Exhibit 10.12

INVESTOR RIGHTS AGREEMENT
 
THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
March ___, 2014, by and among (i) (a) BioPharmX Corporation, a Nevada
corporation (the “Company”), (b) James Pekarsky (“Pekarsky”), Anja Krammer
(“Krammer”) and Kin Chan (“Chan”)(together the “Senior Management”) and (ii) the
subscribers for the Company’s Series A Preferred Stock which are parties to the
Subscription Agreement (as defined below)(the “Subscribers”).  Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Subscription Agreement (as defined below).
 
WITNESSETH:
 
WHEREAS, the Company and the Subscribers have entered into that certain
Subscription Agreement dated as of March ___, 2014 (the “Subscription
Agreement”), pursuant to which the Company has agreed to issue to Subscribers
and Subscribers have agreed to purchase from the Company, up to $6,000,000 of
Series A Preferred Stock and Warrants;
 
WHEREAS, in consideration of the Subscribers entering into the Subscription
Agreement, the Company has agreed to provide certain rights set forth in this
Agreement.
 
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound by this agreement, agree as
follows:
 
1.      Representations and Warranties of the Senior Management.  Each of the
Senior Management, represents and warrants that:
 
1.1      (i) The Senior Management are beneficial owners, free and clear of all
liens, charges or encumbrances of the following numbers of shares of Common
Stock (of record or through a brokerage firm or other nominee arrangement),
which constitutes 68.7% of the outstanding voting power of the Company’s Common
Stock:
 
Pekarsky – 2,500,000 shares;
 
Krammer – 2,500,000 shares;
 
Chan – 1,200,000 shares.
 
1.2      Each member of the Senior Management (each of the foregoing, a
“Warrantor”) has full power and authority to make, enter into and carry out the
terms of this Agreement.  This Agreement has been duly executed and delivered by
each Warrantor and constitutes the legal, valid and binding obligations of such
Warrantor enforceable against such Warrantor in accordance with its terms.
 
 
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1.3      The execution and delivery of this Agreement by each Warrantor do not,
and the performance of this Agreement by such Warrantor will not: (i) conflict
with or violate any law, rule regulation, order, decree or judgment applicable
to any Warrantor or by which any Warrantor or any of the properties of any
Warrantor is or may be bound or affected, or the certificate of incorporation or
by-laws of the Company; (ii) result in or constitute (with or without notice or
lapse of time) any breach of or default under any contract to which any
Warrantor is a party or by which any Warrantor or any of the affiliates or
properties of any Warrantor is or may be bound or affected, or (iii) result in
the creation of any encumbrance or restriction on any of the shares of Common
Stock in the Company.  The execution and delivery of this Agreement by each
Warrantor do not, and the performance of this Agreement by each Warrantor will
not, require any consent or approval of any person or entity.
 
2.      Covenants and Agreements.
 
Unless the context requires otherwise, the Company hereby covenants and agrees
as follows:
 
2.1      Periodic Reports and Other Information.  As long as each Subscriber
that has  purchased not less than 500,000 shares of Series A Preferred holds at
least 30% (the “Minimum Holdings”) of its original holdings (a “Qualified
Subscriber”), the Company shall furnish to such Qualified Subscriber, to the
extent not made publicly available and permitted by applicable law and
regulations:
 
(a)      Quarterly Reports.  Within fifty (50) days after the end of each fiscal
quarter of the Company, unaudited consolidated quarterly financial statements
for such fiscal quarter, including a balance sheet as of the end of such fiscal
quarter, a statement of income and a statement of cash flows of the Company for
such fiscal quarter, setting forth in each case in comparative form the figures
from the Company’s previous fiscal year and for the three, six or nine months
then ended, as the case may be, prepared in accordance with generally accepted
accounting principles (“GAAP”) applied on a consistent basis (except as noted)
and reviewed by internationally recognized independent certified public
accountants, which fairly present the financial condition, results of operations
and cash flows of the Company at the date thereof and for the periods covered
thereby;
 
(b)      Annual Reports.  Within one hundred five (105) days after the end of
each fiscal year of the Company, audited consolidated annual financial
statements for such fiscal year, including a balance sheet as of the end of such
fiscal year, a statement of income and a statement of cash flows of the Company
for such year, setting forth in each case in comparative form the figures from
the Company’s previous fiscal year, if any, prepared in accordance with GAAP
applied on a consistent basis (except as noted) and audited by internationally
recognized independent certified public accountants, which fairly present the
financial condition, results of operations and cash flows of the Company at the
date thereof and for the periods covered thereby;
 
