Document:

Exhibit

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 1 sur 18

EXHIBIT 10.38
[***] indicates material that has been omitted pursuant to a Request for Confidential Treatment filed with the Securities and Exchange Commission.  A complete copy of this agreement, including redacted portions so indicated, has been filed separately with the Securities Exchange Commission.  

Between,

On the one hand, LDR MEDICAL, SAS, a company duly organized and governed by French laws, with 260,852.40 Euros capital, whose registered office is at Hôtel de Bureaux 1, 4 Rue Gustave Eiffel in Rosières-Près-Troyes, France, listed on the Troyes Companies Register under number 433 924 529, acting on its own behalf as well as on behalf of its subsidiaries,
Represented by its Chairman, Christophe LAVIGNE. 
Hereinafter referred to as “LDR MEDICAL”

And,

On the other hand, GREATBATCH MEDICAL SA, a company duly organized and governed by Swiss laws, with CHF 705,000 capital, whose registered office is at Rue de la Gare 15, 2502 Bienne, Switzerland, registration number CHE-106.036.988 , acting on its own behalf as well as on behalf of its subsidiaries,
Represented by its Director, Alexandre Akchoti and Authorized Representative, Thomas J. Mazza.
Hereinafter referred to as the “Supplier”

LDR MEDICAL and the Supplier are hereinafter referred to individually as a “Party” or collectively as the “Parties”.

Recitals:

		
	A.
	LDR MEDICAL is a company specialized in developing, designing and selling medical devices used to treat spine-related pathologies.

		
	B.
	The Supplier is a company specialized in manufacturing medical equipment as a subcontractor.

		
	C.
	On November 28, 2012, LDR MEDICAL entered into a supplier commercial contract with the Supplier’s affiliate, Greatbatch Medical SAS whereby LDR MEDICAL entrusted Greatbatch Medical SAS with the non-exclusive manufacturing of two LDR MEDICAL products developed by LDR MEDICAL: (i) MOBI-C PLUG & FIT USA and (ii) ROI-C (hereinafter the “Supply Agreement”).

		
	D.
	On November 28, 2012, LDR MEDICAL and Greatbatch Medical SAS, also entered into a contract called subcontracting agreement, in which LDR MEDICAL and Greatbatch Medical SAS in particular agreed to the regulatory and quality standards that apply to their relationship and to the Supply Agreement (hereinafter the “Subcontracting Agreement”).

		
	E.
	On July 23, 2012, LDR MEDICAL and Greatbatch Medical SAS also entered into a quality contract signed on July 23, 2012 (hereinafter the “Quality Contract”).

		
	F.
	LDR MEDICAL and the Supplier have now agreed to enter into a contract for the non-exclusive supply of MOBI-C (hereinafter the “Contract”).

		
	1.
	Purpose

		
	1.1.
	The purpose of the Contract is to set forth the manner in which the Supplier shall non-exclusively manufacture certain products developed by LDR MEDICAL and defined in Appendix 1 of the Contract (hereinafter the “Products”), and in particular to specify the procedures for placing orders, manufacturing and delivering the Products.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 2 sur 18

		
	2.
	Duration

		
	2.1.
	The Contract shall come into force starting on January 1, 2016 (hereinafter the “Date of Effect”) for a period of five (5) years (hereinafter the “Initial Period”).

		
	2.2.
	Either Party may cancel the Contract at the end of the Initial Period. The notice period is eighteen (18) months. Accordingly, notice of the intent to terminate the Contract at the expiration of the Initial Period must be provided and sent by registered post with recorded delivery at least eighteen (18) months before the end date of the Initial Period. The notice period shall begin on the date of first submission of this notification of cancellation to the other Party.

		
	2.3.
	Once the Initial Period expires, unless notice has been provided that the Contract shall be cancelled pursuant to Clause 2.2, the Contract shall be automatically renewed for successive periods of [***] months (hereinafter the “Renewal Period(s)”). During any Renewal Period, the Contract may be cancelled by either Party; provided, however, that the party seeking to terminate the Contract must provide a minimum of eighteen (18) months’ notice to the other party. Notification of cancellation must be given by registered post with recorded delivery at least eighteen (18) months before the end date of the Renewal Period.

		
	2.4.
	For each Renewal Period, LDR MEDICAL and the Supplier agree that they will meet at least six (6) months before the Contract’s end date so as to agree, by way of a supplementary agreement, upon any possible amendments to the Contract for the next Renewal Period. In the absence of written agreement between LDR MEDICAL and the Supplier, and if notification of cancellation is not given, LDR MEDICAL and the Supplier agree that the terms and conditions applicable to the Contract for the next Renewal Period shall be the same as those for the current Renewal Period or the Initial Period, as the case may be. 

		
	2.5.
	Should the Supplier, except if the Supplier cancels the Contract pursuant to Clause 10.1 or 10.2, cancel the Contract, the Supplier expressly agrees that LDR MEDICAL shall have the option of placing orders within [***] of receiving the cancellation notice, in either a single or multiple installment(s), for all or part of the Product quantities LDR MEDICAL has not yet ordered but that are otherwise part of LDR MEDICAL’s projected orders set forth in Appendix 2 for the [***]-month period following the date of termination (hereinafter “End-of-Contract Orders”) on a delivery schedule reasonably determined by the Supplier, which shall at least be on a schedule similar to prior deliveries of substantially similar quantities if the requested schedule by LDR MEDICAL cannot be met. LDR MEDICAL and the Supplier agree that this option must not be considered as being an obligation for LDR MEDICAL to order the total quantity of Products not yet ordered by LDR MEDICAL. With respect in particular to Clause 3.6 of the Contract, LDR MEDICAL and the Supplier agree that the Supplier may not refuse to honor End-of-Contract Orders.

		
	2.6.
	LDR MEDICAL and the Supplier understand and agree that should either Party cancel the Contract, as provided for in Clause 2.2 and/or should either Party fail to renew the Contract, as provided for in Clause 2.3, this shall never entitle the other Party to damages or compensation from the terminating Party.

		
	2.7.
	Notwithstanding what it is stated in Clause 2.6 of the Contract, LDR MEDICAL and the Supplier agree that LDR MEDICAL shall be entitled to cancel the Agreement at any time and without any advance notice [***]. Notification of cancellation shall be sent by registered post with recorded delivery. If LDR MEDICAL sends notification of cancellation under this Clause 2.7, [***], LDR MEDICAL will be responsible for all Safety Stock (as defined below), so long as such Safety Stock is delivered to LDR Medical.  The cancellation described in this Clause 2.7 shall be effective on the date of Supplier’s receipt of the full payment described in the immediately preceding two sentences.

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 3 sur 18

		
	3.
	Placing Orders, Manufacturing and Deliveries

		
	3.1.
	LDR MEDICAL undertakes to send an order form, by email and/or facsimile to the Supplier which must list (i) the quantities of Products ordered, (ii) the references for these Products and (iii) the delivery date for these Products (the delivery date listed must be at least three and a half months after the Supplier’s receipt of the order form). In particular, each order form must also state the Contract reference, i.e. CC FRN GB 02 dated 31/12/2015.

		
	3.2.
	Orders shall be processed and managed according to the procedures set out in the Subcontracting Contract.

		
	3.3.
	LDR MEDICAL shall send each order form to the Supplier at one of the following addresses:

GREATBATCH MEDICAL SA, Rue de la Gare 15, Case Postale, 2501 Bienne, Suisse

[***]

		
	3.4.
	The Supplier undertakes to only manufacture and supply the Products ordered by LDR MEDICAL which have been ordered using an order form. 

		
	3.5.
	LDR MEDICAL and the Supplier agree that the Supplier may use subcontractors, a list and details of these subcontractors are specified in Appendix 3 of the Contract (hereinafter the “Subcontractors”). The Supplier shall be solely responsible for this use of Subcontractors and the Supplier must ensure that the Subcontractors manufacture and supply the Products at the same level of requirements as are specified by the Contract and in particular by the Subcontracting Agreement. LDR MEDICAL and the Supplier agree that permission to use a new subcontractor, which the Supplier has not listed in Appendix 3 of the Contract, must be agreed upon beforehand in writing by LDR MEDICAL.

		
	3.6.
	Notwithstanding the delivery forecasts set out in Appendix 2, LDR MEDICAL and the Supplier agree that the right to issue order forms for the manufacturing of the Products at any time is left to LDR MEDICAL’s discretion, according to the needs inherent to any increased business activity which LDR MEDICAL might experience and this, in accordance with the provisions for issuing orders as set out above, without the Supplier being authorized to request any additional remuneration to that already provided for by this Contract and without prejudice to what is set out in Clause 3.7 of the Contract.

		
	3.7.
	The Supplier shall notify LDR MEDICAL and send its acceptance of each order form, by post or by email within [***] working days after receiving the aforementioned order form. Should the Supplier fail to give notification of its acceptance or rejection within [***] working days after receiving the order form, this shall be deemed to be the Supplier’s definite acceptance. LDR MEDICAL and the Supplier agree that the Supplier shall not be able to refuse any order forms for projected quantities of LDR MEDICAL Products, specified in Appendix 2 of the Contract, except if due to force majeure (hereinafter “Force Majeure” and as defined in Clause 16 of this Contract).

		
	3.8.
	The Supplier shall deliver the Products within the time period stipulated by LDR MEDICAL in the order form sent to the Supplier, and which has not been subject to any of the exceptional circumstances as set forth below.

In exceptional circumstances, the Supplier may refuse all or part of any order form (i) which the Supplier could not honor because of an occurrence of Force Majeure; (ii) which is [***] over the total projected amount for the corresponding months in the forecast set forth in Appendix 2; or (iii) when added to the other order forms dispatched over a period of [***] months, this order form will exceed forecast for this period set forth in Appendix 2 by over [***].

