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EMPLOYMENT AGREEMENT

    This Employment Agreement (this “Agreement”), dated as of November 15, 2021 (the “Effective Date”), is entered into by and between COMPASS Pathways, Inc. (the “Company”), a Delaware corporation with a principal place of business at 180 Varick Street, 6th Floor New York, NY 10014, and Michael Falvey, residing at 5 Pine Ridge Drive, Mattapoisett, MA 02739 (the “Employee” or “you”; collectively with the Company, the “Parties”; each of the Parties referred individually as “Party”).

    WHEREAS, the Company desires to employ the Employee in accordance with the terms and conditions set forth below;

WHEREAS, as specified below, the parties have mutually agreed upon consideration, as may be required by the Massachusetts Noncompetition Agreement Act;

    WHEREAS, Employee desires to be employed upon the terms and conditions set forth in this Agreement.

    NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein contained, the parties hereto agree as follows:

1.    EMPLOYMENT.

(a)Start Date and Place of Work.  Employee’s commencement of employment with the Company and the effectiveness of this Agreement are subject to and contingent upon the Company’s satisfactory and successful completion of its hiring practices, procedures, and protocols, including any due diligence procedures (e.g., reference/background checks, completion of required pre-hire documentation).  Subject to the foregoing, Employee’s employment with the Company shall commence on or about December 6, 2021.  Employee’s normal place of work will be remote at home (provided, however, that if the Company opens an office within Massachusetts, such office shall be your normal place of work) with frequent travel to London.  Employee may, however, be required to travel throughout the United States and/or abroad in the performance of Employee’s duties, as the Company may reasonably determine from time to time.

(b)Title. By January 1, 2022, Employee will be appointed to the role of Chief Financial Officer of the Company, reporting to George Goldsmith, Chief Executive Officer. 

(c)At Will Relationship.  Employee’s employment shall be considered “at will” in nature and, accordingly, either the Company or Employee may terminate this Agreement and Employee’s employment at any time and for any reason, with or without cause; provided, however, that the party terminating the employment relationship shall provide the non-terminating party with 3 months’ prior written notice of termination (the “Notice Period”).  Notwithstanding the foregoing or anything to the contrary herein, during the Notice Period, the Company shall be under no obligation to vest or assign any powers or duties or to provide any work for Employee, and may, in its sole discretion, (i) elect to waive or reduce the Notice Period in whole or in part (and the Parties agree that, if the Company elects to waive or reduce the Notice Period in part, Employee shall only be entitled to his salary through the end of the Notice Period as partially waived or reduced), or to modify or reduce Employee’s duties to the Company during such period; (ii) pay Employee his salary in lieu of some or all of the Notice Period; (iii) exclude Employee from the premises of the Company during the Notice Period and require that Employee cease performance of all or any parts of his duties; and/or (iv) require that, during the Notice Period, Employee exhaust or take, or refrain from taking, any vacation or other paid leave or time off entitlement.  Employee acknowledges and agrees that Employee shall not receive or be eligible to receive a bonus, or any compensation other than the Annual Salary (as that term is defined below), either during the Notice Period or with respect to any services rendered therein.  Nothing in this Agreement shall be construed as, or shall interfere with, abridge, limit, modify, or amend the “at will” nature of Employee’s employment with 
[COMPASS Pathways Inc is a Delaware subchapter C corporation (EIN #83-3496958) with its principal office at 180 Varick Street, 6th Floor, New York, NY 10014]

Company as set forth herein.  Except as set forth in Section 3(b) of this Agreement, upon Employee’s separation from employment with the Company (for any reason), all compensation and benefits payable or provided to Employee shall, except as required by applicable law, terminate as of the effective date of Employee’s termination (the “Termination Date”) and Employee shall receive only his/her Annual Salary (as that term is defined below) that has been earned but unpaid as of the Termination Date, and any accrued, but unused vacation pay as required by applicable law.

(d)Duties and Responsibilities.  Employee shall perform all the duties (including but not limited to exercising all the powers) of the position of Chief Financial Officer (or such other position as Employee may hold from time to time).  Employee shall also perform all additional and/or alternative duties (whether temporary or permanent) commensurate with Employee’s status as the Company may reasonably assign to or vest in Employee from time to time.  Employee must: (i) devote Employee’s whole time and attention during working hours to the business and affairs of the Company; (ii) faithfully and diligently serve the Company to the best of Employee’s power, skill and ability; (iii) perform Employee’s duties in accordance with the highest standards; (iv) comply with all Company policies, practices, and procedures (as may be amended or otherwise modified from time to time by the Company); (v) comply with all laws, rules, regulations, and licensing requirements of, or that may be applicable to, Employee’s employment with the Company; and, (vi) comply with all lawful directions given to Employee (although Employee recognizes that the Company expects to be able to rely upon Employee to discharge all the duties of your position properly, without significant instruction); and give to the Company all such information as it may reasonably require in connection with the business of the Company.  Employee must keep informed of all Company rules, policies, and procedures, and any such changes thereto.  Breach of any Company rules, policies or procedures may result in disciplinary action, up to and including termination.

In the event that any term(s) of this Agreement conflicts with a term(s) of any employee handbook, policy, practice, or procedure adopted or maintained, at any time, by the Company, the term(s) of this Agreement shall control and supersede such conflicting term(s).

