Document:

Exhibit 10.10

 

TACTILE SYSTEMS TECHNOLOGY, INC.

Restricted Stock Agreement

 

	
Full   Name of Employee: [           ]
    
	
No. of Shares of   Series A Preferred Stock Covered: [       ]
    	
Date of Issuance: March 3, 2009
    
	
Vesting   Schedule:
    
	
 
    	
 
    
	
 
    	
All   Shares subject to this Agreement will vest immediately in full upon the terms   described in Section 2 of this Agreement.
    
			

 

This Restricted Stock Agreement is made as of the date of issuance set forth above (the “Effective Date”), between Tactile Systems Technology, Inc., a Delaware corporation (the “Company”), and the employee set forth above (the “Employee”).

 

A.                                    The Company desires to give the Employee an inducement to acquire a proprietary interest in the Company and an added incentive to advance the interests of the Company by granting the Employee restricted shares of Series A Preferred Stock of the Company (including the shares of the Company’s common stock issuable upon conversion of the shares of Series A Preferred Stock, the “Shares”), on the terms and conditions and subject to the restrictions set forth herein; and

 

B.                                    The Company and the Employee desire to enter into this Agreement to set forth the terms and conditions of such grant.

 

Now, therefore, the Company and the Employee mutually agree as follows:

 

1.                                      GRANT OF RESTRICTED STOCK.

 

(a)                                 Subject to the terms and conditions of this Agreement, the Company has granted to the Employee the number of Shares specified at the beginning of this Agreement.  Such Shares are subject to the restrictions provided for in this Agreement and are referred to collectively as the “Restricted Shares” and each as a “Restricted Share.”  The term “Restricted Shares” also refers to all securities received by the Employee in replacement of or in connection with the Restricted Shares acquired hereby pursuant to a recapitalization, reclassification, stock dividend, stock split, stock combination or other relevant event.

 

(b)                                 Each Restricted Share will be evidenced by a duly issued stock certificate (which may represent more than one Restricted Share) registered in the name of the Employee.  The Employee will have all rights of a stockholder of the Company with respect to each Restricted Share (including the right to receive dividends and other distributions, if any).  However, all restrictions provided for in this Agreement will apply to each Restricted Share and to any other securities distributed with respect to such Restricted Share.  No Restricted Share may be sold, transferred, pledged, hypothecated or otherwise encumbered or disposed of until such Restricted Share has vested in the Employee in accordance with all terms and conditions of this Agreement.  Each Restricted Share will remain restricted and subject to forfeiture to the Company unless and until such Restricted Share has vested in the Employee in accordance with all of the terms and conditions of this Agreement.  Each stock certificate evidencing any Restricted Share may contain such legends and stock transfer instructions or limitations as may be determined or authorized by the Company in its sole discretion.  The Company may, in its sole discretion, retain custody of any such certificate throughout the period during which any restrictions are in effect and require, as a condition to issuing any such certificate, that the Employee tender to the Company a stock power duly executed in blank relating to such custody.

 

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2.                                      VESTING.  If the Employee remains continuously employed by the Company or a parent or subsidiary thereof until a Change in Control, then the Restricted Shares will vest upon a Change in Control.  A “Change in Control” of the Company shall be deemed to occur if any of the following occur:

 

(a)                                 Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) after the Effective Date first acquires or becomes a “beneficial owner” (as defined in Rule 13d-3 or any successor rule under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors (“Voting Securities”), provided, however, that the following shall not constitute a Change in Control pursuant to this Section 2(a):

 

(A)                               any acquisition of shares of the Company’s capital stock or Voting Securities of the Company directly from the Company,

 

(B)                               any acquisition or beneficial ownership by the Company or a subsidiary of the Company,

 

(C)                               any acquisition or beneficial ownership by any employee benefit plan (or related trust) sponsored or maintained by the Company or one or more of its subsidiaries,

 

