Document:

Exhibit 10.17

 

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.  THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY NOT BE SOLD OR OTHERWISE TRANSFERRED OR PLEDGED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE PROPOSED TRANSFER MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

 

THIS NOTE IS SUBJECT TO THE TERMS AND PROVISIONS OF THE NOTE PURCHASE AGREEMENT AMONG STEMLINE THERAPEUTICS, INC. AND THE OTHER PARTIES THERETO DATED AS OF MARCH 16, 2010, AS AMENDED FROM TIME TO TIME, AND IS ENTITLED TO THE BENEFITS THEREOF.

 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) AS DEFINED BY SECTION 1273(a)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO THE INFORMATION REPORTING REQUIREMENTS SET FORTH IN TREASURY REGULATION 1.1275-3.  YOU MAY CONTACT THE ISSUER, AND THE ISSUER WILL PROVIDE YOU WITH THE ISSUE PRICE, THE AMOUNT OF OID AND THE YIELD TO MATURITY OF THIS NOTE.

 

STEMLINE THERAPEUTICS, INC.

 

SENIOR UNSECURED

CONVERTIBLE NOTE

 

	
US$1,250,000
    	
New York, NY
    
	
N-5
    	
March 16, 2010
    

 

Section 1.                                           General.

 

For value received, STEMLINE THERAPEUTICS, INC., a Delaware corporation (including any successor thereto (by way of merger, consolidation, sale or otherwise), the “Company”), hereby promises to pay on March 16, 2015 or, if earlier, the date pursuant to Section 6 hereof (the “Maturity Date”) to the order of NB Athyrium LLC, or its permitted successors or assigns (the “Holder”), the principal sum of US$1,250,000 or such part thereof as from time to time remains outstanding, whichever is less, together with interest on the outstanding principal balance hereof until such principal balance and interest shall have been paid in full.  All payments hereunder shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender therein for the payment of public and private debts.  Interest on the unpaid balance of the principal amount of this Note shall accrue at the rate of two and forty-five hundredths percent (2.45%) per annum (computed on the basis of a 365-day year and the actual number of days elapsed) (the “Interest Rate”) until repayment or conversion.  Unless converted into capital stock of the Company pursuant to Section 3 hereof, the outstanding principal amount hereof plus all accrued interest hereon (collectively, the “Subject Amount”) shall be payable by wire transfer of immediately available funds to the account of the Holder or by certified or official bank check payable to the Holder mailed to the Holder at the address of the Holder as set forth on the records of the Company or such other address as shall be designated in writing by the Holder to the Company.

 

 

This Note is being issued, together with other substantially similar notes in the aggregate principal amount of US$1,250,000 (collectively, the “Notes”), pursuant to the Note Purchase Agreement dated as of March 16, 2010 (the “Purchase Agreement”) by and among the Company and the other parties thereto.  Capitalized terms used and not otherwise defined herein have the meanings ascribed thereto in the Purchase Agreement.

 

The Maturity Date may be extended (unless previously pre-paid, converted or accelerated) by the written action of the holders of a majority of the aggregate principal amount of the Notes then outstanding (a “Holder Majority”).

 

The indebtedness evidenced by this Note shall be senior in right of payment and priority to all obligations to any Person for borrowed money.

 

Section 2.                                           Prepayment.

 

(a)                                 Except as set forth in Section 2(b) below, this Note may not be prepaid in whole or in part without the written consent of a Holder Majority.  All payments made on the Notes shall be made on a pro rata basis (based upon the principal amount of the Notes then held by each such Holder).  Any partial payments of indebtedness represented by this Note shall be applied first to interest accrued to the date of prepayment and then to the payment of principal.

 

(b)                                 This Note may be prepaid by the Company, at the Company’s sole option, upon giving ten days prior written notice (the “Prepayment Notice Period”) to the Holders, in any of the following circumstances:  (i) $400,000 of the aggregate Subject Amount then outstanding pursuant to the Notes may be prepaid in one payment on or before December 16, 2010; (ii) all (but, except as permitted pursuant to clause (i) of this Section 2(b), not less than all) of the Subject Amount then outstanding pursuant to all of the Notes may be prepaid at any time prior to the first to occur of (x) the Qualified Financing (defined below) and (y) March 16, 2012; and (iii) all (but not less than all) of the Subject Amount then outstanding pursuant to all of the Notes may be prepaid from the proceeds of any licensing or collaboration transaction entered into by the Company which may or may not include an equity issuance in connection therewith (other than an equity issuance that would constitute a Qualified Financing, a Non-Qualified Financing or a Change of Control) (a “Partnering Transaction”) at any time prior to the Maturity Date.  In the event that a Holder Majority provides the Company with an Optional Conversion Notice in accordance with Section 3(b) prior to the end of the Prepayment Notice Period, then the Notes shall not be prepaid by the Company but shall instead be converted into Non-Qualified Financing Securities pursuant to the terms of Section 3(b).

 

Section 3.                                           Conversion.

 

(a)                                 Conversion Upon a Qualified Financing.  At the closing of any Qualified Financing, if this Note remains outstanding, the Subject Amount shall be converted into shares of the same securities (“Qualified Financing Securities”) sold by the Company in (and simultaneously with) the Qualified Financing.  The number of shares of Qualified Financing Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the Subject Amount as of the date of the closing of the Qualified Financing by (ii) the price per share of the Qualified Financing Securities sold in such Qualified Financing.  The Qualified Financing Securities issuable upon such conversion of this Note shall be of the same type and at the same price as the Qualified Financing Securities issued in the Qualified Financing and shall otherwise be issued on substantially the same terms and conditions applicable to the Qualified Financing for a like number of Qualified Financing Securities.  The Holder of this Note agrees to execute and deliver the same documents in the Qualified Financing as are executed and delivered by the investors in such Qualified Financing, if any, who are not holders of the Note.  As

 

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used herein, a “Qualified Financing” means the issuance and sale in one or more related transactions by the Company of preferred stock pursuant to a financing led by an institutional investor (not including a Neuberger Purchaser) in a bona fide arms’ length transaction in which the aggregate net proceeds received by the Company are not less than US $10,000,000 (including the aggregate Subject Amount of all Notes converted into Qualified Financing Securities).