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 4 sur 18

		
	3.9.
	The Supplier shall be expressly bound to manufacture the Products ordered by LDR MEDICAL according to the requirements specified in the plans, specifications and/or purchase orders as well as any document that LDR MEDICAL gives to the Supplier.

		
	3.10.
	The Supplier will have the Products ordered by LDR MEDICAL ready at Supplier’s manufacturing facility set forth below for pick-up by LDR MEDICAL’s carrier and Supplier will have the Products packaged for delivery to the address which LDR MEDICAL shall supply. If no address is supplied, the delivery address shall be the following (hereinafter the “Default Address”):

		
	•
	LDR MEDICAL

Hôtel de Bureaux 1,
4, rue Gustave Eiffel
10430 Rosières-près-Troyes, France

Supplier’s manufacturing facility shall be:

		
	•
	Greatbatch Medical

4 rue Renée et Louis Landanger
ZI de la Vendue
52000 Chaumont, France

		
	3.11.
	LDR MEDICAL and the Supplier agree that LDR MEDICAL shall give notification by registered post of any change to LDR MEDICAL’s Default Address as stipulated in Clause 3.10. This change of Default Address shall become effective following the Supplier’s receipt of LDR MEDICAL’s registered post letter.

		
	3.12.
	The Supplier shall be bound to set up a safety stock equivalent to [***] US MOBI C Units total by [***] (hereinafter the “Safety Stock”). The Supplier shall be permitted to deplete the inventory of Safety Stock by (i) up to [***] pieces to satisfy its obligations under this Contract, or (ii) up to [***] pieces in the event LDR MEDICAL otherwise consents in writing.  In the event of any depletion in Safety Stock, Supplier shall replenish the Safety Stock to the required levels within [***] months of Supplier’s depletion of such Safety Stock. 

		
	3.13.
	LDR MEDICAL and the Supplier agree that the Supplier shall be bound, under its performance obligation, to supply LDR MEDICAL with Products that satisfy the warranties set forth in this Contract.

		
	4.
	Responsibilities if there is a Change in Design

		
	4.1.
	Should any order be cancelled by LDR MEDICAL, LDR MEDICAL shall notify the Supplier about any such change in writing. The aforementioned change shall take effect following the Supplier’ receipt of the notice sent by LDR MEDICAL.  In such an event, LDR MEDICAL will be responsible for all finished good inventory, Safety Stock, WIP, Product-specific non-returnable purchased material and any non-cancelable purchase orders outstanding with the Supplier’s suppliers relating to such Products.

		
	4.2.
	Should a Product be modified, LDR MEDICAL shall notify the Supplier about any such modification in writing. The aforementioned change shall take effect following the Supplier’s receipt of the notice sent by LDR MEDICAL and the parties’ written agreement on the changes in lead time and pricing.  In such an event, LDR MEDICAL will be responsible for all finished good inventory, Safety Stock, WIP, Product-specific non-returnable purchased material and any non-cancelable purchase orders outstanding with the Supplier’s suppliers relating to such Products.

		
	4.3.
	In the possible cases specified in Clauses 4.1 and 4.2, the Supplier must send LDR MEDICAL an inventory for the Products’ production (number of items in stock, finished Products, details of work in progress, etc.) within three business days. LDR MEDICAL and the Supplier agree that LDR MEDICAL may give instructions depending on how the work in progress is progressing which may possibly result in Products that are subject 

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 5 sur 18

to a change in design being scrapped. In such an event, LDR MEDICAL will be responsible for all finished good inventory, Safety Stock, WIP, Product-specific non-returnable purchased material and any non-cancelable purchase orders outstanding with the Supplier’s suppliers relating to such Product.

		
	4.4.
	LDR MEDICAL and the Supplier must contact one another so that procedures for handling the aforementioned changes in design can be determined.  LDR MEDICAL understands and agrees that any changes in the design may result in a change in the (a) the lead time for the Product and (b) the price of the Product, provided that Supplier provides reasonable documentation to LDR MEDICAL evidencing how the design change impacts the lead time and/or the pricing.

		
	5.
	Dealing with Non-compliant Goods

		
	5.1.
	If there are any Products that do not satisfy the applicable warranties set forth in this Contract, they shall be dealt with according to the procedures set out in the Subcontracting Agreement which may be amended and/or updated in writing on a regular basis by LDR MEDICAL and the Supplier.

		
	5.2.
	 LDR MEDICAL and the Supplier agree that should the Subcontracting Agreement have to be amended and/or cancelled and replaced with another contract for the same purpose, this new subcontracting agreement shall effectively replace the existing Subcontracting Agreement, without the need for an amendment to this Contract, unless it is expressly agreed upon between LDR MEDICAL and the Supplier that this new subcontracting agreement may not automatically replace the Subcontracting Agreement. LDR MEDICAL and the Supplier hereby acknowledge that any amendment and/or cancellation or replacement of the Subcontracting Agreement which might be agreed upon by the Parties shall not alter or annul this Contract’s contractual obligations.

		
	6.
	Financial and Contractual Terms and Conditions

6.1. LDR MEDICAL’s forecasts
		
	6.1.1.
	LDR MEDICAL’s monthly forecast for the first eighteen (18) months and full [***] years of the Contract are listed in Appendix 2.  LDR MEDICAL shall provide Supplier with an updated Appendix 2 on an annual basis no later than six (6) months prior to the end of a contractual year indicating LDR MEDICAL’s forecast for the following eighteen (18) months and the next [***]-year period.  Unless agreed otherwise with Supplier in writing, such forecasts shall not be increased on an annual basis by more than [***] from any prior forecasted period.

		
	6.1.2.
	LDR MEDICAL and the Supplier agree that the first contractual year is for a period of twelve (12) months which shall start on the Date of Effect and shall end once this twelve (12)-month period expires. The second contractual year starts on the date when the first contractual year expires, for a period of twelve (12) months and shall end when this period of twelve (12) months expires. LDR MEDICAL and the Supplier agree that all subsequent contractual years shall start on the date of expiry of the previous contractual year and shall last for a period of twelve (12) months and shall end when this period of twelve (12) months expires.

		
	6.1.3.
	[***]

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 6 sur 18

		
	6.1.4.
	[***].

6.2 Pricing

		
	6.2.1.
	LDR MEDICAL and the Supplier agree that:

		
	(i)
	The list of prices for the Products is shown in Appendix 1 of the Contract;

		
	(ii)
	The prices for the Products are binding and applicable throughout the whole Initial Period of the Contract. Any alteration to the prices for the Products must be agreed upon beforehand in writing by LDR MEDICAL, except as set forth in Clause 6.2.3.;

		
	(iii)
	The prices, given in EUROS, shall not include taxes;

		
	(iv)
	The shipping terms will be EXW with the ex works point being the Supplier’s manufacturing facility. 

		
	6.2.2.
	LDR MEDICAL and the Supplier agree that should Supplier desire to change the prices of the Products, Supplier must obtain LDR MEDICAL’S prior written consent, whether this happens during the Initial Period of the Contract or after the Initial Period. LDR MEDICAL and the Supplier agree here and now that reviewing the prices of the Products for the purpose of achieving the purpose of the Contract is cumulatively limited as follows: 

		
	(i)
	LDR MEDICAL must agree beforehand and in writing to changing the prices of the Products, and this before anything is implemented;

		
	(ii)
	Except for price changes made with respect to Product modifications, or price changes permitted pursuant to Clause 6.2.3, the Supplier may not carry out more than [***] 

		
	(iii)
	Any price review undertaken by the Supplier must necessarily be justified by an increase in costs and/or taxes levied on the Supplier by a public body, and/or by an increase in the Supplier’s costs due to an external factor or third party. 

		
	6.2.3.
	[***].

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 7 sur 18

		
	6.2.4.
	Pricing changes shall become effective for all orders placed following the date of such pricing change.

6.3 Invoicing

		
	6.3.1.
	The Supplier shall send an invoice to LDR MEDICAL, reiterating in particular the information contained in the order form for each Product order duly delivered to LDR MEDICAL’s premises and approved as compliant by LDR MEDICAL.

6.4 Payment
		
	6.4.1.
	LDR MEDICAL and the Supplier agree that LDR MEDICAL shall pay the Supplier the total amount for each invoice for Products ordered and duly delivered to LDR MEDICAL’s premises and approved as compliant by LDR MEDICAL, within [***] calendar days from the date when the invoice is issued.

		
	7.
	Packaging and Dispatch

		
	7.1.
	The Supplier must dispatch the goods according to the batch sizes, predetermined in the Subcontracting Agreement.

		
	7.2.
	The delivery terms and conditions are set out in the Subcontracting Agreement.

		
	8.
	Ownership 

		
	8.1.
	LDR MEDICAL and the Supplier agree that this Contract does not constitute the transfer of any intellectual or industrial property rights, thereby prohibiting the Parties from acquiring or laying claim to any intellectual or industrial property right which belongs to the co-contracting party.

		
	8.2.
	LDR MEDICAL and the Supplier hereby acknowledge that the Products are fully owned by LDR MEDICAL from their intellectual conception within LDR MEDICAL and from when manufacturing orders are placed with the Supplier up until their delivery to LDR MEDICAL’s premises after they have been manufactured by the Supplier.

		
	8.3.
	Under this contract, LDR MEDICAL and the Supplier agree that it shall be the Supplier’s duty to take responsibility for safeguarding the Products manufactured by the Supplier until these Products are picked up by the carrier at the Supplier’s manufacturing facility.