(D)                               any acquisition or beneficial ownership by any corporation with respect to which, immediately following such acquisition, more than 50% of both the combined voting power of the Company’s then outstanding Voting Securities and the shares of the Company’s capital stock are then beneficially owned by all or substantially all of the persons who beneficially owned Voting Securities and shares of the Company’s capital stock immediately prior to such acquisition in substantially the same proportions as their ownership of such Voting Securities and shares of the Company’s capital stock, as the case may be, immediately prior to such acquisition;

 

(b)                                 A majority of the members of the board of directors of the Company shall not be Continuing Directors.  “Continuing Directors” shall mean:  (A) individuals who, on the Effective Date, are directors of the Company, (B) individuals elected as directors of the Company subsequent to the date hereof for whose election proxies shall have been solicited by the board of directors, (C) individuals elected as directors of the Company subsequent to the date hereof pursuant to a nomination or board representation right of preferred stockholders of the Company or (D) any individual elected or appointed by the board of directors to fill vacancies on the board of directors caused by death or resignation (but not by removal) or to fill newly-created directorships;

 

(c)                                  Consummation of a reorganization, merger or consolidation of the Company or a statutory exchange of outstanding Voting Securities, unless, immediately following such reorganization, merger, consolidation or exchange, all or substantially all of the persons who were the beneficial owners, respectively, of Voting Securities and shares of the Company’s capital stock immediately prior to such reorganization, merger, consolidation or exchange beneficially own, directly or indirectly, more than 70% of, respectively, the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors and the then outstanding shares of common stock, as the case may be, of the corporation that is the issuer of such securities held by the stockholders of the Company after such reorganization, merger, consolidation or exchange in substantially the same proportions as their ownership, immediately

 

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prior to such reorganization, merger, consolidation or exchange, of the Voting Securities and shares of the Company’s capital stock, as the case may be; or

 

(d)                                 Consummation of (x) a complete liquidation or dissolution of the Company or (y) the sale or other disposition of all or substantially all of the assets of the Company (in one or a series of transactions), other than to a corporation with respect to which, immediately following such sale or other disposition, more than 70% of, respectively, the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and the then outstanding shares of common stock of such corporation is then beneficially owned, directly or indirectly, by all or substantially all of the persons who were the beneficial owners, respectively, of the Voting Securities and shares of the Company’s capital stock immediately prior to such sale or other disposition in substantially the same proportions as their ownership, immediately prior to such sale or other disposition, of the Voting Securities and shares of the Company’s capital stock, as the case may be.

 

3.                                      ISSUANCE OF UNRESTRICTED SHARES.  Upon the vesting of any Restricted Shares, such vested Restricted Shares will no longer be subject to forfeiture as provided in Section 4, but will continue to be subject to the provisions of Section 6.

 

4.                                      FORFEITURE.  If (a) the Employee’s employment with the Company, or a parent or subsidiary thereof, is terminated for any reason, whether by the Company with or without cause, voluntarily or involuntarily by the Employee or otherwise, or (b) the Employee attempts to transfer or otherwise dispose of any of the Restricted Shares or the Restricted Shares become subject to attachment or any similar involuntary process, in violation of this Agreement, then any Restricted Shares that have not previously vested will be forfeited by the Employee to the Company, the Employee will thereafter have no right, title or interest whatever in such Restricted Shares, and, if the Company does not have custody of any and all certificates representing Restricted Shares so forfeited, the Employee must immediately return to the Company any and all certificates representing Restricted Shares so forfeited.  Additionally, the Employee must deliver to Company a stock power duly executed in blank relating to any and all certificates representing Restricted Shares forfeited to the Company in accordance with the previous sentence or, if such stock power has previously been tendered to the Company, the Company will be authorized to deem such previously tendered stock power delivered, and the Company will be authorized to cancel any and all certificates representing Restricted Shares so forfeited and issue and deliver to the Employee a new certificate for any Shares which vested prior to forfeiture.