 

(b)                                 Optional Conversion.  Prior to the Maturity Date, a Holder Majority may elect, by written notice (the “Optional Conversion Notice”) to the Company, to convert all (but not less than all) of the Notes into the capital stock (the “Non-Qualified Financing Securities”) sold by the Company in a Non-Qualified Financing.  Any such conversion shall occur simultaneously with the consummation of the Non-Qualified Financing, subject to the terms and conditions set forth herein.  The Company shall give the Holder not less than ten days prior written notice of any Non-Qualified Financing (an “NQF Notice”) and the Holder Majority must deliver any Optional Conversion Notice to the Company not later than five days after receiving such NQF Notice.  The number of shares of Non-Qualified Financing Securities to be issued upon such conversion of this Note shall be equal to the quotient obtained by dividing (i) the Subject Amount as of the date of the closing of the Non-Qualified Financing by (ii) the price per share of the Non-Qualified Financing Securities sold in such Non-Qualified Financing.  The Non-Qualified Financing Securities issuable upon such conversion of this Note shall be of the same type and at the same price as the Non-Qualified Financing Securities issued in the Non-Qualified Financing and shall otherwise be issued on substantially the same terms and conditions applicable to the Non-Qualified Financing for a like number of Non-Qualified Financing Securities.  The Holder of this Note agrees to execute and deliver the same documents in the Non-Qualified Financing as are executed and delivered by the investors in such Non-Qualified Financing, if any, who are not holders of the Note.  A “Non-Qualified Financing” means the issuance and sale by the Company of capital stock pursuant to a financing in which the aggregate net proceeds received by the Company are at least US $10,000,000 (including the aggregate Subject Amount of all Notes converted into Non-Qualified Financing Securities).  Notwithstanding the foregoing, a Non-Qualified Financing shall not include (i) the issuance at fair market value, as determined in good faith by the Board of Directors of the Company, by the Company (in one or more transactions) of up to 227,759 shares of Common Stock in the aggregate or (ii) any Qualified Financing.  In the event that in any Non-Qualified Financing some or all of the consideration paid for the Non-Qualified Financing Securities is non-cash consideration, the price per share of the Non-Qualified Financing Securities, for purposes of determining the number of Non-Qualified Financing Securities to be received for Notes converted pursuant to this Section 3(b), shall be determined in good faith by the Board of Directors of the Company.

 

(c)                                  Payment Upon a Change of Control or Other Liquidation Preference Event.  Promptly but in no event less than five (5) business days prior to a Change of Control or Other Liquidation Preference Event, the Company shall give the Holder of this Note notice of such Change of Control or Other Liquidation Preference Event.  So long as this Note remains outstanding, the Holder of this Note shall be entitled to receive immediately prior to a Change of Control transaction or Other Liquidation Preference Event, at the written election of a Holder Majority, some or all of the Subject Amount.  As used herein, a “Change of Control” means (A) the acquisition by means of any transaction or series of related transactions (including, without limitation, any stock acquisition, reorganization, merger or consolidation) by a Person or group (other than the Holder of any Note or Ivan Bergstein, M.D.) of the Company’s or the surviving entity’s outstanding capital stock representing greater than 50% of the voting power of the Company or such surviving entity immediately after such transaction or series of transactions, (B) the disposition by existing holders of the Company’s outstanding capital stock holding greater than 50% of the voting power of the Company on the date hereof or (C) a sale, lease, license or other conveyance of all or substantially all of the assets of the Company.  An “Other Liquidation Preference Event” means an event that is not a Change of Control which shall result in the payment of liquidation preference to any class or series of the Company’s capital stock.  Notwithstanding

 

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anything contained in this Section 3(c), the Holder shall not be entitled to receive payment pursuant to this Section 3(c) in connection with any Qualified Financing or any Partnering Transaction entered into by the Company and a party that is not an Affiliate of the Company on arm’s length terms and such Partnering Transaction shall not be deemed to be either a Change of Control or Other Liquidation Preference Event.

 

(d)                                 Acceleration Upon Initial Public Offering.  Within 60 days after the closing of the Company’s first underwritten public offering of its Common Stock registered under the Securities Act of 1933, in which the Company receives not less than $15,000,000 in net proceeds (after deducting all fees, including underwriter compensation, and expenses incurred in connection with such public offering), if this Note remains outstanding, the Holder shall be entitled to receive, at the written election of a Holder Majority, some or all of the Subject Amount.

 

(e)                                  Surrender and Issuance.  Upon the occurrence of any conversion specified in this Section 3, the Holder shall surrender the Note at the office of the Company for the applicable amount of the Qualified Financing Securities or Non-Qualified Financing Securities.  Thereupon, there shall be issued and delivered to such Holder the securities into which the Note surrendered was convertible on the date on which such conversion occurred.  The Company shall not be obligated to issue the Qualified Financing Securities or Non-Qualified Financing Securities, as applicable, issuable upon such conversion unless the Note being converted is either delivered to the Company or the Holder notifies the Company or any transfer agent that such certificate has been lost, stolen or destroyed and executes an agreement satisfactory to the Company (and pursuant to which the Holder need not provide security) to indemnify the Company from any loss incurred by it in connection therewith.

 

(f)                                   No Fractional Interests.  The Company shall not be required to issue any fractional share of Qualified Financing Securities or Non-Qualified Financing Securities (or fractional interest in any other security) upon conversion of this Note.  As to any fraction of a share (or fractional interest in any other security) that the Holder would otherwise be entitled to receive upon such conversion, the Company shall pay cash in respect of such fraction in an amount equal to the same fraction of the price of the Qualified Financing Securities or Non-Qualified Financing Securities, as determined in good faith by the Board of Directors of the Company.

 

Section 4.                                           Defenses.

 

The obligations of the Company under this Note shall not be subject to reduction, limitation, impairment, termination, defense, set-off, counterclaim or recoupment for any reason.

 

Section 5.                                           Events of Default.

 

The occurrence of any of the following events shall be deemed to constitute an “Event of Default” hereunder: (a) the failure of the Company or any Wholly-Owned Subsidiary, as applicable, to pay any principal amount of this Note or any of the other Notes, together with all accrued but unpaid interest, on the Maturity Date or when requested by Holder Majority to pay pursuant to Sections 3(c) or 3(d); (b) the failure of the Company or any Wholly-Owned Subsidiary, as applicable, to perform any covenant or agreement in any material respect (including without limitation the agreement to issue shares of capital stock upon any conversion of the Notes) set forth in this Note, any of the other Notes and any of the other Transaction Documents and such failure shall continue unremedied for a period of twenty (20) days after written notice of such failure is given to the Company; (c) any representation or warranty made by the Company in this Note, any of the other Notes or any of the other Transaction Documents shall prove to have been incorrect in any material respect when made; (d) any default with respect to any outstanding indebtedness due to third parties for borrowed money, which individually or in the aggregate,

 

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is in excess of US$25,000 if (i) such default relates to the failure to pay the principal amount of any such indebtedness on its stated maturity date or (ii) otherwise the effect of such default is to accelerate the maturity of such indebtedness; (e) any monetary judgment, writ or warrant of attachment or similar process shall be entered or filed against the Company or any Wholly-Owned Subsidiary or any of their respective assets or properties which would reasonably be expected to have a material adverse effect on the Company and its Wholly-Owned Subsidiaries, taken as a whole, or any of their respective material assets or properties, taken as a whole, and shall remain undischarged for a period of thirty (30) days (or in any event later than five (5) days prior to the date of any proposed sale thereunder); or (f) any Liquidation Event.  As used herein, “Liquidation Event” means the occurrence or institution by or against the Company or any of its material  subsidiaries of (i) any bankruptcy, reorganization, receivership or insolvency proceeding, (ii) any appointment of a receiver or custodian for all or a substantial portion of the Company’s or any such material subsidiary’s property; (iii) any assignment for the benefit of, or composition or arrangement with, the creditors of the Company or any of its material subsidiaries (whether or not pursuant to bankruptcy or other insolvency laws), (iv) any dissolution, liquidation, or other marshalling of the assets and liabilities of the Company or any of its material subsidiaries; or (v) any voluntary or involuntary ceasing of operations of the Company or any of its material subsidiaries other than as a result of a Change of Control or Other Liquidation Preference Event.  As soon as practicable, and in any event within five (5) days, upon the occurrence of an Event of Default, or any event that with the giving of notice or the passage of time or both would become an Event of Default, the Company shall provide the Holder of the Note with a certificate from the chief financial officer of the Company setting forth the facts relating to or giving rise to such Event of Default or event and the action which the Company proposes to take with respect thereto.

