SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 2, 2010
CHAY ENTERPRISES, INC.
(Exact name of registrant as specified in Charter)
Colorado | 333-146542 | 26-0179592 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File No.) |
(IRS Employee Identification No.) |
8400 East Crescent Parkway
Suite 600
Greenwood Village, Colorado 80111
(Address of Principal Executive Offices)
(303) 418-1000
(Issuer Telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01 | Completion of Acquisition or Disposition of Assets |
Reference is made to Item 2.01 of the Form 8-K that we filed with the SEC on March 8, 2010, which we refer to as the Super 8-K. The number of patents and patent applications we purchased from DMI BioSciences, Inc., or BioSciences, in April 2009 was 107. This corrects the reference to 103 patents and patents pending we purchased from BioSciences in the Super 8-K. In addition, the royalty agreement with BioSciences provides that we will receive 10% of royalty license revenues received by BioSciences from the drug developed to treat male sexual dysfunction, subject to DMI committing additional funding. This corrects the reference to a 10% royalty on license revenues in the Super 8-K. In the description of DMI-5207 in the Super 8-K, we remove the reference to the demonstration that DMI-5207 reaches the target blood vessels and tissue of the eye. As of March 1, 2010, we owned or were the exclusive licensee under 20 granted patents and 92 pending patent applications. This corrects the reference in the Super 8-K to 14 granted patents, 123 patent applications, and 36 provisional patent filings.
We have filed as Exhibits 10.1 through 10.9 hereto the following material contracts to which DMI is a party: Employment Agreement with David Bar-Or; Employment Agreement with Bruce G. Miller; Restricted Stock Agreement with David Bar-Or; Restricted Stock Agreement with Bruce G. Miller; Sponsored Research Agreement with Trauma Research, LLC; and License Agreements with the Institute for Molecular Medicine, Inc., to which we succeeded as a party by purchase from DMI BioSciences, Inc. We have also included as Exhibit 10.7 hereto our Stock and Awards Plan authorized for adoption by the shareholders of Chay Enterprises, Inc. at the special meeting held March 1, 2010, and as Exhibit 10.8 the form of At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement among DMI Life Sciences and its employees.
The Super 8-K reported that we had six employees. That reference is corrected hereby to ten, which includes two officers who currently provide services to us under consulting agreements. These officers devote substantially full-time to our operations, which is why we have included them as employees for disclosure purposes. We note further that for legal purposes we have no employees, as we have outsourced our human resources, payroll, benefits and associated functions to TriNet Group Inc.
The Super 8-K included a table of high and low bid information for our common stock for the period from January 1, 2008 through March 1, 2010, as quoted on the Over-the-Counter Bulletin Board. The information in the Super 8-K was drawn from the NASDAQ web site, which reported such information. However, as our common stock did not trade in many of the reported quarters, we present below a revised table of our common stocks price quotations that reflects periods in which no trades occurred.
Closing Bid | Closing Ask | |||||||
2009 |
||||||||
January 2 Thru March 31 |
1.50 | .10 | 3.00 | 3.00 | ||||
April 1 Thru June 30 |
NONE | NONE | NONE | NONE | ||||
July 1 Thru September 30 |
NONE | NONE | NONE | NONE | ||||
October 1 Thru December 31 |
NONE | NONE | NONE | NONE | ||||
2008 |
||||||||
March 14 (first available) Thru March 31 |
NONE | NONE | NONE | NONE | ||||
April 1 Thru June 30 |
.25 | .25 | NONE | NONE | ||||
July 1 Thru July 31 |
.35 | .25 | 1.00 | 1.00 | ||||
August 1 Thru September 30 (after a 1 for 3.5 reverse split) |
1.50 | 1.50 | NONE | NONE | ||||
October 1 Thru December 31 |
1.50 | 1.50 | NONE | NONE |
Item 4.01 | Changes in Registrants Certifying Accountant. |
(1) Previous Independent Auditors:
(i) On March 16, 2010, Schumacher & Associates, Inc. (SAI) was dismissed as independent auditor for the Company. On March 16, 2010, we engaged Ehrhardt Keefe Steiner & Hottman PC (EKSH) as our independent auditor. This decision to engage EKSH was ratified by the majority approval of the Board of Directors on March 16, 2010. Our shareholders had previously authorized at the special meeting held March 1, 2010 the retention of EKSH as our auditor for the year ending December 31, 2010.
(ii) SAIs report on our financial statements for the two most recent years contained a qualification based upon substantial doubt about our ability to continue as a going concern due to our recurring losses, negative working capital, and lack of business operations. With that exception, SAIs report on the financial statements for the two most recent years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles.
(iii) Our Board of Directors participated in and approved the decision to change independent accountants.
(iv) For the two most recent fiscal years and the subsequent interim period through SAIs termination on March 16, 2010, there has been no disagreement between us and SAI on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of SAI would have caused it to make a reference to the subject matter of the disagreement in connection with its reports.
(v) During the most recent audit period and the interim period through March 16, 2010 there have been no reportable events with us as set forth in Item 304(a)(i)(v) of Regulation S-K.
(vi) We requested that SAI furnish us with a letter addressed to the SEC stating whether or not it agrees with the above statements. A copy of such letter is filed as Exhibit 16.1 to this Form 8-K.
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(2) New Independent Accountants:
On March 16, 2010. we engaged EKSH as its new independent auditors effective immediately upon the dismissal of SAI. Prior to such date, we did not consult with EKSH regarding (i) the application of accounting principles, (ii) the type of audit opinion that might be rendered, or (iii) any other matter that was the subject of a disagreement between us and our former auditor as described in Item 304(a)(1)(iv) of Regulation S-K.
Item 8.01 | Other Events. |
On March 8, 2010, we issued a press release announcing the engagement of Redwood Consultants to assist us with shareholder relations and investor communications. A copy of the press release is attached as Exhibit 99.1.
Upon approval from FINRA to change our stock trading symbol, we intend to reincorporate in the State of Delaware. The reincorporation will be accomplished through the filing of a plan of conversion in Colorado and Delaware, followed by the filing of a certificate of incorporation for Chay Enterprises, Inc. in Delaware, followed by the filing of an amended certificate of incorporation by which Chay Enterprises, Inc., a Delaware corporation, will change its name to Ampio Pharmaceuticals, Inc. We have filed herewith the form of plan of conversion, form of certificate of incorporation for Chay Enterprises, Inc. in the State of Delaware, the form of amended certificate of incorporation to effect the name change, and the form of Bylaws of Ampio Pharmaceuticals, Inc. All of the foregoing will be filed in definitive form once approval for our symbol change is received from FINRA.
Item 9.01 | Financial Statements and Exhibits. |
Reference is made to the Super 8-K and the description of DMI Life Sciences business therein. We have included below material contracts to which DMI Life Sciences is party, in addition to the exhibits filed herewith that are referenced above.
(a) | Financial statements of business acquired . |
Previously filed.
Pro forma financial information .
Previously filed.
(b) | Exhibits . |
Exhibit No. |
Description |
|
3.1 | Form of Plan of Conversion of Chay Enterprises, Inc., a Colorado corporation, into Chay Enterprises, Inc., a Delaware corporation | |
3.2 | Form of Certificate of Incorporation of Chay Enterprises, Inc., a Delaware corporation | |
3.3 | Form of Amended Certificate of Incorporation changing name of Chay Enterprises, Inc., a Delaware corporation, to Ampio Pharmaceuticals, Inc., a Delaware corporation | |
3.4 | Form of Bylaws of Ampio Pharmaceuticals, Inc. | |
3.5 | Form of Certificate of Conversion of Chay Enterprises, Inc. from a Non-Delaware corporation to a Delaware corporation. | |
3.6 | Filed Certificate of Merger of Chay Acquisitions, Inc. and DMI Life Sciences, Inc. | |
10.1 | Employment Agreement by and between David Bar-Or and DMI Life Sciences, Inc. dated April 17, 2009 | |
10.2 | Employment Agreement by and between Bruce G. Miller and DMI Life Sciences, Inc. dated April 17, 2009 | |
10.3 | Restricted Stock Agreement by and between David Bar-Or and DMI Life Sciences, Inc., dated April 17, 2009 | |
10.4 | Restricted Stock Agreement by and between Bruce G. Miller and DMI Life Sciences, Inc., dated April 17, 2009 |
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Exhibit No. |
Description |
|
10.5 | Sponsored Research Agreement dated September 1, 2009, by and between Trauma Research, LLC and DMI Life Sciences, Inc. | |
10.6.1 | Exclusive License Agreement, dated July 11, 2005, between the Institute for Molecular Medicine, Inc., and DMI Life Sciences, Inc., as successor by purchase to DMI BioSciences, Inc. | |
10.6.2 | First Amendment to Exclusive License Agreement, dated April 17, 2009, between the Institute for Molecular Medicine, Inc. and DMI Life Sciences, Inc. | |
10.6.3 | Exclusive License Agreement, dated February 17, 2009, between the Institute for Molecular Medicine, Inc. and DMI Life Sciences, Inc., as successor by purchase to DMI BioSciences, Inc. | |
10.7 | Stock and Awards Plan of Chay Enterprises, Inc. | |
10.8 | Form of At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement among DMI Life Sciences and its employees | |
10.9 | Form of Indemnification Agreement by and between the Company and the executive officers, key employees and directors of the Company. | |
10.10 | Consulting Agreement by and between Redwood Consultants, LLC and the Company dated March 1, 2010. | |
16.1 | Letter of Schumacher & Associates, Inc. dated March 15, 2010 | |
21 | Subsidiaries of the registrant | |
99.1 | Press Release dated March 8, 2010 concerning the engagement of Redwood Consultants, Inc. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CHAY ENTERPRISES, INC. | ||
By: | / S / D ONALD B. W INGERTER , J R . | |
Name: | Donald B. Wingerter, Jr. | |
Title: | Chief Executive Officer |
Dated: March 17, 2010
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Exhibit 3.1
PLAN OF CONVERSION OF
CHAY ENTERPRISES, INC., a Colorado corporation,
INTO
CHAY ENTERPRISES, INC., a Delaware corporation
This PLAN OF CONVERSION (the Plan ), dated as of March 25, 2010., is hereby adopted by Chay Enterprises, Inc., a Colorado corporation ( Chay-Colorado ), in order to set forth the terms, conditions and procedures governing the conversion of Chay into a Delaware corporation pursuant to Section 7-111-101.5 of the Colorado Business Corporation Act (as amended, the CBCA ), Sections 7-90-201 and 7-90-202 of the Colorado Corporations and Associations Act (as amended, the CCAA ) and Section 265 of the Delaware General Corporation Law (as amended, the DGCL ).
WHEREAS, Chays Board of Directors has approved the Conversion (as defined below) and submitted this Plan to the shareholders of Chay for approval, and the shareholders have approved this Plan.
NOW, THEREFORE, Chay does hereby adopt this Plan to effectuate the conversion of Chay into a Delaware corporation as follows:
1. Conversion . Upon and subject to the terms and conditions of this Plan and pursuant to the relevant provisions of the CBCA, CCAA and the DGCL, including, without limitation, Section 7-111-101.5 of the CBCA, Sections 7-90-201 and 7-90-202 of the CCAA and Sections 103 and 265 of the DGCL, Chay shall convert (referred to herein as the Conversion ) into a Delaware corporation named Ampio Pharmaceuticals, Inc. (referred to herein as Chay- Delaware ) at the Effective Time (as defined in Section 3 below). Chay-Delaware shall thereafter be subject to all of the provisions of the DGCL, except that notwithstanding Section 106 of the DGCL, the existence of Chay-Delaware shall be deemed to have commenced on the date Chay-Colorado commenced its existence in Colorado.
2. Effect of Conversion . Following the Conversion, Chay-Delaware shall, for all purposes of the laws of the State of Delaware and Colorado, be deemed to be the same entity as Chay-Colorado. Upon the Effective Time, all of the rights, privileges and powers of Chay-Colorado, and all property, real, personal and mixed, and all debts due to Chay-Colorado, as well as all other things and causes of action belonging to Chay-Colorado, shall remain vested in Chay-Delaware and shall be the property of Chay-Delaware and the title to any real property vested by deed or otherwise in Chay-Colorado shall not revert or be in any way impaired, but all rights of creditors and all liens upon any property of Chay-Colorado shall be preserved unimpaired, and all debts, liabilities and duties of Chay-Colorado shall remain attached to Chay-Delaware and may be enforced against it to the same extent as if said debts, liabilities and duties had originally been incurred or contracted by it in its capacity as a Delaware corporation. The rights, privileges, powers and interests in property of Chay-Colorado, as well as the debts, liabilities and duties of Chay-Colorado, shall not be deemed, as a consequence of the Conversion, to have been transferred to Chay-Delaware for any purpose of the laws of the State of Delaware. The Conversion shall not be deemed to affect any obligations or liabilities of Chay-Colorado incurred prior to the Effective Time or the personal liability of any person incurred prior thereto. Chay-Colorado shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the Conversion shall not be deemed to constitute a dissolution of Chay-Colorado and shall constitute a continuation of the existence of Chay-Colorado in the form of a Delaware corporation. Chay-Delaware is the same entity as Chay-Colorado.
3. Effective Time . Provided that this Plan has not been terminated or deferred pursuant to Section 14 hereof, the Conversion shall be effected as soon as practicable after the shareholders of Chay-Colorado have approved this Plan and the shareholders of Chay-Colorado whose consent of the Conversion was not solicited by Chay-Colorado have received notice of such approval in accordance with applicable law. Subject to the foregoing, unless another date and time is specified, the Conversion shall be effective upon (a) the filing with the Secretary of State of the State of Colorado of a duly executed Statement of Conversion meeting the requirements of Section 7-90-201.7 of the CCAA and (b) the filing with the Secretary of State of the State of Delaware of (i) a duly executed Certificate of Conversion meeting the requirements of Sections 103 and 265 of the DGCL, and (ii) a duly executed Certificate of Incorporation of Chay-Delaware in the form specified below (the Effective Time ).
4. Governance and Other Matters Related to Chay-Delaware .
(a) Certificate of Incorporation . At the Effective Time, the Certificate of Incorporation of Chay-Delaware shall be as set forth in EXHIBIT A attached hereto (the Certificate of Incorporation ) and shall be filed with the Secretary of State of the State of Delaware. As set forth therein, the Corporation shall be renamed Ampio Pharmaceuticals, Inc. upon the filing of the Certificate of Incorporation.
(b) Bylaws . At the Effective Time, the Bylaws of Chay-Delaware shall be as set forth in EXHIBIT B attached hereto (the Bylaws ), and shall be adopted as such by the Board of Directors of Chay-Delaware. Thereafter, the Bylaws may be amended by the Board of Directors or stockholders of Chay-Delaware as provided in the Bylaws and, as applicable, the Certificate of Incorporation.
(c) Directors and Officers . The members of the Board of Directors and the officers of Chay-Colorado immediately prior to the Effective Time shall continue in office following the Effective Time as directors and officers of Chay-Delaware, respectively, until the expiration of their respective terms of office and until their successors have been duly elected and have qualified, or until their earlier death, resignation or removal. After the Effective Time, Chay-Delaware and its Board of Directors shall take any necessary actions to cause each of such individuals to be appointed or to confirm such appointments.
5. Effect of the Conversion on the Common Stock of Chay-Colorado . Subject to the terms and conditions of this Plan, at the Effective Time, automatically by virtue of the Conversion and without any further action on the part of Chay-Colorado, Chay-Delaware or any shareholder or stockholder thereof, respectively, each share of common stock, par value $0.0001 per share, of Chay-Colorado (the Chay-Colorado Common Stock ), shall convert into one validly issued, fully paid and nonassessable share of common stock, par value $0.0001 per share, of Chay-Delaware (the Chay-Delaware Common Stock ). Chay-Delaware shall not issue fractional shares with respect to the Conversion. Any fractional share of Chay-Delaware Common Stock that would otherwise be issued as a result of the Conversion will be rounded up to the nearest whole share. Following the Effective Time, all Chay-Colorado Common Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of Chay-Colorado Common Stock immediately prior to the Effective Time shall cease to have any rights with respect thereto.
6. Stock Certificates . From and after the Effective Time, all of the outstanding certificates that prior to that time represented shares of Chay-Colorado Common Stock shall be deemed for all purposes to evidence ownership of and to represent the shares of Chay-Delaware Common Stock into which the shares represented by such certificates have been converted as provided herein. The registered owner on the books and records of Chay-Delaware or its transfer agent of any such outstanding stock certificate shall, until such certificate shall have been surrendered for transfer or conversion or otherwise accounted for to Chay-Delaware or its transfer agent, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of Chay-Delaware evidenced by such outstanding certificate as provided above.
7. Employee Benefit and Compensation Plans . At the Effective Time, each employee benefit plan, incentive compensation plan, stock purchase plan, stock option agreement and other similar plans and agreements to which Chay-Colorado is then a party shall be automatically assumed by, and continue to be the plan of, Chay-Delaware, without further action by Chay-Colorado or Chay-Delaware or any other party thereto. To the extent any employee benefit plan, incentive compensation plan, stock option agreement or other similar plan provides for the issuance or purchase of, or otherwise relates to, Chay-Colorado Common Stock, after the Effective Time, such plan or agreement shall be deemed to provide for the issuance or purchase of, or otherwise relate to, the Chay-Delaware Common Stock.
8. Outstanding Awards . At the Effective Time, all outstanding stock options, purchase rights, restricted stock awards and other stock awards relating to the Chay-Colorado Common Stock shall, by virtue of the Conversion and without any further action on the part of Chay-Colorado, Chay-Delaware or the holder thereof, continue on the same terms and conditions and be assumed by Chay-Delaware, provided that all such awards shall be deemed to provide for the issuance or purchase of, or otherwise relate to, the Chay-Delaware Common Stock.
9. Filings, Licenses, Permits, Titled Property, Etc . As necessary, following the Effective Time, Chay-Delaware shall apply for new qualifications to conduct business (including as a foreign corporation), licenses, permits and similar authorizations on its behalf and in its own name in connection with the Conversion and to reflect
the fact that it is a Delaware corporation. As required or appropriate, following the Effective Time, all real, personal or intangible property of Chay-Colorado which was titled or registered in the name of Chay-Colorado shall be re-titled or re-registered, as applicable, in the name of Chay-Delaware by appropriate filings and/or notices to the appropriate parties (including, without limitation, any applicable governmental agencies).
10. Further Assurances . If, at any time after the Effective Time, Chay-Delaware shall determine or be advised that any deeds, bills of sale, assignments, agreements, documents or assurances or any other acts or things are necessary, desirable or proper, consistent with the terms of this Plan to vest, perfect or confirm, of record or otherwise, in Chay-Delaware its right, title or interest in, to or under any of the rights, privileges, immunities, powers, purposes, franchises, properties or assets of Chay-Colorado, or to otherwise carry out the purposes of this Plan, Chay-Delaware and its proper officers and directors (or their designees), are hereby authorized to execute and deliver, in the name and on behalf of Chay-Colorado, all such deeds, bills of sale, assignments, agreements, documents and assurances and do, in the name and on behalf of Chay-Colorado, all such other acts and things necessary, desirable to vest, perfect or confirm, of record or otherwise, in Chay-Delaware its right, title or interest in, to or under any of the rights, privileges, immunities, powers, purposes, franchises, properties or assets of Chay-Colorado, or to otherwise carry out the purposes of this Plan and the Conversion.
11. Implementation and Interpretation; Termination and Amendment . This Plan shall be implemented and interpreted, prior to the Effective Time, by the Board of Directors of Chay-Colorado and, upon the Effective Time, by the Board of Directors of Chay-Delaware, (a) each of which shall have full power and authority to delegate and assign any matters covered hereunder to any other party(ies), including, without limitation, any officers of Chay-Colorado or Chay-Delaware, as the case may be, and (b) the interpretations and decisions of which shall be final, binding, and conclusive on all parties.
12. Delaware Indemnification Agreements . As promptly as practicable following the Effective Time, Chay-Delaware shall enter into an indemnification agreement with each member of the Board of Directors of Chay-Delaware and each executive officer of Chay-Delaware.
13. Amendment . This Plan may be amended or modified by the Board of Directors of Chay-Colorado at any time prior to the Effective Time, provided that an amendment made subsequent to the approval of this Plan by the shareholders of Chay-Colorado shall not alter or change (a) the amount or kind of shares or other securities to be received by the shareholders hereunder, (b) any term of the Certificate of Incorporation or the Bylaws, other than changes permitted to be made without stockholder approval by the DGCL, or (c) any of the terms and conditions of this Plan if such alteration or change would adversely affect the holders of any class or series of the stock of Chay-Colorado.
14. Termination or Deferral . At any time before the Effective Time, (a) this Plan may be terminated and the Conversion may be abandoned by action of the Board of Directors of Chay-Colorado, notwithstanding the approval of this Plan by the shareholders of Chay-Colorado, or (b) the consummation of the Conversion may be deferred for a reasonable period of time if, in the opinion of the Board of Directors of Chay-Colorado, such action would be in the best interest of Chay-Colorado and its shareholders. In the event of termination of this Plan, this Plan shall become void and of no effect and there shall be no liability on the part of Chay-Colorado or its Board of Directors or shareholders with respect thereto.
15. Third Party Beneficiaries . This Plan shall not confer any rights or remedies upon any person or entity other than as expressly provided herein.
16. Severability . Whenever possible, each provision of this Plan will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Plan is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Plan.
[Signature page follows]
IN WITNESS WHEREOF, Chay Enterprises, Inc., a Colorado corporation, has caused this Plan to be executed by its duly authorized representative as of the date first stated above.
Chay Enterprises, Inc., a Colorado corporation | ||
By: |
/s/ Donald B. Wingerter, Jr. |
|
Name: | Donald B. Wingerter, Jr. | |
Title: | Chief Executive Officer |
E XHIBIT A
C ERTIFICATE OF I NCORPORATION
E XHIBIT B
B YLAWS
Exhibit 3.2
CERTIFICATE OF INCORPORATION
OF
CHAY ENTERPRISES, INC.
The undersigned, a natural person eighteen years of age or older, hereby establishes a corporation pursuant to the General Corporation Law of the State of Delaware and adopts the following Certificate of Incorporation which reads in its entirety as follows:
ARTICLE I
NAME
The name of the corporation (hereinafter, the Corporation) is Chay Enterprises, Inc.
ARTICLE II
ADDRESS AND REGISTERED AGENT
The address of the Corporations registered office in the State of Delaware is Harvard Business Services, Inc., 16192 Coastal Highway, Sussex County, Delaware. The name of the Corporations registered agent at such address is Harvard Business Services, Inc.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the DGCL).
ARTICLE IV
CAPITAL STOCK
Section 1. Authorized Shares. The aggregate number of shares which the Corporation shall have authority to issue is 110,000,000; of which 10,000,000 shares of the par value of $0.0001 shall be designated Preferred Stock and 100,000,000 shares of the par value of $0.0001 shall be designated Common Stock.
Section 2. Preferred Stock Designation . The Board is hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series, to the full extent now or hereafter permitted by the laws of the State of Delaware and the DGCL. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.
Section 3. Assessment of Stock. The capital stock of the Corporation, after the amount of the subscription price has been fully paid in, shall not be assessable for any purpose, and no stock issued as fully paid shall ever be assessable or assessed. No stockholder of the Corporation is individually liable for the debts or liabilities of the Corporation.
Section 4. Increase or Decrease in Authorized Capital Stock. The number of authorized shares of Preferred Stock or Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote generally in the election of directors, irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), voting together as a single class,
without a separate vote of the holders of the class or classes the number of authorized shares of which are being increased or decreased, unless a vote by any holders of one or more series of Preferred Stock is required by the express terms of any series of Preferred Stock as provided for or fixed pursuant to the provisions of Section 2 of this Article IV.
ARTICLE V
INCORPORATOR
The name and mailing address of the incorporator is Donald B. Wingerter, Jr., 8400 East Crescent Parkway, Suite 600, Greenwood Village, Colorado 80111. The powers of the incorporator shall terminate upon the filing of this Certificate of Incorporation.
ARTICLE VI
DIRECTORS
Section 1. Number of Directors. The members of the governing board of the Corporation are styled as directors. The board of directors of the Corporation shall be elected in such manner as shall be provided in the Bylaws of the Corporation. The number of directors shall be not less than two (2) nor more than ten (10). The number of directors may be changed from time to time within this range in such manner as shall be provided in the Bylaws of the Corporation.
Section 2. Ballot and Nominees. Nominations by stockholders of persons for election to the Board shall be made only in accordance with the procedures set forth in the Bylaws of the Corporation. Elections of directors need not be by written ballot except and to the extent provided in the Bylaws of the Corporation.
Section 3. Removal and Filling of Newly Created Directorships. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director, or the entire Board, may be removed from office with or without cause, at any time, only by the affirmative vote of the holders of a majority of the shares of voting stock then outstanding. Subject to the rights of the holders of any series of Preferred Stock, newly created directorships resulting from any increase in the number of directors shall be filled by the Board by the affirmative vote of a majority of the directors then in office, or by the stockholders holding at least sixty-six and two-thirds percent (66 2 / 3 %) of the issued and outstanding shares of Common Stock that are present or represented at a special meeting of stockholders called for such purpose, voting together as a single class.
Section 4. Election and Vacancies. Directors shall be elected at each annual meeting of stockholders, and each director elected shall hold office until such directors successor has been elected and qualified, subject, however, to earlier death, resignation or removal from office. Except as otherwise provided for or fixed by or pursuant to the provisions of Article IV of this Certificate of Incorporation relating to the rights of the holders of any series of Preferred Stock, any vacancies on the Board resulting from death, resignation, removal or other cause shall be filled by the Board by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, or by a sole remaining director, or by the stockholders holding at least sixty-six and two-thirds percent (66 2 / 3 %) of the issued and outstanding shares of Common Stock that are present or represented at a special meeting of stockholders called for such purpose, voting together as a single class. A person so elected by the Board of Directors to fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have been assigned by the Board of Directors and until his or her successor shall be duly elected and qualified.
Section 5. Advance Notice of Nominations. Subject to Article XII of this Certificate of Incorporation, advance notice of nominations for the election of directors shall be given in the manner and to the extent provided in the Bylaws of the Corporation.
Section 6. Classification of Directors. Upon resolution duly adopted by the Board of Directors at any time from and after the filing of this Certificate of Incorporation, and subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, the directors of the Corporation shall be divided into three classes as nearly equal in size as is practicable, hereby designated Class I, Class II and Class III. The initial assignment of members of the Board of Directors to each such class shall be made by the Board of Directors. The term of office of the initial Class I directors shall expire at the first regularly-scheduled annual meeting of the stockholders following the Effective Date, the term of office of the initial Class II directors shall expire at the second annual meeting of the stockholders following the Effective Date and the term of office of the initial Class III directors shall expire at the third annual meeting of the stockholders following the effective date of the Board
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resolution approving the classification of the Board. At each annual meeting of stockholders, commencing with the first regularly-scheduled annual meeting of stockholders following the effective date of such Board resolution, each of the successors elected to replace the directors of a Class whose term shall have expired at such annual meeting shall be elected to hold office until the third annual meeting next succeeding his or her election and until his or her respective successor shall have been duly elected and qualified. Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, if the number of directors that constitutes the Board of Directors is changed, any newly created directorships or decrease in directorships shall be so apportioned by the Board of Directors among the classes as to make all classes as nearly equal in number as is practicable, provided that no decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
ARTICLE
BYLAWS
The Board of Directors is authorized to adopt, amend or repeal any and all provisions of the Bylaws of the Corporation by a vote of at least two-thirds of all directors who constitute the Board of Directors, except as and to the extent provided in the Bylaws. Notwithstanding any other provision of this Certificate of Incorporation or the Bylaws of this Corporation (and notwithstanding that some lesser percentage may be specified by law), no provision of the Bylaws of the Corporation shall be amended, modified or repealed by the stockholders of the Corporation, nor shall any provision of the Bylaws of the Corporation inconsistent with any such provision be adopted by the stockholders of the Corporation, unless approved by the affirmative vote of holders of at least seventy-five (75%) of the issued and outstanding shares of Common Stock. Any purported amendment to the Bylaws which would add thereto a matter not expressly covered in the Bylaws prior to such purported amendment shall be deemed to constitute the adoption of a Bylaw provision and not an amendment to the Bylaws.
ARTICLE VIII
MODIFICATION, AMENDMENT OR REPEAL OF DESIGNATED PROVISIONS
Notwithstanding any other provision of this Certificate of Incorporation, the Bylaws of the Corporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of stock of the Corporation required by law, the affirmative vote (or consent under Article XIII, if such consent is then permitted) of at least 66 2 / 3 % of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend, alter or repeal, or adopt any provision as part of this Certificate of Incorporation inconsistent with the purpose and intent of, all or any portion of Articles VI, VII, this Article VIII, IX, X, XI, or XII of this Certificate of Incorporation (including, without limitation, any such Article as renumbered as a result of any amendment, alteration, change, repeal or adoption of any other Article).
ARTICLE IX
LIABILITY AND INDEMNIFICATION
To the fullest extent permitted by the DGCL, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. The Corporation shall indemnify, in the manner and to the fullest extent permitted by the DGCL, any person (or the estate of any person) who is or was a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a
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director or officer of another corporation, partnership, joint venture, trust or other enterprise. The Corporation may indemnify, in the manner and to the fullest extent permitted by the DGCL, any person (or the estate of any person) who is or was a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Expenses incurred by any such director, officer, employee or agent in defending any such action, suit or proceeding may be advanced by the Corporation prior to the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director, officer, employee or agent to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified as authorized by the DGCL and this Article IX. The Corporation may, to the fullest extent permitted by the DGCL, purchase and maintain insurance on behalf of any such director, officer, employee or agent against any liability which may be asserted against such person. To the fullest extent permitted by the DGCL, the indemnification provided herein shall include expenses (including attorneys fees), judgments, fines and amounts paid in settlement and, in the manner provided by the DGCL, any such expenses may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person for any such expenses to the fullest extent permitted by the DGCL, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such persons official capacity and as to action in another capacity while holding such office.
No repeal or modification of the foregoing paragraph shall adversely affect any right or protection of a director of the Corporation existing by virtue of the foregoing paragraph at the time of such repeal or modification.
ARTICLE XI
COMPROMISE OR ARRANGEMENT
Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of §291 of Title 8 of the Delaware General Corporation Law or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under §279 of Title 8 of the Delaware General Corporation Law order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.
ARTICLE XII
STOCKHOLDER ACTION
Section 1. Action by Consent. Any election of directors or other action by the stockholders of the Corporation that can be effected at an annual or special meeting of stockholders can be effected by written consent without a meeting so long as such written consent is signed by the holders of at least the number of shares required to approve such action at a duly held annual or special stockholders meeting at which all shares entitled to vote thereon were present and voted.
Section 2. Special Meetings. Except as otherwise expressly provided by the terms of any series of Preferred Stock permitting the holders of such series of Preferred Stock to call a special meeting of the holders of such series, special meetings of stockholders of the Corporation may be called only by the Board of Directors, the chairperson of the Board of Directors, the chief executive officer or the president (in the absence of a chief executive officer), and the ability of the stockholders to call a special meeting is hereby specifically denied. The Board of Directors may cancel, postpone or reschedule any previously scheduled special meeting at any time, before or after the notice for such meeting has been sent to the stockholders.
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IN WITNESS WHEREOF, I made, signed and sealed this Certificate of Incorporation this 25th day of March, 2010.
/s/ Donald B. Wingerter, Jr. |
Donald B. Wingerter, Jr., Incorporator |
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Exhibit 3.3
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION
This corporation (the Corporation ) organized and existing under and by virtue of the General Corporation Law of the State of Delaware does hereby certify:
FIRST : That by written consent of the Board of Directors of:
Chay Enterprises, Inc.
resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration thereof. The resolution setting forth the amendment was as follows:
RESOLVED , that the Certificate of Incorporation of this Corporation be amended by changing the Article thereof numbered FIRST so that, as amended, said Article shall be and read as follows:
FIRST : The name of the Corporation is Ampio Pharmaceuticals, Inc.
SECOND : That pursuant to a resolution of its Board of Directors and in accordance with Section 228(a) of the General Corporation Law of the State of Delaware, a special meeting of the stockholders of said corporation was held on March 1, 2010, at which the necessary number of shares as required by statute were voted in favor of the name change amendment, such change to be effected at such time as was determined to be in the best interests of the Corporation, as determined by the Board of Directors of the Corporation.
THIRD : That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
FOURTH : That the capital of said corporation shall not be reduced under or by reason of said amendment.
IN WITNESS WHEREOF , the Corporation has caused this Certificate to be signed this 25 day of March, 2010.
By: |
/s/ Donald B. Wingerter, Jr. |
|
Name: | Donald B. Wingerter, Jr. | |
Title: | Chief Executive Officer |
EXHIBIT 3.4
B YLAWS OF
A MPIO P HARMACEUTICALS , INC .
A DOPTED M ARCH , 2010
BYLAWS
OF
AMPIO PHARMACEUTICALS, INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle.
Section 2. Other Offices. The corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The Board of Directors may adopt a corporate seal. The corporate seal shall consist of a die bearing the name of the corporation and the inscription, Corporate Seal Delaware. Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders of the corporation may be held at such place, either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the DGCL). In the absence of any such designation or determination, stockholders meetings shall be held at the Companys principal executive office.
Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may lawfully come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors. Nominations of persons for election to the Board of Directors of the corporation and the proposal o f business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the corporations notice of meeting of stockholders; (ii) by or at the
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direction of the Board of Directors; or (iii) by any stockholder of the corporation who was a stockholder of record at the time of giving of notice provided for in the following paragraph, who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 5.
(b) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a) of these Bylaws, (i) the stockholder must have given timely notice thereof in writing to the Secretary of the corporation, (ii) such other business must be a proper matter for stockholder action under the DGCL, (iii) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the corporation with a Solicitation Notice (as defined in this Section 5(b)), such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the corporations voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the corporations voting shares reasonably believed by such stockholder or beneficial owner to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice, and (iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section 5. To be timely, a stockholders notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding years annual meeting; provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding years annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholders notice as described above. Such stockholders notice shall set forth: (A) as to each person whom the stockholder proposed to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the 1934 Act) and Rule 14a-4(d) thereunder (including such persons written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at
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the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporations books, and of such beneficial owner, (ii) the class and number of shares of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of the proposal, at least the percentage of the corporations voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the corporations voting shares to elect such nominee or nominees (an affirmative statement of such intent, a Solicitation Notice).
(c) Notwithstanding anything in the second sentence of Section 5(b) of these Bylaws to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the corporation at least one hundred (100) days prior to the first anniversary of the preceding years annual meeting, a stockholders notice required by this Section 5 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the corporation.
(d) Only such persons who are nominated in accordance with the procedures set forth in this Section 5 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 5. Except as otherwise provided by law, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.
(e) Notwithstanding the foregoing provisions of this Section 5, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders meeting, stockholders must provide notice as required by the regulations promulgated under the 1934 Act. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation proxy statement pursuant to Rule 14a-8 under the 1934 Act.
(f) For purposes of this Section 5, public announcement shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.
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Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation may be called, for any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption) or (iv) by the holders of shares entitled to cast not less than twenty percent (20%) of the votes at the meeting, and shall be held at such place, on such date, and at such time as the Board of Directors shall fix.
(b) If a special meeting is properly called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the general nature of the business proposed to be transacted, and shall be delivered personally or sent by certified or registered mail, return receipt requested, or by telegraphic or other facsimile transmission to the Chairman of the Board of Directors, the Chief Executive Officer, or the Secretary of the corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The Board of Directors shall determine the time and place of such special meeting, which shall be held not less than thirty-five (35) nor more than one hundred twenty (120) days after the date of the receipt of the request. Upon determination of the time and place of the meeting, the officer receiving the request shall cause notice to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7 of these Bylaws. Nothing contained in this paragraph (b) shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.
Section 7. Notice of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholders address as it appears on the records of the corporation. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
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Section 8. Quorum. At all meetings of stockholders, except where otherwise provided by statute or by the Certificate of Incorporation, or by these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute, or by the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of a majority of shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the subject matter shall be the act of the stockholders. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by the statute or by the Certificate of Incorporation or these Bylaws, a majority of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to the vote on that matter. Except where otherwise provided by statute or by the Certificate of Incorporation or these Bylaws, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Section 10. Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in Section 12 of these Bylaws, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote or execute consents shall have the right to do so either in person, by
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remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from its date of creation unless the proxy provides for a longer period.
Section 11. Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one (1) votes, his act binds all; (b) if more than one (1) votes, the act of the majority so voting binds all; (c) if more than one (1) votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even split for the purpose of subsection (c) shall be a majority or even split in interest.
Section 12. List of Stockholders. The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. The list shall be open to examination of any stockholder during the time of the meeting as provided by law.
Section 13. Action Without Meeting.