(c)      Business Plan and Annual Budget.  The Company shall prepare and submit
to each Qualified Subscriber and the Company’s Board of Directors (the “Board”)
for their approval at least thirty (30) days prior to the beginning of the next
financial year or period the annual budget (“Annual Budget”) of the Company and
its subsidiaries on a consolidated basis setting out in reasonable detail the
planned annual capital and operating budgets in reasonable detail, projected
revenues, a projected financial statement for such fiscal year on a quarterly
basis, and promptly after preparation from time to time, any revisions to the
forecasts contained therein of the Company and its Subsidiaries and attaching
thereto such notes as are necessary, desirable or customary, together with a
business plan setting forth in reasonable detail the operating goals of the
Company and its Subsidiaries for the following year (the “Business Plan”).
 
 
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2.2      Inspection.  The Company shall permit each Qualified Subscriber and any
authorized representative thereof, to visit and inspect the properties of the
Company, including its corporate and financial records, to examine its records
and make copies thereof and to discuss its affairs, finances and accounts with
its officers, at all such reasonable times and as often as may be reasonably
requested upon reasonable notice, provided that such visits and inspections
shall not unduly interrupt the daily operation of the Company or its
subsidiaries or affiliates.  Each Qualified Subscriber and its participating
agents and representatives, in exercising rights of inspection hereunder, agree
to maintain the confidentiality of all financial and other confidential
information of the Company, its subsidiaries and affiliates acquired by
them.  If requested by the Company, each Qualified Subscriber, in exercising its
rights under this Section 2.2 shall execute a confidentiality agreement with the
Company in such reasonable form and substance as agreed between each Qualified
Subscriber and the Company.
 
2.3      Qualifying Listing.  The Company shall use commercially reasonable
efforts to effect a Qualifying Listing (as defined below) on or before the third
anniversary of the first issuance of the Series A Preferred.  For purposes of
this Agreement, a “Qualifying Listing” shall mean the receipt by the Company of
approval to list on any tier of the NYSE or NASDAQ which are registered under
the Securities Exchange Act of 1934, as amended, as a “national securities
exchange,” including the NYSE MKT, NASDAQ Global Select Market, NASDAQ Global
Market,  NASDAQ Capital Market or their successors.
 
2.4      Accountants.  As long as a Qualified Subscriber holds the Minimum
Holdings, the Company hereby covenants and agrees that the Company shall retain
independent public accountants (the “Accountants”) of recognized standing and
acceptable to the Audit Committee of the Board who shall certify the Company’s
consolidated financial statements according to GAAP at the end of each fiscal
year.  The Company shall not terminate the services of the Accountants without
the approval of the Audit Committee.
 
3.      Right of Participation in Future Securities Offerings.
 
3.1      Issuance Notice.  Subject to the terms and conditions of this Section
and applicable securities laws, and subject to the consent and approval of the
Company’s underwriter at the time of an offering, if the Company shall effect an
underwritten public offering of its securities at the time of a Qualifying
Listing each Qualified Subscriber shall have the right to sell through such
underwriter the following amounts of shares into which the then remaining Series
A Preferred is convertible (the “Conversion Shares”):
 
(a)       If the public offering price (the “IPO Price”) is two (2) times the
original purchase price of the Conversion Shares (the “Original Purchase
Price”), but less than three (3) times the Conversion Price, the Qualified
Subscribers may sell up to 25% of their Conversion Shares;
 
 
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(b)      If the IPO Price is three (3) times the Conversion Price, but less than
four (4) times the Original Purchase Price, the Qualified Subscribers may sell
up to 15% of their Conversion shares; and
 
(c)      If the IPO Price is four (4) times the Original Purchase Price or more,
the Qualified Subscribers may not sell any of their Conversion shares.
 
4.      Tag-Along Right.
 
4.1      Tag-Along Right.  (a)  If a member of Senior Management is directly or
indirectly transferring Common Stock to a third party purchaser that is not a
family member or trust (a “Third Party Purchaser”), then each Qualified
Subscriber shall have the right to sell to such Third Party Purchaser a
percentage of its Conversion Shares equal to (i) the percentage of the member of
Senior Management’s Common Stock being sold times (ii) a fraction, the numerator
of which is 1 and the denominator of which is the number of Qualified
Subscribers, at a price equal to the price at which the member of Senior
Management is selling (the “Offer Price”).
 