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 8 sur 18

		
	9.
	Jurisdiction Clause

		
	9.1.
	Any dispute arising from this Contract which cannot be settled out of court, shall be examined and interpreted in accordance with the laws of the French Republic. In this event, the courts in Troyes, France shall have sole jurisdiction.

		
	10.
	Breach

		
	10.1.
	This Contract may be cancelled by either Party should there be substantive non-performance by the other Party of one of its obligations stipulated herein. For this purpose, the Party which considers that its rights have been infringed shall send written notification to the Party in breach, and if this breach has not been remedied within a period of thirty (30) days following reception of this notification, the Party whose rights have been infringed shall be entitled to cancel this Contract. [***]. LDR MEDICAL and the Supplier agree that if this Contract is cancelled by LDR Medical pursuant to this Clause 10.1, Product orders placed by LDR MEDICAL before the Contract is actually cancelled must be honored by the Supplier, and without the Supplier being able to invoke Clause 3.6 of this Contract.  Except in the event this Contract is terminated for breach by Supplier, LDR MEDICAL will be responsible for all finished good inventory, Safety Stock, WIP, Product-specific non-returnable purchased material and any non-cancelable purchase orders outstanding with the Supplier’s suppliers relating to the Products.

		
	10.2.
	Either party may, at its own discretion, immediately cancel this Contract by giving written notice to the other party should there be bankruptcy, insolvency, assignment in favor of creditors or similar procedures concerning the liquidation or dissolution of the other party.

		
	11.
	Confidentiality

		
	11.1.
	With this Contract, the Parties undertake not to disclose Confidential Information (hereinafter “Confidential Information”) exchanged between them, nor to use it for any purposes other than the performance of this Contract. 

		
	11.2.
	Under this Contract, the Confidential Information disclosed between the Parties is understood to be all the technical, scientific, sales and marketing, pricing, manufacturing processes, procedures and methods and commercial information or any other information which belongs to or is held by either of the Parties, and communicated between the Parties in any form whatsoever (written, verbal, by computer or by any other means) throughout the whole Initial Period without it being necessary to mention their confidential nature beforehand; the aforementioned Confidential Information shall also include, but not be limited to, the terms and conditions and provisions of this Contract and retroactively any information exchanged between the Parties before this Contract.

		
	11.3.
	The Party which receives the Confidential Information (the “Recipient Party”) from the Party which discloses it (the “Disclosing Party”) shall receive, process and protect this Confidential Information with all the due diligence required for this, namely in exactly the same way as if it were handling its own information.

		
	11.4.
	Under this Contract the Parties undertake not to communicate Confidential Information to any third parties without the express and prior written consent of the Disclosing Party. They also agree that Confidential Information shall only be made available to employees, independent contractors and/or agents of the

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 9 sur 18

Recipient Party who need to know about this Confidential Information in order to perform the aforementioned Party’s obligations under this contract, this latter party shall inform them about the confidential nature of the Confidential Information and shall do its utmost to ensure this Clause is enforced, which if necessary shall include signing confidentiality agreements where such agreements do not exist.

		
	11.5.
	Moreover, the Recipient Party shall limit the reproduction of any form(s) derived from the Confidential Information, unless this is necessary so that the purpose of this Contract can be carried out. In addition, the Parties undertake to take all reasonable measures to protect the Confidential Information and prevent it from being stolen, copied and reproduced and to prevent any unauthorized use, disclosure or dissemination.

		
	11.6.
	Notwithstanding the above, the Recipient Party shall not be required to protect or keep confidential, and shall have no impediment in using, the following Confidential Information:

		
	(i)
	Information which belongs to or falls within the public domain without this being the doing of the Recipient Party; or

		
	(ii)
	Information which is already known to the Recipient Party and which has been recorded in writing by the Recipient Party before the date of this Contract, unless otherwise required to be kept confidential by agreement between the Parties; or

		
	(iii)
	Information which is subsequently legitimately received by the Recipient Party from a third party; or

		
	(iv)
	Information which is developed independently by an employee or consultant working for the Recipient Party who had no prior direct or indirect knowledge of the information disclosed under this Contract; or

		
	(v)
	Information which has to be disclosed due to a court judgment that cannot be appealed provided that the Disclosing Party is informed of this in writing as quickly as possible; or

		
	(vi)
	Information which must be given to government or administrative authorities provided that the Disclosing Party is informed of this in writing as quickly as possible.

		
	11.7.
	The Parties agree that this Clause shall apply throughout the whole duration of this Contract, including any Renewal Period, and for a duration of [***] years following the termination or expiration of this Contract.

		
	11.8.
	All Confidential Information shall remain the property of the Disclosing Party; the Recipient Party undertakes to return said information to the Disclosing Party and/or destroy it within a period of thirty (30) calendar days following receipt of a written request from the Disclosing Party or within a period of thirty (30) calendar days following cancellation of this Contract. In the event that neither Party requests that information be returned, the Parties hereby acknowledge that they shall uphold their obligations not to disclose Confidential Information as set out in this Clause.

Notwithstanding the above, in the event that the Confidential Information cannot be handed back to the Disclosing Party under regulations that apply to the Recipient Party, this latter Party undertakes to write to the Disclosing Party providing a precise list of the Confidential Information in question and the legally required length of time of the aforementioned archiving.

		
	11.9.
	The Parties agree that a violation of the covenants set forth in this Article 11 may cause damages to the other Party that are significant, material and difficult or impossible to adequately measure and the injured Party will be entitled to seek and obtain injunctive or other equitable relief compelling compliance in terms of this Agreement (in addition to any other remedies available, including, but not limited to, monetary damages).

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 10 sur 18

		
	12.
	Disagreements - Disputes

		
	12.1.
	Should a disagreement arise under this Contract which cannot be resolved through usual business practice within [***] days of the disagreement, LDR MEDICAL’s managers and the Supplier’s managers shall quickly hold a meeting to attempt to resolve the problem in good faith.

		
	12.2.
	If LDR MEDICAL’s managers and the Supplier’s managers are unable to resolve the dispute within a reasonable period of time of [***] days following the meeting between the parties referenced in Section 12.1, the disagreement shall be brought before the Troyes Tribunal de Grande Instance (Regional Court) in France.

		
	13.
	Various

		
	13.1.
	Should a provision of this Contract be declared invalid, illegal or unenforceable, such a declaration shall not affect the validity of the remaining clauses of this Contract.

		
	13.2.
	This Contract constitutes the entire agreement between the parties as far as the purpose of this Contract is concerned and replaces any other previous oral or written agreement and commitment of the parties, with respect to the purpose of this Contract and in particular the Supply Agreement. LDR MEDICAL and the Supplier agree that the Contract shall not replace either (i) the Subcontracting Agreement, or (ii) the Quality Contract.  The Subcontracting Agreement and the Quality Agreement, while entered into by GREATBATCH MEDICAL SAS, shall apply to Supplier, and Supplier hereby adopts and agrees to all terms and conditions of the Subcontracting Agreement and the Quality Agreement, as may be amended from time-to-time, as though entered into by Supplier.  In the event of a conflict between this Contract, the Subcontracting Agreement, and/or the Quality Agreement, this Contract shall control.

		
	13.3.
	Any amendment to the Contract must be confirmed in writing and signed by LDR MEDICAL and the Supplier.

		
	13.4.
	[INTENTIONALLY OMITTED.]

		
	13.5.
	The Appendices of this Contract are an integral part of this Contract.

		
	13.6.
	Each of the parties has drawn up this Contract so that it may be executed in two (2) copies by their respective representative.

		
	13.7.
	 Neither Party may, without the other Party’s prior written agreement, transfer this Contract or any rights, privileges and obligations arising from this Contract to any other person, company or corporation, including in the case of acquisition, fusion or consolidation with another company. Any attempt to transfer the Contract which would violate the terms of this clause shall be null and void.  However, either Party may transfer this Contract or any rights, privileges and obligations arising from this Contract to (a) any of its affiliates or (b) any other person, company or corporation which acquires such Party, or acquires substantially all of such Party’s assets to which this Contract relates; provided, however, that Supplier shall not be allowed to transfer this Contract to any party that, as part of its business, sells spinal implants directly to the end user of such implants (i.e. hospitals and doctors) and competes with LDR MEDICAL without LDR MEDICAL’s consent, which consent can be withheld in LDR MEDICAL’s sole and absolute discretion.

		
	13.8.
	The Parties expressly authorize the other Party to disclose the existence and content of the whole Contract to the United States Securities and Exchange Commission, as well as to any authority responsible for the Party and/or its parent company, so as to comply with legislation, codes, regulations or similar government requirements.

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 11 sur 18

		
	13.9.
	The Supplier is an independent contracting party which operates autonomously and is not bound by any relationship of subordination with regard to LDR MEDICAL. Consequently, the Supplier shall not be considered as being a legal representative, agent or any entity under LDR MEDICAL’s direct or indirect, total or partial control, The Supplier shall have no power or entitlement to legally bind, represent or commit LDR MEDICAL without LDR MEDICAL’s prior written agreement.

		
	14.
	Limitations

NOTWITHSTANDING ANYTHING TO THE CONTRARY STIPULATED IN THIS CONTRACT, UNDER NO CIRCUMSTANCES SHALL THE SUPPLIER’S FULL LIABILITY UNDER THIS CONTRACT EXCEED [***].