 

Section 6.                                           Rights Upon Default.

 

Upon the occurrence and during the continuation of any Event of Default, except for a Liquidation Event, a Holder Majority may: (i) declare the entire unpaid principal of the Notes and any accrued interest thereon due and payable immediately and (ii) take any and all other actions available to an unsecured creditor under the laws of the State of New York and all other rights available at law or in equity to collect and otherwise enforce the Notes; provided however, the Holders shall not undertake any of the actions described in clauses (i) or (ii) of this Section 6 or any other enforcement or collection with respect to this Note in the absence of the approval of a Holder Majority.  If there shall occur any Liquidation Event, the entire unpaid principal and accrued but unpaid interest on this Note shall automatically become due and payable, without any requirement by the Holder to give notice, present the Note, make demand, protest or give other notice of any kind of character, all of which are hereby expressly waived, anything herein to the contrary notwithstanding.

 

Section 7.                                           Protective Provisions.

 

(a)                                 So long as this Note is outstanding, without the prior written consent of a Holder Majority, the Company will not nor will it permit any of its Wholly-Owned Subsidiaries to: (i) except for the issuance of the Notes pursuant to the Purchase Agreement, create, incur, assume or suffer to exist any debt or similar obligations for borrowed money or guarantees other than those unsecured and subordinated to this Note on terms reasonably satisfactory to a Holder Majority; (ii) pay or make provision for payment of any kind of cash or deferred compensation to its directors, officers, employees or stockholders other than consistent with customary practice or prevailing market conditions; (iii) enter into a new line of business outside of the biopharmaceutical industry; (iv) encumber or grant any Lien or security interest in any of its assets or properties except for purchase-money security interests; (v) make any investments in, or loans to, any third party (other than as permitted under Section 7(c)); (vi) sell, transfer, gift or otherwise dispose of any assets of the business other than in the ordinary course of business; (vii) declare, set aside or pay any dividends on any of its capital stock; or (viii) purchase,

 

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redeem or otherwise acquire directly or indirectly any capital stock, options, warrants or other securities of the Company except for (A) the repurchase of the Preferred Shares contemplated by the Purchase Agreement, (B) the acquisition, repurchase or redemption of the securities of the Company held by (1) terminated employees, consultants or other service providers (other than Ivan Bergstein, M.D. and any member of the Board of Directors of the Company) and (2) Madoff Family LLC, so long as any such acquisition(s), repurchase(s) and/or redemption(s) by the Company in the aggregate do not exceed $250,000 or (C) the prepayment of the Notes.  As used herein, “Lien” means any mortgage, pledge, bailment, hypothecation, lien, security interest, encumbrance, conditional sale or other title retention device or arrangement (including a capital lease) whether relating to any property or right or the income or profits therefrom other than (x) any lien in respect of taxes not yet due and payable and (y) possible minor liens and encumbrances which do not in any case materially detract from the value of the property subject thereto or materially impair the operations of the Company or such Wholly-Owned Subsidiary, and which have arisen in the ordinary course of business and shall be removed within a reasonable period.

 

(b)                                 So long as this Note is outstanding, (i) each Wholly-Owned Subsidiary, if any, formed by the Company shall unconditionally and irrevocably guarantee (in a form reasonably satisfactory to the Holder Majority) the Company’s payment of the Notes; and (ii) in the event that the Company forms any Non-Wholly Owned Subsidiary, the Company shall pledge (in a form reasonably satisfactory to the Holder Majority) to the holders of the Notes any and all equity interests held by the Company in such Non-Wholly Owned Subsidiary as security for the payment of the Notes.

 

(c)                                  So long as this Note is outstanding, without the prior written consent of a Holder Majority, (i) neither the Company nor any of its Wholly-Owned Subsidiaries shall (w) guarantee, assume or become liable for the indebtedness or any other obligations of any Non-Wholly Owned Subsidiary, (x) make any loans or advances to or investments in a Non-Wholly Owned Subsidiary in an aggregate amount in excess of $575,000 (other than as contemplated by the immediately following subclause (y)), (y) transfer assets to Non-Wholly Owned Subsidiaries except to the extent all such transfers constitute transfers of assets (1) not having a book or fair market value greater than $5,000,000 in the aggregate or (2) of less than, in the aggregate, 25% of the book or fair market value of the Company or any such Wholly-Owned Subsidiary, as applicable, or (z) enter into any transactions or agreements with a Non-Wholly Owned Subsidiary, other than transactions that are disclosed to the Holder at least 5 business days prior to being entered into and are on terms that are no less favorable to the Company and its Wholly-Owned Subsidiaries as those that would be obtained at the time from a Person who is not an Affiliate of the Company and its subsidiaries; and (ii) the Company shall not own less than 50% of the capital securities of any Non-Wholly Owned Subsidiary.

 

(d)                                 As used herein, “Wholly-Owned Subsidiary” means a subsidiary of the Company in which the Company owns 100% of the capital securities of such subsidiary, and “Wholly-Owned Subsidiaries” means two or more of such subsidiaries.

 

(e)                                  As used herein, “Non-Wholly Owned Subsidiary” means a subsidiary of the Company in which the Company owns less than 100% of the capital securities of such subsidiary, and “Non-Wholly Owned Subsidiaries” means two or more of such subsidiaries.

 

Section 8.                                           Information Rights.

 

So long as this Note is outstanding, the Company shall furnish the following to the Holder: (a) quarterly and annual financial reports in form consistent with past practice, to be furnished to the Holder within ninety (90) days after the end of each fiscal quarter, or with respect to annual reports during the third quarter of the following year, as applicable, (b) prior to the consummation of any Qualified Financing, Non-Qualified Financing or Change of Control, the quarterly reports or board

 

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packages, if any, provided to the Board of Directors of the Company (redacted to remove information that the Company in its reasonable judgment deems to be proprietary, confidential or may involve an actual or potential conflict of interest), to be furnished to the Holder simultaneously as to the Board of Directors, provided, however, if the Company fails to deliver such reports or board packages for any fiscal quarter, the Company shall provide to the Holder such reports or board packages at least once every six-month period and (c) any financial report provided by the Company to stockholders or lenders of the Company, to be furnished to the Holder simultaneously as to such stockholders or lenders.

 

Section 9.                                           Confidentiality.