(e)No Conflicts.  Employee represents and warrants that Employee is not bound by or subject to any written or oral agreement, pact, covenant, or understanding with any previous or concurrent employer, or any other party, that would limit, abridge, restrict, or interfere with, in any way, Employee’s ability to perform the duties and obligations hereunder.  Employee further represents and warrants that the performance of Employee’s duties and obligations hereunder shall not violate any written or oral agreement, pact, covenant, or understanding by and between Employee and any previous or concurrent employer, or any other party.  Employee further represents and warrants that Employee will not use any trade secret, or confidential or proprietary information, of any of Employee’s previous or concurrent employers, or that was obtained, learned, or procured during any period of employment prior to or concurrent with Employee’s employment with the Company, in connection with Employee’s employment with the Company or in the performance of Employee’s duties and obligations hereunder.

2.    COMPENSATION AND BENEFITS.  Subject to the terms and conditions of Section 1(c) of this Agreement and Employee’s continued employment with the Company, and in consideration for the services to be provided hereunder by Employee, the Company hereby agrees to pay or otherwise provide Employee with the following compensation and benefits during Employee’s employment with the Company:

(a)Annual Salary.  The Company shall pay you a base salary equal to $430,000.00 per year (as it may be adjusted from time to time, the “Annual Salary”), less applicable taxes, withholdings, and deductions, and any other deductions that may be authorized by you, from time to time, in accordance with applicable federal, state, and/or local law.  The Annual Salary shall be payable in bi-weekly installments in one week arrears or otherwise in accordance with the Company’s standard payroll practices and procedures, as in effect from time to time.  You acknowledge and understand that your position of employment with the Company is considered “exempt,” as that term is 
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defined under the Fair Labor Standards Act and applicable state or local law.  As an exempt employee, you are not eligible to receive overtime pay.

(b)Discretionary Bonus.  Following the end of each fiscal year of the Company (which, unless otherwise stated by the Company in writing, is the calendar year), Employee may be eligible to receive a discretionary bonus payment, with a target bonus in a gross amount equal to 45% of Employee’s then-current Annual Salary.  Notwithstanding such target, the timing and amount, if any, of any such bonus shall be determined in the sole discretion of the Company. Such bonus, if any, will be paid in the calendar year following the year in which the applicable services were performed, in accordance with the Company’s bonus payment practices in effect from time to time for similarly-situated employees of the Company, including tax withholdings.  In order to earn, accrue, and receive any such bonus, Employee must be actively employed by the Company in good standing, without having received from or tendered to the Company notice of an anticipated termination (for any reason), at the time that such bonus is to be paid to Employee.  Payment of a bonus for any year will not give rise to an entitlement or expectation of a bonus for any other year.

Notwithstanding anything to the contrary in this Agreement, in the event that, prior to the end of a given fiscal year, Employee’s employment with the Company is terminated by the Company without Cause or by Employee with Good Reason, Employee shall be eligible to receive a pro rata portion of the Annual Bonus, if any, for the partial period of the applicable fiscal year in which the Termination Date occurs (any such bonus awarded hereunder shall hereinafter be referred to as a “Pro Rata Bonus”).  Employee acknowledges and agrees that:  (i) the Company shall, in good faith and using its reasonable discretion, determine whether to award a Pro Rata Bonus and, if so, the precise amount of such bonus; (ii) payment of any awarded Pro Rata Bonus is subject to Employee meeting the terms and conditions of Section 3(d) of this Agreement; and (iii) a Pro Rata Bonus shall not be awarded in the event that Employee’s employment with the Company is terminated for any reason other than by the Company without Cause or by Employee with Good Reason.  Any Pro Rata Bonus awarded hereunder shall be paid in a single lump sum in the calendar year following the year in which the applicable services were performed.

(c)Benefit Plans.  Employee shall be entitled to participate in any and all medical insurance, group health, disability insurance, life insurance, incentive, savings, retirement, and other benefit plans, if any, which are made generally available to similarly-situated employees of the Company (and subject to eligibility requirements, enrollment criteria, and other terms and conditions of such plans), and which the Company, in its sole discretion, may at any time amend, modify, or terminate, subject to the terms and conditions of such plans and applicable federal, state, or local law.

(d)Vacation and Sick Leave.  Employee shall be entitled to vacation and sick leave in accordance with the Company’s respective vacation and sick leave policies, as in effect from time to time.  In addition, employee shall be entitled to paid time off for other personal use in accordance with the Company’s policies.

(e)Expenses.  All reasonable expenses necessarily and wholly incurred by you in the proper performance of your duties will be repaid to you upon production of an expenses form together with appropriate and sufficient documentation, as determined in the Company’s sole discretion, to substantiate the expenditure.  To be eligible for repayment, expenses must be incurred in line with any applicable Company policy.

(f)Equity.  Subject to both (i) the approval of the Board of Directors of Compass Pathways PLC (the “Issuer”) and (ii) the terms and conditions set forth in the Issuer’s 2020 Share Option and Incentive Plan (the “Plan”) and governing award agreement (the “Award Agreement”), Employee shall be granted 150,000 “Options” (as such term is defined in the Plan), which Options will have an exercise price based on the current “Fair Market Value” of a “Share” (as such terms are defined in the Plan) as of the date of grant.  The Options will be eligible to vest over a four-year period, with twenty-five percent (25%) vesting on the first anniversary of the start date, and the remaining 75% vesting in 36 equal monthly installments thereafter (each, a “Vesting Date”), subject to Employee’s continued employment with the Company through the applicable Vesting Dates.
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(g)Legal Expenses.  The Company agrees to reimburse Employee’s reasonable legal fees in connection with the negotiation of this Agreement, not to exceed $3,500.00, contigent upon Employee and/or his counsel providing any related documentation as may be reasonably requested by the Company (e.g., a tax form completed by Employee and/or his counsel).

