UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

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): November 3, 2017

 

 

MELINTA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE   001-35405   45-4440364

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

300 George Street, Suite 301, New Haven, CT   06511
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (312) 767-0291

Cempra, Inc.

6320 Quadrangle Drive, Suite 360

Chapel Hill, NC 27517

(Former name or former address, if changed since last report)

 

 

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:

 

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Introductory Note

On November 3, 2017, Cempra, Inc., a Delaware corporation (“Cempra” or the “Company”), completed its business combination with Melinta Therapeutics, Inc., a privately held Delaware corporation dedicated to the development and commercialization of novel antibiotics (“Melinta”), in accordance with the terms of an Agreement and Plan of Merger and Reorganization, dated as of August 8, 2017, as amended on each of September 6, 2017 and October 24, 2017 (as so amended, the “Merger Agreement”) by and among the Company, Melinta and Castle Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”). On November 3, 2017, pursuant to the Merger Agreement, Merger Sub merged with and into Melinta, with Melinta surviving the merger and becoming a wholly owned subsidiary of the Company (the “Merger”). Concurrently with the effectiveness of the Merger, the Company changed its name to Melinta Therapeutics, Inc. and Melinta changed its name to Melinta Subsidiary Corp.

 

Item 1.01. Entry into a Material Definitive Agreement.

Concurrently with the closing of the Merger, the Company entered into a Registration Rights Agreement with certain pre-closing Melinta stockholders (the “Registration Rights Agreement”). Under the Registration Rights Agreement, the Company is obligated to file, within 90 calendar days from the date of execution of the Registration Rights Agreement, a shelf registration statement on Form S-3 providing for the resale by such stockholders of the common stock of the Company, par value $0.001 (the “Company Common Stock”) issued or issuable to such stockholders in the Merger (the “Registrable Securities”). Stockholder Vatera Healthcare Partners LLC (the “Vatera Stockholder”) is entitled to two underwritten offerings under such shelf registration statement. Additionally, if the Company registers shares of Company Common Stock (subject to certain exceptions) for public sale, such stockholders will have the right to include their Registrable Securities in the registration statement. The registration rights under the Registration Rights Agreement will terminate upon the earliest of (i) termination of the agreement by the consent of the Vatera Stockholder, (ii) the date on which the Vatera Stockholder holds Company Common Stock equal to or less than 10% of the total Company Common Stock issued and outstanding (on a non-fully-diluted basis) and (iii) the dissolution, liquidation or winding up of the Company.

The foregoing description of the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the Registration Rights Agreement, which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.

The descriptions of the employment agreement, the indemnification agreements and the separation and release agreements referenced in Item 5.02 of this Current Report on Form 8-K are incorporated into this Item 1.01 by reference.

 

Item 1.02. Termination of a Material Definitive Agreement.

Reference is made to Item 2.01 of this Current Report on Form 8-K, which is incorporated into this Item 1.02 by reference.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

On November 3, 2017, the Merger was consummated in accordance with the terms of the Merger Agreement. In order to effect the consummation of the Merger, the Company and Melinta agreed to mutually waive a condition to closing under the Merger Agreement that a proposal to amend the Company’s certificate of incorporation to increase the number of authorized shares be approved at the Company’s 2017 annual meeting of stockholders. As a result of the Merger and after giving effect to a 5-to-1 reverse stock split effected immediately prior to the effective time of the Merger, each outstanding share of Melinta’s common stock (including shares of Melinta common stock issued upon the conversion, immediately prior to the effective time of the Merger, of Melinta’s then-outstanding convertible notes and preferred stock) automatically converted into the right to receive approximately 0.0229 shares of Company Common Stock. At the effective time of the Merger, each outstanding option, whether or not vested, to purchase Melinta common stock and each outstanding warrant to purchase Melinta common stock or Melinta preferred stock unexercised prior to the effective time of the Merger was converted into an option or warrant to purchase Company Common Stock. All obligations with respect to each such Melinta option


or warrant were assumed by the Company in accordance with the terms of such option or warrant. The number of shares of Company Common Stock subject to each outstanding Melinta option or warrant assumed by the Company was determined by multiplying the number of shares of Melinta common stock, or in the case of each warrant, the number of shares of Melinta common stock issuable upon exercise of the warrant or the number of shares of Melinta common stock issuable upon conversion of the Melinta preferred stock issuable upon exercise of the warrant, that were subject to such option or warrant, as applicable, by the exchange ratio noted above and rounding the resulting number down to the nearest whole number of shares of Company Common Stock. The per share exercise price for the Company Common Stock issuable upon exercise of each Melinta option or warrant assumed by the Company was determined by dividing the per share exercise price of Melinta common stock, or in the case of each warrant, the per share exercise price of Melinta common stock or preferred stock, subject to such option or warrant, as applicable, by the exchange ratio noted above and rounding the resulting exercise price up to the nearest whole cent.

Following the closing of the Merger, pre-closing Melinta stockholders owned, on a fully-diluted basis as calculated under the treasury stock method, approximately 51.6% of Company Common Stock and pre-closing Cempra stockholders owned approximately 48.4% of Company Common Stock. The issuance of the shares of Company Common Stock to the former stockholders of Melinta in connection with the Merger and related transactions was approved by the Company’s stockholders at the 2017 annual meeting of stockholders (the “2017 Annual Meeting”) held on November 3, 2017. As previously disclosed, on October 24, 2017, Melinta’s stockholders adopted the Merger Agreement, as amended as of that date.

As of November 3, 2017, after giving effect to the closing of the Merger and the reverse stock split described above, there were approximately 21.9 million shares of Company Common Stock outstanding.

In connection with the closing of the Merger, on November 3, 2017, the Company terminated, and paid off the approximately $9.4 million in principal and accrued interest outstanding under, the Loan and Security Agreement (the “Loan and Security Agreement”), dated July 10, 2015, between the Company and Comerica Bank (“Comerica”). Under the terms of the Loan and Security Agreement, the Company was permitted to borrow up to $20.0 million in a term loan (the “Term Loan”) and, upon FDA approval of the Company’s New Drug Application (“NDA”) for solithromycin, the Company would have been eligible to borrow an additional aggregate amount equal to the lesser of (i) up to 75% of the Company’s eligible inventory and 80% of eligible accounts receivable or (ii) $10.0 million (the “Revolver”). Under the terms of the Loan and Security Agreement, following FDA approval of the NDA for solithromycin, the Company would have been permitted to convert the Term Loan to the Revolver, in which event the Company would have been permitted to borrow a maximum of $25.0 million under the Revolver. The Loan and Security Agreement included customary covenants, representations and events of default for an agreement of its size and type. Outstanding obligations under the Loan and Security Agreement were secured by substantially all of the Company’s personal property assets, excluding its intellectual property and its stock in its subsidiaries, which security interests were released upon the repayment of the amounts outstanding under the Loan and Security Agreement. No prepayment fees or other early termination penalties were incurred by the Company in connection with the termination of, and repayment of the amounts outstanding under, the Loan and Security Agreement.

The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which was previously filed as Annexes A-1 through A-3 to the Definitive Proxy Statement on Schedule 14A, filed on October 5, 2017 and supplemented as of October 24, 2017 and October 27, 2017, and is incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On November 3, 2017, as a result of the Merger, Melinta became a wholly owned subsidiary of the Company. Melinta is party to a Loan and Security Agreement, dated as of May 2, 2017 (the “Subsidiary Loan Agreement”), among Melinta, the lender or lenders party thereto from time to time and Suchard SA LLC, as collateral agent for the lenders. Under the Subsidiary Loan Agreement, the lenders made available to Melinta up to $80.0 million in term loan financing. The loans became available to Melinta in four separate tranches, with separate conditions precedent, of $30.0 million, $10.0 million, $20.0 million and $20.0 million, respectively. As of the date hereof, only the first two tranches, in an aggregate principal amount of $40.0 million, have been drawn. Availability


of the third tranche of $20.0 million is subject to the modification of one of Melinta’s license agreements to protect the lenders’ rights under the Subsidiary Loan Agreement (the “License Modification”). Subject to receipt of the License Modification, Melinta has the right to draw the third tranche through December 28, 2018. The fourth tranche of $20.0 million is available only after the third tranche has been drawn and is further subject to the successful achievement of certain sales milestones. Subject to the achievement of the specified milestones, Melinta has the right to draw the fourth tranche on or prior to September 30, 2019 (which date may be extended under certain circumstances to December 31, 2019). There can be no assurance that the License Modification will be obtained, that the sales milestones will be met or that the third and fourth tranches under the Subsidiary Loan Agreement will be available to Melinta.

Loans under the Subsidiary Loan Agreement bear interest at an annual rate equal to 8.25% or, if greater, the sum of 8.25% plus the prime rate minus 4.50%. Melinta is also required to pay the lenders an end-of-term fee upon the termination of the arrangement. In addition, following the earlier of the funding of the third tranche of $20.0 million and December 28, 2018 until the earlier of repayment of the loans in full and December 31, 2026, the lenders will receive a royalty, based on net sales of Baxdela, of between 1.02% and 2.72%, depending on the balance of the loans outstanding. These additional payments will be applied to either accrued interest or principal based on stated rates of return that vary with time. The principal of each loan must be repaid by the seventh anniversary of funding of such loan, along with end-of-term fees that vary with time.

Obligations under the Subsidiary Loan Agreement are secured by liens on substantially all assets of Melinta. The proceeds of loans under the Subsidiary Loan Agreement will be used to support the commercialization of Baxdela and for the general corporate purposes of Melinta. The Subsidiary Loan Agreement does not contain any financial maintenance covenants; however, it includes affirmative covenants, negative covenants (including limitations on indebtedness, liens, advances, equity and debt investments, dividends, asset sales and mergers and acquisitions), representations and warranties and events of default that are customary for similar financings.

 

Item 3.02. Unregistered Sales of Equity Securities.

Pursuant to the terms of the Merger Agreement and in connection with the Merger, the Company issued shares of Company Common Stock to former Melinta stockholders. The number of shares issued, the nature of the transaction and the nature and amount of consideration received by the Company are described in Item 2.01 of this Form 8-K, which is incorporated by reference into this Item 3.02. The shares of Company Common Stock issued in connection with the Merger were not registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D and Rule 506 promulgated thereunder.

 

Item 4.01. Changes in Registrant’s Certifying Accountant.

For accounting purposes, the Merger is treated as a reverse acquisition and, as such, the historical financial statements of the accounting acquirer, Melinta, which have been audited by Deloitte & Touche LLP, will become the historical financial statements of the Company. In a reverse acquisition, a change of accountants is presumed to have occurred unless the same accountant audited the pre-transaction financial statements of both the legal acquirer and the accounting acquirer, and such change is generally presumed to occur on the date the reverse acquisition is completed. The Audit Committee of the Company’s board of directors, as re-constituted following the Merger, has not yet made a determination as to which accounting firm will serve as the Company’s independent registered public accounting firm following the Merger and the Company will file a Current Report on Form 8-K as soon as this determination has been made.

 

Item 5.01. Changes in Control of Registrant.

Reference is made to Item 2.01 of this Current Report on Form 8-K, which is incorporated into this Item 5.01 by reference.

In connection with the Merger, on November 3, 2017, David Zaccardelli, Pharm.D., the Company’s Acting Chief Executive Officer, was terminated without cause effective immediately after the effective time of the Merger. In addition, on November 3, 2017, David Oldach, M.D., Chief Medical Officer of the Company, and Mark Hahn, Executive Vice President and Chief Financial Officer of the Company, were relieved of their respective positions and will be terminated without cause effective November 15, 2017.


On November 3, 2017, the board of directors of the Company appointed each of the following executive officers to serve, as of the effective time of the Merger, as executive officers of the combined company:

 

Name of Officer

  

Office Held

Daniel Wechsler    President and Chief Executive Officer
Paul Estrem    Executive Vice President, Chief Financial Officer and Secretary
John Temperato    Executive Vice President and Chief Commercial Officer
Sue Cammarata, M.D.    Executive Vice President and Chief Medical Officer
Erin Duffy, Ph.D.    Executive Vice President and Chief Scientific Officer

Pursuant to the terms of the Merger Agreement, prior to the closing of the Merger but effective at the effective time of the Merger, the board of directors of the Company increased the size of the board of directors to nine directors. On November 3, 2017, effective at the effective time of the Merger, Michael Dougherty, Dov A. Goldstein, M.D., Richard Kent, M.D. and P. Sherrill Neff resigned from the Company’s board of directors, and Kevin T. Ferro, Jay Galeota, Cecilia Gonzalo and Thomas P. Koestler, Ph.D., were appointed to the Company’s board of directors. Accordingly, at and immediately after the effective time of the Merger, the directors serving on the board of directors of the Company are Kevin T. Ferro, Jay Galeota, David Gill, Cecilia Gonzalo, John H. Johnson, Dr. Koestler, Garheng Kong, M.D., Ph.D., and Dr. Zaccardelli, with Mr. Ferro serving as chairman of the board of directors. Mr. Ferro, Ms. Gonzalo, and Dr. Koestler served as directors of Melinta prior to the closing of the Merger. In accordance with the terms of the Merger Agreement, Mr. Wechsler will also be appointed to the board. His appointment will be effective ten days following the filing of a supplemental Information Statement on Schedule 14f-1 relating to Mr. Wechsler.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Overview

Reference is made to Item 2.01 of this Current Report on Form 8-K, which is incorporated into this Item 5.02 by reference. Additionally, the information regarding the resignations from the Company’s board of directors, the termination without cause of Drs. Zaccardelli and Oldach and Mr. Hahn, and the appointment of the new directors and executive officers included in Item 5.01 above is incorporated into this Item 5.02 by reference. The resignation of directors from the Company’s board of directors was not due to a disagreement with the Company on any matter relating to its operations, policies or practices. At the time of their resignation, Mr. Dougherty served on the audit committee of the Company’s board of directors (the “Audit Committee”), Dr. Kent and Mr. Neff served on the compensation committee of the Company’s board of directors (the “Compensation Committee”) and Mr. Dougherty and Dr. Goldstein served on the nominating and governance committee of the Company’s board of directors (the “Nominating and Governance Committee”).

Effective as of the effective time of the Merger, Messrs. Galeota, Gill and Johnson and Ms. Gonzalo were appointed to the Audit Committee, Ms. Gonzalo, Drs. Koestler and Kong and Mr. Johnson were appointed to the Compensation Committee, and Mr. Ferro and Drs. Koestler, Kong and Zaccardelli were appointed to the Nominating and Governance Committee. Each of Messrs. Ferro, Galeota, Gill and Johnson, Ms. Gonzalo and Drs. Koestler, Kong and Zaccardelli was determined to be independent under Nasdaq Marketplace Rule 5605(a)(2).

Biographical information regarding each of the newly appointed directors is included in the Information Statement on Schedule 14f-1 (the “14f-1”) filed by the Company with the SEC on October 24, 2017, and is incorporated herein by reference.

In connection with the Merger, each director of the Company has entered into, or will enter into, an indemnification agreement with the Company, dated and effective as of November 3, 2017. The forms of such agreements are attached hereto as Exhibits 10.2, 10.3 and 10.4 to this Current Report on Form 8-K and are incorporated by reference into this Item 5.02.


Daniel Wechsler

Mr. Wechsler, age 49, will join the Company as of immediately following the effective time of the Merger. Prior to joining the Company, Mr. Wechsler served as an operating partner of Welsh, Carson, Anderson & Stowe since October 2016. Prior to that, Mr. Wechsler served as President and CEO of Smile Brands, Inc. from March 2014 until the company’s sale in 2016, and as executive vice president and global president of Pharmaceuticals at Bausch + Lomb Incorporated from 2011 to 2013. Mr. Wechsler started his career at The Upjohn Company and thereafter worked at Pharmacia Corporation, where he helped launch Zyvox, until the company’s acquisition by Pfizer, Inc. in 2003. Mr. Wechsler served as vice president Specialty at Pfizer, Inc. from 2003 to 2005, SVP of Global Operations at Schering-Plough Corporation from 2005 to 2009 and SVP of Strategy and Commercial Model Excellence at Merck & Co. from 2009 to 2011. Mr. Wechsler holds a master’s degree from the University of Rochester and a bachelor’s degree from the State University of New York at Brockport. We believe that Mr. Wechsler’s extensive experience in the pharmaceutical industry as a senior executive qualify him to serve on our board of directors and as president and CEO of the Company.

There are no family relationships between Mr. Wechsler and any of the Company’s directors or executive officers, and there is no arrangement or understanding between Mr. Wechsler or any other person and the Company or any of its subsidiaries pursuant to which he was appointed as an officer of the Company. There are no transactions between Mr. Wechsler or any of his immediate family members and the Company or any of its subsidiaries that would be required to be reported under Item 404(a) of Regulation S-K.

In connection with Mr. Wechsler’s employment, the Company entered into an employment agreement pursuant to which Mr. Wechsler is entitled to an annual base salary of $550,000. In addition, Mr. Wechsler will be eligible to earn an annual bonus with a target equal to 60% of his base salary and a maximum annual bonus equal to not less than 150% of his base salary, subject to the achievement of applicable Company and specific individual performance objectives for each fiscal year. Mr. Wechsler’s annual bonus for 2017 will be prorated based on the number of days in the year actually worked, and will not be less than the target amount.

Pursuant to the terms of the employment agreement, Mr. Wechsler is entitled to an employee inducement award of an option to purchase 550,981 shares of Company Common Stock at an exercise price equal to the closing price of Company Common Stock as reported by the Nasdaq Global Market on November 3, 2017, and a restricted stock unit award for 183,661 shares of Company Common Stock. The stock option and restricted stock unit grant will become twenty-five percent (25%) vested on the one year anniversary of Mr. Wechsler’s date of hire, with the remaining shares vesting in equal monthly installments thereafter over the next three years, subject to his continuing service with the Company. If either of the inducement equity grants is not expressly assumed in a change in control, any then-remaining unvested portion of such grants will become fully vested upon such change in control. The restricted stock unit grant will participate in any dividends paid to stockholders of the Company during such vesting period, provided that the dividends on shares underlying unvested restricted stock units will be subject to the same vesting requirements as the underlying shares on which such dividends are paid, with the payment deferred and paid within ten days after such restricted stock units become vested.

Under the terms of Mr. Wechsler’s employment agreement, if the Company terminates Mr. Wechsler’s employment without cause or if he terminates his employment with the Company for good reason in accordance with the terms of his employment agreement, subject to Mr. Wechsler’s execution of a release of claims, he is entitled to receive from the Company (i) an amount equal to one and one-half times his then annual base salary and target annual bonus (provided, such multiple will be equal to two, if the date of such termination occurs within three months prior to or twelve months following a change in control), payable in equal installments over 18 months in accordance with the Company’s payroll practices, (ii) a pro-rated bonus for the year in which such termination occurs, based on actual performance and (iii) reimbursement for a portion of his COBRA expenses for up to 18 months. In addition, if such termination of Mr. Wechsler’s employment by the Company without cause or by Mr. Wechsler with good reason occurs within three months prior to or twelve months following a change in control, all of his then outstanding equity awards subject to solely service-based vesting will become fully vested. In connection with any termination of Mr. Wechsler’s employment due to death or disability, he is entitled to a pro-rated bonus for the year in which such termination occurs, based on actual performance.


Mr. Wechsler also entered into an Employee Noncompetition, Nondisclosure and Developments Agreement pursuant to which he is subject to customary confidentiality restrictions that apply during his employment and indefinitely thereafter, an invention assignment provision, a covenant not to compete while employed with the Company and for 18 months following any termination of employment, and a covenant not to solicit our employees or customers while employed with the Company and for 18 months thereafter.

The foregoing description of Mr. Wechsler’s employment agreement and Noncompetition, Nondisclosure and Developments Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text thereof, in each case, a copy of which is attached hereto as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated by reference into this Item 5.02. The foregoing description of Mr. Wechsler’s inducement grant does not purport to be complete. A copy of Mr. Wechsler’s inducement grant will be filed as an exhibit in the Company’s next Annual Report on Form 10-K and is incorporated by reference into this Item 5.02.

Paul Estrem

Mr. Estrem, previously the chief financial officer (“CFO”) of Melinta, has more than 27 years of financial leadership experience in the pharmaceutical industry. Prior to joining Melinta, Mr. Estrem held several senior positions at Baxter International, most recently vice president of integration for Baxter’s Medical Products, where he held a lead role in the $4 billion acquisition of Gambro and oversaw the integration of their products, facilities and 8,000 employees. Earlier in his tenure, Mr. Estrem served as CFO of Baxter Medical Products; CFO and vice president of strategy in Baxter Medication Delivery, a division that later became Baxter Medical Products; CFO of Baxter Bioscience, a specialty therapeutics division; and CFO of Baxter Ltd, a subsidiary based in Tokyo, Japan. Mr. Estrem is a member of the American Institute of Certified Public Accountants and the Institute of Internal Auditors. He received an MBA from Northwestern University’s Kellogg School of Management and a B.S. in accounting from Illinois State University.

There are no family relationships between Mr. Estrem and any of the Company’s directors or executive officers, and there is no arrangement or understanding between Mr. Estrem or any other person and the Company or any of its subsidiaries pursuant to which he was appointed as an officer of the Company. There are no transactions between Mr. Estrem or any of his immediate family members and the Company or any of its subsidiaries that would be required to be reported under Item 404(a) of Regulation S-K.

Under the terms of Mr. Estrem’s offer letter, Mr. Estrem is to be employed on an “at-will” basis. Currently, Mr. Estrem earns a base salary of $333,410 and is eligible to earn an annual bonus equal to 30% of his base salary.

Mr. Estrem has entered into a severance agreement, pursuant to which if he terminates his employment with “good reason” (as defined in his severance agreement), or if the Company elects to terminate his employment without “cause” (as defined in his severance agreement), subject to his execution of a release of claims, he will be entitled to severance equal to (i) continued payment of his base salary for a 12-month period, (ii) subject to his election of COBRA continuation coverage, reimbursement for the employer portion of the premium costs of such COBRA continuation coverage, until the earlier of (x) the end of the 12-month period following such qualifying termination, and (y) the date he becomes eligible for coverage under another group health plan, and (iii) if such qualifying termination occurs within 6 months of a “change in control” (as defined in the severance agreement), a pro-rated annual bonus for the year such termination of employment occurs.

Mr. Estrem has also entered into an Employee Noncompetition, Nondisclosure and Developments Agreement pursuant to which he is subject to customary confidentiality restrictions that apply during his employment and indefinitely thereafter, an invention assignment provision, a covenant not to compete while employed with the Company and for 12 months following any termination of employment, and a covenant not to solicit the Company’s employees or customers while employed with the Company and for 12 months thereafter.

The foregoing description of Mr. Estrem’s offer letter, severance agreement and Employee Noncompetition, Nondisclosure and Developments Agreement does not purport to be complete. A copy of Mr. Estrem’s offer letter, severance agreement and Employee Noncompetition, Nondisclosure and Developments Agreement will be filed as an exhibit to the Company’s next Annual Report on Form 10-K.


David Zaccardelli, Mark Hahn and David Oldach

In connection with the termination of the employment of Drs. Zaccardelli and Oldach and Mr. Hahn, and in accordance with their respective existing severance agreement, upon the date of their respective termination, the Company and each of Drs. Zaccardelli and Oldach and Mr. Hahn will enter into a separation and release agreement, as required by their severance agreements. Provided that each officer does not revoke the separation agreement pursuant to the seven-day revocation period available to him, the Company will pay each officer an amount equal to 18 months of his base salary (24 months in the case of Dr. Zaccardelli); a lump sum amount equal to one and one half times his target bonus for 2017 (two times in the case of Dr. Zaccardelli); and his applicable COBRA premiums for the lesser of 18 months following his termination date or until he becomes eligible for insurance benefits from another employer; provided, however, the Company has the right to pay a lump sum amount equal to the applicable COBRA premium multiplied by the number of months remaining in the specified period if the Company determines in its discretion that continued payment of the COBRA premiums is or may be discriminatory under Section 105(h) of the Internal Revenue Code of 1986, as amended (the “Code”). In addition, the Company will provide outplacement assistance through a service provider selected by the Company for a period of 18 months. The vesting of all outstanding and unvested stock options, restricted stock units and other equity in the Company held by the officer will be accelerated and will become immediately and fully exercisable, subject to all other terms of the applicable equity plan and award agreement. The exercise period for any of the officer’s options that have vested prior to his termination date, or pursuant to his separation agreement, will be extended through the date that is 12 months following his termination date, but in no event beyond the original expiration date of the each affected option. Each officer is solely responsible for any individual tax consequences resulting from the extended exercise period, including without limitation, any failure of any such options to qualify as incentive stock options under Section 422 of the Code.

Despite the termination of his employment, Dr. Zaccardelli will remain a member of the board of directors of the Company.

The Company intends to enter into a consulting agreement with each of Mr. Hahn and Dr. Oldach, each with a term of one year, pursuant to which he will provide financial and clinical and scientific consulting services, respectively, of up to 10 hours per week, each at an hourly rate of $270. Either party may terminate the agreement at any time during its term.

 

Item 5.03. Amendments to Charter and Bylaws.

On October 3, 2017, the board of directors of the Company approved a reverse stock split of the issued and outstanding shares of Company Common Stock, subject to the approval of the Company’s stockholders, and on October 24, 2017, the Company’s board of directors approved an amendment to the Company’s certificate of incorporation to effect the reverse stock split (the “Reverse Stock Split Amendment”), at a ratio to be determined by the board of directors of the Company. On November 3, 2017, the Reverse Stock Split Amendment was approved at the 2017 Annual Meeting, a ratio of 5-to-1 was determined by the Company’s board of directors and the Reverse Stock Split Amendment became effective upon filing with the Secretary of State of the State of Delaware, which occurred immediately prior to the closing of the Merger. Upon the effectiveness of the Reverse Stock Split Amendment (the “Split Effective Time”), the issued and outstanding shares of Company Common Stock were reclassified such that each stockholder of the Company held one share of Company Common Stock for each five shares of Company Common Stock held by such stockholder immediately prior to the Split Effective Time.

On November 3, 2017, the board of directors of the Company approved an amendment to the Company’s certificate of incorporation (the “Name Change Charter Amendment”) to change the name of the corporation from “Cempra, Inc.” to “Melinta Therapeutics, Inc.”.

Additionally, effective at the effective time of the Merger, the Company amended its bylaws (the “Amended and Restated Bylaws”) to increase the size of the Board to nine directors and to provide that the election of directors will be by the vote of the majority of the votes cast at any meeting for the election of directors at which a quorum is present, except as otherwise set forth in the Company’s Certificate of Incorporation with respect to the right of the holders of any series of preferred stock or any other series or class of stock to elect additional directors under specified circumstances.


The foregoing descriptions of the Reverse Stock Split Amendment, the Name Change Charter Amendment and the Amended and Restated Bylaws are not complete and are qualified in their entirety by reference to the documents attached hereto as Exhibits 3.1, 3.2 and 3.3, respectively, which are incorporated herein by reference.

 

Item 5.07. Submission of Matters to a Vote of Security Holders.

On November 3, 2017, the Company held an annual meeting of its stockholders at which the following items were voted on.

(1) Approval of the issuance of Company Common Stock pursuant to the Merger Agreement.

 

Votes    Votes          

Cast For

  

Cast Against

  

Abstentions

  

Broker Non-Votes

24,346,872

  

6,823,014

  

127,294

  

14,356,090

(2) Approval of three separate proposals to amend the Company’s certificate of incorporation to:

(a) increase the number of authorized shares of Company Common Stock from 80,000,000 to 250,000,000;

 

Votes    Votes          

Cast For

  

Cast Against

  

Abstentions

  

Broker Non-Votes

23,642,646

  

7,530,066

  

124,468

  

14,356,090

(b) change the name of the Company to “Melinta Therapeutics, Inc.”; and

 

Votes    Votes          

Cast For

  

Cast Against

  

Abstentions

  

Broker Non-Votes

33,562,599

  

10,665,675

  

1,424,996

  

(c) elect for the Company not to be governed by or subject to Section 203 of the DGCL.

