Document:

Exhibit

Exhibit 10.12

SERVICES AGREEMENT
 
THIS SERVICES AGREEMENT (this “Agreement”) is entered into as of January 23, 2018, by and between ALPHAEON Corporation, a Delaware corporation (“ALPHAEON”) and Evolus, Inc., a Delaware corporation (“Evolus”).
 
RECITALS
 
WHEREAS, ALPHAEON is a technology company focused on providing healthcare products and services, including patient financing services;

WHEREAS, Evolus is a medical aesthetics company focused on providing physicians and their patients with expanded choices in aesthetic procedures and treatments;

WHEREAS, to date, ALPHAEON has provided certain services to Evolus relating to, among other things, general and administrative support and development support services;

WHEREAS, the Parties (as defined below) desire to enter into this Agreement in order to set forth the terms and conditions pursuant to which ALPHAEON may provide certain administrative and support services to Evolus and/or Evolus may provide certain administrative and support services to ALPHAEON, subsequent to the Effective Date (as defined below); and

WHEREAS, Evolus further wishes to repay ALPHAEON for a portion of the outstanding intercompany debt obligations owed by Evolus to ALPHAEON in exchange for the satisfaction of the debt in full on the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants, rights and obligations set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
 
		
	1.
	Definitions.

(a)    “Affiliate” shall mean, with respect to any specified Person (as defined below), any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.

(b)    “Costs” shall mean the fully-burdened cost incurred by the Service Provider and its Affiliates during any applicable month to provide the Services. For purposes of this definition, the fully-burdened cost includes without limitation: (i) the costs of any materials used in providing the Services; (ii) the salary, stock option plan or other similar plans, benefits (if any) (including without limitation, medical plans and 401(k) or other retirement plans), employment taxes (if any) of all the Service Provider’s employees involved in providing such services; (iii) related overhead expenses (including without limitation cost of facilities and utilities costs, insurance, and the cost of all general support, operational and business services); (iv) any and all licensing fees paid or payable to Third Parties (as defined below) for any intellectual property incorporated into such services; and (v) any depreciation, amortization or other cost recovery for financial 

1

accounting purposes related to assets of the Service Provider to the extent such assets are used in providing the Services; provided, however, that the fully-burdened cost shall not include costs incurred by the Service Provider to engage a Third Party for the purpose of providing Services pursuant to Section 4 of the Agreement.

(c)     “Marks” shall mean and include trademarks, service marks, trade names, domain names, trade dress, logos, and similar designations, whether registered or unregistered, and all applications and registrations therefor.

(d)     “Party” shall mean the Service Provider or the Service Recipient, and “Parties” shall mean the Service Provider and the Service Recipient, collectively.

(e)     “Person” shall mean and include any individual, corporation, trust, estate, partnership, joint venture, company, association, governmental bureau or agency, or any other entity regardless of the type or nature thereof.

(f)     “Representatives” shall mean, with respect to a particular person or entity, all of his, her or its heirs, legatees, personal representatives, direct or indirect parents, wholly or majority-owned subsidiaries, Affiliates and related entities, predecessors, successors and assigns, partners, privities, and any of its or their present and former directors, officers, employees, stockholders, agents, representatives, attorneys, accountants, insurers, and all persons acting by, through, under or in concert with it or any of them. 

(g)    “Service Provider” shall mean the Party providing Services to the Service Recipient (as defined below) hereunder. 

(h)    “Service Recipient” shall mean the Party receiving Services from the Service Provider hereunder. 

(i)    “Third Party” shall mean any entity other than a Party.

(j)     “Works” shall mean any work product, technical knowledge, creations, know-how, formulations, recipes, specifications, rights, devices, drawings, instructions, expertise, trade practices, customer lists, computer data, source codes, analytical and quality control data, Marks, copyrights, commercial information, inventions, works of authorship, designs, methods, processes, technology, patterns, techniques, data, Confidential Information (as defined below), patents, trade secrets, copyrights, and the like, and all other intellectual property created, authored, composed, invented, discovered, performed, perfected, provided, acquired or learned by the Service Provider, whether solely or jointly with others, whether patented, patentable or not, whether in written form or otherwise, whether disclosed to the Service Provider by the Service Recipient or otherwise, in performing its obligations under this Agreement.

(k)    “Year” shall mean the 12-month period ending on December 31.
 
2.Engagement; Scope of Services. 

(a)    Subject to the terms of this Agreement, the Service Recipient hereby engages the Service Provider to perform the services set forth on Exhibit A attached hereto (collectively, the “Services”). Subject to compliance with the SCM (as defined below), any additional services requested by the Service Recipient that are not included within the Services shall, if mutually agreed upon by the Parties, each in its sole discretion, be negotiated and included in this Agreement through amendments to Exhibit A hereto. 

2

(b)    The scope of the Service Provider’s authority shall be specifically limited to those activities outlined in this Agreement. The Parties hereby covenant and agree to apply the Services Cost Method of U.S. Treasury Regulation § 1.482-9(b) (the “SCM”) and the guidance set forth in Internal Revenue Service Revenue Procedure 2007-13 (or any successor guidance) to any Services rendered under this Agreement. Without limitation of the foregoing, each of the Parties shall use commercially reasonable efforts to comply with the cost allocation, recordkeeping, and documentation requirements of the SCM with respect to any Services rendered hereunder.

3.Relationship of the Parties.

(a)    The Service Provider and the Service Recipient are each independent contractors and not joint venturers, partners, agents, or representatives of the other. The Service Provider shall perform the Services for the Service Recipient under this Agreement as an independent contractor and neither the Service Provider nor its employees, subcontractors or agents shall be deemed to be agents, servants or employees of either of the Service Recipient, nor shall the Service Provider and the Service Recipient be deemed or construed solely by this Agreement to be partners or joint venturers. The Service Provider shall have exclusive control over the direction and conduct of its employees in carrying out the activities required under this Agreement.

(b)    Neither the Service Provider nor its employees, subcontractors or agents shall have the authority to (i) negotiate the terms of or execute contracts and agreements of either of the Service Recipient (including letters of intent, even if non-binding), provided the Service Provider may suggest incorporating certain non-core agreement terms within the parameters and guidelines provided by the Service Recipient; (ii) hire personnel for the Service Recipient; (iii) exercise binding authority with respect to the operations of the Service Recipient; (iv) make binding recommendations to the Service Recipient; (v) make decisions or have decision-making rights with respect to the Service Recipient; (vi) hold itself out as representing the Service Recipient or as having the authority to negotiate the terms of or conclude contracts on behalf of the Service Recipient; or (vii) perform services for the Service Recipient that are not covered by this Agreement.

4.    Engagement of Third Parties. The Service Provider may, with the prior written consent of the Service Recipient, engage such persons, corporations, or other entities as it reasonably deems necessary for the purpose of performing Services under this Agreement; provided, however, that the Service Provider shall remain responsible for the performance of all such Services and shall be considered to engage with such persons, corporations, or other entities in its own name and on its own behalf.

