AGREEMENT
Exhibit 10.15
This agreement (the "Agreement") is entered into as of the ___24_____ day of June, 2016 (the "Effective Date") by and between Advanced Inhalation Therapies (AIT) Ltd., an Israeli corporation ("AIT"), and Xxxxxx Xxxx ("Xxxx").
WHEREAS, AIT intends to undertake a financing in the United States in some form, most likely, but not limited to, an initial public offering (the "IPO"); and
WHEREAS, AIT desires to appoint Xxxx as Member of its Board of Directors (the "Board") and Xxxx desires to serve AIT in such capacity, in accordance with the terms and conditions set forth in this Agreement;
NOW, THEREFORE, AIT and Xxxx hereby agree as follows:
1. Position. AIT hereby appoints Xxxx, and Xxxx hereby agrees to serve, as Member of the Board. Xxxx shall perform for AIT the duties customarily associated with the office of Member of the Board and such other duties consistent with that position as may be specified in the company's by-laws and/or applicable law. Xxxx will not engage in any employment, business or other activity that creates an actual or potential conflict of interest with those duties and responsibilities.
2. Compensation. AIT will pay Xxxx the following compensation and benefits for all services rendered by him under this Agreement:
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(a)
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Business Expenses. AIT shall reimburse Xxxx for his reasonable travel and other business expenses incurred in providing services under this Agreement, provided that Xxxx submits documentation of such expenses in a form acceptable to AIT.
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(b)
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One-time Bonus. Within 30 days from the completion of the IPO, AIT shall make a one time payment to Xxxx of $150,000.
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(b) Annual Retainer. Commencing on the effective date of the IPO, AIT will pay Xxxx an Annual Retainer at the annualized rate of $40,000. The Annual Retainer shall be paid in equal installments not less often than monthly.
(c) Equity. AIT will xxxxx Xxxx, subject to the consummation of the IPO, restricted ordinary shares of AIT equal to 3% of all issued and outstanding shares + stock options (Fully Diluted Share Count) of AIT after the completion of the IPO, including any green shoe (or similar). The restricted shares shall vest as follows: one-third (33.33%) of such shares shall vest immediately on the completion of the IPO, one-third (33.33%) of such shares shall vest on the six (6) month anniversary of the IPO, and the remaining one-third (33.33%) of such shares shall vest on the twelve (12) month anniversary of the IPO. The shares granted hereunder shall be governed by and subject to the terms and conditions of the the Amended and Restated 2013 Equity Incentive Plan attached hereto as Exhibit A.
Notwithstanding anything contained herein to the contrary, it is agreed and understood that the shares granted pursuant to this Section 2(c) shall accelerate and vest immediately upon the closing of a Change of Control Transaction (as hereinafter defined), subject to Xxxx serving as Member of AIT pursuant to this Agreement on the closing date of a Change of Control Transaction. The term "Change of Control Transaction" shall mean (i) a merger, consolidation, a sale of all or substantially all of the assets or similar transaction of AIT or its subsidiaries with or into or to any other person or entity, where AIT shall not be the surviving entity, or, if AIT is the surviving entity, after which the equity holders of AIT as of the date hereof fail to own at least fifty percent (50%) of the voting or management power of AIT or (ii) other than any public offering of securities, one or more sales of the outstanding capital stock of AIT after which the equity holders of AIT as of the date hereof fail to own at least fifty percent (50%) of the voting or management power of AIT or the surviving person or entity, as applicable.
Upon the death or "Disability" (as hereinafter defined) of Xxxx, the shares granted pursuant to this Section 2(c) and any unvested portion thereof shall accelerate and vest immediately. The term "Disability" shall mean "permanent and total disability" as defined in Section 22(e)(3) of the U.S. Internal Revenue Code. Upon the death or Disability of Xxxx the shares granted pursuant to this Section 2(c), including any unvested portion, shall be transferred to Xxxx legal heirs.