(a) Unless otherwise provided in the Certificate of Incorporation, any action required by statute to be taken at any annual or special meeting of the stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, or by electronic transmission setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
(b) Every written consent or electronic transmission shall bear the date of signature of each stockholder who signs the consent, and no written consent or electronic transmission shall be effective to take the corporate action referred to therein unless, within sixty (60) days of
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the earliest dated consent delivered to the corporation in the manner herein required, written consents or electronic transmissions signed by a sufficient number of stockholders to take action are delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporations registered office shall be by hand or by certified or registered mail, return receipt requested.
(c) Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing or by electronic transmission and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take action were delivered to the corporation as provided in Section 228(c) of the DGCL. If the action which is consented to is such as would have required the filing of a certificate under any section of the DGCL if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.
(d) A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this section, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the corporation can determine (i) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the corporation by delivery to its registered office in the state of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporations registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram or other electronic transmission may be otherwise delivered to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the board of directors of the corporation. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.
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Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the President, or, if the President is absent, a chairman of the meeting chosen by a majority in interest of the stockholders entitled to vote, present in person or by proxy, shall act as chairman. The Secretary, or, in his absence, an Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.
(b) The Board of Directors of the corporation shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. N umber and Term of Office. The authorized number of directors of the corporation shall be fixed by the Board of Directors from time to time. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient.
Section 16. Powers. The powers of the corporation shall be exercised, its business conducted and its property controlled by the Board of Directors, except as may be otherwise provided by statute or by the Certificate of Incorporation.
Section 17. Term of Directors.
(a) Directors shall be elected at each annual meeting of stockholders for a term of one year. Each director shall serve until his or her successor is duly elected and qualified or until
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his or her death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
(b) No person entitled to vote at an election for directors may cumulate votes to which such person is entitled to vote.
Section 18. Vacancies. Unless otherwise provided in the Certificate of Incorporation, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such directors successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.
Section 19. Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors. When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each Director so chosen shall hold office for the unexpired portion of the term of the Director whose place shall be vacated and until his successor shall have been duly elected and qualified.
Section 20. Removal. Subject to any limitations imposed by applicable law, the Board of Directors or any director may be removed from office at any time (i) with cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the corporation entitled to vote generally at an election of directors or (ii) without cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the corporation, entitled to vote generally at an election of directors.
Section 21. Meetings
(a) Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any time or date and at any place within or without the State of Delaware which has been designated by the Board of Directors and publicized among all directors, either orally or in writing, including a voice-messaging system or other system designated to record and communicate messages, facsimile,
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telegraph or telex, or by electronic mail or other electronic means. No further notice shall be required for a regular meeting of the Board of Directors.
(b) Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairman of the Board, the President or any director.
(c) Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d) Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least twenty-four (24) hours before the date and time of the meeting. If notice is sent by U.S. mail, it shall be sent by first class mail, postage prepaid at least three (3) days before the date of the meeting. Notice of any meeting may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
(e) Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Certificate of Incorporation requires a greater number, a quorum of the Board of Directors shall consist of a majority of the exact number of directors fixed from time to time by the Board of Directors in accordance with the Certificate of Incorporation; provided, however, at any meeting, whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting.
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(b) At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 24. Fees and Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one (1) or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any bylaw of the corporation.
(b) Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.
(c) Term. The Board of Directors, subject to the provisions of subsections (a) or (b) of this Bylaw, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall
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terminate on the date of his death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 25 shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.
Section 26. Organization. At every meeting of the directors, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the President, or if the President is absent, the most senior Vice President, (if a director) or, in the absence of any such person, a chairman of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his absence, any Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the corporation shall include, if and when designated by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer, and the Treasurer, all of whom shall be appointed at the annual organizational meeting
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of the Board of Directors. The Board of Directors may also appoint one or more Assistant Secretaries, Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed by or in the manner designated by the Board of Directors.
Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The Chairman of the Board of Directors, when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairman of the Board of Directors shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. If there is no President, then the Chairman of the Board of Directors shall also serve as the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. Unless some other officer has been elected Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. The Vice Presidents shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these
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Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. The President may direct any Assistant Secretary to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
(f) Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Chief Financial Officer shall perform other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. The President may direct the Treasurer or any Assistant Treasurer to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and the Treasurer and any Assistant Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
Section 29. Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
Section 30. Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission notice to the Board of Directors or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.
Section 31. Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written consent of the directors in office at the time, by the Chief Executive Officer or by any committee or superior officers upon whom such power of removal may have been conferred by the Board of Directors.
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ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name without limitation, or to enter into contracts on behalf of the corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the corporation. All checks and drafts drawn on banks or other depositaries on funds to the credit of the corporation or in special accounts of the corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do. Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the Corporation. All stock and other securities of other corporations owned or held by the corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates. Certificates for the shares of stock of the corporation shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the corporation shall be entitled to have a certificate signed by or in the name of the corporation by the Chairman of the Board of Directors, or the President or any Vice President and by the Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary, certifying the number of shares owned by him in the corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. Each certificate shall state upon the face or back thereof, in full or in summary, all of the powers, designations, preferences, and rights, and the limitations or restrictions of the shares authorized to be issued or shall, except as otherwise required by law, set forth on the face or back a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Within a reasonable time after the issuance or transfer of uncertificated
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stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to this section or otherwise required by law or with respect to this section a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Section 35. Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owners legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.
Section 36. Transfers.
(a) Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b) The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
Section 37. Fixing Record Dates.
(a) In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, subject to applicable law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
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(b) In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporations registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
(c) In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 38. Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
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ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 34), may be signed by the Chairman of the Board of Directors, the President or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.
Section 41. Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
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ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers, Other Officers, Employees and Other Agents.
(a) Directors and Executive Officers. The corporation shall indemnify its directors and executive officers (for the purposes of this Article XI, executive officers shall have the meaning defined in Rule 3b-7 promulgated under the 1934 Act) to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the corporation may modify the extent of such indemnification by individual contracts with its directors and executive officers; and, provided, further, that the corporation shall not be required to indemnify any director or executive officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the Delaware General Corporation Law or any other applicable law or (iv) such indemnification is required to be made under subsection (d). In addition, the corporation shall not be required to indemnify any director or executive officer in connection with any proceeding (i) for which payment has actually been made to or on behalf of such person under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid; (ii) for an accounting or disgorgement of profits pursuant to Section 16(b) of the 1934 Act, or similar provisions of federal, state or local statutory law or common law, if such person is held liable therefor (including pursuant to any settlement arrangements); (iii) for any reimbursement of the corporation by such person of any bonus or other incentive-based or equity-based compensation or of any profits realized by such person from the sale of securities of the corporation, as required in each case under the 1934 Act (including any such reimbursements that arise from an accounting restatement of the corporation pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), or the payment to the corporation of profits arising from the purchase and sale by such person of securities in violation of Section 306 of the Sarbanes-Oxley Act), if such person is held liable therefor (including pursuant to any settlement arrangements); and (iv) initiated by such person, including any proceeding (or any part of any proceeding) initiated by such person against the corporation or its directors, officers, employees, agents or other indemnitees, unless (a) the Board authorized the proceeding (or the relevant part of the proceeding) prior to its initiation, (b) the corporation provides the indemnification, in its sole discretion, pursuant to the powers vested in the corporation under applicable law, (c) the indemnification is otherwise required to be made under applicable law.
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(b) Other Officers, Employees and Other Agents. The corporation shall have power to indemnify its other officers, employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate the determination of whether indemnification shall be given to any such person except executive officers to such officers or other persons as the Board of Directors shall determine.
(c) Expenses . The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or executive officer, of the corporation, or is or was serving at the request of the corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or executive officer in connection with such proceeding, provided, however, that, if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section 43 or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph (e) of this Bylaw, no advance shall be made by the corporation to an executive officer of the corporation (except by reason of the fact that such executive officer is or was a director of the corporation, in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by a majority vote of a quorum consisting of directors who were not parties to the proceeding, even if not a quorum, or (ii) by a committee of such directors designated by a majority of such directors, even though less than a quorum, or (iii) if there are no such directors, or such directors so direct, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation.
(d) Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and executive officers under this Bylaw shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or executive officer. Any right to indemnification or advances granted by this Bylaw to a director or executive officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. The claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid
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also the expense of prosecuting the claim. In connection with any claim for indemnification, the corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. In connection with any claim by an executive officer of the corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such executive officer is or was a director of the corporation) for advances, the corporation shall be entitled to raise a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his conduct was lawful. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or executive officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or executive officer is not entitled to be indemnified, or to such advancement of expenses, under this Article XI or otherwise shall be on the corporation.
(e) Non Exclusivity of Rights. The rights conferred on any person by this Bylaw shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.
(f) Survival of Rights. The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director, officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(g) Insurance. To the fullest extent permitted by the DGCL, or any other applicable law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.
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(i) Saving Clause. If this Bylaw or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and executive officer to the full extent not prohibited by any applicable portion of this Bylaw that shall not have been invalidated, or by any other applicable law. If this Section 43 shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify each director and executive officer to the full extent under applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the following definitions shall apply:
(1) The term proceeding shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
(2) The term expenses shall be broadly construed and shall include, without limitation, court costs, attorneys fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
(3) The term the corporation shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Bylaw with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
(4) References to a director, executive officer, officer, employee, or agent of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.
(5) References to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to serving at the request of the corporation shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the corporation as referred to in this Bylaw.
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ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Written notice to stockholders of stockholder meetings shall be given as provided in Section 7 herein. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder meetings may be sent by United States mail or nationally recognized overnight courier, or by facsimile, telegraph or telex or by electronic mail or other electronic means.
(b) Notice to Directors. Any notice required to be given to any director may be given by the method stated in subsection (a), or as provided for in Section 21 of these Bylaws. If such notice is not delivered personally, it shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.
(c) Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(e) Notice to Person with Whom Communication Is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
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ARTICLE XIII
AMENDMENTS
Section 45. Amendments. The Board of Directors is expressly empowered to adopt, amend or repeal Bylaws of the corporation. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws of the corporation.
ARTICLE XIV
MISCELLANEOUS
Section 46. Annual Report.
(a) Subject to the provisions of paragraph (b) of this Bylaw, the Board of Directors shall cause an annual report to be sent to each stockholder of the corporation not later than one hundred twenty (120) days after the close of the corporations fiscal year. Such report shall include a balance sheet as of the end of such fiscal year and an income statement and statement of changes in financial position for such fiscal year, accompanied by any report thereon of independent accounts or, if there is no such report, the certificate of an authorized officer of the corporation that such statements were prepared without audit from the books and records of the corporation.
(b) If and so long as there are fewer than 100 holders of record of the corporations shares, the requirement of sending of an annual report to the stockholders of the corporation is hereby expressly waived.
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Exhibit 3.5
STATE OF DELAWARE
CERTIFICATE OF CONVERSION
FROM A NON-DELAWARE CORPORATION
TO A DELAWARE CORPORATION
PURSUANT TO SECTION 265 OF THE
DELAWARE GENERAL CORPORATION LAW
1.) | The jurisdiction where the Non-Delaware Corporation first formed is Colorado . |
2.) | The jurisdiction immediately prior to filing this Certificate is Colorado . |
3.) | The date the Non-Delaware Corporation first formed is March 29, 1996 . |
4.) | The name of the Non-Delaware Corporation immediately prior to filing this Certificate is Chay Enterprises, Inc. |
5.) | The name of the Corporation as set forth in the Certificate of Incorporation is Chay Enterprises, Inc. |
IN WITNESS WHEREOF, the undersigned being duly authorized to sign on behalf of the converting Non-Delaware Corporation has executed this Certificate on the 25th day of March, 2010.
CHAY ENTERPRISES, INC. | ||
By: |
/s/ Donald B. Wingerter, Jr. |
|
Print Name: | Donald B. Wingerter, Jr. | |
Title: | Chief Executive Officer |
Exhibit 3.6
State of Delaware Secretary of State Division of Corporations Delivered 02:47 PM 03/04/2010 FILED 02:47 PM 03/04/2010 SRV 100246448 - 4635220 FILE |
CERTIFICATE OF MERGER
of
CHAY ACQUISITIONS, INC.
(a Delaware corporation)
with and into
DMI LIFE SCIENCES, INC.
(a Delaware corporation)
Pursuant to the provisions of Section 251(c) of the General Corporation Law of the State of Delaware (the DGCL), DMI Life Sciences, Inc., a Delaware corporation (DMI), hereby certifies the following information relating to the merger (the Merger) of Chay Acquisitions, Inc., a Delaware corporation (CAI), with and into DMI:
FIRST: The names and states of incorporation of the constituent corporations in the Merger (the Constituent Corporations) are:
Name: |
State of Incorporation: |
|
DMI Life Sciences, Inc. | Delaware | |
Chay Acquisitions, Inc. | Delaware |
SECOND: The Agreement and Plan of Merger, by and among DMI, Chay Enterprises, Inc., a Colorado corporation, and CAI, dated as of March 2, 2010 (the Merger Agreement), setting forth the terms and conditions of the Merger, has been approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations in accordance with the requirements of Section 251 of the DGCL.
THIRD: The name of the corporation surviving the Merger (the Surviving Corporation) shall be DMI Life Sciences, Inc., which shall be renamed Ampio Pharmaceutical Technologies, Inc. in accordance with the Amended and Restated Certificate of Incorporation of DMI to be filed hereafter.
FOURTH: The Certificate of Incorporation of DMI, as in effect immediately prior to the effective time of the Merger, shall be the Certificate of Incorporation of the Surviving Corporation until it is amended and restated as described hereinabove.
FIFTH: In accordance with the Merger Agreement, the effective time of the Merger shall be as of the filing of this Certificate of Merger with the Secretary of State of the State of Delaware pursuant to Section l03(c)(3) of the DGCL.
SIXTH: The executed Merger Agreement is on file at the principal place of business of the Surviving Corporation, which is located at 8400 East Crescent Parkway, Suite 600, Greenwood Village, Colorado 80111.
SEVENTH: A copy of the Merger Agreement will be furnished to any stockholder of any Constituent Corporation by the Surviving Corporation upon request and without cost to said stockholder.
IN WITNESS WHEREOF, the Surviving Corporation has caused this Certificate of Merger to be executed by an authorized officer on the 2nd day of March, 2010.
DMI LIFE SCIENCES, INC. | ||
By: |
|
|
Name: |
Donald B. Wingerter |
|
Title: |
CEO |
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Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement), is effective as of April 17, 2009 (the Effective Date), between DMI LIFE SCIENCES, INC., a Delaware corporation (with its successors and assigns, referred to as the Company), and DAVID BAR-OR, M.D. (Employee).
WHEREAS, the Company and DMI Biosciences, Inc., a Colorado corporation (DMIB) are party to an Asset Purchase Agreement dated as of April 16, 2009 (the APA) pursuant to which the Company will purchase certain assets of DMIB;
WHEREAS, the Company and Employee mutually desire to have Employee employed by the Company upon the terms and conditions set forth herein;
WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by the APA;
NOW, THEREFORE, in consideration of the foregoing premises and of the mutual agreements and covenants hereinafter set forth, the parties hereto agree to the terms and conditions of this Agreement as follows:
1. Employment for Term. The Company hereby agrees to employ Employee and Employee hereby accepts such employment with the Company for the period beginning on the Effective Date. The term of this Agreement (the Term) shall continue until the termination of Employees employment in accordance with the provisions of this Agreement. The termination of Employees employment under this Agreement shall end the Term but shall not terminate Employees or the Companys other obligations that are intended to survive the termination of this Agreement (including without limitation, the payments under Section 7 and 8 and Employees obligations under Section 9).
2. Position and Duties. During the Term, Employee shall serve as Chairman of the Board, Chief Scientific Officer and Director of Research of the Company, perform such duties as are consistent with his position and report to the Board of Directors of the Company. During the Term, Employee shall also hold such additional positions and titles as the Board of Directors of the Company (the Board) may determine from time to time. During the Term, Employee shall devote as much time as is necessary to satisfactorily perform his duties as an employee and officer of the Company. Without limitation of the foregoing, the Company hereby acknowledges that it consents to Employees participation in those outside activities described on Exhibit A hereto. The Company shall nominate Employee, and use its best efforts to have Employee elected, to the Board of Directors of the Company (the Board) and as Chairman of the Board throughout the Term of this Agreement and shall include him in the management slate for election as a director at every stockholders meeting during the Term at which his term as a director would otherwise expire. Employee agrees to accept election, and to serve during the Term, as director of the Company. On termination of Employees employment, regardless of the reason for such termination, Employee shall immediately (and with contemporaneous effect) resign any directorships, offices or other positions that Employee may hold in the Company or any affiliate, unless otherwise agreed in writing by the parties.
3. Compensation.
(a) Base Salary. The Company shall pay Employee a base salary of $227,500 per annum, payable at least monthly on the Companys regular pay cycle for professional employees (as it may be increased (but not decreased) in the sole discretion of the Board, the Base Salary).
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(b) Annual Review. The Base Salary shall be reviewed at the end of each calendar year (the first such review to occur at the end of calendar year 2009). Any increases in the Base Salary shall be at the sole discretion of the Board.
(c) Equity Compensation. In connection with the execution of this Agreement, the Company hereby agrees to grant initial equity compensation to Employee in the aggregate amount of 2,700,000 shares of Common Stock, which amount is approximately % of the total of the Companys shares, calculated on a fully-diluted, as-converted basis and after giving effect to the closing of the transactions contemplated by the APA. Such equity compensation shall be in the form of restricted shares of the Companys Common Stock. All such equity compensation shall vest in accordance with the vesting schedule set forth in the applicable equity compensation agreements. The composition and vesting schedule for such equity compensation is summarized on Exhibit B hereto. Such vesting schedule will be accelerated, to the extent provided in this Agreement, in certain circumstances.
(d) Other and Additional Compensation. Subsections (a) and (c) above establish Employees compensation during the Term which shall not preclude the Board from awarding Employee a higher salary or any bonuses or stock options, restricted stock or other forms of additional equity awards in the discretion of the Board during the Term at any time.
4. Employee Benefits. During the Term, Employee shall be entitled to participate at the same level as other senior executive officers of the Company in any group insurance, hospitalization, medical, health and accident, disability, fringe benefit and tax-qualified retirement plans or programs of the Company now existing or hereafter established to the extent that he is eligible under the general provisions thereof. For the term of this Agreement, Employee shall be entitled to paid vacation at the rate of (4) weeks per annum. In accordance with Company policy, unused vacation may not be carried over from year to year.
5. Expenses. The Company shall reimburse Employee for actual, reasonable out-of-pocket expenses incurred by him in the performance of his services for the Company upon the receipt of appropriate documentation of such expenses.
6. Termination.
(a) General. The Term shall end immediately upon Employees death. Employees employment may also be terminated by the Company with or without Cause or as a result of Employees Disability, as defined in Section 7 or by Employee with or without Good Reason (as such terms are defined below).
(b) Notice of Termination. Either party shall give written notice of termination to the other party.
(c) Notification of New Employer. In the event that Employee leaves the employ of the Company, Employee grants consent to notification by the Company to Employees new employer about his rights and obligations under this Agreement and the PIA (hereinafter defined).
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7. Severance Benefits.
(a) Cause Defined. Cause means (i) willful malfeasance or willful misconduct by Employee in connection with his employment; (ii) Employees gross negligence in performing any of his duties under this Agreement; (iii) Employees conviction of, or entry of a plea of guilty to, or entry of a plea of nolo contendre with respect to, any crime other than a traffic violation or infraction which is a misdemeanor; (iv) Employees material breach of any written policy applicable to all employees adopted by the Company which is not cured to the reasonable satisfaction of the Company within thirty (30) business days after notice thereof; or (v) material breach by Employee of any of his obligations in this Agreement which is not cured to the reasonable satisfaction of the Company within thirty (30) business days after notice thereof.
(b) Disability Defined. Disability shall mean (i) Employees incapacity due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation, that results in Employee being substantially unable to perform his duties hereunder for six consecutive months (or for six months out of any nine month period) or (ii) a qualified independent physician mutually acceptable to the Company and Employee determines that Employee is incapacitated due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation so as to be unable to regularly perform the duties of his position and such condition is expected to be of a permanent or near-permanent duration. Until such time as Employee is terminated for Disability under this paragraph (b), Employee shall continue to receive his Base Salary hereunder, provided that if the Company provides Employee with disability insurance coverage, payments of Employees Base Salary shall be reduced by the amount of any disability insurance payments received by Employee due to such coverage. The Company shall give Employee written notice of termination due to Disability which shall take effect sixty (60) days after the date it is sent to Employee unless Employee shall have returned to the performance of his duties hereunder during such sixty (60) day period (whereupon such notice shall become void). In the event that the Company terminates Employees employment as a result of his Disability, Employee shall be entitled to the same benefits as if his employment had been terminated by the Company without Cause.
(c) Good Reason Defined. For purposes of this Agreement, Good Reason shall mean, without Employees written consent: (i) there is a material reduction of the level of Employees compensation (excluding any bonuses) (except where there is a general reduction applicable to the management team generally, provided, however, that in no case may the Base Salary be reduced below the amount stated in Section 3(a)), (ii) there is a material reduction in Employees overall responsibilities or authority, or scope of duties (it being understood that the occurrence of a Change in Control shall not, by itself, necessarily constitute a reduction in Employees responsibilities or authority); or (iii) there is a material change in the principal geographic location at which Employee must perform his services (it being understood that the relocation of Employee to a facility or a location within forty (40) miles of the State Capitol Building in Denver, Colorado shall not be deemed material for purposes of this Agreement). No event shall be deemed to be Good Reason if the Company has cured the event (if susceptible to cure) within 30 days of receipt of written notice from Employee specifying the event or events which, absent cure, would constitute Good Cause.
(d) Accrued Compensation Defined. Accrued Compensation shall mean an amount which shall include all amounts earned or accrued by Employee through the date of termination of this Agreement but not paid as of such date, including (i) Base Salary, (ii) reimbursement for business expenses incurred by the Employee on behalf of the Company, pursuant to the Companys expense reimbursement policy in effect at such time, (iii) expense allowance per
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Company policy, (iv) accrued but unused vacation pay per Company policy, and (v) bonuses and incentive compensation earned and awarded prior to the date of termination. Accrued Compensation shall be paid on the first regular pay date after the date of termination (or earlier, if required by applicable law).
(e) Termination.
(i) Cause; Without Good Reason. If the Company ends the Term for Cause, or if Employee resigns as an employee of the Company for reasons other than an event of Good Reason, then the Company shall pay to Employee the Accrued Compensation but shall have no obligation to pay Employee any amount, whether for salary, benefits, bonuses, or other compensation or expense reimbursements of any kind, accruing after the end of the Term, and such rights shall, except as otherwise required by law or pursuant to the applicable award agreement or plan, be forfeited immediately upon the end of the Term. For the sake of clarity, any stock options, restricted stock or other equity compensation shall, to the extent vested on the date of resignation without Good Reason or the date the Company ends the Term for Cause, remain outstanding and exerciseable to the extent provided in the applicable award agreement or plan.
(ii) Without Cause; Good Reason; Death. In the event that the Company terminates Employees employment hereunder without Cause, Employee terminates his employment with Good Reason or his employment terminates as a result of his death, he shall be entitled to the Accrued Compensation and, subject to Section 21 below,
(A) A lump sum payment equal to two times his Base Salary in effect at the date of termination, less applicable withholding.
(B) Continued participation (via state or federal insurance continuation laws such as COBRA, to the extent available) in the health and welfare plans (or comparable plans, if continued participation in the Companys plans is not available) provided by the Company to Employee at the time of termination for a period of two years from the date of termination or, if earlier, until he is eligible for comparable coverage with a subsequent employer. The Company agrees to reimburse the payments Employee makes for such coverage, whether via continuation or separate comparable policy. Premium reimbursements shall be made by the Company to Employee consistent with the Companys normal expense reimbursement policy, provided that Employee submits documentation to the Company substantiating his payments for insurance coverage. Employee shall give the Company prompt notice of his eligibility for comparable coverage.
(C) Any unvested options, restricted stock and other stock-based grants to Employee shall be deemed fully vested on the date of termination and any restrictions thereon shall lapse. All stock options shall remain exerciseable from the date of termination until the tenth anniversary of the date such options were granted (or, if earlier, the expiration date of the applicable Company plan under which such options were granted).
(D) Any severance payments and/or other separation benefits contemplated by this Agreement are conditional on Employee: (i) continuing to comply with the terms of this Agreement and the PIA (as defined herein); (ii) delivering prior to or contemporaneously with any such severance payments, and not revoking, (x) a
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customary general release of claims relating to Employees employment and/or this Agreement against the Company or its successor, its subsidiaries and their respective directors, officers and stockholders and (y) a customary affirmation of Employees continuing obligations hereunder and under the PIA.
Unless otherwise required by law, no severance payments and/or benefits under this Agreement will be paid and/or provided until after the expiration of any relevant revocation period.
8. Change in Control Payments. The provisions of this paragraph 8 set forth the terms of an agreement reached between Employee and the Company regarding Employees rights and obligations upon the occurrence of a Change in Control (as hereinafter defined) of the Company during the Term. These provisions are intended to assure and encourage in advance Employees continued attention and dedication to his assigned duties and his objectivity during the pendency and after the occurrence of any such Change in Control. The following provisions shall apply in the event of a Change in Control, in addition to any payment or benefit that may be required pursuant to Section 7.
(a) Equity. Upon the occurrence of a Change in Control, all stock options, restricted stock and other stock-based grants to Employee by the Company or that may be granted in the future shall, irrespective of any provisions of his award agreements, immediately and irrevocably vest and become exercisable and any restrictions thereon shall lapse. All stock options shall remain exerciseable from the date of the Change in Control until the expiration of the term of such stock options.
(b) Definitions. For purposes of this paragraph 8, the following terms shall have the following meanings:
Change in Control shall mean any of the following:
(1) the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (the Acquiring Person), other than the Company, or any of its Subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3- promulgated under the Exchange Act) of 50% or more of the combined voting power or economic interests of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (excluding any issuance of securities by the Company in a transaction or series of transactions made principally for bona fide equity financing purposes, and also excluding the acquisition of Company securities by DMIB in connection with the transactions contemplated by the APA);
(2) during any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Companys board of directors, and any new directors (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in paragraphs (1), (3) or (4) of this definition) whose election by the board of directors or nomination for election by the Companys stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Companys board of directors; or
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(3) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any issuance of securities by the Company in a transaction or series of transactions made principally for bona fide equity financing purposes, and also excluding the acquisition of Company securities by DMIB in connection with the transactions contemplated by the APA) other than a transaction or series of related transactions in which the holders of the voting securities of the Corporation outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in the Company held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent); or
(4) the sale or other disposition of all or substantially all of the assets of the Company in one transaction or series of related transactions.
9. Proprietary Information and Inventions Agreement. As a condition of Employees employment with the Company, Employee agrees to sign the Companys standard form of Proprietary Information and Inventions Agreement (PIA).
10. Successors and Assigns.
(a) Employee. This Agreement is a personal contract, and the rights and interests that the Agreement accords to Employee may not be sold, transferred, assigned, pledged, encumbered, or hypothecated by him. All rights and benefits of Employee shall be for the sole personal benefit of Employee, and no other person shall acquire any right, title or interest under this Agreement by reason of any sale, assignment, transfer, claim or judgment or bankruptcy proceedings against Employee. Except as so provided, this Agreement shall inure to the benefit of and be binding upon Employee and his personal representatives, distributes and legatees.
(b) The Company. This Agreement shall be binding upon the Company and inure to the benefit of the Company and of its successors and assigns, including (but not limited to) any Company that may acquire all or substantially all of the Companys assets or business or into or with which the Company may be consolidated or merged. In the event that the Company sells all or substantially all of its assets, merges or consolidates, otherwise combines or affiliates with another business, dissolves and liquidates, or otherwise sells or disposes of substantially all of its assets, then this Agreement shall continue in full force and effect. The Companys obligations under this Agreement shall cease, however, if and only if the successor to, the purchaser or acquirer of either of the Company or of all or substantially all of its assets, or the entity with which the Company has affiliated, shall assume in writing the Companys obligations under this Agreement (and deliver and executed copy of such assumption to Employee), in which case such successor or purchaser, but not the Company, shall thereafter be the only party obligated to perform the obligations that remain to be performed on the part of the Company under this Agreement.
11. Entire Agreement. This Agreement (together with the equity award agreements referred to herein) represents the entire agreement between the parties concerning Employees employment with the Company and supersedes all prior negotiations, discussions, understanding and agreements, whether written or oral, between Employee and the Company relating to the subject matter of this Agreement.
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12. Amendment or Modification, Waiver. No provision of this Agreement may be amended or waived unless such amendment or waiver is agreed to in writing signed by Employee and by a duly authorized officer of the Company. No waiver by any party to this Agreement or any breach by another party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar condition or provision at the same time, any prior time or any subsequent time.
13. Notices. Any notice to be given under this Agreement shall be in writing and delivered personally or sent by overnight courier or registered or certified mail, postage prepaid, return receipt requested, addressed to the party concerned at the address indicated below, or to such other address of which such party subsequently may give notice in writing:
If to Employee: | To the address specified in the payroll records of the Company. | |
If to the Company: | DMI Life Sciences, Inc. | |
8400 East Crescent Parkway | ||
Suite 600 | ||
Greenwood Village, Colorado 80111 |
Any notice delivered personally or by overnight courier shall be deemed given on the date delivered and any notice sent by registered or certified mail, postage prepaid, return receipt requested, shall be deemed given on the date mailed.
14. Severability. If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid and unenforceable shall not be affected, and each provision of this Agreement shall be validated and shall be enforced to the fullest extent permitted by law. If for any reason any provision of this Agreement containing restrictions is held to cover an area or to be for a length of time that is unreasonable or in any other way is construed to be too broad or to any extent invalid, such provision shall not be determined to be entirely null, void and of no effect; instead, it is the intention and desire of both the Company and Employee that, to the extent that the provision is or would be valid or enforceable under applicable law, any court of competent jurisdiction shall construe and interpret or reform this Agreement to provide for a restriction having the maximum enforceable area, time period and such other constraints or conditions (although not greater than those contained currently contained in this Agreement) as shall be valid and enforceable under the applicable law.
15. Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.
16. Headings. All descriptive headings of sections and paragraphs in this Agreement are intended solely for convenience of reference, and no provision of this Agreement is to be construed by reference to the heading of any section or paragraph.
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17. Withholding Taxes. All salary, benefits, reimbursements and any other payments to Employee under this Agreement shall be subject to all applicable payroll and withholding taxes and deductions required by any law, rule or regulation of and federal, state or local authority.
18. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together constitute one and same instrument.
19. Applicable Law; Arbitration. The validity, interpretation and enforcement of this Agreement and any amendments or modifications hereto shall be governed by the laws of the State of Colorado, as applied to a contract executed within and to be performed in such State. The parties agree that any disputes shall be definitively resolved by binding arbitration before the American Arbitration Association in Denver, Colorado and consent to the jurisdiction to the federal courts of the District of Colorado or, if there shall be no jurisdiction, to the state courts located in Arapahoe County, Colorado, to enforce any arbitration award rendered with respect thereto. Each party shall choose one arbitrator and the two arbitrators shall choose a third arbitrator. All costs and fees related to such arbitration (and judicial enforcement proceedings, if any) shall be borne by the Company unless Employees claim is deemed to be frivolous by the arbitrator(s) or judge.
20. Legal Fees. Each party shall pay its own counsel fee expenses incurred in drafting and negotiating this Agreement.
21. Section 409A. Notwithstanding anything to the contrary in this Agreement, if Employee is a specified employee within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the Code) and the final regulations and any guidance promulgated thereunder (Section 409A) at the time of Employees termination (other than due to death), and the severance payable to Employee, if any, pursuant to this Agreement, when considered together with any other severance payments or separation benefits which may be considered deferred compensation under Section 409A (together, the Deferred Compensation Separation Benefits) will not and could not under any circumstances, regardless of when such termination occurs, be paid in full by March 15 of the year following Employees termination, then only that portion of the Deferred Compensation Separation Benefits which do not exceed the Section 409A Limit (as defined below) may be made within the first six (6) months following Employees termination of employment in accordance with the payment schedule applicable to each payment or benefit. For these purposes, each severance payment is hereby designated as a separate payment and will not collectively be treated as a single payment. Any portion of the Deferred Compensation Separation Benefits in excess of the Section 409A Limit shall accrue and, to the extent such portion of the Deferred Compensation Separation Benefits would otherwise have been payable within the first six (6) months following Employees termination of employment, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Employees termination. All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Employee dies following his termination but prior to the six (6) month anniversary of his termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Employees death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. The foregoing provision is intended to comply with the requirements of Section 409A so that none of the severance payments and
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benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Employee agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Employee under Section 409A, For purposes of this Agreement, Section 409A Limit will mean the lesser of two (2) times: (A) Employees annualized compensation based upon the annual rate of pay paid to Employee during the Companys taxable year preceding the Companys taxable year of Employees termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (B) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401 (a)(17) of the Code for the year in which Employees employment is terminated.
22. Indemnification. As a condition to the effectiveness of this Agreement, the Company and Employee shall enter into a mutually acceptable indemnification agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
DMI LIFE SCIENCES, INC. | EMPLOYEE | |||||
By: |
|
|
||||
Name: | Name: DAVID BAR-OR, M.D. |
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EXHIBIT A
Outside Activities
1. DMI Biosciences, Inc. Employee is an employee, officer, director and equityholder of DMI Biosciences. Employee shall continue in such roles during the term of this Agreement.
2. Trauma Research LLC Employee serves as an employee, manager and member of Trauma Research. Employee shall continue in such roles during the term of this Agreement.
3. Institute for Molecular Medicine, Inc. Employee is an employee, officer, director and equityholder of IMM. Employee shall continue in such roles during the term of this Agreement.
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EXHIBIT B
Terms of Equity Compensation
Management equity grant :
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2,700,000 total shares, all of which will be in the form of restricted stock |
|
All shares fully vest upon change in control, death, disability, termination without cause, termination for good reason |
|
900,000 shares of restricted stock which are fully vested on Day 1 |
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0 shares of restricted stock vest during months 012 under time vesting |
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900,000 shares of restricted stock vest monthly/ratably during months 1224 |
¡ |
this tranche of restricted stock is subject to acceleration of vesting upon the achievement of the milestones described below |
|
900,000 shares of restricted stock vest monthly/ratably during months 2436 |
¡ |
this tranche of restricted stock is subject to acceleration of vesting upon the achievement of the milestones described below |
Vesting milestones
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Design and fabricate (small scale) a disposable single-use electrochemical test strip capable of attaining reproducible and accurate test results of oxidation-reduction potential (ORP) in blood of one or more selected patient populations (including normals) that correlate to the results obtained from existing ORP |
¡ |
450,000 shares become fully vested upon this milestone achievement |
|
Write clinical trial protocol for initial POC study, including but not limited to a brief summary, background information, study design, inclusion and exclusion criteria, sample size calculation, data capture processes, adverse event recording, safety reviews, statistical analysis and relevant scientific and regulatory references |
¡ |
450,000 shares become fully vested upon this milestone achievement |
|
Complete a sampling study for one new clinical indication of ORP |
¡ |
450,000 shares become fully vested upon this milestone achievement |
|
Submit 510(k), an IDE or a PMA application to FDA in any patient population or clinical application for initial use of ORP sensor |
¡ |
450,000 shares become fully vested upon this milestone achievement |
To the extent that any of the above milestones are satisfied, the restricted shares which will early vest shall be taken from the portion of the restricted shares with the longest remaining time to vesting under the time vesting schedule.
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Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement), is effective as of April 17, 2009 (the Effective Date), between DMI LIFE SCIENCES, INC., a Delaware corporation (with its successors and assigns, referred to as the Company), and BRUCE G. MILLER (Employee).
WHEREAS, the Company and DMI Biosciences, Inc., a Colorado corporation (DMIB) are party to an Asset Purchase Agreement dated as of April 16, 2009 (the APA) pursuant to which the Company will purchase certain assets of DMIB;
WHEREAS, the Company and Employee mutually desire to have Employee employed by the Company upon the terms and conditions set forth herein;
WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by the APA;
NOW, THEREFORE, in consideration of the foregoing premises and of the mutual agreements and covenants hereinafter set forth, the parties hereto agree to the terms and conditions of this Agreement as follows:
1. Employment for Term. The Company hereby agrees to employ Employee and Employee hereby accepts such employment with the Company for the period beginning on the Effective Date. The term of this Agreement (the Term) shall continue until the termination of Employees employment in accordance with the provisions of this Agreement. The termination of Employees employment under this Agreement shall end the Term but shall not terminate Employees or the Companys other obligations that are intended to survive the termination of this Agreement (including without limitation, the payments under Section 7 and 8 and Employees obligations under Section 9).
2. Position and Duties. During the Term, Employee shall serve as Chief Executive Officer and a Director of the Company, perform such duties as are consistent with his position and report to the Board of Directors of the Company. During the Term, Employee shall also hold such additional positions and titles as the Board of Directors of the Company (the Board) may determine from time to time. During the Term, Employee shall devote as much time as is necessary to satisfactorily perform his duties as an employee and officer of the Company. Without limitation of the foregoing, the Company hereby acknowledges that it consents to Employees participation in those outside activities described on Exhibit A hereto. The Company shall nominate Employee, and use its best efforts to have Employee elected, to the Board of Directors of the Company (the Board) throughout the Term of this Agreement and shall include him in the management slate for election as a director at every stockholders meeting during the Term at which his term as a director would otherwise expire. Employee agrees to accept election, and to serve during the Term, as director of the Company. On termination of Employees employment, regardless of the reason for such termination, Employee shall immediately (and with contemporaneous effect) resign any directorships, offices or other positions that Employee may hold in the Company or any affiliate, unless otherwise agreed in writing by the parties.