5.    Fees and Expenses. The Service Recipient shall pay the Service Provider the Cost for the Services provided to the Service Recipient hereunder. On a monthly basis, the Service Provider shall present to the Service Recipient an itemized description of the Services performed that month and the respective Cost for such Service. Fees for Services performed by the Service Provider will be billed by the Service Provider to the Service Recipient on a monthly basis. All other costs for Third Party services shall be billed, by or on behalf of the Service Provider, to the Service Recipient, in such manner and format and with such supporting information as the Parties may reasonably agree from time to time. Payment for undisputed invoices received by the Service Recipient shall be due within sixty (60) days after the billing date.  Any fees and expenses not paid by the due date thereof shall accrue interest at the safe harbor interest rate based on the applicable federal rate as set forth in U.S. Treasury Regulation § 1.482-2(a)(2)(iii)(B). All fees and expenses shall be invoiced and payable in U.S. dollars.

6.    Payment and Re-Characterization of Debt.  

3

(a)    Within five (5) days after the Effective Date (as defined below), Evolus shall pay to ALPHAEON, $5,000,000 in cash of immediately available funds, to an account designated by ALPHAEON (the “Repayment”), constituting the repayment of a portion of the indebtedness then owed by Evolus to ALPHAEON. Upon the receipt of the Repayment, and after all other applicable set-offs have occurred, all of the then-outstanding indebtedness then owed by Evolus to ALPHAEON (the “Debt”) shall be forgiven and re-characterized as a capital contribution of ALPHAEON. 

(b)    For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ALPHAEON, individually and on behalf of its Representatives (as defined below), does fully, finally, and forever release and discharge Evolus as well as its respective Representatives, from all manner of action, causes of action, claims, demands, rights, suits, obligations, debts, contracts, agreements, promises, liabilities, damages, charges, penalties, losses, costs, expenses, and attorneys’ fees, of any nature whatsoever, known or unknown, in law or equity, fixed or contingent, he has or may have based on acts, omissions, or other conduct occurring prior to the date hereof, including, without limitation, any claim arising out of or relating to any demand for payment, or the Repayment of any portion of the Debt, except as set forth in this Agreement. 

(c)    ALPHAEON AND EACH OF ITS REPRESENTATIVES ACKNOWLEDGE THAT THE RELEASE AND WAIVER OF RIGHTS PROVIDED IN THIS AGREEMENT INCLUDES RELINQUISHING ALL RIGHTS AND BENEFITS AFFORDED BY SECTION 1542 OF THE CIVIL CODE OF CALIFORNIA (“SECTION 1542”), WHICH PROVIDES AS FOLLOWS: 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
ALPHAEON AND EACH OF ITS REPRESENTATIVES UNDERSTAND AND ACKNOWLEDGE (I) THE SIGNIFICANCE AND CONSEQUENCES OF A SPECIFIC WAIVER OF SECTION 1542, (II) THAT ALPHAEON AND EACH OF ITS REPRESENTATIVE INTEND TO WAIVE, AND ASSUME THE RISK RELATING TO, EXISTING BUT AS YET UNKNOWN CLAIMS AND (III) THAT THE ALPHAEON AND EACH REPRESENTATIVE HAS BEEN ENCOURAGED HEREBY TO CONSULT INDEPENDENT LEGAL COUNSEL IN RELATION TO ALPHAEON’S AND ITS REPRESENTATIVE’S RELINQUISHMENT OF ALL RIGHTS AND BENEFITS AFFORDED BY SECTION 1542.

7.    Withholding.  The Service Recipient shall be entitled to deduct from any payments to the Service Provider the amount of any withholding taxes with respect to such amounts payable, or any taxes in each case required to be withheld by the Service Recipient to the extent that the Service Recipient pays to the appropriate governmental authority on behalf of the Service Provider such taxes, levies, or charges. The Service Recipient shall, upon the request of the Service Provider, deliver to the Service Provider proof of payment of all such taxes, levies, and other charges and the appropriate documentation that is necessary to obtain a tax credit, to the extent such tax credit can be obtained.

8.    Mutual Covenants. The Parties covenant and agree that each shall cooperate reasonably to comply with the requirements of the SCM under applicable Treasury regulations or other administrative guidance.  In addition, the Service Provider hereby convents and agrees that it will maintain books and records pertaining to the Services provided in any Year pursuant to this Agreement for seven (7) Years 

4

following the performance of such Services and shall make them available for inspection and audit, at the Service Recipient’s expense, by a mutually acceptable independent certified public accounting firm during normal business hours upon reasonable prior written notice to the Service Provider.

9.    Confidential Information. 

(a)    The Parties acknowledge that, from time to time, one Party (the “Disclosing Party”) may disclose to another Party (the “Receiving Party”) information that is marked as “proprietary,” or “confidential,” or which would, under the circumstances, be understood by a reasonable person to be proprietary and nonpublic (“Confidential Information”). The Receiving Party shall retain such Confidential Information in confidence. Each Party shall use at least the same procedures and degree of care that it uses to protect its own Confidential Information of like importance, including those procedures used when disclosing Confidential Information to Third Parties, and in no event less than reasonable care.

(b)    Nothing in this Agreement shall prevent the disclosure by the Receiving Party or its employees of Confidential Information that: (i) prior to the transmittal thereof to Receiving Party was of general public knowledge; (ii) becomes, subsequent to the time of transmittal to Receiving Party, a matter of general public knowledge otherwise than as a consequence of a breach by Receiving Party of any obligation under this Agreement; (iii) is made public by Disclosing Party; (iv) was in the possession of Receiving Party in documentary form prior to the time of disclosure thereof to Receiving Party by Disclosing Party, and is held by Receiving Party free of any obligation of confidence to Disclosing Party or any Third Party; or (v) is received in good faith from a Third Party having the right to disclose it, who, to the best of Receiving Party’s knowledge, did not obtain the same from Disclosing Party and who imposed no obligation of secrecy on Receiving Party with respect to such information.
 
(c)    The Receiving Party shall refrain from using or exploiting any and all Confidential Information for any purposes or activities other than those contemplated in this Agreement or any other written agreement entered into by and between the Parties.

(d)    The Parties’ obligations under this Section 9 shall survive the termination of this Agreement for any reason whatsoever.

(e)    The Parties agree that damages alone will be an insufficient remedy for violations of the terms of this Section 9, and that the Disclosing Party would suffer irreparable damage as a result of a violation.  Accordingly, the Disclosing Party shall be entitled, in the event of a breach or threatened breach of this Section 9, to obtain injunctive relief to enforce the provisions of this Section 9.  Injunctive relief shall be in addition to any and all other rights or remedies available to the Disclosing Party, including, but not limited to, damages or other relief or remedies for such violation.  Assertion or the failure to assert injunctive relief shall not constitute a waiver of any such other rights or remedies.  In the event it is necessary for the Disclosing Party to institute legal proceedings to enforce this Section 9, the Disclosing Party will be entitled to recover attorneys’ fees and costs incurred by the Disclosing Party in such proceedings if it prevails in such proceedings.