 

5.                                      LOCK-UP.

 

(a)                                 The Employee agrees that the Employee will not offer, pledge, sell, contract to sell, sell any option, sell any contract to purchase, purchase any option, purchase any contract to sell, grant any option, right, or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares (or any other Company securities) or enter into any swap, hedging, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares (or any other Company securities) held by the Employee (other than those included in the registration) for a period specified by the representative of the underwriters of the Company’s capital stock (or any other Company securities, collectively, the “Stock”) not to exceed 90 days (180 days in the case of an initial public offering), plus any additional periods required by the Financial Industry Regulatory Authority, after the effective date of any Company registration statement filed under the Securities Act of 1933 (the “Securities Act”).

 

(b)                                 The Employee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter to the extent that such agreements are consistent with the foregoing or that are necessary to give further effect to the provisions set forth in Section 5(a).  In addition, if requested by the Company or the 

 

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representative of the underwriters of shares of the Company’s capital stock, the Employee will provide, within 10 days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act.

 

(c)                                  The obligations described in this Section 5 will not apply to a registration relating solely to employee benefit plans on Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future.  The Company may impose stop-transfer instructions with respect to the Shares subject to the foregoing restriction until the end of such period, as applicable.

 

6.                                      TRANSFER RESTRICTIONS.

 

(a)                                 The Employee understands that, notwithstanding the vesting of the Restricted Shares under Section 2 of this Agreement, none of the Shares issued to the Employee pursuant to this Agreement have been (nor are anticipated to be) registered under the Securities Act, or any state securities laws, in reliance upon exemptions from registration.  The Shares, therefore, cannot be sold unless they are subsequently registered under the Securities Act or the Employee obtains an opinion of counsel satisfactory to the Company that such sale may be effected without violation of applicable federal or state securities laws.  A legend to this effect will be placed on the certificates evidencing the Shares.

 

(b)                                 The Company is not required (1) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (2) to treat as owner of such Shares or to accord the right to vote or pay dividends to any transferee to whom such Shares have been so transferred.

 

7.                                      LIMITATION ON CHANGE IN CONTROL PAYMENTS.  Notwithstanding anything in this Agreement to the contrary, if, with respect to the Employee, the vesting of Restricted Shares as provided in Section 2 (which acceleration could be deemed a “payment” within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)), together with any other payments which the Employee has the right to receive from the Company or any corporation which is a member of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the “payments” to the Employee will be reduced to the largest amount as will result in no portion of such “payments” being subject to the excise tax imposed by Section 4999 of the Code.  Without limiting the prior sentence, the Employee will have the discretion to determine which “payments” will be reduced so that no portion of such “payments” are subject to the excise tax imposed by Section 4999 of the Code.  Notwithstanding anything to the contrary in this Section 7, if the Employee is subject to a separate agreement with the Company that expressly addresses the potential application of Section 280G or 4999 of the Code (including, without limitation, that “payments” under such agreement or otherwise will be reduced, that such “payments” will not be reduced or that such “payments” will be “grossed up” for tax purposes), then this Section 7 will not apply, and any “payments” to the Employee pursuant to this Agreement will be treated as “payments” arising under such separate agreement.

 

8.                                      EMPLOYMENT.  This Agreement does not give the Employee any right to continued employment with the Company or any parent or subsidiary thereof, and the Company or any parent or subsidiary thereof employing the Employee may terminate such employment or otherwise treat the Employee without regard to the effect it may have upon the Employee or any Restricted Shares under this Agreement.

 

9.                                      TAX WITHHOLDING.  The parties to this Agreement recognize that the Company or a parent or subsidiary of the Company may be obligated to withhold federal and state income taxes or other taxes upon the vesting of the Restricted Shares, or, in the event that the Employee elects under Section 83(b) of the

 

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Code to report the receipt of the Restricted Shares as income in the year of receipt, upon the Employee’s receipt of the Restricted Shares.  The Employee agrees that, at such time, if the Company or a parent or subsidiary is required to withhold such taxes, the Employee will promptly pay in cash upon demand to the Company, or the parent or subsidiary having such obligation, such amounts as shall be necessary to satisfy such obligation.

