Ernexa Therapeutics Inc 8-K, filed Jan 4, 2023
Ernexa Therapeutics Inc. (ERNA)
8-K
2023-01-04
For: 2022-12-29
View Original
Added on
April 06, 2026
About this 8-K
Ernexa Therapeutics Inc filed this 8-K on January 4, 2023, reporting on events of December 29, 2022.
Items reported
- Item 3.01: Delisting notice or listing transfer
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
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): December 29, 2022
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (212 ) 582-1199
10355 Science Center Drive, Suite 150, San Diego, CA 92121
(Former name or 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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading symbol
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities
Exchange Act of 1934:
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. ☐
| Item 3.01 |
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
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As previously reported in its Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on November 23, 2022, Eterna Therapeutics Inc.
(the “Company”) received written notice (the “Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) on November 22, 2022 stating that the Company’s stockholders’ equity of approximately $8.8 million, as reported in the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, fails to comply with the minimum $10.0 million stockholders’ equity requirement for continued listing on the Nasdaq Global Market in accordance with Nasdaq Listing
Rule 5450(b)(1)(A). The Notice provided that the Company may consider applying to transfer the listing of the Company’s common stock, par value $0.005 per share (the “common stock”) to The Nasdaq Capital Market, subject to the Company
submitting an online transfer application, paying the requisite fee and satisfying such market’s continued listing requirements.
On December 29, 2022, the Company’s board of directors (the “Board”) authorized the Company to apply to transfer the listing of its common stock from the Nasdaq Global
Market to The Nasdaq Capital Market, and, on January 2, 2023, the Company applied to transfer the listing of its common stock to The Nasdaq Capital Market (the “Transfer”).. The Nasdaq Capital Market operates in substantially the same
manner as The Nasdaq Global Market, with issuers listed on The Nasdaq Capital Market tier required to meet certain financial and corporate governance requirements to qualify for continued listing. The Company currently expects that, upon
consummation of the Transfer, the common stock will continue to trade under the symbol “ERNA”, and the Company expects to file a Current Report on Form 8-K at such time as it can confirm the date of the Transfer.
| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Appointment of President and Chief Executive Officer
On December 30, 2022, the Board appointed Dr. Matthew Angel as the
Company’s President and Chief Executive Officer (principal executive officer) effective January 1, 2023 (the “Start Date”). Prior to such appointment, Dr. Angel had been serving as the Company’s as interim President and Chief Executive Officer.
Dr. Angel, 41 years old, is the co-founder of Factor Bioscience Inc. (“Factor”), a biotechnology company focused on
developing mRNA and cell-engineering technologies, and has served as its President, Chief Executive Officer and Chairman of its Board of Directors since 2011. In 2020, Dr. Angel co-founded, Exacis Biotherapeutics Inc., an immuno-oncology company,
for which he serves as the Scientific Advisory Board Chair. Dr. Angel previously served as the Chief Science Officer, Secretary, Treasurer and as a director of Exacis Biotherapeutics Inc. (“Exacis”), and as the Chief Science Officer,
Secretary and as a director of Novellus, Inc. (“Novellus”), a pre-clinical stage biotechnology company focused on developing engineered cellular medicines using its licensed, patented non-immunogenic mRNA, from 2014 until the sale of
Novellus to the Company in July 2021 (the “Novellus Acquisition”). Dr. Angel received a Ph.D from the Massachusetts Institute of Technology in 2012 and a B.S. in Engineering from Princeton University in 2003.
In connection with his appointment as President and Chief Executive
Officer, the Company entered into an offer letter with Dr. Angel, dated as of December 30, 2022 (the “Angel Offer Letter”). The Angel Offer Letter offers Dr. Angel at-will employment as the President and Chief Executive Officer for a
term commencing on the Start Date and continuing until terminated by either the Company or Dr. Angel. Pursuant to the Angel Offer Letter, the Company and Dr. Angel agreed to
negotiate in good faith and execute and deliver a formal, written employment agreement within 30 days following the date of the Angel Offer Letter, consistent with the terms of the Angel Offer Letter and containing such other terms and
conditions as are mutually acceptable to Dr. Angel and the Company, including severance provisions and restrictive covenant provisions that appropriately take into account Dr. Angel’s affiliations with Factor and its affiliated entities (the “Angel
Employment Agreement”).
Under the terms of the Angel Offer Letter, the Company will pay Dr.