10.    Ownership of Intangible Property. The Service Provider agrees that all right, title and interest in and to any and all Works will be owned exclusively by the Service Recipient for which the Service Provider performed Services using such Works. All Works, as applicable, shall be considered “works made for hire” to the extent permitted under applicable copyright law and will be considered the sole property of the Service Recipient for which the Service Provider performed Services using such Works. To the extent such Works are not considered “works made for hire,” all right, title, and interest to such Works, including, but not limited to, all copyrights, patents, trademarks, rights of publicity, and trade secrets, is hereby assigned by the Service 

5

Provider to the Service Recipient and the Service Provider agrees, at the Service Recipient’s expense, to execute any documents requested by the Service Recipient or any successor in interest to the Service Recipient, at any time in relation to such assignment. The Service Provider acknowledges and agrees that the Service Recipient is and will be the sole and absolute owner of all Marks, patents, copyrights, trade secrets, business names, rights of publicity, inventions, proprietary know-how and information of any type, whether or not in writing, and all other intellectual property used by the Service Recipient or held for use in the business of the Service Recipient, including all Works. The Service Provider further acknowledges and agrees that any and all derivative works, developments, or improvements based on the Works, shall also be deemed Works and all right, title and interest therein shall be exclusively owned by the Service Recipient. The Service Provider shall cooperate with the Service Recipient, at no additional cost (whether during or after the Term (as defined below) of this Agreement), in the confirmation, registration, protection and enforcement of the rights and property of the Service Recipient and its successors in interest in such Works. The Service Provider shall be entitled to use the Works only for purposes of performing the Services. The Service Provider shall not at any time do or cause to be done, or fail to do or cause to be done, any act or thing, directly or indirectly, contesting or in any way impairing either Service Recipient’s right, title, or interest in the intangible property. Every use of any Works (and any derivative works, developments, or improvements based on the Works) by the Service Provider shall inure to the benefit of the Service Recipient for which the Service Provider performed Services using such Works.

11.    Use of Trademarks. The Service Recipient shall grant the Service Provider a right to use its Marks only in connection with the Services, provided that if the Service Recipient provides the Service Provider with reasonable written trademark guidelines governing the use of the Service Recipient’s Marks (which guidelines may be updated by the Service Recipient from time to time with prior written notice to the Service Provider), the Service Provider’s use of such Marks shall be subject to such written guidelines so provided. Notwithstanding the foregoing, the Service Provider will comply with all of the Service Recipient’s reasonable instructions and quality control requirements regarding the Service Provider’s use of its Marks. The Service Provider acknowledges that any of the Service Recipient’s Marks are owned and licensed solely and exclusively by the Service Recipient, and agrees to use such Marks only in the form and with appropriate legends as described by the Service Recipient. All use of the Service Recipient’s Marks and associated goodwill will inure to the benefit of the Service Recipient. All rights not expressly granted are reserved to the Service Recipient. The Service Provider shall not remove, cover, or modify any proprietary rights notice or legend placed by the other party on materials used in connection with this Agreement.

12.    Indemnification; Limitation of Liability. 

(a)    The Service Provider, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Recipient and its officers, employees and directors, as the case may be (“Indemnified Parties”), harmless from and against any and all losses, demands, damages (including, without limitation, special, consequential and punitive damages awarded to Third Parties), claims, liabilities, interest, awards, actions or causes of action, suits, judgments, settlements and compromises relating thereto, and all reasonable attorney’s fees and other fees and expenses in connection therewith (“Losses”) which may be incurred by an Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the provision of the Services or failure to provide the Services under this Agreement, except to the extent that such Losses are the result of the gross negligence or willful misconduct of an Indemnified Party.

(b)    The Service Provider’s liability for aggregate Losses under this Agreement for any cause whatsoever, and regardless of the form of action, whether in contract or in tort, shall be limited to the payments made by the Service Recipient under this Agreement for the specific Service that allegedly caused or was related to the Losses during the period in which the alleged Losses were incurred. In no event shall the 

6

Service Provider be liable for any Losses caused by a Service Recipient’s failure to perform the Service Recipient’s obligations under this Agreement.

(c)    NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR AT LAW OR IN EQUITY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY OR ANY OTHER PERSON (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, ACTIONS OF THIRD PARTIES OR ANY OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR THE PROVISION OR THE FAILURE TO PROVIDE THE SERVICES.

13.    Term and Termination. 

(a)    This Agreement shall commence on the date of the consummation of Evolus’ initial public offering of its common stock, par value $0.00001 per share, under the Securities Act of 1933, as amended (the “Effective Date”) and shall continue until one (1) year after the Effective Date (the “Term”). Thereafter, this Agreement shall renew for successive one (1) year terms, unless terminated by a Party in accordance with this Section 13. A Party may terminate this Agreement at its discretion by giving written notice to the other Party at least sixty (60) days before the proposed termination date. Sections 9 and 24 shall survive the termination of this Agreement. The Service Recipient hereby specifically agrees and acknowledges that all obligations of the Service Provider to provide any and all Services shall immediately cease upon termination of this Agreement. The Service Provider hereby specifically agrees and acknowledges that all of its rights to use Marks pursuant to Section 11 of this Agreement shall immediately cease upon termination of this Agreement. To the extent permitted by applicable law, no Party shall be liable to another Party for, and each Party hereby expressly waives any right to, any termination compensation of any kind or character whatsoever, to which such Party may be entitled solely by virtue of termination of this Agreement.

(b)    Upon termination of this Agreement for any reason, each Party shall cease all use of the other Party’s Confidential Information, and the Service Recipient shall pay Service Provider all accrued and unpaid fees for Services performed through the date of termination.

14.    Compliance with Laws. The Parties shall at all times strictly comply with all applicable laws, rules, regulations, and governmental orders, now or hereafter in effect, including the SCM, relating to their performance of this Agreement. Each Party further agrees to make, obtain, and maintain in force at all times during the Term of this Agreement, all filings, registrations, reports, licenses, permits, and authorizations (collectively, “Authorizations”) required under applicable law, regulation, or order for such Party to perform its obligations under this Agreement. The Service Recipient shall provide the Service Provider with such assistance as the Service Provider may reasonably request in making or obtaining any such Authorizations.

15.    Notices. Any and all notices, elections, offers, acceptances, and demands permitted or required to be made under this Agreement shall be in writing, signed by the Party giving such notice, election, offer, acceptance, or demand and shall be delivered personally, by messenger, courier service, telecopy, first class mail or similar transmission, to the Party, at its address set forth on the signature pages hereto or at such other address as may be supplied in writing. The date of personal delivery or the date of mailing, as the case may be, shall be the date of such notice, election, offer, acceptance, or demand.

16.    Force Majeure. If the performance of any part of this Agreement by a Party, or of any obligation under this Agreement, is prevented, restricted, interfered with, or delayed by reason of any cause beyond the reasonable control of the Party liable to perform, unless conclusive evidence to the contrary is provided, 

7

the Party so affected shall, on giving written notice to the other Parties, be excused from such performance to the extent of such prevention, restriction, interference, or delay, provided that the affected Party shall use its reasonable best efforts to avoid or remove such causes of nonperformance and shall continue performance with the utmost dispatch whenever such causes are removed. When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be required in order to arrive at an equitable solution.

17.    Successors and Assigns. This Agreement may not be assigned or otherwise conveyed by any Party without the prior written consent of the other Party. This Agreement shall be binding on and inure to the benefit of the Parties hereto and their respective successors, successors in title and assigns to the extent that such assignment is permitted under this paragraph.

18.    Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, and communications between the Parties, whether oral or written, relating to the same subject matter. No change, modification, or amendment of this Agreement shall be valid or binding on the Parties unless such change or modification shall be in writing signed by the Party or Parties against whom the same is sought to be enforced.