		
	15.
	Limited Warranty

The Supplier warrants that each Product sold under this Contract, for the [***] period commencing upon LDR MEDICAL’s receipt of the Product, shall comply with the applicable Specifications and shall be free from defects in material and workmanship. Notwithstanding anything to the contrary stipulated in this Contract, the Supplier’s warranty such as supplied in this Contract shall be null if any repair, amendment, modification or work has been carried out on the aforementioned Product or insofar as any alleged defect is the result of misuse, improper use, incorrect storage or maintenance, an accident, action or inaction by any party other than the Supplier. The Supplier shall not be liable for (a) the quality or condition of any material supplied by or through LDR MEDICAL or (b) any defect insofar as it is due to usage that does not comply with the applicable instructions. Subject to the foregoing, if a Product is not as it is guaranteed to be, and LDR MEDICAL notifies the Supplier in writing and returns this Product to the Supplier within a period of sixty (60) days following the discovery of the defect by LDR MEDICAL, the Supplier shall choose to either quickly repair or replace the defective Product or it shall reimburse the Product’s purchase price. Before returning a Product to the Supplier, LDR MEDICAL must contact the Supplier and the Supplier must provide LDR MEDICAL with a RMA number. LDR MEDICAL may only return the approved items and quantities through the RMA. Any Product that is repaired or replaced shall be sent back to LDR MEDICAL and the Supplier alone shall bear the costs. Such exclusive remedy shall not be deemed to have failed in fulfilling its essential purpose as long as the Supplier shall be willing and able to repair or replace a defective Product or to reimburse the purchase price as indicated. THE REPAIR OR REPLACEMENT OF THE PRODUCT OR REIMBURSEMENT OF THE PURCHASE PRICE SUCH AS IS PROVIDED FOR UNDER THIS LIMITED WARRANTY, IS THE EXCLUSIVE REMEDY FOR LDR MEDICAL. THE WARRANTIES IN THIS CLAUSE REPLACE ANY OTHER EXPRESS OR IMPLICIT, MANDATORY OR OTHER WARRANTY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

		
	16.
	Force majeure

Under this Contract, no Party shall be in default should it fail to fulfill any of its obligations arising from this Contract if the aforementioned failure is a result of circumstances beyond that Party’s control and not attributable to that Party’s error or negligence. This includes, but is not limited to, any natural catastrophe, act of public enemies, terrorism, government action, fire, flooding, earth quake, epidemic, quarantine, embargo on goods and failure by transport operators. If it appears that pursuant to this Contract, either of the Parties may be delayed in executing it because of force majeure, that Party shall inform the other Party about this as soon as possible. During the period when, as a

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 12 sur 18

consequence of force majeure, one of the Parties shall suspend fulfillment of its obligations arising from this Contract, the other Party may also suspend fulfillment of all or some of its obligations which arise from this contract (other than the obligation to pay any amount owed) insofar as the aforementioned suspension is reasonable from a business point of view. Both Parties to this Contract expressly agree that an internal strike on their premises, whether total or partial, shall not be regarded as constituting force majeure.

		
	17.
	Cooperation Related to [***]

[***]    

		
	18.
	Manufacturing Location Changes

Notwithstanding anything in this Contract, the Subcontracting Agreement or the Quality Contract to the contrary, in the event that Supplier wishes to manufacture a Product at a different location, LDR MEDICAL will approve such change so long as (i) Supplier provides notice to LDR MEDICAL [***] months before the location change to allow for qualification of the Products, and (ii) Supplier satisfies its obligations in this Clause 18.  Supplier will provide LDR MEDICAL with first article inspection, transfer plans, site specifications, on-site inspection and audit opportunities and any reasonable documentation, as reasonably requested by LDR MEDICAL, to ensure Supplier’s ability to continue production of each Product to meet its Specifications.  Notwithstanding the foregoing, LDR MEDICAL shall not be required to purchase a Product manufactured at such new location until the applicable Regulatory Agencies have approved, as applicable, such new location for such Product; and, Supplier shall continue to manufacture the applicable Products from its existing location until such time, or otherwise as agreed to by LDR MEDICAL.

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 13 sur 18

Drawn up in two original copies and effective as of December 31, 2015.

	
			
	GREATBATCH MEDICAL SA
	 
	LDR MEDICAL, SAS

	Alexandre Akchoti
	 
	Christophe LAVIGNE

	Director
	 
	Chairman

	 
	 
	 

	/s/ Alexandre Akchoti
	 
	/s/ Christophe Lavigne

	 
	 
	 

	Thomas J. Mazza
	 
	 

	Authorized Representative
	 
	 

	 
	 
	 

	/s/ Thomas J. Mazza
	 
	 

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 14 sur 18

Appendix 1
PRODUCTS AND PRICES

	
		
	[***] Mobi C
	[***] EUR YEAR [***]

	[***] Mobi C
	[***] EUR YEAR [***]

	[***] Mobi C
	[***] EUR YEAR [***]

	 [***] Mobi C*
	[***] EUR YEAR [***]

[***]

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 15 sur 18

Appendix 2
FORECAST

18-Month Forecast

	
			
	Contractual Month
	[***]Units 
	[***] Units

	1
	[***]
	TBD following validation

	2
	[***]

	3
	[***]

	4
	[***]

	5
	[***]

	6
	[***]

	7
	[***]

	8
	[***]

	9
	[***]

	10
	[***]

	11
	[***]

	12
	[***]

	13
	[***]

	14
	[***]

	15
	[***]

	16
	[***]

	17
	[***]

	18
	[***]

[***] Forecast

	
			
	Contractual year
	[***] Units
	[***] Units

	[***]
	[***]
	[***]

	[***]
	[***]
	[***]

	[***]
	[***]
	[***]

	[***]
	[***]
	[***]

	[***]
	[***]
	[***]

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 16 sur 18

Appendix 3
List of Subcontractors

[***] 
 
[***]
 
[***] 

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 17 sur 18

Appendix 4
LDR [***]

Insert only [***].

[***] Units
	
		
	[***]
	LDR [***] (in parts)

	[***]
	[***]

	[***]
	[***]

	[***]
	[***]

	[***]
	[***]

	[***]
	[***]

[***] Units
	
		
	[***]
	LDR [***] (in parts)

	[***]
	[***]

	[***]
	[***]

	[***]
	[***]

	[***]
	[***]

	[***]
	[***]

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:

	
				
	LDR Médical
	CONTRAT COMMERCIAL FOURNISSEUR
Supply Agreement
	
	Réf. : CC FRN GB 02

	Indice :
31/12/2015

	
	AM n° :

	Page 18 sur 18

Appendix 5
[***]

[***]

[***]

[***]

[***] Portions of this page have been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Paraphe / Initials:Exhibit

Exhibit 10.10

EMPLOYMENT AGREEMENT 
This Employment Agreement (the “Agreement”) is made and entered into effective as of January 1, 2016 (the “Effective Date”), by and between Regulus Therapeutics Inc., a Delaware corporation (the “Company”), and Joseph P. Hagan (the “Executive”). The Company and the Executive are hereinafter collectively referred to as the “Parties”, and individually referred to as a “Party”. 
Recitals 

Whereas, the Company desires to employ Executive to provide personal services to the Company in that capacity, and wishes to provide Executive with certain compensation and benefits in return for his services, and Executive wishes to be so employed and to receive such benefits; and 
Whereas, the Company and Executive wish to enter into this Agreement to define their mutual rights and duties with respect to Executive’s compensation and benefits as outlined herein. 
Now, Therefore, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the Parties, intending to be legally bound, agree as follows: 
Agreement 
		
	1.
	EMPLOYMENT.

1.1     Term.  The term of this Agreement shall begin on the Effective Date, and shall continue until terminated in accordance with Section 5 herein.

1.2    Title.  The Executive shall serve in the role of Chief Operating Officer of the Company (“COO”) and shall serve in such other capacity or capacities as the Board of Directors of the Company (the “Board”) may from time to time prescribe, but only as consistent with the customary duties of a COO.  

1.3    Duties.  The Executive shall report to the Company's President and CEO and shall do and perform all reasonable services, acts or things necessary or advisable to manage and conduct the business of the Company and which are normally associated with the position of COO, consistent with the bylaws of the Company and as required by the Company's President and CEO.

1.4    Location.  The Executive shall perform services pursuant to this Agreement at the Company’s offices located in San Diego, California, or at any other place at which the Company maintains an office, subject to Article 4.4; provided, however, that the Company may from time to time require the Executive to travel temporarily to other locations in connection with the Company’s business. 

		
	2.
	LOYAL AND CONSCIENTIOUS PERFORMANCE.

2.1    Loyalty.  During the Executive’s employment by the Company the Executive shall devote the Executive’s full business energies, interest, abilities and productive time to the proper and efficient performance of the Executive’s duties under this Agreement.  The Company acknowledges and approves of Executive’s existing other engagements including as Board Director of Zosano Corporation, Advisor to BioMed Realty Ventures and consultant to Orexigen Therapeutics Inc..  Executive may also devote personal time to charities.

2.2    Non-Company Business.    While employed by the Company, Executive shall not, without the Company’s prior written consent, subject to the existing engagements outlined in Article 2.1: (i) render to others, services of any kind for compensation, or engage in any other business activity that would materially interfere with the performance of Executive’s duties under this Agreement, or (ii) directly or indirectly, whether as a partner, employee, creditor, shareholder, or otherwise, promote, participate or engage in any activity or other business competitive with the Company’s business.  Executive shall not invest in any company or business which competes in any manner with the Company; provided that, Executive may, without violating this section, own, as a passive investment, shares of capital stock of a publicly-held corporation that engages in competition if (i) such shares are actively traded on an established national securities market in the United States, (ii) the number of shares of such corporation’s capital stock that are owned beneficially (directly or indirectly) by the Executive represents less than one percent 

of the total number of shares of such corporation’s outstanding capital stock, and (iii) Executive is not otherwise associated directly or indirectly with such corporation or with any affiliate of such corporation.  