Angel an annual base salary of $350,000, which amount is subject to periodic review by the Board or its compensation committee, and a cash signing bonus equal to $210,959 within ten days of the Start Date, which signing bonus represents the
salary Dr. Angel would have earned for the period during which he served as interim President and Chief Executive Officer, had the Angel Employment Agreement been in effect at the beginning thereof. Dr. Angel did not receive a salary or other
cash compensation during his tenure as interim President and Chief Executive Officer. Dr. Angel will be eligible to receive a performance bonus equal to two percent of the
gross proceeds actually received by the Company pursuant to all licensing, option, collaboration, partnership, joint venture, settlement, other similar agreements entered into by the Company, or other actions, judgments, or orders that generate
cash proceeds to the Company, that are originated, negotiated and/or entered into by the Company during Dr. Angel’s employment (commencing on May 26, 2022) with the Company, subject to certain conditions to be set forth in the Angel Employment
Agreement, including that Dr. Angel has not voluntarily resigned other than for good reason or has been terminated for cause.
In accordance with the terms of the Angel Offer Letter, Dr. Angel
is entitled to receive equity awards, consisting of a new time-based nonqualified stock option under the Company’s Restated 2020 Stock Incentive Plan (the “Option Grant”) within ten days of the Start Date, covering a number of shares of common stock, inclusive of all equity awards previously issued to Dr. Angel, equal to 5.0% of the issued and outstanding shares of
the common stock as of the Start Date. The exercise price of the Option Grant will equal the fair market value of the shares of common stock underlying the Option Grant. The Option Grant shall vest such that 50% of the aggregate of the Option
Grant and the option previously granted to Dr. Angel on August 1, 2022 were fully vested on the Start Date and the remaining portion of the Option Grant will vest in substantially equal monthly installments over the 36 months
following the Start Date. Vesting generally requires Dr. Angel’s continued employment through the relevant vesting date.
The Angel Offer Letter provides Dr. Angel will be eligible for (a) reimbursement of reasonable business expenses, (b) participation in the Company’s benefit plans and (c)
paid vacation days in accordance with the Company’s policies, as in effect from time to time.
The foregoing description of the Angel Offer Letter is only a summary and is qualified in its entirety by reference to the full text of the Angel Offer Letter, which is filed
as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference in this Item 5.02.
There are no family relationships between Dr. Angel and any director or executive officer of the Company, and, except as set forth below, Dr. Angel does not have any other
direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K. There are no arrangements or understandings between Dr. Angel and any other persons pursuant to which he
was selected as Chief Executive Officer and President.
Certain Relationships and Related Party Transactions with Dr. Angel
As previously reported, the Company paid consideration totaling approximately $124.0 million in respect of the Novellus Acquisition, which consisted of (a) $22.8 million in
cash and (b) approximately 7,022,000 shares of common stock, which under the terms of the agreement and plan of acquisition, dated as of July 16, 2021, by and between the Company, Novellus and the other parties thereto (the “Novellus
Acquisition Agreement”), were valued at a total of $102.0 million, based on a price of $14.5253 per share of common stock. In connection with the Novellus Acquisition, (i) Factor, of which Dr. Angel beneficially owns approximately 64% of
its outstanding equity, received approximately $1.7 million in cash consideration from the Company and approximately 2,581,000 shares of common stock, and (ii) Dr. Angel received approximately $2.0 million in cash consideration from the Company
and approximately 623,000 shares of common stock. In addition, Dr. Angel also received approximately 286,000 shares of common stock, which the Company had placed in escrow for a period that ended on July 16, 2022 to secure indemnification
obligations to the Company under the Novellus Acquisition Agreement.
As previously reported, on April 26, 2021, Eterna Therapeutics LLC, formerly known as Brooklyn ImmunoTherapeutics LLC (“Eterna LLC”), a subsidiary of the Company, entered into an exclusive license agreement (the “License
Agreement”), with Novellus Therapeutics Limited, a subsidiary of Novellus and, following the Novellus Acquisition, a wholly owned subsidiary of the Company (“Novellus Limited”), and Factor Bioscience Limited, a wholly owned subsidiary of Factor
(“Factor Limited” and together with Novellus Limited, the “Licensors”), to license the Licensors’ intellectual property and mRNA cell reprogramming
and gene editing technology for use in the development of certain cell-based therapies to be evaluated and developed for treating human diseases, including certain types of cancer, sickle cell disease, and beta thalassemia. Pursuant to the
License Agreement, Eterna LLC paid the Licensors a total of $4.0 million in connection with the execution of the License Agreement. The completion of the Novellus Acquisition relieved the Company of potential obligations to pay Novellus
Limited certain upfront fees, clinical development milestone fees and post-registration royalties under the License Agreement, but the agreements with Factor under the License Agreement and Novellus-Factor License Agreement (as defined below)
remained unchanged prior to the Amendment (as defined below). Pursuant to the License Agreement, Eterna LLC paid Factor Limited an additional $2.5 million in October 2021 and was obligated to pay Factor Limited
$3.5 million in October 2022, which obligation Factor Limited waived in full in connection with the execution of the MSA (as defined below).
