 
  

			
	AGREED AND ACCEPTED:

 
			
	
	 Investor:

[                          
  ],
 in its capacity as described in the first paragraph hereof

			
		
	By	 	  

 
			
		 	 Name:
 Title:

  
 14 

 EXHIBIT A

Exchanging Investor Information 
  

			
	 Exchanging Investor
	 	 Aggregate Principal Amount of
Exchanged
Notes

		 	
		 	
		 	
		 	
		 	
		 	

  
 A-1 

 EXHIBIT B.1 

Exchanging Investor: 
  

 
  

 
 Investor Address: 

 
  

 
  

 
  

Telephone:                        
                                         
                                         
              
 Country of Residence: 

 
  

Taxpayer Identification Number: 
  

 
 Account for Notes: 

DTC Participant Number:                    
                                         
                                        
          

DTC Participant Name:                     
                                         
                                        
             

DTC Participant Phone Number:                  
                                         
                                        
 

DTC Participant Contact Email:                  
                                         
                                        
  

FFC Account #:                      
                                         
                                         
                       

Account # at Bank/Broker:                   
                                         
                                        
          
 Account for Shares (if different from Notes): 

DTC Participant Number:                    
                                         
                                        
          

DTC Participant Name:                     
                                         
                                        
             

DTC Participant Phone Number:                  
                                         
                                        
 

DTC Participant Contact Email:                  
                                         
                                        
  

FFC Account #:                      
                                         
                                         
                       

Account # at Bank/Broker:                   
                                         
                                        
          
 Exchanging Investor Address: 

 
  

 
  

 
  

Telephone:                        
                                         
                                         
              
 Country of Residence: 

 
  

Taxpayer Identification Number: 
  

 

  
 B.1-1 

 EXHIBIT B.2 

Exchange Procedures 

NOTICE TO INVESTOR 
 These are the
Exchange Procedures for the settlement of the exchange of 3.500% Convertible Senior Notes due 2026, CUSIP 03753UAB2 (the “Exchanged Notes”) of, a Delaware corporation (the “Company”), for the Shares to be issued as
Exchange Consideration (as defined in and pursuant to the Agreement between you and the Company), which is expected to occur on or about January 25, 2021. To ensure timely settlement for the Exchange Consideration, please follow the
instructions as set forth below. 
 These instructions supersede any prior instructions you received. Your failure to comply with these instructions may
delay your receipt of the Exchange Consideration. 
 If you have any questions, please contact Yun Xie of J. Wood Capital Advisors LLC at 917-727-9869. 
 To deliver Exchanged Notes: 

You must direct the eligible DTC participant through which you hold a beneficial interest in the Exchanged Notes on January 25, 2021,
no later than 9:00 a.m., New York City time, to perform a free delivery through DTC for the aggregate principal amount of Exchanged Notes set forth on Exhibit A of the Agreement to be exchanged for Shares. 

To receive Exchange Consideration: 
 You must direct the
eligible DTC participant on January 25, 2021, no later than 9:00 a.m., New York City time, to perform a free delivery through DTC for the aggregate principal amount of Exchanged Notes set forth on Exhibit A of
the Agreement to be exchanged for Shares. 
 American Stock Transfer & Trust Company is the Transfer Agent and Registrar for the Common Stock. 

Closing: On January 25, 2021, after the Company receives your Exchanged Notes and your delivery instructions as set forth above, and
subject to the satisfaction of the conditions to Closing as set forth in your Exchange Agreement, the Company will deliver the Exchange Consideration in respect of the Exchanged Notes in accordance with the delivery instructions above. 