 

10.                               AMENDMENT TO MEET THE REQUIREMENTS OF SECTION 409A.  The Employee acknowledges that the Company, in the exercise of its sole discretion and without the consent of the Employee, may amend or modify this Agreement in any manner and delay the payment of any amounts payable pursuant to this Agreement to the minimum extent necessary to meet the requirements of Section 409A of the Code as amplified by any Internal Revenue Service or U.S. Treasury Department regulations or guidance as the Company deems appropriate or advisable.  The Employee further acknowledges that the Company has directed the Employee to seek independent advice regarding the applicable provisions of the Code and the income and other tax laws of any municipality, state or foreign country in which the Employee may reside.

 

11.                               DISCRETIONARY ADJUSTMENT.  In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of Shares, rights offering, or extraordinary dividend or divestiture (including a spin-off), or any other change in the corporate structure or Shares of the Company, the Company’s board of directors or a committee thereof (or if the Company does not survive any such transaction, the board of directors or a comparable committee of the board of directors of the surviving corporation) may, without the consent of the Employee, make such adjustment as it determines in its discretion to be appropriate as to the number and kind of securities subject to and reserved under this Agreement and, in order to prevent dilution or enlargement of rights of the Employee, the number and kind of securities issuable upon lapse of the forfeiture restrictions of the Restricted Shares.

 

12.                               MISCELLANEOUS.  This Agreement is binding in all respects on the Employee’s heirs, representatives, successors and assigns.  This Agreement will be governed by and construed in accordance with the laws of the State of Delaware.  This Agreement contains all terms and conditions with respect to the subject matter hereof and no amendment, modification or other change hereto will be of any force or effect unless and until set forth in a writing executed by the Employee and the Company.  The provisions of Sections 5 through 14 will survive vesting of the Restricted Shares.

 

13.                               SHARES SUBJECT TO CERTIFICATE OF INCORPORATION AND BY-LAWS.  The Employee acknowledges that the Shares granted under this Agreement are subject to the Company’s certificate of incorporation, as amended from time to time, and by-laws, as amended from time to time and any applicable federal or state laws, rules or regulations.

 

14.                               EXECUTION OF STOCKHOLDER AGREEMENTS.  At the discretion of the Company’s board of directors or a committee thereof, the Company is hereby granted (a) a right of first refusal to purchase all Shares that the Employee (or a subsequent transferee) may propose to transfer to a third party and (b) the right to require the Employee from time to time (including as a condition to receipt of the Shares) to execute and deliver stockholder, voting, right of first-refusal and co-sale or similar agreements (including in the forms in effect as of the Effective Date.

 

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The Employee and the Company have executed this Agreement as of the Effective Date.

 

	
 
    	
TACTILE SYSTEMS   TECHNOLOGY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
Gerald Mattys
    
	
NAME:
    	
 
    	
 
    	
Chief Executive Officer
    
				

 

6ex4-2.htm

Exhibit 4.2

AMENDMENT NO. 2 TO

PROMISSORY NOTE

OF

FLUOROPHARMA MEDICAL, INC.

 

THIS AMENDMENT NO. 2 TO PROMISSORY NOTE OF FLUOROPHARMA MEDICAL, INC. (this “Amendment”), dated as of January ___, 2016, is made by FluoroPharma Medical, Inc., a Nevada corporation (the “Company” or the “Borrower”), and the undersigned holders (each, a “Holder” and, collectively, the “Holders”).  The Company and the Holders are sometimes referred to individually as “Party” and collectively as the “Parties”.