 

Holder agrees that Holder will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Note or the Purchase Agreement (including without limitation the existence of this Note, the Purchase Agreement or any related document and the terms and provisions hereof and thereof and including any notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 9 by the Holder), (b) is or has been independently developed or conceived by the Holder without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Holder by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that Holder may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser, including a financial investment firm, (in each case, other than a Competitor (as defined in the Stockholders’ Agreement defined in the Purchase Agreement)) unless consented to by the Board of Directors of the Company) of this Note or any capital securities of the Company held by the Holder, if such prospective purchaser agrees to be bound by the provisions of this Section 9; (iii) to any Affiliate, partner, member, stockholder, or wholly owned subsidiary of the Holder in the ordinary course of business, provided that the Holder informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, regulation or legal process, provided that the Holder promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.  The Company acknowledges that at least some of the Holders are in the business of venture capital and other investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company.  Nothing in this Agreement shall preclude or in any way restrict the Holders from investing or participating in any particular enterprise whether or not such enterprise has products or services which compete with those of the Company.

 

Section 10.                                    Transfer, Exchange or Replacement of Note.

 

(a)                                 Notwithstanding anything to the contrary, this Note may be transferred only upon its surrender to the Company for registration of transfer in the Register.  Thereupon, this Note shall be reissued to, and registered in the name of, the transferee, or a new Note for like principal amount and interest shall be issued to, and registered in the name of, the transferee.  Interest and principal shall be paid solely to the registered holder of this Note in the Register.  Such payment shall be full discharge of the Company’s obligation to pay such interest and principal.  The transfer of any Note shall also be subject to any restrictions set forth herein or in the Purchase Agreement.

 

(b)                                 Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction, or mutilation of this Note, and (in case of loss, theft or destruction) of an indemnity reasonably satisfactory to it, and upon surrender and cancellation of this Note, if mutilated, the Company

 

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will deliver a new Note of like tenor in lieu of this Note.  Any Note delivered in accordance with the provisions of this Section 10 shall be dated as of the date of this Note.

 

(c)                                  Except as otherwise expressly set forth herein or in the Purchase Agreement, neither this Note nor any of the rights or obligations hereunder may be assigned (by operation of law or otherwise) by any party without the prior written consent of the Company and the Holder.  Any assignment in violation of this provision will be null and void.  Subject to the foregoing, this Note will be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns, and no other Person will have any right, benefit or obligation hereunder.

 

Section 11.                                    Waivers.

 

The Company hereby waives presentment, demand for payment, notice of dishonor, notice of protest and all other notices or demands in connection with the delivery, acceptance, performance or default of this Note.  No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right, nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof, or the exercise of any other power or right hereunder or otherwise; and no waiver whatsoever or modification of the terms hereof shall be valid unless set forth in writing by the Holder and then only to the extent set forth therein.

 

Section 12.                                    Amendments and Waivers.

 

No provision of this Note may be amended or waived except as provided herein or in the Purchase Agreement.

 

Section 13.                                    Governing Law.

 

This Note and any controversy arising out of or relating to this Note shall be governed by and construed in accordance with the Delaware General Corporation Law as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflict of laws principles that would result in the application of any law other than the law of the State of New York.  The parties hereto also irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States of America located in the City of New York for any actions, suits or proceedings arising out of or relating to this Note (and agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agree that service of any process, summons, notice or document by U.S. registered mail to a party’s principal business address shall be effective service of process for any action, suit or proceeding brought against it in any such court. The parties hereto hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Note in the courts of the State of New York or the United States of America located in the City of New York, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

Section 14.                                    Usury.

 

All agreements between the Company and the Holder are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of the maturity of this Note or otherwise, shall the amount paid or agree to be paid to the Holder for the use or forbearance of the indebtedness represented by this Note exceed the maximum permissible under applicable law.  In this regard, it is expressly agreed that it is the intent of the Company and the Holder, in the execution, delivery

 

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and acceptance of the this Note, to contract in strict compliance with the laws of the State of New York.  If, under any circumstances whatsoever, performance or fulfillment of any provision of this Note or the Purchase Agreement at the time such provision is to be performed or fulfilled shall involve exceeding the limit of validity prescribed by applicable law, then the obligation so to be performed or fulfilled shall be reduced automatically to the limits of such validity.

 

Section 15.                                    Notices.

 

The terms and provisions of Section 5.8  of the Purchase Agreement are expressly incorporated into this Note.

 

Section 16.                                    Other.

 

The Holder agrees that no stockholder, director or officer of the Company shall have any personal liability for the repayment of this Note.

 

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IN WITNESS WHEREOF, the Company has duly executed and delivered this Note as a document under seal as of the date first written above.

 

	
 
    	
STEMLINE   THERAPEUTICS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Ivan Bergstein
    
	
 
    	
 
    	
Name:   Ivan Bergstein
    
	
 
    	
 
    	
Title:   President and CEOGreenlite Ventures Inc.: Exhibit 4.1 - Filed by newsfilecorp.com

GREENLITE VENTURES INC.

2012 STOCK INCENTIVE PLAN

Established March 30, 2012

ARTICLE 1. 
THE PLAN

	1.1 	
      Title

This plan is entitled the "2012 Stock Incentive Plan" (the
"Plan") of Greenlite Ventures Inc., a Nevada corporation (the "Company").

	1.2 	
      Purpose

The purpose of the Plan is to enhance the long-term stockholder
value of the Company by offering opportunities to directors, officers, employees
and eligible consultants of the Company and any Related Company, as defined
below, to acquire and maintain stock ownership in the Company in order to give
these persons the opportunity to participate in the Company's growth and
success, and to encourage them to remain in the service of the Company or a
Related Company. 

ARTICLE 2.
 DEFINITIONS 

	2.1 	
      Definitions

The following terms will have the following meanings in the
Plan: 

"Award" means any Option granted under this Plan. 

"Board" means the Board of Directors of the Company.

"Cause," unless otherwise defined in the
instrument evidencing the award or in an employment or services agreement
between the Company or a Related Company and a Participant, means a material
breach of the employment or services agreement, dishonesty, fraud, misconduct,
unauthorized use or disclosure of confidential information or trade secrets, or
conviction or confession of a crime punishable by law (except minor violations),
in each case as determined by the Plan Administrator, and its determination
shall be conclusive and binding. 

"Code" means the Internal Revenue Code of 1986, as
amended from time to time. 

"Common Stock" means the shares of common stock, par
value $0.001 per share, of the Company. 

“Consultant” means any consultant, agent, advisor or
independent contractor who provides services to the Company or a Related
Company, but does not include an officer or director of the Company.

"Consultant Participant" means a Participant who is
defined as a Consultant Participant in Article 5. 

"Corporate Transaction," unless otherwise defined in the
instrument evidencing the Award or in a written employment or services agreement
between the Company or a Related Company and a Participant, means consummation
of either:

	(a) 	
      a merger or consolidation of the Company with or into any
      other corporation, entity or person or

1

	(b) 	
      a sale, lease, exchange or other transfer in one
      transaction or a series of related transactions of all or substantially
      all the Company's outstanding securities or all or substantially all the
      Company's assets; provided, however, that a Corporate Transaction shall
      not include a Related Party Transaction.