As previously reported, on November 22, 2022 (the “Amendment
Effective Date”), the Company entered into a First Amendment (the “Amendment”) to the License Agreement (as amended by the Amendment, the “Amended Factor License Agreement”), by and among Eterna LLC, Novellus Limited, and
Factor Limited. Pursuant to the Amendment, among other things, Factor Limited granted to Eterna LLC an exclusive, sublicensable license under certain patents owned by Factor Limited (the “Factor Patents”) for the purpose of identifying
and pursuing certain opportunities to grant to third parties sublicenses to the Factor Patents. The Amendment also (i) terminated the Novellus-Factor License Agreement (as defined below), (ii) confirmed Factor’s grant to Eterna LLC of the
rights and licenses Novellus Limited previously granted to Eterna LLC under the Novellus-Factor License Agreement on the same terms and conditions as granted by Novellus Limited to Eterna LLC under such agreement, (iii) confirmed that
sublicense granted by Novellus Limited in accordance with the Novellus-Factor License Agreement to NoveCite, Inc. (the “NoveCite Agreement”), in which the Company has a 25% ownership interest (“NoveCite”), survives termination of
the Novellus-Factor License Agreement; and (iv) removed Novellus from the Amended Factor License Agreement and the NoveCite Agreement and replaced Novellus with Factor Limited as the direct licensor to Eterna LLC and NoveCite under such
agreements, respectively.
On November 1, 2020, Novellus Limited and Factor Limited entered into the Third Amended and Restated Exclusive License Agreement, dated as of November 1, 2020 (the “Novellus-Factor
License Agreement”), by and between Novellus Limited and Factor Limited, pursuant to which Factor Limited granted to Novellus Limited an exclusive license under certain patents owned by Factor Limited for the development of certain stem
cell-based cellular therapies for treating diseases and conditions in humans and animals (the “Novellus-Factor Licensed Technology”), and under which Novellus Limited in turn, under the License Agreement, granted a sublicense to Eterna LLC
to use the Novellus-Factor Licensed Technology to develop, use and commercialize certain stem cell-based therapy products for use in the treatment of cancer in humans. As previously reported, on November 1, 2022, one of the delineated milestone
deadlines for certain regulatory filings required under the Novellus-Factor License Agreement expired, which permitted Factor Limited to terminate the license granted to Novellus Limited thereunder, subject to Factor Limited’s agreement under the
License Agreement that upon such a termination of the Novellus-Factor License Agreement, the rights and licenses granted to Eterna LLC by Novellus under the License Agreement would survive such termination of the Novellus-Factor License
Agreement, and Factor Limited’s agreement to grant to Eterna LLC such rights and licenses on the same terms and conditions as granted by Novellus Limited to Eterna LLC under the License Agreement, which agreement was effected by the Amendment.
Similarly, under the Amendment, the NoveCite Agreement was continued as a direct license between Factor Limited and NoveCite.
Pursuant to the Amendment, the Company agreed to guaranty all payments and other obligations of Eterna LLC owed to Factor Limited under the Amended Factor License Agreement.
The exclusive license granted to Eterna LLC under the Amendment is subject to sublicenses or other rights previously granted by Factor Limited to third parties as of November 1, 2022. The term of the license granted under the Amendment is five
years from the Amendment Effective Date and is extendable for an additional two and a half years if Eterna LLC receives at least $100 million from sublicenses granted by it with respect to the sublicensing opportunities contemplated by the
Amendment. Eterna LLC may not develop or commercialize products by itself under the license granted in the Amendment, but it maintains its right to develop and commercialize the products specified under the License Agreement.