  
 B.2-1 

 EXHIBIT C 

Under U.S. federal income tax law, a holder who exchanges Notes for Shares generally must provide such holder’s correct TIN on a properly completed and
executed IRS Form W-9 (available from the Company or at www.irs.gov/pub/irs-pdf/fw9.pdf) or otherwise establish a basis for exemption from backup withholding. A TIN
is generally an individual holder’s social security number or a holder’s employer identification number. If the correct TIN is not provided, the holder may be subject to a $50 penalty imposed under Section 6723 of the Code. In
addition, certain payments made to holders may be subject to U.S. backup withholding (currently set at 24% of the payment). If a holder is required to provide a TIN but does not have a TIN, the holder should consult its tax advisor regarding how to
obtain a TIN. Certain holders (including corporations and non-U.S. holders) are not subject to these backup withholding and reporting requirements. 

A non-U.S. holder (i) will be subject to 30% U.S. federal withholding unless such holder establishes an exemption
from, or a reduced rate of, such withholding, and (ii) must establish its status as an exempt recipient from backup withholding and can do so by submitting a properly completed IRS Form W-8BEN, IRS
Form W-8BEN-E, IRS Form W-8IMY (and all required attachments), or other applicable IRS Form
W-8 (available from the Company or at www.irs.gov), signed, under penalties of perjury, attesting to such holder’s exempt foreign status. This form also may establish an exemption from withholding
under Section 1471 through 1474 of the Code. 
 U.S. backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is timely furnished to the IRS. Holders are
urged to consult their tax advisors regarding how to complete the appropriate forms and to determine whether they are exempt from backup withholding or other withholding taxes. 

  
 C-1ex_220053.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into effective the 1st day of January 2021, by and between Amerityre Corporation (the “Company”), and Michael Sullivan, (the “Executive”).

 

PREMISES

 

A.     The Board of Directors of the Company (the “Board”), desires to employ the Executive as the Company’s CEO and President.

 

B.     The Executive desires to perform all of such services as the Company’s CEO and President and both the Company and the Executive want to enter into a written agreement as to their understanding of the employment relationship.

 

FOR AND IN CONSIDERATION of the mutual covenants contained herein and of the mutual benefits to be derived hereunder, the parties agree as follows:

 

1.     Definitions. Whenever used in this Agreement, the following terms shall have the meanings set forth below:

 

(a)     “Accrued Benefits” shall mean the amount payable not later than ten (10) days following an applicable Termination Date and which shall be equal to the sum of the following amounts:

 

(i)     All salary, options, bonus or stock awards, earned or accrued through the Termination Date;

 

(ii)     Reimbursement for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive and approved by the Company through the Termination Date; and          

 

(iii)     All other payments and benefits to which the Executive may be entitled under the terms of any benefit plan of the Company.           

 

(b)     “Board” shall mean the board of directors of the Company.

 

(c)     “Cause” shall mean any of the following:

 

(i)     The engagement by the Executive in fraudulent conduct, which the Board determines, in its reasonable discretion, has a significant adverse impact on the Company in the conduct of the Company’s business;

 

(ii)      Conviction of a felony, as evidenced by a binding and final judgment, order or decree of a court of competent jurisdiction, which the Board determines, in its sole discretion, has a significant adverse impact on the Company in the conduct of the Company’s business;

 

(iii)     Neglect or refusal by the Executive to perform his duties or responsibilities, which neglect or refusal, if capable of correction, is not corrected by Executive after seven (7) days’ notice in writing to Executive from the Board which specifies the neglect or refusal; or

 

(iv)     Material violation by the Executive of the Company’s established policies and procedures, which violation, if capable of correction, is not corrected by Executive after seven (7) days’ notice in writing to Executive from the Board which specifies the violation.

 

(d)     “Change of Control” shall mean:

 

1

 

 

(i)     The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (1) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (d), the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, or (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or

 

(ii)     (1) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or (2) a majority of the members of the Board ceases to be comprised of Directors whose most recent election to the Board was approved by at least a majority of the Incumbent Board prior to such election; or

 

(iii)     Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (1) all or substantially all of the Persons who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

 

(iv)     Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

 

(e)     “Change of Control Period” shall mean the term of this Agreement and any renewal or extension thereof.