19.    Remedies Cumulative. The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which the Party may be lawfully entitled.

20.    Other Persons. Nothing in this Agreement shall be construed to prevent or prohibit the Service Provider from providing services to any other Person or from engaging in any other business activity.

21.    Not for the Benefit of Third Parties. This Agreement is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any Third Party.

22.    Further Assurances. Each Party hereby covenants and agrees that it shall execute and deliver such other documents as may be required to implement any of the provisions of this Agreement.

23.    No Waiver. The failure of any Party to insist on strict performance of a covenant hereunder or of any obligation hereunder shall not be a waiver of such Party’s right to demand strict compliance therewith in the future, nor shall the same be construed as a novation of this Agreement.

24.    Counterparts. This Agreement may be executed in multiple counterparts, each one of which shall be an original and all of which shall constitute one and the same document, binding on the Parties, and each Party hereby covenants and agrees to execute all duplicates or replacement counterparts of this Agreement as may be required.

25.    Governing Law and Jurisdiction. THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO ANY CONFLICT OF LAWS RULES. THE COURTS LOCATED WITHIN THE STATE OF CALIFORNIA SHALL HAVE EXCLUSIVE JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO, WHETHER IN LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY AND THE PARTIES CONSENT TO AND AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS. EACH OF THE PARTIES HEREBY WAIVES AND AGREES NOT 

8

TO ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (A) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (B) SUCH PARTY AND SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR (C) ANY LITIGATION OR OTHER PROCEEDING COMMENCED IN SUCH COURTS IS BROUGHT IN AN INCONVENIENT FORUM.

26.    Severability. In the event any provision, clause, sentence, phrase, or word hereof, or the application thereof in any circumstances, is held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder hereof, or of the application of any such provision, sentence, clause, phrase, or word in any other circumstances.
 
 
[Signature Page Follows]

9

 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized officers.
 
	
		
	ALPHAEON:

	 
	 

	ALPHAEON CORPORATION

	 
	 

	By:
	/s/ Simone Blank

	 
	 

	Name:
	Simone Blank

	 
	 

	Title:
	Chair ALPHAEON Board

	 
	 

	Address:
	 

	 
	 

	17901 Von Karman Avenue, Suite 150
Irvine, CA 92614

                            	
		
	EVOLUS:

	 
	 

	EVOLUS, INC.

	 
	 

	By:
	/s/ Murthy Simhambhatla

	 
	 

	Name:
	Murthy Simhambhatla

	 
	 

	Title:
	CEO

	 
	 

	Address:
	 

	 
	 

	17901 Von Karman Avenue, Suite 150
Irvine, CA 92614

10

EXHIBIT A
 
SERVICES PROVIDED
 
The Service Provider shall provide those administrative and support services that do not contribute significantly to the fundamental risks of business success or failure of any of the Service Provider or the Service Recipient, and that are eligible to be charged to the Service Recipient without a mark-up on Costs under the SCM and the guidance set forth in Internal Revenue Service Revenue Procedure 2007-13 (or any successor guidance). Such Services may include, but are not limited to:

		
	•
	Payroll;

		
	•
	Premiums for unemployment, disability, and workers compensation;

		
	•
	Accounts receivable;

		
	•
	Accounts payable;

		
	•
	General administrative Services;

		
	•
	Accounting and auditing;

		
	•
	Tax;

		
	•
	Health, safety, environmental, and regulatory affairs;

		
	•
	Budgeting;

		
	•
	Treasury activities;

		
	•
	Staffing and recruiting;

		
	•
	Sublease arrangement for corporate headquarters;

		
	•
	Office Services; 

		
	•
	Benefits;

		
	•
	Information and technology Services;

		
	•
	Legal Services; 

		
	•
	Insurance claims management; and

		
	•
	Other similar activities.

The Service Provider shall provide such other services as are agreed with the Service Recipient from time to time in accordance with the Agreement.

Exhibit AExhibit

Exhibit 10.26

EMPLOYMENT AGREEMENT
This Employment Agreement is between Evolus, Inc., a Delaware corporation (the “Company”), and Murthy Simhambhatla, an individual (“Employee”). This Agreement will become effective as of, and contingent upon, the initial public offering (the “IPO”) of shares of common stock of the Company, par value $0.00001 per share, pursuant to a registration statement (other than a Form S-8) filed with, and declared effective by, the U.S. Securities and Exchange Commission. The “Effective Date” means the effective date of the IPO.
The Company is a wholly-owned subsidiary of ALPHAEON Corporation, a Delaware Corporation (“AEON”). Employee and AEON are parties to an employment agreement, dated June 21, 2017 (the “AEON Employment Agreement”). Upon the Effective Date, this Agreement shall replace the AEON Employment Agreement and the AEON Employment Agreement shall terminate in its entirety.
1.POSITION AND RESPONSIBILITIES
a.    Position. Employee shall be employed by the Company to render services to the Company in the position of President and Chief Executive Officer of the Company. Employee shall report directly to the Board of Directors of the Company (the “Board”). Employee shall perform such duties and responsibilities as are normally related to such positions in accordance with the standards of the industry and any additional duties of an executive nature the Board now or hereafter assigns to Employee. Employee shall also serve as a member of the Board for no additional compensation, subject to election in accordance with the Company’s applicable governing documents. The principal place of Employee’s employment under this Agreement shall be Orange County, California (or anywhere within a 30-mile radius thereof) or Santa Barbara, California (or anywhere within a 30-mile radius thereof).
b.    Other Activities. Without the prior written consent of the Company, Employee shall not, during Employee’s service with the Company, engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that interferes with Employee’s duties and responsibilities hereunder or creates a conflict of interest with the Company. 
c.    No Conflict. Employee represents and warrants that Employee’s execution of this Agreement, Employee’s employment with the Company, and the performance of Employee’s proposed duties under this Agreement shall not violate any obligations Employee may have to any other employer, person or entity, including any obligations with respect to proprietary or confidential information of any other person or entity.
2.    COMPENSATION AND BENEFITS
a.    Base Salary. In consideration of the services to be rendered under this Agreement, the Company shall pay Employee a salary at the rate of Five Hundred Thousand Dollars ($500,000) per year (“Base Salary”). The Base Salary shall be paid in accordance with the Company’s regularly established payroll practice. Employee’s Base Salary shall be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries for similarly situated employees and may be increased but not decreased in the sole discretion of the Board, beginning one year from the Effective Date.
b.    Annual Bonus. Beginning as of the Effective Date, Employee shall be eligible to participate in the Company’s annual discretionary incentive plan, under which Employee shall be eligible to receive an annual incentive bonus, as determined by the Board in its reasonable discretion (the “Annual Bonus”), of up to 100% of the Base Salary (prorated for any partial performance years), subject to achievement of key 