(b)   Each member of Senior Management shall give notice to the Qualified
Subscribers of each proposed sale by any of them of Common Stock which gives
rise to the rights of the Qualified Subscribers in this Section, at least
fifteen (15) business days prior to the proposed consummation of such sale,
setting forth the number of shares of Common Stock, the name and address of the
proposed Third Party Purchaser, the proposed amount and form of consideration
and terms and conditions of payment offered by such Third Party Purchaser, the
percentage of shares of Common Stock that each Qualified Subscriber may sell to
such Third Party Purchaser, and a representation that such Third Party Purchaser
has been informed of the “tag-along” rights provided for in this Section and has
agreed to purchase Common Stock in accordance with the terms hereof.  The
tag-along rights provided by this Section must be exercised by a Qualified
Subscriber within fifteen (15) business days following receipt of the notice
required by the preceding sentence, by delivery of a written notice to the
member of Senior Management indicating the Qualified Subscriber’s election to
exercise its rights and specifying the number of shares of Common Stock (up to
the maximum number of Conversion Shares owned by the Qualified Subscriber to be
purchased by such Third Party Purchaser) it elects to sell (the “Tag-along
Exercise Notice”), provided that a Qualified Subscriber may waive its rights
under this Section prior to the expiration of such fifteen (15) business day
period by giving written notice to the member of Senior Management, with a copy
to the Company.  The failure of a Qualified Subscriber to respond within such
fifteen (15) business day period shall be deemed to be a waiver of the Qualified
Subscriber ’s rights under this Section.
 
4.2       Exempt Transfers.  The tag-along rights set forth in this Section 4
shall not apply to (i) any transfer to a spouse, child, or other dependent or a
trust for the benefit of any of the foregoing persons (a “Permitted Holder”);
provided that any such Permitted Holder agrees in writing to be bound by this
Agreement in place of the relevant transferor, (ii) the sale in an unsolicited
broker’s transaction pursuant to Rule 144 under the Securities Act of 1933, as
amended, or any successor rule or (iii) the Transfer (as defined below) by a
member of Senior Management of no more than 3% of the total outstanding equity
interest in the Company on a fully-diluted basis if, after such Transfer, the
members of Senior Management still hold not less than 20% of the total
outstanding equity interest in the Company on a fully diluted basis (the “Exempt
Transfers”).  “Transfer” shall mean sell, transfer, assign, pledge, hypothecate,
dispose of, mortgage, enter into any voting trust or other agreement, option or
other arrangement or understanding with respect thereto, whether directly or
indirectly and whether voluntarily or involuntarily.
 
 
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5.      Board Representation and Committees.
 
5.1          Number of Board Members.  The Company shall, effective upon Closing
and until the termination of this Agreement, take all appropriate actions to fix
and maintain a Board of no more than five (5) voting members and the Company
shall not change the number of voting members of its Board without the prior
written approval of the Qualified Subscribers.
 
5.2          Qualified Subscriber Nominees.  Upon the Qualified Subscriber
Election (as defined below), so long as there remains a Qualified Subscriber,
the Qualified Subscribers shall be entitled to appoint one (1) voting member  of
the Company’s Board (a “Qualifying Subscriber Nominee”).
 
5.3          Board Committees.  The Company shall establish Audit and
Compensation Committees of the Board and the Qualified Subscriber Nominee shall
serve on both committees to the extent permitted by applicable law and exchange
listing rules.
 
5.4          Qualified Subscriber Election.  If the Qualifying Subscribers
provide written notice to the Company informing the Company of (i) their
election (the “Election”) to be represented on the Board and (ii) the name(s) of
the Qualified Subscriber Nominee, then, as soon as practicable after its receipt
of such notice from a Qualified Subscriber, but in no event later than five (5)
business days after such receipt, the Company shall:
 
(a)      provide notice of the Election to the Company’s Board, and
 
(b)      to the extent permissible under applicable laws and regulations
(including rules of any relevant listing exchange), take all necessary actions
so as to permit the Qualified Subscriber Nominee to be duly appointed or elected
as a member of the Company’s Board as soon as practicable.
 
5.5      Voting Agreement.  The members of Senior Management agree to vote, or
cause to be voted, all of the Company’s voting shares owned by such members of
Senior Management (of record or through a brokerage firm or other nominee
arrangement), or over which such member of Senior Management has voting control,
from time to time and at all times, in whatever manner as shall be necessary to
ensure that at each annual or special meeting of shareholders at which an
election of directors is held or pursuant to any written consent of the
shareholders, the Qualified Subscriber Nominees are duly elected to the
Board.  The members of Senior Management further covenant not to frustrate the
purpose of the immediately preceding sentence by any means, including through
entering into any agreement or commitment inconsistent with such purpose,
including but not limited to any inconsistent pledge, charge, hypothecation,
voting agreement, voting trust or other disposition of voting rights of the
Common Stock over which the members of Senior Management retain beneficial
ownership or the economic benefits and risks attendant thereto.
 