 

Votes    Votes          

Cast For

  

Cast Against

  

Abstentions

  

Broker Non-Votes

24,543,204

  

6,626,292

  

127,684

  

14,356,090

(3) Approval of an amendment to the Company’s certificate of incorporation to effect a reverse stock split of Company Common Stock.

 

Votes    Votes     

Cast For

  

Cast Against

  

Abstentions

33,777,886

  

11,781,930

  

93,454

(4) Approval of the election of three Class III directors to three-year terms expiring in 2020.

 

     Votes    Votes     
    

Cast For

  

Withheld

  

Broker Non-Votes

Richard Kent, M.D.

  

26,385,314

  

4,911,866

  

14,356,090

Garheng Kong, M.D., Ph.D.

  

15,699,852

  

15,597,328

  

14,356,090

P. Sherrill Neff

  

14,935,559

  

16,361,621

  

14,356,090

(5) Approval, on non-binding advisory basis, of the Company’s fiscal 2016 executive compensation.


Votes    Votes          

Cast For

  

Cast Against

  

Abstentions

  

Broker Non-Votes

23,720,246

  

7,425,040

  

151,894

  

14,356,090

(6) Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017.

 

Votes    Votes     

Cast For

  

Cast Against

  

Abstentions

39,181,902

  

3,298,308

  

3,173,060

(7) Approval of the proposal to adjourn the 2017 Annual Meeting, if necessary, if a quorum is present, to solicit additional proxies, in the event that there are not sufficient votes at the time of the 2017 Annual Meeting to approve items 1, 2a, 2b, 2c or 3 above.

 

Votes    Votes          

Cast For

  

Cast Against

  

Abstentions

  

Broker Non-Votes

31,597,611

  

9,380,573

  

4,675,086

  

On November 3, 2017, the Company issued a press release announcing the results of voting at the 2017 Annual Meeting. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated by reference herein.

 

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The financial statements required by this Item 9.01(a) will be filed by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.

(b) Pro forma financial information.

The pro forma financial information required by this Item 9.01(b) will be filed by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.

(d) Exhibits.

 

Exhibit

No.

  

Description

  3.1    Amendment to Certificate of Incorporation of Cempra, Inc. (Reverse Stock Split)
  3.2    Amendment to Certificate of Incorporation of Cempra, Inc. (Name Change)
  3.3    Amended and Restated Bylaws of Cempra, Inc.
10.1    Registration Rights Agreement, dated as of November 3, 2017, among Cempra and the Melinta stockholders party thereto
10.2    Form of Individual Director Indemnification Agreements
10.3    Form of Continuing Individual Director Indemnification Agreements
10.4    Form of Fund Director Indemnification Agreements


10.5    Employment Agreement, dated October 30, 2017, between Melinta Therapeutics, Inc. and Dan Wechsler
99.1    Press Release issued November 3, 2017


EXHIBIT INDEX

 

Exhibit

No.

 

Description

 

 

  3.1   Amendment to Certificate of Incorporation of Cempra, Inc. (Reverse Stock Split)
  3.2   Amendment to Certificate of Incorporation of Cempra, Inc. (Name Change)
  3.3   Amended and Restated Bylaws of Cempra, Inc.
10.1   Registration Rights Agreement, dated as of November 3, 2017, among Cempra and the Melinta stockholders thereto
10.2   Form of Individual Director Indemnification Agreements
10.3   Form of Continuing Individual Director Indemnification Agreements
10.4   Form of Fund Director Indemnification Agreements
10.5   Employment Agreement, dated October 30, 2017, between Melinta Therapeutics, Inc. and Dan Wechsler
99.1   Press Release issued November 3, 2017


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.

 

Date: November 3, 2017     Melinta Therapeutics, Inc.
    By:  

/s/ Paul Estrem

      Paul Estrem
      Chief Financial Officer

Exhibit 3.1

CERTIFICATE OF AMENDMENT OF

CERTIFICATE OF INCORPORATION OF CEMPRA, INC.

PURSUANT TO SECTION 242 OF THE

GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

Cempra, Inc., a Delaware corporation (the “ Corporation ”), hereby certifies as follows:

The Board of Directors of the Corporation (the “ Board ”), pursuant to Section 242 of the Delaware General Corporations Law (“ DGCL ”), has duly adopted a resolution setting forth a proposed amendment (the “ Amendment ”) to the Corporation’s certificate of incorporation as currently in effect (the “ Certificate of Incorporation ”) and declaring such amendment advisable, and the stockholders of the Corporation have duly approved and adopted the Amendment at an annual meeting of stockholders called and held upon notice in accordance with Section 222 and Section 242 of the DGCL.

In order to effect such proposed amendment, ARTICLE IV of the Certificate of Incorporation is hereby amended by inserting the following two paragraphs at the beginning of ARTICLE IV:

At the time of filing of this Certificate of Amendment of the Certificate of Incorporation with the Secretary of State of the State of Delaware (the “ Effective Time ”), each five (the “ Conversion Number ”) shares of the Corporation’s common stock, par value $0.001 (the “ Common Stock ”) (including treasury shares) issued and outstanding as of the Effective Time shall be reclassified and combined into one validly issued, fully paid and non-assessable share of Common Stock, automatically and without any action by the holder thereof (the “ Reverse Stock Split ”). The par value of the Common Stock following the Reverse Stock Split shall remain at $0.001 per share. No fractional shares of Common Stock shall be issued as a result of the Reverse Stock Split. In lieu of any fractional shares to which a stockholder would otherwise be entitled (after taking into account all fractional shares of Common Stock otherwise issuable to such holder), the Corporation shall, with no further action required on the part of the holder, pay cash in an amount equal to such fractional shares of Common Stock multiplied by the then fair value of the Common Stock as determined by the Board.

Each book entry share that, immediately prior to the Effective Time, represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of Common Stock after the Effective Time into which the shares formerly represented by such book entry share have been reclassified and combined (as well as the right to receive cash in lieu of fractional shares of Common Stock after the Effective Time).

IN WITNESS WHEREOF, this Certificate of Amendment has been executed by a duly authorized officer of the Corporation on this day of November 3, 2017.

 

CEMPRA, INC.
By:  

/s/ David Zaccardelli

Name:   David Zaccardelli
Title:   Acting Chief Executive Officer

Exhibit 3.2

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF INCORPORATION

OF

CEMPRA, INC.

 

 

Pursuant to Section 242 of the General

Corporation Law of the State of Delaware

 

 

Cempra, Inc., a Delaware corporation (hereinafter called the “Corporation”), does hereby certify as follows:

FIRST : Article I of the Corporation’s Certificate of Incorporation is hereby amended to read in its entirety as set forth below:

I.

The name of the corporation is Melinta Therapeutics, Inc. (the “Corporation”).

SECOND : The foregoing amendment was duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed in its corporate name this 3rd day of November, 2017.

 

CEMPRA, INC.
By:   /s/ David Zaccardelli
Name:   David Zaccardelli
Title:   Acting Chief Executive Officer

Exhibit 3.3

AMENDED AND RESTATED

BYLAWS

OF

MELINTA THERAPEUTICS, INC.

 

I. OFFICES

 

  1.1 Registered Office

The registered office of MELINTA THERAPEUTICS, INC. (the “Corporation”), in the State of Delaware is 3500 South Dupont Highway, in the City of Dover, Kent County, Delaware 19901, and its registered agent at such address is Incorporating Services, Ltd.

 

  1.2 Principal Office

The principal office for the transaction of the business of the Corporation will be at such location, within or without the State of Delaware, as will be designated by the board of directors of the Corporation.

 

  1.3 Other Offices

The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the board of directors may from time to time determine or as the business of the Corporation may require.

 

II. MEETINGS OF STOCKHOLDERS

 

  2.1 Place of Meetings

Meetings of stockholders will be held at any place, within or outside the State of Delaware, designated by the board of directors. The board of directors may, in its sole discretion, determine that a meeting will not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211 of the General Corporation Law of Delaware.

If authorized by the board of directors in its sole discretion, and subject to such guidelines and procedures as the board of directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication, participate in a meeting of stockholders, be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation will implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation will implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action will be maintained by the Corporation.

 

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  2.2 Annual Meeting

The annual meeting of stockholders will be held each year on a date and at a time designated by the board of directors. In the absence of such designation, the annual meeting of stockholders will be held on the fourth Tuesday in May in each year at 10:00 a.m. However, if such day falls on a legal holiday, then the meeting will be held at the same time and place on the next succeeding full business day. At the meeting, directors will be elected and any other proper business may be transacted.

 

  2.3 Special Meeting

Special meetings of the stockholders may be called, at any time for any purpose or purposes, by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or these bylaws, or by such person or persons duly designated by the board of directors whose powers and authority, as expressly provided in a resolution of the board of directors, include the power to call such meetings, but such special meetings may not be called by any other person or persons.

 

  2.4 Notice of Stockholders’ Meetings

(a) Except to the extent otherwise required by law, all notices of meetings of stockholders will be in writing and will be sent or otherwise given in accordance with Section 2.5 of these bylaws 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. The notice will specify the place, if any, date, and hour of the meeting, the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

(b) Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation will also be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent will be revocable by the stockholder by written notice to the Corporation. Any such consent will be deemed revoked if (i) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent, and (ii) such inability becomes known to the secretary or an assistant secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice; provided , however , the inadvertent failure to recognize such revocation will not invalidate any meeting or other action.

 

- 2 -


(c) Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation will be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent will be revocable by the stockholder by written notice to the Corporation. Any stockholder who fails to object in writing to the Corporation, within sixty (60) days of having been given written notice by the Corporation of its intention to send the single notice permitted under this subsection 2.4(c), will be deemed to have consented to receiving such single written notice.

(d) Sections 2.4(b) and (c) will not apply to any notice given to stockholders under sections 164 (notice of sale of shares of stockholder who failed to pay an installment or call on stock not fully paid), 296 (notice of disputed claims relating to insolvent corporations), 311 (notice of meeting of stockholders to revoke dissolution of corporation), 312 (notice of meeting of stockholders of corporation whose certificate of incorporation has been renewed or revived) and 324 (notice when stock has been attached as required for sale upon execution process) of the General Corporation Law of Delaware.

 

  2.5 Manner of Giving Notice; Affidavit of Notice

(a) Written notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his, her or its address as it appears on the records of the Corporation. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given will, in the absence of fraud, be prima facie evidence of the facts stated therein.

(b) Notice given pursuant to this Section 2.5(b) will be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; (ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of such posting and the giving of such separate notice; and (iv) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the secretary, an assistant secretary or the transfer agent or other agent of the Corporation that the notice has been given by a form of electronic transmission will, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

  2.6 Quorum

The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum is not present or represented at any meeting of the stockholders, then the chairman of the board of directors, or in the absence of such person, any officer entitled to preside at or to act as secretary of the meeting, will have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.

 

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  2.7 Adjournments; Notice

Any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of stockholders may be held under these bylaws by the chairman of the board of directors, or in the absence of such person, by any officer entitled to preside at or to act as secretary of such meeting. When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time and place thereof, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business that 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 will be given to each stockholder of record entitled to vote at the meeting.

 

  2.8 Voting

The stockholders entitled to vote at any meeting of stockholders will be determined in accordance with the provisions of Section 2.11 of these bylaws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners of stock and to voting trusts and other voting agreements).

Except as otherwise provided in the certificate of incorporation, each stockholder will be entitled to one vote for each share of capital stock held by such stockholder.

 

  2.9 Waiver of Notice

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these bylaws, a written waiver thereof, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, will be deemed equivalent to notice. Attendance of a person at a meeting will constitute a waiver of notice of such meeting, except when the person 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. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver or any waiver by electronic transmission of notice unless so required by the certificate of incorporation or these bylaws.

 

  2.10 No Stockholder Action by Written Consent Without a Meeting

Effective upon the registration of any class of the Corporation’s stock under the Securities Act of 1934, as amended (the “Exchange Act”), any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation and may not be effected by any consent in writing

 

- 4 -


by such stockholders. At all times prior thereto, unless otherwise provided in the certificate of incorporation, any action required by the General Corporation Law of Delaware to be taken at any annual or special meeting of stockholders of a corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, is 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.

A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder, proxyholder, or other person or persons authorized to act for a stockholder or proxyholder, will be deemed to be written, signed and dated for the purposes of this Section 2.10, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (a) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder, proxyholder, or other authorized person or persons, and (b) the date on which such stockholder, proxyholder or other authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted will be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission will be deemed to have been delivered until such consent is reproduced in paper form and until such paper form will have been delivered to the Corporation by delivery to its registered office in this State, 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 Corporation’s registered office will 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 will be a complete reproduction of the entire original writing.

Prompt notice of the taking of the corporate action without a meeting by written consent will be given to those stockholders who have not consented in writing. If the action that is consented to is such as would have required the filing of a certificate under any section of the General Corporation Law of Delaware if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section will state, in lieu of any statement required by such section concerning any vote of stockholders, that written notice and written consent have been given as provided in Section 228 of the General Corporation Law of Delaware.

 

- 5 -


  2.11 Record Date for Stockholder Notice; Voting; Giving Consents

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, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or 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 that will not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action.

If the board of directors does not so fix a record date:

(a) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders will 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;

(b) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the board of directors is necessary, will be the day on which the first written consent is expressed; and

(c) the record date for determining stockholders for any other purpose will be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders will apply to any adjournment of the meeting; provided , however , that the board of directors may fix a new record date for the adjourned meeting.

 

  2.12 Proxies

Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by a written proxy, signed by the stockholder and filed with the secretary of the Corporation, but no such proxy will be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy will be deemed signed if the stockholder’s name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the stockholder or the stockholder’s attorney-in-fact. The revocability of a proxy that states on its face that it is irrevocable will be governed by the provisions of Section 212(e) of the General Corporation Law of Delaware.

 

  2.13 List of Stockholders Entitled to Vote

The officer who has charge of the stock ledger of a corporation will prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each

 

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stockholder and the number of shares registered in the name of each stockholder. The Corporation will not be required to include electronic mail addresses or other electronic contact information on such list. Such list will be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (a) 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 (b) 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. If the meeting is to be held at a place, then the list will be produced and kept at the time and place of the meeting during the whole time thereof, and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list will also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list will be provided with the notice of the meeting.

 

  2.14 Stockholder Proposals

(a) Effective upon the registration of any class of the Corporation’s stock under the Exchange Act, any stockholder wishing to bring any other business before a meeting of stockholders, except for the nomination of persons for election as directors which will be made pursuant to Section 3.15 of these bylaws, must provide notice to the Corporation not more than ninety (90) and not less than sixty (60) days before the meeting in writing by registered mail, return receipt requested, of the business to be presented by the stockholders at the stockholders’ meeting.

(b) Any such notice will set forth the following as to each matter the stockholder proposes to bring before the meeting: (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting and, if such business includes a proposal to amend the bylaws of the Corporation, the language of the proposed amendment; (ii) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business; (iii) the class and number of shares of the Corporation that are beneficially owned by such stockholder; and (iv) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business. In the absence of such notice to the Corporation meeting the above requirements, a stockholder will not be entitled to present any business at any meeting of stockholders.

(c) In any such event, such stockholder must also set forth in its notice: (i) any material interest in such business of such stockholder and any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom; (ii) as to the stockholder giving notice and any Stockholder Associated Person, (A) the class, series and number of all shares of the Corporation beneficially owned by such stockholder and by such Stockholder Associated Person, (B) the nominee holder for, and

 

- 7 -


number of, shares owned beneficially but not of record by such stockholder and by any such Stockholder Associated Person, and (C) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such stockholder of any such Stockholder Associated Person with respect to any share of stock of the Corporation; (iii) as to the stockholder giving the notice and any Stockholder Associated Person, the name and address of such stockholder, as they appear on the Corporation’s stock ledger, and current name and address, if different, and of such Stockholder Associated Person; and (iv) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the proposal of other business on the date of such stockholder’s notice.

(d) Subject to the Corporation’s certificate of incorporation, only such business will be conducted at a meeting of stockholders as will have been brought before the meeting in accordance with the procedures set forth in this Section 2.14. The presiding officer of the meeting will have the power and duty to determine whether any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Section 2.14 and, if any proposed business is not in compliance with this Section 2.14, to declare that such defective proposal be disregarded.

(e) Notwithstanding the foregoing provisions of this Section 2.14, a stockholder will also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.14. Nothing in this Section 2.14 will be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

(f) For the purposes of these bylaws, “Stockholder Associated Person” of any stockholder will mean (i) any person controlling, directly or indirectly, or acting in concert with, such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder and (iii) any person controlling, controlled by or under common control with such Stockholder Associated Person.

 

III. DIRECTORS

 

  3.1 Powers

Subject to the provisions of the General Corporation Law of Delaware and any limitations in the certificate of incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the Corporation will be managed and all corporate powers will be exercised by or under the direction of the board of directors.

 

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  3.2 Number of Directors

The number of directors constituting the board of directors will be not more than nine (9) but not less than five (5), and may be fixed or changed, within this minimum and maximum, by resolution adopted by the affirmative vote of a majority of the directors then in office. Upon adoption of these bylaws, the number of directors constituting the board of directors will be fixed at nine (9) until such time as the directors change the number of directors pursuant to this Section 3.2.

No reduction of the authorized number of directors will have the effect of removing any director before that director’s term of office expires.

 

  3.3 Election, Qualification and Term of Office of Directors

Except as provided in Section 3.13 of these Bylaws, effective upon the initial public offering of the Corporation (the “IPO”), the directors shall be divided, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as is reasonably possible, with the term of office of the first class to expire at the first annual meeting of stockholders following the IPO, the term of office of the second class to expire at the second annual meeting of stockholders following the IPO and the term of office of the third class to expire at the third annual meeting of stockholders following the IPO, with each director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the first annual meeting following the IPO, (i) directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified or until his or her earlier resignation or removal, and (ii) if authorized by a resolution of the Board of Directors, directors may be elected to fill any vacancy on the Board of Directors, regardless of how such vacancy shall have been created. Otherwise, vacancies occurring between stockholder meetings may only be filled as set forth in Section 3.4.

Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws, wherein other qualifications for directors may be prescribed. Each director will be a natural person.

Elections of directors need not be by written ballot.

Except as set forth below, each director to be elected by stockholders shall be elected by the vote of the majority of the votes cast at any meeting for the election of directors at which a quorum is present, except as otherwise set forth in the Certificate of Incorporation with respect to the right of the holders of any series of preferred stock or any other series or class of stock to elect additional directors under specified circumstances. For purposes of this bylaw regarding election of directors, a majority of votes cast shall mean that the number of shares voted “for” a director’s election exceeds 50% of the number of votes cast with respect to that director’s election. Votes cast shall include votes “against” a director’s election and shall exclude abstentions with respect to that director’s election. Notwithstanding the foregoing, in the event of

 

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a contested election of directors, directors shall be elected by the vote of a plurality of the votes cast at any meeting for the election of directors at which a quorum is present. For purposes of this bylaw regarding election of directors, a contested election shall mean any election of directors in which the number of candidates for election as directors exceeds the number of directors to be elected. If directors are to be elected by a plurality of the votes cast, stockholders shall not be permitted to vote against a nominee.

 

  3.4 Resignation and Vacancies

Any director may resign at any time upon notice given in writing or electronic transmission to the Corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, will have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations will become effective, and each director so chosen will hold office as provided in this Section 3.4 in the filling of other vacancies.

Unless otherwise provided in the certificate of incorporation or these bylaws:

(a) vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director; and

(b) whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.

If at any time, by reason of death or resignation or other cause, the Corporation should have no directors in office, then, any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware.

 

  3.5 Place of Meetings; Meetings by Telephone

The board of directors of the Corporation may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting will constitute presence in person at the meeting.

 

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  3.6 Regular Meetings

Regular meetings of the board of directors may be held without notice at such time and at such place as will from time to time be determined by the board.

 

  3.7 Special Meetings; Notice

Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairman of the board, the president, or any two (2) directors.

Notice of the time and place of special meetings will be delivered either personally or by mail, telex, facsimile, telephone or electronic transmission to each director, addressed to each director at such director’s address and/or phone number and/or electronic transmission address as it is shown on the records of the Corporation. If the notice is mailed, it will be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. If the notice is delivered personally or by telex, facsimile, telephone or electronic transmission, it will be delivered by telephone or transmitted at least twenty-four (24) hours before the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose or the place of the meeting, if the meeting is to be held at the principal executive office of the Corporation. Notice may be delivered by any person entitled to call a special meeting or by an agent of such person.

 

  3.8 Quorum

At all meetings of the board of directors, a majority of the authorized number of directors will constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum will be the act of the board of directors, except as otherwise specifically provided by statute or by the certificate of incorporation. If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

 

  3.9 Waiver Of Notice

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these bylaws, a written waiver thereof, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, will be deemed equivalent to notice. Attendance of a person at a meeting will constitute a waiver of notice of such meeting, except when the person 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. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or meeting of a committee of directors, need be specified in any written waiver of notice unless so required by the certificate of incorporation or these bylaws.

 

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  3.10 Adjourned Meeting; Notice

If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

 

  3.11 Board Action by Written Consent Without a 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 or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the board or committee. Such filing will be in paper form if the minutes are maintained in paper form and will be in electronic form if the minutes are maintained in electronic form.

 

  3.12 Fees and Compensation of Directors

Unless otherwise restricted by the certificate of incorporation or these bylaws, the board of directors will have the authority to fix the compensation of directors.

 

  3.13 Removal of Directors

Unless otherwise restricted by statute, by the certificate of incorporation or by these bylaws, any director or the entire board of directors may be removed, only for cause, by the holders of a majority of the shares then entitled to vote at an election of directors; provided, that, whenever the holders of any class or classes of stock, or series thereof, are entitled to elect one or more directors by the provisions of the certificate of incorporation, removal for cause of any directors elected by such class or classes of stock, or series thereof, will be by the holders of a majority of the shares of such class or classes of stock, or series of stock, then entitled to vote at an election of directors.

No reduction of the authorized number of directors will have the effect of removing any director prior to the expiration of such director’s term of office.

 

  3.14 Chairman of the Board of Directors

The Corporation may also have, at the discretion of the board of directors, a chairman of the board of directors. The chairman of the board will, if such a person is elected, preside at the meetings of the board of directors and exercise and perform such other powers and duties as may from time to time be assigned to him or her by the board of directors, or as may be prescribed by these bylaws.

 

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  3.15 Nominating Procedures

Effective upon the registration of any class of the Corporation’s stock under the Exchange Act, nominations for election of directors will be governed by this Section 3.15. Nominations for the election of directors may only be made by the board of directors, by the nominating committee of the board of directors (or, if none, any other committee serving a similar function) or by any stockholder entitled to vote generally in elections of directors where the stockholder complies with the requirements of this Section 3.15. Any stockholder of record entitled to vote generally in elections of directors may nominate one or more persons for election as directors at a meeting of stockholders only if written notice of such stockholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States certified mail, postage prepaid, to the secretary of the Corporation (i) with respect to an election to be held at an annual meeting of stockholders, not more than ninety (90) days nor less than sixty (60) days in advance of such meeting, and (ii) with respect to an election to be held at a special meeting of stockholders called for the purpose of the election of directors, not later than the close of business on the tenth business day following the date on which notice of such meeting is first given to stockholders. Each such notice of a stockholder’s intent to nominate a director or directors at an annual or special meeting will set forth the following: (A) the name and address, as they appear on the Corporation’s books, of (i) the stockholder who intends to make the nomination and the name and residence address of the person or persons to be nominated, and (ii) any Stockholder Associated Person; (B) the information required in Section 2.14(c) of these bylaws; (C) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (D) a description of all arrangements or understandings between the stockholder and any Stockholder Associated Person and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (E) such other information regarding each nominee proposed by such stockholder as would be required to be disclosed in solicitations of proxies for election of directors, or as would otherwise be required, in each case pursuant to Regulation 14A under the Exchange Act including any information that would be required to be included in a proxy statement filed pursuant to Regulation 14A had the nominee been nominated by the board of directors; and (F) the written consent of each nominee to be named in a proxy statement and to serve as director of the Corporation if so elected. No person will be eligible to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 3.15. If the chairman of the stockholders’ meeting will determine that a nomination was not made in accordance with the procedures described by these bylaws, he will so declare to the meeting, and the defective nomination will be disregarded. Notwithstanding the foregoing provisions of this Section, a stockholder will also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section.

 

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IV. COMMITTEES

 

  4.1 Committees of Directors

The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, with each committee to consist of one or more of the directors of the Corporation. Any such committee, to the extent provided in the resolution of the board of directors or in the bylaws of the Corporation, will 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 that may require it; but no such committee will have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the General Corporation Law of Delaware to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaws of the Corporation.

 

  4.2 Committee Minutes

Each committee will keep regular minutes of its meetings and report the same to the board of directors when required.

 

  4.3 Meetings and Action of Committees

Meetings and actions of committees will be governed by, and be held and taken in accordance with, the provisions of Article III of these bylaws, Section 3.5 (place of meetings and meetings by telephone), Section 3.6 (regular meetings), Section 3.7 (special meetings and notice), Section 3.8 (quorum), Section 3.9 (waiver of notice), Section 3.10 (adjourned meeting and notice), and Section 3.11 (board action by written consent without a meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members; provided , however , that the time of regular meetings of committees may also be called by resolution of the board of directors, who will have the right to attend all meetings of the committee. The board of directors may adopt rules for the governance of any committee not inconsistent with the provisions of these bylaws.

 

V. OFFICERS

 

  5.1 Officers

The officers of the Corporation will be a president, one or more vice presidents, a secretary and a treasurer. The Corporation may also have, at the discretion of the board of directors, a chairman of the board, one or more assistant vice presidents, assistant secretaries, assistant treasurers, and any such other officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws. Any number of offices may be held by the same person.

 

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  5.2 Election of Officers

The officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 of these bylaws, will be chosen by the board of directors, subject to the rights, if any, of an officer under any contract of employment.

 

  5.3 Subordinate Officers

The board of directors may appoint, or empower the president to appoint, such other officers and agents as the business of the Corporation may require, each of whom will hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the board of directors may from time to time determine.

 

  5.4 Removal and Resignation of Officers

Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the board of directors at any regular or special meeting of the board or by any officer upon whom such power of removal may be conferred by the board of directors.

Any officer may resign at any time by giving written notice to the Corporation. Any resignation will take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation will not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.

 

  5.5 Vacancies in Offices

Any vacancy occurring in any office of the Corporation will be filled by the board of directors.

 

  5.6 Chairman of the Board

The chairman of the board will, if present, preside at meetings of the board of directors and exercise and perform such other powers and duties as may from time to time be assigned to him by the board of directors or as may be prescribed by these bylaws. The chairman of the board of directors will be chosen by the board of directors.

 

  5.7 President

Subject to such supervisory powers, if any, as may be given by the board of directors to the chairman of the board or the chief executive officer, if there be such officers, the president will, subject to the control of the board of directors, have general supervision, direction, and control of the business and the officers of the Corporation. In the absence or nonexistence of the chief executive officer, he or she will preside at all meetings of the stockholders and, in the absence of a chairman of the board and chief executive officer, at all meetings of the board of directors at which he or she is present. He or she will have the general powers and duties of

 

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management usually vested in the office of president of a corporation and will have such other powers and duties as may be prescribed by the board of directors or these bylaws. The board of directors may provide in their discretion that the offices of president and chief executive officer may be held by the same person.

 

  5.8 Vice Presidents

In the absence or disability of the chief executive officer and president, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, a vice president designated by the board of directors, will perform all the duties of the president and when so acting will have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents will have such other powers and perform such other duties as from time to time may be prescribed for them by the board of directors, these bylaws, the president or the chairman of the board.