 

(f)     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

2

 

 

(g)     “Confidential and Proprietary Information” means all information, whether or not patentable or copyrightable: (i) disclosed to or known by the Executive as a consequence of or through his/her employment with the Company, (ii) not generally known outside the Company, and (iii) which relates to the Company’s business. Confidential and Proprietary Information includes, but is not limited to, information of a technical nature, such as methods and materials, trade secrets under applicable statutes and the common law, methods, discoveries, inventions, processes, formulas, systems, computer programs, and studies, and information of a business nature such as business plans, market information, costs, customer lists, and so forth, regardless of whether such information is in oral, written or tangible form and regardless of whether such information is marked or otherwise designated as confidential or proprietary.

 

(h)     “Developments” means all Inventions, whether or not patentable, computer programs, copyright works, trademarks, Confidential and Proprietary Information, Works of Authorship, and other intellectual property, made, conceived or authored by the Executive, alone or jointly with others, while employed by the Company; whether or not during normal business hours or on the Company’s premises, that are within the present or reasonably contemplated scope of the Company’s business at the time such Developments are made, conceived, or authored, or which result from or are suggested by any work the Executive or others may do for or on behalf of the Company.

 

(i)     “Invention” means discoveries, concepts, and ideas, whether or not patentable or copyrightable, including but not limited to improvements, know-how, data, processes, methods, formulae, and techniques, as well as improvements thereof, or know-how related thereto, concerning any past, present or prospective activities of the Company which the Executive makes, discovers or conceives (whether or not during the hours of his engagement of with the use of the Company’s facilities, materials or personnel), either solely or jointly with others during his engagement by the Company or any affiliate and, if based on or related to Confidential and Proprietary Information, at any time after termination of such engagement.

 

(j)     “Intellectual Property” means Inventions, Confidential and Proprietary Information, Works of Authorship, patent rights, trademark rights, service mark rights, copyrights, know-how, Developments and rights of like nature arising or subsisting anywhere in the world, in relation to all of the foregoing, whether registered or unregistered.

 

(k)     “Notice of Termination” shall mean the notice described in Section 13 hereof.

 

(l)     “Person” shall have the meaning contained in Section 1(d)(i).

 

(m)     “Termination Date” shall mean, except as otherwise provided in Section 13 hereof,

 

(i)     The Executive’s date of death;

 

(ii)     Thirty (30) days after the delivery of the Notice of Termination terminating the Executive’s employment on account of Illness or Incapacity pursuant to Section 17 hereof, unless the Executive returns on a full-time basis to the performance of his duties prior to the expiration of such period; and

 

(iii)     Three (3) months after the delivery of the Notice of Termination if the Executive’s employment is terminated by the Company for any reason other than death, illness, incapacity, or Cause.

 

(n)     “Termination Payment” shall mean the payment described in Section 14 hereof.

 

(o)     “Works of Authorship” means an expression fixed in a tangible medium of expression regardless of the need for a machine to make the expression manifest, and includes but is not limited to, writings, reports, drawings, sculptures, illustrations, video recordings, audio recordings, computer programs, and charts.

 

3

 

 

2.     Employment. The Company hereby employs the Executive to perform those duties generally described in this Agreement, and the Executive hereby accepts and agrees to such employment on the terms and conditions set forth in this Agreement.

 

3.     Stated Term. The term of this Agreement shall be from the effective date hereof until December 31, 2021, subject to the termination provisions of this Agreement, or unless extended or renewed by the written agreement of the parties.