"Disability," unless otherwise defined by the
Plan Administrator, means a mental or physical impairment of the Participant
that is expected to result in death or that has lasted or is expected to last
for a continuous period of twelve (12) months or more and that causes the
Participant to be unable, in the opinion of the Company, to perform his or her
duties for the Company or a Related Company and to be engaged in any substantial
gainful activity. 

"Employment Termination Date" means, with respect to a
Participant, the first day upon which the Participant no longer has an
employment or service relationship with the Company or any Related Company.

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

"Fair Market Value" means the per share value of the
Common Stock determined as follows:

	(a) 	
      if the Common Stock is listed on an established stock
      exchange or exchanges or the NASDAQ National Market, the lesser of (i) the
      closing price per share on the date immediately preceding the date of the
      granting of the options; or (ii) the average closing price per share
      during the ten (10) trading days immediately preceding such date on the
      principal exchange on which it is traded or as reported by
  NASDAQ;

	 	 
	(b) 	
      if the Common Stock is not then listed on an exchange or
      the NASDAQ National Market, but is quoted on the NASDAQ Capital Market,
      the OTC Bulletin Board service or the Pink Sheets electronic quotation
      service, the lesser of (i) the closing price per share on the date
      immediately preceding the date of the granting of the options; or (ii) the
      average of the closing bid and ask prices per share for the Common Stock
      as quoted by NASD, the OTC Bulletin Board or the Pink Sheets, as the case
      may be, during the ten (10) trading days immediately preceding such date;
      or

	 	 
	(c) 	
      if there is no such reported market for the Common Stock
      for the date in question, then an amount determined in good faith by the
      Plan Administrator.

"Grant Date" means the date on which the Plan
Administrator completes the corporate action relating to the grant of an Award
or such later date specified by the Plan Administrator, and on which all
conditions precedent to the grant have been satisfied, provided that conditions
to the exercisability or vesting of Awards shall not defer the Grant Date. 

"Incentive Stock Option" means an Option granted with
the intention, as reflected in the instrument evidencing the Option, that it
qualify as an "incentive stock option" as that term is defined in Section 422 of
the Code. 

"Non-Qualified Stock Option" means an Option other than
an Incentive Stock Option. 

"Option" means the right to purchase Common Stock
granted under Article 7. 

"Option Expiration Date" has the meaning set forth in
Article 7.6. 

"Option Term" has the meaning set forth in Article 7.3.

"Participant" means the person to whom an Award is
granted and who meets the eligibility requirements imposed by Article 5,
including Consultant Participants, as defined in Article 5. 

2

"Plan Administrator" has the meaning set forth in
Article 3.1. 

"Related Company" means any entity that, directly or
indirectly, is in control of or is controlled by the Company. 

"Related Party Transaction" means: (a) a merger or
consolidation of the Company in which the holders of shares of Common Stock
immediately prior to the merger hold at least a majority of the shares of Common
Stock in the Successor Corporation immediately after the merger; (b) a sale,
lease, exchange or other transaction in one transaction or a series of related
transactions of all or substantially all the Company's assets to a wholly-owned
subsidiary corporation; (c) a mere reincorporation of the Company; or (d) a
transaction undertaken for the sole purpose of creating a holding company that
will be owned in substantially the same proportion by the persons who held the
Company's securities immediately before such transaction. 

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

"Successor Corporation" has the meaning set forth in
Article 11.3(a) . 

"Vesting Commencement Date" means the Grant Date or such
other date selected by the Plan Administrator as the date from which the Option
begins to vest for purposes of Article 7.4. 

ARTICLE 3. 
ADMINISTRATION 

	3.1 	
      Plan Administrator

The Plan shall be administered by the Board or a committee
appointed by, and consisting of two or more members of, the Board (the "Plan
Administrator"). If and so long as the Common Stock is registered under Section
12(b) or 12(g) of the Exchange Act, the Board shall consider in selecting the
members of any committee acting as Plan Administrator, with respect to any
persons subject or likely to become subject to Section 16 of the Exchange Act,
the provisions regarding (a) "outside directors" as contemplated by Section
162(m) of the Code and (b) "non-employee directors" as contemplated by Rule
16b-3 under the Exchange Act. Committee members shall serve for such term as the
Board may determine, subject to removal by the Board at any time. At any time
when no committee has been appointed to administer the Plan, then the Board will
be the Plan Administrator.

	3.2 	
      Administration and Interpretation by Plan
      Administrator

Except for the terms and conditions explicitly set forth in the
Plan, the Plan Administrator shall have exclusive authority, in its discretion,
to determine all matters relating to Awards under the Plan, including the
selection of individuals to be granted Awards, the type of Awards, the number of
shares of Common Stock subject to an Award, all terms, conditions, restrictions
and limitations, if any, of an Award and the terms of any instrument that
evidences the Award. The Plan Administrator shall also have exclusive authority
to interpret the Plan and the terms of any instrument evidencing the Award and
may from time to time adopt and change rules and regulations of general
application for the Plan's administration. The Plan Administrator's
interpretation of the Plan and its rules and regulations, and all actions taken
and determinations made by the Plan Administrator pursuant to the Plan, shall be
conclusive and binding on all parties involved or affected. The Plan
Administrator may delegate administrative duties to such of the Company's
officers as it so determines. 

3

ARTICLE 4. 
STOCK SUBJECT TO THE PLAN

	4.1 	
      Authorized Number of
Shares

Subject to adjustment from time to time as provided in this
Article 4.1 and in Article 11.1, the maximum aggregate number of shares of
Common Stock available for issuance under the Plan shall be Three Million Six
Hundred Fifty Thousand (3,650,000) shares. At any time after March 31, 2012,
and from time to time thereafter, the Board may increase the maximum aggregate
number of shares of Common Stock that may be optioned and sold under the Plan,
provided that the maximum aggregate number of shares of Common Stock that may be
optioned and sold under the Plan shall at no time be greater than 15% of the
total number of shares of Common Stock outstanding, less any options still
outstanding under any previous stock option plans.

	4.2 	
      Reuse of Shares

Any shares of Common Stock that have been made subject to an
Award that cease to be subject to the Award (other than by reason of exercise or
settlement of the Award to the extent it is exercised for or settled in shares)
shall again be available for issuance in connection with future grants of Awards
under the Plan. In the event shares issued under the Plan are reacquired by the
Company pursuant to any forfeiture provision or right of repurchase, such shares
shall again be available for the purposes of the Plan; provided, however, that
the maximum number of shares that may be issued upon the exercise of Awards
shall equal the share number stated in Article 4.1, subject to adjustment from
time to time as provided in Articles 11.1 through 11.6.

ARTICLE 5. 
ELIGIBILITY 

	5.1 	
      Plan Eligibility

An Award may be granted to any officer, director or employee of
the Company or a Related Company that the Plan Administrator from time to time
selects. An Award may also be granted to any consultant, agent, advisor or
independent contractor who provides services to the Company or any Related
Company (a “Consultant Participant”), so long as such Consultant Participant:
(a) is a natural person; (b) renders bona fide services that are not in
connection with the offer and sale of the Company's securities in a
capital-raising transaction; and (c) does not directly or indirectly promote or
maintain a market for the Company's securities. 