3. Compensation.
(a) Base Salary. The Company shall pay Employee a base salary of $180,000 per annum, payable at least monthly on the Companys regular pay cycle for professional employees (as it may be increased (but not decreased) in the sole discretion of the Board, the Base Salary).
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(b) Annual Review. The Base Salary shall be reviewed at the end of each calendar year (the first such review to occur at the end of calendar year 2009). Any increases in the Base Salary shall be at the sole discretion of the Board.
(c) Equity Compensation. In connection with the execution of this Agreement, the Company hereby agrees to grant initial equity compensation to Employee in the aggregate amount of 1,500,000 shares of Common Stock, which amount is approximately % of the total of the Companys shares, calculated on a fully-diluted, as-converted basis and after giving effect to the closing of the transactions contemplated by the APA. Such equity compensation shall be in the form of restricted shares of the Companys Common Stock. All such equity compensation shall vest in accordance with the vesting schedule set forth in the applicable equity compensation agreements. The composition and vesting schedule for such equity compensation is summarized on Exhibit B hereto. Such vesting schedule will be accelerated, to the extent provided in this Agreement, in certain circumstances.
(d) Other and Additional Compensation. Subsections (a) and (c) above establish Employees compensation during the Term which shall not preclude the Board from awarding Employee a higher salary or any bonuses or stock options, restricted stock or other forms of additional equity awards in the discretion of the Board during the Term at any time.
4. Employee Benefits. During the Term, Employee shall be entitled to participate at the same level as other senior executive officers of the Company in any group insurance, hospitalization, medical, health and accident, disability, fringe benefit and tax-qualified retirement plans or programs of the Company now existing or hereafter established to the extent that he is eligible under the general provisions thereof. For the term of this Agreement, Employee shall be entitled to paid vacation at the rate of (4) weeks per annum. In accordance with Company policy, unused vacation may not be carried over from year to year.
5. Expenses. The Company shall reimburse Employee for actual, reasonable out-of-pocket expenses incurred by him in the performance of his services for the Company upon the receipt of appropriate documentation of such expenses.
6. Termination.
(a) General. The Term shall end immediately upon Employees death. Employees employment may also be terminated by the Company with or without Cause or as a result of Employees Disability, as defined in Section 7 or by Employee with or without Good Reason (as such terms are defined below).
(b) Notice of Termination. Either party shall give written notice of termination to the other party.
(c) Notification of New Employer. In the event that Employee leaves the employ of the Company, Employee grants consent to notification by the Company to Employees new employer about his rights and obligations under this Agreement and the PIA (hereinafter defined).
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7. Severance Benefits.
(a) Cause Defined. Cause means (i) willful malfeasance or willful misconduct by Employee in connection with his employment; (ii) Employees gross negligence in performing any of his duties under this Agreement; (iii) Employees conviction of, or entry of a plea of guilty to, or entry of a plea of nolo contendre with respect to, any crime other than a traffic violation or infraction which is a misdemeanor; (iv) Employees material breach of any written policy applicable to all employees adopted by the Company which is not cured to the reasonable satisfaction of the Company within thirty (30) business days after notice thereof; or (v) material breach by Employee of any of his obligations in this Agreement which is not cured to the reasonable satisfaction of the Company within thirty (30) business days after notice thereof.
(b) Disability Defined. Disability shall mean (i) Employees incapacity due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation, that results in Employee being substantially unable to perform his duties hereunder for six consecutive months (or for six months out of any nine month period) or (ii) a qualified independent physician mutually acceptable to the Company and Employee determines that Employee is incapacitated due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation so as to be unable to regularly perform the duties of his position and such condition is expected to be of a permanent or near-permanent duration. Until such time as Employee is terminated for Disability under this paragraph (b), Employee shall continue to receive his Base Salary hereunder, provided that if the Company provides Employee with disability insurance coverage, payments of Employees Base Salary shall be reduced by the amount of any disability insurance payments received by Employee due to such coverage. The Company shall give Employee written notice of termination due to Disability which shall take effect sixty (60) days after the date it is sent to Employee unless Employee shall have returned to the performance of his duties hereunder during such sixty (60) day period (whereupon such notice shall become void). In the event that the Company terminates Employees employment as a result of his Disability, Employee shall be entitled to the same benefits as if his employment had been terminated by the Company without Cause.
(c) Good Reason Defined. For purposes of this Agreement, Good Reason shall mean, without Employees written consent: (i) there is a material reduction of the level of Employees compensation (excluding any bonuses) (except where there is a general reduction applicable to the management team generally, provided, however, that in no case may the Base Salary be reduced below the amount stated in Section 3(a)), (ii) there is a material reduction in Employees overall responsibilities or authority, or scope of duties (it being understood that the occurrence of a Change in Control shall not, by itself, necessarily constitute a reduction in Employees responsibilities or authority); or (iii) there is a material change in the principal geographic location at which Employee must perform his services (it being understood that the relocation of Employee to a facility or a location within forty (40) miles of the State Capitol Building in Denver, Colorado shall not be deemed material for purposes of this Agreement). No event shall be deemed to be Good Reason if the Company has cured the event (if susceptible to cure) within 30 days of receipt of written notice from Employee specifying the event or events which, absent cure, would constitute Good Cause.
(d) Accrued Compensation Defined. Accrued Compensation shall mean an amount which shall include all amounts earned or accrued by Employee through the date of termination of this Agreement but not paid as of such date, including (i) Base Salary, (ii) reimbursement for business expenses incurred by the Employee on behalf of the Company, pursuant to the Companys expense reimbursement policy in effect at such time, (iii) expense allowance per
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Company policy, (iv) accrued but unused vacation pay per Company policy, and (v) bonuses and incentive compensation earned and awarded prior to the date of termination. Accrued Compensation shall be paid on the first regular pay date after the date of termination (or earlier, if required by applicable law).
(e) Termination.
(i) Cause; Without Good Reason. If the Company ends the Term for Cause, or if Employee resigns as an employee of the Company for reasons other than an event of Good Reason, then the Company shall pay to Employee the Accrued Compensation but shall have no obligation to pay Employee any amount, whether for salary, benefits, bonuses, or other compensation or expense reimbursements of any kind, accruing after the end of the Term, and such rights shall, except as otherwise required by law or pursuant to the applicable award agreement or plan, be forfeited immediately upon the end of the Term. For the sake of clarity, any stock options, restricted stock or other equity compensation shall, to the extent vested on the date of resignation without Good Reason or the date the Company ends the Term for Cause, remain outstanding and exerciseable to the extent provided in the applicable award agreement or plan.
(ii) Without Cause; Good Reason; Death. In the event that the Company terminates Employees employment hereunder without Cause, Employee terminates his employment with Good Reason or his employment terminates as a result of his death, he shall be entitled to the Accrued Compensation and, subject to Section 21 below,
(A) A lump sum payment equal to two times his Base Salary in effect at the date of termination, less applicable withholding.
(B) Continued participation (via state or federal insurance continuation laws such as COBRA, to the extent available) in the health and welfare plans (or comparable plans, if continued participation in the Companys plans is not available) provided by the Company to Employee at the time of termination for a period of two years from the date of termination or, if earlier, until he is eligible for comparable coverage with a subsequent employer. The Company agrees to reimburse the payments Employee makes for such coverage, whether via continuation or separate comparable policy. Premium reimbursements shall be made by the Company to Employee consistent with the Companys normal expense reimbursement policy, provided that Employee submits documentation to the Company substantiating his payments for insurance coverage. Employee shall give the Company prompt notice of his eligibility for comparable coverage.
(C) Any unvested options, restricted stock and other stock-based grants to Employee shall be deemed fully vested on the date of termination and any restrictions thereon shall lapse. All stock options shall remain exerciseable from the date of termination until the tenth anniversary of the date such options were granted (or, if earlier, the expiration date of the applicable Company plan under which such options were granted).
(D) Any severance payments and/or other separation benefits contemplated by this Agreement are conditional on Employee: (i) continuing to comply with the terms of this Agreement and the PIA (as defined herein); (ii) delivering prior to or contemporaneously with any such severance payments, and not revoking, (x) a
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customary general release of claims relating to Employees employment and/or this Agreement against the Company or its successor, its subsidiaries and their respective directors, officers and stockholders and (y) a customary affirmation of Employees continuing obligations hereunder and under the PIA.
Unless otherwise required by law, no severance payments and/or benefits under this Agreement will be paid and/or provided until after the expiration of any relevant revocation period.
8. Change in Control Payments. The provisions of this paragraph 8 set forth the terms of an agreement reached between Employee and the Company regarding Employees rights and obligations upon the occurrence of a Change in Control (as hereinafter defined) of the Company during the Term. These provisions are intended to assure and encourage in advance Employees continued attention and dedication to his assigned duties and his objectivity during the pendency and after the occurrence of any such Change in Control. The following provisions shall apply in the event of a Change in Control, in addition to any payment or benefit that may be required pursuant to Section 7.
(a) Equity. Upon the occurrence of a Change in Control, all stock options, restricted stock and other stock-based grants to Employee by the Company or that may be granted in the future shall, irrespective of any provisions of his award agreements, immediately and irrevocably vest and become exercisable and any restrictions thereon shall lapse. All stock options shall remain exerciseable from the date of the Change in Control until the expiration of the term of such stock options.
(b) Definitions. For purposes of this paragraph 8, the following terms shall have the following meanings:
Change in Control shall mean any of the following:
(1) the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (the Acquiring Person), other than the Company, or any of its Subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3-promulgated under the Exchange Act) of 50% or more of the combined voting power or economic interests of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (excluding any issuance of securities by the Company in a transaction or series of transactions made principally for bona fide equity financing purposes, and also excluding the acquisition of Company securities by DMIB in connection with the transactions contemplated by the APA);
(2) during any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Companys board of directors, and any new directors (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in paragraphs (1), (3) or (4) of this definition) whose election by the board of directors or nomination for election by the Companys stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Companys board of directors; or
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(3) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any issuance of securities by the Company in a transaction or series of transactions made principally for bona fide equity financing purposes, and also excluding the acquisition of Company securities by DMIB in connection with the transactions contemplated by the APA) other than a transaction or series of related transactions in which the holders of the voting securities of the Corporation outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in the Company held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent); or
(4) the sale or other disposition of all or substantially all of the assets of the Company in one transaction or series of related transactions.
9. Proprietary Information and Inventions Agreement. As a condition of Employees employment with the Company, Employee agrees to sign the Companys standard form of Proprietary Information and Inventions Agreement (PIA).
10. Successors and Assigns.
(a) Employee. This Agreement is a personal contract, and the rights and interests that the Agreement accords to Employee may not be sold, transferred, assigned, pledged, encumbered, or hypothecated by him. All rights and benefits of Employee shall be for the sole personal benefit of Employee, and no other person shall acquire any right, title or interest under this Agreement by reason of any sale, assignment, transfer, claim or judgment or bankruptcy proceedings against Employee. Except as so provided, this Agreement shall inure to the benefit of and be binding upon Employee and his personal representatives, distributes and legatees.
(b) The Company. This Agreement shall be binding upon the Company and inure to the benefit of the Company and of its successors and assigns, including (but not limited to) any Company that may acquire all or substantially all of the Companys assets or business or into or with which the Company may be consolidated or merged. In the event that the Company sells all or substantially all of its assets, merges or consolidates, otherwise combines or affiliates with another business, dissolves and liquidates, or otherwise sells or disposes of substantially all of its assets, then this Agreement shall continue in full force and effect. The Companys obligations under this Agreement shall cease, however, if and only if the successor to, the purchaser or acquirer of either of the Company or of all or substantially all of its assets, or the entity with which the Company has affiliated, shall assume in writing the Companys obligations under this Agreement (and deliver and executed copy of such assumption to Employee), in which case such successor or purchaser, but not the Company, shall thereafter be the only party obligated to perform the obligations that remain to be performed on the part of the Company under this Agreement.
11. Entire Agreement. This Agreement (together with the equity award agreements referred to herein) represents the entire agreement between the parties concerning Employees employment with the Company and supersedes all prior negotiations, discussions, understanding and agreements, whether written or oral, between Employee and the Company relating to the subject matter of this Agreement.
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12. Amendment or Modification, Waiver. No provision of this Agreement may be amended or waived unless such amendment or waiver is agreed to in writing signed by Employee and by a duly authorized officer of the Company. No waiver by any party to this Agreement or any breach by another party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar condition or provision at the same time, any prior time or any subsequent time.
13. Notices. Any notice to be given under this Agreement shall be in writing and delivered personally or sent by overnight courier or registered or certified mail, postage prepaid, return receipt requested, addressed to the party concerned at the address indicated below, or to such other address of which such party subsequently may give notice in writing:
If to Employee: | To the address specified in the payroll records of the Company. | |
If to the Company: | DMI Life Sciences, Inc. | |
8400 East Crescent Parkway Suite 600 Greenwood Village, Colorado 80111 |
Any notice delivered personally or by overnight courier shall be deemed given on the date delivered and any notice sent by registered or certified mail, postage prepaid, return receipt requested, shall be deemed given on the date mailed.
14. Severability. If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid and unenforceable shall not be affected, and each provision of this Agreement shall be validated and shall be enforced to the fullest extent permitted by law. If for any reason any provision of this Agreement containing restrictions is held to cover an area or to be for a length of time that is unreasonable or in any other way is construed to be too broad or to any extent invalid, such provision shall not be determined to be entirely null, void and of no effect; instead, it is the intention and desire of both the Company and Employee that, to the extent that the provision is or would be valid or enforceable under applicable law, any court of competent jurisdiction shall construe and interpret or reform this Agreement to provide for a restriction having the maximum enforceable area, time period and such other constraints or conditions (although not greater than those contained currently contained in this Agreement) as shall be valid and enforceable under the applicable law.
15. Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.
16. Headings. All descriptive headings of sections and paragraphs in this Agreement are intended solely for convenience of reference, and no provision of this Agreement is to be construed by reference to the heading of any section or paragraph.
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17. Withholding Taxes. All salary, benefits, reimbursements and any other payments to Employee under this Agreement shall be subject to all applicable payroll and withholding taxes and deductions required by any law, rule or regulation of and federal, state or local authority.
18. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together constitute one and same instrument.
19. Applicable Law; Arbitration. The validity, interpretation and enforcement of this Agreement and any amendments or modifications hereto shall be governed by the laws of the State of Colorado, as applied to a contract executed within and to be performed in such State. The parties agree that any disputes shall be definitively resolved by binding arbitration before the American Arbitration Association in Denver, Colorado and consent to the jurisdiction to the federal courts of the District of Colorado or, if there shall be no jurisdiction, to the state courts located in Arapahoe County, Colorado, to enforce any arbitration award rendered with respect thereto. Each party shall choose one arbitrator and the two arbitrators shall choose a third arbitrator. All costs and fees related to such arbitration (and judicial enforcement proceedings, if any) shall be borne by the Company unless Employees claim is deemed to be frivolous by the arbitrator(s) or judge.
20. Legal Fees. Each party shall pay its own counsel fee expenses incurred in drafting and negotiating this Agreement.
21. Section 409A. Notwithstanding anything to the contrary in this Agreement, if Employee is a specified employee within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the Code) and the final regulations and any guidance promulgated thereunder (Section 409A) at the time of Employees termination (other than due to death), and the severance payable to Employee, if any, pursuant to this Agreement, when considered together with any other severance payments or separation benefits which may be considered deferred compensation under Section 409A (together, the Deferred Compensation Separation Benefits) will not and could not under any circumstances, regardless of when such termination occurs, be paid in full by March 15 of the year following Employees termination, then only that portion of the Deferred Compensation Separation Benefits which do not exceed the Section 409A Limit (as defined below) may be made within the first six (6) months following Employees termination of employment in accordance with the payment schedule applicable to each payment or benefit. For these purposes, each severance payment is hereby designated as a separate payment and will not collectively be treated as a single payment. Any portion of the Deferred Compensation Separation Benefits in excess of the Section 409A Limit shall accrue and, to the extent such portion of the Deferred Compensation Separation Benefits would otherwise have been payable within the first six (6) months following Employees termination of employment, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Employees termination. All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Employee dies following his termination but prior to the six (6) month anniversary of his termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Employees death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. The foregoing provision is intended to comply with the requirements of Section 409A so that none of the severance payments and
8
benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Employee agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Employee under Section 409A. For purposes of this Agreement, Section 409A Limit will mean the lesser of two (2) times: (A) Employees annualized compensation based upon the annual rate of pay paid to Employee during the Companys taxable year preceding the Companys taxable year of Employees termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (B) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Employees employment is terminated.
22. Indemnification. As a condition to the effectiveness of this Agreement, the Company and Employee shall enter into a mutually acceptable indemnification agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
DMI LIFE SCIENCES, INC. | EMPLOYEE | |||||||
By: |
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Name: | Name: | BRUCE G. MILLER |
9
EXHIBIT A
Outside Activities
1. DMI Biosciences, Inc. Employee is an employee, officer, director and equityholder of DMI Biosciences. Employee shall continue in such roles during the term of this Agreement.
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EXHIBIT B
Terms of Equity Compensation
Management equity grant :
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1,500,000 total shares, all of which will be in the form of restricted stock |
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All shares fully vest upon change in control, death, disability, termination without cause, termination for good reason |
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500,000 shares of restricted stock which are fully vested on Day 1 |
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0 shares of restricted stock vest during months 012 under time vesting |
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500,000 shares of restricted stock vest monthly/ratably during months 1224 |
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this tranche of restricted stock is subject to acceleration of vesting upon the achievement of the milestones described below |
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500,000 shares of restricted stock vest monthly/ratably during months 2436 |
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this tranche of restricted stock is subject to acceleration of vesting upon the achievement of the milestones described below |
Vesting milestones
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Design and fabricate (small scale) a disposable single-use electrochemical test strip capable of attaining reproducible and accurate test results of oxidation-reduction potential (ORP) in blood of one or more selected patient populations (including normals) that correlate to the results obtained from existing ORP |
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125,000 shares become fully vested upon this milestone achievement |
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Write clinical trial protocol for initial POC study, including but not limited to a brief summary, background information, study design, inclusion and exclusion criteria, sample size calculation, data capture processes, adverse event recording, safety reviews, statistical analysis and relevant scientific and regulatory references |
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125,000 shares become fully vested upon this milestone achievement |
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Complete a sampling study for one new clinical indication of ORP |
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125,000 shares become fully vested upon this milestone achievement |
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Submit 510(k), an IDE, or a PMA application to FDA in any patient population or clinical application for initial use of ORP sensor |
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125,000 shares become fully vested upon this milestone achievement |
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Select an initial clinical indication for DMI-5207 (danazol) based on scientific data reviews, medical need assessments and initial key opinion leader and regulatory affairs interview |
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125,000 shares become fully vested upon this milestone achievement |
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Complete a preliminary market analysis for the selected clinical indication for DMI-5207 |
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125,000 shares become fully vested upon this milestone achievement |
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Complete a gap analysis, task list and dose-ranging clinical trial protocol for an IND submission for DMI-5207 for the selected initial clinical indication |
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125,000 shares become fully vested upon this milestone achievement |
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Complete a plan for a pilot safety/tolerability clinical trial for DMI-5207 in the selected patient population |
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125,000 shares become fully vested upon this milestone achievement |
To the extent that any of the above milestones are satisfied, the restricted shares which will early vest shall be taken from the portion of the restricted shares with the longest remaining time to vesting under the time vesting schedule.
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Exhibit 10.3
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this Agreement ) is made effective as of April 17, 2009 (the Grant Date ), by and between DMI Life Sciences, Inc., a Delaware corporation (the Company ), and David Bar-Or M.D. (the Holder ):
WHEREAS, the Company and DMI Biosciences, Inc., a Colorado corporation (DMIB) are party to an Asset Purchase Agreement dated as of April 16, 2009 (the APA) pursuant to which the Company will purchase certain assets of DMIB;
WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by the APA;
WHEREAS, the Companys Board of Directors (the Board) has determined that it would be to the advantage and in the best interest of the Company and its stockholders to enter into this Agreement to assign certain shares of Common Stock of the Company subject to certain restrictions thereon (the Restricted Stock) to the Holder in consideration of services to be rendered and as an incentive for the Holders best performance of future services to Company and its subsidiaries, subject to the restrictions set forth herein and payment of the Aggregate Purchase Price (as defined below);
WHEREAS, the Company and the Holder have entered into an Employment Agreement dated April 17, 2009 (the Employment Agreement ).
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I. AWARD OF RESTRICTED STOCK
Section 1.1 Award of Restricted Stock . In consideration of Holders services and for other good and valuable consideration which the Board has determined, including a per share purchase price of $0.001, the Company hereby awards and assigns to the Holder, on the Grant Date, 2,700,000 shares of Restricted Stock, for an aggregate purchase price of $2,700 (the Aggregate Purchase Price). The Aggregate Purchase Price for the Shares shall be paid by check payable to the Company or by wire transfer per the Companys wiring instructions.
Section 1.2 Not a Contract of Employment . Nothing in this Agreement shall confer upon the Holder any right to continue in the employ of the Company or any subsidiary, or shall interfere with or restrict in any way any otherwise existing rights of the Company and any subsidiary, which are hereby expressly reserved, to discharge the Holder at any time for any reason whatsoever, with or without Cause (subject to the consequences set forth in the Employment Agreement).
ARTICLE II. TERMS OF THE AWARD AND RESTRICTIONS
Section 2.1 Definition . Unless the context otherwise requires, terms defined in the Employment Agreement have the same meanings when used in this Agreement.
Common Stock shall mean common stock of the Company, $0.001 par value per share.
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Restrictions shall mean the restrictions on sale or other transfer set forth in Section 3.1, the exposure to forfeiture set forth in Section 2.2 and the vesting set forth in Section 2.3.
Section 2.2 Forfeiture . Any share of Restricted Stock that is not vested pursuant to Section 2.3 upon the termination of the Holders Service (as defined below) with the Company and its subsidiaries (x) by the Company for Cause or (y) by the Holder other than for Good Reason, shall thereupon be forfeited to the Company without payment. In the event of the termination of the Holders Service (x) as a result of his death or Disability, (y) by the Company without Cause or (z) by the Holder with Good Reason, the Restricted Stock that is not vested pursuant to Section 2.3 shall remain outstanding and shall immediately become fully vested. For purposes of this Agreement, Service shall mean the Holders performance of services to the Company (or any parent, subsidiary or affiliate thereof) in the capacity of an employee, a director, a consultant or an independent advisor.
Section 2.3 Vesting and Lapse of Restrictions . Subject to Sections 2.2, 2.4 and 2.6, each share of Restricted Stock shall not be transferable until such share becomes vested pursuant to this Section. The shares shall vest in accordance with the following schedule (each a Vesting Date):
(a) 500,000 shares of the Restricted Stock shall be fully vested as of the date of this Agreement and there shall be no Restrictions thereon.
(b) No additional shares shall vest pursuant to the passage of time from the date of this Agreement through the first anniversary of this Agreement.
(c) 500,000 shares of the Restricted Stock shall vest in twelve equal installments during the period from the first anniversary to the second anniversary of the date of this Agreement provided that Holder continues to provide Service, such that on the monthly anniversary of the date of this Agreement 1/12 of such Restricted Shares shall vest (such number shall be prorated for any partial month in which Holder is in Service).
(d) 500,000 shares of the Restricted Stock shall vest in twelve equal installments during the period from the second anniversary to the third anniversary of the date of this Agreement provided that Holder continues to provide Service, such that on the monthly anniversary of the date of this Agreement 1/12 of such Restricted Shares shall vest (such number shall be prorated for any partial month in which Holder is in Service).
(e) The time vesting schedule of the Restricted Shares described in paragraphs (c) and (d) above shall be subject to acceleration upon the achievement of the milestones as described on Exhibit B hereto. To the extent that any of the milestones are satisfied, the restricted shares which will early vest shall be taken from the portion of the restricted shares with the longest remaining time to vesting under the time vesting schedule.
Section 2.4 Restricted Account/Stock Legend . Holder acknowledges that the Company will either issue the Restricted Shares covered by this Agreement in the name of the Holder to be held in an uncertificated restricted account or will issue a stock certificate for the Restricted Shares in the name of the Holder, which certificate will bear the legends set forth below and any additional legend required by applicable securities law or other applicable regulation.
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING REQUIREMENTS UNDER THE TERMS OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN DMI LIFE SCIENCES, INC. (THE COMPANY) AND THE REGISTERED OWNER OF SUCH SHARES, AND SUCH SHARES MAY NOT BE, DIRECTLY OR INDIRECTLY, VOLUNTARILY OR INVOLUNTARILY, OR BY OPERATION OF LAW, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT. A COPY OF THE AGREEMENT MAY BE OBTAINED FROM THE COMPANY.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE ACT) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL AS SET FORTH IN THE RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF A PUBLIC OFFERING OF THE COMPANYS SECURITIES SET FORTH IN THE RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY.
Holder acknowledges that the certificates evidencing the Restricted Stock, whether certificated or uncertificated, shall be held in the custody of the Company in the name of the Holder until the restrictions lapse and that it is a condition to the effectiveness of this Agreement and the award of the Restricted Stock that Holder deliver to the Company the stock power attached hereto as Exhibit A, endorsed in blank.
Section 2.5 Assignment of Certificates for Vested Shares . Upon the vesting of the shares of the Restricted Stock as provided in Section 2.3 and subject to Section 3.3, the Company shall, at the request of Holder, cause certificates to be assigned with respect to such vested shares and delivered to the Holder or his legal representative, free from any Restrictions and free from the first legend provided for in Section 2.4; provided, that such shares shall remain subject to applicable securities laws, the Companys employee trading policy and the other restrictions contained in Sections 2.12 and 2.13 of this Agreement.
Section 2.6 Restrictions On New Shares . In the event that the Holder receives any new or additional or different shares or securities by reason of any transaction or event described in Section 2.7, such new or additional or different shares or securities which are attributable to the
3
Holder in his capacity as the registered owner of the Restricted Stock then subject to Restrictions, shall be considered to be Restricted Stock and shall be subject to all of the Restrictions, unless the Board expressly provides for the removal or lapse of the Restrictions on the shares of Restricted Stock underlying the distribution of the new or additional shares or securities, and all of the other restrictions contained in this Agreement.
Section 2.7 Special Circumstances .
(a) Merger and Consolidation. In the event of a Change in Control, all shares of the Restricted Stock shall become fully vested and all Restrictions thereon shall lapse effective immediately prior to the consummation of such Change in Control. Upon the consummation of the Change in Control, the shares of Restricted Stock shall be converted into the right to receive, or shall be exchanged for, cash, securities or other property on the same basis as the other shares of the same class of the Companys capital stock are being converted or exchanged in connection with the Change in Control.
(b) Adjustments. In the event that any merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split, split up, spin-off, repurchase of shares, combination of shares, exchange of shares, dividend in kind, or other like change in corporate structure or dividend or distribution (other than normal cash dividends) to shareholders of the Company occurs, the Board, in order to prevent diminution or enlargement of the Holders rights under this Agreement, shall substitute or adjust, as applicable, the number and kind of shares that may be issued under this Agreement.
(c) Investment Undertaking. The Holder is aware of the Companys business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the shares of Restricted Stock. The Holder hereby represents and warrants that Holder will hold the Restricted Stock and the rights constituent thereto for investment for Holders own account only and without any present intention of distribution or sale.
Section 2.8 Withholding . On each Vesting Date (or, if applicable, as of the time an 83(b) election is made by the Holder), the Holder may, if approved in writing by the Board, (a) elect to have the Company withhold, the number of shares sufficient to satisfy the minimum tax withholding from the shares to satisfy such tax withholding obligations, or (b) deliver to the Company an amount in Common Stock of the Company with a fair market value equal to the amount of such tax obligation. Otherwise, the Holder must deliver to the Company (or have the Company withhold) an amount in cash equal to the amount of such tax obligation.
Section 2.9 Voting Rights . To the extent permitted by law, the Holder shall be entitled to exercise full voting rights as set forth in the Companys certificate of incorporation with respect to those shares of Restricted Stock that have not yet vested.
Section 2.10 Beneficiary Designation . The Holder may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Agreement is to be paid in case of his death before he receives any or all of such benefit. Each such designation shall revoke all prior designations by the Holder, shall be in a form prescribed by the Board, and will be effective only when filed by the Holder in writing with the Company during the Holders lifetime. In the absence of any such designation, benefits remaining unpaid at the Holders death shall be paid to the Holders estate.
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Section 2.11 Dividend Equivalents . The Holder may be granted dividend equivalents based on the dividends declared on shares of Common Stock of the Company that are subject to this award of Restricted Stock, to be credited as of dividend payment dates, during the period between the Grant Date and each Vesting Date, if so determined by the Board. Any such dividend equivalents shall be converted to cash or additional shares of Common Stock of the Company by such formula and at such time and subject to such limitations as may be determined by the Board in good faith.
Section 2.12 Market Stand-Off Agreement . The Holder hereby agrees that such Holder shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale of, any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during (i) the 180-day period following the effective date of the Companys initial public offering (or such longer period, not to exceed 18 days after the expiration of the 180-day period, as the underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711(f)(4) or (NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), and (ii) the 90-day period following the effective date of a registration statement of the Company filed under the Securities Act of 1933 (or such longer period, not to exceed 18 days after the expiration of the 90-day period, as the underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711 (f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto); provided, that, with respect to (i) and (ii) above, all officers and directors of the Company and holders of at least one percent (1%) of the Companys voting securities are bound by and have entered into similar agreements. The obligations described in this Section 2.12 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each such certificate with the fourth legend set forth in Section 2.4 with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) or ninety (90) day (or other) period. Holder agrees to execute a market standoff agreement with said underwriters in customary form consistent with the provisions of this Section 2.12.
Section 2.13 Right of First Refusal . The Holder hereby acknowledges that the shares of Restricted Stock shall be subject to a right of first refusal to the extent provided for in the Companys Investor Rights Agreement, as amended from time to time, to which agreement the Holder shall be a party.
ARTICLE III. MISCELLANEOUS
Section 3.1 Restricted Stock Not Transferable . No share of Restricted Stock or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by sale, transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) until such time as the share of Restricted Stock has vested, and any attempted disposition thereof shall be null and void and of no effect; provided further, that each share of Restricted Stock, whether vested or unvested, shall be subject to transfer restrictions under applicable securities laws and Sections 2.4, 2.6, 2.12 and 2.13 of this Agreement.
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Section 3.2 Conditions to Delivery of Stock Certificates . The Company shall not be required to deliver any certificate or certificates for shares of stock pursuant to this Agreement prior to fulfillment of all of the following conditions:
(a) Approval. The obtaining of any approval or other clearance from any state or federal governmental agency which the Board shall, in its sole discretion, determine to be necessary or advisable; and
(b) Payment. The payment by the Holder of all amounts required to be withheld, under federal, state and local (or applicable foreign) tax laws, with respect to the issuance and/or the lapse or removal of any of the Restrictions which may be paid either by the Holder or, if approved in writing by the Board, by the Holder electing that the Company withhold that number of shares of Common Stock with a fair market value equal to the minimum tax withholding obligation at the election of the Holder.
Section 3.3
Physical Custody
. The Secretary of the Company or such
other representative as the Board may appoint shall retain physical custody of each certificate representing Restricted Stock until all of the restrictions imposed under the Agreement with respect to the shares evidenced by such certificate expire
or shall have been removed; provided, however, that in no event shall the Holder retain physical custody of any certificates representing unvested Restricted Stock assigned to Holder and provided further that the Company may determine not to issue
Section 3.4 Notices . Any notice required by this Agreement will be deemed provided and delivered to the intended recipient when (i) delivered in person by hand; or (ii) three days after being sent via U.S. certified mail, return receipt requested; or (iii) the day after being sent via overnight courier, in each case provided such notice is properly addressed to the following address and enclosed in a properly sealed envelope or wrapper, and with all postage and similar fees having been paid in advance.
If to the Company: |
DMI Life Sciences, Inc. 8400 East Crescent Parkway Suite 600 Greenwood Village, Colorado 80111 |
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If to the Holder: | To the address specific in the Companys payroll records. |
By a notice given pursuant to this Section 3.4, either party may hereafter designate a different address for notices to be given. Any notice which is required to be given to the Holder shall, if the Holder is then deceased, be given to the Holders personal representative if such representative has previously informed the Company of representatives status and address by written notice under this Section 3.4.
Section 3.5 Titles . Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
Section 3.6 Conformity to Securities Laws . The Holder acknowledges that this Agreement is intended to conform to the extent necessary with all provisions of all applicable federal and state (and applicable foreign) laws, rules and regulations (including but not limited to, the Securities Act and the Exchange Act and to such approvals by any listing, regulatory or other
6
governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Notwithstanding anything herein to the contrary, this Agreement shall be administered, and the Restricted Stock shall be assigned, only in such a manner as to conform to such laws, rules and regulations including, without limitation, Rule 16b-3. To the extent permitted by applicable law, this Agreement and the Restricted Stock assigned hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
Section 3.7 Amendment and Successors .
(a) Amendment. This Agreement may be amended without the consent of the Holder provided that such amendment would not impair any rights of the Holder under this Agreement. No amendment of this Agreement shall, without the consent of the Holder, impair any rights of the Holder under this Agreement.
(b) Successors. All obligations of the Company under this Agreement with respect to the award of Restricted Stock shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. This Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors, administrators, successors and assigns. The rights and obligations of Holder under this Agreement may only be assigned with the prior written consent of the Company.
Section 3.8 Governing Law and Jurisdiction .
(a) Governing Law. The laws of the State of Colorado shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.
(b) Jurisdiction. The Holder irrevocably agrees that any legal action, suit or proceeding arising out of or relating to this Agreement may be brought in the courts of the United States of America located in the District of Colorado or in the courts of the State of Colorado located in the County of Arapahoe. By the execution of this Agreement, the Holder irrevocably submits to the jurisdiction of any such court in any such action, suit or proceeding. Final judgment against the Holder in any such action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the judgment, or in any other manner provided by law.
Section 3.9 Section 83(b) Election . If, within 30 days of the Grant Date, a Holder makes an election under Section 83(b) of the Code, or any successor section thereto, to be taxed with respect to all or any portion of the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall deliver a copy of such election to the Company immediately after filing such election with the Internal Revenue Service. The Holder has reviewed with the Holders own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. The Holder is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.
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Section 3.10 No Constraint on Corporate Action . Nothing in this Agreement shall be construed to: (a) limit, impair, or otherwise affect the Companys or a subsidiarys or an affiliates right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or, (b) limit the right or power of the Company or a subsidiary or an affiliate to take any action which such entity deems to be necessary or appropriate.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.
DMI LIFE SCIENCES, INC. | HOLDER | |||||||
By: |
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Name: Michael Macluso | Name: | David Bar-Or, M.D. | ||||||
Title: |
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EXHIBIT A
IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED , the undersigned does hereby sell, assign and transfer to:
DMI Life Sciences, Inc. (the Company)
Taxpayer Identifying No.:
shares of the Common Stock of the Company represented by Certificate(s) No.(s) inclusive, registered in the name(s) of .
The undersigned does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the Company, with full power of substitution in the premises.
By: |
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Dated: |
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EXHIBIT B
VESTING MILESTONES
As provided in Section 2.3(e) above, the vesting of the 1,800,000 Restricted Shares referred to in Section 2.3(c) and 2.3(d) will be accelerated upon the achievement of the following milestones:
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Design and fabricate (small scale) a disposable single-use electrochemical test strip capable of attaining reproducible and accurate test results of oxidation-reduction potential (ORP) in blood of one or more selected patient populations (including normals) that correlate to the results obtained from existing ORP |
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450,000 shares become fully vested upon this milestone achievement |
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Write clinical trial protocol for initial POC study, including but not limited to a brief summary, background information, study design, inclusion and exclusion criteria, sample size calculation, data capture processes, adverse event recording, safety reviews, statistical analysis and relevant scientific and regulatory references |
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450,000 shares become fully vested upon this milestone achievement |
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Complete a sampling study for one new clinical indication of ORP |
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450,000 shares become fully vested upon this milestone achievement |
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Submit 510(k), an IDE, or a PMA application to FDA in any patient population or clinical application for initial use of ORP sensor |
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450,000 shares become fully vested upon this milestone achievement |
To the extent that any of the milestones are satisfied, the restricted shares which will early vest shall be taken from the portion of the restricted shares with the longest remaining time to vesting under the time vesting schedule.