 

  5.9 Secretary

The secretary or an agent of the Corporation will keep or cause to be kept, at the principal executive office of the Corporation or such other place as the board of directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes will show the time and place of each meeting, whether regular or special (and, if special, how authorized and the notice given), the names of those present at directors’ meetings or committee meetings, the number of shares present or represented at stockholders’ meetings, and the proceedings thereof.

The secretary will keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s transfer agent or registrar, as determined by resolution of the board of directors, a share register, or a duplicate share register, showing the names of all stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates evidencing such shares, and the number and date of cancellation of every certificate surrendered for cancellation.

The secretary will give, or cause to be given, notice of all meetings of the stockholders and of the board of directors required to be given by law or by these bylaws. The secretary will keep the seal of the Corporation, if one be adopted, in safe custody and will have such other powers and perform such other duties as may be prescribed by the board of directors or by these bylaws.

 

  5.10 Treasurer

The treasurer will keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account will at all reasonable times be open to inspection by any director.

 

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The treasurer will deposit all money and other valuables in the name and to the credit of the Corporation with such depositaries as may be designated by the board of directors. The treasurer will disburse the funds of the Corporation as may be ordered by the board of directors, will render to the president and directors, whenever they request it, an account of all of his or her transactions as treasurer and of the financial condition of the Corporation, and will have such other powers and perform such other duties as may be prescribed by the board of directors or these bylaws.

 

  5.11 Assistant Secretary

The assistant secretary, or, if there is more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) will, in the absence of the secretary or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the secretary and will perform such other duties and have such other powers as the board of directors may from time to time prescribe.

 

  5.12 Representation of Shares of Other Corporations

The chairman of the board, the chief executive officer, the president, any vice president, the treasurer, the secretary or assistant secretary of the Corporation, or any other person authorized by the board of directors or the chief executive officer, president or a vice president, is authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

 

  5.13 Authority and Duties of Officers

In addition to the foregoing authority and duties, all officers of the Corporation will respectively have such authority and perform such duties in the management of the business of the Corporation as may be designated from time to time by the board of directors.

 

VI. INDEMNITY

 

  6.1 Indemnification of Directors and Officers

The Corporation will, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware (as such law may from time to time be amended, but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights), indemnify each of its directors and officers (each such person sometimes referred to in this Section 6.1 as an “indemnitee”) against Expenses (as herein defined), judgments, fines, penalties, ERISA excise taxes, settlements, loss, liability, and other amounts actually and reasonably incurred in connection with any Proceeding (as herein defined), arising by reason of such person’s Official Capacity (as herein defined) or anything done or not done in such person’s Official Capacity. For purposes of this Section 6.1, a director or officer of the Corporation includes any person (a) who is or was a

 

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director or officer of the Corporation, (b) who is or was serving at the request of the Corporation as a director, officer, manager, member, partner, trustee, or other agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, or (c) who was a director or officer of a corporation that was a predecessor corporation or other entity of the Corporation or of another enterprise at the request of such predecessor corporation or entity. Such indemnification will include the right to receive payment of any Expenses incurred by the indemnitee in connection with any Proceeding in advance of its final disposition, consistent with the provisions of applicable law as then in effect. The right of indemnification provided in this Section 6.1 will not be exclusive of any other rights to which those seeking indemnification may otherwise be entitled, and the provisions of this Section 6.1 will inure to the benefit of the heirs and legal representatives of any person entitled to indemnity under this Section 6.1 and will be applicable to Proceedings commenced or continuing after the adoption of this Section 6.1, whether arising from acts or omissions occurring before or after such adoption. In furtherance, but not in limitation of the foregoing provisions, the following procedures, presumptions and remedies will apply with respect to advancement of Expenses and the right to indemnification under this Section 6.1. Indemnitee will be entitled to indemnification and advancement against all Expenses reasonably incurred for serving as a witness by reason of indemnitee’s Official Capacity in any Proceeding with respect to which indemnitee is not a party.

(a) Advancement of Expenses . All reasonable Expenses incurred by or on behalf of the indemnitee in connection with any Proceeding will be advanced to the indemnitee by the Corporation within twenty (20) days after the receipt by the Corporation of a statement or statements from the indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements will reasonably evidence the Expenses incurred by the indemnitee and, if required by law at the time of such advance, will include or be accompanied by an undertaking by or on behalf of the indemnitee to repay the amounts advanced if it should ultimately be determined that the indemnitee is not entitled to be indemnified against such Expenses pursuant to this Section 6.1.

(b) Procedure for Determination of Entitlement to Indemnification .

(i) To obtain indemnification under this Section 6.1, an indemnitee will submit to the secretary of the Corporation a written request, including such documentation and information as is reasonably available to the indemnitee and reasonably necessary to determine whether and to what extent the indemnitee is entitled to indemnification (the “Supporting Documentation”). The determination of the indemnitee’s entitlement to indemnification will be made not later than sixty (60) days after receipt by the Corporation of the written request for indemnification together with the Supporting Documentation. The secretary of the Corporation will, promptly upon receipt of such a request for indemnification, advise the board of directors in writing that the indemnitee has requested indemnification, whereupon the Corporation will provide such indemnification, including without limitation advancement of Expenses, so long as the indemnitee is legally entitled thereto in accordance with applicable law.

 

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(ii) The indemnitee’s entitlement to indemnification under this Section 6.1 will be determined in one of the following ways: (A) by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum of the board of directors; (B) by a committee of such Disinterested Directors, even though less than a quorum of the board of directors; (C) by a written opinion of Independent Counsel (as hereinafter defined) if (x) a Change of Control (as hereinafter defined) will have occurred and the indemnitee so requests or (y) a quorum of the board of directors consisting of Disinterested Directors is not obtainable or, even if obtainable, a majority of such Disinterested Directors so directs; (D) by the stockholders of the Corporation (but only if a majority of the Disinterested Directors, if they constitute a quorum of the board of directors, presents the issue of entitlement to indemnification to the stockholders for their determination); or (E) as provided in paragraph (c) below.

(iii) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to paragraph (b)(ii) above, a majority of the Disinterested Directors will select the Independent Counsel, but only an Independent Counsel to which the indemnitee does not reasonably object; provided , however , that if a Change of Control will have occurred, the indemnitee will select such Independent Counsel, but only an Independent Counsel to which the board of directors does not reasonably object.

(iv) The only basis upon which a finding that indemnification may not be made is that such indemnification is prohibited by law.

(v) The Corporation will pay all costs associated with its determination of indemnitee’s eligibility for indemnification.

(c) Presumptions and Effect of Certain Proceedings . Except as otherwise expressly provided in this Section 6.1, if a Change of Control will have occurred, the indemnitee will be presumed to be entitled to indemnification under this Section 6.1 upon submission of a request for indemnification together with the Supporting Documentation in accordance with paragraph (b)(i), and thereafter the Corporation will have the burden of proof to overcome that presumption in reaching a contrary determination. In any event, if the person or persons empowered under paragraph (b)(ii) above to determine entitlement to indemnification will not have been appointed or will not have made a determination within sixty (60) days after receipt by the Corporation of the request therefor together with the Supporting Documentation, the indemnitee will be deemed to be entitled to indemnification and the indemnitee will be entitled to such indemnification unless (A) the indemnitee misrepresented a material fact, or omitted a material fact necessary to make indemnitee’s statement not misleading, in making the request for indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by law. The termination of any Proceeding described in this Section 6.1, or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, will not, of itself, adversely affect the right of the indemnitee to indemnification or create a presumption that the indemnitee did not act

 

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in good faith and in a manner that the indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal Proceeding, that the indemnitee had reasonable cause to believe that the indemnitee’s conduct was unlawful.

(d) Remedies of Indemnitee .

(i) In the event that a determination is made pursuant to paragraph (b)(ii) that the indemnitee is not entitled to indemnification under this Section 6.1: (A) the indemnitee will be entitled to seek an adjudication of his or her entitlement to such indemnification either, at the indemnitee’s sole option, in (x) an appropriate court of the State of Delaware or any other court of competent jurisdiction, or (y) an arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association; (B) any such judicial Proceeding or arbitration will be de novo and the indemnitee will not be prejudiced by reason of such adverse determination; and (C) in any such judicial Proceeding or arbitration the Corporation will have the burden of proving that the indemnitee is not entitled to indemnification under this Section 6.1.

(ii) If a determination will have been made or is deemed to have been made, pursuant to paragraph (b)(ii) or (iii), that the indemnitee is entitled to indemnification, the Corporation will be obligated to pay the amounts constituting such indemnification within five (5) days after such determination has been made or is deemed to have been made and will be conclusively bound by such determination unless (A) the indemnitee misrepresented a material fact, or omitted a material fact necessary to make indemnitee’s statement not misleading, in making the request for indemnification or in the Supporting Documentation, or (B) such indemnification is prohibited by law. In the event that: (X) advancement of Expenses is not timely made pursuant to paragraph (a); or (Y) payment of indemnification is not made within five (5) days after a determination of entitlement to indemnification has been made or deemed to have been made pursuant to paragraph (b)(ii) or (iii), the indemnitee will be entitled to seek judicial enforcement of the Corporation’s obligation to pay to the indemnitee such advancement of Expenses or indemnification. Notwithstanding the foregoing, the Corporation may bring an action, in an appropriate court in the State of Delaware or any other court of competent jurisdiction, contesting the right of the indemnitee to receive indemnification hereunder due to the occurrence of an event described in subclause (A) or (B) of this clause (ii) (a “Disqualifying Event”); provided , however , that in any such action the Corporation will have the burden of proving the occurrence of such Disqualifying Event.

(iii) The Corporation will be precluded from asserting in any judicial Proceedings or arbitration commenced pursuant to this paragraph (d) that the procedures and presumptions of this Section 6.1 are not valid, binding and enforceable and will stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Section 6.1.

 

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(iv) In the event that the indemnitee, pursuant to this paragraph (d), seeks a judicial adjudication of or an award in arbitration to enforce his or her rights under, or to recover damages for breach of, this Section 6.1, the indemnitee will be entitled to recover from the Corporation, and will be indemnified by the Corporation against, any Expenses actually and reasonably incurred by the indemnitee if the indemnitee prevails in such judicial adjudication or arbitration. If it will be determined in such judicial adjudication or arbitration that the indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Expenses incurred by the indemnitee in connection with such judicial adjudication will be prorated accordingly.

(e) Definitions . For purposes of this Article VI:

(i) “Change in Control” means a change in control of the Corporation of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or not the Corporation is then subject to such reporting requirement; provided that, without limitation, such a change in control will be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 25% or more of the combined voting power of the Corporation’s then outstanding securities without the prior approval of at least a majority of the members of the board of directors in office immediately prior to such acquisition; (ii) the Corporation is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the board of directors in office immediately prior to such transaction or event constitute less than a majority of the board of directors thereafter; or (iii) during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the board of directors (including for this purpose any new director whose election or nomination for election by the Corporation’s stockholders was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the board of directors;

(ii) “Disinterested Director” means a director of the Corporation who is not a party to the Proceeding in respect of which indemnification or advancement of Expenses is sought by the indemnitee;

(iii) “Expenses” will include all direct and indirect costs including, but not limited to, attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, advisory fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with investigating, prosecuting, defending (or preparing to investigate, prosecute or defend) a Proceeding, or being or preparing to be a witness in a Proceeding;

 

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(iv) “Independent Counsel” means a law firm or a member of a law firm that neither presently is, nor in the past five (5) years has been, retained to represent: (A) the Corporation or the indemnitee in any matter material to either such party or (B) any other party to the Proceeding giving rise to a claim for indemnification under this Section 6.1. Notwithstanding the foregoing, the term “Independent Counsel” will not include any person who, under the applicable standards of professional conduct then prevailing under such persons relevant jurisdiction of practice, would have a conflict of interest in representing either the Corporation or the indemnitee in an action to determine the indemnitee’s rights under this Section 6.1;

(v) “Official Capacity” means indemnitee’s corporate status as an officer and/or director and any other fiduciary capacity in which indemnitee serves the Corporation, its subsidiaries or affiliates, and any other entity which indemnitee serves in such capacity at the request of any of the Corporation’s board of directors or any committee of its board of directors, chief executive officer, chairman of the board of directors, or president. “Official Capacity” also refers to all actions which indemnitee takes or does not take while serving in such capacity; and

(vi) “Proceeding” includes any actual or threatened inquiry, investigation, action, suit, arbitration, or any other such actual or threatened action or occurrence, whether civil, criminal, administrative or investigative.

(f) Invalidity; Severability; Interpretation . If any provision or provisions of this Section 6.1 will be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Section 6.1 (including, without limitation, all portions of any paragraph of this Section 6.1 containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) will not in any way be affected or impaired thereby; and (ii) to the fullest extent possible, the provisions of this Section 6.1 (including, without limitation, all portions of any paragraph of this Section 6.1 containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid; illegal or unenforceable) will be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. Reference herein to laws, regulations or agencies will be deemed to include all amendments thereof, substitutions therefor and successors thereto.

(g) Contractual Rights; Applicability . The right to be indemnified or to the reimbursement or advancement of Expenses pursuant hereto (i) is a contract right based upon good and valuable consideration, pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the Corporation and the director or officer, (ii) is intended to be retroactive and will be available with respect to events occurring prior to the adoption hereof, and (iii) will continue to exist after the rescission or restrictive modification hereof.

 

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  6.2 Indemnification of Others

The Corporation will have the power, to the extent and in the manner permitted by the General Corporation Law of Delaware, to indemnify each of its officers, employees and agents (other than directors) against Expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any Proceeding, arising by reason of the fact that such person is or was an agent of the Corporation. For purposes of this Section 6.2, an officer, employee or agent of the Corporation (other than a director) includes any person (a) who is or was an officer, employee or agent of the Corporation, (b) who is or was serving at the request of the Corporation as a director, officer, manager, member, partner, trustee, employee or other agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, or (c) who was an officer, employee or agent of a corporation that was a predecessor corporation or other entity of the Corporation or of another enterprise at the request of such predecessor corporation or entity.

 

  6.3 Insurance

The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, manager, member, partner, trustee, employee or other agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of the General Corporation Law of Delaware.

 

VII. RECORDS AND REPORTS

 

  7.1 Maintenance and Inspection of Records

The Corporation will, either at its principal executive office or at such place or places as designated by the board of directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws as amended to date, accounting books, and other records.

Any stockholder of record, in person or by attorney or other agent, will, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose will mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath will be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath will be directed to the Corporation at its registered office in Delaware or at its principal place of business.

 

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Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation will so convert any records so kept upon the request of any person entitled to inspect such records pursuant to any provision of the certificate of incorporation, these bylaws or the General Corporation Law of Delaware. When records are kept in such manner, a clearly legible paper from or by means of the information storage device or method will be admissible in evidence, and accepted for all other purposes, to the same extent as an original paper record of the same information would have been, provided the paper form accurately portrays the record.

 

  7.2 Inspection by Directors

Any director will have the right to examine the Corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the Corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The burden of proof will be upon the Corporation to establish that the inspection such director seeks is for an improper purpose. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.

 

VIII. GENERAL MATTERS

 

  8.1 Checks

From time to time, the board of directors will determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the Corporation, and only the persons so authorized will sign or endorse those instruments.

 

  8.2 Execution of Corporate Contracts and Instruments

The board of directors, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the board of directors or within the agency power of an officer, no officer, agent or employee will 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.

 

  8.3 Stock Certificates; Partly Paid Shares

The shares of the Corporation will be represented by certificates, provided that the board of directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock will be uncertificated shares. Any such resolution will not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the board of directors, every

 

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holder of stock represented by certificates and upon request every holder of uncertificated shares will 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 vice president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. The Corporation will not have power to issue a certificate in bearer form.

The Corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, and upon the books and records of the Corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon will be stated. Upon the declaration of any dividend on fully paid shares, the Corporation will declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

 

  8.4 Special Designation on Certificates

If the Corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the 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 will be set forth in full or summarized on the face or back of the certificate that the Corporation will issue to represent such class or series of stock; provided , however , that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the Corporation will issue to represent such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the 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.

 

  8.5 Lost Certificates

Except as provided in this Section 8.5, no new certificates for shares will be issued to replace a previously issued certificate unless the latter is surrendered to the Corporation and cancelled at the same time. The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or his or her legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

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  8.6 Construction; Definitions

Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Delaware General Corporation Law will govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, the masculine includes the feminine, and the term “person” includes both a corporation and a natural person.

 

  8.7 Dividends

The directors of the Corporation, subject to any rights or restrictions contained in the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock pursuant to the General Corporation Law of Delaware. Dividends may be paid in cash, in property, or in shares of the Corporation’s capital stock.

The directors of the Corporation may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes will include but not be limited to equalizing dividends, repairing or maintaining any property of the Corporation, and meeting contingencies.

 

  8.8 Fiscal Year

The fiscal year of the Corporation will be fixed by resolution of the board of directors and may be changed by the board of directors.

 

  8.9 Seal

The Corporation may adopt a corporate seal which may be altered as desired, and may use the same by causing it or a facsimile thereof, to be impressed or affixed or in any other manner reproduced.

 

  8.10 Transfer of Stock

Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it will be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.

 

  8.11 Stock Transfer Agreements and Restrictions

The Corporation will 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 General Corporation Law of Delaware.

 

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  8.12 Electronic Transmission

For purposes of these bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

 

IX. AMENDMENTS

The original or other bylaws of the Corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided , however , that the Corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors will not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.

 

X. DISSOLUTION

If it should be deemed advisable in the judgment of the board of directors of the Corporation that the Corporation should be dissolved, the board, after the adoption of a resolution to that effect by a majority of the whole board at any meeting called for that purpose, will cause notice to be mailed to each stockholder entitled to vote thereon of the adoption of the resolution and of a meeting of stockholders to take action upon the resolution.

At the meeting a vote will be taken for and against the proposed dissolution. If a majority of the outstanding stock of the Corporation entitled to vote thereon votes for the proposed dissolution, then a certificate stating, among other things, that the dissolution has been authorized in accordance with the provisions of Section 275 of the General Corporation Law of Delaware and setting forth the names and residences of the directors and officers will be executed, acknowledged, and filed and will become effective in accordance with Section 103 of the General Corporation Law of Delaware. Upon such certificate’s becoming effective in accordance with Section 103 of the General Corporation Law of Delaware, the Corporation will be dissolved.

Whenever all the stockholders entitled to vote on a dissolution consent in writing, either in person or by duly authorized attorney, to a dissolution, no meeting of directors or stockholders will be necessary. The consent will be filed and will become effective in accordance with Section 103 of the General Corporation Law of Delaware. Upon such consent’s becoming effective in accordance with Section 103 of the General Corporation Law of Delaware, the Corporation will be dissolved. If the consent is signed by an attorney, then the original power of attorney or a photocopy thereof will be attached to and filed with the consent. The consent filed with the Secretary of State will have attached to it the affidavit of the secretary or some other officer of the Corporation stating that the consent has been signed by or on behalf of all the stockholders entitled to vote on a dissolution; in addition, there will be attached to the consent a certification by the secretary or some other officer of the Corporation setting forth the names and residences of the directors and officers of the Corporation.

 

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XI. CUSTODIAN

 

  11.1 Appointment of a Custodian in Certain Cases

The Court of Chancery, upon application of any stockholder, may appoint one or more persons to be custodians and, if the Corporation is insolvent, to be receivers, of and for the Corporation when:

(a) at any meeting held for the election of directors the stockholders are so divided that they have failed to elect successors to directors whose terms have expired or would have expired upon qualification of their successors;

(b) the business of the Corporation is suffering or is threatened with irreparable injury because the directors are so divided respecting the management of the affairs of the Corporation that the required vote for action by the board of directors cannot be obtained and the stockholders are unable to terminate this division; or

(c) the Corporation has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets.

 

  11.2 Duties of Custodian

The custodian will have all the powers and title of a receiver appointed under Section 291 of the General Corporation Law of Delaware, but the authority of the custodian will be to continue the business of the Corporation and not to liquidate its affairs and distribute its assets, except when the Court of Chancery otherwise orders and except in cases arising under Sections 226(a)(3) or 352(a)(2) of the General Corporation Law of Delaware.

 

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Exhibit 10.1

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT, dated as of November 3, 2017 (this “ Agreement ”), is made among Cempra, Inc., a Delaware corporation (the “ Company ”), Vatera Healthcare Partners LLC, a Delaware limited liability company (the “ Vatera Shareholder ”), and the other shareholders of the Company set forth on the signature pages hereto (the “ Other Shareholders ” and, together with the Vatera Shareholder, the “ Shareholders ” or individually a “ Shareholder ”).

A. On August 8, 2017, the Company, Castle Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company (“ Merger Sub ”) and Melinta Therapeutics, Inc., a Delaware corporation (“ Melinta ”), entered into an Agreement and Plan of Merger and Reorganization (as amended on each of September 6, 2017 and October 24, 2017, and as may be further amended from time to time, the “ Merger Agreement ”), pursuant to which Merger Sub merged with and into Melinta, with Melinta as the surviving company and a wholly owned subsidiary of the Company (the “ Merger ”).

B. In connection with the Merger and pursuant to the Merger Agreement the Shareholders acquired Castle Common Stock (as defined in the Merger Agreement) (“ Company Common Stock ”).

C. In order to induce the Shareholders to adopt and approve the Merger Agreement and approve the Merger and other transactions contemplated in the Merger Agreement, the Company has agreed to provide the registration rights set forth in this Agreement.

D. Capitalized terms used in this Agreement and set forth in Section 9 are used as defined in Section 9.

Now, therefore, the parties hereto agree as follows:

1 . Mandatory Shelf Registration.

(a) The Company agrees to file with the SEC as soon as reasonably practicable, but in no event later than 90 calendar days following the date hereof, a shelf Registration Statement on Form S-3 or such other form under the Securities Act then available to the Company providing for the resale pursuant to Rule 415 from time to time by the Vatera Shareholder of any and all Registrable Securities held by the Vatera Shareholder (the “ Mandatory Shelf Registration Statement ”). The Company agrees to use its commercially reasonable efforts to cause the Mandatory Shelf Registration Statement to be declared effective by the SEC within 90 calendar days after the initial date of filing thereof.

(b) The Company shall use its commercially reasonable efforts to cause the Mandatory Shelf Registration Statement to remain continuously effective until the earliest of (A) the sale pursuant to a registration statement of all of the Registrable Securities covered by the Mandatory Shelf Registration Statement, (B) the sale, transfer or other disposition pursuant to Rule 144 of all of the Registrable Securities covered by the Mandatory Shelf Registration


Statement, (C) such time as the Registrable Securities covered by the Mandatory Shelf Registration Statement that are not held by Affiliates of the Company are, in the opinion of counsel to the Company, eligible for resale pursuant to Rule 144 so long as the Company is current in its 1934 Act reporting, if so required by Rule 144, (D) such time as all of the Registrable Securities covered by the Mandatory Shelf Registration Statement have been sold to the Company or any of its subsidiaries or (E) the fifth anniversary of the effective date of the Mandatory Shelf Registration Statement. The Mandatory Shelf Registration Statement shall provide for the resale of Registrable Securities from time to time, and pursuant to any method or combination of methods legally available to, and requested by, the Vatera Shareholder. The Company will pay all Registration Expenses incurred in connection with any registration pursuant to this Section 1.

(c) If the Vatera Shareholder intends to distribute Registrable Securities under the Mandatory Shelf Registration Statement by means of an underwritten offering, the Vatera Shareholder will so advise the Company. In such event, the Vatera Shareholder will have the right to select one bookrunner for the offering, provided that such bookrunner is reasonably satisfactory to the Company. In connection with each underwritten resale of Registrable Securities under the Mandatory Shelf Registration Statement, the Company shall cause there to be Full Cooperation. The Vatera Shareholder shall be entitled to no more than two underwritten offerings under the Mandatory Shelf Registration Statement; and in no event shall the Vatera Shareholder be entitled to request an underwritten offering until after the six month anniversary of the date hereof.

2 . Piggyback Registrations.

(a) Right to Piggyback . At any time after the date hereof, whenever the Company proposes to register shares of Company Common Stock (“ Common Shares ”) (other than pursuant to (i) registrations on Form S-8 or any similar form(s) solely for registration of securities in connection with an employee benefit plan or dividend reinvestment plan, (ii) registrations on Form S-4 or any similar form(s) solely for registration of securities in connection with a business combination, or (iii) a Mandatory Shelf Registration Statement), whether for its own account or for the account of one or more securityholders of the Company, and the registration form to be filed may be used for the registration or qualification for distribution of Registrable Securities, the Company will give prompt written notice to the Shareholders of its intention to effect such a registration and will include in such registration all Registrable Securities with respect to which the Company has received a written request for inclusion therein within 15 days after the date of the Company’s notice (a “ Piggyback Registration ”). Once a Shareholder has made such a written request, it may withdraw its Registrable Securities from such Piggyback Registration by giving written notice to the Company and the managing underwriter, if any, on or before the fifth (5th) day prior to the anticipated effective date of such Piggyback Registration. The Company may terminate or withdraw any registration initiated by it and covered by this Section 2 prior to the effectiveness of such registration, whether or not any Shareholder has elected to include Registrable Securities in such registration, and except for the obligation to pay Registration Expenses pursuant to Section 2(c) the Company will have no liability to the Shareholders in connection with such termination or withdrawal.

 

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(b) Underwritten Registration . If the registration referred to in Section 2(a) is proposed to be underwritten, the Company will so advise the Shareholders in the written notice given pursuant to Section 2(a). In such event, the right of any Shareholder to registration pursuant to this Section 2 will be conditioned upon such Shareholder’s participation in such underwriting and the inclusion of such Shareholder’s Registrable Securities in the underwriting, and each such Shareholder will (together with the Company and the other holders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. If any such Shareholder disapproves of the terms of the underwriting, it may elect to withdraw therefrom by written notice to the Company and the managing underwriter.

(c) Piggyback Registration Expenses . Except to the extent prohibited by applicable law, the Company will pay all Registration Expenses in connection with any Piggyback Registration, whether or not any registration or prospectus becomes effective or final.

(d) Priority on Primary Registrations . If a Piggyback Registration relates to an underwritten primary offering on behalf of the Company, and the managing underwriters advise the Company that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold without adversely affecting the marketability of the offering, including the price at which such securities can be sold, the Company will include in such registration the maximum number of securities that in the opinion of such underwriters can be sold without adversely affecting the marketability of the offering, including the price at which such securities can be sold, which securities will be so included in the following order of priority: (i) first, the securities the Company proposes to sell, (ii) second, the Registrable Securities and Prior Holder Securities requested to be included in such registration, pro rata among the Shareholders and the Prior Holders of such securities on the basis of the number of Registrable Securities and Prior Holder Securities so requested to be included therein owned by each such holder or in such other manner as they may agree, and (iii) third, other securities requested to be included in such registration.

(e) Priority on Secondary Registrations . If a Piggyback Registration relates solely to an underwritten secondary registration on behalf of other holders of the Company’s securities, and the managing underwriters advise the Company that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold without adversely affecting the marketability of the offering, including the price at which such securities can be sold, the Company will include in such registration the maximum number of securities that in the opinion of such underwriters can be sold without adversely affecting the marketability of the offering, including the price at which such securities can be sold, which securities will be so included in the following order of priority: (i) first, (A) the securities requested to be included therein by the holders requesting such registration and (B) the Registrable Securities and Prior Holder Securities pro rata among the holders thereof on the basis of the number of securities so requested to be included therein owned by each such holder or in such other manner as they may agree, and (iii) third, other securities requested to be included in such registration.