Under the Amendment, Eterna LLC agreed to pay to Factor Limited 20% of the sublicense fees received by Eterna LLC under the sublicenses granted with respect to the
sublicensing opportunities that are identified during the first five-year term of the license granted under the Amendment and 30% of any sublicense fees received by Eterna LLC under the sublicenses granted with respect to the sublicensing
opportunities that are identified during the potential two and a half year extension period of the term of the license granted under the Amendment. Eterna LLC also agreed to pay the expenses incurred by Factor Limited in preparing, filing,
prosecuting and maintaining the Factor Patents and has agreed to bear all costs and expenses associated with enforcing and defending the Factor Patents in any action or proceeding arising from pursuit of sublicensing opportunities under the
license granted in the Amendment.
Additionally, during the term of the license granted under the
Amendment, Eterna LLC may identify two opportunities as “Surviving Opportunities” for which Eterna LLC may pursue sublicense for up to four years following termination of the license granted under the Amendment and collect any compensation
received under any such sublicenses, subject to payment to Factor Limited of the fees to which it is entitled under the Amendment. Upon the termination of the license granted under the Amendment and in the event the parties are unable to
resolve any dispute regarding the Surviving Opportunities, or at Eterna LLC’s election, Factor Limited agreed to assume the Surviving Opportunities and pay to Eterna LLC 80% of all amounts received by Factor Limited pursuant to sublicenses
entered into with respect to such Surviving Opportunities within the four-year period following such termination.
On September 9, 2022, the Company, entered into a Master Services Agreement with Factor, pursuant to which Factor has agreed
to provide services to the Company as agreed between the Company and Factor and set forth in one or more work orders under such agreement (including the first work order thereunder, the “MSA”). Under the MSA, Factor agreed to provide the Company with mRNA cell engineering research support services, including access to certain facilities, equipment, materials and training, and the Company agreed to pay
Factor an initial fee of $5,000,000, payable in twelve equal monthly installments of $416,667. Following the initial 12-month period, the Company agreed to pay Factor a monthly fee of $416,667 until such time as the first work order under the
MSA is terminated.
The Company may terminate the first work under the MSA on or after the second anniversary of the date of the MSA, subject to
providing Factor with 120 days’ prior notice. Factor may terminate such work order only on and after the fourth anniversary of the date of the MSA, subject to providing the Company with 120 days’ prior notice. The MSA contains customary
confidentiality provisions and representations and warranties of the parties, and the MSA may be terminated by ether party upon 30 days’ prior notice, subject to any superseding termination provisions contained in a particular work order.
On October 8, 2022, the Company entered into an option agreement
(the “Option Agreement”) with Exacis, pursuant to which Exacis granted the Company the option to negotiate and enter into an exclusive worldwide license to certain of the technology licensed by Exacis for the treatment of cancer in
humans. The Option Agreement provided that the Company would pay Exacis a fee of $250,000 for the option, which would be creditable against the fees or purchase price payable under any such license if entered into by the Company in accordance
with Option Agreement. The Company did not exercise the option, and the Option Agreement terminated on December 31, 2022.
The foregoing description of the Novellus Acquisition Agreement, the License Agreement, the Amendment and the MSA is only a summary and is
qualified in its entirety by reference to the full text of the Novellus Acquisition Agreement, the License Agreement, the Amendment and the MSA, which the Company filed as Exhibit 10.1 to its Current Report on Form 8-K filed with the SEC on July
19, 2021 (filed at 4:05 p.m. EDT), as Exhibit 10.3 to its Current Report on Form 8-K filed with the SEC on April 30, 2021, as Exhibit 10.1 to its Current Report on Form 8-K filed with the SEC on November 22, 2022, and as Exhibit 10.1 to its
Current Report on Form 8-K filed with the SEC on September 15, 2022, respectively, and are incorporated by reference in this Item 5.02.
Forward-Looking Statements
Certain matters discussed in this Current Report on Form 8-K constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements relating to the Transfer. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by
such statements, including, without limitation, that the common stock will continue to trade under the symbol “ERNA”. These forward-looking statements speak only as of the date hereof, and the Company expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is
based. Please refer to the publicly filed documents of the Company, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, for risks and uncertainties related to the Company’s business which may affect the
statements made in this this Current Report on Form 8-K.
| Item 9.01 |
Financial Statements and Exhibits.
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(d) Exhibits.
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Exhibit
Number
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Description
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Angel Offer Letter, dated December 30, 2022, by and among Eterna Therapeutics Inc. and Dr. Matthew Angel.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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Management contract or compensation plan or arrangement.