		
	3.
	COMPENSATION OF THE EXECUTIVE.

3.1    Base Salary.  The Company shall pay the Executive a base salary at the rate of $415,000 per year (the “Base Salary”), less payroll deductions and all required withholdings, payable in regular bi-weekly payments or otherwise in accordance with Company policy.  Such Base Salary shall be prorated for any partial year of employment on the basis of a 365-day fiscal year.

3.2    Discretionary Bonuses.  In addition to the Base Salary, the Executive will be eligible to receive a yearly discretionary merit bonus pursuant to the Company’s annual performance bonus plan (beginning with respect to the plan relating to the 2016 year), with a target amount of such bonus equal to 40% of Executive’s Base Salary (the “Annual Bonus”).  The target percentage for the Annual Bonus is subject to modification from time to time in the discretion of the Board. Whether Executive receives an Annual Bonus for any given year, and the amount of any such Annual Bonus, will be determined by the Board in its sole discretion based upon the Company’s and Executive’s achievement of objectives and milestones to be determined on an annual basis by the Board.  Executive must remain an active employee through the end of the applicable performance period in order to earn an Annual Bonus for that year and any such bonus will be paid in a lump sum prior to March 15 of the year following the year in which Executive’s right to such amount became vested.  

3.2.1    Signing Bonus.  Upon Executive’s commencement of employment with Company, Executive will be paid a lump-sum cash signing bonus in the amount of $100,000.00, less payroll deductions and all required withholdings.  In the event of Executive’s termination of employment with the Company for Cause or Executive's resignation of employment with the Company without Good Reason (as these terms are defined below) (in either case, a “Triggering Termination”) within the three years following the Effective Date, Executive shall repay the amount of the signing bonus to Company according to the following schedule.  Executive's repayment of the signing bonus shall be made in cash within 30 days of the date of Executive's termination or resignation, as applicable.
	
		
	Triggering Termination occurs after the Effective Date and on or before the first anniversary of the Effective Date
	$100,000.00 to be repaid

	Triggering Termination occurs after the first anniversary of the Effective Date and on or before the second anniversary of the Effective Date
	$66,667.00 to be repaid

	Triggering Termination occurs after the second anniversary of the Effective Date and on or before the third anniversary of the Effective Date
	$33,334.00 to be repaid

	Triggering Termination occurs after the third anniversary of the Effective Date
	$0 to be repaid

3.3    Equity Compensation.  Upon Executive’s commencement of employment with the Company, Executive will be eligible for initial stock option grants to purchase (i) up to 420,000 shares of the Company’s common stock (the "Time-Based Option") and (ii) up to 122,631 shares of the Company's common stock (the "Performance-Based Option" and, together with the Time-Based Option, the "Option Grants").  The proposed Option Grants are intended to be a material inducement to Executive's entering into employment with the Company.  The Time-Based Option is expected to vest, in aggregate, over a four-year period from the grant date (25% will vest after one year, with the balance to vest in equal monthly installments thereafter), subject to Executive's continued service to the Company.  The Performance-Based Option is expected to vest, in the aggregate, based on the performance-based vesting conditions and other material vesting terms set forth in the applicable option agreement, and Executive's continued service to the Company.  Each of the Option Grants will be granted with an exercise price per share equal to the closing price of the Company's common stock on the date the Option Grant is granted.  The Option Grants will, to the maximum extent possible under tax laws, be granted as "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). All Option Grants that are granted as "incentive stock options" shall be granted under the Regulus 2012 Equity Incentive Plan (the "2012 Plan").  Option Grants that are not granted as "incentive stock options" shall be granted under the Regulus Inducement Plan (the "Inducement Plan" and, together with the 2012 Plan, the "Plans").  The Option Grants will be subject to the terms and conditions of the applicable Plans and the stock option grant notice(s) and option agreement(s) under such Plans. Executive will be provided confirmation of the vesting schedule, option price, and the applicable Plan documents once Executive begins employment. 

3.4    Notwithstanding the provisions of any such grant agreements, all outstanding stock options subject to vesting based on the Company performance, , that are held by the Executive as of immediately before a Change in Control, shall become fully vested and exercisable as of immediately before, and contingent upon the occurrence of the Change in Control provided that the Executive is employed with the Company as of such date.  The Board may grant additional stock, stock options, or other equity awards to Executive in its sole discretion.

3.5    Changes to Compensation.  It is anticipated that the Executive will be considered on an annual basis for merit increases in base compensation consistent with performance and market trends but subject to Board approval in its sole discretion.  Subject to Section 5.3 below, the Executive’s compensation may be changed from time to time in the Company’s sole discretion based upon Board approved changes to the Company’s operating plan after considering relevant business conditions.

3.6    Employment Taxes.  All of the Executive’s compensation and payments under this Agreement shall be subject to customary withholding taxes and any other employment taxes as are commonly required to be collected or withheld by the Company.

3.7    Benefits.  The Executive shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any executive benefit plan or arrangement which may be in effect from time to time and made available to the Company’s executive or key management employees.

3.8    Vacations and Holidays.  In accordance with Company policies, Executive shall be entitled to accrue fifteen (15) days of paid vacation during each calendar year, subject to applicable maximum accrual caps.  Notwithstanding the foregoing, for calendar year 2016 only, Executive will be awarded fifteen (15) days of paid vacation on January 1, 2016 (the “Advanced Accrual”), and such Advanced Accrual will otherwise be subject to Company policies and the applicable maximum accrual caps. Executive shall also be entitled to certain paid holidays.  The Company may modify any of its benefit plans or policies, including its vacation and holiday policies, from time to time in its sole discretion.

3.9    Expenses.  The Company will promptly reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in furtherance or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time. For the avoidance of doubt, to the extent that any reimbursements payable to Executive are subject to the provisions of Section 409A of the Code: (a) to be eligible to obtain reimbursement for such expenses Executive must submit expense reports within 45 days after the expense is incurred, (b) any such reimbursements will be paid promptly but no later than December 31 of the year following the year in which the expense was incurred, (c) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (d) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

		
	4.
	DEFINITIONS.  

For purposes of this Agreement, the following terms shall have the following meanings: 
4.1    Cause. At any time other than during the Change in Control Protection Period, “Cause” for the Company to terminate Executive’s employment hereunder means the occurrence of any of the following events:  (i) Executive’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) Executive’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) Executive’s intentional, material violation of any contract or agreement between the Executive and the Company (including this Agreement) or of any statutory duty owed to the Company; (iv) Executive’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) Executive’s gross misconduct.  During the Change in Control Protection Period, and notwithstanding the foregoing, “Cause” for the Company to terminate Executive’s employment hereunder means the occurrence of any of the following events:  (I) Executive’s conviction of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (II) commission of an intentional act of fraud, embezzlement or theft by the Executive in the course of Executive’s employment by the Company; (III) Executive’s intentional, material violation of any contract or agreement between the Executive and the Company (including this Agreement) or of any statutory duty owed to the Company which is not remedied within a thirty (30) days’ written notice from the Company specifying such failure; (IV) Executive’s intentional and unauthorized use or disclosure of the Company’s confidential information or trade secrets which is materially and demonstrably injurious to the Company; or (V) Executive’s gross misconduct.  For purposes of item (III) of this Cause definition, the Executive will have the opportunity to remedy this failure only the first time that the Company provides notice that Cause exists pursuant to item (III).

4.2    Change in Control. For purposes of this Agreement, “Change in Control” means: the occurrence of any one or more of the following events:   (i) any person,  (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), becomes the owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities (other than in connection with a transaction involving the issuance of securities by the Company for which the principal purpose is to raise capital for the Company); (ii) there is consummated a merger, consolidation or similar transaction to which the Company is a party and the stockholders of the Company immediately prior thereto do not own outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving entity immediately following such merger, consolidation or similar transaction or more than 50% of the combined outstanding voting power of the parent of the surviving entity immediately following such merger, consolidation or similar transaction; or (iii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries, other than a sale, lease or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries to an entity more than 50% of the combined voting power of which is owned immediately following such disposition by the stockholders of the Company immediately prior thereto.

4.3    Complete Disability. “Complete Disability” shall mean the inability of the Executive to perform the Executive’s duties under this Agreement because the Executive has become permanently disabled within the meaning of any policy of disability income insurance covering employees of the Company then in force.  In the event the Company has no policy of disability income insurance covering employees of the Company in force when the Executive becomes disabled, the term Complete Disability shall mean the inability of the Executive to perform the Executive’s duties under this Agreement by reason of any incapacity, physical or mental, which the Board, based upon medical advice or an opinion provided by a licensed physician acceptable to the Board, determines can be expected to result in death or expected to last for a continuous period of more than 12 months.  Based upon such medical advice or opinion, the determination of the Board shall be final and binding and the date such determination is made shall be the date of such Complete Disability for purposes of this Agreement.  The Company shall act upon this Section in compliance with the Family Medical Leave Act (if applicable to the Company), the Americans with Disabilities Act (as amended), and applicable state and local laws.