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Exhibit 10.4
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this Agreement ) is made effective as of April 17, 2009 (the Grant Date ), by and between DMI Life Sciences, Inc., a Delaware corporation (the Company ), and Bruce G. Miller (the Holder ):
WHEREAS, the Company and DMI Biosciences, Inc., a Colorado corporation (DMIB) are party to an Asset Purchase Agreement dated as of April 16, 2009 (the APA) pursuant to which the Company will purchase certain assets of DMIB;
WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by the APA;
WHEREAS, the Companys Board of Directors (the Board) has determined that it would be to the advantage and in the best interest of the Company and its stockholders to enter into this Agreement to assign certain shares of Common Stock of the Company subject to certain restrictions thereon (the Restricted Stock) to the Holder in consideration of services to be rendered and as an incentive for the Holders best performance of future services to Company and its subsidiaries, subject to the restrictions set forth herein and payment of the Aggregate Purchase Price (as defined below);
WHEREAS, the Company and the Holder have entered into an Employment Agreement dated April 17, 2009 (the Employment Agreement ).
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I. AWARD OF RESTRICTED STOCK
Section 1.1 Award of Restricted Stock . In consideration of Holders services and for other good and valuable consideration which the Board has determined, including a per share purchase price of $0.001, the Company hereby awards and assigns to the Holder, on the Grant Date, 1,500,000 shares of Restricted Stock, for an aggregate purchase price of $1,500.00 (the Aggregate Purchase Price). The Aggregate Purchase Price for the Shares shall be paid by check payable to the Company or by wire transfer per the Companys wiring instructions.
Section 1.2 Not a Contract of Employment . Nothing in this Agreement shall confer upon the Holder any right to continue in the employ of the Company or any subsidiary, or shall interfere with or restrict in any way any otherwise existing rights of the Company and any subsidiary, which are hereby expressly reserved, to discharge the Holder at any time for any reason whatsoever, with or without Cause (subject to the consequences set forth in the Employment Agreement).
ARTICLE II. TERMS OF THE AWARD AND RESTRICTIONS
Section 2.1 Definition . Unless the context otherwise requires, terms defined in the Employment Agreement have the same meanings when used in this Agreement.
Common Stock shall mean common stock of the Company, $0.001 par value per share.
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Restrictions shall mean the restrictions on sale or other transfer set forth in Section 3.1, the exposure to forfeiture set forth in Section 2.2 and the vesting set forth in Section 2.3.
Section 2.2 Forfeiture . Any share of Restricted Stock that is not vested pursuant to Section 2.3 upon the termination of the Holders Service (as defined below) with the Company and its subsidiaries (x) by the Company for Cause or (y) by the Holder other than for Good Reason, shall thereupon be forfeited to the Company without payment. In the event of the termination of the Holders Service (x) as a result of his death or Disability, (y) by the Company without Cause or (z) by the Holder with Good Reason, the Restricted Stock that is not vested pursuant to Section 2.3 shall remain outstanding and shall immediately become fully vested. For purposes of this Agreement, Service shall mean the Holders performance of services to the Company (or any parent, subsidiary or affiliate thereof) in the capacity of an employee, a director, a consultant or an independent advisor.
Section 2.3 Vesting and Lapse of Restrictions . Subject to Sections 2.2, 2.4 and 2.6, each share of Restricted Stock shall not be transferable until such share becomes vested pursuant to this Section. The shares shall vest in accordance with the following schedule (each a Vesting Date):
(a) 500,000 shares of the Restricted Stock shall be fully vested as of the date of this Agreement and there shall be no Restrictions thereon.
(b) No additional shares shall vest pursuant to the passage of time from the date of this Agreement through the first anniversary of this Agreement.
(c) 500,000 shares of the Restricted Stock shall vest in twelve equal installments during the period from the first anniversary to the second anniversary of the date of this Agreement provided that Holder continues to provide Service, such that on the monthly anniversary of the date of this Agreement 1/12 of such Restricted Shares shall vest (such number shall be prorated for any partial month in which Holder is in Service).
(d) 500,000 shares of the Restricted Stock shall vest in twelve equal installments during the period from the second anniversary to the third anniversary of the date of this Agreement provided that Holder continues to provide Service, such that on the monthly anniversary of the date of this Agreement 1/12 of such Restricted Shares shall vest (such number shall be prorated for any partial month in which Holder is in Service).
(e) The time vesting schedule of the Restricted Shares described in paragraphs (c) and (d) above shall be subject to acceleration upon the achievement of the milestones as described on Exhibit B hereto. To the extent that any of the milestones are satisfied, the restricted shares which will early vest shall be taken from the portion of the restricted shares with the longest remaining time to vesting under the time vesting schedule.
Section 2.4 Restricted Account/Stock Legend . Holder acknowledges that the Company will either issue the Restricted Shares covered by this Agreement in the name of the Holder to be held in an uncertificated restricted account or will issue a stock certificate for the Restricted Shares in the name of the Holder, which certificate will bear the legends set forth below and any additional legend required by applicable securities law or other applicable regulation.
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING REQUIREMENTS UNDER THE TERMS OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN DMI LIFE SCIENCES, INC. (THE COMPANY) AND THE REGISTERED OWNER OF SUCH SHARES, AND SUCH SHARES MAY NOT BE, DIRECTLY OR INDIRECTLY, VOLUNTARILY OR INVOLUNTARILY, OR BY OPERATION OF LAW, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT. A COPY OF THE AGREEMENT MAY BE OBTAINED FROM THE COMPANY.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE ACT) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL AS SET FORTH IN THE RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF A PUBLIC OFFERING OF THE COMPANYS SECURITIES SET FORTH IN THE RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY.
Holder acknowledges that the certificates evidencing the Restricted Stock, whether certificated or uncertificated, shall be held in the custody of the Company in the name of the Holder until the restrictions lapse and that it is a condition to the effectiveness of this Agreement and the award of the Restricted Stock that Holder deliver to the Company the stock power attached hereto as Exhibit A, endorsed in blank.
Section 2.5 Assignment of Certificates for Vested Shares . Upon the vesting of the shares of the Restricted Stock as provided in Section 2.3 and subject to Section 3.3, the Company shall, at the request of Holder, cause certificates to be assigned with respect to such vested shares and delivered to the Holder or his legal representative, free from any Restrictions and free from the first legend provided for in Section 2.4; provided, that such shares shall remain subject to applicable securities laws, the Companys employee trading policy and the other restrictions contained in Sections 2.12 and 2.13 of this Agreement.
Section 2.6 Restrictions On New Shares . In the event that the Holder receives any new or additional or different shares or securities by reason of any transaction or event described in Section 2.7, such new or additional or different shares or securities which are attributable to the
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Holder in his capacity as the registered owner of the Restricted Stock then subject to Restrictions, shall be considered to be Restricted Stock and shall be subject to all of the Restrictions, unless the Board expressly provides for the removal or lapse of the Restrictions on the shares of Restricted Stock underlying the distribution of the new or additional shares or securities, and all of the other restrictions contained in this Agreement.
Section 2.7 Special Circumstances .
(a) Merger and Consolidation. In the event of a Change in Control, all shares of the Restricted Stock shall become fully vested and all Restrictions thereon shall lapse effective immediately prior to the consummation of such Change in Control. Upon the consummation of the Change in Control, the shares of Restricted Stock shall be converted into the right to receive, or shall be exchanged for, cash, securities or other property on the same basis as the other shares of the same class of the Companys capital stock are being converted or exchanged in connection with the Change in Control.
(b) Adjustments. In the event that any merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split, split up, spin-off, repurchase of shares, combination of shares, exchange of shares, dividend in kind, or other like change in corporate structure or dividend or distribution (other than normal cash dividends) to shareholders of the Company occurs, the Board, in order to prevent diminution or enlargement of the Holders rights under this Agreement, shall substitute or adjust, as applicable, the number and kind of shares that may be issued under this Agreement.
(c) Investment Undertaking. The Holder is aware of the Companys business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the shares of Restricted Stock. The Holder hereby represents and warrants that Holder will hold the Restricted Stock and the rights constituent thereto for investment for Holders own account only and without any present intention of distribution or sale.
Section 2.8 Withholding . On each Vesting Date (or, if applicable, as of the time an 83(b) election is made by the Holder), the Holder may, if approved in writing by the Board, (a) elect to have the Company withhold, the number of shares sufficient to satisfy the minimum tax withholding from the shares to satisfy such tax withholding obligations, or (b) deliver to the Company an amount in Common Stock of the Company with a fair market value equal to the amount of such tax obligation. Otherwise, the Holder must deliver to the Company (or have the Company withhold) an amount in cash equal to the amount of such tax obligation.
Section 2.9 Voting Rights . To the extent permitted by law, the Holder shall be entitled to exercise full voting rights as set forth in the Companys certificate of incorporation with respect to those shares of Restricted Stock that have not yet vested.
Section 2.10 Beneficiary Designation . The Holder may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Agreement is to be paid in case of his death before he receives any or all of such benefit. Each such designation shall revoke all prior designations by the Holder, shall be in a form prescribed by the Board, and will be effective only when filed by the Holder in writing with the Company during the Holders lifetime. In the absence of any such designation, benefits remaining unpaid at the Holders death shall be paid to the Holders estate.
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Section 2.11 Dividend Equivalents . The Holder may be granted dividend equivalents based on the dividends declared on shares of Common Stock of the Company that are subject to this award of Restricted Stock, to be credited as of dividend payment dates, during the period between the Grant Date and each Vesting Date, if so determined by the Board. Any such dividend equivalents shall be converted to cash or additional shares of Common Stock of the Company by such formula and at such time and subject to such limitations as may be determined by the Board in good faith.
Section 2.12 Market Stand-Off Agreement . The Holder hereby agrees that such Holder shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale of, any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during (i) the 180-day period following the effective date of the Companys initial public offering (or such longer period, not to exceed 18 days after the expiration of the 180-day period, as the underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711(f)(4) or (NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), and (ii) the 90-day period following the effective date of a registration statement of the Company filed under the Securities Act of 1933 (or such longer period, not to exceed 18 days after the expiration of the 90-day period, as the underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711 (f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto); provided, that, with respect to (i) and (ii) above, all officers and directors of the Company and holders of at least one percent (1%) of the Companys voting securities are bound by and have entered into similar agreements. The obligations described in this Section 2.12 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each such certificate with the fourth legend set forth in Section 2.4 with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) or ninety (90) day (or other) period. Holder agrees to execute a market standoff agreement with said underwriters in customary form consistent with the provisions of this Section 2.12.
Section 2.13 Right of First Refusal . The Holder hereby acknowledges that the shares of Restricted Stock shall be subject to a right of first refusal to the extent provided for in the Companys Investor Rights Agreement, as amended from time to time, to which agreement the Holder shall be a party.
ARTICLE III. MISCELLANEOUS
Section 3.1 Restricted Stock Not Transferable . No share of Restricted Stock or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by sale, transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) until such time as the share of Restricted Stock has vested, and any attempted disposition thereof shall be null and void and of no effect; provided further, that each share of Restricted Stock, whether vested or unvested, shall be subject to transfer restrictions under applicable securities laws and Sections 2.4, 2.6, 2.12 and 2.13 of this Agreement.
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Section 3.2 Conditions to Delivery of Stock Certificates . The Company shall not be required to deliver any certificate or certificates for shares of stock pursuant to this Agreement prior to fulfillment of all of the following conditions:
(a) Approval. The obtaining of any approval or other clearance from any state or federal governmental agency which the Board shall, in its sole discretion, determine to be necessary or advisable; and
(b) Payment. The payment by the Holder of all amounts required to be withheld, under federal, state and local (or applicable foreign) tax laws, with respect to the issuance and/or the lapse or removal of any of the Restrictions which may be paid either by the Holder or, if approved in writing by the Board, by the Holder electing that the Company withhold that number of shares of Common Stock with a fair market value equal to the minimum tax withholding obligation at the election of the Holder.
Section 3.3
Physical Custody
. The Secretary of the Company or such
other representative as the Board may appoint shall retain physical custody of each certificate representing Restricted Stock until all of the restrictions imposed under the Agreement with respect to the shares evidenced by such certificate expire
or shall have been removed; provided, however, that in no event shall the Holder retain physical custody of any certificates representing unvested Restricted Stock assigned to Holder and provided further that the Company may determine not to issue
Section 3.4 Notices . Any notice required by this Agreement will be deemed provided and delivered to the intended recipient when (i) delivered in person by hand; or (ii) three days after being sent via U.S. certified mail, return receipt requested; or (iii) the day after being sent via overnight courier, in each case provided such notice is properly addressed to the following address and enclosed in a properly sealed envelope or wrapper, and with all postage and similar fees having been paid in advance.
If to the Company: |
DMI Life Sciences, Inc. 8400 East Crescent Parkway Suite 600 Greenwood Village, Colorado 80111 |
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If to the Holder: | To the address specific in the Companys payroll records. |
By a notice given pursuant to this Section 3.4, either party may hereafter designate a different address for notices to be given. Any notice which is required to be given to the Holder shall, if the Holder is then deceased, be given to the Holders personal representative if such representative has previously informed the Company of representatives status and address by written notice under this Section 3.4.
Section 3.5 Titles . Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
Section 3.6 Conformity to Securities Laws . The Holder acknowledges that this Agreement is intended to conform to the extent necessary with all provisions of all applicable federal and state (and applicable foreign) laws, rules and regulations (including but not limited to, the Securities Act and the Exchange Act and to such approvals by any listing, regulatory or other
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governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Notwithstanding anything herein to the contrary, this Agreement shall be administered, and the Restricted Stock shall be assigned, only in such a manner as to conform to such laws, rules and regulations including, without limitation, Rule 16b-3. To the extent permitted by applicable law, this Agreement and the Restricted Stock assigned hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
Section 3.7 Amendment and Successors .
(a) Amendment. This Agreement may be amended without the consent of the Holder provided that such amendment would not impair any rights of the Holder under this Agreement. No amendment of this Agreement shall, without the consent of the Holder, impair any rights of the Holder under this Agreement.
(b) Successors. All obligations of the Company under this Agreement with respect to the award of Restricted Stock shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. This Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors, administrators, successors and assigns. The rights and obligations of Holder under this Agreement may only be assigned with the prior written consent of the Company.
Section 3.8 Governing Law and Jurisdiction .
(a) Governing Law. The laws of the State of Colorado shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.
(b) Jurisdiction. The Holder irrevocably agrees that any legal action, suit or proceeding arising out of or relating to this Agreement may be brought in the courts of the United States of America located in the District of Colorado or in the courts of the State of Colorado located in the County of Arapahoe. By the execution of this Agreement, the Holder irrevocably submits to the jurisdiction of any such court in any such action, suit or proceeding. Final judgment against the Holder in any such action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the judgment, or in any other manner provided by law.
Section 3.9 Section 83(b) Election . If, within 30 days of the Grant Date, a Holder makes an election under Section 83(b) of the Code, or any successor section thereto, to be taxed with respect to all or any portion of the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall deliver a copy of such election to the Company immediately after filing such election with the Internal Revenue Service. The Holder has reviewed with the Holders own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. The Holder is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.
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Section 3.10 No Constraint on Corporate Action . Nothing in this Agreement shall be construed to: (a) limit, impair, or otherwise affect the Companys or a subsidiarys or an affiliates right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or, (b) limit the right or power of the Company or a subsidiary or an affiliate to take any action which such entity deems to be necessary or appropriate.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.
DMI LIFE SCIENCES, INC. | HOLDER | |||||||
By: |
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Name: | Name: | Bruce G. Miller | ||||||
Title: |
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EXHIBIT A
IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED , the undersigned does hereby sell, assign and transfer to:
DMI Life Sciences, Inc. (the Company)
Taxpayer Identifying No.:
shares of the Common Stock of the Company represented by Certificate(s) No.(s) inclusive, registered in the name(s) of .
The undersigned does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the Company, with full power of substitution in the premises.
By: |
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Dated: |
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EXHIBIT B
VESTING MILESTONES
As provided in Section 2.3(e) above, the vesting of the 1,000,000 Restricted Shares referred to in Section 2.3(c) and 2.3(d) will be accelerated upon the achievement of the following milestones:
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Design and fabricate (small scale) a disposable single-use electrochemical test strip capable of attaining reproducible and accurate test results of oxidation-reduction potential (ORP) in blood of one or more selected patient populations (including normals) that correlate to the results obtained from existing ORP |
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125,000 shares become fully vested upon this milestone achievement |
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Write clinical trial protocol for initial POC study, including but not limited to a brief summary, background information, study design, inclusion and exclusion criteria, sample size calculation, data capture processes, adverse event recording, safety reviews, statistical analysis and relevant scientific and regulatory references |
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125,000 shares become fully vested upon this milestone achievement |
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Complete a sampling study for one new clinical indication of ORP |
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125,000 shares become fully vested upon this milestone achievement |
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Submit 510(k), an IDE, or a PMA application to FDA in any patient population or clinical application for initial use of ORP sensor |
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125,000 shares become fully vested upon this milestone achievement |
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Select an initial clinical indication for DMI-5207 (danazol) based on scientific data reviews, medical need assessments and initial key opinion leader and regulatory affairs interview |
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125,000 shares become fully vested upon this milestone achievement |
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Complete a preliminary market analysis for the selected clinical indication for DMI-5207 |
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125,000 shares become fully vested upon this milestone achievement |
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Complete a gap analysis, task list and dose-ranging clinical trial protocol for an IND submission for DMI-5207 for the selected initial clinical indication |
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125,000 shares become fully vested upon this milestone achievement |
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Complete a plan for a pilot safety/tolerability clinical trial for DMI-5207 in the selected patient population |
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125,000 shares become fully vested upon this milestone achievement |
To the extent that any of the milestones are satisfied, the restricted shares which will early vest shall be taken from the portion of the restricted shares with the longest remaining time to vesting under the time vesting schedule.
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Exhibit 10.5
SPONSORED RESEARCH AGREEMENT
This Sponsored Research Agreement (the Agreement) is made by and between Trauma Research LLC (TRLLC) , a Colorado limited liability company, having its address at 900 East Oxford Lane, Englewood, Colorado 80113 and DMI Life Sciences, Inc. (Sponsor) , a Delaware corporation, with its principal place of business at 8400 East Crescent Parkway, Suite 600, Greenwood Village, Colorado 80111.
RECITALS
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
WHEREAS, Sponsor desires that TRLLC perform certain research work hereinafter described and is willing to advance personnel, equipment and other resources to sponsor such research; and
WHEREAS, TRLLC is willing to perform such research for Sponsor;
NOW THEREFORE, in consideration of the mutual covenants and promises herein contained, TRLLC and Sponsor agree as follows:
I. EFFECTIVE DATE
This Agreement shall be effective as of September 1, 2009 (the Effective Date).
II. RESEARCH PROJECT
2.1 TRLLC will use its best efforts to conduct the research project described in Attachment A, as amended and supplemented from time to time (collectively, the Research Project) and will furnish the laboratory facilities necessary to carry out the Research Project. The Research Project will be under the direction of David Bar-Or, M.D. (the Principal Investigator) and will be conducted at [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] one or more other suitable facilities selected by TRLLC.
2.2 The Research Project shall be performed commencing on the Effective Date and continuing until August 31, 2014, or until this Agreement is earlier terminated or extended as provided in Article IX.
2.3 [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] The manner of performance of the Research Project shall be determined solely by the Principal Investigator. TRLLC does not guarantee specific results, and the Research Project will be conducted only on a best efforts basis.
2.4 TRLLC will keep accurate financial and scientific records relating to the Research Project and will make such records available to Sponsor or its authorized representative throughout the term of the Agreement and for a period of one year following termination of the Agreement, or for such longer period required by law, during normal business hours upon reasonable notice.
2.5 Sponsor understands that TRLLC, alone or with other researchers, may be involved in conducting research on behalf of other sponsors. TRLLC agrees that all such research will be conducted separately and by different investigators from the Research Project. Sponsor shall not gain any rights via this Agreement to such other research.
2.6 TRLLC does not guarantee that any patent rights will result from the Research Project, that the scope of any patent rights obtained will cover Sponsors commercial interests, or that any such patent rights will be free of dominance by other patents.
III. SPONSOR CONTRIBUTIONS
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
3.3 Within sixty (60) days after the end of each calendar year the Research Project is conducted, the Principal Investigator and the Sponsors representative shall meet to evaluate and, if appropriate, to revise the Research Project to accurately reflect anticipated activities for the coming year.
3.4 TRLLC shall maintain any Research Project funds in a separate account and shall expend such funds as agreed with Sponsor for wages (other than for Sponsors personnel who shall be paid by Sponsor), supplies, equipment, travel, and other operation expenses in connection with the Research Project. It is understood that funds for the Research Project which are not used in a particular quarter or during the initial one year period of this Agreement may be used in subsequent quarters or periods during the Term of this Agreement.
IV. CONSULTATION AND REPORTS
4.1 Sponsors designated representative for consultation and communications with the Principal Investigator shall be Bruce G. Miller or such other person as Sponsor may from time to time designate in writing to TRLLC and to the Principal Investigator.
4.2 During the Term of this Agreement, Sponsors representatives may consult informally with the Principal Investigator and other TRLLC representatives regarding the Research Project, both personally and by telephone. Access to work carried on by TRLLC in the course of these investigations shall be entirely under the control of the Principal Investigator but shall be made available on a reasonable basis for observation of the work.
4.3 The Principal Investigator will make up to four oral reports each year during the term of this Agreement as requested by Sponsors designated representative. Within ninety (90) days after termination of this Agreement, the Principal Investigator shall prepare a final report summarizing all activities undertaken and accomplishments achieved through the Research Project.
4.4 TRLLC shall prepare and maintain records regarding the Research Project, in sufficient detail and in good scientific manner, which shall be complete and accurate, and shall fully and properly reflect all work done and results achieved in the performance of the Research Project (including all data in the form required by applicable laws and regulations). Sponsor shall have the right, upon reasonable notice and during normal business hours, to inspect, copy, and to check out all research records and reports regarding the Research Project; provided that Sponsor shall maintain such records and reports and the information contained therein in confidence in accordance with applicable laws, regulations and agreements.
V. PUBLICATION AND ACADEMIC RIGHTS
5.1 Principal Investigator shall have the right to publish or otherwise publicly disclose information gained as the result of his research in the course of this Agreement, but, in order to avoid loss of patent rights as a result of premature public disclosure of patentable information, Principal Investigator will submit any prepublication materials and a summary of any other planned public disclosure to Sponsor for review and comment at least thirty (30) days prior to the planned submission for publication. The Principal Investigator will have all personnel participating in the Research Project submit all such prepublication materials and planned public disclosures to the Principal Investigator for submission to Sponsor as set forth in the preceding sentence. Sponsor shall notify the Principal Investigator within fifteen (15) days of receipt of such materials whether it desires to file patent applications on any inventions contained in the materials; and, if Sponsor chooses to do so, it will promptly proceed to file the patent application(s) in due course. In such case, Principal Investigator will delay publication and any other disclosure as required to ensure that such filings are made before publication or other disclosure. Principal Investigator shall have final authority to determine the scope and content of any publications, but Principal Investigator will consider in good faith suggestions by Sponsor.
5.2 It is understood that, subject to Section 5.1, the Principal Investigator may discuss the research being performed under this Agreement with other investigators, but shall not reveal information which is Sponsors Confidential Information to the other investigators. TRLLC and Principal Investigator also agree not to disclose Sponsors Confidential Information to any third party and to employ reasonable safeguards to maintain Sponsors Confidential Information confidential and to prevent its unauthorized use, including causing TRLLCs employees and consultants and others who will have access to Sponsors Confidential Information, to be bound by nondisclosure and nonuse undertakings for the protection of Sponsors Confidential Information. Sponsors Confidential Information means all business and technical information of a proprietary nature, whether in physical or non-physical form, of Sponsor, or any third party proprietary information in the possession of Sponsor, whether disclosed to TRLLC or Principal Investigator in written, oral or other media form, or by observation or inspection of tangible objects.
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
VI. INTELLECTUAL PROPERTY
6.1 [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] TRLLC waives all moral rights in any such Intellectual Property. Intellectual Property means know-how, trade secrets, inventions, works of authorship, trademarks, and all business and technical information of a proprietary nature (including, without limitation, ideas, discoveries, observations, research plans, development plans, business plans, methods, techniques, processes, protocols, test results, research results, data, analyses, specifications, formulas, formulations, and computer programs) and all physical embodiments of any of the foregoing (including, without limitation, memoranda, letters, printouts, compilations, reports, records, notebooks, lists, specifications, software, computer disks, prototypes, instruments, blueprints, diagrams, operating instructions, drawings, designs, models, proposals, databases, photographs, videos, written descriptions, invention disclosures, patent applications, patents, copyright applications, copyright registrations, trademark applications, trademark registrations, compounds, compositions and biological materials) and all rights therein throughout the world. Sponsor will have the responsibility for, and bear all expenses incurred in obtaining and maintaining protection for, and enforcing rights in, all such Intellectual Property. TRLLC will cooperate with Sponsor and will take all necessary steps to assist Sponsor in obtaining and maintaining protection for, and enforcing rights in, all such Intellectual Property, all at Sponsors expense. To that end, TRLLC will execute, verify and deliver such documents and perform such other acts (including providing evidence and witnesses within its control) as Sponsor may reasonably request. If Sponsor is unable because of TRLLCs or its personnels or Principal Investigators unavailability, dissolution, mental or physical incapacity, or for any other reason, to secure the necessary signature(s) to apply for or to pursue any application for any United States or foreign patents or mask work or copyright registrations covering the Intellectual Property assigned to the Sponsor above, then TRLLC hereby irrevocably designates and appoints the Sponsor and its duly authorized officers and agents as TRLLCs agent and attorney in fact, to act for and in TRLLCs behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyright and mask work registrations thereon with the same legal force and effect as if executed by TRLLC. Upon termination of this Agreement, Sponsor shall retain all physical embodiments of Intellectual Property to which it obtains rights, subject to TRLLCs right to inspect and copy records.
6.2 [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
6.3 [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
6.4 TRLLC also agrees that it will obtain a written agreement with each third party for research work to be performed by TRLLC for the third party, and that the agreement will include a
detailed description of the research work to be performed and shall clearly limit assignment to the third party of that Intellectual Property which is conceived, developed, suggested, created, discovered or produced solely as a result of performing the research covered by the agreement. [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
VII. INSURANCE AND INDEMNIFICATION
7.1 [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
7.2 [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
7.3 Sponsor shall maintain, at its sole cost and expense, business and general liability coverage for the acts and omissions of itself, its officers, directors, employees and agents, including, but not limited to, covering claims, liabilities, damages and judgments which may arise out of its sponsorship of the Research Project. All such insurance shall be issued upon such forms and in such amounts that are reasonable and customary in the health care industry. Written documentation of this insurance coverage will be provided to TRLLC upon request.
7.4 Each party specifically reserves the common law right of indemnity and/or contribution which either party may have against the other. Both parties agree that upon receipt of a notice of claim or action for which indemnity may be claimed (or any threat thereof), the party receiving such notice will notify the other party promptly.
VIII. INDEPENDENT CONTRACTORS
For the purposes of this Agreement and all services to be provided hereunder, the parties shall be, and shall be deemed to be, independent contractors and not agents or employees of the other party. Neither party shall have authority to make any statements, representations or commitments of any kind, or to take any action which shall be binding on the other party, except as may be expressly provided for herein or authorized in writing.
IX. TERM AND TERMINATION
9.1 This Agreement shall commence on the Effective Date and extend until August 31, 2014, unless sooner terminated in accordance with the provisions of this Article IX or extended by mutual agreement of the parties.
9.2 This Agreement may be terminated by th e written agreement of both parties.
9.3 This Agreement may be terminated without cause by either party. The party wanting to terminate the Agreement shall provide written notice to the other party at least one-hundred eighty (180) days prior to the date of termination, and the date of termination shall be set forth in the notice.
9.4 In the event that either party shall be in default of its material obligations under this agreement and shall fail to remedy such default within sixty (60) days after receipt of written notice thereof, this Agreement shall terminate upon expiration of the sixty (60) day period.
9.5 Termination or cancellation of this Agreement shall not affect the rights and obligations of the parties accrued prior to termination.
9.6 Any provisions of this Agreement which by their nature extend beyond termination hereof shall survive such termination.
X. ATTACHMENTS
Attachments A, B, C and D are incorporated herein and made a part hereof for all purposes. Attachment A is not intended to provide or reflect the dates of conception or reduction to practice of any invention.
XI. MATERIALS TRANSFER
11.1 [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
11.2 The Sponsors Material shall be used by the Principal Investigator solely in connection with the Research Project and not for any other purpose without the prior written consent of Sponsor, which consent shall not be unreasonably withheld. TRLLC shall not distribute, release, or in any way disclose Sponsors Material to any person or entity other than laboratory personnel under the Principal Investigators direct supervision.
11.3 The Receiving Party shall ensure that no one will be allowed to take or send Material to any other location, unless written permission is obtained from the Disclosing Party. The Material is made available by TRLLC and Sponsor for investigational use only in laboratory animals or in vitro experiments. Neither the Material, nor any chemical or biological materials treated therewith or derived therefrom, will be used in human beings.
11.4 This Agreement and the resulting transfer of Material constitute a license to use the Material solely for purposes of the Research Project. Except as otherwise provided in this Agreement, the Receiving Party agrees that nothing pursuant to this Article XI shall be deemed to grant any rights under any patents. At the request of the Disclosing Party, the Receiving Party will return all unused Material, whether or not during the Term.
11.5 Any Material provided is experimental in nature and shall be provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY
OTHER WARRANTY, EXPRESS OR IMPLIED. THERE IS NO REPRESENTATION OR WARRANTY THAT THE USE OF THE MATERIAL WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.
11.6 In no event shall the Disclosing Party be liable for any use by the Receiving Party of the Material or any loss, claim, damage or liability, of whatsoever kind or nature, which may arise from or in connection with this Agreement or the use, handling or storage of the Material.
11.7 The Receiving Party will use the Material in compliance with all laws, governmental regulations and guidelines applicable to the Material.
XII. GENERAL
12.1 This Agreement may be assigned by Sponsor in connection with an acquisition (by whatever means) by, merger with, or the sale of substantially all of its related business to, another. This Agreement may otherwise be assigned by Sponsor only with the consent of TRLLC, not to be unreasonably withheld. TRLLC may not assign this Agreement without the consent of Sponsor.
12.2 This Agreement constitutes the entire and only agreement between the parties relating to the Research Project, and all prior negotiations, representations, agreements and understandings are superseded hereby. No agreements altering or supplementing the terms hereof may be made except by means of a written document signed by the duly authorized representatives of the parties.
12.3 Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to be properly given on the date of personal delivery or three (3) days after deposit in the U. S. mail, sent by registered or certified mail, return receipt requested, and addressed as follows:
or at such other addresses as may be given from time to time in accordance with the terms of this notice provision.
12.4 This Agreement shall be governed by, construed, and enforced in accordance with the internal laws of the State of Colorado.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.
DMI LIFE SCIENCES, INC. | TRAUMA RESEARCH, LLC | |||||||
By: |
|
By: |
|
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Bruce G. Miller | David Bar-Or, M.D. | |||||||
President & CEO | Manager |
Attachment A
DESCRIPTION OF RESEARCH PROJECT
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
ATTACHMENT B
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
ATTACHMENT C
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
ATTACHMENT D
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
Exhibit 10.6.1
EXCLUSIVE LICENSE AGREEMENT
This Exclusive License Agreement (Agreement) effective as of July 11, 2005 (the Effective Date) is by and between DMI BioSciences, Inc., a Colorado corporation having its principal place of business at 3601 South Clarkson Street, Suite 420, Englewood, Colorado 80113-3948 (DMI), and Institute For Molecular Medicine, Inc., a non-profit corporation organized and existing under the laws of Colorado, having a place of business at 3531 South Logan Street, Suite D318, Englewood, Colorado 80110 (IMM).
WHEREAS, IMM owns Intellectual Property relating to therapeutic uses of Methylphenidate Derivatives;
WHEREAS, DMI wants to obtain a worldwide exclusive license of IMMs Intellectual Property to research, develop and commercialize Methylphenidate Derivatives [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission];
WHEREAS, IMM is willing to grant DMI such an exclusive license; and
WHEREAS, IMM and DMI signed a Term Sheet on April 12, 2005, setting forth certain agreed terms to be included in this Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants, terms and agreements set forth below, the parties agree as follows.