 

RECITALS

 

WHEREAS, the Company and the Holders entered into a Note and Warrant Purchase Agreement dated as of July 22, 2014 (the “Purchase Agreement”) pursuant to which the Company issued promissory notes, as amended (the “Notes”) to the Holders;

WHEREAS, the Notes may be amended only by a written instrument executed by the Company and the Holders holding a majority of the aggregate principal amount of the Notes;

WHEREAS, the Holders hold a majority of the aggregate principal amount of the Notes outstanding as of the date hereof; and

WHEREAS, the Company and the Holders desire to amend certain provisions of the Notes, as amended by this Amendment, as described herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

AMENDMENT

 

1.           Capitalized Terms.  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Notes.

 

2.           Amendments to Notes.

 

(a)           The interest rate of “8%” in the first paragraph of the Notes shall be deleted and “12%” shall be substituted in lieu thereof.

 

(b)           The Maturity Date of January [__], 2016 as defined in the first paragraph of the Notes shall be deleted and July [__], 2016 shall be substituted in lieu thereof.

 

(c)           A new Section 1.4 of the Notes is hereby added as follows:

 

  

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“1.4           Voluntary Conversion; Conversion Price.  The Holder shall have the right, at its option at any time, to convert the principal amount of this Note plus any accrued interest into such number of fully paid and nonassessable whole shares of Common Stock (the “Conversion Shares”) as is obtained by dividing (i) the Outstanding Balance to be converted multiplied by 1.25, by (ii) the conversion price of no greater than $0.35 per share or, if there has been an adjustment of the conversion price, by the conversion price as last adjusted and in effect at the date this Note is surrendered for conversion (such price, or such price as last adjusted, being referred to herein as the “Conversion Price”); provided, however, if an Event of Default has occurred and is continuing, the Conversion Price shall be adjusted to $0.15 per share. Holders shall effect conversions by providing the Borrower with written notice of the details of such voluntary conversion, which may be provided by email (“Notice of Conversion”). The Borrower shall instruct its transfer agent to issue the Conversion Shares via FedEx within 3 to 5 days following receipt of the Notice of Conversion. Notwithstanding anything contained in this Section 1.4 to the contrary, any voluntary conversions made by the Holder under this Note shall not in any way affect the rights of the Holder to the Additional Warrant.”

 

(d)           A new Section 1.5 of the Notes is hereby added as follows:

 

“1.5           Certain Adjustments.

 

(a)           Adjustments for Stock Splits, Combinations, Certain Dividends and Distributions.  If the Borrower shall, at any time or from time to time after the date hereof, effect a split of the outstanding Common Stock (or any other subdivision of its shares of Common Stock into a larger number of shares of Common Stock), combine the outstanding shares of Common Stock into a smaller number of shares of Common Stock, or make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in shares of Common Stock, then, in each event (i) the number of shares of Common Stock for which this Note shall be convertible immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common Stock that a record holder of the same number of shares of Common Stock for which this Note shall be convertible immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and (ii) the Conversion Price then in effect shall be adjusted to equal (A) the Conversion Price then in effect multiplied by the number of shares of Common Stock for which this Note shall be convertible immediately prior to the adjustment divided by (B) the number of shares of Common Stock for which this Note shall be convertible immediately after such adjustment.

 