 

4.     Duties. During the term of this Agreement, the Executive shall be employed by the Company as CEO and President to perform the following duties:

 

(a) Have general charge of the Company’s business affairs and property and general supervision over the Company’s other officers, employees and agents, provided that the Executive shall report to the Board;

 

(b) Provide leadership, coordination and general direction regarding the Company’s policies, plans and programs to the operations of the Company and oversee their execution;

 

(c) Establish goals and objectives for the operations of the Company and use reasonable efforts to ensure that such goals and objectives are met;

 

(d) Administer and otherwise use reasonable efforts to ensure compliance with the Company’s policies and procedures and local, county, state and federal regulations;

 

(e) Develop and manage Company’s strategic operating plan and budgets;

 

(f) Perform related duties as required or deemed appropriate by the Board to accomplish the responsibilities and functions of the office;

 

(g) Anticipate, identify and communicate issues of concern to the Board and assist the Board in developing and implementing strategies and solutions.

 

The Executive shall devote substantially all of his working time and efforts to the business of the Company and its subsidiaries and shall not during the term of this Agreement be engaged in any other substantial business activities which will significantly interfere or conflict with the reasonable performance of his duties hereunder.

 

5.     Compensation.

 

(a)     Salary. For all services rendered by the Executive, the Company shall pay to the Executive a salary of $180,000 per year (“Annual Salary”) throughout the term of this Agreement, payable in equal installments bi-weekly. All salary payments shall be subject to withholding for all applicable taxes and other required amounts. The Base Salary may be increased at any time as the Board may determine, including without limitation based on earnings, increased business activities of the Company, or such other factors as the Board may deem appropriate.

 

(b)     Stock Award. In connection with the execution of this Agreement, the Company awards Executive with 2,700,000 shares of the Company’s common stock (the “Stock Award”). The Stock Award shall be issued from the authorized shares under the Company’s 2020 Stock Option and Award Plan and shall be valued at a price per share based on the average closing price of the Company’s common stock as quoted on the OTC Markets for the period of December 24, 2020 to December 31, 2020. The Stock Award will vest and be earned by the Executive in twelve equal monthly installments (225,000 shares per month) over the course of calendar year 2021, subject to continued service as an employee as of each applicable vesting date. Notwithstanding the vesting schedule, vested shares underlying the Stock Award will be issued approximately every six months.

 

4

 

 

(c)     Bonus Compensation. In connection with the Executive’s employment, the Executive will be eligible to earn bonus compensation up to twenty five (25) % of Annual Salary under Section 5(a) based on the Company meeting the following financial performance objectives. Each component will represent 50% of the bonus amount. The final bonus amount may be increased at the discretion of the Board based on earnings, increased business activities of the Company, or such other factors as the Board may deem appropriate :

 

Fiscal Year Ending June 30, 2021:

 

(i)     For achieving net sales revenue equal to or exceeding $4.5 million for the fiscal 2021 year.

(ii)     For achieving positive net income exceeding $250,000 for the fiscal 2021 year

 

(d)     Executive Benefits. The Company shall provide such health and medical insurance for the Executive in the form and program chosen by the Company for such full-time employees. In addition to the Stock Award specified in subsection 5(b) above, the Executive shall be entitled to participate in any retirement, pension, profit-sharing, stock option, or other plan as in effect from time to time on the same basis as other employees.

 

6.     Expenses. The Company will reimburse the Executive for reasonable documented expenses incurred by him in connection with the performance of his duties and in the furtherance of the Company’s business, including reasonable expenses for travel, lodging, meals, beverages, entertainment, and other items which are documented on the Executive’s periodic presentation of an account of such expenses.

 

7.     Vacations. Executive shall be entitled each year during the term hereof to a paid vacation of four (4) weeks. Vacation shall be taken by Executive at a time and with starting and ending dates mutually convenient to the Company and Executive. Vacation or portions of vacations not used in one employment year shall carry over to the succeeding employment year according to current Company employee policy.

