Exhibit 10.1

 

AMENDMENT #4 TO SECURED CONVERTIBLE PROMISSORY NOTE

 

This Amendment #4 to Secured Convertible Promissory Note (this "Amendment") is
entered into as of August 2, 2017, by and between ILIAD RESEARCH AND TRADING,
L.P., a Utah limited partnership ("Lender"), and CV SCIENCES, INC., a Delaware
corporation ("Borrower"). Capitalized terms used in this Amendment without
definition shall have the meanings given to them in the Note (as defined below).

 

A.          Borrower previously issued to Lender a Secured Convertible
Promissory Note dated May 24, 2016 in the original principal amount of
$2,055,000.00 (as amended from time to time, the "Note," and together with all
other documents entered into in conjunction therewith, the "Transaction
Documents").

 

B.           The Note was amended pursuant to that certain Amendment to Secured
Convertible Promissory Note dated November 29, 2016 ("Amendment #1").

 

C.           The Note was again amended pursuant to that certain Amendment #2 to
Secured Convertible Promissory Note dated January 27, 2017 ("Amendment #2").

 

D.           The Note was again amended pursuant to that certain Amendment #3 to
Secured Convertible Promissory Note dated March 1, 2017 ("Amendment #3", and
together with Amendment #1 and Amendment #2, the "Prior Amendments").

 

E.            Borrower has again requested to amend the Note as set forth
herein.

 

F.            Lender has agreed, subject to the terms, amendments, conditions
and understandings expressed in this Amendment, to make such amendments to the
Note.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

1.            Recitals. Each of the parties hereto acknowledges and agrees that
the recitals set forth above in this Amendment are true and accurate and are
hereby incorporated into and made a part of this Amendment.

 

2.            Extension of Maturity Date. The Maturity Date of the Note is
hereby extended to April 1, 2018.

 

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3.            Restrictions on Sales of Conversion Shares.

 

(a)            Volume Limitation. Lender agrees that, with respect to the sale
of any Conversion Shares, in any given calendar week its Net Sales (as defined
below) of such Conversion Shares shall not exceed the greater of (i) fifteen
percent (15%) of Borrower's weekly dollar trading volume in such week (which,
for purposes hereof, means the number of shares traded during such calendar week
multiplied by the volume weighted average price per share for such week), and
(ii) $50,000.00 (the "Volume Limitation");provided; however, that if Lender's
Net Sales are less than the Volume Limitation for any given week, then in the
following week or weeks Lender shall be allowed to sell an additional amount of
Conversion Shares equal to the difference between the amount Lender was allowed
to sell and the amount Lender actually sold. For illustration purposes only, if
Borrower's weekly dollar trading volume was $400,000.00 each week for three (3)
consecutive weeks, Lender would be entitled to Net Sales of up to $60,000.00 per
week or up to $180,000.00 during such three-week period. If Lender's Net Sales
were $50,000.00 during the first two (2) such weeks, then Lender would be
entitled to Net Sales of up to $80,000.00 during the third week. For purposes of
this Agreement, the term "Net Sales" means the gross proceeds from sales of the
Conversion Shares sold in a calendar week minus any trading commissions or costs
associated with clearing and selling such Conversion Shares minus the purchase
price paid for any shares of Common Stock purchased on the open market during
such week. For the avoidance of doubt, any amounts received by Lender in
connection with previous sales of shares received pursuant to the Note shall not
be deemed to be Net Sales.

 

(b)          Breach of Volume Limitation. Borrower and Lender agree that in the
event Lender breaches the Volume Limitation where its Net Sales of Conversion
Shares during any week exceed the dollar volume it is permitted to sell during
such week pursuant to the Volume Limitation (such excess, the "Excess Sales"),
then in such event, as Borrower's sole and exclusive remedy for such breach (and
which breach may not be used as a defense to Borrower's performance of its
obligations hereunder), Borrower shall be entitled to reduce the Outstanding
Balance of the Note by an amount equal to 200% of the Excess Sales upon delivery
of written notice to Lender setting forth its basis for such reduction (the
"Outstanding Balance Reduction"). For illustration purposes only, if Borrower's
weekly dollar trading volume was $400,000.00 for a calendar week, Lender would
be entitled to Net Sales of up to $60,000.00 during that week. If Lender's Net
Sales for such week were equal to $70,000.00, and Lender had sold the maximum
number of Conversion Shares it could within the Volume Limitation during each
prior week, then in such event Borrower would be entitled to reduce the
Outstanding Balance of the Note by $20,000.00 (($70,000.00 - $60,000.00) x
200%)). For the avoidance of doubt, in such event Lender shall be entitled to
retain the Excess Sales and shall have no obligation to return the Excess Sales
to Borrower.