(b)           Adjustment for Other Dividends and Distributions. If the Borrower shall, at any time or from time to time after the date hereof, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in (i) cash, (ii) any evidences of indebtedness, or any other securities of the Borrower or any property of any nature whatsoever, other than, in each case, shares of Common Stock; or (iii) any warrants or other rights to subscribe for or purchase any evidences of indebtedness, or any other securities of the Borrower or any property of any nature whatsoever, other than, in each case, shares of Common Stock, then, and in each event, (A) the number of shares of Common Stock for which this Note shall be convertible shall be adjusted to equal the product of the number of shares of Common Stock for which this Note shall be convertible immediately prior to such adjustment multiplied by a fraction (1) the numerator of which shall  be the last closing bid price per share of the Common Stock at the date of taking such record and (2) the denominator of which shall be such last closing bid price per share of the Common Stock minus the amount allocable to one share of Common Stock of any such cash so distributable and of the fair value (as determined in good faith by the Board) of any and all such evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights so distributable, and (B) the Conversion Price then in effect shall be adjusted to equal (1) the Conversion Price then in effect multiplied by the number of shares of Common Stock for which this Note shall be convertible immediately prior to the adjustment divided by (2) the number of shares of Common Stock for which this Note shall be convertible immediately after such adjustment. A reclassification of the Common Stock (other than a change in par value, or from par value to no par value or from no par value to par value) into shares of Common Stock and shares of any other class of stock shall be deemed a distribution by the Borrower to the holders of its Common Stock of such shares of such other class of stock within the meaning of this Section 1.4(b) and, if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock within the meaning of Section 1.4(a).

 

(c)           Adjustments for Reclassification, Exchange or Substitution. If the Common Stock for which this Note shall be convertible at any time or from time to time after the date hereof shall be changed to the same or different number of shares of any class or classes of stock, whether by reclassification, exchange, substitution or otherwise (other than by way of a stock split or combination of shares or stock dividends provided for in Section 1.5(a), Section 1.5(b), or a reorganization, merger, consolidation, or sale of assets provided for in Section 1.5(d)), then, and in each event, an appropriate revision to the Conversion Price shall be made and provisions shall be made (by adjustments of the Conversion Price or otherwise) so that, upon any subsequent conversion of this Note, the Holder shall have the right to receive, in lieu of Conversion Shares, the kind and amount of shares of stock and other securities receivable upon reclassification, exchange, substitution or other change, by holders of the number of shares of Common Stock for which this Note was convertible immediately prior to such reclassification, exchange, substitution or other change, all subject to further adjustment as provided herein.

  

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(d)           Adjustments for Reorganization, Merger, Consolidation or Sales of Assets. If at any time or from time to time after the date hereof there shall be a capital reorganization of the Borrower (other than by way of a stock split or combination of shares or stock dividends or distributions provided for in Section 1.5(a), and Section 1.5(b), or a reclassification, exchange or substitution of shares provided for in Section 1.5(c)), or a merger or consolidation of the Borrower with or into another Borrower where the holders of the Borrower’s outstanding voting securities prior to such merger or consolidation do not own over 50% of the outstanding voting securities of the merged or consolidated entity, immediately after such merger or consolidation, or the sale of all or substantially all of the Borrower’s properties or assets to any other person (an “Organic Change”), then as a part of such Organic Change an appropriate revision to the Conversion Price shall be made if necessary and provision shall be made if necessary (by adjustments of the Conversion Price or otherwise) so that, upon any subsequent conversion of this Note, the Holder shall have the right to receive, in lieu of Conversion Shares, the kind and amount of shares of stock and other securities or property of the Borrower or any successor Borrower resulting from the Organic Change. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 1.5(d) with respect to the rights of the Holder after the Organic Change to the end that the provisions of this Section 1.5(d) (including any adjustment in the Conversion Price then in effect and the number of shares of stock or other securities deliverable upon conversion of this Note) shall be applied after that event in as nearly an equivalent manner as may be practicable.

 

(e)           Adjustments for Issuance of Additional Shares of Common Stock.  In the event the Borrower, shall, at any time during the period in which this Note is outstanding, issue or sell any additional shares of Common Stock (otherwise than as provided in the foregoing subsections 1.5(a) through (d) or pursuant to Common Stock Equivalents (hereafter defined) granted or issued prior to the date hereof) (“Additional Shares of Common Stock”), other than Excluded Stock (as defined below), at a price per share less than the Conversion Price or without consideration, then the Conversion Price upon each such issuance shall be reduced to a price equal to the consideration per share paid for such Additional Shares of Common Stock.