ARTICLE 1: DEFINITIONS
1.1 | Affiliate means any corporation, firm, partnership or other entity that, directly or indirectly, is controlled by DMI. For the purposes of this Agreement, controlled means possession of the power to direct, or cause the direction of, the management and policies of a corporation, firm, partnership, or other entity, whether through the ownership of equity, status as a general partner, by contract or otherwise. For avoidance of doubt, IMM is not an Affiliate of DMI. |
1.2 | Calendar Quarter means each three (3)-month period ending on the last day of March, June, September and December of a given year. |
1.3 |
Calendar Year means each twelve (12)-month period beginning on the 1 st day of January and ending on the 31st day of December. |
1.4 | Clinical Trials means all human clinical trials conducted with a Product, including Phase 1 through Phase 4 human clinical trials. |
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1.5 | Commencement of a Clinical Trial shall mean the first date on which the Clinical Trial may legally be commenced. |
1.6 | Commercial Sales means sales of a Product in the Territory to Third Parties in bona fide arms-length transactions. |
1.7 | Commercially Reasonable And Diligent Efforts means, with respect to research, development and commercialization of a Product, a partys use of best efforts and resources consistent with the exercise of prudent scientific and business judgment, as applied to other pharmaceutical or veterinary products of similar potential, market size and competitive environment. |
1.8 | Drug Approval Application means an application for Regulatory Approval required for commercial sales of a Product, such as an NDA. |
1.9 | Effective Date is the date first written above. |
1.10 | FDA means the United States Food and Drug Administration. |
1.11 | [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
1.12 | First Commercial Sale means the first commercial sale of each Product in a country of the Territory following Regulatory Approval of the Product in that country, or if no such Regulatory Approval or similar marketing approval is required, the date upon which each Product is first commercially available in a country. |
1.13 | Gross Sales Amount means all monies and the fair market value of all other consideration (including payment in kind, exchange or other form) received with respect to Commercial Sales of a Product. |
1.14 | IMM Intellectual Property means: |
a. |
All Intellectual Property now or hereafter owned by IMM concerning or pertaining to Methylphenidate Derivatives, their uses and Product(s), including, but not limited to, (i) those provisional patent applications listed on Appendix B, all nonprovisional U.S. applications corresponding to the provisional patent applications listed on Appendix B, any divisions, continuations and continuations-in-part of and substitutions for all such nonprovisional U.S. applications, all PCT applications corresponding to any of the foregoing, all applications in countries outside the United States corresponding to any of the |
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foregoing and all patents issuing from any of the foregoing and any reissues or extensions of any such patents, and (ii) that Intellectual Property assigned to IMM by DMI pursuant to the terms of Article 6; |
b. | All Intellectual Property concerning or relating to Methylphenidate Derivatives, their uses and Product(s) which is now or hereafter licensed by IMM with a right to grant sublicenses; and |
c. | All Intellectual Property now or hereafter owned or licensed by IMM which is necessary for DMI to research, develop, make, use, offer for sale, sell, market, commercialize, import and export Product(s) for the Field in the Territory. |
1.15 | IMM Patents means all patents included within the IMM Intellectual Property. |
1.16 | IND means an Investigational New Drug Application satisfying the requirements of Part 312 of Title 21 of the United States Code of Federal Regulations filed with the FDA to commence human clinical testing of any Product in the United States or any similar filing with a regulatory authority of another country to commence human clinical testing of any Product in that country. |
1.17 | Intellectual Property means: (i) inventions, know-how, trade secrets, other Proprietary Information, works of authorship, and trademarks and other designations of origin; (ii) all rights and privileges therein throughout the world; and (iii) all physical embodiments of any of the foregoing. |
1.18 | Methylphenidate Derivatives means those compounds whose formulas are shown in attached Appendix A, including IMM 0001, and any other derivatives of methylphenidate and any other compounds comprising the phenidylacetate ( a -phenyl-2-piperidineacetate) portion of the compounds whose formulas are shown in Appendix A. |
1.19 | NDA means a New Drug Application satisfying the requirements of Title 21 of the United States Code of Federal Regulations filed with the FDA to obtain Regulatory Approval for a Product in the United States or any similar filing with a regulatory authority of another country to market any Product in that country. |
1.20 | Net Sales means [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
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[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
1.21 | Phase 1 Trial means a human clinical trial in any country that is conducted to initially evaluate the safety and/or pharmacological effect of a Product in human subjects or that would otherwise satisfy the requirements of Part 312 of Title 21 of the United States Code of Federal Regulations or its foreign equivalent. |
1.22 | Phase 2 Trial means a human clinical trial in any country that is conducted to initially evaluate the effectiveness of a Product for a particular Indication in patients with the Indication or that would otherwise satisfy the requirements of Part 312 of Title 21 of the United States Code of Federal Regulations or its foreign equivalent. |
1.23 | Phase 2a Trial means a limited Phase 2 Trial typically conducted in up to 50 patients to demonstrate the effectiveness of a Product for a human Indication. |
1.24 | Phase 3 Trial means a controlled human clinical trial in any country, the results of which could be used to establish safety and efficacy of a Product as a basis for a marketing approval application submitted to the FDA, or that would otherwise satisfy the requirements of Part 312 of Title 21 of the United States Code of Federal Regulations or its foreign equivalent. |
1.25 | Preclinical Studies means, with respect to a Product for human use, (i) synthesis and formulation; (ii) physical and chemical properties, (iii) in vitro activity, (iv) in vivo activity in animals, (v) metabolism, absorption and pharmacokinetics data from animal studies, (vi) toxicology data, and (vii) similar studies that are typically performed before first administration of a Product to humans. |
1.26 | Prime Rate means that prime interest rate specified in the Wall Street Journal, New York Edition, for the date specified. |
1.27 | Product(s) means product(s) comprising or utilizing a Methylphenidate Derivative [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
1.28 |
Proprietary Information means all business and technical information of a confidential and proprietary nature, including ideas, inventions, discoveries, trade secrets, know-how, protocols, research plans, development plans, compilations, methods, techniques, processes, data, test results, formulas, formulations, computer programs, reports, other works of authorship, business plans, sales forecasts, marketing |
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information, pricing and financial information, customer lists, branding strategy, and planned or pending acquisitions and divestitures, and all physical embodiments thereof, including disks, computers, software, printouts, laboratory notebooks, writings, notes, documentation, records, reports, sketches, plans, memoranda, compilations, devices, prototypes, instruments, blueprints, diagrams, specifications, operating instructions, written descriptions, photographs, videos, chemicals, biological materials, compositions, lists, invention disclosures, and patent applications. |
1.29 | Regulatory Approval means all approvals, licenses, registrations and authorizations by the appropriate government entity or entities in a country or region (such as the European Union) necessary for the commercial sale of a Product in that country or region, including where applicable, approval of labeling, pricing, reimbursements and manufacturing. Regulatory Approval in the United States for Product(s) for human use shall mean final approval of an NDA pursuant to Part 314 of Title 21 of the United States Code of Federal Regulations permitting marketing of the Product in interstate commerce of the United States. Regulatory Approval in the European Union for Product(s) for human use shall mean final approval of a Marketing Authorization Application pursuant Council Directive 75/319/EEC, as amended, or Council Regulation 2309/93/EEC, as amended. |
1.30 | Royalty Product means a Product, the making, using, selling, offering for sale, marketing, commercialization, importing or exporting of which by DMI and its Affiliates and sublicensees would, in the absence of the license granted to DMI in this Agreement, infringe at least one Valid Claim of an IMM Patent in the country where Commercial Sales of the Product are being made. |
1.31 | Territory means the world. |
1.32 | Third Party means an entity other than DMI or IMM. Affiliates of DMI are Third Parties. A Third Party may be an individual, corporation, firm, partnership or other entity. |
1.33 | Valid Claim means a claim of an issued and unexpired IMM Patent that (i) has not been held permanently revoked, unenforceable or invalid by a decision of a court, patent office or other governmental agency of competent jurisdiction, which decision cannot be appealed or was not appealed within the time allowed for appeal, and (ii) has not be admitted to be invalid or unenforceable through reissue, disclaimer or otherwise. |
1.34 |
Veterinary Studies/Trials means, with respect to a Product for use in animals, (i) synthesis and formulation; (ii) physical and chemical properties, (iii) in vitro activity, (iv) in vivo trials in animals, |
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(v) metabolism, absorption and pharmacokinetics data from animal studies, (vi) toxicology data, and (vii) similar studies that are typically performed prior to marketing of a Product for animals or which must be performed to obtain Regulatory Approval to market a Product for animals. |
ARTICLE 2: GRANT OF RIGHTS
2.1 | On the terms and conditions set forth herein, IMM hereby grants to DMI an exclusive license of all IMM Intellectual Property to research, develop, make, use, sell, offer for sale, market, commercialize, import and export Product(s) for the Field in the Territory. |
2.2 | DMI shall have the right to sublicense Third Parties in all or a part of the Territory and/or for all or a part of the Field. |
2.3 | DMI shall have the right to assign its rights to Third Parties in all or a part of the Territory and/or for all or a part of the Field with the written approval of IMM and provided the assignee agrees to assume all of DMIs responsibilities and obligations under this Agreement in all, or the assignees part, of the Territory and/or Field. |
2.4 | DMI shall have the right to enter into written contracts with Third Parties to perform some or all of the research, development, Preclinical Studies, Clinical Trials, Veterinary Studies/Trials, manufacture of Products, marketing of Products, or other activities contemplated by this Agreement. Any such Third-Party contractors must agree to adhere to all applicable laws, regulatory guidelines and requirements, and quality standards for the research, development, manufacture, Preclinical Studies, Clinical Trials, Veterinary Studies/Trials, marketing and/or other activities it performs and must agree to use only qualified personnel to perform the work which is the subject of the Third-Party contract. All Third-Party contractors must also agree to be bound by confidentiality and nonuse provisions which are substantially the same as those contained in Article 7. DMI must cause all of its Third-Party contractors to agree to assign to DMI any Intellectual Property conceived, discovered, created, produced or developed by them during the term of their contracts with DMI. |
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
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[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
ARTICLE 4: PAYMENTS, REPORTS, RECORDS AND AUDITS
4.1 | All payments required by this Agreement shall be made by wire transfer in United States dollars to the credit of such bank account as may be designated by the receiving party to the paying party in writing. Any payment which falls due on a date which is a Saturday, Sunday or a legal holiday in the United States may be made on the next succeeding day which is not a Saturday, Sunday or legal holiday. |
4.2 | In the case of any delay in any payment, interest at 2% over the Prime Rate, assessed from the first day after the payment was due until the date the payment is received, shall be due. |
4.3 | Each party shall be responsible for paying any and all taxes levied on account of the payments it receives. |
4.4 |
Each party shall furnish or cause to be furnished to the other party on a quarterly basis a written report or reports covering each Calendar Quarter (each such Calendar Quarter being sometimes referred to herein as a reporting period) in which Commercial Sales are made and/or in which payments are received from licensees or sublicensees showing (i) Commercial Sales of each Product in the Territory during the reporting period, (ii) dispositions of Product(s) other than by sale for cash, (iii) calculation of Net Sales and royalties for each Product during the reporting period, (iv) payments received from licensees or sublicensees during the reporting period, including, for royalty payments, a report from the licensees and/or sublicensees showing the calculation of the royalties, |
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(v) the exchange rates used in converting into dollars from the currencies in which Commercial Sales were made or payments from licensees and sublicensees were received, and (vi) any other information necessary to establish the accuracy and completeness of the payments. Reports shall be due thirty (30) days after the end of each Calendar Quarter in which Commercial Sales are made and/or in which payments are received from licensees or sublicensees. |
4.5 | Each party shall keep accurate and consistent records and books of account containing regular entries relating to Commercial Sales and payments received from licensees or sublicensees, which records shall contain all information necessary for the computation of all amounts due to the other party, including computation of royalties. Such records shall be available, including for a period of three (3) years after termination of this Agreement, for examination by representatives of the other party for the purpose of verifying the accuracy of the quarterly reports required by Section 4.4, including all royalty computations, for any year ending no more than 36 months prior to the date of such examination. Such examination shall be made no more than once in each Calendar Year during normal business hours with prior notice. Any such representative shall be entitled to make copies and extracts from such books and records, but only to the extent necessary to verify the accuracy of the quarterly reports required by Section 4.4, including all royalty computations. Each party shall fully cooperate with such examination and inspection and shall give any explanations that reasonably may be requested. |
4.6 | Upon the written request of a party (requesting party), and not more than once in each Calendar Year, the other party (audited party) will permit an independent certified public accounting firm of recognized standing selected by the requesting party and reasonably acceptable to the audited party to have access during normal business hours to those records of the audited party that may be necessary to verify the accuracy of the quarterly reports required by Section 4.4 and calculations of royalties for any year ending no more than 36 months prior to the date of such request. |
a. | The accounting firm will disclose to the requesting party only whether the quarterly reports and royalty calculations are correct or incorrect, the specific details concerning any discrepancies, and the corrected amount of royalty and other payments due. No other information will be provided to the requesting party. |
b. |
If the requesting partys independent accounting firm determines that royalties have been overpaid, the requesting party will repay the audited party the overage on the same date that the requesting party delivers to the audited party such |
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accounting firms written report. If the requesting partys independent accounting firm determines that royalties have been underpaid, the audited party will pay the amount of the additional royalties plus interest assessed at 2% over the Prime Rate from the time(s) the payment(s) was(were) originally due. The payment of the additional royalties and interest will be due no later than fifteen (15) days after the date on which the requesting party delivers to the audited party such accounting firms written report. |
c. | The fees charged by the accounting firm will be paid by the requesting party, provided that, if the audit determines that the additional royalties payable by the audited party to the requesting party for such period exceed 5% of the royalties actually paid, then the audited party will pay the reasonable fees and expenses charged by such accounting firm. |
4.7 | Each party will treat all financial information of the other party subject to review under this Article 4 as Proprietary Information in accordance with Article 7 hereof and will cause its representatives and accounting firm to enter into an acceptable confidentiality agreement obligating such representatives and accounting firm to retain all such financial information in confidence pursuant to the confidentiality and non-use provisions of Article 7. |
ARTICLE 5: DMIS RESPONSIBILITIES
5.1 | DMI shall be responsible for, and bear all the costs of, researching, developing, performing Preclinical Studies of, performing Clinical Trials of, performing Veterinary Studies/Trials of, obtaining Regulatory Approval for, manufacturing, marketing and commercializing Product(s) for the Field in the Territory. |
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
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5.3 | DMI agrees to adhere to, and comply with, all applicable laws, regulatory guidelines and requirements, and quality standards for the research, development, manufacturing, Preclinical Studies, Clinical Trials and Veterinary Studies/Trials it performs, and for Commercial Sales of Product(s) made by it. DMI agrees to cause any Affiliate, sublicensee or Third Party contractor to adhere to, and comply with, all applicable laws, regulatory guidelines and requirements, and quality standards for the research, development, manufacturing, Preclinical Studies, Clinical Trials and Veterinary Studies/Trials it performs and for Commercial Sales of Product(s) made by it. |
5.4 | Except as provided in Article 6, DMI shall be the owner of all data, results and other information produced or obtained as a result of performing its obligations and responsibilities under this Agreement or having them performed on its behalf, including all data, results and other information from the research, Preclinical Studies, Clinical Trials and Veterinary Studies/Trials it performs or has performed on it behalf, all reports or other documents containing such data, results and other information, all INDs and Drug Approval Applications and all documentation contained therein or relating thereto, and all Regulatory Approvals. |
5.5 | DMI agrees to mark all Product(s) sold by it, and shall cause any entity authorized by it to sell Product(s) to mark all Product(s) sold by the entity, with the applicable patent number(s) in accordance with the requirements of applicable laws and regulations in the country or countries of manufacture and sale. |
ARTICLE 6: INTELLECTUAL PROPERTY
6.1 | As of the Effective Date, IMM is the sole and exclusive owner of Intellectual Property covering or relating to the use of Methylphenidate Derivatives to treat inflammation, inflammatory diseases, cancers, autoimmune diseases and pulmonary diseases in humans and animals, including the patent applications listed in Appendix B attached hereto. IMM shall remain the owner of this Intellectual Property. |
6.2 |
Subject to the terms and conditions of this Agreement, IMM shall also be the sole and exclusive owner of all Intellectual Property concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s) which is conceived, created, discovered, produced or developed by either party, alone or jointly, during the term of this Agreement. Each party |
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agrees to make prompt written disclosure to the other of all Intellectual Property concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s) which is conceived, created, discovered, produced or developed by it during the term of this Agreement. |
6.3 | DMI agrees to cause its sublicensees, consultants and Third-Party contractors to assign to DMI all Intellectual Property concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s) which is conceived, created, discovered, produced or developed by any of them during the term of the sublicense, consultants agreement or Third- Party contract. DMI agrees to make prompt written disclosure to IMM of all such Intellectual Property concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s) assigned to DMI by its sublicensees, consultants and/or Third-Party contractors. |
6.4 | Subject to the terms and conditions of this Agreement, DMI agrees to, and does hereby, assign to IMM all of its right, title and interest in and to all Intellectual Property concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s) which is conceived, created, discovered, produced or developed by it or which is assigned to DMI by its sublicensees, consultants and/or its Third-Party contractors during the term of this Agreement. |
6.5 | DMI will assist IMM, at IMMs expense, in every proper way to obtain, maintain and enforce United States and foreign proprietary rights relating to any and all Intellectual Property now or hereafter owned by IMM which concerns or relates to Methylphenidate Derivatives, their uses and/or Product(s). To that end, DMI will: |
a. | Execute, verify and deliver such documents and perform such other acts (including providing evidence and witnesses within its control and appearing as a witness) as IMM may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such proprietary rights. |
b. | Where the assignment of proprietary rights to IMM is provided for herein, execute, verify and deliver assignments of such proprietary rights to IMM or its designee. |
c. | In the event IMM is unable for any reason, after reasonable effort, to secure DMIs signature on any document needed in connection with the actions specified in this Article 6, DMI hereby irrevocably designates and appoints IMM and its duly authorized officers and agents as its agent and attorney-in-fact, to act for and on DMIs behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of this Article 6 with the same legal force and effect as if executed by DMI. |
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6.6 | IMM will take all necessary steps to obtain and maintain protection for all Intellectual Property now or hereafter owned by it concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s), and IMM shall be responsible for, and shall bear all the costs of, obtaining and maintaining protection for this Intellectual Property. |
6.7 | IMM will shall keep DMI advised as to all developments and shall provide DMI with all materials sufficiently in advance to allow DMI to review and provide input on any proposed filing prior to its filing, which input shall be considered in good faith and included where reasonably possible by IMM. Notwithstanding the foregoing, IMM shall have the right to take such actions as are reasonably necessary, in its good faith judgment, to preserve all rights in its Intellectual Property, and IMM shall notify DMI as soon as possible after taking any such action. |
6.8 | IMM will abandon Intellectual Property concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s), now or hereafter owned by it, or any rights therein, only after notice to DMI at least thirty (30) days in advance and only after giving DMI an opportunity to assume responsibility for obtaining and/or maintaining the Intellectual Property protection proposed to be abandoned. |
ARTICLE 7: CONFIDENTIALITY
7.1 | Each party agrees to treat and maintain any of the other partys Proprietary Information which is in its possession, which comes into its possession during the term of this Agreement, or which is conceived, created, discovered, produced, developed or obtained by the other party as a result of performance under this Agreement, in confidence, and agrees not to disclose any such Proprietary Information to anyone and to not use any such Proprietary Information, except for the purposes of performing its obligations under this Agreement. Notwithstanding the foregoing, each party may disclose the other partys Proprietary Information to its employees, Affiliates, consultants, licensees, sublicensees and Third-Party contractors, or as is deemed necessary for any purpose set forth in, or relating to, this Agreement, provided that any recipients are bound by like duties of confidentiality, nondisclosure and nonuse as contained herein. Further, each party may disclose and use the other partys Proprietary Information with the written consent of the other party. |
7.2 |
As of the Effective Date, this Agreement supersedes the confidentiality agreement between the parties dated on or about February 18, 2004, but only insofar as such confidentiality agreement relates to the subject matter |
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of this Agreement. All Proprietary Information exchanged between the parties under such confidentiality agreement relating to the subject matter of this Agreement shall be deemed Proprietary Information hereunder and shall be subject to the terms of this Agreement. |
7.3 | Notwithstanding the foregoing, each party may disclose the existence and content of this Agreement and other agreements between the parties to advisors, agents, consultants, investors, licensees, sublicensees and Third- Party contactors who agree to be bound by like duties of confidentiality, nondisclosure and nonuse as contained herein. |
7.4 | Nothing contained herein shall in any way restrict or impair the right of either party to use, disclose, or otherwise deal with the other partys Proprietary Information which the party claiming waiver can demonstrate by written records: |
a. | is or becomes generally known to the public through no fault of the party; |
b. | was known to it prior to the time of disclosure by the other party; |
c. | was independently developed by it and not in performance of its obligations under this Agreement; |
d. | was lawfully obtained without restrictions from a Third Party who has authority to make such disclosure; or |
e. | which the party is required to disclose pursuant to applicable law or pursuant to a requirement, subpoena, order or other request of a court, agency or other governmental entity, including required disclosures to a governmental entity or agency in connection with seeking any governmental or regulatory approval; in such case, the party shall notify the other party prior to such disclosure so as to give the other party an opportunity to protest the disclosure. |
ARTICLE 8: PUBLICITY, PUBLICATIONS AND PRESENTATIONS
8.1 |
The parties agree that the public announcement of the execution of this Agreement shall be in the form of a press release to be agreed on by the parties before or on the Effective Date and, thereafter, each party shall be entitled to make or publish any public statement consistent with the contents thereof. Thereafter, the parties will jointly discuss and agree on any statement to the public regarding this Agreement, the transactions |
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contemplated herein, or clinical, regulatory and commercial developments relating to the Product(s), subject in each case to disclosure otherwise required by law or regulation as determined in good faith by each party. When a party wishes to make a public statement, it will notify the other party and give the other party at least three (3) business days to review and comment on such statement, and the parties will discuss and agree on the final content of the statement. If a party is not legally able to give notice as required by the previous sentence, it will furnish the other party with a copy of its disclosure as soon as practicable after the making thereof. The parties acknowledge the importance of supporting each others efforts to publicly disclose results and significant developments regarding Product(s). The principles to be observed in such public disclosures will be accuracy, the confidentiality requirements of Article 7, compliance with regulatory agency regulations and guidelines, the advantage a competitor may gain from any public statements, and the standards and customs in the pharmaceutical industry for such disclosures by companies comparable to DMI and IMM. |
8.2 | IMM and DMI each acknowledge the other partys interest in publishing certain of the results of the work performed pursuant to the terms of this Agreement and in making presentations at scientific meetings to (i) obtain recognition within the scientific community, (ii) advance the state of scientific knowledge, and (iii) promote the Product(s). Both parties also recognize their mutual interest in obtaining valid patent rights for any inventions concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s) and in protecting the confidentiality of their Proprietary Information. |
a. | Consequently, if either party desires to publish or present the results of the work performed pursuant to the terms of this Agreement, the publishing/presenting party shall provide the nonpublishing/nonpresenting party with a draft manuscript of the proposed publication or presentation. |
b. | The nonpublishing/nonpresenting party shall have thirty (30) days from receipt of the draft manuscript to review it. |
c. | The publishing/presenting party agrees to delete any information identified by the nonpublishing/nonpresenting party as its Proprietary Information upon written request of the nonpublishing/nonpresenting party received within the thirty-day review period. |
d. |
Finally, in the event that the nonpublishing/nonpresenting party determines that the manuscript describes patentable subject matter, the nonpublishing/nonpresenting party shall so notify the |
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publishing/presenting party in writing within the thirty-day review period. Upon receipt of this notification, the publishing/presenting party will delay publication of the manuscript or the presentation of the information contained in the manuscript up to ninety (90) days from the date of receipt of the written notice to allow time for a patent application to be prepared and filed. |
ARTICLE 9: REPRESENTATIONS AND WARRANTIES
9.1 | IMM represents and warrants that it has the right and authority to enter into, and perform its obligations under, this Agreement and that there are no outstanding grants, licenses, encumbrances or agreements, either written, oral or implied, inconsistent with this Agreement, or which this Agreement, or performance hereunder, would violate, breach, conflict with, or cause a default. |
9.2 | IMM represents and warrants that it is the sole and exclusive owner of the patent applications listed in Appendix B and the inventions described therein. |
9.3 | IMM further represents and warrants that it has the full right and authority to grant DMI all of the rights granted hereunder. |
9.4 | DMI represents and warrants that it has the right and authority to enter into, and perform its obligations under, this Agreement and that there are no outstanding grants, licenses, encumbrances or agreements, either written, oral or implied, inconsistent with this Agreement, or which this Agreement, or performance hereunder, would violate, breach, conflict with, or cause a default. |
9.5 | EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 9 OR ELSEWHERE IN THIS AGREEMENT, DMI DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES, STATUTORY OR OTHERWISE. |
9.6 |
EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 9 OR ELSEWHERE IN THIS AGREEMENT, IMM DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES, STATUTORY OR OTHERWISE. IN PARTICULAR, IMM DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES CONCERNING THE INTELLECTUAL PROPERTY OR PROPRIETARY INFORMATION IT CURRENTLY OWNS AND WHICH IT IS LICENSING TO DMI HEREUNDER. SPECIFICALLY, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IMM MAKES NO EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS (FOR A PARTICULAR PURPOSE OR OTHERWISE), QUALITY OR |
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USEFULNESS OF ITS INTELLECTUAL PROPERTY OR PROPRIETARY INFORMATION. IMM DOES NOT WARRANT THE ACCURACY OF ANY INFORMATION INCLUDED WITHIN THE INTELLECTUAL PROPERTY OR PROPRIETARY INFORMATION OR THAT THE PRACTICE OF ITS INTELLECTUAL PROPERTY OR THE USE OF ITS PROPRIETARY INFORMATION WILL BE FREE FROM CLAIMS OF INFRINGEMENT BY THIRD PARTIES OR ANY OTHER RIGHTS OF THIRD PARTIES. |
9.7 | UNDER NO CIRCUMSTANCE SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES IN TORT, CONTRACT, STRICT LIABILITY OR OTHERWISE INCURRED BY THE OTHER PARTY OR ANY THIRD PARTY. |
ARTICLE 10: DEFENSE OF THIRD PARTY CLAIMS
10.1 | With respect to claims or suits by Third Parties resulting from, or arising out of, the performance of this Agreement, the parties hereto agree as follows: |
a. | Each party shall have the right to control the defense of any claim or suit that may be brought against it with counsel of its own choosing and at its own expense. |
b. | Each party agrees to inform the other party as soon as practicable of any such claim or suit and to keep the other party informed about the claim or suit until resolved. |
c. | Each party agrees to cooperate with the other party to the extent necessary with respect to defending against any such claim or suit. All of the cooperating partys expenses shall be paid for, or reimbursed by, the other party. |
d. | Each party agrees that it will not settle any claim or suit brought against it without the input of the other party, which input will be considered in good faith. Further, each party agrees that it will not enter into any settlement that would have an adverse effect on the other party without the consent of the other party, which consent will not be unreasonably withheld. |
10.2 | Notwithstanding the foregoing, a party seeking indemnification from the other party must proceed as provided in the indemnification provisions of Article 12. |
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ARTICLE 11: INFRINGEMENT OR MISAPPROPRIATION BY THIRD PARTIES
11.1 | Each party will inform the other as soon as possible upon learning of any infringement or misappropriation by any Third Party of any Intellectual Property currently or hereafter owned by IMM. |
11.2 | IMM shall have the first option to proceed against such Third Party. DMI agrees that it will permit the use of its name in any litigation suit, will sign all necessary papers, will take all rightful oaths, and will do whatever else may be necessary to assist IMM in proceeding against the Third Party. All costs, expenses and disbursements of proceeding against such Third Party shall be borne by IMM, including reimbursement of expenses incurred by DMI as a result of assisting IMM in proceeding against the Third Party. IMM shall keep DMI fully informed of all such proceedings. IMM shall not settle any such proceeding without the input of DMI, which input will be considered in good faith. In the event that IMM is successful in proceeding against the Third Party, all monies recovered by IMM for infringement or misappropriation by way of settlement or order of court shall be treated as follows. If it has not already done so, IMM shall deduct and reimburse DMI the attorneys fees, disbursements and costs expended by DMI in the conduct of proceeding against the Third Party. Next, IMM shall deduct and retain the attorneys fees, disbursements and costs expended by IMM in the conduct of proceeding against the Third Party. Any monies remaining after such deduction shall be divided as follows: [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
11.3 | In the event that IMM elects not to proceed, DMI shall have the right to proceed against the Third Party. IMM agrees that it will permit the use of its name in any litigation suit, will sign all necessary papers, will take all rightful oaths, and will do whatever else may be necessary to assist DMI in proceeding against the Third Party. All costs, expenses and disbursements of proceeding against such Third Party shall be borne by DMI, including reimbursement of expenses incurred by IMM as a result of assisting DMI in proceeding against the Third Party. DMI shall keep IMM fully informed of all such proceedings. DMI shall not settle any such proceeding without the input of IMM, which input will be considered in good faith. In the event that DMI is successful in proceeding against the Third Party, all monies recovered by DMI for infringement or misappropriation by way of settlement or order of court shall be treated as follows. If it has not already done so, DMI shall deduct and reimburse IMM the attorneys fees, disbursements and costs expended by IMM in the conduct of proceeding against the Third Party. Next, DMI shall deduct and retain the attorneys fees, disbursements and costs expended by DMI in the conduct of proceeding against the Third Party. Any monies remaining after such deduction shall be divided as follows: [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
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ARTICLE 12: INDEMNIFICATION
12.1 | DMI hereby agrees to indemnify, defend and hold harmless IMM, its officers, directors, employees, consultants and agents from and against any and all liabilities, claims, demands, actions, suits, damages, costs, expenses (including reasonable attorneys fees), or judgments (collectively Damages) arising out of, based upon, resulting from, or presented or brought on account of, a material breach of this Agreement by DMI, except to the extent that such Damages arise out of, are based upon or result from (i) a material breach of the Agreement by IMM or (ii) the negligence or willful misconduct of IMM. |
12.2 | IMM hereby agrees to indemnify, defend and hold harmless DMI, its officers, directors, employees, consultants and agents, from and against any liabilities, claims, demands, actions, suits, damages, costs, expenses (including reasonable attorneys fees), or judgments (collectively Damages) arising out of, based upon, resulting from, or presented or brought on account of, a material breach of this Agreement by IMM, except to the extent that such Damages arise out of, are based upon or result from (i) a material breach of the Agreement by DMI or (ii) the negligence or willful misconduct of DMI. |
12.3 | DMI hereby agrees to indemnify, defend and hold harmless IMM, its officers, directors, employees, consultants and agents, from and against any liabilities, claims, demands, suits, actions, damages, costs, expense (including reasonable attorneys fees), or judgments (collectively Damages) arising out of, based upon, resulting from, or presented or brought on account of, any injuries, losses or damages sustained by any person or property in consequence of any act or omission of DMI, except to the extent that such Damages arise out of, are based upon or result from (i) a material breach of the Agreement by IMM or (ii) the negligence or willful misconduct of IMM. |
12.4 | IMM hereby agrees to indemnify, defend and hold harmless DMI, its officers, directors, employees, consultants and agents, from and against any liabilities, claims, demands, suits, actions, damages, costs, expense (including reasonable attorneys fees), or judgments (collectively Damages) arising out of, based upon, resulting from, or presented or brought on account of, any injuries, losses or damages sustained by any person or property in consequence of any act or omission of IMM, except to the extent that such Damages arise out of, are based upon or result from (i) a material breach of the Agreement by DMI or (ii) the negligence or willful misconduct of DMI |
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12.5 | A party entitled to indemnification under this Article 12 (the Indemnified Party) shall promptly notify the party potentially responsible for such indemnification (the Indemnifying Party) upon becoming aware of any claim or claims asserted or threatened against such Indemnified Party which could give rise to a right of indemnification under this Agreement; provided, however, that the failure to give such notice shall not relieve the Indemnifying Party of its indemnity obligation hereunder, except to the extent that such failure substantially prejudices its rights hereunder. |
12.6 | The Indemnifying Party shall have the right to defend, at its sole cost and expense, such claim by all appropriate proceedings, which proceedings shall be prosecuted diligently by the Indemnifying Party to a final conclusion or settled at the discretion of the Indemnifying Party; provided, however, that the Indemnifying Party may not enter into any compromise or settlement unless the Indemnified Party consents thereto, which consent shall not be unreasonably withheld, conditioned or delayed. |
12.7 | The Indemnified Party may participate in, but not control, the defense or settlement of any claim controlled by the Indemnifying Party pursuant to this Article 12 and shall bear its own costs and expenses with respect to such participation; provided, however, that the Indemnifying Party shall bear such costs and expenses if counsel for the Indemnifying Party shall have reasonably determined that such counsel may not properly represent both the Indemnifying Party and the Indemnified Party. |
12.8 | If the Indemnifying Party fails to notify the Indemnified Party within twenty (20) days after receipt of notice of a claim in accordance with Section 12.5 hereof that it elects to defend the Indemnified Party pursuant to this Article 12, or if the Indemnifying Party elects to defend the Indemnified Party but fails to prosecute or settle the claim diligently and promptly, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the claim by all appropriate proceedings, which proceedings shall be promptly and vigorously prosecuted by the Indemnified Party to a final conclusion or settlement; provided, however, that in no event shall the Indemnifying Party be required to indemnify the Indemnified Party for any amount paid or payable by the Indemnified Party in the settlement of any such claim agreed to without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed. |
ARTICLE 13: INSURANCE
13.1 |
Each party shall use Commercial Reasonable And Diligent Efforts to maintain insurance, including product liability insurance, with respect to its activities hereunder. Such insurance shall be in such amounts and |
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subject to such deductibles as the parties may agree based upon standards prevailing in the industry at the time. Until such time as a Clinical Trial is begun, either party may satisfy its obligations under this Section 13.1 through self-insurance to the same extent. At such time as a Product is being manufactured by DMI for Commercial Sales, DMI shall name IMM as an additional insured on any such policies. Any insurance shall not be construed to create a limit of the insuring partys liability with respect to its indemnification obligations under Article 12. Each party shall use Commercially Reasonable And Diligent Efforts to provide the other party with written notice at least thirty (30) prior to a cancellation, non-renewal or material change in such insurance or self-insurance that could materially adversely affect the rights of the other party hereunder. Each partys insurance hereunder shall be primary and non-contributing. |
ARTICLE 14: TERM AND TERMINATION
14.1 | Unless terminated sooner as provided below, this Agreement will continue in full force and effect until all of the IMM Patents have expired and/or have been held invalid or unenforceable by a decision of a court, patent office or other governmental agency of competent jurisdiction, which decision cannot be appealed or was not appealed within the time allowed for appeal. |
14.2 | DMI may terminate this Agreement at any time upon six (6) months written notice to IMM. |
14.3 | The parties may at any time terminate this Agreement, in part or in its entirety, by mutual written agreement. |
14.4 | In the event of a breach or default in respect of any of the terms of this Agreement by either party, the other party shall give notice in writing, specifying in detail the nature of the breach or default. If the alleged breach or default is not cured within sixty (60) days after receipt of this notice, the party giving notice shall have the right to immediately terminate this Agreement by giving a second written notice to the breaching party. |
14.5 | In the event of either party experiencing financial difficulties, that party shall immediately notify the other party to that effect. The party so notified shall have the right to terminate this Agreement within thirty (30) days of said notification. In the event IMM is the party having financial difficulties, DMI may, instead of terminating the Agreement, assume IMMs financial obligations under this Agreement, including those set forth in Article 6, and subtract an amount which is 150% of any payments made on IMMs behalf from any payments due to IMM pursuant to the terms of Articles 3 and 5. A party shall be considered as having financial difficulties by: |
a. | that partys commencement of a voluntary case under any applicable bankruptcy code or statute, or by its authorizing, by appropriate proceedings, the commencement of such a voluntary case; |
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b. | that partys failing to receive dismissal of any involuntary case under any applicable bankruptcy code or statute (wherein the other party is not a party to the case) within sixty (60) days after initiation of such action or petition; |
c. | that partys seeking relief as a debtor under any applicable law of any jurisdiction relating to the liquidation or reorganization of debtors or to the modification or alteration of the rights of creditors, or by consenting to or acquiescing in such relief; |
d. | the entry of an order by a court of competent jurisdiction finding it to be bankrupt or insolvent, or ordering or approving its liquidation, reorganization, or any modification or alteration of the rights of its creditors, or assuming custody of, or appointing a receiver or other custodian for, all or a substantial part of its property or assets; or |
e. | that partys making an assignment for the benefit of, or entering into a composition with, its creditors, or appointing or consenting to the appointment of a receiver or other custodian for all or a substantial part of its property. |
14.6 | Upon termination of this Agreement for any reason except for a material breach or default by IMM or as provided in Section 14.1: |
a. | All rights and licenses granted to DMI hereunder shall revert to IMM, except that DMI shall have the right to sell any Product(s) in inventory as provided in Subsection (b) of this Section 14.6; |
b. | DMI shall cease all activities with respect to the Product(s), including all making (by DMI and/or by Third Parties for DMI), using, selling, offering for sale, marketing, commercializing, importing and exporting of Product(s). Notwithstanding the foregoing, DMI shall have the right to sell any Product(s) in inventory at prices of its chosing, provided DMI makes the payments and reports required by Article 3. |
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c. | If requested by IMM, DMI shall (i) remain responsible to supply the amounts of Product(s) required for Commercial Sales at the time of such termination for a reasonable period of time, not to exceed six (6) months from the date of termination, to allow IMM to find an alternate source of supply, (ii) make its personnel and other resources reasonably available to IMM as necessary for a reasonable period of time, not to exceed six (6) months from the date of termination, to effect an orderly transition of responsibilities, and (iii) provide and assign to IMM all clinical data, INDs, Drug Approval Applications, Regulatory Approvals, and all other regulatory documentation covering the Product(s) that DMI may have developed in its activities under this Agreement. If termination of the Agreement occurred because of a breach by DMI, then DMI will be responsible for all of the costs of performing these obligations. Otherwise, IMM will be responsible for all of the costs of performing these obligations. |
d. | DMIs sublicense(s) of its rights shall be transferred to IMM. The sublicense(s) will remain in full force and effect so long as the sublicensee(s) perform(s) the obligations of the sublicense(s), and IMM shall have all of the rights and benefits of the sublicense(s) (including the right to receive 100% of all payments due under the sublicense(s)) and shall be responsible for performing all of the obligations required of DMI by the sublicense(s). DMI will execute such documents as may be requested by IMM to attest to the transfer to IMM of all of its sublicense(s). |
14.7 | Upon termination of this Agreement as provided in Section 14.1 or upon termination of this Agreement for a material breach by IMM, the exclusive license and all of the other rights granted to DMI shall be deemed to be irrevocable and fully paid-up. |
14.8 | Upon termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation matured prior to the effective date of such termination, and neither party waives any rights it may have to remedies arising out of the termination or breach of surviving obligations. |
ARTICLE 15: MISCELLANEOUS
15.1 |
All payments, notices, reports, exchanges of information and other communications between the parties required by this Agreement shall be sent to the addresses set out below, or to such other addresses as may be designated by one party to the other by notice pursuant hereto, by (i) prepaid, certified air mail (which shall be deemed received by the other party on the fifth business day following deposit in the mails), |
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(ii) facsimile transmission or other electronic means of communication (which shall be deemed received when transmitted), with confirmation by first class letter, postage prepaid, or (iii) an express courier service, such as FedEx, DHL, Airborne or similar delivery service, with capabilities of tracking packages and/or letter delivery and providing verification of receipt (in the even of the use of such a service, receipt shall be on the date actually received, as verified by such delivery service). |
15.2 | No party to this Agreement shall be liable for failure to perform on its part any provision or part of this Agreement when such failure is due to fire, flood, strike or other industrial disturbance, unavoidable accident, war, embargo, inability to obtain materials, transportation controls, governmental actions, or other causes beyond the control of such party, but only for the period of delay imposed by such cause. |
15.3 | For purposes of this Agreement, business day means a day on which the banks in the United States are generally open to conduct their regular banking business. |
15.4 | Should any part or provision of this Agreement be held unenforceable or in conflict with the law, the validity of the remaining parts or provisions shall not be affected by such holding. |
15.5 | The failure of either party to enforce, at any time and for any period of time, a provision of this Agreement is not, and shall not be construed to be, a waiver of any such provision or of the right of such party to subsequently enforce each and every such provision. |
15.6 |
This Agreement and the Sponsored Research Agreement being executed on even date herewith constitute the entire agreement and understanding between the parties with respect to the subject matter of those agreements, |
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and supersede and replace all prior negotiations, understandings and agreements, whether written or oral, including (i) the confidentiality agreement between the parties dated on or about February 18, 2004, in part, as provided in Section 7.2 hereof, and (ii) the Term Sheet executed April 12, 2005. |
15.7 | All amendments and modifications of this Agreement shall be in writing and executed by both parties. |
15.8 | Each party will obtain any government approval required in its country of domicile to enable this Agreement to become effective, or to enable any payment hereunder to be made, or any other obligation hereunder to be observed or performed. Each party will keep the other informed of progress in obtaining any such governmental approval and will cooperate with the other party in any such efforts. |
15.9 | This Agreement is made subject to any restrictions concerning the export of materials and technology from the United States which may be imposed upon or related to either party to this Agreement from time to time by the Government of the United States. Neither party will export, directly or indirectly, any Proprietary Information, Intellectual Property, or Product(s) or other materials utilizing such technology to any countries for which the United States Government or any agency thereof at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the Department of Commerce or other agency of the United States Government when required by applicable statute or regulation. |
15.10 | This Agreement may be assigned by either party only with the prior written consent of the other party, which consent will not be unreasonably withheld, and provided the assignee agrees to perform fully all of the responsibilities and obligations of the assignor hereunder. Any purported assignment in contravention of this Section 15.10 shall, at the option of the non-assigning party, be null and void and of no effect. No assignment shall release either party from responsibility for performance of any accrued obligation of such party hereunder. |
15.11 | This Agreement shall be binding upon and inure to the benefit of the parties, their respective officers and directors, and the permitted assignees of either party. |
15.12 | This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. Further, telefax signatures shall be binding. |
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15.13 | Nothing contained herein shall be deemed to create an agency, joint venture, amalgamation, partnership or similar relationship between IMM and DMI. |
15.14 | This Agreement does not confer, and shall not be construed as conferring, on either party, or any other entity, any proprietary right or license in or to the other partys Proprietary Information or Intellectual Property, except as expressly provided in this Agreement. |
15.15 | Ambiguities, if any, in this Agreement shall not be construed against any party, irrespective of which party may be deemed to have authored the ambiguous provision. |
15.16 | The Article headings are for convenience only and will not be deemed to affect in any way the language of the provisions to which they refer. |
IN WITNESS HEREOF, each party hereto acknowledges that the representative named below has authority to execute this Agreement on behalf of the respective party to form a legally binding contract and has caused this Agreement to be duly executed on its behalf.