 

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3 . Registration Procedures . Whenever a Shareholder has requested that any Registrable Securities be registered pursuant to this Agreement (or in connection with the Mandatory Shelf Registration Statement), the Company will use its commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of disposition thereof. Without limiting the generality of the foregoing, the Company will, as expeditiously as commercially reasonable:

(a) prepare and (except with respect to the Mandatory Shelf Registration Statement) file with the SEC a Registration Statement with respect to such Registrable Securities, make all required filings with the National Association of Securities Dealers and thereafter use its commercially reasonable efforts to cause such Registration Statement to become effective; provided, that before filing a Registration Statement or any amendments or supplements thereto, the Company will furnish to one firm of counsel selected by the Vatera Shareholder copies of all such documents proposed to be filed. The Company will not file any Registration Statement or amendment or post-effective amendment or supplement to such Registration Statement to which such counsel will have reasonably objected in writing on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the 1933 Act or of the rules or regulations thereunder;

(b) prepare and file with the SEC such amendments and supplements to such Registration Statement as may be necessary to keep such Registration Statement effective for a period of either (i) not less than six months or, if such Registration Statement relates to an underwritten offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer or (ii) such shorter period as will terminate when all of the securities covered by such Registration Statement have been disposed of in accordance with the intended methods of disposition by the Shareholders set forth in such Registration Statement (but in any event not before the expiration of any longer period required under the 1933 Act), and to comply with the provisions of the 1933 Act with respect to the disposition of all securities covered by such Registration Statement until such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the Shareholders set forth in such Registration Statement;

(c) furnish to the Shareholders such number of copies, without charge, of such Registration Statement, each amendment and supplement thereto, including each preliminary prospectus, final prospectus, all exhibits and other documents filed therewith and such other documents as the Shareholders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Shareholders;

(d) use its commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as the Shareholders reasonably request and do any and all other acts and things that may be necessary or reasonably advisable to enable the Shareholders to consummate the disposition in such jurisdictions of the Registrable Securities owned by the Shareholders (provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);

 

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(e) use its commercially reasonable efforts to cause all Registrable Securities covered by such Registration Statement to be registered with or approved by such other governmental agencies, authorities or self-regulatory bodies as may be necessary or reasonably advisable in light of the business and operations of the Company to enable the Shareholders to consummate the disposition of such Registrable Securities in accordance with the intended method or methods of disposition thereof;

(f) immediately notify the Shareholders and any underwriter(s), at any time when a prospectus relating thereto is required to be delivered under the 1933 Act, of the occurrence of any event which will have the result that, the prospectus contains an untrue statement of a material fact or omits to state any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

(g) notify the Shareholders (i) when the prospectus or any prospectus supplement or post-effective amendment has been filed and, with respect to such Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC for amendments or supplements to such registration statement or to amend or to supplement such prospectus or for additional information and (iii) of the issuance by the SEC of any stop order suspending the effectiveness of such registration statement or the initiation of any proceedings for any of such purposes;

(h) use its commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which Common Shares are then listed;

(i) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement;

(j) enter into such customary agreements (including underwriting agreements with customary provisions) and take all such other actions as the Shareholders or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;

(k) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement, which earnings statement will satisfy the provisions of Section 10(a) of the 1933 Act and Rule 158 thereunder;

(l) make available for inspection by the Shareholders, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other agent retained by a Shareholder or underwriter, all financial and other records, pertinent corporate documents and documents relating to the business of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by a Shareholder or any such underwriter, attorney, accountant or agent in connection with such Registration Statement; provided, that such Shareholder will, and will use its commercially reasonable efforts to cause each such underwriter, accountant or other agent to enter into a customary confidentiality agreement in form and substance reasonably satisfactory to the Company; provided further, that such confidentiality agreement will not contain terms that would prohibit any such Person from complying with its obligations under applicable law or Nasdaq rules;

 

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(m) in the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related prospectus or ceasing trading of any securities included in such Registration Statement for sale in any jurisdiction, use its commercially reasonable efforts promptly to obtain the withdrawal of such order;

(n) enter into such agreements and take such other actions as the Shareholders or the underwriters reasonably request in order to expedite or facilitate the disposition of such Registrable Securities, including, without limitation, preparing for and participating in such number of “road shows” and all such other customary selling efforts as the underwriters reasonably request in order to expedite or facilitate such disposition;

(o) if such registration relates to an underwritten offering, obtain a comfort letter, addressed to the Shareholders (and, if such registration includes an underwritten public offering to the underwriters of such offering), signed by the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by comfort letters;

(p) if such registration relates to an underwritten offering, provide a legal opinion of the Company’s outside counsel, addressed to the underwriters of any underwritten public offering, with respect to the Registration Statement and prospectus in customary form and covering such matters of the type customarily covered by legal opinions of such nature;

(q) if such registration relates to an underwritten offering, furnish to the Shareholders such information and assistance as the Shareholders may reasonably request in connection with any “due diligence” effort which the Shareholders deem appropriate; and

(r) use its commercially reasonable efforts to take or cause to be taken all other actions, and do and cause to be done all other things, necessary or reasonably advisable to effect the registration of such Registrable Securities contemplated hereby.

The Company agrees not to file or make any amendment to any Registration Statement with respect to any Registrable Securities, or any amendment of or supplement to the prospectus used in connection therewith, that refers to the Shareholders by name, or otherwise identifies the Shareholders as the holders of any securities of the Company, without the consent of each such Shareholder, such consent not to be unreasonably withheld or delayed; unless such disclosure is required by law.

The Company may require the Shareholders to furnish the Company with such information regarding the Shareholders and pertinent to the disclosure requirements relating to the registration and the distribution of such securities as the Company may from time to time reasonably request in writing.

 

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4 . Registration Expenses.

(a) Except as otherwise provided for herein, all expenses incidental to the Company’s performance of or compliance with this Agreement, including, without limitation, all registration and filing fees (including SEC registration and National Association of Securities Dealers filing fees), fees and expenses of compliance with securities or blue sky laws, word processing, duplicating and printing expenses, messenger and delivery expenses, transfer agent s and registrar’s fees, cost of distributing prospectuses in preliminary and final form, as well as any supplements thereto, and fees and disbursements of counsel for the Company and all independent certified public accountants, underwriters and other Persons retained by the Company (all such expenses, “ Registration Expenses ”), will be borne by the Company. In addition, the Company will, in any event, pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit or quarterly review, the expenses of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange or automatic quotation system on which similar securities issued by the Company are then listed (including Nasdaq). Notwithstanding the foregoing, all Selling Expenses will be borne by the holders of the securities so registered pro rata on the basis of the number of their shares so registered.

(b) In connection with the Mandatory Shelf Registration Statement and each Piggyback Registration, the Company will reimburse the Shareholders for reasonable fees and disbursements, in an amount not to exceed $25,000, of one law firm, chosen by the Vatera Shareholder.

5 . Indemnification.

(a) The Company agrees to indemnify and hold harmless, and hereby does indemnify and hold harmless, each Shareholder, its affiliates and their respective officers, directors and partners and each Person who controls each Shareholder (within the meaning of the 1933 Act) against, and pay and reimburse such holder, affiliate, director, officer or partner or controlling person for any losses, claims, damages, expenses, liabilities, joint or several, to which such holder or any such affiliate, director, officer or partner or controlling person may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue or alleged untrue statement of material fact contained in any Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto, or any “issuer free writing prospectus” (as defined in 1933 Act Rule 433), (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any violation or alleged violation by the Company of any rule or regulation promulgated under the 1933 Act, the 1934 Act, the National Association of Securities Dealers or any state securities laws applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, and the Company will pay and reimburse each Shareholder and each such affiliate, director, officer, partner and controlling person for the legal fees and expenses of one counsel, and any other nonlegal expenses, actually and reasonably incurred by them in connection with investigating, defending or settling any such loss, claim, liability, action or proceeding or (iv) the failure to include, at the time of pricing any offering, the information required by Sections 12(a)(2) and 17(a)(2) of the 1933 Act; provided, that the Company will not be liable in any such case to the extent that any such loss, claim, damage, expense, liability (or action or proceeding in respect

 

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thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement, or omission or alleged omission, made in such Registration Statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in conformity with, written information prepared and furnished to the Company by a Shareholder expressly for use therein or by such Shareholder’s failure to deliver, to the extent required by law and except to the extent such failure results from a failure by the Company to comply with Section 3(f), a copy of the Registration Statement or prospectus or any amendments or supplements thereto after the Company has furnished the Shareholders with a sufficient number of copies of the same. In connection with an underwritten offering, the Company, if requested, will indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the 1933 Act) to at least the same extent as provided above with respect to the indemnification of the Shareholders.

(b) In connection with any Registration Statement in which any Shareholder is participating, such Shareholder will furnish to the Company in writing such information as the Company reasonably requests for use in connection with any such Registration Statement or prospectus and will indemnify and hold harmless the Company, its directors and officers, each other Person who controls the Company (within the meaning of the 1933 Act) and each underwriter (to the extent required by such underwriter) against any losses, claims, damages, expenses, liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof), joint or several, to which the Company or any such director or officer, any such underwriter or controlling person may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages, liabilities, actions or proceedings arise out of or are based upon (i) any untrue or alleged untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or in any application or (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is made in such Registration Statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon and in conformity with written information prepared and furnished to the Company by such Shareholder expressly for use therein, and such Shareholder will reimburse the Company and each such director, officer, underwriter and controlling Person for any legal or any other expenses actually and reasonably incurred by them in connection with investigating, defending or settling any such loss, claim, liability, action or proceeding; provided, that the obligation to indemnify and hold harmless will be individual and several to such Shareholder and will be limited to the amount of net proceeds received by such Shareholder from the sale of Registrable Securities pursuant to such Registration Statement.

(c) Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its prior written consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and

 

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expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder except to the extent that such indemnifying party is materially prejudiced as a result of such failure to give notice.

(d) The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and will survive the registration and sale of any securities by any Person entitled to any indemnification hereunder and the expiration or termination of this Agreement.

(e) If the indemnification provided for in this Section 5 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, will contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other hand in connection with the statements or omissions which resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations. The relevant fault of the indemnifying party and the indemnified party will be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, the amount a Shareholder will be obligated to contribute pursuant to this Section 5(e) will be limited to an amount equal to the net proceeds to such Shareholder of the Registrable Securities sold pursuant to the registration statement which gives rise to such obligation to contribute (less the aggregate amount of any damages which such Shareholder has otherwise been required to pay in respect of such loss, claim, damage, expense, liability or action or any substantially similar loss, claim, damage, expense, liability or action arising from the sale of such Registrable Securities).

6 . Participation in Underwritten Registrations.

(a) No Shareholder may participate in any registration hereunder that is underwritten unless it (i) agrees to sell its Registrable Securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements (including, without limitation, pursuant to the terms of any over-allotment or “green shoe” option requested by the managing underwriter(s); provided, that a Shareholder will not be required to sell more than the number of Registrable Securities that it has requested the Company to include in any registration), (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and (iii) cooperates with the Company’s reasonable requests in connection with such registration or qualification (it being understood that the Company’s failure to perform its obligations hereunder, which failure is caused by such

 

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Shareholder’s failure to cooperate, will not constitute a breach by the Company of this Agreement). Notwithstanding the foregoing, a Shareholder will not be required to agree to any indemnification obligations on the part of such Shareholder that are materially greater than its obligations pursuant to Section 6(b).

(b) Each Shareholder agrees that, if it is participating in any registration hereunder, upon receipt of any notice from the Company of the happening of any event of the kind described in subsection 3(f) above, such Shareholder will forthwith discontinue the disposition of its Registrable Securities pursuant to the Registration Statement until it receives copies of a supplemented or amended prospectus as contemplated by such Section 3(f). In the event the Company gives any such notice, the applicable time period during which a Registration Statement is to remain effective will be extended by the number of days during the period from and including the date of the giving of such notice pursuant to this Section 6(b) to and including the date when such Shareholder will have received the copies of the supplemented or amended prospectus contemplated by Section 3(f).

7 . Rule 144; Legend Removal.

(a) Facilitation of Sales Pursuant to Rule 144 . The Company covenants to the Shareholders that to the extent it shall be required to do so under the 1934 Act, the Company shall use its commercially reasonable efforts to (i) timely file the reports required to be filed by it under the 1934 Act or the 1933 Act (including the reports under Sections 13 and 15(d) of the 1934 Act referred to in subparagraph (c)(1) of Rule 144), and (ii) make and keep public information available as those terms are understood and defined in Rule 144 under the 1933 Act, all to the extent required from time to time to enable the Shareholders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144. Upon the request of any Shareholder in connection with its sale pursuant to Rule 144, the Company shall deliver to such Shareholder a written statement as to whether it has complied with such requirements.

(b) Availability of Rule 144 Not Excuse for Obligations . The fact that any Shareholder may become eligible to sell its Registrable Securities pursuant to Rule 144 shall not (i) cause such Securities to cease to be Registrable Securities or (ii) excuse the Company’s obligations set forth in this Agreement.

(c) Upon request of any Shareholder, upon receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that such legend is no longer required under the 1933 Act and applicable state laws, the Company shall promptly cause any legend affixed to any Registrable Securities to be removed from any certificate for any Registrable Securities, including by providing any opinion of counsel to the Company that may be reasonably required by the transfer agent to effect such removal.

8 . Term . This Agreement will be effective as of the date hereof and will continue in effect thereafter until the earliest of (a) its termination by the consent of the Vatera Shareholder or its successor(s) in interest, (b) the date on which the Vatera Shareholder or its successor(s) in interest holds a number of shares of Company Common Stock equal to or less than 10% of the total number of shares of Company Common Stock issued and outstanding (on a non-fully diluted basis) and (c) the dissolution, liquidation or winding up of the Company.

 

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9 . Defined Terms . Capitalized terms when used in this Agreement have the following meanings:

1933 Act ” means the Securities Act of 1933, as amended.

1934 Act ” means the Securities Exchange Act of 1934, as amended.

Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person, provided that, for purposes of this Agreement, the Company shall not be deemed an Affiliate of any Shareholder, and no Shareholder shall be deemed an Affiliate of the Company. For purposes of this definition, when used with respect to any Person, “control” means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have correlative meanings.

Business Day ” means any day, except a Saturday, Sunday or legal holiday on which banking institutions in The City of New York are authorized or obligated to close.

Full Cooperation ” means, in connection with any underwritten offering, where, in addition to the cooperation otherwise required by this Agreement, (a) members of senior management of the Company (including the chief executive officer and chief financial officer) reasonably cooperate with the underwriter(s) in connection therewith and make themselves reasonably available to participate in “road-shows” and other customary marketing activities in such locations (domestic and foreign) as reasonably recommended by the underwriter(s) (including one-on-one meetings with prospective purchasers of the Registrable Securities) and (b) the Company prepares preliminary and final prospectuses for use in connection therewith containing such additional information as reasonably requested by the underwriter(s) (in additional to the minimum amount of information required by law, rule or regulation).

Person ” means an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization or a government or department or agency thereof.

Prior Holder ” means a “Holder” as defined in the Prior Registration Rights Agreements.

Prior Holder Securities ” means those securities that constitute “Registrable Securities” under the Prior Registration Rights Agreements.

Prior Registration Rights Agreements ” means the Registration Rights Agreement, dated February 8, 2011, by and among the Company and the persons set forth on Exhibit A attached thereto.

 

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Register ,” “registered” and “registration” refers to a registration effected by preparing and filing a Registration Statement in compliance with the 1933 Act, and the declaration or ordering of the effectiveness of such Registration Statement, and compliance with applicable state securities laws of such states in which a Shareholder notifies the Company of its intention to offer Registrable Securities.

Registrable Securities ” means (i) any Common Shares issued or delivered to the Shareholders pursuant to the Merger Agreement, (ii) any Common Shares issuable upon exercise of any warrants held by the Shareholders that were assumed by the Company pursuant to the Merger Agreement or (iii) any Common Shares issued or issuable with respect to the shares referred to in the foregoing clauses (i) and (ii) by way of a share dividend or share split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, recapitalization, reclassification, merger, amalgamation, arrangement, consolidation or other reorganization. As to any particular securities constituting Registrable Securities, such securities will cease to be Registrable Securities when (x) they have been effectively registered or qualified for sale by prospectus filed under the 1933 Act and disposed of in accordance with the Registration Statement covering them, (y) subject to Section 7(b), such Registrable Security has been sold by a Shareholder pursuant to Rule 144 under circumstances in which any legend borne by such Registrable Security relating to restrictions on transferability thereof, under the 1933 Act or otherwise, is removed by the Company; or (z) such Registrable Security shall cease to be outstanding. For purposes of this Agreement, a Person will be deemed to be a holder of Registrable Securities whenever such Person has the right to acquire directly or indirectly such Registrable Securities (upon conversion, exercise or exchange in connection with a transfer of securities or otherwise, but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected.

Registration Statement ” means the prospectus and other documents filed with the SEC to effect a registration under the 1933 Act.

Rule 144 ” means Rule 144 under the 1933 Act or any successor or similar rule as may be enacted by the SEC from time to time, as in effect from time to time.

SEC ” means the Securities and Exchange Commission.

Selling Expenses ” means all underwriting discounts, fees, selling commissions and related out-of-pocket expenses of and underwriters and such underwriters’ counsel and transfer taxes applicable to the sale of Registrable Securities hereunder.

10 . Miscellaneous.

(a) No Inconsistent Agreements . The Company will not hereafter enter into any agreement with respect to its securities that is more favorable or is inconsistent or conflicts with or violates the rights granted to any Shareholder in this Agreement.

(b) Remedies . The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party hereto will have the right to equitable relief, including specific performance and injunctive relief, in addition to all of its other rights and remedies at law or in equity, to enforce the provisions of this Agreement.

 

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(c) Amendments and Waivers . Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only by the written consent of the Company and the Vatera Shareholder.

(d) Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, that a Shareholder may not assign or otherwise transfer its rights or obligations under this Agreement to any other Person without the prior written consent of the Company; provided, further, that no such prior written consent shall be required for an assignment to an affiliate of a Shareholder.

(e) Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

(f) Counterparts . This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement.

(g) Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

(h) Governing Law . This Agreement and the rights and duties of the parties hereto hereunder shall be governed by and construed in accordance with laws of the State of Delaware, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules are not mandatorily applicable by statute and would require or permit the application of the laws of another jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in the Court of Chancery of the State of Delaware, or, to the extent such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware or the United States District Court for the District of Delaware, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereinafter have to the laying of the venue of any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 10(k) shall be deemed effective service of process on such party.

 

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EACH OF THE PARTIES HERETO HERBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(i) Further Assurances . Each of the parties hereto shall execute such documents and other papers and perform such further acts as may be reasonably required or advisable to carry out the provisions of this Agreement and the transactions contemplated hereby.

(j) Organizational Documents . Notwithstanding anything to the contrary herein, all applicable provisions of the Company’s bylaws and certificate of incorporation (the “ Organizational Documents ”) shall apply to this Agreement and any actions taken hereunder as if set forth herein, and any conflict between the Organizational Documents and this Agreement shall be resolved in favor of the provisions of the Organizational Documents. If any conflict between this Agreement and the Organizational Documents interferes in any material respect with the exercise of any right or remedy hereunder, the Company shall use its commercially reasonable efforts to facilitate the exercise of such right or remedy without conflict with the Organizational Documents.

(k) Notices . All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and shall be deemed to have been given (a) when personally delivered, (b) when transmitted via facsimile to the number set out below, if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (c) the day following the day (except if not a Business Day then the next Business Day) on which the same has been delivered prepaid to a reputable national overnight air courier service, (d) when transmitted via e-mail (including via attached pdf document) to the e-mail address set out below, if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid) or (e) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective parties as applicable, at the address, facsimile number or e-mail address set forth below:

To the Company :

Cempra, Inc.

6320 Quadrangle Drive, Suite 360

Chapel Hill, NC 27517

Telephone: (919) 313-6601

Fax: (984) 209-4577

Attention: David Zaccardelli

 

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with a copy (which shall not constitute notice to the Company) to :

Skadden, Arps, Slate, Meagher & Flom LLP

500 Boylston Street

Boston, Massachusetts 02116

Telephone: (617) 573-4850

Fax: (617) 573-4822

Attention: Graham Robinson

To the Vatera Shareholder :

c/o Vatera Holdings, LLC

499 Park Avenue; 23rd Floor

New York, NY 10022

Telephone: 212-590-2950

Fax: 212-590-2951

E-mail: kferro@vateragroup.com; cgonzalo@vateragroup.com; akim@vateragroup.com; legal@vateragroup.com

Attention: Kevin Ferro

                 Cecilia Gonzalo

                 Anna Kim

                 Legal Department

with a copy (which shall not constitute notice to the Vatera Shareholder) to :

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Telephone: (212) 728-8000

Fax: (212) 728-9867

Attention: Gordon Caplan, Esq.

                 Sean M. Ewen, Esq.

; or to the other Shareholders, at such address set forth on the signature pages hereto; or to such other address as the party to whom notice is given may have previously furnished to the others in writing in the manner set forth above.

(l) Entire Agreement . This Agreement, together with the Organizational Documents, contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof.

(m) No Waivers; Third Party Beneficiary Rights . No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative

 

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and not exclusive of any rights or remedies provided by law. Nothing in this Agreement, express or implied, is intended to confer on any Person (other than the parties hereto and any permitted transferee under Section 10(e) hereof) its heirs, successors, legal representatives or permitted assigns, any rights, remedies, obligations or liabilities under this Agreement

[Remainder of this page left intentionally blank.]

 

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IN WITNESS WHEREOF, the undersigned have set their hands and seals as of the above date.

 

CEMPRA, INC.
By:  

/s/ David Zaccardelli

Name:   David Zaccardelli
Title:   Acting Chief Executive Officer
Vatera Shareholder
VATERA HEALTHCARE PARTNERS LLC
By: Vatera Holdings LLC, as manager
By:  

/s/ Kevin Ferro

  Name: Kevin Ferro
  Title: CEO


Other Shareholders
LUPA GmbH
By:  

/s/ Bernhard Nüller

Name:  
Title:  
Notice Address:


JWC RIB-X LLC
By:  

/s/ Christopher Eklund

Name:   Christopher Eklund
Title:   Managing Director
Notice Address:


MALIN LIFE SCIENCES HOLDINGS LIMITED
By:  

/s/ Darragh Lyons

Name:   Darragh Lyons
Title:   Director
Notice Address:


FALCON FLIGHT LLC

By: TDM VENTURES LLC,

its Managing Member

By:  

/s/ Erik S. Akhund

Name:  
Title:  
Notice Address:

Exhibit 10.2

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “ Agreement ”) is made and entered into as of                 , 2017 by and among, Melinta Therapeutics, Inc., f/k/a Cempra, Inc., a Delaware corporation, Cempra Pharmaceuticals, Inc., a Delaware corporation, CEM-102 Pharmaceuticals, Inc., a Delaware corporation, and Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., a Delaware corporation (each an “ Indemnitor ” and collectively, the “ Indemnitors ”), and                  (“ Indemnitee ”).

RECITALS

WHEREAS, effective November 3, 2017, Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., merged with and into Castle Acquisition Corp., a wholly owned subsidiary of Melinta Therapeutics, Inc., f/k/a Cempra, Inc., with Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., surviving as a wholly-owned subsidiary of Melinta Therapeutics, Inc., f/k/a Cempra, Inc.; and

WHEREAS, each Indemnitor desires to attract and retain highly qualified individuals, such as Indemnitee, to serve such Indemnitor; and

WHEREAS, highly competent persons have become more reluctant to serve companies as officers, directors, managers, representatives or in other capacities (each a “ Representative ” and collectively, the “ Representatives ”) unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and

WHEREAS, Indemnitors and Indemnitee recognize the significant risk of claims and actions against a Representative that may arise from such Representative’s services to and activities on behalf of Indemnitors; and

WHEREAS, Indemnitors and Indemnitee recognize that Representatives of companies are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the company or business enterprise itself; and

WHEREAS, Indemnitors and Indemnitee further recognize that although each Indemnitor maintains liability insurance for certain of its Representatives, such insurance often provides for coverage of limited scope, and that competent and experienced persons are often unable or unwilling to serve as Representatives unless they are protected by comprehensive liability insurance or indemnification; and

WHEREAS, Indemnitors and Indemnitee recognize that Indemnitee may be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“ DGCL ”), which expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplates that contracts may be entered into between companies and their Representatives with respect to indemnification; and


WHEREAS, Indemnitors further recognize that uncertainties relating to liability insurance and to indemnification have increased the difficulty of attracting and retaining highly qualified persons, such as the Indemnitee, as such persons have become more reluctant to serve companies as Representatives unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the company; and

WHEREAS, each Indemnitor further recognizes that the increased difficulty in attracting and retaining highly qualified persons, such as the Indemnitee, is detrimental to the best interests of its stockholders and that such Indemnitor should act to assure such persons that there will be increased certainty of such protection in the future; and

WHEREAS, each Indemnitor believes that it is reasonable, prudent and necessary for such Indemnitor to contractually obligate itself to indemnify, and to advance expenses on behalf of, highly qualified persons, such as the Indemnitee, to the fullest extent permitted by applicable law so that they will serve or continue to serve such Indemnitor free from undue concern that they will not be so indemnified; and

WHEREAS, each Indemnitor recognizes this Agreement is a supplement to and in furtherance of such Indemnitor’s certificate of incorporation or bylaws, as applicable (each a “ Governing Document ” and collectively, the “ Governing Documents ”) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee thereunder; and

WHEREAS, Indemnitee does not regard the protection available under the Governing Documents and insurance as adequate in the present circumstances, and may not be willing to serve as a Representative without adequate protection, and each Indemnitor desires Indemnitee to serve in such capacity; and

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of each Indemnitor on the condition that he be so indemnified; and

WHEREAS, in view of the considerations set forth above, each Indemnitor desires that the Indemnitee be indemnified by such Indemnitor as set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a Representative after the date hereof, the parties hereto agree as follows.

1.     Indemnity of Indemnitee . Each Indemnitor hereby agrees, severally but not jointly, to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof, each Indemnitor agrees as follows.


(a)     Proceedings Other Than Proceedings by or in the Right of Indemnitor . Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of an Indemnitor. Pursuant to this Section  1(a) , Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of such Indemnitor, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

(b)     Proceedings by or in the Right of Indemnitor . Indemnitee shall be entitled to the rights of indemnification provided in this Section  1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of an Indemnitor. Pursuant to this Section  1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of such Indemnitor; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to such Indemnitor unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

(c)     Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the applicable Indemnitor shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

2.     Additional Indemnity . In addition to, and without regard to any limitations on, the indemnification provided for in Section  1 of this Agreement, each Indemnitor shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of such Indemnitor), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon such Indemnitor’s obligations pursuant to this Agreement shall be that such Indemnitor shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.


3.     Contribution .

(a)    Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any Proceeding in which an Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding), such Indemnitor shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment, and such Indemnitor hereby waives and relinquishes any right of contribution it may have against Indemnitee. No Indemnitor shall enter into any settlement of any Proceeding in which such Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b)    Without diminishing or impairing the obligations of each Indemnitor set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which such Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding), such Indemnitor shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by such Indemnitor and all Representatives of such Indemnitor, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of such Indemnitor and all Representatives of such Indemnitor other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of such Indemnitor and all Representatives of such Indemnitor, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c)    Each Indemnitor hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by a Representative of such Indemnitor, other than Indemnitee, who may be jointly liable with Indemnitee.

(d)    To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the applicable Indemnitor, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim


relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by such Indemnitor and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of such Indemnitor (and its Representatives) and Indemnitee in connection with such event(s) and/or transaction(s).

4.     Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

5.     Advancement of Expenses . Notwithstanding any other provision of this Agreement, the applicable Indemnitor shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within twenty (20) days after the receipt by such Indemnitor of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section  5 shall be unsecured and interest free.

6.     Procedures and Presumptions for Determination of Entitlement to Indemnification . It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement.