 

(f)           Issuance of Common Stock Equivalents. The provisions of this Section 1.5(f) shall apply if (a) the Borrower, at any time after the date hereof during the period in which this Note is outstanding, shall issue any securities convertible into or exchangeable for, directly or indirectly, Common Stock (“Convertible Securities”), other than Excluded Stock, or (b) any rights or warrants or options to purchase any such Common Stock or Convertible Securities (collectively, the “Common Stock Equivalents”), other than Excluded Stock, shall be issued or sold.  If the price per share for which Additional Shares of Common Stock may be issuable pursuant to any such Common Stock Equivalent shall be less than Conversion Price, or if, after any such issuance of Common Stock Equivalents, the price per share for which Additional Shares of Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall be less than Conversion Price at the time of such amendment or adjustment, then the applicable Conversion Price upon each such issuance or amendment shall be adjusted as provided in Section 1.5(e). No adjustment shall be made to the Conversion Price upon the issuance of Common Stock pursuant to the exercise, conversion or exchange of any Convertible Security or Common Stock Equivalent where an adjustment to the Conversion Price was made as a result of the issuance or purchase of any Convertible Security or Common Stock Equivalent.

 

(g)           Excluded Stock.  Anything herein to the contrary notwithstanding, the Borrower shall not be required to make any adjustment to the Conversion Price in connection with any issuance of Excluded Stock.  For purposes hereof, “Excluded Stock” means Common Stock or other securities of the Borrower issued or to be issued (i) pursuant to the conversion, exercise or exchange of securities outstanding on the date hereof, (ii) pursuant to the exercise or conversion of any equity securities at an exercise or conversion price greater than the Conversion Price, (iii) in accordance with the Borrower’s stock option plan or stock purchase plan, or otherwise issued to the Borrower’s employees, consultants or directors in transactions not primarily for equity financing purposes and approved by a majority of the members of the Compensation Committee of the Borrower or the Board of Directors, (iv) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the primary purpose of raising capital, (v) except as otherwise provided herein, and following any applicable adjustment in the Conversion Price, upon the actual issuance of Common Stock or securities convertible into Common Stock at the time of exercise of any rights, options or warrants to purchase Common Stock or any securities convertible into Common Stock, as appropriate, or upon conversion or exchange of securities convertible into Common Stock, (vi) to the extent provided for in the Purchase Agreement or herein, any shares of Common Stock issued as interest or after the date hereof pursuant to the terms therein or herein, or (vii) any non-convertible debt offering arranged by the Borrower, its advisors or bankers.

 

(h)           Calculations. All calculations under this Section 1.5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 1.5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

(i)           Notice to Holder.

 

(i)           Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 1.5, the Borrower shall promptly email to the Holder a notice setting forth the Conversion Price after such adjustment and any resulting adjustment to the number of Conversion Shares and setting forth a brief statement of the facts requiring such adjustment.

  

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(ii)           Notice to Allow Exercise by Holder. If (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially all of the assets of the Borrower, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower, then, in each case, the Borrower shall cause to be mailed to the Holder at its last address as it shall appear upon the Note Register of the Borrower, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Borrower or any of the Subsidiaries, the Borrower shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to convert this Note during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.”

(e)           A new Section 1.6 of the Notes is hereby added as follows:

 

“1.6           Registration Rights.  The Company shall use its commercially reasonable efforts to register for resale the Conversion Shares on the Company’s Registration Statement on Form S-1 (File No. 333-208196) initially filed on November 24, 2015 (the “Form S-1”).  In addition, in the event the aggregate number of Conversion Shares is not registered on the Form S-1, the Holders shall have piggyback registration rights with respect to any Conversion Shares not so registered on any registration statement filed by the Company, other than (i) a registration on Form S-8 or otherwise relating solely to employee benefit plans, (ii) a registration on Form S-4, (iii) a registration on any other form which does not permit secondary sales, or (iv) a registration on any other form which does not include substantially the same information as would be required to be included in a registration statement covering the resale of the Conversion Shares.”