1

performance indicators for the Company, as determined by the Board in its sole discretion and communicated to Employee (i) for the year that includes the Effective Date, on or before the 90th day following the Effective Date, and (ii) for each succeeding performance year, on or before the 90th day of each year. The terms of any written Annual Bonus plan developed by the Board shall govern any Annual Bonus that may be paid. Any Annual Bonus shall be paid in all events within two and one-half months after the end of the year in which such Annual Bonus becomes earned, provided that no Annual Bonus shall be considered earned until the Board makes all necessary determinations with respect to the Annual Bonus.
c.    Benefits. Employee shall be eligible to participate in the benefits made generally available by the Company to similarly-situated employees, in accordance with the benefit plans established by the Company, and as may be amended from time to time in the Company’s sole discretion.
d.    Vacation. Employee’s vacation and other paid time off shall be governed by the Company’s usual policies applicable to senior management employees. 
e.    Expenses. The Company shall reimburse Employee for reasonable business expenses incurred, and for any other approved expenses incurred, in the performance of Employee’s duties hereunder in accordance with the Company’s expense reimbursement guidelines.
f.    Employment Policy. As an employee of the Company, Employee shall be subject to and abide by the Company’s policies, procedures, practices, rules and regulations as adopted or as amended from time to time in the Company’s sole discretion.
g.    Indemnification. Employee shall be covered under a directors’ and officers’ liability insurance policy paid for by the Company to the extent that the Company maintains such a liability insurance policy now or in the future.
3.    AT-WILL EMPLOYMENT; TERMINATION BY COMPANY
The employment of Employee shall be “at will” unless amended by a written instrument approved by the Board. The Company may terminate Employee’s employment with the Company at any time, without any advance notice, for any reason or no reason at all, notwithstanding anything to the contrary contained in or arising from any statements, policies or practices of the Company relating to the employment, discipline or termination of its employees. For any Termination of Employment to be for “Cause,” such termination must be based on: (a) the commission of any act of fraud, embezzlement or dishonesty by Employee which adversely affects the business of the Company, the acquiring or successor entity (or parent or any subsidiary thereof); (b) any unauthorized use or disclosure by Employee of confidential information or trade secrets of the Company, the acquiring or successor entity (or parent or any subsidiary thereof); (c) the refusal or omission by Employee to perform any lawful duties properly required of him under this Agreement, provided that any such failure or refusal has been communicated to Employee in writing and Employee has been provided a reasonable opportunity to correct it, if correction is possible; (d) any act or omission by Employee involving malfeasance or gross negligence in the performance of Employee’s duties to, or material deviation from any of the policies or directives of, the Company or the acquiring or successor entity (or parent or any subsidiary thereof), provided, however, that in the case of deviations from policies or directives, the Company must give Employee notice of such deviations and, if curable, an opportunity to cure or correct the deviation; (e) conduct on the part of Employee which constitutes the breach of any statutory or common law duty of loyalty to the Company, the acquiring or successor entity (or parent or any subsidiary thereof); or (f) any illegal act by Employee which the Board determines adversely affects the business of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), or any felony committed by Employee, as evidenced by conviction thereof.

2

4.    TERMINATION BY EMPLOYEE
Employee may terminate employment with the Company at any time for any reason or no reason at all. 
5.    TERMINATION OBLIGATIONS
a.    Termination of Employment. Employee’s right to benefits and payments under this Agreement, if any, for periods after a Termination of Employment shall be determined in accordance with this Section 5. A “Termination of Employment” means the termination of Employee’s employment with the Company and all affiliates, whether initiated by the Company or Employee.
b.    All Terminations of Employment. Upon a Termination of Employment, Employee shall be entitled to prompt and full payment of all earned but unpaid Employee compensation or benefits required by law to be provided, including accrued but unpaid Base Salary and accrued but unpaid vacation pay through the Termination of Employment (the “Accrued Benefits”). 
c.    Termination of Employment by Company without Cause. If a Termination of Employment is initiated by the Company other than for Cause, Employee shall be entitled to continued payment of Base Salary for a period of 12 months following the Termination of Employment,  subject to Section 5(e) below.
d.    Other Benefits.
(i)    Employee’s rights following a Termination of Employment with respect to any benefits, incentives or awards provided to Employee pursuant to the terms of any plan, program or arrangement sponsored or maintained by the Company, whether tax-qualified or not, which are not specifically addressed herein, shall be subject to the terms of such plan, program or arrangement, and this Agreement shall have no effect upon such terms except as specifically provided herein. Company acknowledges that any rights Employee may have to indemnification for actions taken as an officer or director under Company’s charter, other arrangements and its insurance policies shall not be forfeited or terminated with respect to any actions or omissions prior to any Termination of Employment.
(ii)    Except as specifically provided herein, the Company shall have no further obligations to Employee under this Agreement following a Termination of Employment.
e.    Release. Any and all amounts payable and benefits or additional rights provided pursuant to this Agreement upon a Termination of Employment beyond the Accrued Benefits (including any post-termination benefits or amounts under this Section 5) shall only be payable if Employee delivers to the Company and does not revoke a general release of claims in favor of the Company in a form satisfactory to the Company, provided such release does not purport to revoke any of the rights provided pursuant to this Agreement or rights to continued indemnification for actions taken as an officer or director prior to the Termination of Employment. Such release shall be furnished to Employee within two business days after a Termination of Employment, and must be executed and delivered (and no longer subject to revocation, if applicable) within 30 days following the Termination of Employment (or such longer period to the extent required by law). 
f.    Return of Property. Employee agrees that all property (including all equipment, tangible proprietary information, documents, records, notes, contracts and computer-generated materials) furnished to or created or prepared by Employee incident to Employee’s employment belongs to the Company and shall be promptly returned to the Company upon a Termination of Employment.

3

g.    Resignation and Cooperation. Upon a Termination of Employment, Employee shall be deemed to have resigned from all offices and directorships then held with the Company, including any such positions with its subsidiaries. Following a Termination of Employment, Employee shall cooperate with the Company in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees. Employee shall also cooperate with the Company in the defense of any action brought by any third party against the Company that relates to Employee’s employment by the Company.
h.    Continuing Obligations. Employee understands and agrees that Employee’s obligations under Sections 5, 6, and 7 herein (including the exhibits and schedules described therein) shall survive a Termination of Employment and the termination of this Agreement.
		
	6.
	INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION

Employee agrees to sign and be bound by the terms of the Company’s standard employee proprietary information and invention assignment agreement attached hereto as Schedule A (the “PIIAA”).
7.    ARBITRATION
Employee agrees to sign and be bound by the terms of the Company’s standard employee arbitration agreement. 