4.4    Good Reason.  At any time other than during the Change in Control Protection Period, “Good Reason” means the occurrence of any of the following events without the Executive’s consent; provided however, that any resignation by the Executive due to any of the following conditions shall only be deemed for Good Reason if: (i) the Executive gives the Company written notice of the intent to terminate for Good Reason within 90 days following the first occurrence of the condition(s) that the Executive believes constitutes Good Reason, which notice shall describe such condition(s); (ii) the Company fails to remedy, if remediable, such condition(s) within 30 days following receipt of the written notice (the “Cure Period”) of such condition(s) from the Executive; and (iii) Executive actually resigns his employment within the first 15 days after expiration of the Cure Period: (a) a material breach of this Agreement by the Company; (b) a material reduction by the Company of the Executive’s Base Salary as initially set forth herein or as the same may be increased from time to time; (c) a material reduction in the Executive’s authority, duties or responsibilities; or (d) the Company relocates the facility that is the Executive’s principal place of business with the Company to a location that requires an increase in the Executive’s one-way driving distance by more than 35 miles.  For purposes of the foregoing Good Reason definition, the Company will have the opportunity to remedy the Good Reason condition only the first time that the Executive provides notice that Good Reason exists.  During the Change in Control Protection Period, and notwithstanding the foregoing, “Good Reason” means the occurrence of one of the following without Executive’s express, written consent: (I) a significant reduction of Executive’s duties, position or responsibilities (including, without limitation, any negative change in reporting hierarchy involving the Executive or the person to whom Executive directly reports), or Executive’s removal from such position and responsibilities; (II) a reduction by the Company in Executive’s (A) Base Salary or target annual bonus as in effect immediately prior to such reduction, or (B) a change to the timing associated with long-term incentive awards or a reduction in the annual grant date fair value of such awards relative to the highest fair value award granted to Executive during the three (3)-year period prior to a Change in Control; (III) a material reduction by the Company in the kind or aggregate level of employee benefits to which Executive is entitled immediately prior to such reduction with the result that Executive’s overall benefits package is significantly reduced; (IV) Executive is requested to relocate (except for office relocations that would not increase Executive’s one way commute by more than thirty-five (35) miles); or (V) the failure of the Company to obtain the assumption of this Agreement pursuant to Section .  During the Change in Control Protection Period, any good faith determination of Good Reason by the Executive shall be binding on the Company provided the Company does not remedy the occurrence giving rise to Good Reason within thirty (30) days’ written notice thereof from the Executive.  Upon and after a Change in Control, references to the "Company" in this section 4.4 shall apply to the successor to the Company in such Change in Control which executes and delivers this Agreement or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

		
	5.
	COMPENSATION UPON TERMINATION.

5.1    Death Or Complete Disability. If the Executive’s employment with the Company is terminated as a result of Executive’s death or Complete Disability, the Company shall pay to Executive, and/or Executive’s heirs, the Executive’s Base Salary and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings, and the Company shall thereafter have no further obligations to the Executive and/or Executive’s heirs under this Agreement. 

5.2    With Cause or Without Good Reason. If the Executive’s employment with the Company is terminated by the Company for Cause or if the Executive terminates employment with the Company without Good Reason, the Company shall pay the Executive’s Base Salary and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings, and the Company shall thereafter have no further obligations to the Executive under this Agreement. 

5.3    Without Cause or for Good Reason. If the Executive’s employment with the Company is terminated by the Company without Cause, or Executive resigns for Good Reason, and in either case Executive signs a waiver and release of claims (in substantially the form attached hereto as Exhibit A, or in such other form of release as the Company may require (the “Release”)) on or within the time period set forth therein, but in no event later than 45 days after Executive’s termination date, and allows such Release to become effective in accordance with its terms, which shall in no event be later than 60 days after Executive's termination date (such latest permitted date on which the Release could become effective, the “Release Deadline”), then Executive will receive the following benefits: 

5.3.1    Severance Payment.  A payment equal to the equivalent of 12 months of the Executive’s Base Salary (the “Severance Payment”), less standard deductions and withholdings, which shall be paid in a single lump sum within five days after the effective date of the Release.  For the avoidance of doubt, the Severance Payment shall relate to the Base Salary at the rate in effect during the last regularly scheduled payroll period immediately preceding the date of the termination, and prior to any reduction in Base Salary that would permit the Executive to voluntarily terminate employment for Good Reason. 

5.3.2    Health Benefits Cash Payment.  On the effective date of the Release, the Company will pay to the Executive a single, lump-sum cash amount equal to (i) 229.56% multiplied by the total cost of the projected premiums for group medical, dental and vision insurance coverage (the “Health Benefits”) for a period of twelve (12) months following the date of the Executive’s termination of employment, based on the projected premium rates for such period for continuation of coverage in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) determined, in all cases, as of the date of the Executive’s termination of employment (1) based on the Company plans in which the Executive participates and the level of the Executive’s Health Benefits coverage as of immediately preceding the date of the Executive’s termination of employment or, if more favorable to the Executive, the level of the Executive’s Health Benefits coverage as in effect at any time during the ninety (90)-day period immediately preceding the date of a Change in Control, and (2) assuming, to the extent applicable, an increase of four percent (4%) in the applicable premium rates at the beginning of each calendar year during such twelve (12)-month period from those in effect as of the end of the previous calendar year.  For the avoidance of doubt, the cash amount described in this paragraph shall be in lieu of the provision of any welfare benefits following the date of the Executive’s termination of employment and the Executive’s sole right to post-termination welfare benefits shall be those required to be made available under COBRA, the cost of which (if elected) shall be borne solely by the Executive.  

5.3.3    Equity Acceleration.  Contingent on the effective date of the Release, all of the outstanding stock options, restricted stock or other equity awards that Executive holds with respect to the Company’s common stock that have time-based vesting shall accelerate and vest such that all shares shall be vested and fully exercisable as of the effective date of Executive’s termination of employment.  Equity awards that Executive holds with respect to the Company’s common stock that are subject to vesting based on Company performance will not accelerate upon Executive’s termination unless such performance goals are already achieved.  In order to give effect to the foregoing provision, notwithstanding anything to the contrary set forth in Executive’s equity award agreements, following any termination of Executive’s employment that is without Cause or for Good Reason, none of Executive’s equity awards shall terminate with respect to any vested or unvested portion subject to such award before the later of (A) the effective date of the Release, or (B) the Release Deadline.

5.4    Additional Change in Control Related Severance Benefits. In the event that Executive’s employment with the Company is terminated without Cause or Executive resigns for Good Reason within the one month period immediately preceding or the twelve month period immediately following the effective date of a Change in Control (such thirteen-month period, the “Change in Control Protection Period”), then subject to the Executive’s delivery to the Company of an effective Release as required pursuant to Section 5.3, Executive shall be entitled to all of the severance benefits described under Section 5.3 above, provided that:

5.4.1    The Executive shall additionally be entitled to a lump sum payment equivalent to the Executive’s target Annual Bonus that was in effect at the time of Executive’s termination (the “Bonus Payment”). The Bonus Payment shall be subject to all standard deductions and withholdings and shall be paid in a single lump sum within five days after the later of (A) the effective date of the Release, or (B) the effective date of the Change in Control (if Executive’s termination occurs prior to the Change in Control), but in no event later than March 15 of the year following the year in which Executive’s termination of employment occurred.  

5.5    Termination by Mutual Agreement of the Parties.  The Executive’s employment pursuant to this Agreement may be terminated at any time upon mutual agreement, in writing, of the Parties.  Any such termination of employment shall have the consequences specified in such writing. 

5.6    No Mitigation.  The Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Section 5 by seeking other employment or otherwise, nor shall the amount of such payment be reduced by reason of compensation or other income the Executive receives for services rendered after the Executive’s termination of employment with the Company.

5.7    Exclusive Remedy.  In the event of the Executive’s termination of employment on account of an involuntary termination without Cause or a voluntary termination for Good Reason, the provisions of this Section 5 are intended to be and are exclusive and in lieu of any other rights or remedies to which the Executive or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement.  Payments made to or on behalf of the Executive under any other severance plan, policy, contract or arrangement with the Company shall reduce amounts payable under this Agreement on a dollar for dollar basis.

5.8    Survival of Certain Provisions.  Sections 6 and 18 shall survive the termination of this Agreement. 
    
		
	6.
	CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.

6.1    As a condition of employment, Executive agrees to execute and to abide by the Employee Confidential Information and Inventions Agreement set forth on Exhibit B  to this Agreement. 

6.2    While employed by the Company and for one year thereafter, the Executive agrees that in order to protect the Company’s trade secrets and confidential and proprietary information from unauthorized use, the Executive will not, either directly or through others, solicit or attempt to solicit any employee, consultant or independent contractor of the Company to terminate his or her relationship with the Company in order to become an employee, consultant or independent contractor to or for any other person or business entity. 

		
	7.
	ASSIGNMENT AND BINDING EFFECT.

This Agreement shall be binding upon and inure to the benefit of the Executive and the Executive’s heirs, executors, personal representatives, assigns, administrators and legal representatives.  Because of the unique and personal nature of the Executive’s duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assignable by the Executive.
The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform the obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  As used in this Section 7, Company includes any successor to its business or assets as aforesaid which executes and delivers this Agreement or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.
		
	8.
	INDEMNITY.

The Company shall execute and deliver to Executive the Company’s standard indemnification agreement, which agreement shall be substantially in the form filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-183384) (the “Indemnity Agreement”)
		
	9.
	CHOICE OF LAW.

This Agreement shall be construed and interpreted in accordance with the internal laws of the State of California. 

		
	10.
	INTEGRATION.

This Agreement, including Exhibit A, and Exhibit B, and the Indemnity Agreement contains the complete, final and exclusive agreement of the Parties relating to the terms and conditions of the Executive’s employment and the termination of the Executive’s employment, and supersedes all prior and contemporaneous oral and written employment agreements or arrangements between the Parties except as indicated herein.  
		
	11.
	AMENDMENT.

Except as otherwise provided for in this Agreement, this Agreement cannot be amended or modified except by a written agreement signed by the Executive and the Company as directed by the Board. 
		
	12.
	WAIVER.

No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach. 
		
	13.
	SEVERABILITY.

The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal.  Such court shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision which most accurately represents the Parties’ intention with respect to the invalid or unenforceable term or provision. 
		