3.    EFFECT OF TERMINATION. 

(a)Definitions. For purposes of this Agreement, the following terms shall mean:
i.“Cause” shall mean:  (a) any act or omission of Employee that, in connection with his employment with the Company, amounts to or constitutes a breach of a fiduciary duty, gross negligence, willful misconduct, material misconduct, fraud, embezzlement, or misappropriation; (b) Employee’s breach of any term(s) of this Agreement; (c) Employee’s violation of any policy(ies) established, adopted, or maintained by the Company; (d) any act or omission of Employee that, in the Company’s sole discretion, is demonstrably and materially injurious to the Company; (e) any act or omission of Employee that causes the Company to suffer or endure public disgrace, disrepute, or economic harm; (f) Employee’s misappropriation of corporate assets or corporate opportunities; (g) Employee’s conviction of a felony, a crime involving financial dishonesty towards the Company, or a crime involving moral turpitude; or (h) Employee’s failure to follow the reasonable directives of the Company or to perform the material responsibilities or duties of his position; provided, however, that, with respect to definitions (b), (c), and (h) above and in the event that the applicable act, event, or occurrence constituting “Cause” may be or is capable of being cured by Employee, “Cause” shall not be deemed to exist with respect to such act, event, or occurrence unless (x) the Company has delivered to Employee a written notice (email to suffice) providing Employee with 30 calendar days to cure such act, event, or occurrence and (y) Employee has failed to cure such act, event, or occurrence within the 30-day cure period;
ii.“Good Reason” shall mean the occurrence of either of the following events without the consent of Employee:  (a) a material breach of this Agreement by the Company; (b) a material reduction in the Employee’s Annual Salary (provided, however, that the Parties acknowledge and agree that, if the Employee’s Annual Salary is downwardly adjusted in the event of, and consistent with, a reduction of or downward adjustment to the annual salary(ies) of similarly-situated employees, such reduction shall not constitute Good Reason); or (c) a material reduction in Employee’s responsibility, authority, or duties relative to Employee’s responsibility, authority or duties in effect immediately prior to such reduction, except for any change in title or reporting relationship (such title or reporting change shall not constitute Good Reason); provided, however, that “Good Reason” shall not be deemed to exist for purposes of this Agreement unless Employee has first provided written notice of such reason to the Company no later than ninety (90) days after the event or occurrence constituting Good Reason first arises, with such notice affording the Company thirty (30) days, from the date of the Company’s receipt of such notice, to cure the deficiency, and further provided that the Company has failed to cure such deficiency within the time frame prescribed in such written notice; and
iii.“Disabled” or “Disability” shall mean Employee’s inability to perform the essential functions of his position, with or without a reasonable accommodation, for either 120 consecutive days, or 180 aggregate days in a twelve-month period, by reason of any physical or mental impairment.  For purposes of this Agreement, the Termination Date shall be the date that Employee first became Disabled.
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(b)Termination by the Company Without Cause or Termination by Employee with Good Reason.  If this Agreement is terminated by the Company without Cause (and expressly exluding any termination due to Employee’s death or Disability) or terminated by the Employee with Good Reason at any time (subject to the notice and cure period provided in Section 3(a)(ii) above), Employee shall receive only:
i.any Annual Salary earned but unpaid, plus any accrued but unused vacation time (subject to and in accordance applicable Company policy as in effect from time to time), as of the Termination Date (the “Earned Amounts”); 
ii.subject to Employee meeting the terms and conditions of Section 3(d) below, the Separation Payment (as that term is defined below), which shall be paid in substantially equal monthly installments commencing with the first regular payroll of the Company following the effective date of the Release (as that term is defined below), and if at all, in any event no later than seventy (70) days after the Termination Date (for purposes of this Section 3(b), the term “Separation Payment” shall mean a gross amount equal to 12 months of the Employee’s then-current Annual Salary as of the Termination Date);
iii.any reimbursable business expenses that Employee incurs through the Termination Date, subject to and in accordance with Section 2(e) of this Agreement (the “Final Expenses”).; 
iv.subject to Employee meeting the terms and conditions of Section 3(d) below, a Pro Rata Bonus (only if the Company in its discretion has awarded Employee a Pro Rata Bonus), determined and which shall be paid as set forth in Section 2(b) of this Agreement; and
v.subject to Employee meeting the terms and conditions of Section 3(d) below, any unvested Options that are outstanding as of the Termination Date, which were otherwise scheduled to vest over the twelve month period following the Termination Date had Employee continued to remain employed by the Company through each such Vesting Date, will vest as of the Termination Date (the “Accelerated Options”).  For the avoidance of doubt, any remaining unvested Options as of the Termination Date (other than the Accelerated Options) will automatically be forfeited as of the Termination Date..
(c)Termination with Cause and All Other Terminations. Subject to the terms and conditions set forth in this Section 3, if this Agreement is terminated by the Company with Cause at any time, by Employee without Good Reason at any time, due to Employee’s death or Disability at any time, or for any reason other than as specified in Section 3(b) at any time, Employee shall receive only the Earned Amounts and the Final Expenses.
(d)Release of Claims. Notwithstanding the foregoing, no payment shall be made or benefit provided to Employee or Employee’s estate, as applicable, pursuant to this Section 3 of the Agreement, other than the Earned Amounts, unless Employee or a representative or agent of Employee’s estate, as applicable, signs and, if applicable, does not revoke a general release of all claims against the Company, and any related, affiliated, or associated persons and/or entities as the Company may designate or determine in its sole discretion, in such form as the Company may reasonably require (the “Release”), and such Release shall contain, among other provisions, restrictive covenants similar to those found in Section 4.  The Release must be signed by Employee or Employee’s estate, as applicable, and returned to the Company within the period designated by the Company, which shall not extend less than fifteen (15) days nor later than fifty (50) days after the Termination Date.  Any payment to be made or benefit provided pursuant to this Section 3 of the Agreement shall be tendered in accordance with the schedule to be set forth in the Release.