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SIGNATURE
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.
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Eterna Therapeutics Inc.
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Dated: January 4, 2023
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By:
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/s/ Andrew Jackson
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Andrew Jackson
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Chief Financial Officer
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Exhibit 10.1
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Eterna Therapeutics Inc.
10355 Science Center Drive, Suite 150
San Diego, CA 92121
December 30, 2022
Matthew Angel
via email: matt.angel@eternatx.com
Dear Matthew:
On behalf of Eterna Therapeutics, Inc. (formerly known as Brooklyn ImmunoTherapeutics, Inc.), a Delaware corporation (the “Company”), I am pleased to extend an offer
of employment to you to serve as the Company’s President and Chief Executive Officer, with an employment start date anticipated to be on or about January 1, 2023 (the “Start Date”). In such capacity, you will report directly to the Board of
Directors of the Company (the “Board”). You will be responsible for such duties as are normally associated with such position and as otherwise assigned from time to time. While you are serving as Chief Executive Officer, you will serve, or be
nominated to serve, as applicable, as a member of the Board. Your principal place of employment will be in Cambridge, Massachusetts, with travel required from time-to-time as necessary for the performance of your job duties.
This offer and your employment relationship will be subject to the terms and conditions of this letter agreement. Upon execution of this letter agreement, you and the
Company each agree to negotiate in good faith and execute and deliver a formal, written employment agreement within 30 days following the date hereof, consistent with the terms of this letter and containing such other terms and conditions as are
mutually acceptable to you and the Company (the “Employment Agreement”), including restrictive covenant provisions that appropriately take into account your affiliations with Factor Bioscience Inc. (“Factor”) and its affiliated entities. The
Parties further contemplate that the Employment Agreement will include severance provisions and an assignment of certain inventions by you consistent with the Company’s agreements with Factor and its affiliated entities.
Compensation
Base Salary: From and after your Start Date,
you will be paid an annualized base salary of $350,000.00. This position is an exempt position, which means you are paid for the job and not by the hour. Accordingly, you will not receive overtime pay if you work more than 8 hours in a workday
or 40 hours in a workweek. Your base salary will be payable in accordance with the Company’s standard payroll policies and subject to adjustment pursuant to the Company’s policies as in effect from time to time.
Signing Bonus: Within ten calendar days
following your Start Date, you will receive a cash signing bonus equal to $210,959. You and the Company acknowledge that you have been serving as Interim President and Chief Executive Officer without pay since May 26, 2022. This signing bonus
represents salary you would have earned for the period during which you served as Interim Chief Executive Officer, had this letter agreement been in effect.
Performance Bonus: During and, in certain
circumstances, after your employment with the Company, you will eligible to receive a performance bonus equal to 2% of the gross proceeds actually received by the Company pursuant to all licensing, option, collaboration, partnership, joint
venture, settlement, other similar agreements entered into by the Company, or other actions, judgments, or orders that generate cash proceeds to the Company, that are originated, negotiated and/or entered into by the Company during your
employment (commencing on May 26, 2022) with the Company (the “Performance Bonus”). Such Performance Bonuses will be paid on or before the last day of the month following each quarter in which the proceeds are received in accordance with the
Company’s payroll practices then in effect (and subject to all required tax deduction and other legally required withholding), and, unless your employment is terminated by the Company for Cause (which shall have the meaning as mutually agreed in
the Employment Agreement) or you voluntarily resign from the Company (other than for Good Reason, which shall have the meaning as mutually agreed in the Employment Agreement), the Performance Bonus will remain a continuing obligation of the
Company that will survive any other termination of your employment with the Company. For clarity, the Company’s obligation to pay, and your right to receive, the Performance Bonus will immediately terminate if you voluntarily resign other than
for Good Reason or are terminated for Cause. Notwithstanding the foregoing, the obligation to continue paying the Performance Bonus following your termination is contingent upon you having remained employed by the Company (unless terminated by
the Company without Cause or terminated by you for Good Reason) for two years following the effective date of the applicable agreement/arrangement underlying the applicable Performance Bonus. For example, if a license agreement is entered into
on February 1, 2023, then you shall be entitled to continue to receive a Performance Bonus following your termination with respect to such agreement only if you remain employed by the Company until February 1, 2025 or if your employment is
terminated by the Company without Cause or terminated by you for Good Reason.