	14.
	INTERPRETATION; CONSTRUCTION.

The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement.  This Agreement has been drafted by legal counsel representing the Company, but the Executive has been encouraged to consult with, and have consulted with, the Executive’s own independent counsel and tax advisors with respect to the terms of this Agreement.  The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
		
	15.
	REPRESENTATION AND WARRANTIES.

The Executive represents and warrants that the Executive is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that the Executive’s execution and performance of this Agreement will not violate or breach any other agreements between the Executive and any other person or entity.
		
	16.
	COUNTERPARTS; FACSIMILIE.

This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute one and the same instrument.  Facsimile signatures shall be treated the same as original signatures.
		
	17.
	DISPUTE RESOLUTION.

To ensure the timely and economical resolution of disputes that may arise in connection with Executive’s employment with the Company, Executive and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance, negotiation, execution, or interpretation of this Agreement, Executive’s employment, or the termination of Executive’s employment, including but not limited to statutory claims, shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in San Diego, California, conducted by JAMS, Inc. (“JAMS”) under the then applicable JAMS rules (which can be found at the following web address: http://www.jamsadr.com/rulesclauses).  By agreeing to this arbitration procedure, both Executive and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding.  The Company acknowledges that Executive will have the right to be represented by legal counsel at any arbitration proceeding.  The arbitrator shall:  (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award.  The arbitrator shall be authorized to award any or all remedies that Executive or the Company would be entitled to seek in a court of law.  The Company shall pay all JAMS’ arbitration fees in excess of the amount of court fees that would be required of the Executive if the dispute were decided in a court of law.  Nothing in this Agreement is intended to prevent either Executive or the Company 

from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.  Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction. 
		
	18.
	TRADE SECRETS.

It is the understanding of both the Company and the Executive that the Executive shall not divulge to the Company and/or its subsidiaries any confidential information or trade secrets belonging to others, including the Executive’s former employers, nor shall the Company and/or its Affiliates seek to elicit from the Executive any such information.  Consistent with the foregoing, the Executive shall not provide to the Company and/or its Affiliates, and the Company and/or its Affiliates shall not request, any documents or copies of documents containing such information.
		
	19.
	ADVERTISING WAIVER.

The Executive agrees to permit the Company and/or its affiliates, subsidiaries, or joint ventures currently existing or which shall be established during Executive’s employment by the Company (collectively, “Affiliates”), and persons or other organizations authorized by the Company and/or its Affiliates, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company and/or its Affiliates, or the machinery and equipment used in the provision thereof, in which the Executive’s name and/or pictures of the Executive taken in the course of the Executive’s provision of services to the Company and/or its Affiliates, appear.  The Executive hereby waives and releases any claim or right the Executive may otherwise have arising out of such use, publication or distribution.  The Company agrees that, following termination of the Executive’s employment, it will not create any new such literature containing the Executive’s name and/or pictures without the Executive’s prior written consent.
		
	20.
	APPLICATION OF SECTION 409A.

All benefits under this Agreement are intended to qualify for an exemption from application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (“Section 409A”) or to comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.
Notwithstanding anything to the contrary set forth herein, any severance benefits that constitute “deferred compensation” within the meaning of Section 409A shall not commence in connection with the Executive’s termination of employment unless and until the Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to the Executive without causing the Executive to incur the additional 20% tax under Section 409A.
It is intended that each installment of the severance benefit payments provided for in this Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i).  For the avoidance of doubt, it is intended that payments of the severance benefits set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9).  However, if the Company (or, if applicable, the successor entity thereto) determines that the severance benefits constitute “deferred compensation” under Section 409A and the Executive is, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the severance benefit payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after the Executive’s Separation From Service, or (ii) the date of the Executive’s death.  If all or any portion of any amounts payable to Executive is deferred to comply with Section 409A in accordance with the foregoing, such payments shall accrue interest at the six (6)-month Libor rate, and, on or before the date of the Executive’s Separation From Service, the Company shall make an irrevocable contribution of the amount deferred to comply with  Section 409A to a grantor trust established by the Company prior to the Change in Control consistent with the terms of Rev. Proc. 92-64, 1992-33 I.R.B. 11, with irrevocable instructions to pay such amounts to Executive on the earlier to occur of: (i) the date that is six months and one day after the Executive’s Separation From Service, or (ii) the date of the Executive’s death.  Such grantor trust shall have an independent trustee and the Company shall bear all costs, expenses and fees, including legal and trustee fees, of establishing and maintaining such trust.
None of the severance benefits will be paid or otherwise delivered prior to the effective date of the Release.  If the severance benefits are not covered by one or more exemptions from the application of Section 409A and the Release could become effective in the calendar year following the calendar year in which Executive’s Separation From Service occurs, the Release will not be deemed effective any earlier than the Release Deadline.  Except to the minimum extent that payments must be delayed because Executive is a “specified employee” or until the effectiveness of the Release, all amounts will be paid as soon as practicable in accordance with the Company’s normal payroll practices. 

The severance benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.
		
	21.
	PARACHUTE PAYMENTS.

    
In the event that any of the severance payments and other benefits provided by this Agreement or otherwise payable to Executive (a) constitute “parachute payments” within the meaning of Section 280G of the Code, and (b) but for this Section, would be subject to the excise tax imposed by Section 4999 of the Code (“Excise Tax”), Executive’s severance payments and benefits under this Agreement or otherwise shall be payable either in full or in such lesser amount which would result in no portion of such severance payments or benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the Excise Tax, results in the receipt by Executive, on an after-tax basis, of the greatest amount of severance payments and benefits under this Agreement or otherwise, notwithstanding that all or some portion of such severance payments or benefits may be taxable under Section 4999 of the Code.  Any reduction in the severance payments and benefits required by this Section shall be made in the following order: (i) reduction of cash payments; (ii) reduction of accelerated vesting of equity awards other than stock options; (iii) reduction of accelerated vesting of stock options; and (iv) reduction of other benefits paid or provided to Executive.
The calculations in this Section will be performed by the professional firm engaged by the Company for general tax purposes as of the day prior to the date of the event that might reasonably be anticipated to result in severance payments and benefits that would otherwise be subject to the Excise Tax. If the tax firm so engaged by the Company is serving as accountant or auditor for the acquiring company, the Company shall appoint a nationally recognized tax firm to make the determinations required by this Section.  The Company shall bear all expenses with respect to the determinations by such firm required to be made by this Section. The Company and Executive shall furnish such tax firm such information and documents as the tax firm may reasonably request in order to make its required determination. The tax firm will provide its calculations, together with detailed supporting documentation, to the Company and Executive as soon as practicable following its engagement. Any good faith determinations of the tax firm made hereunder shall be final, binding and conclusive upon the Company and Executive. However, the Executive shall have the final authority to make any good faith determination(s) associated with the assumptions used by the tax firm in providing its calculations, and such good faith determination by the Executive shall be binding on the Company.
As a result of the uncertainty in the application of Sections 409A, 280G or 4999 of the Code at the time of the initial determination by the professional tax firm described in this Section, it is possible that the Internal Revenue Service (the “IRS”) or other agency will claim that an Excise Tax greater than that amount, if any, determined by such professional firm for the purposes of this Section is due (the “Additional Excise Tax”).  Executive shall notify the Company in writing of any claim by the IRS or other agency that, if successful, would require payment of Additional Excise Tax. Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to payments made or due to Executive. The Company shall pay all reasonable fees, expenses and penalties of Executive relating to a claim by the IRS or other agency. In the event it is finally determined that a further reduction would have been required under this Section to place Executive in a better after-tax position, Executive shall repay the Company such amount within 30 days thereof in order to effect such result.  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 In Witness Whereof, the Parties have executed this Agreement as of the date first above written.

Regulus Therapeutics Inc.

By:      /s/ Mary Glanville

Name:      Mary Glanville
Title:       Senior Vice President of Human Capital

/s/ Joseph Hagan
Joseph P. Hagan

Exhibit A

RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in Section 5 of the Amended and Restated Employment Agreement dated January 1, 2016, to which this form is attached (the “Amended Employment Agreement”), I, Joseph P. Hagan, hereby furnish Regulus Therapeutics Inc. (the “Company”) with the following release and waiver (“Release and Waiver”).
In exchange for the consideration provided to me by the Amended Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Release and Waiver (collectively, the “Released Claims”).  The Released Claims include, but are not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), the federal Family and Medical Leave Act (as amended), the California Labor Code, and the California Fair Employment and Housing Act (as amended).  Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (a) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; (b) any rights or claims to unemployment compensation, funds accrued in my 401k account, or any vested equity incentives; (c) any rights or claims I may have pursuant to the Amended Employment Agreement for separation pay or benefits after a Change in Control (as defined therein); (d) any rights that are not waivable as a matter of law; and (e) any claims arising from the breach of this Release and Waiver.  Furthermore, if there is a dispute over severance pay or benefits payable to me pursuant to the Amended Employment Agreement, the Company will nevertheless pay to me all amounts that are not in dispute and my claim for such amounts that are in dispute shall also be deemed an Excluded Claim.  I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.
I also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads 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.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims I may have against the Company.
I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company.  If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that:  (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; (c) I have twenty-one (21) days in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired without my having previously revoked this Release and Waiver.
If I am less than 40 years of age upon execution of this Release and Waiver, I acknowledge that I have the right to consult with an attorney prior to executing this Release and Waiver (although I may choose voluntarily not to do so); and that I have ten 

(10) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier). 
I acknowledge my continuing obligations under my Employee Confidentiality and Inventions Assignment Agreement a copy of which is attached hereto (the “CIAA”).  Pursuant to the CIAA, I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control.  I understand and agree that my right to the severance benefits I am receiving is in exchange for my agreement to the terms of this Release and Waiver and is contingent upon my continued compliance with my CIAA.
This Release and Waiver, including the CIAA, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

Date: __________________    By:         Joseph P. Hagan
  

 

Exhibit B

Regulus Therapeutics, Inc.
EMPLOYEE CONFIDENTIAL INFORMATION AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by Regulus Therapeutics, Inc., (the “Company”), and the compensation now and hereafter paid to me, I hereby agree as follows:

		
	1.
	Recognition of Company’s Rights; Nondisclosure.  At all times during the term of my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any the Company’s Confidential Information (defined below), except as such disclosure, use or publication may be required by the Company in connection with my work for the Company, or unless an officer of the Company expressly authorizes such in writing. I will not make any permitted disclosure, use or publication unless such disclosure, use or publication is in strict compliance with the Company’s publication and presentation clearance policy. I will not export, directly or indirectly, any Company products, any direct product thereof, or any related technical data in violation of the United States Department of Commerce’s Export Administration Regulations.