DMI BioSciences, Inc. | Institute For Molecular Medicine, Inc. | |||||||
By: |
|
By: |
|
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Name: | Bruce G. Miller | Name: | David Bar-Or, M.D. | |||||
Title: | President and CEO | Title: | Executive Director |
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APPENDIX A
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
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APPENDIX B
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
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Exhibit 10.6.2
EXCLUSIVE LICENSE AGREEMENT
This Exclusive License Agreement (Agreement) effective as of February 17, 2009 (the Effective Date) is by and between DMI BioSciences, Inc., a Colorado corporation having its principal place of business at 8400 East Crescent Parkway, Suite 600, Greenwood Village, Colorado 80111 (DMI), and Institute For Molecular Medicine, Inc., a non-profit corporation organized and existing under the laws of Colorado, having a place of business at 3531 South Logan Street, Suite D318, Englewood, Colorado 80110 (IMM).
WHEREAS, IMM owns Intellectual Property relating to the measurement of the oxidation-reduction potential (ORP) and [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] of a body fluid or tissue of an animal (including a human) for the diagnosis, evaluation and/or monitoring of the body fluid, tissue and/or animal (collectively the ORP Diagnostic);
WHEREAS, DMI wants to obtain a worldwide exclusive license of IMMs Intellectual Property to research, develop and commercialize the ORP Diagnostic; and
WHEREAS, IMM is willing to grant DMI such an exclusive license.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants, terms and agreements set forth below, the parties agree as follows.
ARTICLE 1: DEFINITIONS
1.1 | Affiliate means any corporation, firm, partnership or other entity that, directly or indirectly, is controlled by DMI. For the purposes of this Agreement, controlled means possession of the power to direct, or cause the direction of, the management and policies of a corporation, firm, partnership, or other entity, whether through the ownership of equity, status as a general partner, by contract or otherwise. For avoidance of doubt, IMM is not an Affiliate of DMI. |
1.2 | Calendar Quarter means each three (3)-month period ending on the last day of March, June, September and December of a given year. |
1.3 |
Calendar Year means each twelve (12)-month period beginning on the 1st day of January and ending on the 31 st day of December. |
1.4 | Commercial Sales means sales of a Product in the Territory to Third Parties in bona fide arms-length transactions. |
1.5 | Commercially Reasonable And Diligent Efforts means, with respect to research, development and commercialization of a Product, a partys use of best efforts and resources consistent with the exercise of prudent scientific and business judgment, as applied to other diagnostic products of similar potential, market size and competitive environment. |
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1.6 | Effective Date is the date first written above. |
1.7 | First Commercial Sale means the first commercial sale of each Product in a country of the Territory following Regulatory Approval of the Product in that country, or if no such Regulatory Approval or similar marketing approval is required, the date upon which each Product is first commercially available in a country. |
1.8 | Gross Sales Amount means all monies and the fair market value of all other consideration (including payment in kind, exchange or other form) received with respect to Commercial Sales of a Product. |
1.9 | IMM Intellectual Property means: |
a. | All Intellectual Property now or hereafter owned by IMM concerning or pertaining to the ORP Diagnostic, Products and/or uses of either of them, including, but not limited to, the provisional, nonprovisional and PCT patent applications listed on Appendix A, any divisions, continuations, continuations-in-part of and substitutions for any of the foregoing, all applications in countries outside the United States corresponding to any of the foregoing, and all patents issuing from any of the foregoing and any reissues or extensions of any such patent; |
b. | All Intellectual Property concerning or relating to the ORP Diagnostic, Product(s) and/or uses of either of them, which is now or hereafter licensed by IMM with a right to grant sublicenses; and |
c. | All Intellectual Property now or hereafter owned or licensed by IMM which is necessary for DMI to research, develop, make, use, offer for sale, sell, market, commercialize, import and export Product(s) in the Territory. |
1.10 | IMM Patents means all patents now or hereafter included within the IMM Intellectual Property. |
1.11 | Intellectual Property means: (i) inventions, know-how, trade secrets, other Proprietary Information, works of authorship, and trademarks and other designations of origin; (ii) all rights and privileges therein throughout the world; and (iii) all physical embodiments of any of the foregoing. |
1.12 | Net Sales means [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
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[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
1.13 | ORP Diagnostic means the [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
1.14 | Prime Rate means that prime interest rate specified in the Wall Street Journal, New York Edition, for the date specified. |
1.15 | Product(s) means [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
1.16 | Proprietary Information means all business and technical information of a confidential and proprietary nature, including ideas, inventions, discoveries, trade secrets, know-how, protocols, research plans, development plans, compilations, methods, techniques, processes, data, test results, formulas, formulations, computer programs, reports, other works of authorship, business plans, sales forecasts, marketing information, pricing and financial information, customer lists, branding strategy, and planned or pending acquisitions and divestitures, and all physical embodiments thereof, including disks, computers, software, printouts, laboratory notebooks, writings, notes, documentation, records, reports, sketches, plans, memoranda, compilations, devices, prototypes, instruments, blueprints, diagrams, specifications, operating instructions, written descriptions, photographs, videos, chemicals, biological materials, compositions, lists, invention disclosures, and patent applications. |
1.17 |
Regulatory Approval means all approvals, licenses, registrations and authorizations by the appropriate government entity or entities in a country |
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or region (such as the European Union) necessary for the commercial sale of a Product in that country or region, including where applicable, approval of labeling, pricing, reimbursements and manufacturing. |
1.18 | Royalty Product means a Product, the making, using, selling, offering for sale, marketing, commercialization, importing or exporting of which by DMI and its Affiliates and sublicensees would, in the absence of the license granted to DMI in this Agreement, infringe at least one Valid Claim of an IMM Patent in the country where Commercial Sales of the Product are being made. |
1.19 | Territory means the world. |
1.20 | Third Party means an entity other than DMI or IMM. Affiliates of DMI are Third Parties. A Third Party may be an individual, corporation, firm, partnership or other entity. |
1.21 | Valid Claim means a claim of an issued and unexpired IMM Patent that (i) has not been held permanently revoked, unenforceable or invalid by a decision of a court, patent office or other governmental agency of competent jurisdiction, which decision cannot be appealed or was not appealed within the time allowed for appeal, and (ii) has not be admitted to be invalid or unenforceable through reissue, disclaimer or otherwise. |
ARTICLE 2: GRANT OF RIGHTS
2.1 | On the terms and conditions set forth herein, IMM hereby grants to DMI an exclusive license of all IMM Intellectual Property to research, develop, make, use, sell, offer for sale, market, commercialize, import and export Product(s) in the Territory. |
2.2 | DMI shall have the right to sublicense Third Parties in all or a part of the Territory. |
2.3 | DMI shall have the right to assign its rights to Third Parties in all or a part of the Territory with the written approval of IMM and provided the assignee agrees to assume all of DMIs responsibilities and obligations under this Agreement in all, or the assignees part, of the Territory. |
2.4 |
DMI shall have the right to enter into written contracts with Third Parties to perform some or all of the research, development, clinical trials, manufacture of Products, marketing of Products, or other activities contemplated by this Agreement. Any such Third-Party contractors must agree to adhere to all applicable laws, regulatory guidelines and requirements, and quality standards for the research, development, manufacture, clinical trials, marketing and/or other activities it performs |
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and must agree to use only qualified personnel to perform the work which is the subject of the Third-Party contract. All Third-Party contractors must also agree to be bound by confidentiality and nonuse provisions which are substantially the same as those contained in Article 7. DMI must cause all of its Third-Party contractors to agree to assign to DMI any Intellectual Property conceived, discovered, created, produced or developed by them during the term of their contracts with DMI. |
ARTICLE 3: FINANCIAL TERMS
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
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[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
ARTICLE 4: PAYMENTS, REPORTS, RECORDS AND AUDITS
4.1 | All payments required by this Agreement shall be made by wire transfer in United States dollars to the credit of such bank account as may be designated by IMM To DMI in writing. Any payment which falls due on a date which is a Saturday, Sunday or a legal holiday in the United States may be made on the next succeeding day which is not a Saturday, Sunday or legal holiday. |
4.2 | In the case of any delay in any payment, interest at 2% over the Prime Rate, assessed from the first day after the payment was due until the date the payment is received, shall be due. |
4.3 | DMI shall be responsible for paying any and all taxes levied on account of the payments it receives. |
4.4 | DMI shall furnish or cause to be furnished to IMM on a quarterly basis a written report or reports covering each Calendar Quarter (each such Calendar Quarter being sometimes referred to herein as a reporting period) in which Commercial Sales are made and/or in which payments are received from sublicensees showing (i) Commercial Sales of each Product in the Territory during the reporting period, (ii) dispositions of Product(s) other than by sale for cash, (iii) calculation of Net Sales and royalties for each Product during the reporting period, (iv) payments received from Affiliates and sublicensees during the reporting period, including, for royalty payments, a report from the Affiliates and/or sublicensees showing the calculation of the royalties, (v) the exchange rates used in converting into dollars from the currencies in which Commercial Sales were made or payments from Affiliates and sublicensees were received, and (vi) any other information necessary to establish the accuracy and completeness of the payments. Reports shall be due thirty (30) days after the end of each Calendar Quarter in which Commercial Sales are made and/or in which payments are received from Affiliates or sublicensees. |
4.5 |
DMI shall keep accurate and consistent records and books of account containing regular entries relating to Commercial Sales |
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and payments received from Affiliates or sublicensees, which records shall contain all information necessary for the computation of all amounts due to IMM, including computation of royalties. Such records shall be available, including for a period of three (3) years after termination of this Agreement, for examination by representatives of IMM for the purpose of verifying the accuracy of the quarterly reports required by Section 4.4, including all royalty computations, for any year ending no more than 36 months prior to the date of such examination. Such examination shall be made no more than once in each Calendar Year during normal business hours with prior notice. Any such representative shall be entitled to make copies and extracts from such books and records, but only to the extent necessary to verify the accuracy of the quarterly reports required by Section 4.4, including all royalty computations. DMI shall fully cooperate with such examination and inspection and shall give any explanations that reasonably may be requested. |
4.6 | Upon the written request of IMM (requesting party), and not more than once in each Calendar Year, DMI (audited party) will permit an independent certified public accounting firm of recognized standing selected by the requesting party and reasonably acceptable to the audited party to have access during normal business hours to those records of the audited party that may be necessary to verify the accuracy of the quarterly reports required by Section 4.4 and calculations of royalties for any year ending no more than 36 months prior to the date of such request. |
a. | The accounting firm will disclose to the requesting party only whether the quarterly reports and royalty calculations are correct or incorrect, the specific details concerning any discrepancies, and the corrected amount of royalty and other payments due. No other information will be provided to the requesting party. |
b. | If the requesting partys independent accounting firm determines that royalties have been overpaid, the requesting party will repay the audited party the overage on the same date that the requesting party delivers to the audited party such accounting firms written report. If the requesting partys independent accounting firm determines that royalties have been underpaid, the audited party will pay the amount of the additional royalties plus interest assessed at 2% over the Prime Rate from the time(s) the payment(s) was(were) originally due. The payment of the additional royalties and interest will be due no later than fifteen (15) days after the date on which the requesting party delivers to the audited party such accounting firms written report. |
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c. | The fees charged by the accounting firm will be paid by the requesting party, provided that, if the audit determines that the additional royalties payable by the audited party to the requesting party for such period exceed 5% of the royalties actually paid, then the audited party will pay the reasonable fees and expenses charged by such accounting firm. |
4.7 | IMM will treat all financial information of DMI subject to review under this Article 4 as Proprietary Information in accordance with Article 7 hereof and will cause its representatives and accounting firm to enter into an acceptable confidentiality agreement obligating such representatives and accounting firm to retain all such financial information in confidence pursuant to the confidentiality and non-use provisions of Article 7. |
ARTICLE 5: DMIS RESPONSIBILITIES
5.1 | DMI shall be responsible for, and bear all the costs of, researching, developing, performing clinical trials of, obtaining Regulatory Approval for, manufacturing, marketing and commercializing Product(s) in the Territory. |
5.2 | DMI agrees [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
5.3 |
DMI agrees to adhere to, and comply with, all applicable laws, regulatory guidelines and requirements, and quality standards for the research, development, manufacturing and clinical trials it performs, and for Commercial Sales of Product(s) made by it. DMI agrees to cause any Affiliate, sublicensee or Third Party contractor to adhere to, and comply |
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with, all applicable laws, regulatory guidelines and requirements, and quality standards for the research, development, manufacturing and clinical trials it performs and for Commercial Sales of Product(s) made by it. |
5.4 | Except as provided in Article 6, DMI shall be the owner of all data, results and other information produced or obtained as a result of performing its obligations and responsibilities under this Agreement or having them performed on its behalf, including all data, results and other information from the research, development, manufacturing and clinical trials it performs or has performed on its behalf, all reports or other documents containing such data, results and other information, all Regulatory Approval applications and all documentation contained therein or relating thereto, and all Regulatory Approvals. |
5.5 | DMI agrees to mark all Product(s) sold by it, and shall cause any entity authorized by it to sell Product(s) to mark all Product(s) sold by the entity, with the applicable patent number(s) in accordance with the requirements of applicable laws and regulations in the country or countries of manufacture and sale. |
ARTICLE 6: INTELLECTUAL PROPERTY
6.1 | As of the Effective Date, IMM is the sole and exclusive owner of Intellectual Property covering or relating to the use of the ORP Diagnostic, including the patent applications listed in Appendix A attached hereto. IMM shall remain the owner of this Intellectual Property. |
6.2 | Subject to the terms and conditions of this Agreement, IMM shall also be the sole and exclusive owner of all Intellectual Property concerning or relating to the ORP Diagnostic, Product(s) and/or uses of either of them, which is conceived, created, discovered, produced or developed by either party, alone or jointly, during the term of this Agreement. Each party agrees to make prompt written disclosure to the other of all Intellectual Property concerning or relating to the ORP Diagnostic, Product(s) and/or uses of either of them, which is conceived, created, discovered, produced or developed by it during the term of this Agreement. |
6.3 | DMI agrees to cause its sublicensees, consultants and Third-Party contractors to assign to DMI all Intellectual Property concerning or relating to ORP Diagnostic, Product(s) and/or uses of either of them, which is conceived, created, discovered, produced or developed by any of them during the term of the sublicense, consultants agreement or Third-Party contract. DMI agrees to make prompt written disclosure to IMM of all such Intellectual Property concerning or relating to the ORP Diagnostic, Product(s) and/or uses of either of them, assigned to DMI by its sublicensees, consultants and/or Third-Party contractors. |
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6.4 | Subject to the terms and conditions of this Agreement, DMI agrees to, and does hereby, assign to IMM all of its right, title and interest in and to all Intellectual Property concerning or relating to the ORP Diagnostic, Product(s) and/or uses of either of them, which is conceived, created, discovered, produced or developed by it or which is assigned to DMI by its sublicensees, consultants and/or its Third-Party contractors during the term of this Agreement. |
6.5 | DMI will assist IMM in every proper way to obtain, maintain and enforce United States and foreign proprietary rights relating to any and all Intellectual Property now or hereafter owned by IMM which concerns or relates to the ORP Diagnostic, Product(s) and/or uses of either of them. To that end, DMI will: |
a. | Execute, verify and deliver such documents and perform such other acts (including providing evidence and witnesses within its control and appearing as a witness) as IMM may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such proprietary rights. |
b. | Where the assignment of proprietary rights to IMM is provided for herein, execute, verify and deliver assignments of such proprietary rights to IMM or its designee. |
c. | In the event IMM is unable for any reason, after reasonable effort, to secure DMIs signature on any document needed in connection with the actions specified in this Article 6, DMI hereby irrevocably designates and appoints IMM and its duly authorized officers and agents as its agent and attorney-in-fact, to act for and on DMIs behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of this Article 6 with the same legal force and effect as if executed by DMI. |
6.6 | DMI will take all necessary steps to obtain and maintain protection for all Intellectual Property now or hereafter owned by IMM concerning or relating to the ORP Diagnostic, Product(s) and/or uses of either of them, and DMI shall be responsible for, and shall bear all the costs of, obtaining and maintaining protection for this Intellectual Property. |
6.7 |
DMI will shall keep IMM advised as to all developments and shall provide IMM with all materials sufficiently in advance to allow IMM to review and provide input on any proposed filing prior to its filing, which input shall be considered in good faith and included where reasonably |
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possible by DMI. Notwithstanding the foregoing, DMI shall have the right to take such actions as are reasonably necessary, in its good faith judgment, to preserve all rights in IMMs Intellectual Property, and DMI shall notify IMM as soon as possible after taking any such action. |
6.8 | DMI will abandon Intellectual Property concerning or relating to the ORP Diagnostic, Product(s) and/or uses of either of them, now or hereafter owned by IMM, or any rights therein, only after notice to IMM at least thirty (30) days in advance and only after giving IMM an opportunity to assume responsibility for obtaining and/or maintaining the Intellectual Property protection proposed to be abandoned. |
ARTICLE 7: CONFIDENTIALITY
7.1 | Each party agrees to treat and maintain any of the other partys Proprietary Information which is in its possession, which comes into its possession during the term of this Agreement, or which is conceived, created, discovered, produced, developed or obtained by the other party as a result of performance under this Agreement, in confidence, and agrees not to disclose any such Proprietary Information to anyone and to not use any such Proprietary Information, except for the purposes of performing its obligations under this Agreement. Notwithstanding the foregoing, each party may disclose the other partys Proprietary Information to its employees, Affiliates, consultants, sublicensees and Third-Party contractors, or as is deemed necessary for any purpose set forth in, or relating to, this Agreement, provided that any recipients are bound by like duties of confidentiality, nondisclosure and nonuse as contained herein. Further, each party may disclose and use the other partys Proprietary Information with the written consent of the other party. |
7.2 | As of the Effective Date, this Agreement supersedes the confidentiality agreement between the parties dated on or about February 18, 2004, but only insofar as such confidentiality agreement relates to the subject matter of this Agreement. All Proprietary Information exchanged between the parties under such confidentiality agreement relating to the subject matter of this Agreement shall be deemed Proprietary Information hereunder and shall be subject to the terms of this Agreement. |
7.3 | Notwithstanding the foregoing, each party may disclose the existence and content of this Agreement and other agreements between the parties to advisors, agents, consultants, investors, sublicensees and Third-Party contactors who agree to be bound by like duties of confidentiality, nondisclosure and nonuse as contained herein. |
7.4 | Nothing contained herein shall in any way restrict or impair the right of either party to use, disclose, or otherwise deal with the other partys Proprietary Information which the party claiming waiver can demonstrate by written records: |
a. | is or becomes generally known to the public through no fault of the party; |
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b. | was known to it prior to the time of disclosure by the other party; |
c. | was independently developed by it and not in performance of its obligations under this Agreement; |
d. | was lawfully obtained without restrictions from a Third Party who has authority to make such disclosure; or |
e. | which the party is required to disclose pursuant to applicable law or pursuant to a requirement, subpoena, order or other request of a court, agency or other governmental entity, including required disclosures to a governmental entity or agency in connection with seeking any governmental or regulatory approval; in such case, the party shall notify the other party prior to such disclosure so as to give the other party an opportunity to protest the disclosure. |
ARTICLE 8: PUBLICITY, PUBLICATIONS AND PRESENTATIONS
8.1 |
The parties agree that the public announcement of the execution of this Agreement shall be in the form of a press release to be agreed on by the parties before or on the Effective Date and, thereafter, each party shall be entitled to make or publish any public statement consistent with the contents thereof. Thereafter, the parties will jointly discuss and agree on any statement to the public regarding this Agreement, the transactions contemplated herein, or clinical, regulatory and commercial developments relating to the Product(s), subject in each case to disclosure otherwise required by law or regulation as determined in good faith by each party. When a party wishes to make a public statement, it will notify the other party and give the other party at least three (3) business days to review and comment on such statement, and the parties will discuss and agree on the final content of the statement. If a party is not legally able to give notice as required by the previous sentence, it will furnish the other party with a copy of its disclosure as soon as practicable after the making thereof. The parties acknowledge the importance of supporting each others efforts to publicly disclose results and significant developments regarding Product(s). The principles to be observed in such public disclosures will be accuracy, the confidentiality requirements of Article 7, compliance |
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with regulatory agency regulations and guidelines, the advantage a competitor may gain from any public statements, and the standards and customs in the diagnostics industry for such disclosures by companies comparable to DMI and IMM. |
8.2 | IMM and DMI each acknowledge the other partys interest in publishing certain of the results of the work performed pursuant to the terms of this Agreement and in making presentations at scientific meetings to (i) obtain recognition within the scientific community, (ii) advance the state of scientific knowledge, and (iii) promote the Product(s). Both parties also recognize their mutual interest in obtaining valid patent rights for any inventions concerning or relating to the ORP Diagnostic, Product(s) and/or uses of either of them, and in protecting the confidentiality of their Proprietary Information. |
a. | Consequently, if either party desires to publish or present the results of the work performed pursuant to the terms of this Agreement, the publishing/presenting party shall provide the nonpublishing/nonpresenting party with a draft manuscript of the proposed publication or presentation. |
b. | The nonpublishing/nonpresenting party shall have thirty (30) days from receipt of the draft manuscript to review it. |
c. | The publishing/presenting party agrees to delete any information identified by the nonpublishing/nonpresenting party as its Proprietary Information upon written request of the nonpublishing/nonpresenting party received within the thirty-day review period. |
d. | Finally, in the event that the nonpublishing/nonpresenting party determines that the manuscript describes patentable subject matter, the nonpublishing/nonpresenting party shall so notify the publishing/presenting party in writing within the thirty-day review period. Upon receipt of this notification, the publishing/presenting party will delay publication of the manuscript or the presentation of the information contained in the manuscript up to ninety (90) days from the date of receipt of the written notice to allow time for a patent application to be prepared and filed. |
ARTICLE 9: REPRESENTATIONS AND WARRANTIES
9.1 | IMM represents and warrants that it has the right and authority to enter into, and perform its obligations under, this Agreement and that there are no outstanding grants, licenses, encumbrances or agreements, either written, oral or implied, inconsistent with this Agreement, or which this Agreement, or performance hereunder, would violate, breach, conflict with, or cause a default. |
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9.2 | IMM represents and warrants that it is the sole and exclusive owner of the patent applications listed in Appendix A and the inventions described therein. |
9.3 | IMM further represents and warrants that it has the full right and authority to grant DMI all of the rights granted hereunder. |
9.4 | DMI represents and warrants that it has the right and authority to enter into, and perform its obligations under, this Agreement and that there are no outstanding grants, licenses, encumbrances or agreements, either written, oral or implied, inconsistent with this Agreement, or which this Agreement, or performance hereunder, would violate, breach, conflict with, or cause a default. |
9.5 | EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 9 OR ELSEWHERE IN THIS AGREEMENT, DMI DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES, STATUTORY OR OTHERWISE. |
9.6 | EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 9 OR ELSEWHERE IN THIS AGREEMENT, IMM DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES, STATUTORY OR OTHERWISE. IN PARTICULAR, IMM DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES CONCERNING THE INTELLECTUAL PROPERTY OR PROPRIETARY INFORMATION IT CURRENTLY OWNS AND WHICH IT IS LICENSING TO DMI HEREUNDER. SPECIFICALLY, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IMM MAKES NO EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS (FOR A PARTICULAR PURPOSE OR OTHERWISE), QUALITY OR USEFULNESS OF ITS INTELLECTUAL PROPERTY OR PROPRIETARY INFORMATION. IMM DOES NOT WARRANT THE ACCURACY OF ANY INFORMATION INCLUDED WITHIN THE INTELLECTUAL PROPERTY OR PROPRIETARY INFORMATION OR THAT THE PRACTICE OF ITS INTELLECTUAL PROPERTY OR THE USE OF ITS PROPRIETARY INFORMATION WILL BE FREE FROM CLAIMS OF INFRINGEMENT BY THIRD PARTIES OR ANY OTHER RIGHTS OF THIRD PARTIES. |
9.7 | UNDER NO CIRCUMSTANCE SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES IN TORT, CONTRACT, STRICT LIABILITY OR OTHERWISE INCURRED BY THE OTHER PARTY OR ANY THIRD PARTY. |
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ARTICLE 10: DEFENSE OF THIRD PARTY CLAIMS
10.1 | With respect to claims or suits by Third Parties resulting from, or arising out of, the performance of this Agreement, the parties hereto agree as follows: |
a. | Each party shall have the right to control the defense of any claim or suit that may be brought against it with counsel of its own choosing and at its own expense. |
b. | Each party agrees to inform the other party as soon as practicable of any such claim or suit and to keep the other party informed about the claim or suit until resolved. |
c. | Each party agrees to cooperate with the other party to the extent necessary with respect to defending against any such claim or suit. All of the cooperating partys expenses shall be paid for, or reimbursed by, the other party. |
d. | Each party agrees that it will not settle any claim or suit brought against it without the input of the other party, which input will be considered in good faith. Further, each party agrees that it will not enter into any settlement that would have an adverse effect on the other party without the consent of the other party, which consent will not be unreasonably withheld. |
10.2 | Notwithstanding the foregoing, a party seeking indemnification from the other party must proceed as provided in the indemnification provisions of Article 12. |
ARTICLE 11: INFRINGEMENT OR MISAPPROPRIATION BY THIRD PARTIES
11.1 | Each party will inform the other as soon as possible upon learning of any infringement or misappropriation by any Third Party of any Intellectual Property currently or hereafter owned by IMM. |
11.2 |
IMM shall have the first option to proceed against such Third Party. DMI agrees that it will permit the use of its name in any litigation suit, will sign all necessary papers, will take all rightful oaths, and will do whatever else may be necessary to assist IMM in proceeding against the Third Party. All costs, expenses and disbursements of proceeding against such Third Party shall be borne by IMM, including reimbursement of expenses incurred by |
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DMI as a result of assisting IMM in proceeding against the Third Party. IMM shall keep DMI fully informed of all such proceedings. IMM shall not settle any such proceeding without the input of DMI, which input will be considered in good faith. In the event that IMM is successful in proceeding against the Third Party, all monies recovered by IMM for infringement or misappropriation by way of settlement or order of court shall be treated as follows. If it has not already done so, IMM shall deduct and reimburse DMI the attorneys fees, disbursements and costs expended by DMI in the conduct of proceeding against the Third Party. Next, IMM shall deduct and retain the attorneys fees, disbursements and costs expended by IMM in the conduct of proceeding against the Third Party. Any monies remaining after such deduction shall be divided as follows: [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
11.3 | In the event that IMM elects not to proceed, DMI shall have the right to proceed against the Third Party. IMM agrees that it will permit the use of its name in any litigation suit, will sign all necessary papers, will take all rightful oaths, and will do whatever else may be necessary to assist DMI in proceeding against the Third Party. All costs, expenses and disbursements of proceeding against such Third Party shall be borne by DMI, including reimbursement of expenses incurred by IMM as a result of assisting DMI in proceeding against the Third Party. DMI shall keep IMM fully informed of all such proceedings. DMI shall not settle any such proceeding without the input of IMM, which input will be considered in good faith. In the event that DMI is successful in proceeding against the Third Party, all monies recovered by DMI for infringement or misappropriation by way of settlement or order of court shall be treated as follows. If it has not already done so, DMI shall deduct and reimburse IMM the attorneys fees, disbursements and costs expended by IMM in the conduct of proceeding against the Third Party. Next, DMI shall deduct and retain the attorneys fees, disbursements and costs expended by DMI in the conduct of proceeding against the Third Party. Any monies remaining after such deduction shall be divided as follows: [Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission] |
ARTICLE 12: INDEMNIFICATION
12.1 |
DMI hereby agrees to indemnify, defend and hold harmless IMM, its officers, directors, employees, consultants and agents, from and against any liabilities, claims, demands, suits, actions, damages, costs, expense (including reasonable attorneys fees), or judgments (collectively Damages) arising out of, based upon, resulting from, or presented or brought on account of, any injuries, losses or damages sustained by any person or property in consequence of any act or omission of DMI, except |
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to the extent that such Damages arise out of, are based upon or result from (i) a material breach of the Agreement by IMM or (ii) the negligence or willful misconduct of IMM. |
12.2 | IMM (the Indemnified Party) shall promptly notify DMI (the Indemnifying Party) upon becoming aware of any claim or claims asserted or threatened against such Indemnified Party which could give rise to a right of indemnification under this Agreement; provided, however, that the failure to give such notice shall not relieve the Indemnifying Party of its indemnity obligation hereunder, except to the extent that such failure substantially prejudices its rights hereunder. |
12.3 | The Indemnifying Party shall have the right to defend, at its sole cost and expense, such claim by all appropriate proceedings, which proceedings shall be prosecuted diligently by the Indemnifying Party to a final conclusion or settled at the discretion of the Indemnifying Party; provided, however, that the Indemnifying Party may not enter into any compromise or settlement unless the Indemnified Party consents thereto, which consent shall not be unreasonably withheld, conditioned or delayed. |
12.4 | The Indemnified Party may participate in, but not control, the defense or settlement of any claim controlled by the Indemnifying Party pursuant to this Article 12 and shall bear its own costs and expenses with respect to such participation; provided, however, that the Indemnifying Party shall bear such costs and expenses if counsel for the Indemnifying Party shall have reasonably determined that such counsel may not properly represent both the Indemnifying Party and the Indemnified Party. |
12.5 | If the Indemnifying Party fails to notify the Indemnified Party within twenty (20) days after receipt of notice of a claim in accordance with Section 12.5 hereof that it elects to defend the Indemnified Party pursuant to this Article 12, or if the Indemnifying Party elects to defend the Indemnified Party but fails to prosecute or settle the claim diligently and promptly, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the claim by all appropriate proceedings, which proceedings shall be promptly and vigorously prosecuted by the Indemnified Party to a final conclusion or settlement; provided, however, that in no event shall the Indemnifying Party be required to indemnify the Indemnified Party for any amount paid or payable by the Indemnified Party in the settlement of any such claim agreed to without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed. |
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ARTICLE 13: INSURANCE
13.1 | DMI shall use Commercial Reasonable And Diligent Efforts to maintain insurance, including product liability insurance, with respect to its activities hereunder. Such insurance shall be in such amounts and subject to such deductibles as the parties may agree based upon standards prevailing in the industry at the time. Until such time as a clinical trial is begun, DMI may satisfy its obligations under this Section 13.1 through self-insurance to the same extent. At such time as a Product is being manufactured by DMI for Commercial Sales, DMI shall name IMM as an additional insured on any such policies. DMI shall use Commercially Reasonable And Diligent Efforts to provide IMM with written notice at least thirty (30) prior to a cancellation, non-renewal or material change in such insurance or self-insurance that could materially adversely affect the rights of IMM hereunder. DMIs insurance hereunder shall be primary and non-contributing. |
ARTICLE 14: TERM AND TERMINATION
14.1 | Unless terminated sooner as provided below, this Agreement will continue in full force and effect until all of the IMM Patents have expired and/or have been held invalid or unenforceable by a decision of a court, patent office or other governmental agency of competent jurisdiction, which decision cannot be appealed or was not appealed within the time allowed for appeal. |
14.2 | DMI may terminate this Agreement at any time upon six (6) months written notice to IMM. |
14.3 | The parties may at any time terminate this Agreement, in part or in its entirety, by mutual written agreement. |
14.4 | In the event of a breach or default in respect of any of the terms of this Agreement by either party, the other party shall give notice in writing, specifying in detail the nature of the breach or default. If the alleged breach or default is not cured within sixty (60) days after receipt of this notice, the party giving notice shall have the right to immediately terminate this Agreement by giving a second written notice to the breaching party. |
14.5 |
In the event of either party experiencing financial difficulties, that party shall immediately notify the other party to that effect. The party so notified shall have the right to terminate this Agreement within thirty (30) days of said notification. In the event IMM is the party having financial difficulties, DMI may, instead of terminating the Agreement, assume |
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IMMs financial obligations under this Agreement, and subtract an amount which is 150% of any payments made on IMMs behalf from any payments due to IMM pursuant to the terms of Articles 3 and 5. A party shall be considered as having financial difficulties by: |
a. | that partys commencement of a voluntary case under any applicable bankruptcy code or statute, or by its authorizing, by appropriate proceedings, the commencement of such a voluntary case; |
b. | that partys failing to receive dismissal of any involuntary case under any applicable bankruptcy code or statute (wherein the other party is not a party to the case) within sixty (60) days after initiation of such action or petition; |
c. | that partys seeking relief as a debtor under any applicable law of any jurisdiction relating to the liquidation or reorganization of debtors or to the modification or alteration of the rights of creditors, or by consenting to or acquiescing in such relief; |
d. | the entry of an order by a court of competent jurisdiction finding it to be bankrupt or insolvent, or ordering or approving its liquidation, reorganization, or any modification or alteration of the rights of its creditors, or assuming custody of, or appointing a receiver or other custodian for, all or a substantial part of its property or assets; or |
e. | that partys making an assignment for the benefit of, or entering into a composition with, its creditors, or appointing or consenting to the appointment of a receiver or other custodian for all or a substantial part of its property. |
14.6 | Upon termination of this Agreement for any reason except for a material breach or default by IMM or as provided in Section 14.1: |
a. | All rights and licenses granted to DMI hereunder shall revert to IMM, except that DMI shall have the right to sell any Product(s) in inventory as provided in Subsection (b) of this Section 14.6; |
b. | DMI shall cease all activities with respect to the Product(s), including all making (by DMI and/or by Third Parties for DMI), using, selling, offering for sale, marketing, commercializing, importing and exporting of Product(s). Notwithstanding the foregoing, DMI shall have the right to sell any Product(s) in inventory at prices of its chosing, provided DMI makes the payments and reports required by Article 3. |
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c. | If requested by IMM, DMI shall (i) remain responsible to supply the amounts of Product(s) required for Commercial Sales at the time of such termination for a reasonable period of time, not to exceed six (6) months from the date of termination, to allow IMM to find an alternate source of supply, (ii) make its personnel and other resources reasonably available to IMM as necessary for a reasonable period of time, not to exceed six (6) months from the date of termination, to effect an orderly transition of responsibilities, and (iii) provide and assign to IMM all clinical data, Regulatory Approval Applications, Regulatory Approvals, and all other regulatory documentation covering the Product(s) that DMI may have developed in its activities under this Agreement. If termination of the Agreement occurred because of a breach by DMI, then DMI will be responsible for all of the costs of performing these obligations. Otherwise, IMM will be responsible for all of the costs of performing these obligations. |
d. | DMIs sublicense(s) of its rights shall be transferred to IMM. The sublicense(s) will remain in full force and effect so long as the sublicensee(s) perform(s) the obligations of the sublicense(s), and IMM shall have all of the rights and benefits of the sublicense(s) (including the right to receive 100% of all payments due under the sublicense(s)) and shall be responsible for performing all of the obligations required of DMI by the sublicense(s). DMI will execute such documents as may be requested by IMM to attest to the transfer to IMM of all of its sublicense(s). |
14.7 | Upon termination of this Agreement as provided in Section 14.1 or upon termination of this Agreement for a material breach by IMM, the exclusive license and all of the other rights granted to DMI shall be deemed to be irrevocable and fully paid-up. |
14.8 | Upon termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation matured prior to the effective date of such termination, and neither party waives any rights it may have to remedies arising out of the termination or breach of surviving obligations. |
ARTICLE 15: MISCELLANEOUS
15.1 |
All payments, notices, reports, exchanges of information and other communications between the parties required by this Agreement shall be sent to the addresses set out below, or to such other addresses as may be designated by one party to the other by notice pursuant hereto, by (i) prepaid, certified air mail (which shall be deemed received by the other |
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party on the fifth business day following deposit in the mails), (ii) facsimile transmission or other electronic means of communication (which shall be deemed received when transmitted), with confirmation by first class letter, postage prepaid, or (iii) an express courier service, such as FedEx, DHL, Airborne or similar delivery service, with capabilities of tracking packages and/or letter delivery and providing verification of receipt (in the even of the use of such a service, receipt shall be on the date actually received, as verified by such delivery service). |
15.2 | No party to this Agreement shall be liable for failure to perform on its part any provision or part of this Agreement when such failure is due to fire, flood, strike or other industrial disturbance, unavoidable accident, war, embargo, inability to obtain materials, transportation controls, governmental actions, or other causes beyond the control of such party, but only for the period of delay imposed by such cause. |
15.3 | For purposes of this Agreement, business day means a day on which the banks in the United States are generally open to conduct their regular banking business. |
15.4 | Should any part or provision of this Agreement be held unenforceable or in conflict with the law, the validity of the remaining parts or provisions shall not be affected by such holding. |
15.5 | The failure of either party to enforce, at any time and for any period of time, a provision of this Agreement is not, and shall not be construed to be, a waiver of any such provision or of the right of such party to subsequently enforce each and every such provision. |
15.6 |
This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof, and |
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supersedes and replaces all prior negotiations, understandings and agreements, whether written or oral, including (i) the confidentiality agreement between the parties dated on or about February 18, 2004, in part, as provided in Section 7.2 hereof. |
15.7 | All amendments and modifications of this Agreement shall be in writing and executed by both parties. |
15.8 | Each party will obtain any government approval required in its country of domicile to enable this Agreement to become effective, or to enable any payment hereunder to be made, or any other obligation hereunder to be observed or performed. Each party will keep the other informed of progress in obtaining any such governmental approval and will cooperate with the other party in any such efforts. |
15.9 | This Agreement is made subject to any restrictions concerning the export of materials and technology from the United States which may be imposed upon or related to either party to this Agreement from time to time by the Government of the United States. Neither party will export, directly or indirectly, any Proprietary Information, Intellectual Property, or Product(s) or other materials utilizing such technology to any countries for which the United States Government or any agency thereof at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the Department of Commerce or other agency of the United States Government when required by applicable statute or regulation. |
15.10 | This Agreement may be assigned by either party only with the prior written consent of the other party, which consent will not be unreasonably withheld, and provided the assignee agrees to perform fully all of the responsibilities and obligations of the assignor hereunder. Any purported assignment in contravention of this Section 15.10 shall, at the option of the non-assigning party, be null and void and of no effect. No assignment shall release either party from responsibility for performance of any accrued obligation of such party hereunder. |
15.11 | This Agreement shall be binding upon and inure to the benefit of the parties, their respective officers and directors, and the permitted assignees of either party. |
15.12 | This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. Further, telefax signatures shall be binding. |
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15.13 | Nothing contained herein shall be deemed to create an agency, joint venture, amalgamation, partnership or similar relationship between IMM and DMI. |
15.14 | This Agreement does not confer, and shall not be construed as conferring, on either party, or any other entity, any proprietary right or license in or to the other partys Proprietary Information or Intellectual Property, except as expressly provided in this Agreement. |
15.15 | Ambiguities, if any, in this Agreement shall not be construed against any party, irrespective of which party may be deemed to have authored the ambiguous provision. |
15.16 | The Article headings are for convenience only and will not be deemed to affect in any way the language of the provisions to which they refer. |
IN WITNESS HEREOF, each party hereto acknowledges that the representative named below has authority to execute this Agreement on behalf of the respective party to form a legally binding contract and has caused this Agreement to be duly executed on its behalf.