 

4.          Representations and Warranties. In order to induce Lender to enter
into this Amendment, Borrower, for itself, and for its affiliates, successors
and assigns, hereby acknowledges, represents, warrants and agrees as follows:

 

(a)          Borrower has full power and authority to enter into this Amendment
and to incur and perform all obligations and covenants contained herein, all of
which have been duly authorized by all proper and necessary action. No consent,
approval, filing or registration with or notice to any governmental authority is
required as a condition to the validity of this Amendment or the performance of
any of the obligations of Borrower hereunder.

 

(b)          Except as expressly set forth in this Amendment, Borrower
acknowledges and agrees that neither the execution and delivery of this
Amendment nor any of the terms, provisions, covenants, or agreements contained
in this Amendment shall in any manner release, impair, lessen, modify, waive, or
otherwise affect the liability and obligations of Borrower under the terms of
the Transaction Documents.

 

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(c)          Borrower has no defenses, affirmative or otherwise, rights of
setoff, rights of recoupment, claims, counterclaims, actions or causes of action
of any kind or nature whatsoever against Lender, directly or indirectly, arising
out of, based upon, or in any manner connected with, the transactions
contemplated hereby, whether known or unknown, which occurred, existed, was
taken, permitted, or begun prior to the execution of this Amendment and
occurred, existed, was taken, permitted or begun in accordance with, pursuant
to, or by virtue of any of the terms or conditions of the Transaction Documents.
To the extent any such defenses, affirmative or otherwise, rights of setoff,
rights of recoupment, claims, counterclaims, actions or causes of action exist
or existed, such defenses, rights, claims, counterclaims, actions and causes of
action are hereby waived, discharged and released. Borrower hereby acknowledges
and agrees that the execution of this Amendment by Lender shall not constitute
an acknowledgment of or admission by Lender of the existence of any claims or of
liability for any matter or precedent upon which any claim or liability may be
asserted.

 

(d)          Borrower represents and warrants that as of the date hereof no
Events of Default or other material breaches exist under the Transaction
Documents.

 

5.          Certain Acknowledgments. Each of the parties acknowledges and agrees
that no property or cash consideration of any kind whatsoever has been or shall
be given by Lender to Borrower in connection with any amendment to the Note
granted herein.

 

6.          Other Terms Unchanged. The Note, as amended by this Amendment and
the Prior Amendments, remains and continues in full force and effect,
constitutes legal, valid, and binding obligations of each of the parties, and is
in all respects agreed to, ratified, and confirmed. Any reference to the Note
after the date of this Amendment is deemed to be a reference to the Note as
amended by this Amendment and the Prior Amendments. If there is a conflict
between the terms of this Amendment and the Note, the terms of this Amendment
shall control. If there is a conflict between the terms of this Amendment and
any Prior Amendment, the terms of this Amendment shall control. No forbearance
or waiver may be implied by this Amendment. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment to, any right, power, or remedy of
Lender under the Note, as in effect prior to the date hereof.

 

7.          No Reliance. Borrower acknowledges and agrees that neither Lender
nor any of its officers, directors, members, managers, equity holders,
representatives or agents has made any representations or warranties to Borrower
or any of its agents, representatives, officers, directors, or employees except
as expressly set forth in this Amendment and the Transaction Documents and, in
making its decision to enter into the transactions contemplated by this
Amendment, Borrower is not relying on any representation, warranty, covenant or
promise of Lender or its officers, directors, members, managers, equity holders,
agents or representatives other than as set forth in this Amendment.

 

8.          Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The parties hereto confirm that any
electronic copy of another party's executed counterpart of this Amendment (or
such party's signature page thereof) will be deemed to be an executed original
thereof.

 

9.          Further Assurances. Each party shall do and perform or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Amendment and the consummation of the
transactions contemplated hereby.

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
set forth above.

 

 

BORROWER:

 

CV SCIENCES, INC.

 

 

By: /s/ Michael Mona, Jr.

Name: Michael Mona, Jr.

Title: President and Chief Executive Officer

 

 

LENDER:

 

ILIAD RESEARCH AND TRADING, L.P.

 

By: Iliad Management, LLC, its General Partner

 

By: Fife Trading, Inc., its Manager

 

 

       By: /s/ John M. Fife

              John M. Fife, President

 

 

 

 

[Signature Page to Amendment #4 to Secured Convertible Promissory Note]

 

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