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4.    RESTRICTIVE COVENANTS.  The Parties agree that the Company is engaged in a highly competitive industry and would suffer irreparable harm and incur substantial damage if Employee were to enter into competition with the Company.  Therefore, in order for the Company to protect its legitimate business interests, Employee covenants and agrees as follows:

(a)Employee shall not, at any time during his/her employment with the Company and for a period of one (1) year thereafter, anywhere in the United States (to that end, the Parties acknowledge and agree that, given Employee’s senior role in the organization, this georgraphic area is necessary, reasonable, and appropriate), either directly or indirectly:  (i) accept employment with or render services to (whether as an agent, servant, owner, partner, consultant, employee, independent contractor, representative, director, officer, or stockholder) any person or entity that is a business competitor of the Company in the area of psychedelics and/or psychedelic-based mental health treatments and digital mental health, or has at any time during Employee’s employment with the Company engaged or attempted to engage in business competition with the Company in those areas, in a position, capacity, or function that is similar, in title or substance, whether in whole or in part, to any position, capacity, or function that Employee held with or in which Employee served the Company during the last two years of his employment with the Company; or (ii) invest in any person or entity that is a business competitor of the Company, or has at any time during the last two years of Employee’s employment with the Company engaged or attempted to engage in business competition with the Company, except that Employee may own up to one percent (1%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended;

(b)Employee shall not, at any time during his/her employment with the Company and for a period of one (1) year thereafter, for any reason, on his/her own behalf or on behalf of any other person or entity, by or through any means including but not limited to social media: (i) solicit, invite, induce, cause, or encourage to alter or terminate his, her, or its business relationship with the Company, any client, customer, strategic partner, patient, physician, physician referral source, supplier, vendor, licensee, licensor, or other person or entity that, at any time during Employee’s employment with the Company, had a business relationship with the Company, or any person or entity whose business the Company was soliciting or attempting to solicit at the time of Employee’s termination, (a) for whom Employee performed services or with whom Employee had contact during his/her employment with the Company, or whose business Employee was soliciting or attempting to solicit at the time of Employee’s termination, and (b) with whom Employee did not have a business relationship prior to his/her employment with the Company; (ii) solicit, entice, attempt to solicit or entice, or accept business from any such client, customer, strategic partner, patient, physician, physician referral source, supplier, vendor, licensee, licensor, person, or entity; or (iii) interfere or attempt to interfere with any aspect of the business relationship between the Company and any such client, customer, strategic partner, patient, physician, physician referral source, supplier, vendor, licensee, licensor, person, or entity; and

(c)Employee shall not, at any time during his/her employment with the Company and for a period of one (1) year thereafter, either directly or indirectly, on his/her own behalf or on behalf of any other person or entity, by or through any means including but not limited to social media:  (i) solicit, invite, induce, cause, or encourage any director, officer, employee, agent, representative, consultant, or contractor of the Company to alter or terminate his, her, or its employment, relationship, or affiliation with the Company; (ii) interfere or attempt to interfere with any aspect of the relationship between the Company and any such director, officer, employee, agent, representative, consultant, or contractor; or (iii) engage, hire, or employ, or cause to be engaged, hired, or employed, in any capacity whatsoever, any such director, officer, employee, agent, representative, consultant, or contractor.

Employee represents, warrants, agrees, and understands that:  (i) the covenants and agreements set forth in this Section 4 of the Agreement are reasonable in their geographic scope, temporal duration, and the type and scope of activities they restrict; (ii) the Company’s agreement to employ Employee, and a portion of the compensation to be paid to Employee by the Company pursuant to this Agreement (specifically identified as the Annual Salary) are mutually agreed upon consideration for such covenants and Employee’s continued compliance therewith, and constitute 
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adequate and sufficient consideration for such covenants; (iii) the the noncompetition covenant in Section 4(a) is necessary because the Company’s legitimate business interests cannot be adequately protected through alternative restrictive covenants, such as the non-solicitation covenant and non-disclosure of confidential information provisions; (iv) the covenants and agreements set forth in this Section 4 of the Agreement are essential for the Company’s reasonable protection, are designed to protect the Company’s legitimate business interests, and are necessary and implemented for legitimate business reasons; (v) in entering into this Agreement, the Company has relied upon Employee’s representation that he/she will comply in full with the covenants and agreements set forth in this Section 4 of the Agreement; and (vi) the post-employment restrictions set forth in this Section 4 are entered into at the commencement of the Parties’ employment relationship

If Employee breaches his fiduciary duty to the Company or Employee has unlawfully taken, physically or electronically, property belonging to the Company, then the period during which Section 4(a) remains in effect shall be extended by the length of time during which such breach continues, not to exceed two years from the date of the cessation of Employee’s employment.  If Employee breaches Section 4(b) or 4(c), then the period during which that section remains in effect shall be extended by the length of time during which such breach continues.