DMI BioSciences, Inc. | Institute For Molecular Medicine, Inc. | |||||||
By: |
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By: |
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Name: | Bruce G. Miller | Name: | David Bar-Or, M.D. | |||||
Title: | President and CEO | Title: | Manager |
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APPENDIX A
[Information redacted pursuant to confidential treatment request filed with the Securities and Exchange Commission]
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Exhibit 10.6.3
FIRST AMENDMENT TO
EXCLUSIVE LICENSE AGREEMENT
This First Amendment To Exclusive License Agreement (First Amendment), effective as of April 17, 2009 (the First Amendment Effective Date), is by and between DMI Life Sciences, Inc., a Delaware corporation having its principal place of business at 8400 East Crescent Parkway, Suite 600, Greenwood Village, Colorado 80111 (DMI), and Institute For Molecular Medicine, Inc., a non-profit corporation organized and existing under the laws of Colorado, having a place of business at 3531 South Logan Street, Suite D318, Englewood, Colorado 80110 (IMM).
WHEREAS, DMI and IMM are parties to that certain Exclusive License Agreement effective as of July 11, 2005 (Agreement);
WHEREAS, DMI and IMM now desire to amend the Agreement to provide for changes in certain payments;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants, terms and agreements set forth below, the parties agree as follows.
A. Capitalized terms used herein and not defined herein shall have the meanings given to them in the Agreement.
B. A new Section 6.9 shall be added to Article 6 as follows:
6.9 | Notwithstanding anything to the contrary contained herein, from and after the First Amendment Effective Date, DMI agrees to reimburse IMM for, or pay on IMMs behalf, all of IMMs out of pocket expenses for obtaining and maintaining protection for Intellectual Property concerning or relating to Methylphenidate Derivatives, their uses and/or Product(s) now or hereafter owned by IMM, provided IMM obtains DMIs advance approval to pay or incur such expenses. In consideration therefor, DMI shall be entitled to subtract twice the total amount it has reimbursed to IMM or has paid on IMMs behalf from any payments or amounts due IMM hereunder, provided however, that the amount of each such payment or amount due IMM shall be reduced by no more than fifty percent (50%). |
C. Except as expressly provided in this First Amendment, the Agreement is not being amended, supplemented or otherwise modified, and all other terms, conditions and agreements of the Agreement are hereby ratified and confirmed and shall continue in full force and effect. This First Amendment shall be governed by and construed in all respects in accordance with the laws of the State of Colorado. This First Amendment may be executed in any number of counterparts and all such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.
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IN WITNESS HEREOF, each party hereto acknowledges that the representative named below has authority to execute this First Amendment on behalf of the respective party to form a legally binding contract and has caused this First Amendment to be duly executed on its behalf.
DMI Life Sciences, Inc. | Institute For Molecular Medicine, Inc. | |||||||
By: |
|
By: |
|
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Name: | Bruce G. Miller | Name: | David Bar-Or, M.D. | |||||
Title: | President and CEO | Title: | Executive Director |
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Exhibit 10.7
CHAY ENTERPRISES, INC. d/b/a
AMPIO PHARMACEUTICALS, INC.
2010 STOCK AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Chay Enterprises, Inc. (the Company), d/b/a Ampio Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan (the Plan). Upon the name change of the Company from Chay Enterprises, Inc. to Ampio Pharmaceuticals, Inc., the name of the Plan shall then be the Ampio Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan.
The purpose of the Plan is to encourage and enable the officers, employees, Non-Employee Directors and other key persons (including Consultants and prospective employees) of the Company and its Subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Companys welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating their efforts on the Companys behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
Act means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
Administrator means either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation committee. At such time as the Companys common stock is listed on a national securities exchange, the compensation committee will be comprised of not less than two Non-Employee Directors who are independent.
Award or Awards, except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights.
Award Certificate means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan. Each Award Certificate is subject to the terms and conditions of the Plan.
Board means the Board of Directors of the Company.
Cash-Based Award means an Award entitling the recipient to receive a cash-denominated payment.
Code means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.
Consultant means any natural person that provides bona fide services to the Company, and such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Companys securities.
Covered Employee means an employee who is a Covered Employee within the meaning of Section 162(m) of the Code.
Dividend Equivalent Right means an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the grantee.
Effective Date means the March 15, 2010.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
Fair Market Value of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is admitted to quotation on the OTC Bulletin Board, the National Association of Securities Dealers Automated Quotation System (NASDAQ), NASDAQ Global Market or another national securities exchange, the determination shall be made by reference to market quotations. If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations.
Incentive Stock Option means any Stock Option designated and qualified as an incentive stock option as defined in Section 422 of the Code.
Non-Employee Director means a member of the Board who is not also an employee of the Company or any Subsidiary.
Non-Qualified Stock Option means any Stock Option that is not an Incentive Stock Option.
Option or Stock Option means any option to purchase shares of Stock granted pursuant to Section 5.
Performance-Based Award means any Restricted Stock Award, Restricted Stock Units, Performance Share Award or Cash-Based Award granted to a Covered Employee that is intended to qualify as performance-based compensation under Section 162(m) of the Code and the regulations promulgated thereunder.
Performance Criteria means the criteria that the Administrator selects for purposes of establishing the Performance Goal or Performance Goals for an individual for a Performance Cycle. The Performance Criteria (which shall be applicable to the organizational level specified by the Administrator, including, but not limited to, the Company or a unit, division, group, or Subsidiary of the Company) that will be used to establish Performance Goals are limited to the following: achievement of key clinical milestones, earnings before interest, taxes, depreciation and amortization, net income (loss) (either before or after interest, taxes, depreciation and/or amortization), changes in the market price of the Stock, economic value-added, sales or revenue, acquisitions or strategic transactions, financing transactions, operating income (loss), cash flow (including, but not limited to, operating cash flow and free cash flow), return on capital, assets, equity, or investment, stockholder returns, return on sales, gross or net profit levels, productivity, expense, margins, operating efficiency, customer satisfaction, working capital, earnings (loss) per share of Stock, sales or market shares and number of customers, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.
Performance Cycle means one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Criteria will be measured for the purpose of determining a grantees right to and the payment of a Restricted Stock Award, Restricted Stock Units, Performance Share Award or Cash-Based Award. Each such period shall not be less than 12 months, nor more than five years.
Performance Goals means, for a Performance Cycle, the specific goals established in writing by the Administrator for a Performance Cycle based upon the Performance Criteria.
Performance Share Award means an Award entitling the recipient to acquire shares of Stock upon the attainment of specified Performance Goals.
Restricted Stock Award means an Award entitling the recipient to acquire, at such purchase price (which may be zero) as determined by the Administrator, shares of Stock subject to such restrictions and conditions as the Administrator may determine at the time of grant.
Restricted Stock Units means an Award of phantom stock units to a grantee.
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Sale Event shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Companys outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, or (iii) the sale of all of the Stock of the Company to an unrelated person or entity.
Sale Price means the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event.
Section 409A means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
Stock means the Common Stock, par value $0.0001 per share, of the Company, subject to adjustments pursuant to Section 3.
Stock Appreciation Right means an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.
Subsidiary means any corporation or other entity (other than the Company) in which the Company has at least a 50 percent interest, either directly or indirectly.
Ten Percent Owner means an employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.
Unrestricted Stock Award means an Award of shares of Stock free of any restrictions.
SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS
(a) Administration of Plan . The Plan shall be administered by the Administrator.
(b) Powers of Administrator . The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority:
(i) to select the individuals to whom Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if any, of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;
(iii) to determine the number of shares of Stock to be covered by any Award;
(iv) to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the forms of Award Certificates;
(v) to accelerate at any time the exercisability or vesting of all or any portion of any Award;
(vi) subject to the provisions of Section 5(b), to extend at any time the period in which Stock Options may be exercised; and
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(vii) at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.
(c) Delegation of Authority to Grant Options . Subject to applicable law, the Administrator, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Administrators authority and duties with respect to the granting of Options to individuals who are (i) not subject to the reporting and other provisions of Section 16 of the Exchange Act and (ii) not Covered Employees. Any such delegation by the Administrator shall include a limitation as to the amount of Options that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price and the vesting criteria. The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrators delegate or delegates that were consistent with the terms of the Plan.
(d) Award Certificate . Awards under the Plan shall be evidenced by Award Certificates that set forth the terms, conditions and limitations for each Award which may include, without limitation, the term of an Award and the provisions applicable in the event employment or service terminates.
(e) Indemnification . Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Companys certificate of incorporation or bylaws or any directors and officers liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company.
(f) Foreign Award Recipients . Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries may operate or have employees or other individuals eligible for Awards, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent the Administrator determines such actions to be necessary or advisable (and such subplans and/or modifications shall be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Section 3(a) hereof; and (v) take any action, before or after an Award is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or law.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable . The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 2,500,000 shares of Stock, subject in all cases to adjustment as provided in Section 3(b). For purposes of this limitation, the shares of Stock underlying any Awards that are forfeited, canceled, held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan. In the event the Company repurchases shares of Stock on the open market, such shares shall not be added to the shares of Stock available for issuance under the Plan.
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Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that Stock Options or Stock Appreciation Rights with respect to no more than 400,000 shares of Stock may be granted to any one individual grantee during any one calendar year period. The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.
(b) Changes in Stock . Subject to Section 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Companys capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Incentive Stock Options, (ii) the number of Stock Options or Stock Appreciation Rights that can be granted to any one individual grantee and the maximum number of shares that may be granted under a Performance-Based Award, (iii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, and (v) the exercise price for each share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan, without changing the aggregate exercise price ( i.e ., the exercise price multiplied by the number of Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation Rights remain exercisable. The Administrator shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration cash dividends paid other than in the ordinary course or any other extraordinary corporate event. The adjustment by the Administrator shall be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional shares.
(c) Mergers and Other Transactions . Except as the Administrator may otherwise specify with respect to particular Awards in the relevant Award Certificate, in the case of and subject to the consummation of a Sale Event, the Plan and all outstanding Awards granted hereunder shall terminate, unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto for the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree (after taking into account any acceleration hereunder). In the event of such termination, (i) the Company shall have the option (in its sole discretion) to make or provide for a cash payment to the grantees holding Options and Stock Appreciation Rights, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of shares of Stock subject to outstanding Options and Stock Appreciation Rights (to the extent then exercisable (after taking into account any acceleration hereunder) at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options and Stock Appreciation Rights; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding Options and Stock Appreciation Rights held by such grantee. The Administrator shall also have the discretion to accelerate the vesting of all other Awards.
(d) Substitute Awards . The Administrator may grant Awards under the Plan in substitution for stock and stock based awards held by employees, directors or other key persons of another corporation in connection with the merger or consolidation of the employing corporation with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or stock of the employing corporation. The Administrator may direct that the substitute awards be granted on such terms and conditions as the Administrator considers appropriate in the circumstances. Any substitute Awards granted under the Plan shall not count against the share limitation set forth in Section 3(a).
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SECTION 4. ELIGIBILITY
Grantees under the Plan will be such full or part-time officers and other employees, Non-Employee Directors and key persons (including Consultants and prospective employees) of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a subsidiary corporation within the meaning of Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock Option.
Stock Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable. If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionees election, subject to such terms and conditions as the Administrator may establish.
(a) Exercise Price . The exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5 shall be determined by the Administrator at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the option price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market Value on the grant date.
(b) Option Term . The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than ten years after the date the Stock Option is granted. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the term of such Stock Option shall be no more than five years from the date of grant.
(c) Exercisability; Rights of a Stockholder . Stock Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Administrator at or after the grant date. The Administrator may at any time accelerate the exercisability of all or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.
(d) Method of Exercise . Stock Options may be exercised in whole or in part, by giving written or electronic notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the following methods to the extent provided in the Option Award Certificate:
(i) In cash, by certified or bank check or other instrument acceptable to the Administrator;
(ii) Through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the optionee on the open market or that have been beneficially owned by the optionee for at least six months and that are not then subject to restrictions under any Company plan. Such surrendered shares shall be valued at Fair Market Value on the exercise date;
(iii) By the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; or
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(iv) With respect to Stock Options that are not Incentive Stock Options, by a net exercise arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. Payment instruments will be received subject to collection. The transfer to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award Certificate or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee). In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the delivery and attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of delivered and attested shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.
(e) Annual Limit on Incentive Stock Options . To the extent required for incentive stock option treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent that any Stock Option exceeds this limit, it shall constitute a Non-Qualified Stock Option.
SECTION 6. STOCK APPRECIATION RIGHTS
(a) Exercise Price of Stock Appreciation Rights . The exercise price of a Stock Appreciation Right shall not be less than 100 percent of the Fair Market Value of the Stock on the date of grant.
(b) Grant and Exercise of Stock Appreciation Rights . Stock Appreciation Rights may be granted by the Administrator independently of any Stock Option granted pursuant to Section 5 of the Plan.
(c) Terms and Conditions of Stock Appreciation Rights . Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined from time to time by the Administrator. The term of a Stock Appreciation Right may not exceed ten years.
SECTION 7. RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Awards . The Administrator shall determine the restrictions and conditions applicable to each Restricted Stock Award at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.
(b) Rights as a Stockholder . Upon the grant of the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the voting of the Restricted Stock, subject to such conditions contained in the Restricted Stock Award Certificate. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Stock shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Stock are vested as provided in Section 7(d) below, and (ii) certificated Restricted Stock shall remain in the possession of the Company until such Restricted Stock is vested as provided in Section 7(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe.
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(c) Restrictions . Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award Certificate. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, if a grantees employment (or other service relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Stock that has not vested at the time of termination shall automatically and without any requirement of notice to such grantee from or other action by or on behalf of, the Company be deemed to have been reacquired by the Company at its original purchase price (if any) from such grantee or such grantees legal representative simultaneously with such termination of employment (or other service relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a stockholder. Following such deemed reacquisition of unvested Restricted Stock that is represented by physical certificates, a grantee shall surrender such certificates to the Company upon request without consideration.
(d) Vesting of Restricted Stock . The Administrator at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which the non-transferability of the Restricted Stock and the Companys right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of such pre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Stock and shall be deemed vested. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantees rights in any shares of Restricted Stock that have not vested shall automatically terminate upon the grantees termination of employment (or other service relationship) with the Company and its Subsidiaries and such shares shall be subject to the provisions of Section 7(c) above.
SECTION 8. RESTRICTED STOCK UNITS
(a) Nature of Restricted Stock Units . The Administrator shall determine the restrictions and conditions applicable to each Restricted Stock Unit at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees. At the end of the deferral period, the Restricted Stock Units, to the extent vested, shall be settled in the form of shares of Stock. To the extent that an award of Restricted Stock Units is subject to Section 409A, it may contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order for such Award to comply with the requirements of Section 409A.
(b) Election to Receive Restricted Stock Units in Lieu of Compensation . The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of future cash compensation otherwise due to such grantee in the form of an award of Restricted Stock Units. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator. Any such future cash compensation that the grantee elects to defer shall be converted to a fixed number of Restricted Stock Units based on the Fair Market Value of Stock on the date the compensation would otherwise have been paid to the grantee if such payment had not been deferred as provided herein. The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate. Any Restricted Stock Units that are elected to be received in lieu of cash compensation shall be fully vested.
(c) Rights as a Stockholder . A grantee shall have the rights as a stockholder only as to shares of Stock acquired by the grantee upon settlement of Restricted Stock Units; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the phantom stock units underlying his Restricted Stock Units, subject to such terms and conditions as the Administrator may determine.
(d) Termination . Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantees right in all Restricted Stock Units that have not vested shall automatically terminate upon the grantees termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
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SECTION 9. UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock . The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award under the Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.
SECTION 10. CASH-BASED AWARDS
Grant of Cash-Based Awards . The Administrator may, in its sole discretion, grant Cash-Based Awards to any grantee in such number or amount and upon such terms, and subject to such conditions, as the Administrator shall determine at the time of grant. The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in shares of Stock, as the Administrator determines.
SECTION 11. PERFORMANCE SHARE AWARDS
(a) Nature of Performance Share Awards . The Administrator may, in its sole discretion, grant Performance Share Awards independent of, or in connection with, the granting of any other Award under the Plan. The Administrator shall determine whether and to whom Performance Share Awards shall be granted, the Performance Goals, the periods during which performance is to be measured, and such other limitations and conditions as the Administrator shall determine.
(b) Rights as a Stockholder . A grantee receiving a Performance Share Award shall have the rights of a stockholder only as to shares actually received by the grantee under the Plan and not with respect to shares subject to the Award but not actually received by the grantee. A grantee shall be entitled to receive shares of Stock under a Performance Share Award only upon satisfaction of all conditions specified in the Performance Share Award Certificate (or in a performance plan adopted by the Administrator).
(c) Termination . Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 18 below, in writing after the Award is issued, a grantees rights in all Performance Share Awards shall automatically terminate upon the grantees termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
SECTION 12. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
(a) Performance-Based Awards . Any employee or other key person providing services to the Company and who is selected by the Administrator may be granted one or more Performance-Based Awards in the form of a Restricted Stock Award, Restricted Stock Units, Performance Share Awards or Cash-Based Award payable upon the attainment of Performance Goals that are established by the Administrator and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Administrator. The Administrator shall define in an objective fashion the manner of calculating the Performance Criteria it selects to use for any Performance Cycle. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual. The Administrator, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Cycle in order to prevent the dilution or enlargement of the rights of an individual (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development, (ii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or (iii) in response to, or in anticipation
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of, changes in applicable laws, regulations, accounting principles, or business conditions provided however, that the Administrator may not exercise such discretion in a manner that would increase the Performance-Based Award granted to a Covered Employee. Each Performance-Based Award shall comply with the provisions set forth below.
(b) Grant of Performance-Based Awards . With respect to each Performance-Based Award granted to a Covered Employee, the Administrator shall select, within the first 90 days of a Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of the Code) the Performance Criteria for such grant, and the Performance Goals with respect to each Performance Criterion (including a threshold level of performance below which no amount will become payable with respect to such Award). Each Performance-Based Award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets. The Performance Criteria established by the Administrator may be (but need not be) different for each Performance Cycle and different Performance Goals may be applicable to Performance-Based Awards to different Covered Employees.
(c) Payment of Performance-Based Awards . Following the completion of a Performance Cycle, the Administrator shall meet to review and certify in writing whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved and, if so, to also calculate and certify in writing the amount of the Performance-Based Awards earned for the Performance Cycle. The Administrator shall then determine the actual size of each Covered Employees Performance-Based Award, and, in doing so, may reduce or eliminate the amount of the Performance-Based Award for a Covered Employee if, in its sole judgment, such reduction or elimination is appropriate.
(d) Maximum Award Payable . The maximum Performance-Based Award payable to any one Covered Employee under the Plan for a Performance Cycle is 200,000 shares of Stock (subject to adjustment as provided in Section 3(c) hereof) or $500,000 in the case of a Performance-Based Award that is a Cash-Based Award.
SECTION 13. DIVIDEND EQUIVALENT RIGHTS
(a) Dividend Equivalent Rights . A Dividend Equivalent Right may be granted hereunder to any grantee as a component of an award of Restricted Stock Units, Restricted Stock Award or Performance Share Award or as a freestanding award. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Certificate. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or installments. A Dividend Equivalent Right granted as a component of an award of Restricted Stock Units, a Restricted Stock Award or a Performance Share Award may provide that such Dividend Equivalent Right shall be settled upon settlement or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award. A Dividend Equivalent Right granted as a component of Restricted Stock Units, a Restricted Stock Award or a Performance Share Award may also contain terms and conditions different from such other Award.
(b) Interest Equivalents . Any Award under this Plan that is settled in whole or in part in cash on a deferred basis may provide in the grant for interest equivalents to be credited with respect to such cash payment. Interest equivalents may be compounded and shall be paid upon such terms and conditions as may be specified by the grant.
(c) Termination . Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantees rights in all Dividend Equivalent Rights or interest equivalents granted as a component of an award of Restricted Stock Units, Restricted Stock Award or Performance Share Award that has not vested shall automatically terminate upon the grantees termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
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SECTION 14. TRANSFERABILITY OF AWARDS
(a) Transferability . Except as provided in Section 14(b) below, during a grantees lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantees legal representative or guardian in the event of the grantees incapacity. No Awards shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order. No Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be null and void.
(b) Administrator Action . Notwithstanding Section 14(a), the Administrator, in its discretion, may provide either in the Award Certificate regarding a given Award or by subsequent written approval that the grantee (who is an employee or director) may transfer his or her Awards (other than any Incentive Stock Options or Restricted Stock Units) to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Award. In no event may an Award be transferred by a grantee for value.
(c) Family Member . For purposes of Section 14(b), family member shall mean a grantees child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the grantees household (other than a tenant of the grantee), a trust in which these persons (or the grantee) have more than 50 percent of the beneficial interest, a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons (or the grantee) own more than 50 percent of the voting interests.
(d) Designation of Beneficiary . Each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantees death. Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantees estate.
SECTION 15. TAX WITHHOLDING
(a) Payment by Grantee . Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company with respect to such income. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee. The Companys obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned on tax withholding obligations being satisfied by the grantee.
(b) Payment in Stock . Subject to approval by the Administrator, a grantee may elect to have the Companys minimum required tax withholding obligation as it relates to a grantee satisfied, in whole or in part, by authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due.
SECTION 16. SECTION 409A AWARDS
To the extent that any Award is determined to constitute nonqualified deferred compensation within the meaning of Section 409A (a 409A Award), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable upon a separation from service (within the meaning of Section 409A) to a grantee who is then considered a specified employee (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantees separation from
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service, or (ii) the grantees death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.
SECTION 17. TRANSFER, LEAVE OF ABSENCE, ETC .
For purposes of the Plan, the following events shall not be deemed a termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employees right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.
SECTION 18. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holders consent. The Administrator is specifically authorized to exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or effect the repricing of such Awards through cancellation and re-grants. To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code, or to ensure that compensation earned under Awards qualifies as performance-based compensation under Section 162(m) of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders. Nothing in this Section 18 shall limit the Administrators authority to take any action permitted pursuant to Section 3(b) or 3(c).
SECTION 19. STATUS OF PLAN
With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Companys obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.
SECTION 20. GENERAL PROVISIONS
(a) No Distribution . The Administrator may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.
(b) Delivery of Stock Certificates . Stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantees last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantees last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic book entry records). Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of
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Stock pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or applicable), that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed, quoted or traded. All Stock certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded. The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.
(c) Stockholder Rights . Until Stock is deemed delivered in accordance with Section 20(b), no right to vote or receive dividends or any other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award.
(d) Other Compensation Arrangements; No Employment Rights . Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary.
(e) Trading Policy Restrictions . Option exercises and other Awards under the Plan shall be subject to the Companys insider trading policies and procedures, as in effect from time to time.
(f) Forfeiture of Awards under Sarbanes-Oxley Act . If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, then any grantee who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any Award received by such individual under the Plan during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission, as the case may be, of the financial document embodying such financial reporting requirement.
SECTION 21. EFFECTIVE DATE OF PLAN
This Plan shall become effective on the date of ratification by the Board of Directors of the Company on March 5, 2010, having already received stockholder approval on March 1, 2010. No grants of Stock Options and other Awards may be made hereunder after the tenth anniversary of the Effective Date and no grants of Incentive Stock Options may be made hereunder after the tenth anniversary of the date the Plan is approved by the Board.
SECTION 22. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware, applied without regard to conflict of law principles.
DATE APPROVED BY BOARD OF DIRECTORS: | March 5, 2010 | |
DATE APPROVED BY STOCKHOLDERS: | March 1, 2010 |
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Exhibit 10.8
DMI LIFE SCIENCES, INC.
AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION,
INVENTION ASSIGNMENT,
AND ARBITRATION AGREEMENT
As a condition of my employment with DMI Life Sciences, Inc., its subsidiaries, affiliates, successors or assigns (together, the Company ), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by Company, I agree to the following provisions of this DMI Life Sciences, Inc. At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (this Agreement ):
1. At- Will Employment.
I UNDERSTAND AND ACKNOWLEDGE THAT MY EMPLOYMENT WITH THE COMPANY IS FOR NO SPECIFIED TERM AND CONSTITUTES AT-WILL EMPLOYMENT. I ALSO UNDERSTAND THAT ANY REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND NOT VALID UNLESS IN WRITING AND SIGNED BY THE PRESIDENT OR CEO OF THE COMPANY. ACCORDINGLY, I ACKNOWLEDGE THAT MY EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD CAUSE OR FOR ANY OR NO CAUSE, AT MY OPTION OR AT THE OPTION OF THE COMPANY, WITH OR WITHOUT NOTICE. I FURTHER ACKNOWLEDGE THAT THE COMPANY MAY MODIFY JOB TITLES, SALARIES, AND BENEFITS FROM TIME TO TIME AS IT DEEMS NECESSARY.
2. Confidential Information.
A. Company Information. I agree that during and after my employment with the Company, I will hold in the strictest confidence, and will not use (except for the benefit of the Company during my employment) or disclose to any person, firm, or corporation (without written authorization of the President, CEO, or the Board of Directors of the Company) any Company Confidential Information. I understand that my unauthorized use or disclosure of Company Confidential Information during my employment may lead to disciplinary action, up to and including immediate termination and legal action by the Company. I understand that Company Confidential Information means any non-public information that relates to the actual or anticipated business, research or development of the Company, or to the Companys technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Companys products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on which I called or with which I may become acquainted during the term of my employment), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, and other business information; provided, however, Company Confidential Information does not include any of the foregoing items to the extent the same have become publicly known and made generally available through no wrongful act of mine or of others. I understand that nothing in this Agreement is intended to limit employees rights to discuss the terms, wages, and working conditions of their employment, as protected by applicable law.
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B. Former Employer Information. I agree that during my employment with the Company, I will not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any former or concurrent employer or other person or entity. I further agree that I will not bring onto the premises of the Company or transfer onto the Companys technology systems any unpublished document, proprietary information, or trade secrets belonging to any such employer, person, or entity unless consented to in writing by both the Company and such employer, person, or entity.
C. Third Party Information. I recognize that the Company may have received and in the future may receive from third parties associated with the Company, e.g., the Companys customers, suppliers, licensors, licensees, partners, or collaborators ( Associated Third Parties ), their confidential or proprietary information ( Associated Third Party Confidential Information ). By way of example, Associated Third Party Confidential Information may include the habits or practices of Associated Third Parties, the technology of Associated Third Parties, requirements of Associated Third Parties, and information related to the business conducted between the Company and such Associated Third Parties. I agree at all times during my employment with the Company and thereafter to hold in the strictest confidence, and not to use or to disclose to any person, firm, or corporation, any Associated Third Party Confidential Information, except as necessary in carrying out my work for the Company consistent with the Companys agreement with such Associated Third Parties. I further agree to comply with any and all Company policies and guidelines that may be adopted from time to time regarding Associated Third Parties and Associated Third Party Confidential Information. I understand that my unauthorized use or disclosure of Associated Third Party Confidential Information or violation of any Company policies during my employment may lead to disciplinary action, up to and including immediate termination and legal action by the Company.
D. Provision of Confidential Information. The Company agrees to provide me with certain Confidential Information regarding the Company that will enable me to optimize the performance of my duties to the Company. I agree that the Company will have no obligation to make available to me any of its Confidential Information after the termination of my employment.
3. Inventions.
A. Inventions Retained and Licensed. I have attached hereto as Exhibit A , a list describing all inventions, discoveries, original works of authorship, developments, improvements, and trade secrets that were conceived in whole or in part by me prior to my employment with the Company and to which I have any right, title, or interest, and which relate to the Companys proposed business, products, or research and development ( Prior Inventions ); or, if no such list is attached, I represent and warrant that there are no such Prior Inventions. Furthermore, I represent and warrant that if any Prior Inventions are included on Exhibit A , they will not materially affect my ability to perform all obligations under this Agreement. If, in the course of my employment with the Company, I incorporate into or use in connection with any product, process, service, technology, or other work by or on behalf of the Company any Prior Invention, I hereby grant to the Company a non-exclusive, royalty-free, fully paid-up, irrevocable, perpetual, transferable, worldwide license, with the right to grant and authorize sublicenses, to make, have made, modify, use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise exploit such Prior Invention without restriction, including, without limitation, as part of or in connection with such product, process, service, technology, or other work, and to practice any method related thereto.
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B. Assignment of Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and agree to assign and hereby do irrevocably assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks, or trade secrets, whether or not patentable or registrable under patent, copyright, or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company and within the scope of my employment with the Company or with the use of Companys equipment, supplies, facilities, or Company Confidential Information (collectively referred to as Inventions ). I further acknowledge that all original works of authorship that are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and that are protectable by copyright are works made for hire, as that term is defined in the United States Copyright Act. I understand and agree that the decision whether or not to commercialize or market any Inventions is within the Companys sole discretion and for the Companys sole benefit, and that no royalty or other consideration will be due to me as a result of the Companys efforts to commercialize or market any such Inventions.
C. Moral Rights. Any assignment to the Company of Inventions includes all rights of attribution, paternity, integrity, modification, disclosure and withdrawal, and any other rights throughout the world that may be known as or referred to as moral rights, artists rights, droit moral, or the like (collectively, Moral Rights ). To the extent that Moral Rights cannot be assigned under applicable law, I hereby waive and agree not to enforce any and all Moral Rights, including, without limitation, any right to identification of authorship or limitation on subsequent modification that I may have in the assigned Inventions.
D. Maintenance of Records. I agree to keep and maintain adequate, current, accurate, and authentic written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, electronic files, reports, or any other format that may be specified by the Company. The records are and will be available to and remain the sole property of the Company at all times.
E. Further Assurances. I agree to assist the Company, or its designee, at the Companys expense, in every proper way to secure the Companys rights in the Inventions and any rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, and all other instruments that the Company shall deem proper or necessary in order to apply for, register, obtain, maintain, defend, and enforce such rights, and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title, and interest in and to such Inventions and any rights relating thereto, and testifying in a suit or other proceeding relating to such Inventions and any rights relating thereto. I further agree that my obligations under this Section 3.E shall continue after the termination of this Agreement. If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature with respect to any Inventions, including, without limitation, to apply for or to pursue any
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application for any United States or foreign patents or copyright registrations covering such Inventions, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead, to execute and file any papers and oaths, and to do all other lawfully permitted acts with respect to such Inventions with the same legal force and effect as if executed by me.
4. Conflicting Employment.
A. Current Obligations. I agree that during the term of my employment with the Company, I will not engage in or undertake any other employment, occupation, consulting relationship, or commitment that is directly related to the business in which the Company is now involved or becomes involved or has plans to become involved, nor will I engage in any other activities that conflict with my obligations to the Company, except as set forth in 4.B.
B. Prior And Current Relationships. Without limiting Section 4.A, I represent that I have no other agreements, relationships, or commitments to any other person or entity that conflict with my obligations to the Company under this Agreement or my ability to become employed and perform the services for which I am being hired by the Company. I hereby disclose to Company, and Company acknowledges that it has been informed, of my employment by DMI BioSciences, Inc. Company and I agree that such employment does not create a conflict with my obligations to the Company under this Agreement or my ability to become employed and perform the services for which I am being hired by the Company. I agree to immediately inform Company of any change in my employment by DMI BioSciences, Inc. which may create a conflict with my obligations to the Company under this Agreement or my ability to remain employed by Company and perform the services for which I am being hired by the company. I further agree that if I have signed a confidentiality agreement or similar type of agreement with any former or current employer or other entity, I will comply with the terms of any such agreement to the extent that its terms are lawful under applicable law. I represent and warrant that after undertaking a careful search (including searches of my computers, cell phones, electronic devices, and documents), I have returned all property and confidential information belonging to all prior employers. Moreover, I agree to fully indemnify the Company, its directors, officers, agents, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns for all verdicts, judgments, settlements, and other losses incurred by any of them resulting from my breach of my obligations under any agreement to which I am a party or obligation to which I am bound, as well as any reasonable attorneys fees and costs if the plaintiff is the prevailing party in such an action, except as prohibited by law.
5. Returning Company Documents. Upon separation from employment with the Company or on demand by the Company during my employment, I will immediately deliver to the Company, and will not keep in my possession, recreate, or deliver to anyone else, any and all Company property, including, but not limited to, Company Confidential Information, Associated Third Party Confidential Information, as well as all devices and equipment belonging to the Company (including computers, handheld electronic devices, telephone equipment, and other electronic devices), Company credit cards, records, data, notes, notebooks, reports, files, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, photographs, charts, any other documents and property, and reproductions of any and all of the aforementioned items that were developed by me pursuant to my employment with the Company, obtained by me in connection
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with my employment with the Company, or otherwise belonging to the Company, its successors, or assigns, including, without limitation, those records maintained pursuant to Section 3.D. I also consent to an exit interview to confirm my compliance with this Section 5.
6. Termination Certification. Upon separation from employment with the Company, I agree to immediately sign and deliver to the Company the Termination Certification attached hereto as Exhibit B . I also agree to keep the Company advised of my home and business address for a period of three (3) years after termination of my employment with the Company, so that the Company can contact me regarding my continuing obligations provided by this Agreement.
7. Notification of New Employer. In the event that I leave the employ of the Company, I hereby grant consent to notification by the Company to my new employer about my obligations under this Agreement.
8. Solicitation of Employees; Covenant Not to Compete.
A. Solicitation of Employees. I agree that for a period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether voluntary or involuntary, with or without cause, I shall not either directly or indirectly solicit any of the Companys employees to leave their employment, or attempt to solicit employees of the Company, either for myself or for any other person or entity. I agree that nothing in this Section 8 shall affect my continuing obligations under this Agreement during and after this twelve (12) month period, including, without limitation, my obligations under Section 2.A.