ARTICLE 6. 
AWARDS 

	6.1 	
      Form and Grant of Awards

The Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of Awards to be granted under the
Plan. Awards may be granted singly or in combination. 

	6.2 	
      Settlement of Awards

The Company may settle Awards through the delivery of shares of
Common Stock, the granting of replacement Awards or any combination thereof as
the Plan Administrator shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Award payment, subject to such rules and
procedures as it may establish, which may include provisions for the payment or
crediting of interest, or dividend equivalents, including converting such
credits into deferred stock equivalents. 

4

ARTICLE 7. 
AWARDS OF OPTIONS

	7.1 	
      Grant of Options

The Plan Administrator shall have the authority, in its sole
discretion, to grant Options to Participants as Incentive Stock Options or as
Non-Qualified Stock Options, which shall be appropriately designated.

	7.2 	
      Option Exercise Price

The exercise price for shares purchased under an Option shall
be as determined by the Plan Administrator, provided that:

	(a) 	
      the exercise price for Options granted to Participants
      other than Consultant Participants shall not be less than the minimum
      exercise price required by Article 8.3 with respect to Incentive Stock
      Options and shall not be less than 80% of the Fair Market Value of the
      Common Stock on the Grant Date with respect to Non-Qualified Stock
      Options;

	 	 
	(b) 	
      the exercise price for Options granted to Consultant
      Participants shall not be less than 80% of the Fair Market Value of the
      Common Stock on the Grant Date.

	7.3 	
      Term of Options

Subject to earlier termination in accordance with the terms of
the Plan and the instrument evidencing the Option, the maximum term of an Option
(the "Option Term") shall be as established for that Option by the Plan
Administrator or, if not so established, shall be ten (10) years from the Grant
Date. 

	7.4 	
      Exercise of Options

The Plan Administrator shall establish and set forth in each
instrument that evidences an Option the time at which, or the installments in
which, the Option shall vest and become exercisable, any of which provisions may
be waived or modified by the Plan Administrator at any time. 

The Plan Administrator, in its sole discretion, may adjust the
vesting schedule of an Option held by a Participant who works less than
"full-time" as that term is defined by the Plan Administrator or who takes a
Company-approved leave of absence. 

To the extent an Option has vested and become exercisable, the
Option may be exercised in whole or from time to time in part by delivery to the
Company of a written stock option exercise agreement or notice, in a form and in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised, the
restrictions imposed on the shares purchased under such exercise agreement, if
any, and such representations and agreements as may be required by the Plan
Administrator, accompanied by payment in full as described in Article 7.5. An
Option may be exercised only for whole shares and may not be exercised for less
than a reasonable number of shares at any one time, as determined by the Plan
Administrator. 

	7.5 	
      Payment of Exercise Price

The exercise price for shares purchased under an Option shall
be paid in full to the Company by the delivery of consideration equal to the
product of the Option exercise price and the number of shares purchased. Such
consideration must be paid before the Company will issue the shares being
purchased and must be delivered in the form of a check or bank draft or
other method of payment or some combination thereof as may be acceptable to the
Plan Administrator for that purchase.

5

	7.6 	
      Post-Termination Exercises

The Plan Administrator shall establish and set forth, in each
instrument that evidences an Option, whether the Option shall continue to be
exercisable, and the terms and conditions of such exercise, if the Participant
ceases to be employed by, or to provide services to, the Company or a Related
Company, which provisions may be waived or modified by the Plan Administrator at
any time. If not so established in the instrument evidencing the Option, the
Option shall be exercisable according to the following terms and conditions,
which may be waived or modified by the Plan Administrator at any time: 

	(a) 	
      Except as otherwise set forth in this Article 7.6, any
      portion of an Option that is not vested and exercisable on the Employment
      Termination Date shall expire on such date.

	 	 	 
	(b) 	
      Any portion of an Option that is vested and exercisable
      on the Employment Termination Date shall expire on the earliest to occur
      of:

	 	 	 
		(i) 	
      if the Participant's Employment Termination Date occurs
      by reason of retirement, resignation or for any other reasons other than
      for Cause, Disability or death, the day which is thirty (30) days after
      such Employment Termination Date;

	 	 	 
		(ii) 	
      if the Participant's Employment Termination Date occurs
      by reason of Disability or death, the day which is six (6) months after
      such Employment Termination Date; and

	 	 	 
		(iii) 	
      the last day of the Option Term (the "Option Expiration
      Date").

	 	 	 
		
      Notwithstanding the foregoing, if the Participant dies
      after his or her Employment Termination Date, but while an Option is
      otherwise exercisable, the portion of the Option that is vested and
      exercisable on such Employment Termination Date shall expire upon the
      earlier to occur of: (A) the Option Expiration Date, and (B) the day which
      is six (6) months after the date of death, unless the Plan Administrator
      determines otherwise.

	 	 
		
      Also notwithstanding the foregoing, in case of
      termination of the Participant's employment or service relationship for
      Cause, all Options granted to that Participant shall automatically expire
      upon first notification to the Participant of such termination, unless the
      Plan Administrator determines otherwise. If a Participant's employment or
      service relationship with the Company is suspended pending an
      investigation of whether the Participant shall be terminated for Cause,
      all the Participant's rights under any Option shall likewise be suspended
      during the period of investigation. If any facts that would constitute
      termination for Cause are discovered after the Participant's relationship
      with the Company or a Related Company has ended, any Option then held by
      the Participant may be immediately terminated by the Plan Administrator,
      in its sole discretion.

	 	 	 
	(c) 	
      Unless the Plan Administrator determines otherwise, upon
      a termination of the Participant’s status as an employee, officer,
      director or Consultant of the Company or any Related Company (the
      “Original Position”), other than a termination for Cause, death or
      Disability, the Participant shall not be deemed to have ceased to be
      employed by or to have ceased providing services to the Company or any
      Related Company, provided that the Participant acts as an employee,
      officer, director or Consultant of the Company or a Related Company
      eligible to receive an Award under the provisions of Article 5, in another
      capacity, immediately upon the termination of the Original
  Position.

	 	 	 
	(d) 	
      The effect of a Company-approved leave of absence on the
      application of this Article 7 shall be determined by the Plan
      Administrator, in its sole discretion.

6

	(e) 	
      If a Participant's employment or service relationship
      with the Company or a Related Company terminates by reason of Disability
      or death, the Option shall become fully vested and exercisable for all the
      shares subject to the Option. Such Option shall remain exercisable for the
      time period set forth in this Article 7.6.

ARTICLE 8. 
INCENTIVE STOCK OPTION LIMITATIONS

Notwithstanding any other provisions of the Plan, and to the
extent required by Section 422 of the Code, Incentive Stock Options shall be
subject to the following additional terms and conditions: 

	8.1 	
      Dollar Limitation

To the extent the aggregate Fair Market Value (determined as of
the Grant Date) of Common Stock with respect to which Incentive Stock Options
are exercisable for the first time during any calendar year (under the Plan and
all other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Non-Qualified Stock Option. In the
event the Participant holds two or more such Options that become exercisable for
the first time in the same calendar year, such limitation shall be applied on
the basis of the order in which such Options are granted. 