In the event that Employee is terminated without cause or laid off, Employee and the Company agree that the restriction set forth in Section 4(a) shall not apply to Employee and shall not be enforceable.  All remaining terms and conditions of this Agreement shall continue to be in full force and effect.  “Cause” is not defined by the Massachusetts Noncompetition Agreement Act.  Nonetheless, the Company and Employee acknowledge and agree that the definition of the term “Cause” in Section 3(a) above represents their understanding of “cause” for the purposes of the statute and this paragraph.

5.    CONFIDENTIALITY.

(a)Confidential Information.  Employee acknowledges that during his/her employment with the Company, and by the nature of Employee’s duties and obligations hereunder, Employee will come into close contact with confidential information of the Company and its subsidiaries, affiliates, and/or other related entities, as applicable, including but not limited to:  trade secrets, know-how, Intellectual Property (as that term is defined below), business plans, client/customer lists, pricing, sales and marketing information, products, research, algorithms, market intelligence, services, technologies, concepts, methods, sources, methods of doing business, patterns, processes, compounds, formulae, programs, devices, tools, compilations of information, development, manufacturing, purchasing, engineering, computer programs (whether in source code or object code), theories, techniques, procedures, strategies, systems, designs, works of art, the identity of and any information concerning affiliates or customers, or potential customers, information received from others that the Company is obligated to treat as confidential or proprietary, and any other technical, operating, non-public financial, and other business information that has commercial value, whether relating to the Company, its business, potential business, or operations, or the business of any of the Company’s affiliates, subsidiaries, related entities, clients, customers, suppliers, vendors, licensees, or licensors, that Employee may develop or of which Employee may acquire knowledge during his/her employment with the Company, or from his/her colleagues while working for the Company, whether prior to, during, or subsequent to his/her execution of this Agreement, and all other business affairs, methods, and information not readily available to the public (collectively, “Confidential Information”). Confidential Information does not include:  (i) information that was lawfully in Employee’s possession prior to his/her employment with the Company (other than through breach by a third party of any confidentiality obligation to the Company); (ii) information that is or becomes publicly available without any direct or indirect act or omission on Employee’s part; or (iii) information that is required to be disclosed pursuant to any applicable law, regulation, judicial or administrative order or decree, or request by other regulatory organization having authority pursuant to the law; provided, however, that, except as set forth in and subject to Section 5(b) of this Agreement, Employee shall first have given reasonable notice to the Company prior to making such disclosure.

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Employee acknowledges and agrees that each and every part of the Company’s Confidential Information:  (a) has been developed by the Company at significant effort and expense; (b) is sufficiently secret to derive economic value from not being generally known to other parties; (c) is proprietary to and a trade secret of the Company and, as such, is a valuable, special, and unique asset of the Company; and (d) constitutes a protectable business interest of the Company.  Employee further acknowledges and agrees that any unauthorized use or disclosure of any Confidential Information by Employee will cause irreparable harm and loss to the Company.  Employee acknowledges and agrees that the Company owns the Confidential Information.  Employee agrees not to dispute, contest, or deny any such ownership rights either during or after Employee’s employment with the Company.

In recognition of the foregoing, and except as set forth in and subject to Section 5(b) of this Agreement, Employee covenants and agrees as follows:

i.Employee will use Confidential Information only in the performance of his/her duties and obligations hereunder for the Company.  Employee will not use Confidential Information, directly or indirectly, at any time during or after his/her employment with the Company, for his/her personal benefit, for the benefit of any other person or entity, or in any manner adverse to the interests of the Company.  Further, Employee will keep secret all Confidential Information and will not make use of, divulge, or otherwise disclose Confidential Information, directly or indirectly, to anyone outside of the Company, except with the Company’s prior written consent;

ii.Employee will take all necessary and reasonable steps to protect Confidential Information from being disclosed to anyone within the Company who does not have a need to know the information and to anyone outside of the Company, except with the Company’s prior written consent; and

iii.Employee shall not at any time remove, copy, download, or transmit any information from the Company during the term of this Agreement, except for the benefit of the Company and in accordance with this Agreement and the Company’s policies.

(b)Duration of Covenant.  Employee acknowledges and agrees that his/her obligations under this Section 5 of the Agreement shall remain in effect forever.