B. Covenant Not to Compete.
(1) I agree that during the course of my employment and for a period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether with or without cause, at the option either of the Company or myself, with or without notice, I will not, either directly or indirectly, (a) serve as an advisor, agent, consultant, director, employee, officer, partner, proprietor or otherwise of, (b) have any ownership interest in (except for passive ownership of one percent (1%) or less of any entity whose securities have been registered under the Securities Act of 1933, as amended, or Section 12 of the Securities Exchange Act of 1934, as amended) or (c) participate in the organization, financing, operation, management or control of, any business in competition with the Companys business as conducted by the Company at any time during the course of my employment with the Company. Company and I agree that my continued employment by, and/or my ownership interest in, DMI BioSciences, Inc. after termination of my employment with the Company will not be a violation of the covenants contained in this subsection (B)(1). The foregoing covenant shall cover my activities in every part of the Territory, as defined herein, to the extent permitted by applicable law. Territory shall mean: (a) all counties in the State of Colorado, (b) all other states or territories of the United States, and (c) all other countries of the world; provided that, with respect to clauses (b) and (c), the Company maintains non-trivial operations, facilities, or customers in such geographic area prior to the date of the termination of my relationship with the Company.
(2) I acknowledge and agree that my fulfillment of the obligations contained in this Agreement, including, but not limited to, my obligation neither to use, except for the benefit of
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G. Signatures. This Agreement may be signed in two counterparts, each of which shall be deemed an original, with the same force and effectiveness as though executed in a single document.
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Exhibit A
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
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Identifying Number or Brief Description |
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ü | No inventions or improvements | |
Additional Sheets Attached |
Signature of Employee: |
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Print Name of Employee: |
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Date: |
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Exhibit B
DMI Life Sciences, Inc.
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, any other documents or property, or reproductions of any and all aforementioned items belonging to DMI Life Sciences, Inc., its subsidiaries, affiliates, successors or assigns (together, the Company ).
I further certify that I have complied with all the terms of the Companys At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein) conceived or made by me (solely or jointly with others), as covered by that agreement.
I further agree that, in compliance with the At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement, I will preserve as confidential all Company Confidential Information and Associated Third Party Confidential Information, including trade secrets, confidential knowledge, data, or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, databases, other original works of authorship, customer lists, business plans, financial information, or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants, or licensees.
I also agree that for twelve (12) months from this date, I will not either directly or indirectly solicit any of the Companys employees to leave their employment, or to enter into an employment, consulting, contractor, or other relationship with any other person, firm, business entity, or organization (including with myself), nor will I engage in any conduct that would violate my non-competition obligations under Section 8(B) of the At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement. I agree that nothing in this paragraph shall affect my continuing obligations under the At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement during and after this twelve (12) month period, including, without limitation, my obligations under Section 2A thereof.
After leaving the Companys employment, I will be employed by in the position of: .
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Address for Notifications: |
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Exhibit C
DMI Life Sciences, Inc.
CONFLICT OF INTEREST GUIDELINES
It is the policy of DMI Life Sciences, Inc. to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics. Accordingly, all officers, employees, and independent contractors must avoid activities that are in conflict, or give the appearance of being in conflict, with these principles and with the interests of the Company. The following are potentially compromising situations that must be avoided:
1. Revealing confidential information to outsiders or misusing confidential information. Unauthorized divulging of information is a violation of this policy whether or not for personal gain and whether or not harm to the Company is intended. (The At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement elaborates on this principle and is a binding agreement.)
2. Accepting or offering substantial gifts, excessive entertainment, favors, or payments that may be deemed to constitute undue influence or otherwise be improper or embarrassing to the Company.
3. Participating in civic or professional organizations that might involve divulging confidential information of the Company.
4. Initiating or approving personnel actions affecting reward or punishment of employees or applicants where there is a family relationship or is or appears to be a personal or social involvement.
5. Initiating or approving any form of personal or social harassment of employees.
6. Investing or holding outside directorship in suppliers, customers, or competing companies, including financial speculations, where such investment or directorship might influence in any manner a decision or course of action of the Company.
7. Borrowing from or lending to employees, customers, or suppliers.
8. Acquiring real estate of interest to the Company.
9. Improperly using or disclosing to the Company any proprietary information or trade secrets of any former or concurrent employer or other person or entity with whom obligations of confidentiality exist.
10. Unlawfully discussing prices, costs, customers, sales, or markets with competing companies or their employees.
11. Making any unlawful agreement with distributors with respect to prices.
12. Improperly using or authorizing the use of any inventions that are the subject of patent claims of any other person or entity.
13. Engaging in any conduct that is not in the best interest of the Company.
Each officer, employee, and independent contractor must take every necessary action to ensure compliance with these guidelines and to bring problem areas to the attention of higher management for review. Violations of this conflict of interest policy may result in discharge without warning.
Exhibit 10.9
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (Agreement) is effective as of , 2010, by and between Ampio Pharmaceuticals, Inc., a Delaware corporation (the Company or Ampio), and (Name) (Indemnitee).
WHEREAS, in order to induce Indemnitee to provide, or continue to provide, services to the Company, the Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to the maximum extent permitted by law;
WHEREAS, Indemnitee does not regard the current protection available as adequate under the present circumstances, and the Indemnitee and other directors, officers, employees, agents and fiduciaries of the Company may not be willing to continue to serve in such capacities without additional protection;
WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining liability insurance for the Companys directors, officers, employees, agents and fiduciaries, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees, agents and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited; and
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, Indemnitee to the fullest extent permitted by applicable law so that Indemnitee will serve or continue to serve the Company free from undue concern that he or she will not be so indemnified.
NOW, THEREFORE, in consideration of the foregoing and Indemnitees agreement to provide, or continue to provide, services to the Company, the Company and Indemnitee hereby agree as set forth below.
1. Certain Definitions.
(a) Change in Control shall mean, and shall be deemed to have occurred if, on or after the date of this Agreement, (i) any person (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company acting in such capacity or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the beneficial owner (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 20% of the total voting power represented by the Companys then outstanding Voting Securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Companys stockholders was approved by a vote of at least two thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of related transactions) all or substantially all of the Companys assets.
(b) Claim shall mean any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, whether formal or informal, investigative or other.
(c) References to the Company shall include, in addition to Ampio Pharmaceuticals, Inc., any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which Ampio Pharmaceuticals, Inc. (or any of its wholly owned subsidiaries) is a party which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.
(d) Expenses shall mean any and all expenses (including attorneys fees, expert witness fees, and all other costs, expenses and obligations incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, to be a witness in or to participate in, any action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation, whether formal or informal), judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) of any Claim regarding any Indemnifiable Event and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement.
(e) Expense Advance shall mean an advance payment of Expenses to Indemnitee pursuant to Section 3(a).
(f) Indemnifiable Event shall mean any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or any subsidiary of the Company, or is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity.
(g) Independent Legal Counsel shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 2(b) hereof, who shall not have otherwise performed services for the Company or Indemnitee within the last three years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).
(h) References to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to serving at the request of the Company shall include any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner not opposed to the best interests of the Company as referred to in this Agreement.
(i) Voting Securities shall mean any securities of the Company that vote generally in the election of directors.
2. Indemnification.
(a) Indemnification of Expenses. The Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee was or is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any Claim by reason of (or arising in part out of) any Indemnifiable Event against Expenses, including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses. Such payment of Expenses shall be made by the Company as soon as practicable but in any event no later than five (5) business days after written demand by Indemnitee therefor is presented to the Company.
(b) Change in Control. The Company agrees that if there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Companys Board of Directors who were directors immediately prior to such Change in Control), then with respect to all matters thereafter arising concerning the rights of Indemnitee to payments of Expenses and Expense Advances under this Agreement or
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any other agreement or under the Companys Certificate of Incorporation or Bylaws as now or hereafter in effect, Independent Legal Counsel, if desired by Indemnitee, shall be selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law and the Company agrees to abide by such opinion. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to indemnify fully such counsel against any and all Expenses (including attorneys fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. Notwithstanding any other provision of this Agreement, the Company shall not be required to pay Expenses of more than one Independent Legal Counsel in connection with all matters concerning a single Indemnitee, and such Independent Legal Counsel shall be the Independent Legal Counsel for any or all other Indemnitees unless (i) the Company otherwise determines, or (ii) any Indemnitee shall provide a written statement setting forth in detail a reasonable objection to such Independent Legal Counsel representing other Indemnitees.
(c) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement other than Section 9 hereof, to the extent that Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any Claim regarding any Indemnifiable Event, Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in connection therewith.
3. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid by the Company to Indemnitee as soon as practicable but in any event no later than 30 days after written demand by Indemnitee therefor to the Company. Indemnitee hereby agrees to repay to the Company all amounts advanced to Indemnitee hereunder if it is ultimately determined that Indemnitee is not entitled to indemnification hereunder. The Companys obligation to advance Expenses shall terminate with respect to any Claim as to which the Indemnitee shall have entered a plea of guilty or nolo contendere, or an equivalent plea acknowledging guilt.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to Indemnitees right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement; provided however that the failure to so provide notice to the Company shall not relieve the Company from any liability that it may have to Indemnitee hereunder unless the Companys ability to participate in the defense of such claim was materially and adversely affected by such failure. Notice to the Company shall be directed to the Chief Executive Officer of the Company at the headquarters office of the Company (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitees power, to the extent that doing so is consistent with the exercise of the Indemnitees rights under the federal and state Constitutions. The Company shall provide Indemnitee with such information and cooperation as Indemnitee may reasonably require, to the extent that doing so is consistent with the Companys obligation to cooperate with regulatory or law enforcement agencies. Indemnitee understands that such obligation may include, as deemed necessary or advisable by the Company, a waiver of any attorney-client or other privilege held by the Company.
(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.
(d) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 3(b) hereof, the Company has liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies. The Company shall keep Indemnitee reasonably informed as to the status of all relevant insurance matters.
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(e) Selection of Counsel. In the event the Company shall be obligated hereunder to pay the Expenses of any Claim the Company, if appropriate, shall be entitled to assume the defense of such Claim with counsel approved by Indemnitee (not to be unreasonably withheld) upon the delivery to Indemnitee of written notice of the Companys election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Claim; provided that, (i) Indemnitee shall have the right to employ Indemnitees separate counsel in any such Claim at Indemnitees Expense, and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and Expenses of Indemnitees separate counsel shall be at the Expense of the Company.
4. Additional Indemnification Rights; Non-Exclusivity.
(a) Scope. The Company hereby agrees to indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Companys Certificate of Incorporation, the Companys Bylaws (as now or hereafter in effect) or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties rights and obligations hereunder except as set forth in Section 9(a) hereof.
(b) Non-Exclusivity. The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Companys Certificate of Incorporation, its Bylaws (as now hereafter in effect), any other agreement, any vote of stockholders or disinterested directors, the General Corporation Law of the State of Delaware, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.
5. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, provision of the Companys Certificate of Incorporation, Bylaw (as now or hereafter in effect) or otherwise) of the amounts otherwise indemnifiable hereunder.
6. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses incurred in connection with any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
7. No Imputation. The knowledge or actions, or failure to act, of any director, officer, agent or employee of the Company or the Company itself shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
8. Liability Insurance. For the duration of Indemnitees service as a director or officer or other agent of the Company, and thereafter for so long as Indemnitee shall be subject to any pending or possible Claim by reason of any Indemnifiable Event, the Company shall use reasonable efforts, taking into account the scope and amount of coverage available relative to the cost thereof, to obtain and maintain in effect policies of liability insurance providing coverage for directors and officers of the Company. Indemnitee acknowledges that at the date hereof, the Company maintains no such policy in effect. To the extent the Company in the future maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Companys directors, if Indemnitee is a director; or of the Companys officers, if Indemnitee is not a director of the Company but is an officer; or of the Companys key employees, agents or fiduciaries, if Indemnitee is not an officer or director but is a key employee, agent or fiduciary.
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9. Exceptions. Notwithstanding any other provision of this Agreement, the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for acts, omissions or transactions if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is prohibited by applicable law.
(b) Claims Initiated by Indemnitee. To indemnify or advance Expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (i) with respect to actions or proceedings brought to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Companys Certificate of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required under Section 145 of the Delaware General Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance Expense payment or insurance recovery, as the case may be.
(c) Lack of Good Faith. To indemnify Indemnitee for any Expenses incurred by the Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by the Indemnitee in such proceeding was not made in good faith or was frivolous.
(d) Claims Under Section 16(b) . To indemnify Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute; provided that the Company shall advance expenses in connection with Indemnitees defense of a claim under Section 16(b), which advances shall be repaid to the Company if it is ultimately determined that Indemnitee is not entitled to indemnification of such expenses.
10. Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitees estate, spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.
11. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), spouses, heirs and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect, and whether by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform 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. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary (as applicable) of the Company or of any other enterprise at the Companys request.
13. Attorneys Fees. In the event that any action is instituted by Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with respect to such action, regardless of whether Indemnitee is ultimately successful in such action, and shall be entitled to the advancement of Expenses with respect to such action, unless as a part of such action a court of competent jurisdiction over such action determines that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to
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enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in defense of such action (including costs and Expenses incurred with respect to Indemnitees counterclaims and cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action.
14. Notice. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and signed for by the party addressed, on the date of such delivery, or (ii) if mailed by domestic certified or registered mail with postage prepaid, on the third business day after the date postmarked. The address for notice to Indemnitee is as shown on the signature page of this Agreement, and the address for the Company is its headquarters office , or as subsequently modified by either party by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive and only proper forum for adjudicating such a claim.
16. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
17. Choice of Law. This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware as applied to contracts between Delaware residents entered into and to be performed entirely within the State of Delaware.
18. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.
19. Amendment and Termination. Due to the uncertain application of any statutes of limitations that may govern any Claim, this Agreement shall be of indefinite duration. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.
20. Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries or affiliated entities.
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date first above written.
Ampio Pharmaceuticals, Inc. | ||
By: |
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Title: |
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AGREED TO AND ACCEPTED
INDEMNITEE: |
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(signature) |
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(print name of Indemnitee) |
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(address) |
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Exhibit 10.10
INVESTOR RELATIONS CONSULTING AGREEMENT
This Consulting Agreement (the Agreement) effective as of March 2, 2010 is entered into by and between Ampio Pharmaceuticals Inc, formerly referred to as DMI Life Sciences, Inc., a Colorado corporation (herein referred to as the Company) and Redwood Consultants, LLC, a California Limited Liability Company (herein referred to as RC or the Redwood) or its successors, designees or assignees, and replaces and supercedes any and all other agreements between the above parties.
RECITALS
WHEREAS , Company is a publicly-held corporation with its common stock traded on the OTC BB Market under the symbol CHYE ; and
WHEREAS , Company desires to engage the services of Redwood to advise the Company regarding investor communications, and public relations with existing shareholders, brokers, dealers and other investment professionals as to the Companys current and proposed activities, and to consult with management concerning such Company activities;
NOW THEREFORE , in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows:
1. Term of Consultancy . Company hereby agrees to retain Redwood to act in an advisory and consulting capacity to the Company and Redwood hereby agrees to provide services to the Company commencing upon March 2, 2010 and ending, unless extended, on January 12, 2011.
2. Duties of Redwood . Redwood agrees that it will generally provide the following specified advisory and consulting services through its officers, employees, consultants and other professionals during the term specified in Section 1:
(a) | Advise, consult and assist the Company in developing and implementing appropriate plans and means for presenting the Company and its business plans, strategy and personnel to the financial community, assist in establishing an image for the Company in the financial community, and assist in creating the foundation for subsequent financial public relations efforts; |
(b) | Assist in making new introductions of the Company to the financial community; |
(c) | With the cooperation and support of the Company and its management and directors, maintain an awareness during the term of this Agreement of the Companys plans, strategy and personnel, as they may evolve during such period, and consult and assist the Company in communicating appropriate information regarding such plans, strategy and personnel to the financial community; |
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(d) | Advise, assist and consult the Company with respect to its (i) relations with stockholders, (ii) relations with brokers, dealers, analysts and other investment professionals, and (iii) financial public relations generally; |
(e) | Perform the functions generally assigned to shareholder relations and public relations departments in major corporations, including responding to telephone and written inquiries (which may be referred to Redwood by the Company); if requested, assist in the preparation of press releases for the Company with the Companys involvement and approval of all Company press releases, reports and other communications with or to shareholders, the investment community and the general public; consulting with respect to the timing, form, distribution and other matters related to such releases, reports and communications; and, at the Companys request and subject to the Companys securing its own rights to the use of its names, marks, and logos, consulting with respect to corporate symbols, logos, names, assist in the presentation of such symbols, logos and names, and other matters relating to corporate image; |
(f) | Under the Companys direction and approval, disseminate information regarding the Company to shareholders, brokers, dealers, other investment community professionals and the general investing public; |
(g) | Under the Companys direction and approval conduct meetings, in person or by telephone, with brokers, dealers, analysts and other investment professionals to communicate with them regarding the Companys plans, goals and activities, and assist the Company in preparing for press conferences and other forums involving the media, investment professionals and the general investment public; |
(h) | At the Companys request, and under the Companys direction and approval, review business plans, strategies, mission statements budgets, proposed transactions and other plans for the purpose of advising the Company of the public relations implications thereof; and, |
(i) | Otherwise perform as the Companys advisor and consultant for public relations and relations with financial professionals. |
3. Duties of Company . The Parties hereto recognize that the success of Redwoods services to be provided pursuant to this Agreement rely heavily on cooperation and communication between Redwood and the Company. In this regard, the Company and Redwood agree that the Company will use its best efforts in cooperating and communicating with Redwood, and in so doing, agrees to perform all of the acts set out in Exhibit A hereto, attached to this Agreement and incorporated herein by reference as though fully set out. The Parties further acknowledge that all of the items listed in Exhibit A are material to the ability of Redwood to perform its obligations hereunder, and that the Companys failure to use its best efforts to satisfy the requirements of Exhibit A would materially hinder Redwoods performance herein. The above notwithstanding, the Company agrees and understands that the status of the Companys Intellectual Property rights and defenses constitutes an important part of Redwoods understanding of and ability to perform its duties pursuant to this Agreement.
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4. Allocation of Time and Energies . Redwood hereby promises to perform and discharge faithfully the targeted responsibilities which may be assigned to Redwood from time to time by the officers and duly authorized representatives of the Company in connection with the conduct of its financial and public relations and communications activities, so long as such activities are in compliance with applicable securities laws and regulations. Redwood and staff shall diligently and thoroughly provide the advisory and consulting services required hereunder. Although no specific hours-per-day requirement is required of Redwood pursuant to this Agreement; Redwood and the Company agree that Redwood will perform the duties set forth herein above in a diligent and professional manner. The parties acknowledge and agree that a disproportionately large amount of the effort to be expended and the costs to be incurred by Redwood are expected to occur within or shortly after the first two months of the effectiveness of this Agreement. In addition to and notwithstanding the above, the Company represents and warrants that it is, as of the date of this Agreement, fully compliant with the reporting requirements of the United States Securities and Exchange Commission (SEC). The Company represents and warrants that it will continue to maintain compliance with applicable SEC rules and regulations governing the filings required by public corporations. In the event that the Company is either not fully compliant as of the effective date of this Agreement, or at any time during the term of this Agreement, then the Company and Redwood shall agree on a schedule for achieving such compliance. In the event that the parties cannot agree on such a schedule, then the dispute resolution provisions of Articles 15 and 17 herein may be invoked by either party.
5. Remuneration . As full and complete compensation for services described in this Agreement, the Company shall compensate RC by issuing Company common stock as follows:
5.1 For undertaking this engagement and for other good and valuable consideration, the Company agrees to issue to Consultant an initial payment of eight hundred fifteen thousand (815,000) restricted shares of the Companys Common Stock (Common Stock or compensation shares) to be delivered to Consultant within ten (10) business days of the signing of this Agreement. This initial payment shall be issued to the Consultant immediately following execution of this Agreement and shall, when issued and delivered to Consultant, be fully paid and non-assessable. The Company understands and agrees that Consultant has foregone significant opportunities to accept this engagement and that the Company derives substantial benefit from the execution of this Agreement and the ability to announce its relationship with Consultant. The 815,000 restricted shares of Common Stock issued as an initial payment, therefore, constitute payment for Consultants agreement to consult to the Company and are a nonrefundable, non-apportionable, and non-ratable retainer; such shares of common stock are not a prepayment for future services. If the Company decides to terminate this Agreement prior to January 12, 2011 for any reason whatsoever, it is agreed and understood that Consultant will not be requested or demanded by the Company to return any of the shares of Common Stock paid to it as the initial payment hereunder. Further, if and in the event the Company is acquired in whole or in part, during the term of this agreement, it is agreed and understood Consultant will not be requested or demanded by the Company to return any of the 815,000 restricted shares of Common Stock paid to it hereunder. It is further agreed that if at any time during the term of this agreement, the Company or substantially all of the Companys assets are merged with or acquired by another entity, or some other change occurs in the legal entity that constitutes the Company, the Consultant shall retain and will not be requested by the Company to return any of the shares.
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5.2 The compensation shares issued pursuant to this agreement shall be issued in the name of Redwood Consultants, LLC, Tax ID # 68-047-3637 or its designees to be provided under separate cover email.
5.3 With each transfer of shares of Common Stock to be issued pursuant to this Agreement (collectively, the Shares); Company shall cause to be issued a certificate representing the Common Stock and, if required by applicable law, a written opinion of counsel for the Company stating that said shares are validly issued, fully paid and non-assessable and that the issuance and eventual transfer of them to Redwood has been duly authorized by the Company. Company warrants that all Shares and share equivalents issued to Redwood pursuant to this Agreement shall have been validly issued, fully paid and non-assessable and that the issuance and any transfer of them to Redwood shall have been duly authorized by the Companys board of directors.
5.4 Redwood acknowledges that the eight hundred fifteen thousand (815,000) Rule 144 restricted shares of Common Stock to be issued pursuant to this Agreement (collectively, the 144 Securities) have not been registered under the Securities Act of 1933, and accordingly are restricted securities within the meaning of Rule 144 of the Act. As such, the 144 Securities may not be resold or transferred unless the Company has received an opinion of counsel reasonably satisfactory to the Company that such resale or transfer is exempt from the registration requirements of that Act. The Company agrees to take any and all action(s) necessary to clear the subject securities of restriction upon presentation of any Rule 144(d) application by Redwood or its broker, including, but not limited to: (1) Authorizing the Companys transfer agent to remove the restrictive legend on the subject securities; (2) Expediting either the acquisition of a legal opinion from Companys counsel authorizing the removal of the restrictive legend, or accepting a third party legal opinion acknowledging same; and (3) Cooperating and communicating with Redwood and its broker in order to use Companys best efforts to clear the subject securities of restriction as soon as possible after presentation of a Rule 144(d) application by Redwood (or its broker) to either the Company and/or the Companys transfer agent. Further, the Company agrees to not unreasonably withhold or delay approval of any application filed by Redwood under Rule 144(d) of the Act to clear the subject securities of restriction.
(a) | Redwood and the Company acknowledge and agree that Redwood will suffer irreparable harm and anticipated and actual damages in the event that the Company unreasonably withholds or delays any Rule 144(d) application by Redwood to either the Company or the Companys transfer agent. The Company agrees that money damages could not compensate Redwood for its irreparable harm. |
(b) |
Redwood and the Company therefore agree that the Company shall have a period of five (5) business days from the date Redwoods Rule 144(d) application is tendered to either the Company or its transfer agent by either Redwood and/or its broker, to take any and all necessary action to clear the subject securities of restriction, consistent the covenants in Section 5.4 above. The Company and Redwood agree that this five (5) day |
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period is reasonable and consistent with industry standards concerning the handling and processing of restricted securities under Rule 144 by publicly traded companies. The Company also acknowledges that Redwoods ability to clear the subject securities of restriction, by virtue of the Companys best efforts, cooperation, covenants and representations in this regard is a material part of this Agreement and is a reasonable and material expectation of Redwood in entering into this Agreement. Should events occur that require further expense of time beyond this five (5) day time period, the Company and Redwood shall reasonably agree in a writing signed by each to an extension for a specific amount of time. In no event shall an extension be agreed to unless the Company comports with its best efforts obligations, as set out above, and communicates with Redwood bona fide and reasonable attempts at meeting Companys obligations to clear the subject restricted securities, as described herein. Any written extension herein may be executed in counterparts by the principals of the Company and Redwood, and facsimile signatures may be tendered in lieu of originals. It is agreed that the separate signature of each principal on any agreement to extend time shall be deemed a complete original. |
(c) | Should the Company fail to successfully take any and all actions necessary to clear the subject securities of restriction within the five (5) day time period after Redwood or its brokers presentation of a Rule 144(d) application, or seek to extend time as provided for above in sub-section (b), and in light of the irreparable harm that Redwood will suffer in the event of any intentional and/or unintentional delay in Redwoods Rule 144(d) application, Company herein irrevocably consents and agrees that Redwood shall be entitled to injunctive relief in order to immediately enforce Redwoods right to removal of the restrictive legend on the Companys securities. Company further agrees that Redwood shall be entitled to immediately seek the injunctive relief contemplated and described herein in the Superior Court of California, Marin County. Both the Company and Redwood agreed that Redwoods access to injunctive relief; and the Companys consent to Redwoods ability to obtain such injunctive relief shall not otherwise amend, supersede or modify the parties agreement to submit any other disputes to mediation and arbitration as provided herein. |
5.5 In connection with the acquisition of Securities hereunder, Redwood represents and warrants to the Company, to the best of its/his knowledge, as follows:
(a) | Redwood acknowledges that Redwood has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning an investment in the Securities, and any additional information which Redwood has requested. |
(b) |
Redwoods investment in restricted securities is reasonable in relation to Redwoods net worth, which is in excess of ten (10) times Redwoods cost basis in the Shares. Redwood has had experience in investments in restricted and publicly traded securities, and Redwood has had experience in investments in speculative securities and other investments which involve the risk of loss of investment. Redwood |
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acknowledges that an investment in the Securities is speculative and involves the risk of loss. Redwood has the requisite knowledge to assess the relative merits and risks of this investment without the necessity of relying upon other advisors, and Redwood can afford the risk of loss of his entire investment in the Securities. Redwood is (i) an accredited investor, as that term is defined in Regulation D promulgated under the Securities Act of 1933, and (ii) a purchaser described in Section 25102 (f) (2) of the California Corporate Securities Law of 1968, as amended. |
(c) | Redwood is acquiring the Securities for Redwoods own account for long-term investment and not with a view toward resale or distribution thereof except in accordance with applicable securities laws. |
5.6 Additionally, for a period of two years after the effective date hereof, should the Company make any public offering of its securities pursuant to an effective registration statement under the Securities Acts of 1933 or 1934, as amended, Redwood shall be entitled, and the Company agrees, to include in such registration, pari passu with the Piggyback Registration Rights available to founding management; any or all of the common stock or common stock equivalents issued to Redwood by the Company as consideration hereunder [commonly referred to as Piggyback Registration Rights]. Such piggyback registration rights include, at Redwoods option, registration on Form S-1.
5.7 In addition to the above, in the event that the Company requests that Redwood introduce Company to an investment banker or other person or entity that is lawfully engaged in the business of assisting public and private companies with raising debt and/or equity capital (a financing); Redwood agrees to use its best efforts to make such introductions. Both the Company and Redwood agree that any and all transactions and discussions and negotiations relating thereto will be the exclusive and sole responsibility of Company. Company and Redwood agree that Redwood has informed Company that Redwood is not a FINRA member firm. In the event that Company obtains debt or equity financing as a result of Redwoods introduction, Company agrees to pay Redwood a Finders Fee equal to three percent (3%) of the total amount raised on behalf of the company. This Finders Fee shall be payable in cash, directly to Redwood, by the financing source at the time of the Closing on the financing.
6. Non-Assignability of Services . Redwoods services under this contract are offered to Company only and may not be assigned by Company to any entity with which Company merges or which acquires the Company or substantially all of its assets. In the event of such merger or acquisition, all compensation to Redwood herein under the schedules set forth herein shall remain non cancellable and due and payable, and any compensation received by Redwood may be retained in the entirety by Redwood, all without any reduction or pro-rating and shall be considered and remain fully paid and non-assessable. Notwithstanding the non-Assignability of Redwoods services, Company shall assure that in the event of any merger, acquisition, or similar change of form of entity, that its successor entity shall agree to complete all obligations to Redwood, including the provision and transfer of all compensation herein, and the preservation of the value thereof consistent with the rights granted to Redwood by the Company herein, and to Shareholders.
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7. Expenses . Redwood agrees to pay for all its expenses (phone, mailing, labor, etc.), other than extraordinary items (travel required by/or specifically requested by the Company, luncheons or dinners to large groups of investment professionals, mass faxing to a sizable percentage of the Companys constituents, investor conference calls, print advertisements in publications, etc.) approved by the Company prior to its incurring an obligation for reimbursement.
8. Indemnification. The Company warrants and represents that all oral communications, written documents or materials furnished to Redwood by the Company with respect to financial affairs, operations, profitability and strategic planning of the Company are accurate and Redwood may rely upon the accuracy thereof without independent investigation. The Company will protect, indemnify and hold harmless Redwood against any claims or litigation including any damages, liability, cost and reasonable attorneys fees as incurred with respect thereto resulting from Redwoods performance of its obligations under this Agreement, communication or dissemination of any said information, documents or materials excluding any such claims or litigation resulting from Redwoods communication or dissemination of information not provided or authorized by the Company.
9. Representations and Warranties . The Company represents and warrants that any information furnished to Redwood will contain no untrue statement of any material fact nor omit any material facts, which would make the information misleading. The Company represents and warrants that it will adhere to any and all local, state and federal laws, rules and regulations governing the Companys businesses and any and all actions and activities involving the Company, its shareholders and the investment community. The Company further warrants that if the circumstances relating to information or documents furnished to Redwood change at any time, the Company will inform Redwood promptly of the changes and immediately deliver to Redwood documents or information necessary to ensure the continued accuracy and completeness of all information and documents. Redwood represents to the Company that it will not, to the best of Redwoods knowledge and belief, make any untrue statement of material fact. Redwood further represents and warrants to the Company that, to the best of Redwoods knowledge and belief, all actions taken by it, on behalf of the Company, in connection with its advisory services will be conducted in compliance with all applicable state and federal laws. Further, Redwood shall comply with any procedures that might be reasonably imposed by the Company or its legal counsel to ensure compliance with such laws. Both the Company and Redwood agree and acknowledge that they and their employees, advisors and consultants and therefore the parties duties and obligations under this Agreement will be performed and governed by applicable state and federal law, including without limitation the federal securities laws. All parties expressly understand, agree and acknowledge that Redwoods performance of its duties hereunder cannot and therefore will in no way be measured by the price of the Companys common stock, nor the trading volume of the Companys common stock. It is also understood that the Company is entering into this Agreement with Redwood Consultants, LLC (RC), a California Limited Liability Company and not any individual member of RC, and, as such, Redwood will not be deemed to have breached this Agreement if any member, officer or director of RC leaves the firm or dies or becomes physically unable to perform any meaningful activities during the term of the Agreement, provided the Redwood otherwise performs its obligations under this Agreement. Redwood represents that it is not required to maintain any licenses and registrations under federal or any state regulations necessary to perform the services set forth herein. Redwood acknowledges that, to the best of its knowledge, the performance of the
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services set forth under this Agreement will not violate any rule or provision of any regulatory agency having jurisdiction over Redwood. Redwood acknowledges that, to the best of its knowledge, Redwood and its officers and directors are not the subject of any investigation, claim, decree or judgment involving any violation of the SEC or securities laws. Redwood further acknowledges that it is not a securities Broker Dealer or a registered investment advisor. Company acknowledges that, to the best of its knowledge, that it has not violated any rule or provision of any regulatory agency having jurisdiction over the Company. Company acknowledges that, to the best of its knowledge, Company is not the subject of any investigation, claim, decree or judgment involving any violation of the SEC or securities laws.
10. Legal Representation . The Company acknowledges that it has been represented by independent legal counsel in the preparation of this Agreement. Redwood represents that it has consulted with independent legal counsel and/or tax, financial and business advisors, to the extent the Redwood deemed necessary.
11. Status as Independent Contractor . Redwoods engagement pursuant to this Agreement shall be as independent contractor, and not as an employee, officer or other agent of the Company. Neither party to this Agreement shall represent or hold itself out to be the employer or employee of the other. Redwood further acknowledges the consideration provided hereinabove is a gross amount of consideration and that the Company will not withhold from such consideration any amounts as to income taxes, social security payments or any other payroll taxes. All such income taxes and other such payment shall be made or provided for by Redwood and the Company shall have no responsibility or duties regarding such matters. Neither the Company nor the Redwood possesses the authority to bind each other in any agreements without the express written consent of the entity to be bound.
12. Attorneys Fee . If any legal action or any arbitration or other proceeding is brought for the enforcement or interpretation of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with or related to this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys fees and other costs in connection with that action or proceeding, in addition to any other relief to which it or they may be entitled.
13. Waiver . The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by such other party.
14. Notices . All notices, requests, and other communications hereunder shall be deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the other party at the address as set forth herein below:
To the Company:
Ampio Pharmaceuticals, Inc.
8400 East Crescent Parkway Suite 600
Greenwood Village, CO 80111
Attn:
Don Wingerter, CEO
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To Redwood:
Redwood Consultants, LLC
250 Bel Marin Keys Blvd., Bldg. A-1
Novato, CA 94949
Attn:
Jens Dalsgaard, Managing Director
It is understood that either party may change the address to which notices for it shall be addressed by providing notice of such change to the other party in the manner set forth in this paragraph.
15. Term and Termination of Agreement .
a. | This Agreement shall remain in full force and effect for a term of twelve (12) months. During the terms of this Agreement the indemnity provisions set forth paragraph in 14 shall survive any termination of this Agreement. |
b. |
After the original term of this agreement is expired, this agreement may be extended upon either party giving the other party 30 days written notice, which written notice shall be sent by certified mail return receipt. Extension of the agreement shall be effective on the 30 th day after said written notice has been mailed or delivered, whichever is earlier. |
c. | Notwithstanding anything to the contrary, if either party materially breaches this agreement, the non-breaching party may, at his or its election, immediately terminate the agreement thereby relieving the non-breaching party of any obligation there under. Alternatively, the non-breaching party may proceed with performance without waiving any rights under the agreement. A material breach will mean and refer to a partys failure to comply with any covenants or obligation specified in this agreement. |
d. | In the event of a dispute arising between parties the dispute shall be submitted to mediation before the Judicial Arbitration and Mediation Services (JAMS) in San Francisco, California. The parties shall bear the costs of mediation equally. In the event that either party refuses to participate in mediation said party shall be prohibited from recovering attorney fees notwithstanding anything to the contrary in this agreement. |
e. | If mediation should fail to resolve the dispute between the parties, the matter shall be submitted to JAMS for binding arbitration. Discovery rights shall be preserved in said arbitration with regard to depositions and demands for production of documents as if the dispute were pending in San Francisco County Superior Court. Otherwise, discovery shall be prohibited. The costs of arbitration shall be equally shared by the parties until the dispute is either settled or adjudicated, at which time the arbitration may award said fees and costs to the prevailing party. |
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16. Choice of Law, Jurisdiction and Venue . This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of California. The parties agree that California will be the venue of any dispute and will have jurisdiction over all parties.
17. Arbitration . Any controversy or claim arising out of or relating to this Agreement, or pertaining to any and all prior or subsequent agreements between or amongst the parties; or the alleged breach thereof, or relating to Redwoods activities or remuneration under this Agreement, shall be settled by binding arbitration in California, in accordance with the applicable rules of the JAMS, and judgment on the award rendered by the arbitrator(s) shall be binding on the parties and may be entered in any court having jurisdiction as provided by Paragraph 14 herein. The provisions of Title 9 of Part 3 of the California Code of Civil Procedure, including section 1283.05, and successor statutes, permitting expanded discovery proceedings shall be applicable to all disputes that are arbitrated under this paragraph.
18. Complete Agreement . This Agreement contains the entire agreement of the parties relating to the subject matter hereof. This Agreement and its terms may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.
This ten (10) page agreement has been duly signed by the Parties hereto:
AGREED TO:
Company | Ampio Pharmaceuticals, Inc. | |||||||||
Date: |
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By: |
/s/ Don Wingerter |
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Don Wingerter, CEO | ||||||||||
Redwood | REDWOOD CONSULTANTS, LLC | |||||||||
Date: |
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By: |
/s/ Jens Dalsgaard |
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Jens Dalsgaard, Managing Direct |
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EXHIBIT A
Redwood Consultants, LLC is committed to ensuring
That our clients get the most out of their relationship with us.
We ask that you keep our partnership strong by
Making the following commitments:
1. | Update your current company website. If you dont have one, you should immediately commission and construct one using an experienced designer. Redwood can provide contacts for web designers if needed. The website must be able to capture investor information that will be automatically forwarded to InvestorInfo@RedwoodConsultants.com so that we can promptly send the full investor package, or make contact via fax or telephone call . |
2. | As requested by Redwood, be prepared to ensure that the Companys website is up-to-date; including posting timely (which may include the making of weekly updates) website updates. |
3. | Place our contact information in the Investor section of your website and at the bottom of press releases: |
For further information please contact:
Redwood Consultants, LLC
415-884-0348
4. | Prepare a comprehensive PowerPoint presentation for Redwood to use to introduce your company to potential investors and brokers. |