	8.2 	
      Eligible Employees

Individuals who are not employees of the Company or one of its
parent corporations or subsidiary corporations may not be granted Incentive
Stock Options. 

	8.3 	
      Exercise Price

The exercise price of an Incentive Stock Option shall be at
least 100% of the Fair Market Value of the Common Stock on the Grant Date, and
in the case of an Incentive Stock Option granted to a Participant who owns more
than 10% of the total combined voting power of all classes of the stock of the
Company or of its parent or subsidiary corporations (a "Ten Percent
Stockholder"), shall not be less than 110% of the Fair Market Value of the
Common Stock on the Grant Date. The determination of more than 10% ownership
shall be made in accordance with Section 422 of the Code. 

	8.4 	
      Exercisability

An Option designated as an Incentive Stock Option shall cease
to qualify for favorable tax treatment as an Incentive Stock Option to the
extent it is exercised (if permitted by the terms of the Option) (a) more than
three (3) months after the Employment Termination Date if termination was for
reasons other than death or disability, (b) more than one (1) year after the
Employment Termination Date if termination was by reason of disability, or (c)
after the Participant has been on leave of absence for more than ninety (90)
days, unless the Participant's reemployment rights are guaranteed by statute or
contract. 

	8.5 	
      Taxation of Incentive Stock
  Options

In order to obtain certain tax benefits afforded to Incentive
Stock Options under Section 422 of the Code, the Participant must hold the
shares acquired upon the exercise of an Incentive Stock Option for two (2) years
after the Grant Date and one (1) year after the date of exercise. A Participant
may be subject to the alternative minimum tax at the time of exercise of an
Incentive Stock Option. The Participant shall give the Company prompt notice of
any disposition of shares acquired on the exercise of an Incentive Stock Option
prior to the expiration of such holding periods. 

7

	8.6 	
      Code Definitions

For the purposes of this Article 8, "parent corporation,"
"subsidiary corporation" and "disability" shall have the meanings attributed to
those terms for purposes of Section 422 of the Code. 

ARTICLE 9.
 WITHHOLDING 

	9.1 	
      General

The Company may require the Participant to pay to the Company
the amount of any taxes that the Company is required by applicable federal,
state, local or foreign law to withhold with respect to the grant, vesting or
exercise of an Award. The Company shall not be required to issue any shares
Common Stock under the Plan until such obligations are satisfied. 

	9.2 	
      Payment of Withholding Obligations in Cash or
      Shares

The Plan Administrator may permit or require a Participant to
satisfy all or part of his or her tax withholding obligations by: (a) paying
cash to the Company, (b) having the Company withhold from any cash amounts
otherwise due or to become due from the Company to the Participant, (c) having
the Company withhold a portion of any shares of Common Stock that would
otherwise be issued to the Participant having a value equal to the tax
withholding obligations (up to the employer's minimum required tax withholding
rate), or (d) surrendering any shares of Common Stock that the Participant
previously acquired having a value equal to the tax withholding obligations (up
to the employer's minimum required tax withholding rate to the extent the
Participant has held the surrendered shares for less than six months). 

ARTICLE 10. 
ASSIGNABILITY 

	10.1 	
      Assignment

Neither an Award nor any interest therein may be assigned,
pledged or transferred by the Participant or made subject to attachment or
similar proceedings other than by will or by the applicable laws of descent and
distribution, and, during the Participant's lifetime, such Awards may be
exercised only by the Participant. Notwithstanding the foregoing, and to the
extent permitted by Section 422 of the Code, the Plan Administrator, in its sole
discretion, may permit a Participant to assign or transfer an Award or may
permit a Participant to designate a beneficiary who may exercise the Award or
receive payment under the Award after the Participant's death; provided,
however, that any Award so assigned or transferred shall be subject to all the
terms and conditions of the Plan and those contained in the instrument
evidencing the Award. 

ARTICLE 11.
 ADJUSTMENTS 

	11.1 	
      Adjustment of Shares

In the event, at any time or from time to time, a stock
dividend, stock split, spin-off, combination or exchange of shares,
recapitalization, merger, consolidation, distribution to stockholders other than
a normal cash dividend, or other change in the Company's corporate or capital
structure, including, without limitation, a Related Party Transaction, results
in: (a) the outstanding shares of Common Stock, or any securities exchanged
therefor or received in their place, being exchanged for a different number or
kind of securities of the Company or of any other corporation, or (b) new,
different or additional securities of the Company or of any other corporation being
received by the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in: (i) the maximum number and
kind of securities subject to the Plan and issuable as Incentive Stock Options
as set forth in Article 4 and the maximum number and kind of securities that may
be made subject to Awards to any individual as set forth in Article 4.3, and
(ii) the number and kind of securities that are subject to any outstanding Award
and the per share price of such securities, without any change in the aggregate
price to be paid therefor. The determination by the Plan Administrator as to the
terms of any of the foregoing adjustments shall be conclusive and binding.
Notwithstanding the foregoing, a dissolution or liquidation of the Company or a
Corporate Transaction shall not be governed by this Article 11.1 but shall be
governed by Articles 11.2 and 11.3, respectively. 

8

	11.2 	
      Dissolution or Liquidation

To the extent not previously exercised or settled, and unless
otherwise determined by the Plan Administrator in its sole discretion, Options
denominated in units shall terminate immediately prior to the dissolution or
liquidation of the Company. To the extent a forfeiture provision or repurchase
right applicable to an Award has not been waived by the Plan Administrator, the
Award shall be forfeited immediately prior to the consummation of the
dissolution or liquidation. 

	11.3 	
      Corporate Transaction

Options 

	(a) 	
      In the event of a Corporate Transaction, except as
      otherwise provided in the instrument evidencing an Option (or in a written
      employment or services agreement between a Participant and the Company or
      Related Company) and except as provided in subsection (b) below, each
      outstanding Option shall be assumed or an equivalent option or right
      substituted by the surviving corporation, the successor corporation or its
      parent corporation, as applicable (the "Successor Corporation").

	 	 
	(b) 	
      If, in connection with a Corporate Transaction, the
      Successor Corporation refuses to assume or substitute for an Option, then
      each such outstanding Option shall become fully vested and exercisable
      with respect to 100% of the unvested portion of the Option. In such case,
      the Plan Administrator shall notify the Participant in writing or
      electronically that the unvested portion of the Option specified above
      shall be fully vested and exercisable for a specified time period. At the
      expiration of the time period, the Option shall terminate, provided that
      the Corporate Transaction has occurred.

	 	 
	(c) 	
      For the purposes of this Article 11.3, the Option shall
      be considered assumed or substituted for if following the Corporate
      Transaction the option or right confers the right to purchase or receive,
      for each share of Common Stock subject to the Option immediately prior to
      the Corporate Transaction, the consideration (whether stock, cash, or
      other securities or property) received in the Corporate Transaction by
      holders of Common Stock for each share held on the effective date of the
      transaction (and if holders were offered a choice of consideration, the
      type of consideration chosen by the holders of a majority of the
      outstanding shares); provided, however, that if such consideration
      received in the Corporate Transaction is not solely common stock of the
      Successor Corporation, the Plan Administrator may, with the consent of the
      Successor Corporation, provide for the consideration to be received upon
      the exercise of the Option, for each share of Common Stock subject
      thereto, to be solely common stock of the Successor Corporation
      substantially equal in fair market value to the per share consideration
      received by holders of Common Stock in the Corporate Transaction. The
      determination of such substantial equality of value of consideration shall
      be made by the Plan Administrator and its determination shall be
      conclusive and binding.