Notwithstanding the foregoing, nothing in this Agreement shall be construed as, or shall interfere with, abridge, limit, restrain, or restrict Employee’s (or his/her attorney’s) right (to the extent applicable), without prior authorization from or notification to the Company:  (i) to communicate with any federal, state, or local government agency charged with the enforcement and/or investigation of claims of discrimination, harassment, retaliation, improper wage payments, or any other unlawful employment practices under federal, state, or local law, or to file a charge, claim, or complaint with, or participate in or cooperate with any investigation or proceeding conducted by, any such agency; (ii) to report possible violations of federal, state, or local law or regulation to any government agency or entity, including but not limited, to the extent applicable, to the U.S. Department of Labor, the Department of Justice, the Securities and Exchange Commission (the “SEC”), the Congress, and/or any agency Inspector General, or make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation; or (iii) to communicate directly with, respond to any inquiry from, or provide testimony before, to the extent applicable, the SEC, the Financial Industry Regulatory Authority, any other self-regulatory organization, or any other federal, state, or local regulatory authority, regarding this Agreement or its underlying facts or circumstances.

In addition, Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that:  (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Further, in the event that 
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Employee files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Employee may disclose the trade secret to his/her attorney and use the trade secret information in the court proceeding, if Employee:  (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

6.    INJUNCTIVE RELIEF.  Employee agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by Employee of the covenants and agreements set forth in Sections 4 and 5 of this Agreement, and that in any event money damages would be an inadequate remedy for any such breach.  Accordingly, and notwithstanding any other provision of this Agreement, Employee agrees that if Employee breaches, or the Company reasonably believes that Employee is likely to breach, Sections 4 or 5 of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to seek an injunction or other appropriate equitable relief to restrain any such breach, without showing or proving any actual damage to the Company.  Any award or relief to the Company may, in the discretion of the court, include the Company’s costs and expenses of enforcement (including reasonable attorneys’ fees, court costs, and expenses).  Nothing contained in this Section 6 of the Agreement or in any other provision of the Agreement shall restrict or limit in any manner the Company’s right to seek and obtain any form of relief, legal or equitable, and shall not waive the Company’s right to any other relief related to any dispute arising out of this Agreement or related to Employee’s employment with the Company.
7.    WORKS FOR HIRE.  As it is used in this Section 7 of the Agreement, the term “Intellectual Property” means all discoveries, procedures, designs, creations, developments, improvements, methods, techniques, practices, methodologies, data models, databases, scripts, know-how, processes, algorithms, application program interfaces, software programs, software source documents and training manuals, codes, formulae, works of authorship, mask-works, reports, memoranda, ideas, inventions, customer lists, business and/or financial information, and contributions of any kind, whether or not they are patentable, registrable, or protectable under federal or state patent, copyright, or trade secret laws, or similar statutes, or protectable under common-law principles, and regardless of their form or state of development, that are made, conceived, generated, or reduced to practice by Employee, in whole or in part, either alone or jointly with others, or while Employee was serving as an officer, director, employee, or consultant of, or in any other capacity with, the Company.  Notwithstanding anything else in this Agreement, and as it used in this Section 7, the term “Intellectual Property” excludes any software program, application program interface, equipment, supplies, resources, facilities, data, products, information, materials, or trade secrets used by the Company, and which was developed entirely on Employee’s own time, unless said Intellectual Property: (i) relates to the Company’s business or potential business; or (ii) results from tasks assigned to Employee by the Company or from work performed by Employee for the Company.
All Intellectual Property is exclusively the property of the Company.  Employee will promptly disclose in writing, in full detail to persons authorized by the Company, all Intellectual Property which Employee conceives, creates, makes, or develops during his/her employment with the Company, which relate either to Employee’s work assignment with the Company, or the trade secrets, confidential or proprietary information, business, or potential business of the Company, for the purpose of determining the Company’s rights in such Intellectual Property.  Employee agrees he/she will not file any patent application, or other application seeking intellectual property rights relating to any such Intellectual Property without the prior written consent of the Company’s General Counsel or his/her designee.  If Employee does not prove that Employee conceived or made the Intellectual Property entirely after leaving the Company’s employment, the Intellectual Property is presumed to have been conceived or made during the period of time Employee was employed by the Company, and Employee agrees to assign said Intellectual Property to the Company.
All Intellectual Property will belong solely to the Company from conception.  The Company shall be the sole owner of all issued patents, pending patent applications, before any relevant authority worldwide (including any additions, continuations, continuation-in-part, divisional, reissue, reexaminations, renewals or extensions based thereon), copyrights and other works of authorship, domain names, trade secrets, trademarks, service marks, and all other intellectual property or other rights (collectively, the “Proprietary Rights”) in connection with all Intellectual Property in the United States and/or in any other country.  Employee further acknowledges and agrees that such Intellectual Property and other works of authorship shall be deemed “works made 
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for hire” as defined in the U.S. Copyright Law, 17 U.S.C. § 101 et seq. (as amended), and were prepared by Employee within the scope of his/her employment with the Company, for purposes of the Company’s rights under copyright laws, and are owned by the Company.  To the extent that title to any Intellectual Property or any materials comprising or including any Intellectual Property, e.g., derivative work, including all Proprietary Rights embodied therein, does not, by operation of law, vest in the Company, or is not considered “works made for hire,” Employee hereby irrevocably assigns to the Company all of his/her rights, title and interest to that Intellectual Property, including all Proprietary Rights embodied therein, free of all encumbrances and restrictions.  At any time during or after Employee’s employment with the Company that the Company requests, Employee will cooperate, and take any action, including signing whatever written documents of assignment the Company deems reasonably necessary, to formally evidence Employee’s irrevocable assignment to the Company of any Intellectual Property and all related Proprietary Rights, and, upon the Company’s request, he/she shall deliver to the Company any documents which the Company deems necessary to effect the transfer or prosecution of rights for all Intellectual Property and Proprietary Rights in the United States and/or in any other country.  At all times during and after Employee’s employment with the Company, Employee will cooperate and assist the Company in obtaining, maintaining and renewing patent, copyright, trademark and other appropriate protection for any Intellectual Property, in the United States and in any other country, at the Company’s expense.  In the event that the Company is unable, after reasonable effort, to secure Employee’s signature on any document or documents needed to apply for or prosecute any patent, copyright, domain name, trademark, or other right or protection relating to Intellectual Property, for any other reason whatsoever, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his/her agent and attorney-in-fact, to act for and on Employee’s behalf to execute and file any such application or applications, and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, domain names, trademarks, or similar protections thereon with the same legal force and effect as if executed by Employee.  With respect to Intellectual Property owned by the Company, Employee hereby waives all rights of publicity, moral rights or droit morale, and agrees not to enforce or permit others to enforce such rights against the Company or its successors in interest.
On Schedule A, which is an integral part of this Agreement, Employee has completely identified (without disclosing any trade secret, proprietary or other confidential information) Intellectual Property he/she conceived or made before his/her employment with the Company in which Employee has an ownership interest and which is not the subject matter of an issued patent or a printed publication at the time Employee signs this Agreement.  If Employee becomes aware of any projected or actual use of any such Intellectual Property by the Company, Employee will promptly notify the Company in writing of said use.  Except as to the Intellectual Property listed on Schedule A or those which are the subject matter of an issued patent or a printed publication at the time Employee signs this Agreement, Employee will not assert any rights against the Company with respect to any Intellectual Property made before his/her employment with the Company.