(a)    To obtain indemnification under this Agreement, Indemnitee shall submit to the Secretary of the applicable Indemnitor a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification (the “ Supporting Documentation ”). The determination of the Indemnitee’s entitlement to indemnification shall be made no later than sixty (60) days after receipt by such Indemnitor of the written request for indemnification together with the Supporting Documentation. The Secretary of the applicable Indemnitor shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors of such Indemnitor (the “ Board ”) in writing that Indemnitee has requested indemnification. Any failure of Indemnitee to provide such notice to the applicable Indemnitor, or to provide such notice in a timely fashion, shall not, however, relieve such Indemnitor of any liability or obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent such failure or delay materially prejudices such Indemnitor.


(b)    Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section  6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board of the applicable Indemnitor: (i) by a majority vote of the Disinterested Representatives (as defined in Section  13 below), even though less than a quorum; (ii) by a committee of Disinterested Representatives designated by a majority vote of the Disinterested Representatives, even though less than a quorum; (iii) by Independent Counsel (as defined in Section  13 below) in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, if (A) a quorum of the Board consisting of Disinterested Representatives is not obtainable or, even if obtainable, a majority of such Disinterested Representatives so directs; or (B) a Change of Control (as hereinafter defined) shall have occurred and Indemnitee so requests; or (iv) if so directed by the Board, or by the members or stockholders of the applicable Indemnitor.

(c)    If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section  6(b) hereof, the Independent Counsel shall be selected as provided in this Section  6(c) . The Independent Counsel shall be selected by the Board of the applicable Indemnitor, but only an Independent Counsel to which Indemnitee does not reasonably object; provided, however, that if a Change of Control shall have occurred, Indemnitee shall select such Independent Counsel, but only an Independent Counsel to which the Board does not reasonably object. Within ten (10) days after such written notice of selection shall have been given, the non-selecting party shall deliver to the selecting party, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “ Independent Counsel ” as defined in Section  13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section  6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the applicable Indemnitor or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section  6(b) hereof. The applicable Indemnitor shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section  6(b) hereof, and such Indemnitor shall pay all reasonable fees and expenses incident to the procedures of this Section  6(c) , regardless of the manner in which such Independent Counsel was selected or appointed.

(d)    For purposes of this Section  6 , “ Change in Control ” means a change in control of an Indemnitor of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), whether or not the corporation is then subject to


such reporting requirement; provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule l3d-3 under the Exchange Act), directly or indirectly, of securities of such Indemnitor representing 25% or more of the combined voting power of such Indemnitor’s then outstanding securities without the prior approval of at least a majority of the members of the Board, immediately prior to such acquisition; (ii) such Indemnitor is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (including for this purpose any new member whose election or nomination for election by such Indemnitor’s stockholders was approved by a vote of at least a majority of the Board then still in office who were members of the Board at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

(e)    In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of an Indemnitor (including by its officers, managers, Board or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by such Indemnitor (including by its officers, managers, Board or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(f)    Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as defined in Section  13 below), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any Representative of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section  6(f) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the applicable Indemnitor. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(g)    If the person, persons or entity empowered or selected under Section  6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by an Indemnitor of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a


material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section  6(g) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section  6(b) of this Agreement and if (A) within fifteen (15) days after receipt such Indemnitor of the request for such determination, the Board or the Disinterested Representatives, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

(h)    Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholders of an Indemnitor shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by such Indemnitor (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and such Indemnitor hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(i)    Each Indemnitor acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(j)    The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of an Indemnitor or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.


7.     Remedies of Indemnitee .

(a)    In the event that (i) a determination is made pursuant to Section  6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section  5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section  6(b) of this Agreement within ninety (90) days after receipt by the an Indemnitor of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within five (5) days after receipt by an Indemnitor of a written request therefor or (v) payment of indemnification is not made within five (5) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section  6 of this Agreement, Indemnitee shall be entitled to an adjudication of Indemnitee’s entitlement to such indemnification either (A) in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, or (B) in an arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section  7(a) . No Indemnitor shall oppose Indemnitee’s right to seek any such adjudication.

(b)    In the event that a determination shall have been made pursuant to Section  6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section  7 shall be conducted in all respects as de novo , and Indemnitee shall not be prejudiced by reason of the adverse determination under Section  6(b) .

(c)    If a determination shall have been made pursuant to Section  6(b) of this Agreement that Indemnitee is entitled to indemnification, the applicable Indemnitor shall be bound by such determination in any judicial proceeding commenced pursuant to this Section  7 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d)    In the event that Indemnitee, pursuant to this Section  7 , seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by an Indemnitor, such Indemnitor shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section  13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

(e)    Each Indemnitor shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section  7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that such Indemnitor is bound by all the provisions of this Agreement. Each Indemnitor shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10)


days after receipt by such Indemnitor of a written request therefor) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from such Indemnitor under this Agreement or under any directors’ and officers’ liability insurance policies maintained by such Indemnitor, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

(f)    Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding

8.     Non-Exclusivity; Survival of Rights; Insurance; Several Obligations .

(a)    The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Governing Documents, any agreement, a vote of stockholders, a resolution of the Board or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Governing Documents and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)    To the extent that an Indemnitor maintains an insurance policy or policies providing liability insurance for directors, managers, officers, employees, or agents or fiduciaries of such Indemnitor or of any other Enterprise that such person serves at the request of such Indemnitor, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, manager, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, an Indemnitor has director and officer liability insurance in effect, such Indemnitor shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The applicable Indemnitor 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 proceeding in accordance with the terms of such policies.

(c)    In the event of any payment under this Agreement, each Indemnitor shall be subrogated to the extent of such payment to all of the rights of recovery the Indemnitee may have against an opposing party to the Proceeding giving rise to the payment to the Indemnitee under this Agreement, and the Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable such Indemnitor to bring suit to enforce such rights.


(d)    No Indemnitor shall be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e)    Each Indemnitor’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of such Indemnitor as a Representative of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other Enterprise.

(f)    The indemnification obligations of each Indemnitor hereunder, shall be limited to matters related to the service of the Indemnitee as a Representative of such Indemnitor. Notwithstanding anything to the contrary contained herein, no Indemnitor shall have any obligation to indemnify the Indemnitee for losses related to a Proceeding arising from the Indemnitee’s service as a Representative of another Indemnitor, except to the extent that such Proceeding also relates to the Indemnitee’s service as a Representative for such Indemnitor. To the extent that the Indemnitee is entitled to indemnification from more than one Indemnitor, no Indemnitor shall be liable for indemnification obligations in excess of such Indemnitor’s proportionate share of Expenses, judgments, penalties, fines and amounts paid as a result of such Proceeding.

9.     Exception to Right of Indemnification . Notwithstanding any provision in this Agreement, no Indemnitor shall be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a)    for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;

(b)    for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of such Indemnitor within the meaning of Section 16(b) of the Exchange Act, or similar provisions of state statutory law or common law; or

(c)    in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against such Indemnitor or its Representatives, unless (i) the Board of such Indemnitor authorized the Proceeding (or any part of any Proceeding) prior to its initiation, or (ii) such Indemnitor provides the indemnification, in its sole discretion, pursuant to the powers vested in such Indemnitor under applicable law.

10.     Duration of Agreement . All agreements and obligations of each Indemnitor contained herein shall continue during and apply to the period Indemnitee is or was a Representative of such Indemnitor (or is or was serving at the request of such Indemnitor as a Representative of such Indemnitor or another Enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section  7


hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of such Indemnitor), assigns, spouses, heirs, executors and personal and legal representatives.

11.     Security . To the extent requested by Indemnitee and approved by the Board of an Indemnitor, such Indemnitor may at any time and from time to time provide security to Indemnitee for such Indemnitor’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

12.     Enforcement .

(a)    Each Indemnitor expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a Representative of such Indemnitor, and each Indemnitor acknowledges that Indemnitee is relying upon this Agreement in serving as a Representative of such Indemnitor.

(b)    This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

13.     Definitions . The following terms have the following definitions for purposes of this Agreement.

(a)    “ Corporate Status ” describes the status of a person who is or was a representative, director, manager, officer, employee, agent or fiduciary of the applicable Indemnitor or of any other Enterprise that such person is or was serving at the express written request of such Indemnitor.

(b)    “ Disinterested Representative ” means a member of the Board of an Indemnitor who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(c)    “ Enterprise ” shall mean an Indemnitor and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of such Indemnitor as a representative, director, manager, officer, employee, agent or fiduciary.

(d)    “ Expenses ” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting,


defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(e)    “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Indemnitors or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either an Indemnitor or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. Each Indemnitor agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(f)    “ Proceeding ” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of an Indemnitor or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a Representative of such Indemnitor, by reason of any action taken by him or of any inaction on his part while acting as a Representative of such Indemnitor, or by reason of the fact that he is or was serving at the request of such Indemnitor as a Representative of another Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section  7 of this Agreement to enforce his rights under this Agreement.

14.     Severability . The invalidity of unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

15.     Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by all of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


16.     Notice By Indemnitee . Indemnitee agrees promptly to notify each Indemnitor in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Indemnitors shall not relieve the applicable Indemnitor of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices such Indemnitor.

17.     Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (1) upon personal delivery to the party to be notified; (2) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day; (3) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (4) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

 

  (a) to Indemnitee at the address set forth below Indemnitee’s signature hereto; or

 

  (b) to Indemnitor at:

 

    Melinta Therapeutics, Inc.
    300 George Street
    Suite 301
    New Haven, Connecticut 06511
    Attn: Daniel Wechsler
    Telephone: (312) 767-0291

or to such other address as may have been furnished to Indemnitee by an Indemnitor or to an Indemnitor by Indemnitee, as the case may be.

18.     Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19.     Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

20.     Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Each Indemnitor and Indemnitee hereby irrevocably and unconditionally (a) agrees that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the


Chancery Court of the State of Delaware (the “ Delaware Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consents to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waives any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (d) waives and agrees not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

[The next page is the signature page.]


IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

 

INDEMNITORS:     MELINTA THERAPEUTICS, INC.,
    F/K/A CEMPRA, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    MELINTA SUBSIDIARY CORP.,
    F/K/A MELINTA THERAPEUTICS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    CEMPRA PHARMACEUTICALS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    CEM-102 PHARMACEUTICALS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
INDEMNITEE:    
   

 

    Name:  

 

    Address:
   

 

   

 

   

 

   

 

   

 

Exhibit 10.3

AMENDED AND RESTATED

INDEMNIFICATION AGREEMENT

THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (the “ Agreement ”) is made and entered into as of             , 2017 by and among, Melinta Therapeutics, Inc., f/k/a Cempra, Inc., a Delaware corporation, Cempra Pharmaceuticals, Inc., a Delaware corporation, CEM-102 Pharmaceuticals, Inc., a Delaware corporation, and Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., a Delaware corporation (each an “ Indemnitor ” and collectively, the “ Indemnitors ”), and              (“ Indemnitee ”).

RECITALS

WHEREAS, effective November 3, 2017, Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., merged with and into Castle Acquisition Corp., a wholly owned subsidiary of Melinta Therapeutics, Inc., f/k/a Cempra, Inc., with Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., surviving as a wholly-owned subsidiary of Melinta Therapeutics, Inc., f/k/a Cempra, Inc. (the “ Merger ”); and

WHEREAS, each Indemnitor desires to attract and retain highly qualified individuals, such as Indemnitee, to serve such Indemnitor; and

WHEREAS, to reflect the new corporate structure of the Indemnitors following the Merger, each Indemnitor desires to enter into a new Agreement with the Indemnitee; and

WHEREAS, highly competent persons have become more reluctant to serve companies as officers, directors, managers, representatives or in other capacities (each a “ Representative ” and collectively, the “ Representatives ”) unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and

WHEREAS, Indemnitors and Indemnitee recognize the significant risk of claims and actions against a Representative that may arise from such Representative’s services to and activities on behalf of Indemnitors; and

WHEREAS, Indemnitors and Indemnitee recognize that Representatives of companies are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the company or business enterprise itself; and

WHEREAS, Indemnitors and Indemnitee further recognize that although each Indemnitor maintains liability insurance for certain of its Representatives, such insurance often provides for coverage of limited scope, and that competent and experienced persons are often unable or unwilling to serve as Representatives unless they are protected by comprehensive liability insurance or indemnification; and


WHEREAS, Indemnitors and Indemnitee recognize that Indemnitee may be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“ DGCL ”), which expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplates that contracts may be entered into between companies and their Representatives with respect to indemnification; and

WHEREAS, Indemnitors further recognize that uncertainties relating to liability insurance and to indemnification have increased the difficulty of attracting and retaining highly qualified persons, such as the Indemnitee, as such persons have become more reluctant to serve companies as Representatives unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the company; and

WHEREAS, each Indemnitor further recognizes that the increased difficulty in attracting and retaining highly qualified persons, such as the Indemnitee, is detrimental to the best interests of its stockholders and that such Indemnitor should act to assure such persons that there will be increased certainty of such protection in the future; and

WHEREAS, each Indemnitor believes that it is reasonable, prudent and necessary for such Indemnitor to contractually obligate itself to indemnify, and to advance expenses on behalf of, highly qualified persons, such as the Indemnitee, to the fullest extent permitted by applicable law so that they will serve or continue to serve such Indemnitor free from undue concern that they will not be so indemnified; and

WHEREAS, each Indemnitor recognizes this Agreement is a supplement to and in furtherance of such Indemnitor’s certificate of incorporation or bylaws, as applicable (each a “ Governing Document ” and collectively, the “ Governing Documents ”) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee thereunder; and

WHEREAS, Indemnitee does not regard the protection available under the Governing Documents and insurance as adequate in the present circumstances, and may not be willing to serve as a Representative without adequate protection, and each Indemnitor desires Indemnitee to serve in such capacity; and

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of each Indemnitor on the condition that he be so indemnified; and

WHEREAS, in view of the considerations set forth above, each Indemnitor desires that the Indemnitee be indemnified by such Indemnitor as set forth herein.


AGREEMENT

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a Representative after the date hereof, the parties hereto agree as follows.

1.     Indemnity of Indemnitee . Each Indemnitor hereby agrees, severally but not jointly, to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof, each Indemnitor agrees as follows.

(a)     Proceedings Other Than Proceedings by or in the Right of Indemnitor . Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of an Indemnitor. Pursuant to this Section  1(a) , Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of such Indemnitor, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

(b)     Proceedings by or in the Right of Indemnitor . Indemnitee shall be entitled to the rights of indemnification provided in this Section  1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of an Indemnitor. Pursuant to this Section  1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of such Indemnitor; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to such Indemnitor unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

(c)     Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the applicable Indemnitor shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

2.     Additional Indemnity . In addition to, and without regard to any limitations on, the indemnification provided for in Section  1 of this Agreement, each Indemnitor shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or


participant in any Proceeding (including a Proceeding by or in the right of such Indemnitor), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon such Indemnitor’s obligations pursuant to this Agreement shall be that such Indemnitor shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.

3.     Contribution .

(a)    Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any Proceeding in which an Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding), such Indemnitor shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment, and such Indemnitor hereby waives and relinquishes any right of contribution it may have against Indemnitee. No Indemnitor shall enter into any settlement of any Proceeding in which such Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b)    Without diminishing or impairing the obligations of each Indemnitor set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which such Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding), such Indemnitor shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by such Indemnitor and all Representatives of such Indemnitor, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of such Indemnitor and all Representatives of such Indemnitor other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of such Indemnitor and all Representatives of such Indemnitor, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c)    Each Indemnitor hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by a Representative of such Indemnitor, other than Indemnitee, who may be jointly liable with Indemnitee.


(d)    To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the applicable Indemnitor, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by such Indemnitor and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of such Indemnitor (and its Representatives) and Indemnitee in connection with such event(s) and/or transaction(s).

4.     Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

5.     Advancement of Expenses . Notwithstanding any other provision of this Agreement, the applicable Indemnitor shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within twenty (20) days after the receipt by such Indemnitor of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section  5 shall be unsecured and interest free.

6.     Procedures and Presumptions for Determination of Entitlement to Indemnification . It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement.

(a)    To obtain indemnification under this Agreement, Indemnitee shall submit to the Secretary of the applicable Indemnitor a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification (the “ Supporting Documentation ”). The determination of the Indemnitee’s entitlement to indemnification shall be made no later than sixty (60) days after receipt by such Indemnitor of the written request for indemnification together with the Supporting Documentation. The Secretary of the applicable Indemnitor shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors of such Indemnitor (the “ Board ”) in writing that Indemnitee has requested indemnification. Any failure of Indemnitee to provide such notice to the applicable Indemnitor, or to provide such notice in a timely fashion, shall not,


however, relieve such Indemnitor of any liability or obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent such failure or delay materially prejudices such Indemnitor.

(b)    Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section  6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board of the applicable Indemnitor: (i) by a majority vote of the Disinterested Representatives (as defined in Section  13 below), even though less than a quorum; (ii) by a committee of Disinterested Representatives designated by a majority vote of the Disinterested Representatives, even though less than a quorum; (iii) by Independent Counsel (as defined in Section  13 below) in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, if (A) a quorum of the Board consisting of Disinterested Representatives is not obtainable or, even if obtainable, a majority of such Disinterested Representatives so directs; or (B) a Change of Control (as hereinafter defined) shall have occurred and Indemnitee so requests; or (iv) if so directed by the Board, or by the members or stockholders of the applicable Indemnitor.

(c)    If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section  6(b) hereof, the Independent Counsel shall be selected as provided in this Section  6(c) . The Independent Counsel shall be selected by the Board of the applicable Indemnitor, but only an Independent Counsel to which Indemnitee does not reasonably object; provided, however, that if a Change of Control shall have occurred, Indemnitee shall select such Independent Counsel, but only an Independent Counsel to which the Board does not reasonably object. Within ten (10) days after such written notice of selection shall have been given, the non-selecting party shall deliver to the selecting party, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “ Independent Counsel ” as defined in Section  13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section  6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the applicable Indemnitor or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section  6(b) hereof. The applicable Indemnitor shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section  6(b) hereof, and such Indemnitor shall pay all reasonable fees and expenses incident to the procedures of this Section  6(c) , regardless of the manner in which such Independent Counsel was selected or appointed.


(d)    For purposes of this Section  6 , “ Change in Control ” means a change in control of an Indemnitor of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), whether or not the corporation is then subject to such reporting requirement; provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule l3d-3 under the Exchange Act), directly or indirectly, of securities of such Indemnitor representing 25% or more of the combined voting power of such Indemnitor’s then outstanding securities without the prior approval of at least a majority of the members of the Board, immediately prior to such acquisition; (ii) such Indemnitor is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (including for this purpose any new member whose election or nomination for election by such Indemnitor’s stockholders was approved by a vote of at least a majority of the Board then still in office who were members of the Board at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

(e)    In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of an Indemnitor (including by its officers, managers, Board or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by such Indemnitor (including by its officers, managers, Board or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(f)    Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as defined in Section  13 below), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any Representative of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section  6(f) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the applicable Indemnitor. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.


(g)    If the person, persons or entity empowered or selected under Section  6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by an Indemnitor of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section  6(g) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section  6(b) of this Agreement and if (A) within fifteen (15) days after receipt such Indemnitor of the request for such determination, the Board or the Disinterested Representatives, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

(h)    Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholders of an Indemnitor shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by such Indemnitor (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and such Indemnitor hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(i)    Each Indemnitor acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.


(j)    The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of an Indemnitor or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

7.     Remedies of Indemnitee .

(a)    In the event that (i) a determination is made pursuant to Section  6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section  5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section  6(b) of this Agreement within ninety (90) days after receipt by the an Indemnitor of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within five (5) days after receipt by an Indemnitor of a written request therefor or (v) payment of indemnification is not made within five (5) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section  6 of this Agreement, Indemnitee shall be entitled to an adjudication of Indemnitee’s entitlement to such indemnification either (A) in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, or (B) in an arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section  7(a) . No Indemnitor shall oppose Indemnitee’s right to seek any such adjudication.

(b)    In the event that a determination shall have been made pursuant to Section  6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section  7 shall be conducted in all respects as de novo , and Indemnitee shall not be prejudiced by reason of the adverse determination under Section  6(b) .

(c)    If a determination shall have been made pursuant to Section  6(b) of this Agreement that Indemnitee is entitled to indemnification, the applicable Indemnitor shall be bound by such determination in any judicial proceeding commenced pursuant to this Section  7 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d)    In the event that Indemnitee, pursuant to this Section  7 , seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by an Indemnitor, such Indemnitor shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section  13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.


(e)    Each Indemnitor shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section  7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that such Indemnitor is bound by all the provisions of this Agreement. Each Indemnitor shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by such Indemnitor of a written request therefor) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from such Indemnitor under this Agreement or under any directors’ and officers’ liability insurance policies maintained by such Indemnitor, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

(f)    Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding

8.     Non-Exclusivity; Survival of Rights; Insurance; Several Obligations .

(a)    The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Governing Documents, any agreement, a vote of stockholders, a resolution of the Board or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Governing Documents and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)    To the extent that an Indemnitor maintains an insurance policy or policies providing liability insurance for directors, managers, officers, employees, or agents or fiduciaries of such Indemnitor or of any other Enterprise that such person serves at the request of such Indemnitor, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, manager, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, an Indemnitor has director and officer liability insurance in effect, such Indemnitor shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The applicable Indemnitor 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 proceeding in accordance with the terms of such policies.


(c)    In the event of any payment under this Agreement, each Indemnitor shall be subrogated to the extent of such payment to all of the rights of recovery the Indemnitee may have against an opposing party to the Proceeding giving rise to the payment to the Indemnitee under this Agreement, and the Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable such Indemnitor to bring suit to enforce such rights.

(d)    No Indemnitor shall be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e)    Each Indemnitor’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of such Indemnitor as a Representative of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other Enterprise.

(f)    The indemnification obligations of each Indemnitor hereunder, shall be limited to matters related to the service of the Indemnitee as a Representative of such Indemnitor. Notwithstanding anything to the contrary contained herein, no Indemnitor shall have any obligation to indemnify the Indemnitee for losses related to a Proceeding arising from the Indemnitee’s service as a Representative of another Indemnitor, except to the extent that such Proceeding also relates to the Indemnitee’s service as a Representative for such Indemnitor. To the extent that the Indemnitee is entitled to indemnification from more than one Indemnitor, no Indemnitor shall be liable for indemnification obligations in excess of such Indemnitor’s proportionate share of Expenses, judgments, penalties, fines and amounts paid as a result of such Proceeding.

9.     Exception to Right of Indemnification . Notwithstanding any provision in this Agreement, no Indemnitor shall be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a)    for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;

(b)    for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of such Indemnitor within the meaning of Section 16(b) of the Exchange Act, or similar provisions of state statutory law or common law; or

(c)    in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against such Indemnitor or its Representatives, unless (i) the Board of such Indemnitor authorized the Proceeding (or any part of any Proceeding) prior to its initiation, or (ii) such Indemnitor provides the indemnification, in its sole discretion, pursuant to the powers vested in such Indemnitor under applicable law.


10.     Duration of Agreement . All agreements and obligations of each Indemnitor contained herein shall continue during and apply to the period Indemnitee is or was a Representative of such Indemnitor (or is or was serving at the request of such Indemnitor as a Representative of such Indemnitor or another Enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section  7 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of such Indemnitor), assigns, spouses, heirs, executors and personal and legal representatives.

11.     Security . To the extent requested by Indemnitee and approved by the Board of an Indemnitor, such Indemnitor may at any time and from time to time provide security to Indemnitee for such Indemnitor’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

12.     Enforcement .

(a)    Each Indemnitor expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a Representative of such Indemnitor, and each Indemnitor acknowledges that Indemnitee is relying upon this Agreement in serving as a Representative of such Indemnitor.

(b)    This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

13.     Definitions . The following terms have the following definitions for purposes of this Agreement.

(a)    “ Corporate Status ” describes the status of a person who is or was a representative, director, manager, officer, employee, agent or fiduciary of the applicable Indemnitor or of any other Enterprise that such person is or was serving at the express written request of such Indemnitor.

(b)    “ Disinterested Representative ” means a member of the Board of an Indemnitor who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(c)    “ Enterprise ” shall mean an Indemnitor and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of such Indemnitor as a representative, director, manager, officer, employee, agent or fiduciary.


(d)    “ Expenses ” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(e)    “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Indemnitors or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either an Indemnitor or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. Each Indemnitor agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(f)    “ Proceeding ” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of an Indemnitor or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a Representative of such Indemnitor, by reason of any action taken by him or of any inaction on his part while acting as a Representative of such Indemnitor, or by reason of the fact that he is or was serving at the request of such Indemnitor as a Representative of another Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section  7 of this Agreement to enforce his rights under this Agreement.

14.     Severability . The invalidity of unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.


15.     Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by all of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

16.     Notice By Indemnitee . Indemnitee agrees promptly to notify each Indemnitor in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Indemnitors shall not relieve the applicable Indemnitor of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices such Indemnitor.

17.     Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (1) upon personal delivery to the party to be notified; (2) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day; (3) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (4) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

 

  (a) to Indemnitee at the address set forth below Indemnitee’s signature

hereto; or

 

  (b) to Indemnitor at:

Melinta Therapeutics, Inc.

300 George Street

Suite 301

New Haven, Connecticut 06511

Attn: Daniel Wechsler

Telephone: (312) 767-0291

or to such other address as may have been furnished to Indemnitee by an Indemnitor or to an Indemnitor by Indemnitee, as the case may be.

18.     Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19.     Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


20.     Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Each Indemnitor and Indemnitee hereby irrevocably and unconditionally (a) agrees that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “ Delaware Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consents to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waives any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (d) waives and agrees not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

[The next page is the signature page.]


IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

 

INDEMNITORS:     MELINTA THERAPEUTICS, INC.,
    F/K/A CEMPRA, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    MELINTA SUBSIDIARY CORP.,
    F/K/A MELINTA THERAPEUTICS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    CEMPRA PHARMACEUTICALS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    CEM-102 PHARMACEUTICALS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
INDEMNITEE:    
   

 

    Name:  

 

    Address:
   

 

   

 

   

 

   

 

   

 

Exhibit 10.4

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “ Agreement ”) is made and entered into as of             , 2017 by and among, Melinta Therapeutics, Inc., f/k/a Cempra, Inc., a Delaware corporation, Cempra Pharmaceuticals, Inc., a Delaware corporation, CEM-102 Pharmaceuticals, Inc., a Delaware corporation, and Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., a Delaware corporation (each an “ Indemnitor ” and collectively, the “ Indemnitors ”), and              (“ Indemnitee ”).