(d) Xxxx shall be solely responsible for the payment of, and agrees to pay all income, social security, employment-related or other taxes of any kind incurred as a result of the performance of the services under this Agreement, and for all obligations, reports and timely notifications relating to those taxes, except those imposed on AIT and its subsidiaries. AIT has no obligation to pay or withhold any sums for those taxes. Xxxx will indemnify the Company and hold it harmless from and against any taxes imposed upon or asserted against AIT as a result of or in connection with Xxxx services hereunder other than any taxes arising as a result of the application of U.S. Internal Revenue Code Section 280G.
3. Term. The term of this Agreement shall commence as of the Effective Date and shall continue for a period of three years from the Effective Date, subject to earlier termination as provided herein. This Agreement shall terminate upon termination by Xxxx or AIT, subject to the terminating party providing sixty (60) days' prior written notice of termination to the other party.
4. Payment Upon Termination. In the event that this Agreement and Xxxx services as Member are terminated for any reason, AIT will pay Xxxx any earned and accrued Annual Retainer through the termination date and reimburse him for any unpaid business expenses. If this agreement is terminated without cause by AIT then any unvested shares will vest immediately. Cause is defined as Gross Negligence or Willful Misconduct that is documented.
5. Restrictions on Competition; Non-Solicitation.
(a) Restrictions on Competition. Xxxx agrees that, during his service as Member and for a period of one (1) year following the termination of such service for any reason, (the "Restricted Period"), he shall not directly or indirectly, alone or with others, establish, open, reestablish or reopen, or in any manner become engaged, either as an employee, owner, partner, agent, stockholder, director, officer, consultant or otherwise, in any Competing Business in any territory. For purposes of this Agreement, "Competing Business" means any person, corporation or other entity whose main activity is to develop or to sell Nitric Oxide therapeutic products. Any investment Xxxx may make in such business shall not be considered to give rise to a violation of this covenant if the following three (3) conditions are met: (i) the stock of such business is publicly traded, (ii) Xxxx equity interest in such business does not exceed five percent (5%) of the aggregate outstanding equity interests of such business, and (iii) Xxxx does not participate in the management or operational affairs of such business.
(b) Non-Solicitation of Clients. Xxxx agrees that during the Restricted Period he shall not, either directly or indirectly, alone or with others, solicit any customer of AIT or any subsidiary for the purpose of engaging in a business relationship related to Nitric Oxide therapeutic products.
(c) Non-Solicitation of Employees. Xxxx agrees that during the Restricted Period he shall not, either directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of AIT or any subsidiary to leave the employ of that company,.
6. Confidentiality.
(a) Nondisclosure of Confidential Information. During Xxxx service hereunder and after such service ends for any reason, Xxxx will hold in strict confidence and will not disclose, use or publish in any manner (including, without limitation, in print, audio or video or in any manner, on-line or through internet, mobile or cloud based transmission) any Confidential Information (as defined below) of AIT or any subsidiary, except as may be required in the performance of his duties hereunder, required by law or with the prior written authorization of the Board. Xxxx recognizes that all Confidential Information shall at all times be the sole property of AIT and/or any subsidiary and its/their assigns or successors in interest.
(b) Definition of Confidential Information. The term "Confidential Information" shall include but not be limited to (i) trade secrets, documentation, designs, schematics, catalysts, settings, hardware designs, programming, processes, specifications required to produce material, research and development techniques, ideas, processes, products, handbooks, manuals, machines, compositions, methods, formulas, source and object codes, data, programs, patents, patent applications, know-how, improvements, research projects, formats, discoveries, developments, designs, drawings, techniques, system documentation, special hardware, related software development, computer software and programs, electronic codes; (b) plans for research, development, new products, marketing and selling, business and strategic plans, budgets and financial statements, licenses, prices and costs, suppliers and customers; (c) information concerning sales, sales volume, sales and marketing methods, financial performance, sales proposals, identity of clients, kind of client purchases, sources of supply; (d) information regarding the compensation of executives and employees of AIT and any subsidiary; and (e) other confidential or proprietary information belonging to or relating to the business affairs of AIT and any subsidiary. The term Confidential Information is to be broadly defined and construed to and for the benefit of AIT and any subsidiary, and includes any and all information that has or could have commercial value or other utility in the business in which AIT and any subsidiary are engaged or contemplate engaging in, and all information of which the unauthorized disclosure could be detrimental or adverse to the their interests.