Equity Compensation: During the term of your
employment with the Company, you will be awarded a new time-based stock option grant (the “Option Grant”) to acquire shares of the Company’s common stock (“Shares”) under the Company’s Restated 2020 Stock Incentive Plan, as amended and restated
from time to time (the “Current Plan”). The number of Shares underlying the Option Grant will be calculated on the Start Date so that your aggregate total outstanding option awards (i.e. including previously issued equity awards) will equal 5%
of the issued and outstanding Shares of the Company as of the Start Date. The per share exercise price of the Option Grant will equal the Fair Market Value (as defined in the Current Plan) of such Shares on the date of grant.
The Option Grant will be awarded within ten business days following the Start Date. The Option Grant will vest such that fifty percent (50%) of the aggregate of the
Option Grant and the option that was granted to you on August 1, 2022 will be fully vested on the Start Date and the remaining portion of the Option Grant, if any, will vest in substantially equal monthly installments over the 36 months following
the Start Date. The Option Grant will become fully vested on a liquidity event (as defined in your award agreement or pursuant to the terms of the Current Plan), including without limitation a merger, sale or other transaction in which the
Company’s shareholders before the transaction hold less than 50% of the resulting Company equity after the transaction, or a sale of all or substantially all of the Company’s assets.
The Option Grant will have a ten-year term and will provide for the right to exercise by means of a “cashless exercise sale and remittance procedure” (as described in
the Current Plan).
If your employment is terminated by the Company without Cause, by you for Good Reason, or due to your death or Disability (which shall have the meaning as mutually
agreed in the Employment Agreement), the Option Grant will vest in the amount that would have vested had you remained employed for 12 months after such termination. In addition, notwithstanding anything to the contrary in any option agreement, if
your employment is terminated by the Company without Cause, by you for Good Reason, or due to your death or Disability, any other options that you receive (including the option that was granted to you on August 1, 2022) will vest in the amount that
would have vested had you remained employed for 12 months after such termination. Notwithstanding anything to the contrary in any option agreement, all options that you receive (including the option that was granted to you on August 1, 2022) will
remain exercisable for 12 months after termination by the Company without Cause, by you for Good Reason, or due to your death or Disability (but not beyond the end of the applicable option term). Your continued employment with the Company through
the applicable vesting date will be a condition precedent to the vesting of the Option Grant, except as provided in the preceding sentences. The Option Grant will be granted under, and governed by, the Current Plan and a grant instrument with
mutually agreed upon terms that are consistent with the foregoing terms.
Commencing in 2023, you will be eligible to receive annual equity awards under an applicable equity incentive plan of the Company as then in effect, as determined by
the Compensation Committee of the Board in its discretion.
Benefits
Standard benefits: You will be eligible to
participate in all employee benefit plans that the Company customarily makes available to its executive employees. You will be provided with flexible vacation and paid sick leave, consistent with the Company’s policies in effect from time to time
and/or applicable law. The Company reserves the right to change or eliminate the employee benefit plans on a prospective basis, at any time, effective upon notice to you.
Reimbursable expenses: The Company will
reimburse you for all reasonable lodging, transportation, travel, entertainment, and other business expenses that you incur while performing your duties hereunder, in accordance with the Company’s expense reimbursement policies and procedures.
To obtain reimbursement, expenses must be submitted promptly with appropriate supporting documentation and will be reimbursed in accordance with the Company’s policies. Any reimbursement you are entitled to receive will (a) be paid no later than
the last day of your tax year following the tax year in which the expense was incurred, (b) not be affected by any other expenses that are eligible for reimbursement in any tax year and (c) not be subject to liquidation or exchange for another
benefit.
At-Will Employment
If you accept our offer, your employment with Company will be “at will.” This means your employment is not for any specific period and can be terminated by you at any
time for any reason. Likewise, the Company may terminate the employment relationship at any time, with or without cause or advance notice. Any change to the at-will employment relationship must be by a specific, written agreement signed by you
and the Chair of the Board.