In addition, Employee hereby grants to the Company a license to use, without further compensation or approval from Employee, Employee’s name, image, portrait, voice, likeness, and all other rights of publicity, or any derivative or modification thereto that the Company may create, in any and all mediums, now known or hereafter developed, provided that such use is in relation to the Company’s business and consistent with professional business standards, and does not disparage Employee; provided, however, that if written notice is provided to the Company by Employee following termination of Employee’s employment (for any reason) requesting that the Company cease using Employee’s likeness, the Company shall have 30 calendar days to cease using Employee’s likeness in the manner set forth in the notice.

8.    DATA PROTECTION AND PRIVACY.  Employee acknowledges and agrees as follows:

(a)You consent to the Company processing your personal data, both electronically and manually, and including disclosing such data to third parties, for the purposes of: (i)    the Company's and any of its parent companies, subsidiaries, affiliates, and/or related entities’ (collectively, the “Group Company”) administration and management of its or their employees and business; and (ii) compliance with any applicable procedures, laws and regulations.

(b)You acknowledge that where the Company operates in an overseas territory, such third parties may include any regulators relevant to the Company's business in such territories.

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(c)You also consent to the transfer and processing (both electronically and manually) by the Company and any Group Company of any such data outside the European Economic Area (and in particular, but without limitation, to and in the United States and any other country in which the Company and any Group Company operates).

(d)You will comply with the Company's policies relating to the use of information technology equipment provided to you, including computers and mobile devices.

9.    RETURN OF COMPANY PROPERTY.  Upon separation from employment with the Company, on Company’s earlier request during Employee’s employment, or at any time subsequent to Employee’s employment upon demand from the Company, Employee will immediately deliver to the Company, and will not keep in Employee’s possession, recreate, or deliver to anyone else, any and all Company property, including, but not limited to, Confidential Information (as defined herein), all devices and equipment belonging to the Company (including computers, handheld electronic devices, telephone equipment, and other electronic devices), all electronically stored information and passwords to access such property, Company credit cards, records, data, notes, notebooks, reports, files, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, photographs, charts, any other documents and property, and reproductions of any of the foregoing items.  Upon request of the Company, Employee will provide written certification of Employee’s compliance with the obligations under this Section 9.

10.    NOTICES.  Any notice to be given under this Agreement shall be in writing.  Notice to you shall be sufficiently served by being delivered personally to you, or by being sent by first class post, by facsimile, or by e-mail addressed to you at your usual or last known place of residence, fax number or e-mail address.  Notice to the Company shall be sufficiently served by being delivered to the Company Secretary, or by being sent by first class post, or by facsimile, to the registered office of the Company.  Any notice which is sent by post is deemed to be served on the third day following that on which it was posted and if sent by facsimile or by e-mail when a complete and legible copy of the notice has been received.

11.    LEGAL REPRESENTATION.  Employee acknowledges that he/she was advised to consult with, and has had ample opportunity to receive the advice of, independent legal counsel before executing this Agreement – and the Company hereby advises Employee to do so – and that Employee has fully exercised that opportunity to the extent he/she desired.  Employee acknowledges that he/she had ample opportunity to consider this Agreement and to receive an explanation from such legal counsel of the legal nature, effect, ramifications, and consequences of this Agreement.  Employee warrants that he/she has carefully read this Agreement, that he/she understands completely its contents, that he/she understands the significance, nature, effect, and consequences of signing it, and that he/she has agreed to and signed this Agreement knowingly and voluntarily of his/her own free will, act, and deed, and for full and sufficient consideration.