8.    AMENDMENTS; WAIVERS; REMEDIES
This Agreement may not be amended or waived except by a writing signed by Employee and by a duty authorized representative of the Company other than Employee. Failure to exercise any right under this Agreement shall not constitute a waiver of such right. Any waiver of any breach of this Agreement shall not operate as a waiver of any subsequent breaches. All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable law.
9.    ASSIGNMENT; BINDING EFFECT
a.    Assignment. The performance of Employee is personal hereunder, and Employee agrees that Employee shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement. This Agreement may be assigned or transferred by the Company; and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or all or substantially all of its assets.
b.    Binding Effect. Subject to the foregoing restriction on assignment by Employee, this Agreement shall inure to the benefit of and be binding upon each of the parties; the affiliates, officers, directors, agents, successors and assigns of the Company; and the heirs, devisees, spouses, legal representatives and successors of Employee.
10.    NOTICES
All notices or other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered: (a) by hand; (b) by a nationally recognized overnight courier service; or (c) by United States first class registered or certified mail, return receipt requested, to the principal address of the other party, as set forth below. The date of notice shall be deemed to be the earlier 

4

of (i) actual receipt of notice by any permitted means, or (ii) five business days following dispatch by overnight delivery service or the United States Mail. Employee shall be obligated to notify the Company in writing of any change in Employee’s address. Notice of change of address shall be effective only when done in accordance with this paragraph.
Company’s Notice Address:
17901 Von Karman Ave., Suite 150 
Irvine, CA 92614 
Attention:  Legal
Employee’s Notice Address:
3 Turnberry Dr. 
Newport Beach, CA 92660 
E-Mail: msimhamb@yahoo.com
11.    SEVERABILITY
If any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect. In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce the time period or scope to the maximum time period or scope permitted by law.
12.    TAX MATTERS
a.    Withholding. Any and all amounts payable under this Agreement or otherwise shall be subject to, and the Company may withhold from such amounts, any federal, state, local or other taxes as may be required to be withheld pursuant to any applicable law or regulation.
b.    Section 409A Compliance.
(i)    The intent of the parties hereto is that payments and benefits under this Agreement be exempt from (to the extent possible) Section 409A (“Section 409A”) of the Internal Revenue Code of 1986 and the regulations and guidance promulgated thereunder, as amended (collectively, the “Code”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. To the extent that any provision hereof is modified in order to comply with Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the parties hereto of the applicable provision without violating the provisions of Section 409A. In no event shall the Company be liable for any additional tax, interest or penalty that may be imposed on Employee by Section 409A or damages for failing to comply with Section 409A.
(ii)    A Termination of Employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that constitute “nonqualified deferred compensation” under Section 409A upon or following a Termination of Employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for 

5

purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”
(iii)    To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Employee, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit and (C) no such reimbursement, expenses eligible for reimbursement or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.
(iv)    For purposes of Section 409A, Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be at the sole discretion of the Board.
(v)    Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Section 409A be subject to offset by any other amount unless otherwise permitted by Section 409A.
(vi)    Notwithstanding any other provision of this Agreement, to the extent required to avoid accelerated taxation or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided under this Agreement during the six-month period immediately following a Termination of Employment shall instead be paid on the first payroll date after the six (6)-month anniversary of the Termination of Employment (or Employee’s death, if earlier).
c.    Section 280G. In the event it shall be determined that any payment, right or distribution by the Company or any other person or entity to or for the benefit of Employee pursuant to the terms of this Agreement or otherwise, in connection with, or arising out of, Employee’s employment with the Company or a change in ownership or effective control of the Company or a substantial portion of its assets (a “Payment”) is a “parachute payment” within the meaning of Code Section 280G on account of the aggregate value of the Payments due to Employee being equal to or greater than three times the “base amount,” as defined in Code Section 280G (the “Parachute Threshold”), so that Employee would be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”) and the net after-tax benefit that Employee would receive by reducing the Payments to the Parachute Threshold is greater than the net after-tax benefit Employee would receive if the full amount of the Payments were paid to Employee, then the Payments payable to Employee shall be reduced (but not below zero) so that the Payments due to Employee do not exceed the amount of the Parachute Threshold.
13.    GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the State of California.
14.    INTERPRETATION
This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. Sections and section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation of this Agreement. Whenever the context requires, references to the singular shall include the plural and the plural the singular.

6

15.    OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT
Each party agrees that any and all of such party’s obligations under this Agreement, including any agreement contemplated hereby, shall survive a Termination of Employment.
16.    COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument.
17.    AUTHORITY
Each party represents and warrants that such party has the right, power and authority to enter into and execute this Agreement and to perform and discharge all of the obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement and obligation of such party and is enforceable in accordance with its terms.
18.    ENTIRE AGREEMENT
This Agreement is intended to be the final, complete and exclusive statement of the terms of Employee’s employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein (including the agreements referenced in Sections 6 and 7 above). To the extent that the practices, policies or procedures of the Company, now or in the future, apply to Employee and are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control. Any subsequent change in Employee’s duties, position or compensation shall not affect the validity or scope of this Agreement.
19.    EMPLOYEE ACKNOWLEDGEMENT
EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EMPLOYEE HAS READ AND UNDERSTANDS THE AGREEMENT, THAT EMPLOYEE IS FULLY AWARE OF ITS LEGAL EFFECT AND THAT EMPLOYEE HAS ENTERED INTO IT FREELY BASED ON EMPLOYEE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

7

By signing below, each of the parties hereto acknowledges and agrees to all of the terms of this Employment Agreement, effective as of the Effective Date.
	
				
	MURTHY SIMHAMBHATLA (“Employee”)

	 
	 
	 
	 

	Sign name:
	/s/ Murthy Simhambhatla
	 

	 
	 
	 
	 

	 
	 
	 
	 

	EVOLUS, INC., a Delaware Corporation (the “Company”)

	 
	 
	 
	 

	Sign name:
	/s/ Vikram Malik
	 

	 
	 
	 
	 

	Print name:
	Vikram Malik
	 

	 
	 
	 
	 

	Title:
	Chairman
	 

	 
	 
	 
	 

	Solely for purposes of termination of the AEON Employment Agreement:

	ALPHAEON CORPORATION, a Delaware Corporation

	 
	 
	 
	 

	Sign name:
	/s/ Simone Blank
	 

	 
	 
	 
	 

	Print name:
	Simone Blank
	 

	 
	 
	 
	 

	Title:
	Chair ALPHAEON Board
	 

8

Schedule A to Employment Agreement
EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
I hereby enter into this Agreement with Evolus, Inc., a Delaware corporation (the “Company”), effective as of the date of my signature below. In doing so, I acknowledge and understand the following facts:
A.    The successful operation of the Company’s business depends upon the protection of the Company’s information assets against unauthorized use or disclosure. 
B.    In order to perform my job duties successfully for the Company, I need to access and use some of the Company’s confidential and trade secret information. 
C.    The Company is willing to allow me to access and use its confidential and trade secret information, in exchange for my promise to comply with the terms of this Agreement.
D.     Company acknowledges that as President and Chief Executive Officer I will participate in making policies about the conditions under which Company information will be disclosed to customers, suppliers, financing sources and consultants and to prospective customers, suppliers, financing sources and consultants, among others.
Based upon the Company’s need and desire to place reasonable restrictions upon my use and development of information, technology, ideas and inventions, and in exchange for my continuing employment with the Company and allowing me to use and access the Company’s information assets, I promise to comply fully with all of the following terms and conditions:
1.    Proprietary Information.
(a)    Restrictions on Proprietary Information. I promise that, at all times both during and after my employment, I will hold the Proprietary Information of the Company in strict confidence. I promise never to use the Proprietary Information or disclose it to anyone, except to the extent appropriate or necessary to carry out my responsibilities as an employee of the Company or as specifically authorized in writing by an officer of the Company. 
(b)    Definition of Proprietary Information: I understand that “Proprietary Information” means all confidential information and information pertaining in any manner to the business of the Company or its parent, affiliates, consultants, or business associates, except to the extent such information is generally known or made available to the public or to the Company’s competitors, suppliers, financing sources, consultants and similar persons through lawful means. Proprietary Information specifically includes, but is not limited to, the following types of information in whatever form it exists (such as verbal, written or electronic):
(i)    The Company’s customers and prospective customers (including customer and prospective customer and distributor lists, contact information, the nature and amount of their respective purchases, outstanding bids or orders, requirements for service, key contacts, ordering procedures, credit and relations information, marketing proposals, and pricing practices);
(ii)    The Company’s methods of doing business (including its finances, costs, profits, sales, markets, licensing arrangements, strategic or business plans, projections, research 