 

8.     Nondisclosure of Confidential and Proprietary Information. Recognizing that the Company is presently engaged, and may hereafter continue to be engaged, in the research and development of processes and the performance of services which involve experimental and inventive work; and that the success of the Company’s business depends upon the protection of the processes, products and services by patent, copyright or by secrecy; and that the Executive has had, or during the course of his engagement may have, access to Confidential and Proprietary Information of the Company, as herein defined, or other information and data of a secret or propriety nature of the Company which the Company desires to keep confidential and the Executive has received, or during the course of his engagement may receive, the Executive agrees and acknowledges that:

 

(a)     The Company has exclusive rights to all Confidential and Proprietary Information and the Executive hereby assigns all rights he might otherwise possess in any Confidential and Proprietary Information to the Company. Except as required in the performance of his duties to the Company, the Executive will not at any time during or after the term of his engagement with the Company, which term shall include any time in which the Executive may be retained by the Company as a consultant, directly or indirectly use, communicate, disclose or disseminate any Confidential and Proprietary Information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company, its products, customers, processes and services, including information relating to testing, research, development, manufacturing, marketing and selling.

 

(b)     All documents, records, notebooks, notes, memoranda and similar repositories of, or containing, Confidential and Proprietary Information or any other information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company or its operations and activities made or compiled by the Executive at any time or made available to him prior to or during the term of his engagement by the Company, including any and all copies thereof, shall be and remain the property of the Company, shall be held by him in trust solely for the benefit of the Company, and shall be delivered to the Company by him on the termination of his engagement or at any other time on the request of the Company.

 

5

 

 

(c)     The Executive will not assert any rights under any inventions, trademarks, copyrights, discoveries, concepts or ideas, or improvements thereof, or know-how related thereto, as having been made or acquired by him prior to his being engaged by the Company or during the term of his engagement if based on or otherwise related to Confidential and Proprietary Information.

 

9.     Ownership of Inventions.     

 

(a)     All Inventions shall be the sole property of the Company, and the Executive agrees to perform the provisions of this Section 10 with respect thereto without the payment by the Company of any royalty or any consideration therefor, other than Base Salary and other compensation required to be paid to the Executive under this Agreement.

 

(b)     The Executive shall maintain written notebooks in which he shall set forth, on a current basis, information as to all Inventions, describing in detail the procedures employed and the results achieved as well as information as to any studies or research projects undertaken on the Company’s behalf. The written notebooks shall at all times be the property of the Company and shall be surrendered to the Company upon termination of his engagement or, upon the request of the Company, at any time prior thereto.

 

(c)     The Executive shall apply, at the Company’s request and expense, for United States and foreign letters patent or copyrights either in the Executive’s name or otherwise as the Company shall desire.

 

(d)     The Executive hereby assigns to the Company all of his rights to such Inventions, and to applications for United States and/or foreign letters patent or copyrights and to United States and/or foreign letters patent or copyrights granted upon such Inventions.

 

(e)     The Executive shall acknowledge and deliver promptly to the Company, without charge to the Company, but at its expense, such written instruments (including applications and assignments) and do such other acts, such as giving testimony in support of the Executive’s inventorship, as may be necessary in the opinion of the Company to obtain, maintain, extend, reissue and enforce United States and/or foreign letters patent and copyrights relating to the Inventions and to vest the entire right and title thereto in the Company of its nominee. The Executive acknowledges and agrees that any copyright developed or conceived of, by the Executive during the term of his employment which is related to the business of the Company shall be a “work made for hire” under the federal copyright law of the United States and other applicable jurisdictions.

 

(f)     The Executive represents that his performance of all the terms of this Agreement and as an Executive of or consultant to the Company does not and will not breach any trust prior to his employment by the Company. The Executive agrees not to enter into any agreement either written or oral in conflict herewith and represents and agrees that he has not brought and will not bring with him to the Company or use in the performance of his responsibilities at the Company any materials or documents of a former Company which are not generally available to the public, unless he has obtained written authorization from the former Company for their possession and use, a copy of which has been provided to the Company.

 

(g)     No provisions of the Paragraph shall be deemed to limit the restrictions applicable to the Executive under Section 9 and 10.