RECITALS

WHEREAS, effective November 3, 2017, Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., merged with and into Castle Acquisition Corp., a wholly owned subsidiary of Melinta Therapeutics, Inc., f/k/a Cempra, Inc., with Melinta Subsidiary Corp., f/k/a Melinta Therapeutics, Inc., surviving as a wholly-owned subsidiary of Melinta Therapeutics, Inc., f/k/a Cempra, Inc.; and

WHEREAS, each Indemnitor desires to attract and retain highly qualified individuals, such as Indemnitee, to serve such Indemnitor; and

WHEREAS, highly competent persons have become more reluctant to serve companies as officers, directors, managers, representatives or in other capacities (each a “ Representative ” and collectively, the “ Representatives ”) unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and

WHEREAS, Indemnitors and Indemnitee recognize the significant risk of claims and actions against a Representative that may arise from such Representative’s services to and activities on behalf of Indemnitors; and

WHEREAS, Indemnitors and Indemnitee recognize that Representatives of companies are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the company or business enterprise itself; and

WHEREAS, Indemnitors and Indemnitee further recognize that although each Indemnitor maintains liability insurance for certain of its Representatives, such insurance often provides for coverage of limited scope, and that competent and experienced persons are often unable or unwilling to serve as Representatives unless they are protected by comprehensive liability insurance or indemnification; and

WHEREAS, Indemnitors and Indemnitee recognize that Indemnitee may be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“ DGCL ”), which expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplates that contracts may be entered into between companies and their Representatives with respect to indemnification; and


WHEREAS, Indemnitors further recognize that uncertainties relating to liability insurance and to indemnification have increased the difficulty of attracting and retaining highly qualified persons, such as the Indemnitee, as such persons have become more reluctant to serve companies as Representatives unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the company; and

WHEREAS, each Indemnitor further recognizes that the increased difficulty in attracting and retaining highly qualified persons, such as the Indemnitee, is detrimental to the best interests of its stockholders and that such Indemnitor should act to assure such persons that there will be increased certainty of such protection in the future; and

WHEREAS, each Indemnitor believes that it is reasonable, prudent and necessary for such Indemnitor to contractually obligate itself to indemnify, and to advance expenses on behalf of, highly qualified persons, such as the Indemnitee, to the fullest extent permitted by applicable law so that they will serve or continue to serve such Indemnitor free from undue concern that they will not be so indemnified; and

WHEREAS, each Indemnitor recognizes this Agreement is a supplement to and in furtherance of such Indemnitor’s certificate of incorporation or bylaws, as applicable (each a “ Governing Document ” and collectively, the “ Governing Documents ”) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee thereunder; and

WHEREAS, Indemnitee does not regard the protection available under the Governing Documents and insurance as adequate in the present circumstances, and may not be willing to serve as a Representative without adequate protection, and each Indemnitor desires Indemnitee to serve in such capacity; and

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of each Indemnitor on the condition that he be so indemnified; and

WHEREAS, Indemnitee has or may from time to time obtain certain rights to indemnification and/or insurance which Indemnitee intends to be secondary to the primary obligation of Indemnitor to indemnify Indemnitee as provided herein, with each Indemnitor’s acknowledgement and agreement to the foregoing being a material condition to Indemnitee’s willingness to serve as a Representative of such Indemnitor; and

WHEREAS, in view of the considerations set forth above, each Indemnitor desires that the Indemnitee be indemnified by such Indemnitor as set forth herein.


AGREEMENT

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a Representative after the date hereof, the parties hereto agree as follows.

1. Indemnity of Indemnitee . Each Indemnitor hereby agrees, severally but not jointly, to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof, each Indemnitor agrees as follows.

(a) Proceedings Other Than Proceedings by or in the Right of Indemnitor . Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of an Indemnitor. Pursuant to this Section 1(a) , Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of such Indemnitor, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

(b) Proceedings by or in the Right of Indemnitor . Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of an Indemnitor. Pursuant to this Section 1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of such Indemnitor; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to such Indemnitor unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the applicable Indemnitor shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

2. Additional Indemnity . In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, each Indemnitor shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments,


penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of such Indemnitor), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon such Indemnitor’s obligations pursuant to this Agreement shall be that such Indemnitor shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.

3. Contribution .

(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any Proceeding in which an Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding), such Indemnitor shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment, and such Indemnitor hereby waives and relinquishes any right of contribution it may have against Indemnitee. No Indemnitor shall enter into any settlement of any Proceeding in which such Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b) Without diminishing or impairing the obligations of each Indemnitor set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which such Indemnitor is jointly liable with Indemnitee (or would be if joined in such Proceeding), such Indemnitor shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by such Indemnitor and all Representatives of such Indemnitor, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of such Indemnitor and all Representatives of such Indemnitor other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of such Indemnitor and all Representatives of such Indemnitor, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c) Each Indemnitor hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by a Representative of such Indemnitor, other than Indemnitee, who may be jointly liable with Indemnitee.


(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the applicable Indemnitor, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by such Indemnitor and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of such Indemnitor (and its Representatives) and Indemnitee in connection with such event(s) and/or transaction(s).

4. Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

5. Advancement of Expenses . Notwithstanding any other provision of this Agreement, the applicable Indemnitor shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within twenty (20) days after the receipt by such Indemnitor of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.

6. Procedures and Presumptions for Determination of Entitlement to Indemnification . It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement.

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Secretary of the applicable Indemnitor a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification (the “ Supporting Documentation ”). The determination of the Indemnitee’s entitlement to indemnification shall be made no later than sixty (60) days after receipt by such Indemnitor of the written request for indemnification together with the Supporting Documentation. The Secretary of the applicable Indemnitor shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors of such Indemnitor (the “ Board ”) in writing that Indemnitee has requested indemnification. Any failure of Indemnitee to provide such notice to the applicable Indemnitor, or to provide such notice in a timely fashion, shall not,


however, relieve such Indemnitor of any liability or obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent such failure or delay materially prejudices such Indemnitor.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board of the applicable Indemnitor: (i) by a majority vote of the Disinterested Representatives (as defined in Section 13 below), even though less than a quorum; (ii) by a committee of Disinterested Representatives designated by a majority vote of the Disinterested Representatives, even though less than a quorum; (iii) by Independent Counsel (as defined in Section 13 below) in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, if (A) a quorum of the Board consisting of Disinterested Representatives is not obtainable or, even if obtainable, a majority of such Disinterested Representatives so directs; or (B) a Change of Control (as hereinafter defined) shall have occurred and Indemnitee so requests; or (iv) if so directed by the Board, or by the members or stockholders of the applicable Indemnitor.

(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c) . The Independent Counsel shall be selected by the Board of the applicable Indemnitor, but only an Independent Counsel to which Indemnitee does not reasonably object; provided, however, that if a Change of Control shall have occurred, Indemnitee shall select such Independent Counsel, but only an Independent Counsel to which the Board does not reasonably object. Within ten (10) days after such written notice of selection shall have been given, the non-selecting party shall deliver to the selecting party, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “ Independent Counsel ” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the applicable Indemnitor or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof. The applicable Indemnitor shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and such Indemnitor shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c) , regardless of the manner in which such Independent Counsel was selected or appointed.


(d) For purposes of this Section 6 , “ Change in Control ” means a change in control of an Indemnitor of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), whether or not the corporation is then subject to such reporting requirement; provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule l3d-3 under the Exchange Act), directly or indirectly, of securities of such Indemnitor representing 25% or more of the combined voting power of such Indemnitor’s then outstanding securities without the prior approval of at least a majority of the members of the Board, immediately prior to such acquisition; (ii) such Indemnitor is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (including for this purpose any new member whose election or nomination for election by such Indemnitor’s stockholders was approved by a vote of at least a majority of the Board then still in office who were members of the Board at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

(e) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of an Indemnitor (including by its officers, managers, Board or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by such Indemnitor (including by its officers, managers, Board or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(f) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as defined in Section 13 below), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any Representative of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(f) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the applicable Indemnitor. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.


(g) If the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by an Indemnitor of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(g) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt such Indemnitor of the request for such determination, the Board or the Disinterested Representatives, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

(h) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholders of an Indemnitor shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by such Indemnitor (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and such Indemnitor hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(i) Each Indemnitor acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.


(j) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of an Indemnitor or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

7. Remedies of Indemnitee .

(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by the an Indemnitor of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within five (5) days after receipt by an Indemnitor of a written request therefor or (v) payment of indemnification is not made within five (5) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication of Indemnitee’s entitlement to such indemnification either (A) in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, or (B) in an arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a) . No Indemnitor shall oppose Indemnitee’s right to seek any such adjudication.

(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 7 shall be conducted in all respects as de novo , and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b) .

(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the applicable Indemnitor shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) In the event that Indemnitee, pursuant to this Section 7 , seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by an Indemnitor, such Indemnitor shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.


(e) Each Indemnitor shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that such Indemnitor is bound by all the provisions of this Agreement. Each Indemnitor shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by such Indemnitor of a written request therefor) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from such Indemnitor under this Agreement or under any directors’ and officers’ liability insurance policies maintained by such Indemnitor, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding

8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation; Several Obligations .

(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Governing Documents, any agreement, a vote of stockholders, a resolution of the Board or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Governing Documents and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that an Indemnitor maintains an insurance policy or policies providing liability insurance for directors, managers, officers, employees, or agents or fiduciaries of such Indemnitor or of any other Enterprise that such person serves at the request of such Indemnitor, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, manager, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, an Indemnitor has director and officer liability insurance in effect, such Indemnitor shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The applicable Indemnitor 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 proceeding in accordance with the terms of such policies.


(c) Each Indemnitor hereby acknowledges that Indemnitee has or may from time to time obtain certain rights to indemnification, advancement of expenses and/or insurance provided by one or more third party entities or its affiliates in connection with his or her service on the Board of Directors at the behest of such third party entity (collectively the “ Third Party Indemnitors ”). Each Indemnitor hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Third Party Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the Governing Documents of such Indemnitor (or any agreement between such Indemnitor and Indemnitee), without regard to any rights Indemnitee may have against the Third Party Indemnitors, and, (iii) that it irrevocably waives, relinquishes and releases the Third Party Indemnitors from any and all claims against the Third Party Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Each Indemnitor further agrees that no advancement or payment by the Third Party Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from such Indemnitor shall affect the foregoing and the Third Party Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against such Indemnitor. Each Indemnitor and Indemnitee agree that each Third Party Indemnitor is an express third party beneficiary of the terms hereof.

(d) Except as set forth in paragraph (c) above, in the event of any payment under this Agreement, each Indemnitor shall be subrogated to the extent of such payment to all of the rights of recovery the Indemnitee may have against an opposing party to the Proceeding giving rise to the payment to the Indemnitee under this Agreement, and the Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable such Indemnitor to bring suit to enforce such rights.

(e) Except as set forth in paragraph (c) above, no Indemnitor shall be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(f) Except as set forth in paragraph (c) above, each Indemnitor’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of such Indemnitor as a Representative of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other Enterprise.

(g) The indemnification obligations of each Indemnitor hereunder, shall be limited to matters related to the service of the Indemnitee as a Representative of such Indemnitor. Notwithstanding anything to the contrary contained herein, no Indemnitor shall


have any obligation to indemnify the Indemnitee for losses related to a Proceeding arising from the Indemnitee’s service as a Representative of another Indemnitor, except to the extent that such Proceeding also relates to the Indemnitee’s service as a Representative for such Indemnitor. To the extent that the Indemnitee is entitled to indemnification from more than one Indemnitor, no Indemnitor shall be liable for indemnification obligations in excess of such Indemnitor’s proportionate share of Expenses, judgments, penalties, fines and amounts paid as a result of such Proceeding.

9. Exception to Right of Indemnification . Notwithstanding any provision in this Agreement, no Indemnitor shall be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except (i) with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision, or (ii) as set forth in paragraph 8(c) above;

(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of such Indemnitor within the meaning of Section 16(b) of the Exchange Act, or similar provisions of state statutory law or common law; or

(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against such Indemnitor or its Representatives, unless (i) the Board of such Indemnitor authorized the Proceeding (or any part of any Proceeding) prior to its initiation, or (ii) such Indemnitor provides the indemnification, in its sole discretion, pursuant to the powers vested in such Indemnitor under applicable law.

10. Duration of Agreement . All agreements and obligations of each Indemnitor contained herein shall continue during and apply to the period Indemnitee is or was a Representative of such Indemnitor (or is or was serving at the request of such Indemnitor as a Representative of such Indemnitor or another Enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of such Indemnitor), assigns, spouses, heirs, executors and personal and legal representatives.

11. Security . To the extent requested by Indemnitee and approved by the Board of an Indemnitor, such Indemnitor may at any time and from time to time provide security to Indemnitee for such Indemnitor’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.


12. Enforcement .

(a) Each Indemnitor expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a Representative of such Indemnitor, and each Indemnitor acknowledges that Indemnitee is relying upon this Agreement in serving as a Representative of such Indemnitor.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

13. Definitions . The following terms have the following definitions for purposes of this Agreement.

(a) “ Corporate Status ” describes the status of a person who is or was a representative, director, manager, officer, employee, agent or fiduciary of the applicable Indemnitor or of any other Enterprise that such person is or was serving at the express written request of such Indemnitor.

(b) “ Disinterested Representative ” means a member of the Board of an Indemnitor who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(c) “ Enterprise ” shall mean an Indemnitor and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of such Indemnitor as a representative, director, manager, officer, employee, agent or fiduciary.

(d) “ Expenses ” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(e) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Indemnitors or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the


applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either an Indemnitor or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. Each Indemnitor agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(f) “ Proceeding ” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of an Indemnitor or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a Representative of such Indemnitor, by reason of any action taken by him or of any inaction on his part while acting as a Representative of such Indemnitor, or by reason of the fact that he is or was serving at the request of such Indemnitor as a Representative of another Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.

14. Severability . The invalidity of unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

15. Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by all of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

16. Notice By Indemnitee . Indemnitee agrees promptly to notify each Indemnitor in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Indemnitors shall not relieve the applicable Indemnitor of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices such Indemnitor.

17. Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (1) upon personal delivery to the party to be notified; (2) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day; (3) five (5) days after having been sent by registered or certified mail, return


receipt requested, postage prepaid; or (4) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

 

  (a) to Indemnitee at the address set forth below Indemnitee’s signature hereto; or

 

  (b) to Indemnitor at:

 

     Melinta Therapeutics, Inc.
     300 George Street
     Suite 301
     New Haven, Connecticut 06511
     Attn: Daniel Wechsler
     Telephone: (312) 767-0291

or to such other address as may have been furnished to Indemnitee by an Indemnitor or to an Indemnitor by Indemnitee, as the case may be.

18. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

20. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Each Indemnitor and Indemnitee hereby irrevocably and unconditionally (a) agrees that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “ Delaware Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consents to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waives any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (d) waives and agrees not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

[The next page is the signature page.]


IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

 

INDEMNITORS:     MELINTA THERAPEUTICS, INC.,
    F/K/A CEMPRA, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    MELINTA SUBSIDIARY CORP.,
    F/K/A MELINTA THERAPEUTICS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    CEMPRA PHARMACEUTICALS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO
    CEM-102 PHARMACEUTICALS, INC.
    By:  

 

      Daniel Wechsler
      President and CEO

INDEMNITEE:

 

   

 

    Name:  

 

    Address:
   

 

   

 

   

 

   

 

   

 

Exhibit 10.5

Execution Version

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into this this 30th day of October 2017, by and between Melinta Therapeutics, Inc., a Delaware corporation (the “ Company ”), and Daniel Mark Wechsler (“ Executive ”). Upon the closing of the transactions contemplated by that certain Agreement and Plan of Merger and Reorganization (the “ Acquisition Agreement ”), dated August 8, 2017, by and among Cempra, Inc. (“ Cempra ”), a Delaware corporation, Castle Acquisition Corp., a Delaware corporation and the Company, this Agreement shall be assumed by Cempra and all references herein to the Company shall refer to Cempra, which shall be renamed “Melinta Therapeutics, Inc.”

W I T N E S S E T H :

WHEREAS, the Company desires to employ Executive and to enter into this Agreement embodying the terms of such employment, and Executive desires to enter into this Agreement and to accept such employment, subject to the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the Company and Executive hereby agree as follows:

Section 1. Definitions.

Terms used herein with initial capitalization not otherwise defined are defined in Appendix A to this Agreement.

Section 2. Acceptance and Term.

The Company agrees to employ Executive, and Executive agrees to serve the Company, on the terms and conditions set forth herein for a term (such period of employment, the “ Term ”) commencing immediately following the closing of the transactions contemplated by the Acquisition Agreement (the “ Commencement Date ”) and ending upon the termination of Executive’s employment pursuant to Section 8 below.

Section 3. Position, Duties, and Responsibilities; Place of Performance.

(a) Position, Duties, and Responsibilities . During the Term, Executive shall be employed and serve as the President and Chief Executive Officer of the Company (together with such other position or positions consistent with Executive’s titles and positions as President and Chief Executive Officer of the Company as the Board shall specify from time to time), reporting directly to the Board, and shall have such duties and responsibilities commensurate with such titles and positions as the most senior officer of the Company. Effective as of the Commencement Date, Executive shall be appointed as a member of the Board, and thereafter, for so long as Executive is the Chief Executive Officer of the Company, the Board shall nominate Executive for election to the Board at each annual meeting of the stockholders where his term of office as a director would expire; provided , further , that the foregoing shall not be required to the extent prohibited by legal or regulatory requirements and Executive is treated in the same manner as similarly situated directors. Executive also agrees to serve as an officer and/or director of any other member of the Company Group, in each case without additional compensation.


(b) Performance . Executive shall devote Executive’s full business time, attention, skill, and best efforts to the performance of Executive’s duties under this Agreement and shall not engage in any other business or occupation during the Term, including, without limitation, any activity that (x) conflicts with the interests of the Company or any other member of the Company Group, (y) interferes with the proper and efficient performance of Executive’s duties for the Company, or (z) interferes with Executive’s exercise of judgment in the Company’s best interests. Notwithstanding the foregoing, nothing herein shall preclude Executive from (i) serving, with the prior written consent of the Board, as a member of the boards of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations, (ii) engaging in charitable activities and community affairs, and (iii) managing Executive’s personal investments and affairs; provided , however , that the activities set out in clauses (i), (ii), and (iii) shall be limited by Executive so as not to materially interfere, individually or in the aggregate, with the performance of Executive’s duties and responsibilities hereunder.

(c) Place of Performance . Executive acknowledges and agrees that, during the Term, he shall be required to spend sufficient time among each of the Company offices and other business locations to effectively perform his duties and responsibilities, and that frequent business travel may be necessary. Executive shall not be required to relocate his residence in connection with his employment under this Agreement.

Section 4. Compensation.

During the Term, Executive shall be entitled to the following compensation:

(a) Base Salary . Executive shall be paid an annualized Base Salary, payable in accordance with the regular payroll practices of the Company, of not less than $550,000, with increases, if any, as may be approved in writing by the Compensation Committee; provided, however , that the foregoing shall not preclude the Compensation Committee from reducing Executive’s Base salary as part of an across-the-board reduction applicable in like proportions to all similarly situated executives of the Company.

(b) Annual Bonus . Executive shall be eligible for an annual incentive bonus award determined by the Compensation Committee in respect of each fiscal year during the Term (the “ Annual Bonus ”). The target Annual Bonus for each fiscal year shall be 60% of Base Salary (“ Target Annual Bonus ”) and the maximum Annual Bonus shall not be less than 150% of Base Salary, with the actual Annual Bonus payable being based upon the level of achievement of annual Company and specific individual performance objectives for such fiscal year, as determined by the Compensation Committee and communicated to Executive. Executive’s Annual Bonus for 2017 shall be prorated based on the number of days worked in that year at not less than the target amount. The Annual Bonus shall be paid to Executive at the same time as annual bonuses are generally payable to other senior executives of the Company subject to Executive’s continuous employment through the payment date except as otherwise provided for in this Agreement.

 

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(c) Sign-On Equity Grants . On the Commencement Date, the Company shall grant to Executive:

(i) A stock option to purchase a number of shares of the Company equal to 2.25% of the fully diluted equity capitalization of the Company as of the Commencement Date (the “ Initial Stock Option Grant ”), at an exercise price equal to the closing price per share of common stock on the Nasdaq on the grant date. Subject to Executive’s continued employment with the Company through each applicable vesting date and subject to Section 8(d)(vi) hereof, twenty-five percent (25%) of the Initial Stock Option Grant will vest and become exercisable on the first anniversary of the Commencement Date and the remainder will vest and become exercisable in substantially equal monthly installments during the three (3) year period commencing on the first anniversary of the Commencement Date, and will be granted in the form of stock option award agreement provided to Executive with this Agreement; and

(ii) A restricted stock unit award for a number of shares of the Company equal to 0.75% of the fully diluted equity capitalization of the Company as of the Commencement Date (the “ Initial Restricted Stock Unit Grant ”). Subject to Executive’s continued employment with the Company through each applicable vesting date and subject to Section 8(d)(vi) hereof, twenty-five percent (25%) of the Initial Restricted Stock Unit Grant will vest and be settled on the first anniversary of the Commencement Date and the remainder will vest and be settled in substantially equal monthly installments during the three (3) year period commencing on the first anniversary of the Commencement Date, and will be granted in the form of restricted stock unit award agreement provided to Executive with this Agreement. The Initial Restricted Stock Unit Grant will participate in any dividends paid to stockholders of the Company during such vesting period; provided, that dividends on shares underlying unvested restricted stock units shall be subject to the same vesting requirements as the underlying shares on which such dividends are paid and payment deferred and paid within ten (10) days after such restricted stock units become vested (and will be forfeited to the extent unvested restricted stock are forfeited).

(d) Change in Control . Subject to Section 8(d)(vi) hereof, if either of the Initial Stock Option Grant or the Initial Restricted Stock Unit Grant is not expressly assumed in a Change in Control, such award will fully vest upon such Change in Control (and participate fully with other stockholders in such Change in Control).

(e) Annual Equity/LTI Grants . Executive shall be eligible for annual equity (or other long-term incentive) grants, commencing with grants made to senior executives in fiscal year 2019, in such forms, amounts and terms as shall be determined by the Compensation Committee in its sole discretion.

(f) Inducement Grant . The Initial Stock Option Grant and Initial Restricted Stock Unit Grant will be granted under a non-stockholder approved arrangement outside of any Company equity plan pursuant to the Nasdaq’s “inducement exception.” Executive agrees that the granting of the Initial Stock Option Grant and Initial Restricted Stock Unit Grant is an inducement material to Executive’s decision to enter into this Agreement and accept employment with the Company.

 

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Section 5. Employee Benefits.

During the Term, Executive shall be entitled to participate in health, insurance, retirement, and other benefits provided generally to similarly situated executives of the Company. Executive shall also be entitled to the same number of holidays and sick days, as well as any other benefits, in each case as are generally allowed to similarly situated executive of the Company in accordance with the Company policy as in effect from time to time. Executive shall be entitled to not less than four (4) weeks of vacation per year. Nothing contained herein shall be construed to limit the Company’s ability to amend, suspend, or terminate any employee benefit plan or policy at any time without providing Executive notice, and the right to do so is expressly reserved.

Section 6. Key-Man Insurance.

At any time during the Term, the Company shall have the right to insure the life of Executive for the sole benefit of the Company, in such amounts, and with such terms, as it may determine. All premiums payable thereon shall be the obligation of the Company. Executive shall have no interest in any such policy, but agrees to cooperate with the Company in procuring such insurance by submitting to physical examinations, supplying all information required by the insurance company, and executing all necessary documents, provided that no financial obligation is imposed on Executive by any such documents. The Company shall maintain, and instruct such insurance company and its agents to maintain, any such physical examination and other application submissions in strictest confidence.

Section 7. Reimbursement of Business Expenses.

During the Term, the Company shall pay (or promptly reimburse Executive) for documented, out-of-pocket expenses reasonably incurred by Executive in the course of performing Executive’s duties and responsibilities hereunder, which are consistent with the Company’s policies in effect from time to time with respect to business expenses, subject to the Company’s requirements with respect to reporting of such expenses. The Company will pay Executive’s professional expenses incurred to negotiate and prepare this Agreement and all other related agreements hereunder, in an amount not to exceed $15,000.

Section 8. Termination of Employment.

(a) General . The Term shall terminate earlier than as provided in Section 2 hereof upon the earliest to occur of (i) Executive’s death, (ii) a termination by reason of a Disability, (iii) a termination by the Company with or without Cause, and (iv) a termination by Executive with or without Good Reason. Upon any termination of Executive’s employment for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by Executive, Executive shall be deemed to have resigned from any and all directorships, committee memberships, and any other positions Executive holds with the Company or any other member of the Company Group and hereby agrees to execute any documents that the Company (or any member of the Company Group) determines necessary to

 

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effectuate such resignations. Notwithstanding anything herein to the contrary, the payment (or commencement of a series of payments) hereunder of any “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive has also undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of Executive’s termination of employment hereunder) shall be paid (or commence to be paid) to Executive on the schedule set forth in this Section 8 as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive’s ultimate “separation from service.”

(b) Termination Due to Death or Disability . Executive’s employment shall terminate automatically upon Executive’s death. The Company may terminate Executive’s employment immediately upon the occurrence of a Disability, such termination to be effective upon Executive’s receipt of written notice of such termination. Upon Executive’s death or in the event that Executive’s employment is terminated due to Executive’s Disability, Executive or Executive’s estate or Executive’s beneficiaries, as the case may be, shall be entitled to:

(i) The Accrued Obligations;

(ii) Any unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination, which amount shall be paid at such time annual bonuses are paid to other senior executives of the Company, but in no event later than the date that is two and one-half (2  1 2 ) months following the last day of the fiscal year in which such termination occurred; and

(iii) A Pro Rata Bonus.

Following Executive’s death or a termination of Executive’s employment by reason of a Disability, except as set forth in this Section 8(b), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(c) Termination by the Company with Cause .

(i) The Company may terminate Executive’s employment at any time with Cause, effective upon Executive’s receipt of written notice of such termination; provided , however , that with respect to any Cause termination relying on clause (ii) or (vi) of the definition of Cause set forth in paragraph (h) in Appendix A to this Agreement, to the extent that such act or acts or failure or failures to act are curable, Executive shall be given not less than ten (10) days’ written notice by the Board of the Company’s intention to terminate him with Cause, such notice to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination with Cause is based, and such termination shall be effective at the expiration of such ten (10) day notice period unless Executive has fully cured such act or acts or failure or failures to act that give rise to Cause during such period.

(ii) In the event that the Company terminates Executive’s employment with Cause, Executive shall be entitled only to the Accrued Obligations. Following such termination of Executive’s employment with Cause, except as set forth in this Section 8(c)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

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(d) Termination by the Company without Cause . The Company may terminate Executive’s employment at any time without Cause, effective upon Executive’s receipt of written notice of such termination. In the event that Executive’s employment is terminated by the Company without Cause (other than due to death or Disability), Executive shall be entitled to:

(i) The Accrued Obligations;

(ii) Any unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination, which amount shall be paid at such time annual bonuses are paid to other senior executives of the Company, but in no event later than the date that is two and one-half (2  1 2 ) months following the last day of the fiscal year in which such termination occurred;

(iii) A Pro Rata Bonus;

(iv) Payment of an amount equal to (x) one and one-half (1.5) (provided, such multiple shall be equal to two (2), if the date of such termination occurs within three (3) months prior to or twelve (12) months following the consummation of a Change in Control), multiplied by (y) the sum of Base Salary plus Target Annual Bonus, payable during the Severance Term in equal installments in accordance with the Company’s regular payroll practices;

(v) To the extent permitted by applicable law without any penalty to Executive or any member of the Company Group and subject to Executive’s election of COBRA continuation coverage under the Company’s group health plan, on the first regularly scheduled payroll date of each month of the COBRA Continuation Period, the Company will pay Executive an amount equal to the “applicable percentage” of the monthly COBRA premium cost; provided , that the payments pursuant to this clause (v) shall cease earlier than the expiration of the COBRA Continuation Period in the event that Executive becomes eligible to receive any health benefits, including through a spouse’s employer, during the COBRA Continuation Period. For purposes hereof, the “ applicable percentage ” shall be the percentage of Executive’s health care premium costs covered by the Company as of the date of termination. Amounts paid by the Company on behalf of Executive pursuant to this clause (v) shall be imputed to Executive as additional taxable income to the minimum extent as may be required to avoid adverse consequences to Executive or the Company under either Section 105(h) of the Code or the Patient Protection and Affordable Care Act of 2010; provided that, if such imputation does not prevent the imposition of an excise tax under, or the violation of, the Patient Protection and Affordable Care Act (as amended by the Health Care and Education Reconciliation Act of 2010 and as amended from time to time), including, without limitation, Section 4980D of the Code, the Company shall no longer provide for payment of such medical and dental benefits to Executive (without otherwise limiting Executive’s rights to continuation coverage under applicable law at his personal expense); and

(vi) If the date of such termination occurs within twelve (12) months following the consummation of a Change in Control and any equity award previously granted to Executive and then-unvested and outstanding (including the Initial Stock Option Grant and the Initial Restricted Stock Unit Grant) is assumed or substituted in connection with such Change in

 

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Control, any such equity award, that is subject to solely service-based vesting, shall become fully vested and non-forfeitable as of the date of such termination of Executive’s employment, it being understood that if any equity award (other than the Initial Stock Option Grant or the Initial Restricted Stock Unit Grant) is not expressly assumed in a Change in Control, the treatment of the equity award in the Change in Control shall be determined by the Compensation Committee consistent with other active senior executives; provided, that any such equity award that is subject to performance vesting requirements will be treated in all events in the same manner as equity awards subject to performance vesting held by other senior executives. Upon any such termination prior to a Change in Control, any then unvested equity awards held by Executive shall remain outstanding but will not vest, and will terminate and be forfeited without consideration on the three (3) month anniversary following such termination unless a Change in Control occurs during such three (3) month period; provided that if a Change in Control occurs during the three (3) month period, the unvested equity awards held by Executive shall become vested in accordance with the terms of this Section 8(d)(vi) as though he had experienced such termination of employment on the day immediately following such Change in Control.