 

(f)           A new Section 1.7 of the Notes is hereby added as follows:

 

“1.7           Holder’s Conversion Limitations.  The Borrower shall not effect any conversion of this Note, and a Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to such issuance after conversion as set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Borrower (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Borrower is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Note is convertible, in each case subject to the Beneficial Ownership Limitation, and the Borrower shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Borrower’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Borrower or (C) a more recent written notice by the Borrower or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Borrower shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Borrower, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note.  The Holder, upon not less than 61 days’ prior notice to the Borrower, may increase or decrease the Beneficial Ownership Limitation provisions of this Section, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the provisions of this Section shall continue to apply.  Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Borrower.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.”

 

  

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(g)           A new Section 1.8 of the Notes is hereby added as follows:

 

“1.8           Interest Payments.  Beginning on the issuance date of this Note, the outstanding principal balance of this Note shall bear interest, in arrears, at a rate per annum equal to twelve percent (12%), payable upon the earlier of (i) exchange or conversion of this Note in accordance with the terms hereof and (ii) the Maturity Date.  Interest shall be computed on the basis of a 360-day year of twelve (12) 30-day months and shall accrue commencing on the date of this Note. Furthermore, upon the occurrence of an Event of Default (as defined in Article II hereof), then to the extent permitted by law, the Borrower will pay interest to the Holder on the outstanding principal balance of this Note from the date of the Event of Default until such Event of Default is cured at the rate of the lesser of sixteen percent (16%) and the maximum applicable legal rate per annum. Interest shall be payable hereunder either in cash or in additional shares of Common Stock (the “Interest Shares”) at the sole option of the Holder.  If the Holder elects to receive any accrued interest in Interest Shares, each Holder shall be deemed to be the Holder of record of the Interest Shares issuable with respect to the relevant interest payment notwithstanding that the stock transfer books of the Borrower shall then be closed or that certificates evidencing such Interest Shares shall not have been actually delivered to the Holder. In the event that interest under this Note is paid with Interest Shares, the number of Interest Shares to be issued shall be based on the average of the three lowest VWAPs (as defined below) of the Common Stock for the ten trading days immediately preceding the date such interest payment is due.  For purposes hereof, “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market (as defined below), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Borrower, the fees and expenses of which shall be paid by the Borrower. For purposes hereof, “Trading Market” means whichever of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the OTC Bulletin Board or any tier of the OTC Markets Group, Inc. (or any successors to any of the foregoing).”

 

3.           Ratification.  Except as expressly amended hereby, all of the terms, provisions and conditions of the Notes are hereby ratified and confirmed in all respects by each Party hereto and, except as expressly amended hereby, are, and hereafter shall continue, in full force and effect.

 

4.           Entire Agreement.  This Amendment, Amendment No. 1 to the Notes, the Notes and the Purchase Agreement (as may have been amended) constitute the entire agreement of the Parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, both written and oral, between the Parties with respect thereto.

 

5.           Conflicting Terms.  In the event of any inconsistency or conflict between the Notes and this Amendment, the terms, conditions and provisions of this Amendment shall govern and control.

 

6.           Amendments.  No amendment, supplement, modification or waiver of this Amendment shall be binding unless executed in writing by all Parties hereto.

 

7.           Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract.

 

8.           Governing Law.  This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the choice of law provisions.

 

9.           Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the Parties hereto and their respective permitted successors and assigns.

 

 [Signature pages follow]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 to the Notes as of the date set forth above.

 

	 	
COMPANY:

 

FLUOROPHARMA MEDICAL, INC.

 

By: _________________

Name: Thomas Tulip

Title:  President

 

HOLDER:

By: __________________

Name:

Title:

 

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