Third Party Rights
By accepting this offer, you represent that, other than with respect to Factor and its affiliated entities, you are not a party to any other agreement, covenant, or
restriction which will or could interfere with your ability to fully and satisfactorily provide the services for which you are being offered employment and employed by the Company. During your employment with the Company, you will not breach any
agreement between you and any third party to keep in confidence proprietary information, knowledge or data belonging to that third party that was acquired by you prior to your employment with the Company. In addition, you agree that you will not
disclose to the Company, or induce the Company to use, any confidential or proprietary information or material belonging to any previous or other current employer or others, unless such disclosure is required or authorized under the Company’s
agreements with such employer or others or is otherwise authorized by such employer or others. You agree not to enter into any agreement, whether written or oral, in conflict with your promises in this provision. You also agree to keep
confidential all confidential information owned or possessed by the company in accordance with any third-party agreements pertaining to confidentiality.
No Conflict of Interest
During your employment with the Company, you agree that you will not engage in any work, paid or unpaid, that creates an actual conflict of interest with the Company,
other than with respect to Factor and its affiliated entities. Such work will include, but is not limited to, competing with the Company in any way, or acting as an officer, director, employee, consultant, stockholder, volunteer, lender, or agent
of any business enterprise of the same nature as the Company (other than Factor and its affiliated entities), or any business enterprise which is in direct competition with the Company. If the Company believes such a conflict exists, the Company
may ask you to choose to discontinue the other work or resign employment with the Company. For the avoidance of doubt, the Company will not ask you to reduce or discontinue your affiliations with Factor and its affiliated entities.
Outside Activities
Notwithstanding anything in this letter agreement or any Company policy to the contrary, the Company acknowledges that you currently serve, and during your employment
with the Company will continue to serve, as an employee, officer, and director of Factor and its affiliated entities and as a member of the Scientific Advisory Board of Exacis Biotherapeutics Inc. The Company approves of your affiliations with
Factor and its affiliated entities, and agrees that you shall not be deemed to be in violation of any obligation to the Company by virtue or as a result of your affiliations with Factor and its affiliated entities.
Indemnification
You and the Company agree to comply with the terms of the Indemnification Agreement dated May 26, 2022, which is incorporated into this letter agreement by this
reference.
Legal Fees
Within 30 days of the Start Date, but in no event later than March 15, 2023, the Company will reimburse your legal fees and expenses in connection with the review,
preparation, negotiation and execution of this letter agreement, your Option Grant and related documents; provided such reimbursement will not exceed $30,000.
Tax Withholding; Internal Revenue Code
All payments and taxable benefits under this letter agreement will be made subject to applicable taxes and withholding. All payments and option grants under this
letter agreement shall be made consistently with Section 409A of the Internal Revenue Code.
Severability
The invalidity or unenforceability of any provision of this letter agreement will not affect the validity or enforceability of the other provisions of this letter
agreement, which will remain in full force and effect. Moreover, if any provision is found to be excessively broad in duration, scope or covered activity, the provision will be construed, and to the extent necessary will be deemed to be amended,
to be enforceable to the maximum extent compatible with applicable law.
Contingencies
You agree to execute the following documents on the date hereof:
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This letter agreement, and
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The Company’s Code of Conduct and Ethics policy attached hereto as Exhibit A.
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The Company acknowledges and agrees that you shall not be deemed to be in violation of any provision of the Company’s Code of Conduct and Ethics policy by
virtue or as a result of your affiliations with Factor and its affiliated entities.
You also agree to:
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Comply with Company’s policies and procedures, consistent with the above, and
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| • |
Comply with federal I-9 requirements
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Both Parties agree to negotiate in good faith and execute and deliver the Employment Agreement within 30 days following the date
hereof.
Complete Agreement
This letter agreement (including Exhibit A attached hereto) constitutes the entire agreement between you and the Company relating to this subject matter and
supersedes all prior or contemporaneous agreements, understandings, negotiations, or representations, whether oral or written, express or implied, on this subject. This letter agreement may not be modified or amended except by a specific, written
agreement signed by you and the Company’s authorized signatory.
To indicate your acceptance, please sign and return the enclosed copy of this letter agreement to me by December 31, 2022.
If you have any questions, regarding this letter agreement or employment with the Company, please feel free to contact Donna Parkinson, HR Specialist via email at
donna.parkinson@eternatx.com. The Company looks forward to your favorable reply and to a productive and enjoyable work relationship.
Sincerely,
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Eterna Therapeutics, Inc.
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By:
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/s/ Donna Parkinson
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Name:
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Donna Parkinson
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Title: HR Specialist
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ACCEPTED:
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Employee Name: Matthew Angel
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/s/ Matthew Angel
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(Signature)
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Dated:
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12/30/2022
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EXHIBIT A
Code of Conduct and Ethics
(See Attached)