 
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5.6      Vacancies.  Any vacancies created by the resignation, removal or death
of a Qualified Subscriber Nominee appointed or elected to the Board shall be
filled pursuant to the provisions of this Section.
 
6.      Senior Management Additional Voting Agreement.
 
6.1      Voting Agreement.  At all times that more than 60% of the Series A
Preferred issued by the Company under the Subscription Agreement remains
outstanding, the members of Senior Management agree to vote, or cause to be
voted, all of the Company’s voting shares owned by such members of Senior
Management (of record or through a brokerage firm or other nominee arrangement),
or over which such member of Senior Management has voting control, from time to
time and at all times, in favor of any transaction which would result in a sale
of more than 50% of the voting stock of the Company or substantially all of its
assets, if such transaction is approved in writing by the holders of more than
50% of the then outstanding Series A Preferred.  The members of Senior
Management further covenant not to frustrate the purpose of the immediately
preceding sentence by any means, including through entering into any agreement
or commitment inconsistent with such purpose, including but not limited to any
inconsistent pledge, charge, hypothecation, voting agreement, voting trust or
other disposition of voting rights of the Common Stock over which the members of
Senior Management retain beneficial ownership or the economic benefits and risks
attendant thereto.
 
7.      Miscellaneous.
 
7.1      Termination.  This Agreement will be automatically terminated with no
further effect at such time that less than 30% of the Series A Preferred
originally issued pursuant to the Subscription Agreement remains outstanding.
 
7.2      Specific Enforcement.  Upon a breach by the Company or any member of
the Senior Management of this Agreement, the Subscribers shall be entitled to
injunctive relief against the Company or such member of the Senior Management if
such relief is applicable and available, as a remedy at law would be inadequate
and insufficient. Nothing in this Section shall be construed as limiting the
Subscribers’ remedies in any way.
 
7.3      Notices.  All notices, requests, consents and other communications
hereunder shall be in writing and shall be personally delivered or delivered by
overnight courier or mailed by first-class registered or certified mail, postage
prepaid, return receipt requested, or by facsimile transmission.  Every notice
hereunder shall be deemed to have been duly given or served on the date on which
personally delivered, with receipt acknowledged, upon transmission by facsimile
and confirmed facsimile receipt, or two (2) days after the same shall have been
deposited with a reputable international overnight courier.
 
(a)      If to a Subscriber, at its address as set forth in the Subscription
Agreement, or at such other address as may have been furnished to the Company by
it in writing.
 
 
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(b)      If to any member of the Senior Management, at the address set forth on
Schedule I to this Agreement, or at such other address as may have been
furnished to the Company by it in writing.
 
(c)      If to the Company at:

BioPharmX Corporation
1098 Hamilton Court
Menlo Park, California 94025
Attention: James Pekarsky, CEO
Fax: 650-900-4130
 
with a copy to:
 
Ofsink, LLC
900 Third Avenue, 5th Floor
New York, New York 10022
Fax: 646-244-9844

7.4      Amendments and Waiver.  Unless otherwise specifically stated herein,
any term of this Agreement may be amended with the written consent of the party
against whom enforcement may be sought and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively).  In the case of the Subscribers, a waiver may
be effected by written consent of greater than 50% of the then outstanding
Series A Preferred.  No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.
 
7.5      Entire Agreement.  This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof.
 
7.6      Severability.  The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement to the extent permitted by law.
 
7.7      Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
 
7.8      Successors and Assigns.  Except as otherwise provided herein, the terms
and conditions of this Agreement shall be binding upon, and inure to the benefit
of, the respective representatives, successors and assigns of the parties
hereto.
 
7.9       Counterparts.  This Agreement may be executed in a number of
counterparts, by facsimile, each of which shall be deemed to be an original as
of those whose signature appears thereon, and all of which shall together
constitute one and the same instrument.  This Agreement shall become binding
when one or more of the counterparts hereof, individually or taken together, are
signed by all the parties.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the undersigned have executed this Investor Rights Agreement
as of the day and year written above.
 

 
THE COMPANY:
          BIOPHARMX CORPORATION            
By:
     
Name:
James Pekarsky    
Title:
Chief Executive Officer          
SENIOR MANAGEMENT:
               
James Pekarsky
               
Anja Krammer
               
Kin Chan
 

 
 
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THE SUBSCRIBER:

Accepted and Agreed to:
____________________________________

 
By:_________________________________

Name:

Title:  Authorized Signatory

 
 
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Schedule I
 
Addresses of Senior Management:
 
1.
 
2.
 
3.
 
 
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