9

projects, sources and nature of financing, staffing and personnel information, and company policies and procedures);
(iii)    The Company’s suppliers (including its costs, distribution, and other arrangements with such suppliers); and
(iv)    The Company’s products and services (including technologies, schematics, support procedures, programming and formatting processes and techniques, product formulations, specifications, designs, drawings, materials, manuals, electronic codes, formulas, as well as any research and development products relating to existing or potential products).
(c)    Location and Reproduction. I agree to maintain at my work station and/or any other place under my control only such Proprietary Information as I have a current “need to know.” I promise to return to the appropriate person or location or otherwise properly dispose of Proprietary Information once that need to know no longer exists. I also promise not to reproduce the Proprietary Information or otherwise make it available to anyone unless there is a legitimate and genuine business need for reproduction.
(d)    Prior Actions and Knowledge. Except as disclosed on Exhibit A to this Agreement, I do not know anything about the Company’s business or Proprietary Information, other than information I have learned from the Company in the course of being hired and employed.
(e)    Acknowledgement. To the best of my knowledge, the Proprietary Information defined above (i) is not known to the Company’s competitors or to the general public and (ii) has potential, if not actual, monetary value to the Company because it is unknown to the Company’s competitors, and the Company is making reasonable efforts to keep the Proprietary Information secret. I agree and understand that the Proprietary Information is confidential regardless of whether the Company labels it as such, or otherwise subjects it to any security systems (although the Company may do so in its discretion).
(f)    Third Party Information. I recognize that the Company has received and will receive confidential or proprietary information from third parties. I promise to hold all such information in the strictest confidence, and I will not use the information or disclose it to anyone (except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party). 
2.    Interference with Business.
(a)    Customers/Employees. I promise that during my employment with the Company and for a period of two (2) years after termination of my employment with the Company, I will not directly or indirectly do any of the following:
(i)    use Proprietary Information to contact any of the Company’s existing or prospective customers or suppliers for the purpose of soliciting their business; or
(ii)    use Proprietary Information to solicit or otherwise induce any employee or consultant of the Company to terminate his or her relationship with the Company.
(b)    Unfair Competition. I promise that during my employment with the Company, I will devote myself to the lawful business of the Company and will not directly or indirectly engage in any activity or business that competes with the Company’s business or that creates a conflict of interest. 

10

(c)    Prevention of Misappropriation by Others. I promise that during my employment with the Company and for a period of three (3) years after termination of my employment with the Company, I will notify the Company in writing and as soon as possible of request by any person or entity that I disclose or use, or allow them to use, any of the Proprietary Information for any purpose other than in connection with my authorized work for the Company.
3.    Inventions.
(a)    Assignment of Inventions. I agree to assign, and do hereby irrevocably transfer and assign, to the Company, without further consideration, my entire right, title, and interest (throughout the United States and in all foreign countries), free and clear of all liens and encumbrances, in and to all Inventions. Notwithstanding the foregoing, the Company may, in its discretion, agree to provide consideration for certain Inventions through a written agreement between the Company and me which specifically provides for such consideration; in all other cases, no consideration shall be paid. The Inventions shall be the sole property of the Company, whether or not copyrightable or patentable. In addition, I agree to maintain adequate and current written records on the development of all Inventions, which shall also remain the sole property of the Company. I understand that “Inventions” means all ideas, processes, inventions, technology, designs, formulas, discoveries, patents, copyrights, and trademarks, and all improvements, rights, and claims related to the foregoing, that are conceived, developed, or reduced to practice by me alone or with others, during my time of employment by the Company, except Inventions excluded in Exhibit A hereto and to the extent Section 2870 of the California Labor Code (as set forth in Section 3(b) below) lawfully prohibits the assignment. I also hereby forever waive and agree never to assert any Moral Rights I may have in or with respect to any assigned Inventions and any excluded Inventions licensed to the Company herein, even after termination of my employment with the Company. I understand that “Moral Rights” means any rights to claim authorship of a work, to object to or prevent the modification or destruction of a work, to withdraw from circulation or control the publication or distribution of a work, and any similar right, regardless of whether or not such right is denominated or generally referred to as a “moral right.”
(b)    Exception to Assignment. I understand that the any assigned Inventions may not include, and the provisions of this Agreement requiring assignment of Inventions to the Company may not apply to, any invention that qualifies fully for exclusion under the provisions of Section 2870 of the California Labor Code. I understand that Section 2870(a) provides:
“Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:
(1)    Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer.
(2)    Result from any work performed by the employee for the employer.”
(c)    License for Other Inventions. If, in the course of my employment with the Company (i) I incorporate into Company property an Invention owned by me or in which I have an interest, or (ii) if my rights in an Invention may block or interfere with, or may otherwise be required for, the exercise by the Company of any rights assigned to the Company under this Agreement, then the Company is granted a 

11

nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, modify, use and sell my Invention as part of and in connection with the Company property.
(d)    Assist With Registration. In the event any Invention shall be deemed by the Company to be copyrightable or patentable or otherwise registrable, I will assist the Company (at its expense) in obtaining and maintaining letters patent or other applicable registrations and in vesting the Company with full title. Should the Company be unable to secure my signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to any Invention, due to my incapacity or any other cause, I hereby irrevocably designate and appoint the Company and each of its duly authorized officers and agents as my agent and attorney-in-fact to do all lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, or other rights or protection with the same force and effect as if executed and delivered by me.
(e)    Disclosure. I agree to disclose promptly to the Company all Inventions and relevant records. I further agree to promptly disclose to the Company any idea that I do not believe to be an Invention, but is conceived, developed, or reduced to practice by me (alone or with others) while I am employed by the Company or during the one (1)-year period following termination of my employment. I will disclose the idea, along with all information and records pertaining to the idea, and the Company will examine the disclosure in confidence to determine if in fact it is an Invention subject to this Agreement. If any such disclosure is required following the termination of my employment I reserve the right to make such disclosure only subject to an appropriate confidentiality agreement in which the Company agrees not to use information provided unless it is established that the information relates to an Invention I am required to assign to the Company.
(f)    Post-Termination Period. I agree that any idea, invention, writing, discovery, patent, copyright, or trademark or similar item, or improvement shall be presumed to be an Invention if it relates to any Company product or line of business and is conceived, developed, used, sold, exploited, or reduced to practice by me or with my aid within one (1) year after my termination of employment with the Company. I can rebut the above presumption if I prove that the idea, invention, writing, discovery, patent, copyright, or trademark or similar item, or improvement is not an Invention covered by this Agreement.
4.    Former or Conflicting Agreements. 
(a)    Former Agreements. I represent and warrant that my work for the Company, and my performance of the terms of this Agreement, will not breach any agreement to keep in confidence proprietary information acquired by me prior to my employment by the Company. I have listed in Exhibit A hereto all other agreements concerning proprietary information or Inventions to which I am a party and attached copies of any agreements in my possession. To the best of my knowledge, there is no other contract between me and any other person or entity that is in conflict with this Agreement or concerns proprietary information, inventions or assignment of ideas.
(b)    Obligations during Employment. During my employment with the Company, I promise not to disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others.
(c)    Indemnification. I agree to indemnify, defend and hold harmless the Company, and its officers, directors and employees from any and all claims, damages, costs expenses or liability, including reasonable attorneys’ fees incurred in connection with or resulting from any breach or default of the representations and warranties contained in this Section 4.