The term “Confidential Information” will mean trade secrets, confidential knowledge, data or any other proprietary information        of the Company. By way of illustration but not limitation, “Confidential Information” includes (a) inventions, mask works, trade secrets, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, (hereinafter collectively referred to as “Inventions”); and (b) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; as well as information regarding the skills and compensation of other employees of the Company.

		
	2.
	Third Party Information. I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  In addition, Third Party Information will include the confidential or proprietary information of the Company’s parent, Isis Pharmaceuticals, Inc. (“Isis”).  During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose (except as required to be disclosed in connection with my work for the Company) Third Party Information unless expressly authorized by an officer of the Company in writing.  I will not make any permitted disclosures unless such disclosure is in strict compliance with the Company’s publication and presentation clearance policy.

		
	3.
	Assignment of Inventions.

3.1    Assignment.
		
	(a)
	I hereby assign to the Company all my right, title and interest throughout the world in and to any and all Inventions (and all patent rights, copyrights, and all other rights in connection therewith, hereinafter referred to as “Proprietary Rights”) whether or not patentable or registrable under patent, copyright, trademark or similar statutes (together with the goodwill associated therewith), made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company (“Work Inventions”) or within one year after termination of my employment, which relate to any Work Invention or to any work performed by me while I was employed by the Company.  Inventions assigned to the Company by this Paragraph 3 are hereinafter referred to as “Company Inventions.” I agree, upon request, to execute, verify and deliver assignments of the Proprietary Rights to the Company or its designee.

		
	(b)
	If I am employed by the Company in the State of California, I recognize that this Agreement does not require assignment of any invention on which qualifies fully for protection under Section 2870 of the California Labor Code (hereinafter “Section 2870”), which provides as follows:

		
	(i)
	Any provision in an employment agreement which provides that an employee will assign, or offer to assign, any of his or her rights in an invention to his or her employer will 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. 

		
	(ii)
	To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (i), the provision is against the public policy of this state and is unenforceable.

3.2    Government.  I also agree to assign all my rights, title and interest in and to any and all Company Inventions to the United States of America, if such is required to be assigned by a contract between the Company and United States of America or any of its agencies.

3.3    Works for Hire. I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment as well as those works made by me within one year after termination of my employment which relate to any work made by me while I was employed by the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C., Section 101).

		
	4.
	Enforcement of Proprietary Rights. I will assist the Company in every proper way to obtain and from time to time enforce United States and foreign Proprietary Rights relating to Company Inventions in any and all countries.  My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries will continue beyond the termination of my employment, but the Company will compensate me at a reasonable rate after my termination for the time actually spent by me if the Company requests such assistance.

I hereby waive and transfer to the Company, any and all claims, of any nature whatsoever, which I now or may hereafter have, for infringement of any Proprietary Rights assigned hereunder to the Company.

		
	5.
	Obligation to Keep Company Informed.  During the period of my employment, I  will promptly disclose all Company Inventions to the Company fully and in writing and will hold such Company Inventions in trust for the sole right and benefit of the Company.  In addition, after termination of my employment, I will disclose all patent applications filed by me within a year after termination of employment which relate to any Company Invention or to any work performed by me while I was employed by Company.

		
	6.
	Prior Inventions. Inventions, if any, patented or unpatented, which I made prior to the commencement of my employment with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, except for any Inventions I have already assigned to Isis prior to executing this Agreement, I have set forth in Exhibit A attached hereto a complete list of all Inventions that I have, alone or jointly with others, conceived, developed or reduced to practice prior to the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement.  If disclosure of any such Invention on Exhibit A would cause me to violate any prior confidentiality agreement, I understand that I am not to list such Inventions in Exhibit A but am to inform the Company that all such Inventions have not been listed for that reason.

		
	7.
	Additional Activities.

		
	(a)
	I agree that during the period of my employment by the Company I will not, without the Company’s express written consent, engage in any employment or business activity other than for the Company.  Additionally, during the period of my employment by the Company and for one year after the date of termination of my employment with the Company I will not induce any employee of the Company to leave the employ of the Company. 

		
	(b)
	I acknowledge that the Company has developed, through an extensive acquisition process, valuable information regarding actual or perspective partners, licensors, licensees, clients, customers and accounts of the Company (“Trade Secret Information”). I further acknowledge that my use of such Trade Secret Information after the termination of my employment would cause the Company irreparable harm.  Therefore I agree that I will not use Trade Secret Information to solicit the business relationship or patronage of any of the actual or prospective partners, licensors, licensees, clients, customers or accounts of the Company.

		
	8.
	No Improper Use of Materials. During my employment by the Company, I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person.

		
	9.
	No Conflicting Obligation. I represent that my performance (a) of all the terms of this Agreement and (b) as an employee of the Company, does not and will not breach any agreement to keep in confidence information acquired by me in confidence 

or in trust prior to my employment by the Company.  I have not entered into, and I will not enter into, any agreement that conflicts with this Agreement.

		
	10.
	Return of Company Documents. When I leave the employ of the Company, I will deliver to the company any and all laboratory notebooks, conception notebooks, drawings, notes, memoranda, specifications, devices, formulas, molecules, cells, storage media, including software and documents, including any computer printouts, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Confidential Information of the Company.  I further agree that nay property situated on the Company’s premises and owned by the Company including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.  Prior to leaving, I will cooperate with the Company in completing and signing the Company’s termination statement for technical and management personnel.

		
	11.
	Legal and Equitable Remedies. Because my services are personal and unique and because I may have access to and become acquainted with the Confidential Information of the Company, the Company will have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond, without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.

		
	12.
	Notices. Any notices required or permitted hereunder will be given to me at the address specified below or at such other address as I will specify in writing. Such notice will be deemed given upon personal delivery to the appropriate address, or by facsimile transmission (receipt verified and with confirmation copy following by another permitted method), telexed, sent by express courier service, or, if sent by certified or registered mail, three days after the date of mailing.

		
	13.
	General Provisions.

13.1    Governing Law. This Agreement will be governed by and construed according to the laws of the State of California.
13.2    Entire Agreement. This Agreement is the final, completed and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges wall prior discussions between us. No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by both parties.  Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.  As used in this Agreement, the period of my employment includes any time during which I may be retained by the Company as a consultant.
13.3    Severability. If any of the provisions in this Agreement are deemed unenforceable by law, then the remaining provisions will continue in full force and effect.
13.4    Successors and Assigns; Third Party Beneficiary. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns. In addition, I agree that Isis is a third party beneficiary to Sections 2, 10 and 11 of this Agreement. Without limiting the foregoing, Isis will have the right to enforce such provisions directly against me as they relate to Isis’ proprietary or confidential information.
13.5    Survival. The provisions of this Agreement will survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.
13.6    Employment. I agree and understand that nothing in this Agreement will confer any right with respect to continuation of employment by the Company, nor will it interfere in any way with my right or the Company’s right to terminate my employment at any time, with or without cause.
13.7    Waiver. No waiver by the Company of any breach of this Agreement will be a waiver of any preceding or succeeding breach. No waiver of the Company of any right under this Agreement will be construed as a waiver of any other right. The Company will not be required to give notice to enforce strict adherence to all terms of this Agreement.

This agreement will be effective as of the first day of employment with the Company, namely January 1, 2016.

I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I MAKE DURING MY EMPLOYMENT, AND RESTRICTS MY RIGHT TO DISCLOSE OR USE THE COMPANY’S CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO MY EMPLOYMENT.

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.

                        

Dated:        January 4, 2016                /s/ Joseph Hagan
Signature

Joseph Hagan
Name of Employee
                                                                        

ACCEPTED AND AGREED TO:
Regulus Therapeutics, Inc. 
            
            
By:            /s/ Paul C. Grint                
Signature
Paul C. Grint, M.D.
Printed Name
President & CEO                
Title

EXHIBIT A

Regulus Therapeutics, Inc.
3545 John Hopkins Court
San Diego, CA  92121

		
	1.
	The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by Regulus Therapeutics, Inc. (the “Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company, except for any invention I have already assigned to Isis Pharmaceuticals, Inc. prior to executing this Agreement:

□    No inventions or improvements.    □    See below                                                            

□    Due to confidentiality agreements with prior employer(s), I cannot disclose certain inventions that would otherwise be included on the above-described list.

□    Additional sheets attached.

		
	2.
	I proposed to bring to my employment the following devices, materials and documents of a former employer or other person to whom I  have an obligation of confidentiality that are not generally available to the public, which materials and documents may be used in my employment pursuant to the express written authorization of my former employer or such other person (a copy is attached hereto):

□    No material                □    See below                    

□    Additional sheets attached.

    
Date:    January 4, 2016                
/s/ Joseph Hagan

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