Notwithstanding the foregoing, the payments and benefits described in clauses (ii), (iii), (iv) and (v) above shall immediately terminate, and the Company shall have no further obligations to Executive with respect thereto, in the event that Executive breaches any provision of the Restrictive Covenant Agreement. Following such termination of Executive’s employment by the Company without Cause, except as set forth in this Section 8(d), Executive shall have no further rights to any compensation or any other benefits under this Agreement. For the avoidance of doubt, Executive’s sole and exclusive remedy upon a termination of employment by the Company without Cause shall be receipt of the Severance Benefits.

(e) Termination by Executive with Good Reason . Executive may terminate Executive’s employment with Good Reason by providing the Company ten (10) days’ written notice setting forth in reasonable specificity the event that constitutes Good Reason, which written notice, to be effective, must be provided to the Company within sixty (60) days of the occurrence of such event. During such ten (10) day notice period, the Company shall have a cure right (if curable), and if not cured within such period, Executive’s termination will be effective upon the expiration of such cure period, and Executive shall be entitled to the same payments and benefits as provided in Section 8(d) hereof for a termination by the Company without Cause, subject to the same conditions on payment and benefits as described in Section 8(d) hereof. Following such termination of Executive’s employment by Executive with Good Reason, except as set forth in this Section 8(e), Executive shall have no further rights to any compensation or any other benefits under this Agreement. For the avoidance of doubt, Executive’s sole and exclusive remedy upon a termination of employment with Good Reason shall be receipt of the Severance Benefits.

(f) Termination by Executive without Good Reason . Executive may terminate Executive’s employment without Good Reason by providing the Company thirty (30) days’ written notice of such termination. In the event of a termination of employment by Executive under this Section 8(f), Executive shall be entitled only to the Accrued Obligations. In the event of termination of Executive’s employment under this Section 8(f), the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination without changing the characterization of such termination as a termination by Executive without Good Reason. Following such termination of Executive’s employment by Executive without Good Reason, except as set forth in this Section 8(f), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

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(g) Release . Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to subsection (b), (d), or (e) of this Section 8 (other than the Accrued Obligations) (collectively, the “ Severance Benefits ”) shall be conditioned upon Executive’s execution, delivery to the Company, and non-revocation of the Release of Claims (and the expiration of any revocation period contained in such Release of Claims) within sixty (60) days following the date of Executive’s termination of employment hereunder. If Executive fails to execute the Release of Claims in such a timely manner so as to permit any revocation period to expire prior to the end of such sixty (60) day period, or timely revokes Executive’s acceptance of such release following its execution, Executive shall not be entitled to any of the Severance Benefits. Further, (i) to the extent that any of the Severance Benefits constitutes “nonqualified deferred compensation” for purposes of Section 409A of the Code, any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60 th ) day following the date of Executive’s termination of employment hereunder, but for the condition on executing the Release of Claims as set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60 th ) day and (ii) to the extent that any of the Severance Benefits do not constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, any payment of any amount or provision of any benefit otherwise scheduled to occur following the date of Executive’s termination of employment hereunder, but for the condition on executing the Release of Claims as set forth herein, shall not be made until the first regularly scheduled payroll date following the date the Release of Claims is timely executed and the applicable revocation period has ended, after which, in each case, any remaining Severance Benefits shall thereafter be provided to Executive according to the applicable schedule set forth herein. For the avoidance of doubt, in the event of a termination due to Executive’s death or Disability, Executive’s obligations herein to execute and not revoke the Release of Claims may be satisfied on Executive’s behalf by Executive’s estate or a person having legal power of attorney over Executive’s affairs.

Section 9. Restrictive Covenant Agreement.

As a condition of, and prior to commencement of, Executive’s employment with the Company, Executive shall have executed and delivered to the Company the Restrictive Covenant Agreement. The parties hereto acknowledge and agree that this Agreement and the Restrictive Covenant Agreement shall be considered separate contracts, and the Restrictive Covenant Agreement will survive the termination of this Agreement for any reason.

Section 10. Representations and Warranties of Executive.

Executive represents and warrants to the Company that—

(a) Executive is entering into this Agreement voluntarily and that Executive’s employment hereunder and compliance with the terms and conditions hereof will not conflict with or result in the breach by Executive of any agreement to which Executive is a party or by which Executive may be bound;

 

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(b) Executive has not violated, and in connection with Executive’s employment with the Company will not violate, any non-solicitation, non-competition, or other similar covenant or agreement of a prior employer by which Executive is or may be bound; and

(c) in connection with Executive’s employment with the Company, Executive will not use any confidential or proprietary information Executive may have obtained in connection with employment with any prior employer.

Section 11. Taxes.

The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment, and social insurance taxes, as shall be required by law. Executive acknowledges and represents that the Company has not provided any tax advice to Executive in connection with this Agreement and that Executive has been advised by the Company to seek tax advice from Executive’s own tax advisors regarding this Agreement and payments that may be made to Executive pursuant to this Agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments.

Section 12. Set Off; Mitigation.

The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim, or recoupment of undisputed amounts owed by Executive to the Company or its affiliates; provided , however , that to the extent any amount so subject to set-off, counterclaim, or recoupment is payable in installments hereunder, such set-off, counterclaim, or recoupment shall not modify the applicable payment date of any installment, and to the extent an obligation cannot be satisfied by reduction of a single installment payment, any portion not satisfied shall remain an outstanding obligation of Executive and shall be applied to the next installment only at such time the installment is otherwise payable pursuant to the specified payment schedule. Executive shall not be required to mitigate the amount of any payment or benefit provided pursuant to this Agreement by seeking other employment or otherwise, and except as provided in Section 8(d)(v) hereof, the amount of any payment or benefit provided for pursuant to this Agreement shall not be reduced by any compensation earned as a result of Executive’s other employment or otherwise.

Section 13. Additional Section 409A Provisions.

Notwithstanding any provision in this Agreement to the contrary—

(a) Any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “ Delay Period ”). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

 

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(b) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(c) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided , that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

(d) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any of its affiliates (including, without limitation, the Company) be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

Section 14. Golden Parachute Tax Provision.

If there is a change in ownership or control of the Company that would cause any payment or distribution by the Company or any other Person or entity to Executive or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “ Payment ”) to be subject to the excise tax imposed by Section 4999 of the Code (such excise tax, together with any interest or penalties incurred by Executive with respect to such excise tax, the “ Excise Tax ”), then Executive will receive the greatest of the following, whichever gives Executive the highest net after-tax amount (after taking into account federal, state, local and social security taxes): (a) the Payments or (b) one dollar less than the amount of the Payments that would subject Executive to the Excise Tax (the “ Safe Harbor Amount ”). If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount and none of the Payments constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), then the reduction shall occur in the manner Executive elects in writing prior to the date of payment. If any Payment constitutes nonqualified deferred compensation or if Executive fails to elect an order, then the Payments to be reduced will be determined in a manner which has the least economic cost to Executive and, to the extent the economic cost is equivalent, will be reduced in the inverse order of when payment would have been made to Executive, until the reduction is achieved. All determinations required to be made under this Section 14, including whether and when the Safe Harbor Amount is required and the amount of the reduction of the Payments and the assumptions to be utilized in arriving at such determination, shall be made by an independent, certified public accounting firm designated by the Company (the “ Accounting Firm ”). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting Firm shall be binding upon Company and Executive.

 

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Section 15. Clawbacks.

All payments made pursuant to this Agreement are subject to the “clawback” obligations of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Act, as may be amended from time to time, and any other “clawback” obligations pursuant to applicable law, rule, regulation or Company policy, in each case as consistently applied to all similarly situated executives of the Company.

Section 16. Successors and Assigns; No Third-Party Beneficiaries.

(a) The Company . This Agreement shall inure to the benefit of the Company and its respective successors and assigns. Neither this Agreement nor any of the rights, obligations, or interests arising hereunder may be assigned by the Company to a Person (other than another member of the Company Group, or its or their respective successors) without Executive’s prior written consent (which shall not be unreasonably withheld, delayed, or conditioned); provided , however , that in the event of a sale of all or substantially all of the assets of the Company or any direct or indirect division or subsidiary thereof to which Executive’s employment primarily relates, the Company may provide that this Agreement will be assigned to, and assumed by, the acquiror of such assets, it being agreed that in such circumstances, Executive’s consent will not be required in connection therewith. In the event of any assignment or assumption of this Agreement or the Restrictive Covenant Agreement in connection with a sale of all or substantially all of the assets of the Company or any direct or indirect division or subsidiary thereof to which Executive’s employment primarily relates, the scope and applicability of Executive’s noncompetition and customer nonsolicitation covenants under the Restrictive Covenant Agreement (or any other agreement entered into by Executive and the Company prior to such sale) will be determined as of immediately prior to such sale, unless Executive shall otherwise agree or shall continue his employment pursuant to this Agreement and the Restrictive Covenant Agreement for at least six months following such sale.

(b) Executive . Executive’s rights and obligations under this Agreement shall not be transferable by Executive by assignment or otherwise, without the prior written consent of the Company; provided , however , that if Executive shall die, all amounts then payable to Executive hereunder (including future unpaid installments thereof) shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee, or other designee, or if there be no such designee, to Executive’s estate.

(c) No Third-Party Beneficiaries . Except as otherwise set forth in Section 8(b) or Section 16(b) hereof, nothing expressed or referred to in this Agreement will be construed to give any Person other than the Company, the other members of the Company Group, and Executive any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement.

 

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Section 17. Waiver and Amendments.

Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by each of the parties hereto; provided , however , that any such waiver, alteration, amendment, or modification must be consented to on the Company’s behalf by the Board. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

Section 18. Severability.

If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court of competent jurisdiction, (a) the remaining terms and provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof.

Section 19. Governing Law and Jurisdiction.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD TO CONFLICT OF LAWS RULES. ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN EXECUTIVE AND THE COMPANY ARISING OUT OF THIS AGREEMENT OR THE RESTRICTIVE COVENANT AGREEMENT SHALL BE RESOLVED BY ARBITRATION ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION (“ AAA ”) IN ACCORDANCE WITH ITS EMPLOYMENT ARBITRATION RULES INCLUDING THE EMERGENCY INTERIM RELIEF PROCEDURES OF THE AAA. JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THE PLACE OF ARBITRATION SHALL BE WILMINGTON, DELAWARE. THE ARBITRATOR(S) MAY GRANT INJUNCTIONS OR OTHER RELIEF IN SUCH DISPUTE OR CONTROVERSY. THE DECISION OF THE ARBITRATOR(S) SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE ARBITRATION. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THE COMPANY SHALL PAY ALL ARBITRATOR’S FEES AND EXPENSES AND EXECUTIVE AND THE COMPANY SHALL EACH BEAR THEIR OWN ATTORNEYS’ FEES INCURRED IN CONNECTION WITH THE ARBITRATION, AND THE ARBITRATOR(S) WILL NOT HAVE AUTHORITY TO BE ENTITLED TO AWARD ATTORNEYS’ FEES UNLESS A STATUTE OR CONTRACT AT ISSUE IN THE DISPUTE AUTHORIZES THE AWARD OF ATTORNEYS’ FEES TO THE PREVAILING PARTY, IN WHICH CASE THE
ARBITRATOR(S) SHALL HAVE THE AUTHORITY TO MAKE AN AWARD OF ATTORNEYS’ FEES AS REQUIRED OR PERMITTED BY APPLICABLE LAW. IF THERE IS A DISPUTE AS TO WHETHER THE COMPANY OR EXECUTIVE IS THE PREVAILING PARTY IN THE ARBITRATION, THE ARBITRATOR(S) WILL DECIDE THIS ISSUE. LIABILITY FOR THE FEES AND EXPENSES OF ALL THE ARBITRATORS WITH RESPECT TO THE

 

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ARBITRATION SHALL BE EVENLY DIVIDED BETWEEN THE PARTIES TO THE ARBITRATION. THE DETERMINATION RENDERED BY THE ARBITRATOR(S) SHALL (I) SPECIFY THE FINDING OF FACTS UPON WHICH IT IS BASED AND THE REASONS THEREFOR, AND (II) BE CONCLUSIVE AND BINDING UPON THE PARTIES. NOTWITHSTANDING THE PROVISIONS OF THIS PARAGRAPH, THE COMPANY SHALL NOT BE COMPELLED TO ARBITRATE CLAIMS ARISING UNDER THE RESTRICTIVE COVENANT AGREEMENT AND MAY INSTITUTE JUDICIAL PROCEEDINGS TO ENFORCE THAT AGREEMENT PURSUANT TO THE RESTRICTICE COVENANT AGREEMENT. EXECUTIVE HEREBY AGREES TO SUBMIT ANY AND ALL CLAIMS EXECUTIVE MAY HAVE AGAINST THE COMPANY ON AN INDIVIDUAL BASIS. THIS MEANS THAT NO CLAIM (INCLUDING ANY CLAIM RELATED TO TERMS OR CONDITIONS OF EXECUTIVE’S EMPLOYMENT WITH OR COMPENSATION PAID BY THE COMPANY, OR ANY CHANGE IN OR TERMINATION OF EXECUTIVE’S EMPLOYMENT) MAY BE LITIGATED OR ARBITRATED ON A CLASS OR COLLECTIVE BASIS. EXECUTIVE ALSO HEREBY WAIVES ANY RIGHT TO SUBMIT, INITIATE, OR PARTICIPATE IN A REPRESENTATIVE CAPACITY OR AS A PLAINTIFF, CLAIMANT, OR MEMBER IN A CLASS ACTION, COLLECTIVE ACTION, OR OTHER REPRESENTATIVE OR JOINT ACTION AGAINST THE COMPANY, REGARDLESS OF WHETHER THE ACTION IS FILED IN ARBITRATION OR IN A JUDICIAL OR ADMINISTRATIVE FORUM. FURTHERMORE, IF A COURT ORDERS THAT A CLASS, COLLECTIVE, OR OTHER REPRESENTATIVE OR JOINT ACTION SHOULD PROCEED, IN NO EVENT WILL SUCH ACTION PROCEED IN AN ARBITRATION FORUM. CLAIMS MAY NOT BE JOINED OR CONSOLIDATED IN ARBITRATION WITH DISPUTES BROUGHT BY ANY OTHER INDIVIDUAL(S), UNLESS AGREED TO IN WRITING BY ALL PARTIES.

Section 20. Indemnification; D&O Insurance.

The Company will indemnify and hold Executive harmless for all acts and omissions to act, in the performance of his duties, to the maximum extent permitted under the Company charter and by-laws and under applicable law. The Company will cover Executive as an insured under any contract of directors and officers liability insurance that covers other members of the Board.

Section 21. Notices.

(a) Place of Delivery . Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided , that unless and until some other address be so designated, all notices and communications shall be mailed or delivered to the following addresses:

If to the Company :

Chairman of the Board/Melinta Therapeutics, Inc.

c/o Willkie Farr & Gallagher LLP

787 Seventh Avenue

 

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New York, New York 10019

Attn: Sean M. Ewen, Esq.

If to Executive :

Executive’s last known address, as reflected in the Company’s records.

(b) Date of Delivery . Any notice so addressed shall be deemed to be given or received (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing.

Section 22. Section Headings.

The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof or affect the meaning or interpretation of this Agreement or of any term or provision hereof.

Section 23. Entire Agreement.

This Agreement, together with any exhibits attached hereto, constitutes the entire understanding and agreement of the parties hereto regarding the employment of Executive. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings, and agreements between the parties relating to the subject matter of this Agreement.

Section 24. Survival of Operative Sections.

Upon any termination of Executive’s employment, the provisions of Section 8 through Section 25 of this Agreement (together with any related definitions set forth in Appendix A to this Agreement) shall survive to the extent necessary to give effect to the provisions thereof.

Section 25. Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual signature or by signature delivered by facsimile or by e-mail as a portable document format (.pdf) file or image file attachment.

Section 26. Effectiveness.

This Agreement shall be conditioned upon the closing of the transactions contemplated by the Acquisition Agreement. In the event that the Acquisition Agreement terminates prior to the closing of the transactions contemplated thereby, this Agreement shall be void ab initio .

* * *

[ Signatures to appear on the following page(s). ]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

 

MELINTA THERAPEUTICS, INC.
By:  

/s/ Thomas Koestler

 

Thomas Koestler

Title:   Chairman
EXECUTIVE

/s/ Daniel Mark Wechsler

Daniel Mark Wechsler

[ Signature Page to D. Wechsler Employment Agreement ]


Appendix A

Definitions

In this Appendix A , and in the Agreement unless the context otherwise requires, the following terms shall have the meanings assigned below (unless otherwise specified Section references in this Appendix A are to Sections of this Agreement):

(a) “ AAA ” shall have the meaning set forth in Section 19 hereof.

(b) “ Accounting Firm ” shall have the meaning set forth in Section 14 hereof.

(c) “ Accrued Obligations ” shall mean (i) all accrued but unpaid Base Salary through the date of termination of Executive’s employment and, to the extent payable pursuant to the Company’s policies, accrued but unused vacation through the date of termination of Executive’s employment, (ii) any unpaid or unreimbursed expenses incurred in accordance with Section 7 hereof, and (iii) any benefits provided under the Company’s employee benefit plans upon a termination of employment (excluding any employee benefit plan providing for severance or similar benefits), in accordance with the terms contained therein.

(d) “ Agreement ” shall have the meaning set forth in the preamble hereto.

(e) “ Annual Bonus ” shall have the meaning set forth in Section 4(b) hereof.

(f) “ Base Salary ” shall mean the salary provided for in Section 4(a) hereof or any increased salary granted to Executive pursuant to Section 4(a) hereof.

(g) “ Board ” shall mean the Board of Directors of the Company.

(h) “ Cause ” shall mean (i) Executive’s act(s) of gross negligence or willful misconduct in the course of Executive’s employment hereunder, (ii) willful failure or refusal in any material respect by Executive to perform Executive’s duties or responsibilities, (iii) misappropriation (or attempted misappropriation) by Executive of any assets or business opportunities of the Company or any other member of the Company Group, (iv) embezzlement or fraud committed (or attempted) by Executive, at Executive’s direction, or with Executive’s prior actual knowledge, (v) Executive’s conviction of or pleading “guilty” or “ no contest” to, (x) a felony or (y) any other criminal charge that has, or could be reasonably expected to have, an adverse impact on the performance of Executive’s duties to the Company or any other member of the Company Group or otherwise result in material injury to the reputation or business of the Company or any other member of the Company Group, (vi) any material violation by Executive of the material policies of the Company, including but not limited to those relating to sexual harassment or business conduct, and those otherwise set forth in the manuals or statements of policy of the Company, or (vii) Executive’s material breach of this Agreement or breach of the Restrictive Covenant Agreement. If, within ninety (90) days subsequent to Executive’s termination for any reason other than by the Company for Cause, the Company discovers that Executive’s employment could have been terminated for Cause, Executive’s employment will be deemed to have been terminated for Cause for all purposes, and Executive will be required to disgorge to the Company all amounts received pursuant to this Agreement or otherwise on account of such termination that would not have been payable to Executive had such termination been by the Company for Cause.


(i) “ Change in Control ” shall have the meaning set forth in the Melinta Therapeutics, Inc. (f/k/a Cempra, Inc.) 2011 Equity Incentive Plan, as amended from time to time.

(j) “ COBRA ” shall mean Part 6 of Title I of the Employee Retirement Income Security Act of 1974, as amended, and Section 4980B of the Code, and the rules and regulations promulgated under either of them.

(k) “ COBRA Continuation Period ” shall mean the eighteen (18) month period following Executive’s termination by the Company without Cause (other than by reason of death or Disability) or by Executive for Good Reason.

(l) “ Code ” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

(m) “ Commencement Date ” shall have the meaning set forth in Section 2 hereof.

(n) “ Company ” shall have the meaning set forth in the preamble hereto.

(o) “ Company Group ” shall mean the Company together with any direct or indirect subsidiaries of the Company.

(p) “ Compensation Committee ” shall mean the Compensation Committee of the Board.

(q) “ Excise Tax ” shall have the meaning set forth in Section 14 hereof.

(r) “ Delay Period ” shall have the meaning set forth in Section 13(a) hereof.

(s) “ Disability ” shall mean any physical or mental disability or infirmity of Executive that prevents the performance of Executive’s duties for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days during any twelve (12) month period. Any question as to the existence, extent, or potentiality of Executive’s Disability upon which Executive and the Company cannot agree shall be determined by a qualified, independent physician selected by the Company. The determination of any such physician shall be final and conclusive for all purposes of this Agreement.

(t) “ Executive ” shall have the meaning set forth in the preamble hereto.

(u) “ Good Reason ” shall mean, without Executive’s consent, (i) a material diminution in Executive’s title, duties, or responsibilities (including reporting requirements) as set forth in Section 3 hereof (it being acknowledged and agreed that (a) such event shall occur if Executive is not the most senior officer of the most senior parent company resulting from and immediately following any Change in Control and (b) such event shall not occur solely by reason of the Company’s hiring or appointment of a new President, with all related duties and

 

A-2


responsibilities, and the resulting change in Executive’s title, duties or responsibilities so long as Executive retains the office of the Chief Executive Officer and any President reports solely and directly to Executive), (ii) a material reduction in Base Salary set forth in Section 4(a) hereof or Annual Bonus opportunity set forth in Section 4(b) hereof (other than pursuant to an across-the-board reduction applicable in like proportions to all similarly situated executives of the Company), (iii) any other material breach of a provision of this Agreement by the Company (other than a provision that is covered by clause (i) or (ii) above), or (iv) any failure of the Company to assign to a successor, for such successor to assume, this Agreement in connection with a Change in Control. Executive acknowledges and agrees that Executive’s exclusive remedy in the event of any breach of this Agreement shall be to assert Good Reason pursuant to the terms and conditions of Section 8(e) hereof.

(v) “ Initial Stock Option Grant ” shall have the meaning set forth in Section 4(c) hereof.

(w) “ Initial Restricted Stock Unit Grant ” shall have the meaning set forth in Section 4(c).

(x) “ Payment ” shall have the meaning set forth in Section 14 hereof.

(y) “ Person ” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust (charitable or non-charitable), unincorporated organization, or other form of business entity.

(z) “ Pro Rata Bonus ” shall mean an Annual Bonus payable in such amount as is earned based on achievement of the applicable performance goals for the fiscal year in which such death or other termination occurs as determined by the Compensation Committee (disregarding any negative discretion exercised by the Compensation Committee to the extent such exercise does not apply to all bonus plan participants with like effect, and treating any and all personal performance objectives of Executive as fully satisfied), prorated based on the ratio of the number of days employed during the fiscal year through the date of death or other employment termination to 365, and payable when annual bonuses are paid to other active senior executives.

(aa) “ Release of Claims ” shall mean the Release of Claims in substantially the same form attached hereto as Exhibit B (as the same may be revised from time to time by the Company upon the advice of counsel).

(bb) “ Restrictive Covenant Agreement ” shall mean the Employee Noncompetition, Nondisclosure and Developments Agreement attached hereto as Exhibit A .

(cc) “ Safe Harbor Amount ” shall have the meaning set forth in Section 14 hereof.

(dd) “ Severance Benefits ” shall have the meaning set forth in Section 8(g) hereof.

(ee) “ Severance Term ” shall mean the eighteen (18) month period following Executive’s termination by the Company without Cause (other than by reason of death or Disability) or by Executive for Good Reason.

 

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(ff) “ Term ” shall mean the period specified in Section 2 hereof.

 

A-4


Exhibit A

EMPLOYEE NONCOMPETITION,

NONDISCLOSURE AND DEVELOPMENTS AGREEMENT

This Employee Noncompetition, Nondisclosure and Developments Agreement (the “ Agreement ”) is entered into by and between Daniel Mark Wechsler the undersigned employee and Melinta Therapeutics, Inc., its parents, affiliates and subsidiaries (the “ Company ”) on the date set forth beneath the parties’ signatures (the “ Effective Date ”).

NOW THEREFORE, in consideration of my employment by the Company pursuant to the employment agreement entered into with the Company contemporaneous with this Agreement (“ Employment Agreement ”) and of the covenants herein, and for other good and valuable consideration, I hereby covenant and agree as follows:

 

1. Noncompetition .

During the period of my employment by the Company, I shall not, directly or indirectly, alone or as a consultant, partner, officer, director, employee, joint venturer, lender or stockholder of any entity, engage in any business or activity that is in competition with the products or services being created, developed, manufactured, marketed, distributed or sold by the Company in (a) the United States or (b) worldwide. For the eighteen (18) month period following the termination of my employment, regardless of the reasons for my termination, I will not engage in the management of or participation in programs at or on behalf of any entity in the business of developing, marketing or selling antimicrobial products or other specific chemical approaches or series the Company is engaged in during my employment or in which the Company is planning to engage or has in the previous twelve (12) months engaged. In the case of areas of business unrelated to antimicrobials, for the eighteen (18) month period following the termination of my employment, regardless of the reasons for my termination, I will not engage in the management of or participation in any such other non-antimicrobial programs which are under prosecution at the Company, in which the Company is planning to engage or has in the immediately previous twelve (12) months engaged in, and which are directly competitive with the Company. Prohibited activities under the immediately preceding two sentences are referred to as “ Competitive ” products. The foregoing provisions of this Section 1 to the contrary notwithstanding, this Section 1 shall not apply to any such entity engaged in the development, marketing or sale of diversified products that include Competitive products if not more than twenty percent (20%) of such entity’s aggregate annual revenues for the immediately preceding eight (8) completed fiscal quarters are from the sale of Competitive products; provided, that, I first recuse myself from, and am in no way involved with, the division of such entity that is engaged in the development, marketing or sale of any Competitive products.

 

2. Nonsolicitation of Customers .

During the period of my employment by the Company and for the eighteen (18) month period following the termination of my employment, regardless of the reasons for my termination, I shall not, directly or indirectly, alone or as a consultant, partner, officer, director, employee, joint venturer, lender or stockholder of any entity, solicit or do business with any customer of the Company or any potential customer of the Company (i) with whom I have had contact or (ii) about whom I obtained information, or became familiar with through Confidential Information (as defined in Paragraph 5), during the course of my employment with the Company, for the purpose of developing, marketing or selling Competitive products.

 

                           

Initial and Date


3. Nonsolicitation of Employees .

(a) During the period of my employment by the Company and for the eighteen (18) month period following the termination of my employment, regardless of the reasons for the termination, I will not, in any manner, hire or engage, or assist any company or business organization by which I am employed or which is directly or indirectly controlled by me to hire or engage, any person who is or was employed by the Company (or is or was an individual independent contractor providing significant services to the Company) within the twelve (12) month period prior to the date of such hiring.

(b) During the period of my employment by the Company and for the eighteen (18) month period following the termination of my employment, regardless of the reasons for the termination, I will not, in any manner, solicit, recruit or induce, or assist any company or business organization by which I am employed or which is directly or indirectly controlled by me to solicit, recruit or induce, any person who is or was employed by the Company (or is or was an individual independent contractor providing significant services to the Company) within the twelve (12) month period prior to the date of such hiring, to leave his or her employment, relationship or engagement with the Company.