12

5.    Termination. 
(a)    Return of the Company’s Property. In the event my employment with the Company ends for any reason, I promise to promptly return to the Company all Proprietary Information and all personal property furnished to or prepared by me in connection with my employment. Following my termination, I will not retain any written, electronic or other tangible material containing any Proprietary Information or information pertaining to any Invention.
(b)    Termination Certificate. In the event my employment with the Company ends for any reason, I agree to sign and deliver the Termination Certificate attached hereto as Exhibit B.
(c)    Subsequent Employers. I promise that after the termination of my employment with the Company, I will not enter into any agreement that conflicts with my obligations under this Agreement, and I will inform any subsequent employers of my obligations under this Agreement.
(d)    Notice of Agreement. I agree that the Company may provide a copy of this Agreement to any person or entity, or otherwise notify any person or entity of the existence of this Agreement and the promises I made in it.
6.    No Implied Employment Rights. 
Except as set forth in writing in my Employment Agreement, I recognize that my employment with the Company is “at will,” and nothing in this Agreement shall be construed to imply that my employment is guaranteed for any period of time, or to limit in any way my right or the Company’s right to terminate our “at will” employment relationship at any time, without notice and for any reason, with or without cause. I understand that both the Company and I have the right to terminate employment at any time, with or without advance notice, and with or without cause. I understand that I may also be demoted or disciplined and the terms of my employment may be altered at any time, with or without cause, at the discretion of the Company. No one other than the Chairman of the Company has the authority to alter this arrangement, to enter into an agreement for employment for a specified period of time, or to make any agreement contrary to this policy, and any such agreement must be in writing and must be signed by the Chairman of the Company and me.
7.    Remedies. 
I recognize that nothing in this Agreement is intended to limit any remedy of the Company under any federal or state law concerning trade secrets. I recognize that my violation of this Agreement could cause the Company irreparable harm and agree that the Company shall have the right to apply to any court of competent jurisdiction for an order restraining any breach or threatened breach of this Agreement.
8.    Miscellaneous Provisions.
(a)    Assignment. I agree that the Company may assign to another person or entity any of its rights under this Agreement.
(b)    Governing Law/Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of California. In addition, the parties agree that all disputes relating to this Agreement will be litigated exclusively in the state or federal courts of Orange County, California. 
(c)    Severability. If any provision of this Agreement, or application thereof to any person, place, or circumstance, shall be held by a court of competent jurisdiction to be unenforceable, such provision 

13

shall be enforced to the greatest extent permitted by law and the remainder of this Agreement shall remain in full force and effect.
(d)    Entire Agreement. The terms of this Agreement are the final expression of my agreement with respect to the subject matter hereof and may not be contradicted by evidence of any prior or contemporaneous agreement. This Agreement shall constitute the complete and exclusive statement of its terms. I acknowledge that the Company has not made any other representations concerning the subject matter of this Agreement.
(e)    Amendment; Waivers. This Agreement can be amended or terminated only by a written agreement signed by both parties. No failure to exercise or delay in exercising any right under this Agreement shall operate as a waiver thereof.
(f)    Successors and Assigns. This Agreement shall be binding upon me and my heirs, executors, administrators, and successors, and shall inure to the benefit of the Company's successors and assigns.
(g)    Interpretation. This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. By way of example and not in limitation, this Agreement shall not be construed in favor of the party receiving a benefit or against the party responsible for any particular language in this Agreement. Captions are used for reference purposes only and should be ignored in the interpretation of the Agreement.
MY SIGNATURE BELOW SIGNIFIES THAT I CAREFULLY READ, UNDERSTAND, AND AGREE TO BE LEGALLY BOUND TO ALL OF THE TERMS OF THIS AGREEMENT.
	
				
	Date:
	1/23/2018
	 
	Murthy Simhambhatla

	 
	 
	 
	Employee Name

	 
	 
	 
	 

	 
	 
	 
	/s/ Murthy Simhambhatla

	 
	 
	 
	Employee Signature

 
                    

14

Exhibit A to Employee Proprietary Information and Inventions Agreement
EMPLOYEE’S DISCLOSURE
1.    Proprietary Information. Except as set forth below, I acknowledge that at this time I know nothing about the business or Proprietary Information of the Company, other than information I have learned from the Company in the course of being hired or employed: Employee served as President and Chief Executive Officer of AEON since August 17, 2016 and as a consequence has acquired considerable information about Company operations before executing this Agreement, but Employee agrees such information is subject to this Agreement. 
2.    Prior Inventions. Except as set forth below, there are no ideas, processes, inventions, technology, writings, programs, designs, formulas, discoveries, patents, copyrights, or trademarks, or any claims, rights, or improvements to the foregoing, that I wish to exclude from the operation of this Agreement:
	
	
	 

	 

	 

	 

3.    Prior Agreements. Except as set forth below, I am aware of no prior agreements between me and any other person or entity concerning proprietary information or inventions (attach copies of all agreements in your possession):
Employee has notified his prior employer, AEON, of accepting this position and received no objection.
	
	
	 

	 

	 

	 

	
				
	Date:
	1/23/2018
	 
	Murthy Simhambhatla

	 
	 
	 
	Employee Name

	 
	 
	 
	 

	 
	 
	 
	/s/ Murthy Simhambhatla

	 
	 
	 
	Employee Signature

15

Exhibit B to Employee Proprietary Information and Inventions Agreement
TERMINATION CERTIFICATE CONCERNING COMPANY PROPRIETARY INFORMATION
This is to certify that I have returned all personal property of the Company, including, without limitation, all laptop computers, cellular phones, source code listings, books, manuals, records, models, drawings, reports, notes, contracts, lists, blueprints, and other documents and materials, Proprietary Information, and equipment furnished to or prepared by me in the course of or incident to my employment with the Company, and that I did not make or distribute any copies of the foregoing.
I further certify that I have reviewed the Employee Proprietary Information and Inventions Agreement signed by me, and that I have complied with and will continue to comply with all of its terms, including, without limitation, (i) the reporting of any idea, process, invention, technology, writing, program, design, formula, discovery, patent, copyright, or trademark, or any improvement, rights, or claims related to the foregoing, conceived or developed by me and covered by the Agreement and (ii) the preservation as confidential of all Proprietary Information pertaining to the Company. This certificate in no way limits my responsibilities or the Company's rights under the Agreement.
On termination of my employment with the Company, I will be employed by ___________________ [Name of New Employer] [in the __________________ division] and I will be working in connection with the following projects:
[generally describe the projects]
	
	
	 

	 

	 

	 

	
				
	Date:
	 
	 
	Murthy Simhambhatla

	 
	 
	 
	Employee Name

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	Employee Signature

16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00278-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00278-of-00352.parquet"}]]