	 	 
	(d) 	
      All Options shall terminate and cease to remain
      outstanding immediately following the Corporate Transaction, except to the
      extent assumed by the Successor Corporation.

9

	11.4 	
      Further Adjustment of
Awards

Subject to Articles 11.2 and 11.3, the Plan Administrator shall
have the discretion, exercisable at any time before a sale, merger,
consolidation, reorganization, liquidation or change of control of the Company,
as defined by the Plan Administrator, to take such further action as it
determines to be necessary or advisable, and fair and equitable to the
Participants, with respect to Awards. Such authorized action may include (but
shall not be limited to) establishing, amending or waiving the type, terms,
conditions or duration of, or restrictions on, Awards so as to provide for
earlier, later, extended or additional time for exercise, lifting restrictions
and other modifications, and the Plan Administrator may take such actions with
respect to all Participants, to certain categories of Participants or only to
individual Participants. The Plan Administrator may take such action before or
after granting Awards to which the action relates and before or after any public
announcement with respect to such sale, merger, consolidation, reorganization,
liquidation or change of control that is the reason for such action. 

	11.5 	
      Limitations

The grant of Awards shall in no way affect the Company's right
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets. 

	11.6 	
      Fractional Shares

In the event of any adjustment in the number of shares covered
by any Award, each such Award shall cover only the number of full shares
resulting from such adjustment. 

ARTICLE 12. 
AMENDMENT AND TERMINATION 

	12.1 	
      Amendment or Termination of
Plan

The Board may suspend, amend or terminate the Plan or any
portion of the Plan at any time and in such respects as it shall deem advisable;
provided, however, that to the extent required for compliance with Section 422
of the Code or any applicable law or regulation, stockholder approval shall be
required for any amendment that would: (a) increase the total number of shares
available for issuance under the Plan, (b) modify the class of employees
eligible to receive Options, or (c) otherwise require stockholder approval under
any applicable law or regulation. Any amendment made to the Plan that would
constitute a "modification" to Incentive Stock Options outstanding on the date
of such amendment shall not, without the consent of the Participant, be
applicable to such outstanding Incentive Stock Options but shall have
prospective effect only. 

	12.2 	
      Term of Plan

Unless sooner terminated as provided herein, the Plan shall
terminate ten (10) years after the earlier of the Plan's adoption by the Board
and approval by the stockholders. 

	12.3 	
      Consent of Participant

The suspension, amendment or termination of the Plan or a
portion thereof or the amendment of an outstanding Award shall not, without the
Participant's consent, materially adversely affect any rights under any Award
theretofore granted to the Participant under the Plan. Any change or adjustment
to an outstanding Incentive Stock Option shall not, without the consent of the
Participant, be made in a manner so as to constitute a "modification" that would
cause such Incentive Stock Option to fail to continue to qualify as an Incentive
Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to
Article 11 shall not be subject to these restrictions. 

10

ARTICLE 13. 
GENERAL 

	13.1 	
      Evidence of Awards

Awards granted under the Plan shall be evidenced by a written
instrument that shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and that are not
inconsistent with the Plan. 

	13.2 	
      No Individual Rights

Nothing in the Plan or any Award granted under the Plan shall
be deemed to constitute an employment contract or confer or be deemed to confer
on any Participant any right to continue in the employ of, or to continue any
other relationship with, the Company or any Related Company or limit in any way
the right of the Company or any Related Company to terminate a Participant's
employment or other relationship at any time, with or without Cause. 

	13.3 	
      Issuance of Shares

Notwithstanding any other provision of the Plan, the Company
shall have no obligation to issue or deliver any shares of Common Stock under
the Plan or make any other distribution of benefits under the Plan unless, in
the opinion of the Company's counsel, such issuance, delivery or distribution
would comply with all applicable laws (including, without limitation, the
requirements of the Securities Act), and the applicable requirements of any
securities exchange or similar entity. 

The Company shall be under no obligation to any Participant to
register for offering or resale or to qualify for exemption under the Securities
Act, or to register or qualify under state securities laws, any shares of Common
Stock, security or interest in a security paid or issued under, or created by,
the Plan, or to continue in effect any such registrations or qualifications if
made. The Company may issue certificates for shares with such legends and
subject to such restrictions on transfer and stop-transfer instructions as
counsel for the Company deems necessary or desirable for compliance by the
Company with federal and state securities laws. 

To the extent the Plan or any instrument evidencing an Award
provides for issuance of stock certificates to reflect the issuance of shares of
Common Stock, the issuance may be effected on a noncertificated basis, to the
extent not prohibited by applicable law or the applicable rules of any stock
exchange. 

	13.4 	
      No Rights as a Stockholder

No Option denominated in units shall entitle the Participant to
any cash dividend, voting or other right of a stockholder unless and until the
date of issuance under the Plan of the shares that are the subject of such
Award. 

	13.5 	
      Compliance With Laws and
  Regulations

Notwithstanding anything in the Plan to the contrary, the Plan
Administrator, in its sole discretion, may bifurcate the Plan so as to restrict,
limit or condition the use of any provision of the Plan to Participants who are
officers or directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to other
Participants. Additionally, in interpreting and applying the provisions of the
Plan, any Option granted as an Incentive Stock Option pursuant to the Plan
shall, to the extent permitted by law, be construed as an "incentive stock
option" within the meaning of Section 422 of the Code. 

11

	13.6 	
      Participants in Other
Countries

The Plan Administrator shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of other countries in which the Company or
any Related Company may operate to assure the viability of the benefits from
Awards granted to Participants employed in such countries and to meet the
objectives of the Plan. 

	13.7 	
      No Trust or Fund

The Plan is intended to constitute an "unfunded" plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company. 

	13.8 	
      Severability

If any provision of the Plan or any Award is determined to be
invalid, illegal or unenforceable in any jurisdiction, or as to any person, or
would disqualify the Plan or any Award under any law deemed applicable by the
Plan Administrator, such provision shall be construed or deemed amended to
conform to applicable laws, or, if it cannot be so construed or deemed amended
without, in the Plan Administrator's determination, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, person or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect. 

	13.9 	
      Choice of Law

The Plan and all determinations made and actions taken pursuant
hereto, to the extent not otherwise governed by the laws of the United States,
shall be governed by the laws of the State of Nevada without giving effect to
principles of conflicts of law. 

ARTICLE 14. 
EFFECTIVE DATE 

	14.1 	
      Effective Date of Plan

The effective date is the date on which the Plan is adopted by
the Board. If the stockholders of the Company do not approve the Plan within
twelve (12) months after the Board's adoption of the Plan, any Incentive Stock
Options granted under the Plan will be treated as Non-Qualified Stock Options.

12

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