(c) Further, during the period of my employment by the Company and for the eighteen (18) month period following the termination of my employment, regardless of the reasons for the termination, I shall not interfere with the Company’s relationship with any agent, representative, contractor, project consultant or consultant then engaged by the Company.

 

4. Nondisclosure .

I shall not at any time, whether during or after the termination of my employment, reveal to any person or entity any Confidential Information except to (a) employees of the Company who need to know such Confidential Information for the purposes of their employment, (b) others as I reasonably determine appropriate to discharge my duties with the Company, or (c) as otherwise authorized by the Company in writing. The term “ Confidential Information ” shall include any information concerning the organization, business or finances of the Company or of any third party which the Company is under an obligation to keep confidential that is maintained by the Company as confidential. Such Confidential Information shall include, but is not limited to, trade secrets or confidential information respecting inventions, products, designs, methods, know-how, techniques, systems, processes, specifications, blueprints, engineering data, software programs, works of authorship, customer lists, customer information, financial information, pricing information, personnel information, business plans, projects, plans and proposals. I shall keep confidential all matters entrusted to me and shall not use or attempt to use any Confidential Information except as may be required in the ordinary course of performing my duties as an employee of the Company, nor shall I use any Confidential Information in any manner which may injure or cause loss or may be calculated to injure or cause loss to the Company, whether directly or indirectly.

 

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5. Assignment of Developments .

(a) If at any time or times during my employment, I shall (either alone or with others) make, conceive, create, discover, invent or reduce to practice any Development that (i) relates to the business of the Company or any customer of or supplier to the Company or any of the products or services being developed, manufactured or sold by the Company or which may be used in relation therewith; or (ii) results from tasks assigned to me by the Company; or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company, then all such Developments and the benefits thereof are and shall immediately become the sole and absolute property of the Company and its assigns, as works made for hire or otherwise. The term “ Development ” shall mean any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, trade secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright, trademark or similar statutes (including, but not limited to, the Semiconductor Chip Protection Act) or subject to analogous protection). I shall promptly disclose to the Company (or any persons designated by it) each such Development. I hereby assign all rights (including, but not limited to, rights to inventions, patentable subject matter, copyrights and trademarks) I may have or may acquire in the Developments and all benefits and/or rights resulting therefrom to the Company and its assigns without further compensation and shall communicate, without cost or delay, and without disclosing to others the same, all available information relating thereto (with all necessary plans and models) to the Company.

(b) Excluded Developments . I represent that the Developments identified in the Appendix, if any, attached hereto comprise all the Developments that I have made or conceived prior to my employment by the Company and that are owned or controlled by me, which Developments are excluded from this Agreement. I understand that it is only necessary to list the title of such Developments and the purpose thereof but not details of the Development itself. If no Developments are identified in the Appendix, it will be deemed that there are no such exclusions.

 

  (gg) 6. Whistleblower; Defend Trade Secrets Act Disclosure .

In addition, I understand that nothing in this Agreement shall be construed to prohibit me from reporting possible violations of law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.

I understand that the Defend Trade Secrets Act provides that I may not be held criminally or civilly liable under any Federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a Federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In the event that I file a lawsuit for retaliation by the Company for reporting a suspected violation of law, I may disclose the trade secret to my attorney and use the trade secret information in the court proceeding, if I file any document containing the trade secret under seal and do not disclose the trade secret, except pursuant to court order.

 

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  (hh) 7. Non-Disparagement .

During the period of my employment by the Company, and at all times thereafter, I will not make any disparaging or defamatory comments regarding the Company or its respective current or former directors, officers, employees or shareholders in any respect or make any comments concerning any aspect of my relationship with the Company or any conduct or events which precipitated any termination of my employment from the Company. During the period of my employment by the Company, and at all times thereafter, the Company will not, through any authorized public statement, and will direct the Company’s officers and members of the board of directors not to make any disparaging or defamatory comments regarding me in any respect or make any comments concerning any aspect of my relationship with the Company or any conduct or events which precipitated any termination of my employment from the Company. However, the Company’s and my obligations under this paragraph 7 shall not apply to disclosures required by applicable law, regulation, or order of a court or governmental agency.

 

8. Further Assurances .

I shall, during my employment and at any time thereafter, at the request and cost of the Company, promptly sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized officers may reasonably require:

(a) to apply for, obtain, register and vest in the name of the Company alone (unless the Company otherwise directs) patents, copyrights, trademarks or other analogous protection in any country throughout the world relating to a Development and when so obtained or vested to renew and restore the same; and

(b) to defend any judicial, opposition or other proceedings in respect of such applications and any judicial, opposition or other proceeding, petition or application for revocation of any such patent, copyright, trademark or other analogous protection.

If the Company is unable, after reasonable effort, to secure my signature on any application for patent, copyright, trademark or other analogous protection or other documents regarding any legal protection relating to a Development, whether because of my physical or mental incapacity or for any other reason whatsoever, 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 such application or applications or other documents and to do all other lawfully permitted acts to further the prosecution and issuance of patent, copyright or trademark registrations or any other legal protection thereon with the same legal force and effect as if executed by me.

 

9. Employment At Will .

I understand that this Agreement does not constitute an implied or written employment contract and that my employment with the Company is on an “at-will” basis. Accordingly, I understand that either the Company or I may terminate my employment at any time, for any or no reason, subject to the terms of my Employment Agreement.

 

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10. Severability .

I hereby agree that each provision and the subparts of each provision herein shall be treated as separate and independent clauses, and the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses of this Agreement. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity, subject or otherwise so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting or reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear. I hereby further agree that the language of all parts of this Agreement shall in all cases be construed as a whole according to its fair meaning and not strictly for or against either of the parties.

11. Amendments; Waiver .

Any amendment to or modification of this Agreement, or any waiver of any provision hereof, shall be in writing and signed by the Company. Any waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any other provision hereof.

 

12. Survival .

This agreement shall be effective as of the Effective Date. The parties obligations under this Agreement shall survive the termination of my employment regardless of the manner of such termination, in accordance with the terms hereof, and shall be binding, respectively, upon the Company’s successors and assigns and on my heirs, executors, administrators and legal representatives.

 

13. Assignment .

The Company shall have the right to assign this Agreement to its successors and assigns, and all covenants and agreements hereunder shall inure to the benefit of and be enforceable by said successors or assigns. I may not assign this Agreement.

 

14. Representations .

(a) I represent that my employment with the Company and my performance of all of the terms of this Agreement do not and will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I shall not enter into, any agreement either written or oral in conflict herewith. I agree that in the course of my employment with the Company, if the Company requests that I undertake activities that will cause me to use Confidential Information of my prior employer, I will inform the Company of that fact.

 

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(b) I agree that the restrictions set forth in this Agreement are reasonable and necessary to protect specific business interests of the Company. I agree that any breach of this Agreement by me will cause irreparable damage to the Company and that in the event of such breach the Company shall have, in addition to any and all remedies of law, the right to an injunction, specific performance or other equitable relief to prevent the violation of my obligations hereunder. The Company may apply for such injunctive relief in any court of competent jurisdiction without the necessity of posting any bond or other security.

 

15. Governing Law; Forum Selection Clause .

This Agreement and any claims arising out of this Agreement (or any other claims arising out of the relationship between the parties) shall be governed by and construed in accordance with the laws of the State of Delaware and shall in all respects be interpreted, enforced and governed under the internal and domestic laws of such state, without giving effect to the principles of conflicts of laws of such state. Any claims or legal actions by one party against the other shall be commenced and maintained in any state or federal court located in such state, and I hereby submit to the jurisdiction and venue of any such court.

 

16. Entire Agreement .

This Agreement sets forth the complete, sole and entire agreement between the parties on the subject matter herein and supersedes any and all other agreements, negotiations, discussions, proposals, or understandings, whether oral or written, previously entered into, discussed or considered by the parties

[Signature to appear on the following page.]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the Effective Date.

 

Melinta Therapeutics, Inc.

By:

 

/s/ Thomas Koestler

 

Thomas Koestler

Title:

 

Chairman

/s/ Daniel Mark Wechsler

Daniel Mark Wechsler

Address:

Date: October 30, 2017

[ Signature Page to Noncompetition, Nondisclosure and Developments Agreement ]

 

                             

Initial and Date


(ii) APPENDIX – TITLE/PURPOSE OF DEVELOPMENTS

The following is a complete list of all Developments owned or controlled by me and the purpose of those Developments:

If There Are No Developments Check Here                                     

If There Are Developments Check Here And List Below                  

Developments and purpose:

 

  

 

  

 

  

 

  

 

  

 

  


Exhibit B

RELEASE OF CLAIMS

As used in this Release of Claims (this “ Release ”), the term “claims” will include all claims, covenants, warranties, promises, undertakings, actions, suits, causes of action, obligations, debts, accounts, attorneys’ fees, judgments, losses, and liabilities, of whatsoever kind or nature, in law, in equity, or otherwise.

For and in consideration of the Severance Benefits (as defined in my Employment Agreement, dated October [__], 2017, with Melinta Therapeutics, Inc. (such corporation, the “ Company ” and such agreement, my “ Employment Agreement ”)), and other good and valuable consideration, I, Daniel Mark Wechsler, for and on behalf of myself and my heirs, administrators, executors, and assigns, effective as of the date on which this release becomes effective pursuant to its terms, do fully and forever release, remise, and discharge each of the Company and each of its direct and indirect subsidiaries and affiliates, and their respective successors and assigns, together with their respective current and former officers, directors, partners, shareholders, employees, and agents (collectively, and with the Company, the “ Group ”), from any and all claims whatsoever up to the date hereof that I had, may have had, or now have against the Group, whether known or unknown, for or by reason of any matter, cause, or thing whatsoever, including any claim arising out of or attributable to my employment or the termination of my employment with the Company, whether for tort, breach of express or implied employment contract, intentional infliction of emotional distress, wrongful termination, unjust dismissal, defamation, libel, or slander, or under any federal, state, or local law dealing with discrimination based on age, race, sex, national origin, handicap, religion, disability, or sexual orientation. The release of claims in this Release includes, but is not limited to, all claims arising under the Age Discrimination in Employment Act of 1967 (“ ADEA ”), Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Civil Rights Act of 1991, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, as amended, the Worker Adjustment and Retraining Notification Act of 1988 and the Equal Pay Act of 1963, each as may be amended from time to time, and all other federal, state, and local laws, the common law, and any other purported restriction on an employer’s right to terminate the employment of employees. The release contained herein is intended to be a general release of any and all claims to the fullest extent permissible by law and for the provisions regarding the release of claims against the Group to be construed as broadly as possible, and hereby incorporate in this release similar federal, state or other laws, all of which I also hereby expressly waive.

I understand and agree that claims or facts in addition to or different from those which are now known or believed by me to exist may hereafter be discovered, but it is my intention to fully and forever release, remise and discharge all claims which I had, may have had, or now have against the Group, whether known or unknown, suspected or unsuspected, asserted or unasserted, contingent or noncontingent, without regard to the subsequent discovery or existence of such additional or different facts. Without limiting the foregoing, by signing this Release, I expressly waive and release any provision of law that purports to limit the scope of a general release.

I acknowledge and agree that as of the date I execute this Release, I have no knowledge of any facts or circumstances that give rise or could give rise to any claims under any of the laws listed in the preceding paragraphs.

 

B-1


By executing this Release, I specifically release all claims relating to my employment and its termination under the ADEA, a United States federal statute that, among other things, prohibits discrimination on the basis of age in employment and employee benefit plans.

Notwithstanding any provision of this Release to the contrary, by executing this Release, I am not releasing (i) any claims relating to my rights under Section 8 of my Employment Agreement, (ii) any claims that cannot be waived by law, or (iii) my right of indemnification and coverage under Company directors and officers liability insurance under Section 20 of my Employment Agreement.

I expressly acknowledge and agree that I –

• Am able to read the language, and understand the meaning and effect, of this Release;

• Have no physical or mental impairment of any kind that has interfered with my ability to read and understand the meaning of this Release or its terms, and that I am not acting under the influence of any medication, drug, or chemical of any type in entering into this Release;

• Am specifically agreeing to the terms of the release contained in this Release because the Company has agreed to pay me the Severance Benefits in consideration for my agreement to accept it in full settlement of all possible claims I might have or ever have had, and because of my execution of this Release;

• Acknowledge that, but for my execution of this Release, I would not be entitled to the Severance Benefits;

• Understand that, by entering into this Release, I do not waive rights or claims under the ADEA that may arise after the date I execute this Release;

• Had or could have had [twenty-one (21)][forty-five (45)] 1 calendar days from the date of my termination of employment (the “ Release Expiration Date ”) in which to review and consider this Release, and that if I execute this Release prior to the Release Expiration Date, I have voluntarily and knowingly waived the remainder of the review period;

• Have not relied upon any representation or statement not set forth in this Release or my Employment Agreement made by the Company or any of its representatives;

 

1   To be selected based on whether applicable termination was “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967).

 

B-2


• Was advised to consult with my attorney regarding the terms and effect of this Release; and

• Have signed this Release knowingly and voluntarily.

I represent and warrant that I have not previously filed, and to the maximum extent permitted by law agree that I will not file, a complaint, charge, or lawsuit against any member of the Group regarding any of the claims released herein. If, notwithstanding this representation and warranty, I have filed or file such a complaint, charge, or lawsuit, I agree that I shall cause such complaint, charge, or lawsuit to be dismissed with prejudice and shall pay any and all costs required in obtaining dismissal of such complaint, charge, or lawsuit, including without limitation the attorneys’ fees of any member of the Group against whom I have filed such a complaint, charge, or lawsuit. This paragraph shall not apply, however, to a claim of age discrimination under the ADEA or to any non-waivable right to file a charge with the United States Equal Employment Opportunity Commission (the “ EEOC ”) or similar state agency; provided , however , that if the EEOC or similar state agency were to pursue any claims relating to my employment with the Company, I agree that I shall not be entitled to recover any monetary damages or any other remedies or benefits as a result and that this Release and Section 8 of my Employment Agreement will control as the exclusive remedy and full settlement of all such claims by me.

I hereby agree to waive any and all claims to re-employment with the Company or any other member of the Group and affirmatively agree not to seek further employment with the Company or any other member of the Group. I acknowledge that if I re-apply for or seek employment with the Company or any other member of the Group, the Company’s or any other member of the Group’s refusal to hire me based on this provision will provide a complete defense to any claims arising from my attempt to apply for employment.

Notwithstanding anything contained herein to the contrary, this Release will not become effective or enforceable prior to the expiration of the period of seven (7) calendar days immediately following the date of its execution by me (the “ Revocation Period ”), during which time I may revoke my acceptance of this Release by notifying the Company and the Board of Directors of the Company, in writing, delivered to the Company at its principal executive office, marked for the attention of its Chairman of the Board. To be effective, such revocation must be received by the Company no later than 11:59 p.m. Eastern Time on the seventh (7 th ) calendar day following the execution of this Release. Provided that this Release is executed and I do not revoke it during the Revocation Period, the eighth (8 th ) calendar day following the date on which this Release is executed shall be its effective date. I acknowledge and agree that if I revoke this Release during the Revocation Period, this Release will be null and void and of no effect, and neither the Company nor any other member of the Group will have any obligations to pay me the Severance Benefits.

The provisions of this Release shall be binding upon my heirs, executors, administrators, legal personal representatives, and assigns. If any provision of this Release shall be held by any court of competent jurisdiction to be illegal, void, or unenforceable, such provision shall be of no force or effect. The illegality or unenforceability of such provision, however, shall have no effect upon and shall not impair the enforceability of any other provision of this Release.

 

B-3


THIS RELEASE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD TO CONFLICT OF LAWS RULES. ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN ME AND THE COMPANY ARISING OUT OF OR RELATED TO THIS RELEASE SHALL BE RESOLVED BY ARBITRATION ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION (“ AAA ”) IN ACCORDANCE WITH ITS EMPLOYMENT ARBITRATION RULES INCLUDING THE EMERGENCY INTERIM RELIEF PROCEDURES OF THE AAA. JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THE PLACE OF ARBITRATION SHALL BE WILMINGTON, DELEWARE. THE ARBITRATOR(S) MAY GRANT INJUNCTIONS OR OTHER RELIEF IN SUCH DISPUTE OR CONTROVERSY. THE DECISION OF THE ARBITRATOR(S) SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE ARBITRATION. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THE COMPANY AND I SHALL EACH BEAR OUR OWN ATTORNEYS’ FEES INCURRED IN CONNECTION WITH THE ARBITRATION, AND THE ARBITRATOR(S) WILL NOT HAVE AUTHORITY TO BE ENTITLED TO AWARD ATTORNEYS’ FEES UNLESS A STATUTE OR CONTRACT AT ISSUE IN THE DISPUTE AUTHORIZES THE AWARD OF ATTORNEYS’ FEES TO THE PREVAILING PARTY, IN WHICH CASE THE ARBITRATOR(S) SHALL HAVE THE AUTHORITY TO MAKE AN AWARD OF ATTORNEYS’ FEES AS REQUIRED OR PERMITTED BY APPLICABLE LAW. IF THERE IS A DISPUTE AS TO WHETHER THE COMPANY IS OR I AM THE PREVAILING PARTY IN THE ARBITRATION, THE ARBITRATOR(S) WILL DECIDE THIS ISSUE. LIABILITY FOR THE FEES AND EXPENSES OF ALL THE ARBITRATORS WITH RESPECT TO THE ARBITRATION SHALL BE EVENLY DIVIDED BETWEEN THE PARTIES TO THE ARBITRATION. THE DETERMINATION RENDERED BY THE ARBITRATOR(S) SHALL (I) SPECIFY THE FINDING OF FACTS UPON WHICH IT IS BASED AND THE REASONS THEREFOR, AND (II) BE CONCLUSIVE AND BINDING UPON THE PARTIES. NOTWITHSTANDING THE PROVISIONS OF THIS PARAGRAPH, I HEREBY AGREE TO SUBMIT ANY AND ALL CLAIMS I MAY HAVE AGAINST THE COMPANY ON AN INDIVIDUAL BASIS. THIS MEANS THAT NO CLAIM (INCLUDING ANY CLAIM RELATED TO TERMS OR CONDITIONS OF MY EMPLOYMENT WITH OR COMPENSATION PAID BY THE COMPANY, OR ANY CHANGE IN OR TERMINATION OF MY EMPLOYMENT) MAY BE LITIGATED OR ARBITRATED ON A CLASS OR COLLECTIVE BASIS. I ALSO HEREBY WAIVE ANY RIGHT TO SUBMIT, INITIATE, OR PARTICIPATE IN A REPRESENTATIVE CAPACITY OR AS A PLAINTIFF, CLAIMANT, OR MEMBER IN A CLASS ACTION, COLLECTIVE ACTION, OR OTHER REPRESENTATIVE OR JOINT ACTION AGAINST THE COMPANY, REGARDLESS OF WHETHER THE ACTION IS FILED IN ARBITRATION OR IN A JUDICIAL OR ADMINISTRATIVE FORUM. FURTHERMORE, IF A COURT ORDERS THAT A CLASS, COLLECTIVE, OR OTHER REPRESENTATIVE OR JOINT ACTION SHOULD PROCEED, IN NO EVENT WILL SUCH ACTION PROCEED IN AN ARBITRATION FORUM. CLAIMS MAY NOT BE JOINED OR CONSOLIDATED IN ARBITRATION WITH DISPUTES BROUGHT BY ANY OTHER INDIVIDUAL(S), UNLESS AGREED TO IN WRITING BY ALL PARTIES.

 

B-4


Capitalized terms used, but not defined herein, shall have the meanings ascribed to such terms in my Employment Agreement.

*            *             *

I, Daniel Mark Wechsler, have executed this Release of Claims on the date set forth below:

 

 

Daniel Mark Wechsler

Date: [To Be Executed Following
Termination of Employment]

 

B-5

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

CEMPRA ANNOUNCES PRELIMINARY RESULTS OF 2017 STOCKHOLDER VOTE

CHAPEL HILL, N.C. – November  3, 2017 –Cempra, Inc. (Nasdaq: CEMP), a clinical-stage pharmaceutical company focused on developing differentiated anti-infectives for acute care and community settings to meet critical medical needs in the treatment of infectious diseases, today announced the preliminary results of its stockholder vote at the company’s 2017 annual meeting of stockholders held today. Among other proposals, Cempra stockholders approved the issuance of Cempra common stock pursuant to the previously announced agreement and plan of merger and reorganization dated as of August 8, 2017, as amended on September 6, 2017 and October 24, 2017 (the merger agreement), pursuant to which Melinta will merge with a subsidiary of Cempra (the merger) as described in the definitive proxy statement filed by Cempra on October 5, 2017 and supplemented as of October 24, 2017 and October 27, 2017 (the definitive proxy statement). As a result of the stockholder vote, the parties will proceed with the closing of the merger as soon as practicable.

The following merger-related proposals were approved:

 

    A proposal to approve the issuance of Cempra common stock pursuant to merger agreement

 

    A proposal to change the name of Cempra to “Melinta Therapeutics, Inc.”

 

    A proposal to approve amendments to Cempra’s certificate of incorporation to effect a reverse stock split

 

    The adjournment of the annual meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the annual meeting to approve and adopt the Merger Agreement

 

    Stockholders also approved on a non-binding advisory basis Cempra’s 2016 executive compensation (say on pay)

 

    Stockholders elected each of the three Class III directors standing for re-election (note, however, that if the merger is consummated, the board of directors will be reconstituted in accordance with the terms of the merger agreement and as described in the definitive proxy statement)

 

    Stockholders also approved the appointment of PricewaterhouseCoopers LLP to serve as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2017


Two proposals were not approved:

 

    A proposal to increase the number of authorized shares of Cempra common stock from 80,000,000 to 250,000,000; and

 

    A proposal to elect for Cempra not to be governed by or subject to Section 203 of the Delaware General Corporation Law (DGCL)

Final vote results will be reported in a Form 8-K.

Pursuant to the terms of the merger agreement, the proposal to increase the number of authorized shares of Cempra common stock is a condition to the closing of the merger. However, Cempra and Melinta have agreed that they will mutually waive this condition and proceed with the closing of the merger.

About Cempra, Inc.

Cempra, Inc. is a clinical-stage pharmaceutical company focused on developing differentiated anti-infectives for acute care and community settings to meet critical medical needs in the treatment of infectious diseases. Cempra’s two lead product candidates are currently in advanced clinical development. Solithromycin has been evaluated in two Phase 3 clinical trials for community-acquired bacterial pneumonia (CABP). Cempra is currently seeking approval for CABP for both intravenous and oral capsule formulations from the U.S. Food and Drug Administration. Solithromycin is licensed to strategic commercial partner Toyama Chemical Co., Ltd., a subsidiary of FUJIFILM Holdings Corporation, for certain exclusive rights in Japan. Cempra is contracted with BARDA for the development of solithromycin for pediatric use and has commenced enrollment in a global Phase 2/3 trial to evaluate the safety and efficacy of solithromycin versus standard of care antibiotics in children and adolescents from two months to 17 years of age. Solithromycin is also in development for uncomplicated urogenital urethritis caused by Neisseria gonorrhoeae or chlamydia. Fusidic acid is Cempra’s second product candidate, which has completed a Phase 3 trial comparing fusidic acid to linezolid in patients with ABSSSI. Cempra also has an ongoing exploratory study of fusidic acid for chronic oral treatment of refractory infections in bones and joints. Both products seek to address the need for new treatments targeting drug-resistant bacterial infections in the hospital and in the community. Cempra is also studying solithromycin for ophthalmic conditions and has synthesized novel macrolides for non-antibiotic uses such as the treatment of chronic inflammatory diseases, endocrine diseases and gastric motility disorders. Cempra was founded in 2006 and is headquartered in Chapel Hill, N.C. For additional information about Cempra please visit www.cempra.com .


Cautionary Note Regarding Forward-Looking Statements

Certain statements in this communication regarding the proposed merger and other contemplated transactions (including statements relating to satisfaction of the conditions to and consummation of the proposed merger) constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control.

Risks and uncertainties for Cempra and Melinta and of the combined company include, but are not limited to: inability to complete the proposed merger and other contemplated transactions; liquidity and trading market for shares prior to and following the consummation of the proposed merger; costs and potential litigation associated with the proposed merger; failure or delay in obtaining required approvals by the SEC or any other governmental or quasi-governmental entity necessary to consummate the proposed merger, which may also result in unexpected additional transaction expenses and operating cash expenditures on the parties; failure to obtain the necessary stockholder approvals or to satisfy other conditions to the closing of the proposed merger and the other contemplated transactions; a superior proposal being submitted to either party; failure to issue Cempra common stock in the proposed merger and other contemplated transactions exempt from registration or qualification requirements under applicable state securities laws; risks related to the costs, timing and regulatory review of the combined company’s studies and clinical trials, including its ability to address the issues identified by the FDA in the complete response letter relating to Cempra’s new drug applications for solithromycin for community acquired bacterial pneumonia; uncertainties in obtaining successful clinical results for product candidates and unexpected costs that may result therefrom; inability or the delay in obtaining required regulatory approvals for product candidates, which may result in unexpected cost expenditures; failure to realize any value of certain product candidates developed and being developed, in light of inherent risks and difficulties involved in successfully bringing product candidates to market; inability to develop new product candidates and support existing products; inability to commercialize and launch any product candidate that receives regulatory approval, including Baxdela; the combined company’s anticipated capital expenditures, its estimates regarding its capital requirements and its need for future capital; uncertainties of cash flows and inability to meet working capital needs; cost reductions that may not result in anticipated level of cost savings or cost reductions prior to or after the consummation of the proposed merger; the approval by the FDA and EMA and any other similar foreign regulatory authorities of other competing or superior products brought to market; risks resulting from unforeseen side effects; risk that the market for the combined company’s products may not be as large as expected; inability to obtain, maintain and enforce patents and other intellectual property


rights or the unexpected costs associated with such enforcement or litigation; inability to obtain and maintain commercial manufacturing arrangements with third party manufacturers or establish commercial scale manufacturing capabilities; loss of or diminished demand from one or more key customers or distributors; unexpected cost increases and pricing pressures; the possibility of economic recession and its negative impact on customers, vendors or suppliers; and risks associated with the possible failure to realize certain benefits of the proposed merger, including future financial, tax, accounting treatment, and operating results. Many of these factors that will determine actual results are beyond Cempra’s, Melinta’s, or the combined company’s ability to control or predict.

Other risks and uncertainties are more fully described in our Annual Report on Form 10-K for the year ended December 31, 2016, as amended by Form 10-K/A filed with the SEC on April 13, 2017, and in other filings that Cempra makes and will make with the SEC in connection with the proposed transactions, including the proxy statement described below under “Important Information and Where to Find It.” Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The statements made in this communication speak only as of the date stated herein, and subsequent events and developments may cause our expectations and beliefs to change. While we may elect to update these forward-looking statements publicly at some point in the future, we specifically disclaim any obligation to do so, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date after the date stated herein.

Important Information and Where to Find It

You can find information about Cempra’s directors and executive officers in Cempra’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 28, 2017, as amended by Form 10-K/A filed with the SEC on April 13, 2017, and in the definitive proxy statement filed with the SEC on October 5, 2017 and supplemented as of October 24, 2017 and October 27, 2017 in connection with the proposed merger.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Stockholders may obtain, free of charge, copies of the proxy statement and any other documents filed by Cempra with the SEC in connection with the proposed transactions at the SEC’s website (http://www.sec.gov), at Cempra’s website (http://investor.cempra.com/), or by writing to the Secretary, Cempra, Inc. at 6320 Quadrangle Drive, Suite 360, Chapel Hill, North Carolina 27517.

Company Contact:

John Bluth

Cempra, Inc.

+1 984 209 4534

jbluth@cempra.com

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