 

10.     Shop Rights. The Company shall have the royalty-free right to use in its business, and to make, use and sell products, processes and/or services derived from any inventions, discoveries, concepts and ideas, whether or not patentable, including but not limited to processes, methods, formulas and techniques, as well as improvements thereof or know-how related thereto, which are not within the scope of Inventions as defined herein but which are conceived of or made by Executive during the period he is engaged by the Company or with the use or assistance of the Company’s facilities, materials, or personnel.

 

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11.     Non-Compete. The Executive hereby agrees that during the term of this Agreement and any renewal or extension term thereof, and for the period of two years from the termination thereof that the Executive will not except as permitted by Nevada law, directly or indirectly:

 

(a)     Own, manage, operate, or control any business of the type and character engaged in and competitive with the Company or any subsidiary thereof. For purposes of this paragraph, ownership of securities of not in excess of two and one-half percent (2.5%) of any class of securities of a public company listed on a national securities exchange shall not be considered to be competition with the Company or any subsidiary thereof;

 

(b)     Act as, or become employed as, an officer, director, executive, manager, partner consultant or agent of any business of the type and character engaged in and competitive with the Company or any of its subsidiaries;

 

(c)     sell any products or services that are in competition with the Company’s products and services to, which is, as of the date hereof, a customer or client of the Company or any of its subsidiaries, or was such a customer or client within [ ] days of termination of employment

 

(d)     Solicit the employment of, or hire, any Person employed full-time by the Company or its subsidiaries as of the date of termination of this Agreement.

 

12.     Termination. The Company may terminate this Agreement without Cause. If this Agreement is so terminated, then Company will be obligated to pay the Executive termination payments in accordance with section 14 of this Agreement. Any termination by the Company or the Executive of the Executive’s employment during the term hereof shall be communicated by written Notice of Termination to the Executive, if such Notice of Termination is delivered by the Company, and to the Company, if such Notice of Termination is delivered by the Executive, all in accordance with the following procedures:

 

(a)     The Notice of termination shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances alleged to provide a basis for termination; and

 

(b)     Any Notice of Termination by the Company shall be approved by a resolution duly adopted by a majority of the members of the Board.

 

13.     Termination Upon Change of Control. Notwithstanding any provision of this Agreement to the contrary, the Executive may terminate this Agreement upon a Change of Control, provided the Executive has been given ninety (90) days to consider whether to continue in the same or substantially equivalent capacity with the acquiring Person or accept Termination Payments consistent with Section 14 below.

 

14.     Termination Payments. In the event the Executive’s employment is terminated by the Company during the term hereof without Cause or following a Change of Control the Executive’s position as President and CEO is, or his duties are, modified and the Executive terminates his employment, the Executive shall be paid six (6) months severance, which includes six months of the Executive’s Annual Salary, pro rata share of earned Bonus Compensation through the termination date and six (6) months of the Executive Benefits as set forth in Section 5 as full settlement of any sums owed under this Agreement and for any potential actions for breach of this Agreement by the Company. Termination of this agreement will result in the immediate vesting of all shares awarded in section 5b of this agreement, and all shares will be issued to the Executive upon termination. Other than any payments set forth in this Section 14, the Executive shall be entitled to no further compensation nor any other payments after such termination. The Executive shall receive no further payments if terminated for Cause other than Accrued Benefits. If terminated for Cause, the Executive will only receive vested shares as of the date of termination, and any unvested shares will be forfeited.

 

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15.     Death During Employment. If the Executive dies during the term of this Agreement, the Company shall have no further obligations to pay the Executive other than any Accrued Benefits to the Executive’s estate.