"Confidential Information" shall not include information that (i) is or becomes known to the general public through no breach of an obligation of secrecy by Xxxx, (ii) is disclosed in written form, under no obligation of secrecy, to Xxxx by another party having a legal right to disclose it; or (iii) Xxxx is required to disclose, pursuant to the terms of a subpoena or other lawful process issued by a court or governmental regulatory agency with jurisdiction over AIT and/or any subsidiary, provided however, that Xxxx shall give timely notice to AIT of such required disclosure and shall disclose such information only to the extent required.
7. Return of Documents. Upon the termination of Xxxx service to AIT for any reason, Xxxx will promptly deliver to AIT all correspondence, drawings, blueprints, manuals, letters, notes, notebooks, reports, flow charts, programs, proposals, product samples, prototypes, any documents concerning AIT's or any subsidiary's clients or concerning products or processes used by them, and all documents or materials, including those stored on computers or electronic devices, containing or constituting Confidential Information.
8. No Prior Agreements. Xxxx represents and warrants that he is not a party to or otherwise subject to or bound by the terms of any contract, agreement, or understanding which in any manner would limit or otherwise affect his ability to perform any obligation under this Agreement. Xxxx further represents and warrants that he will not use or disclose any Confidential Information belonging to prior employers or other persons or entities in the performance of his duties hereunder.
10. Assignment. This Agreement may not be assigned by any party hereto.
11. Survival. The covenants and obligations of Xxxx herein which by their terms require performance after the termination of this Agreement shall survive the termination of this Agreement and shall be binding and enforceable until fully satisfied in accordance with the terms of this Agreement.
12. Waiver. No consent to or waiver of any breach or default in the performance of any obligation hereunder shall be deemed or construed to be a consent to or waiver of any other breach or default in the performance of any of the same or any other obligations hereunder. No waiver hereunder shall be effective unless it is in writing and signed by the waiving party.
13. Complete Agreement; Modification. This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof, and supersedes any previous oral or written communications, representations, understandings, contracts or agreements between them. Any modification of this Agreement shall be effective only if set forth in a written document signed by Xxxx and a duly authorized officer of AIT.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflict of law principles and to the fullest extent permitted by law. (ii) All parties submit that any dispute related to this Agreement shall be filed and adjudicated without objection to venue in New York County, New York
15. Indemnification; General Liability (i) To the fullest extent permitted by applicable law, AIT, it's receiver, trustee, or its successor, shall indemnify, defend, and hold Xxxx harmless from and against any expense, loss, damage or liability incurred in connection with any claim, suit, demand, loss, judgment, liability, cost or expense (including reasonable attorneys' fees) arising from or related to the services performed by him under the terms of this Agreement and amounts paid in settlement of any of the foregoing; provided that the same were not the resolute of Xxxx'x fraud or criminal misconduct. (ii) AIT will maintain insurance with an A rated or equivalent carrier for the purposes of and with appropriate limits of liability to effect the defense and indemnification requirements set forth in this paragraph
16. Counterparts; Section Headings. This Agreement may be executed via facsimile or other electronic transmission and in two (2) or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. The section headings of this Agreement are for convenience only and will not affect the construction or interpretation of any of its provisions.
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ADVANCED INHALATION THERAPIES (AIT) LTD.
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By:
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Xxxx Xxxxxx
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Title:
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Chief Executive Officer
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Xxxxxx Xxxx
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