 

16.     Illness or Incapacity. If the Executive is unable to perform the Executive’s services by reason of illness or incapacity for a period of more than three (3) consecutive months, the compensation thereafter payable to the Executive during the next nine (9) consecutive months shall be 50% of the compensation provided for herein. During such period of illness or incapacity, the Executive shall be entitled to receive incentive compensation if any. Notwithstanding the foregoing, if such illness or incapacity does not cease to exist within a twelve (12) consecutive month period, the Executive shall not be entitled to receive any further compensation nor any payments for such illness or incapacity, and the Company may terminate this Agreement without further liability to the Executive. Any existing options to purchase the Company’s common stock held by the Executive at the time of termination shall be governed by the terms of the option and not affected by this provision. Notwithstanding any of the foregoing, if such illness or incapacity ceases prior to twelve (12) consecutive months, at the termination of such illness or incapacity, the Executive shall be entitled to receive the Executive’s full compensation payable pursuant to the terms of this Agreement.

 

17.     Non-transferability. Any right to receive any payment due under this Agreement or any other rights hereunder are expressly declared nontransferable with the exception of payment of Accrued Benefits to the Executive’s estate in the event of the death of the Executive.

 

18.     Indemnification. The Company shall indemnify the Executive and hold the Executive harmless from liability for acts or decisions made by the Executive while performing services for the Company to the greatest extent permitted by applicable law. The Company shall use its best efforts to obtain coverage for the Executive under any insurance policy now in force or hereafter obtained during the term of this Agreement insuring officers and directors of the Company against such liability.

 

19.     Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party.

 

20.     Entire Agreement. This Agreement is and shall be considered to be the entire agreement or understanding between the parties hereto with respect to the employment of the Executive by the Company. All negotiations, commitments, and understandings acceptable to both parties have been incorporated herein. No letter, telegram, or communication passing between the parties hereto covering any such matter during this contract period, or any plans or periods thereafter, shall be deemed a part of this Agreement; nor shall it have the effect of modifying or adding to this Agreement unless it is distinctly stated in such letter, telegram, or communication that is to constitute a part of this Agreement and is attached as an amendment to this Agreement and is signed by the parties to this Agreement.

 

21.     Enforcement. Each of the parties to this Agreement shall be entitled to any remedies available in equity or by statute with respect to the breach of the terms of this Agreement by the other party. The Executive hereby specifically acknowledges and agrees that a breach of the provisions of Sections 8, 9, 10, or 11 of this Agreement will cause irreparable harm and damage to the Company, that the remedy at law, for the breach or threatened breach of this Agreement will be inadequate, and that, in addition to all other remedies available to the Company for such breach or threatened breach (including, without limitation, the right to recover damages), the Company shall be entitled to injunctive relief for any breach or threatened breach of the provisions of Sections 8, 9, 10, or 11 of this Agreement, without the requirement of posting any bond or other security.

 

22.     Governing Law; Exclusive Jurisdiction.. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. Jurisdiction and venue for any subsequent legal proceeding involving disputes arising out of this Agreement shall lie exclusively in Nevada’s Eighth Judicial District Court, Clark County, Nevada.          

 

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23.     Severability. If and to the extent that any court of competent jurisdiction holds any provision or any part thereof of this Agreement to be invalid or unenforceable, such holding shall in no way affect the validity of the remainder of this Agreement.

 

24.     Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement, or condition of this Agreement or to exercise any right or remedy consequent upon a breach hereof shall constitute a waiver of any such breach or of any covenant, agreement, term, or condition.

 

25.     Litigation Expenses. In the event that the Executive or the Company shall file an action in connection with the enforcement of this Agreement, the prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees, costs, and expenses incurred by the prevailing party in connection with the enforcement of this Agreement. Payment shall be made upon the conclusion of such action.

 

26.     Survivability. The provisions of Sections 8, 9, 10, 11 and 21 shall survive termination of this Agreement.

 

 

 

AGREED AND ENTERED INTO as of the date first above written.

 

	Company:	Executive:
	 	 
	AMERITYRE CORPORATION	 
	 	 
	 	 
	By                                                                            	                                                                          

 

 

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