12.    ENTIRE AGREEMENT; AMENDMENT.  This Agreement, together with all exhibits and schedules annexed hereto, constitutes the entire agreement between the Parties relating to the subject matter hereof, and supersedes all prior agreements and understandings, whether oral or written, with respect to the same.  In entering into and performing under this Agreement, neither the Company nor Employee has relied upon any promises, representations, or statements except as expressly set forth herein.  The Parties acknowledge and agree that this Agreement supersedes and replaces any prior offer letters, employment agreements or contracts.  No modification, alteration, amendment, revision of, or supplement to this Agreement shall be valid or effective unless the same is memorialized in a writing signed by both by Employee and a duly-authorized representative or agent of the Company.  Neither e-mail correspondence, text messages, nor any other electronic communications constitutes a writing for purposes of this Section 12 of the Agreement.

13.    GOVERNING LAW.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts (without reference to the conflict of laws provisions thereof).  Each party to this Agreement irrevocably agrees that any and all suits, actions or proceedings relating to this Agreement (collectively, “Actions” and, individually, an “Action”) may be maintained exclusively in any federal or state court located in Boston, Massachusetts, and the Parties specifically consent to the jurisdiction of the Massachusetts state court in Suffolk County  (collectively, the “Chosen Courts”) and that the Chosen Courts shall have jurisdiction to hear and determine or settle any such Action and that any such Actions may be brought in the Chosen Courts.  Each party irrevocably waives any objection that it may have now or hereafter to the laying 
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of the venue of any Actions in the Chosen Courts and any claim that any Actions have been brought in an inconvenient forum and further irrevocably agrees that a judgment in any Action brought in the Chosen Courts shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction. THE PARTIES FURTHER AGREE, TO THE FULLEST EXTENT PERMITTED BY LAW, TO WAIVE ANY AND ALL RIGHTS IN ANY ACTION TO A TRIAL BY JURY.

14.    ASSIGNMENT.  This Agreement shall not be assignable by Employee, but shall be binding upon Employee and upon his/her heirs, administrators, representatives, executors, and successors.  This Agreement shall be freely assignable by the Company without restriction and, without limitation of the foregoing, shall be deemed automatically assigned by the Company with Employee’s consent in the event of any sale, merger, share exchange, consolidation, or other business reorganization (so long as the assignor agrees to assume the Company’s obligations hereunder).  This Agreement shall inure to the benefit of the Company and its successors and assigns.

15.    SEVERABILITY.  If one or more of the provisions of this Agreement is deemed void by law, then the remaining provisions shall continue with full force and effect and, if legally permitted, such offending provision or provisions shall be replaced with an enforceable provision or enforceable provisions that as nearly as possible effects the Parties’ intent.  Without limiting the generality of the foregoing, the Parties hereby expressly state their intent that, to the extent any provision of this Agreement is deemed unenforceable due to the scope, whether geographic, temporal, or otherwise, being deemed excessive, unreasonable, and/or overbroad, the court, person, or entity rendering such opinion regarding the scope shall modify such provision(s), or shall direct or permit the Parties to modify such provision(s), to the minimum extent necessary to cause such provision(s) to be enforceable.

16.    SURVIVAL.  Upon the termination or expiration of this Agreement, Sections 3(d) and 4-20 shall survive such termination or expiration, and shall continue, with full force and effect, in accordance with their respective terms and conditions.
 
17.    COMPLIANCE WITH SECTION 409A OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“SECTION 409A”).  Notwithstanding anything in this Agreement to the contrary, the Company intends that income paid to Employee pursuant to this Agreement will be exempt from or comply with the requirements of Section 409A, such that the amounts will not be subject to taxation under Section 409A, and the provisions of this Agreement shall be interpreted and construed accordingly.  However, the Company does not guarantee, and Employee hereby acknowledges and agrees, that the Company does not guarantee any particular tax effect for income provided to Employee pursuant to this Agreement.  No amount payable to Employee pursuant to this Agreement on account of Employee’s termination of employment with the Company which constitutes a “deferral of compensation” within the meaning of Section 409A and the regulations promulgated thereunder shall be paid unless and until Employee has incurred a “separation from service” as defined in Section 409A.  In the event that Employee is a “specified employee” as defined in Section 409A as of his/her termination, any payment due to Employee that is payable upon termination will be delayed for a period of six (6) months to the extent required to avoid the imposition of income taxes on Employee under Section 409A, and any delayed payments instead will be paid in a lump sum on the date that is seven (7) months following termination.

18.    WAIVER.  No delay or omission by the Company or the Employee in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent given by the Company or Employee on any one occasion shall be effective only in that instance and shall not be construed as a bar to or waiver of any right on any other occasion.

19.    TAXES.  The Parties acknowledge and agree that the Company may withhold from any amounts payable under this Agreement such federal, state, local, and foreign taxes and withholdings as may be required to be withheld pursuant to any applicable law, rule, or regulation.

20.    SECTION HEADINGS.  The headings or captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

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21.    COUNTERPARTS.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

22.    NOTICE OF AGREEMENT AND RIGHT TO COUNSEL.  Employee has the right to consult with counsel before signing this Agreement.  This Agreement is entered into in connection with the commencement of employment.  By signing below, Employee confirms that the Agreement was provided to him by the earlier of a formal offer of employment or 10 business days before the commencement of Employee’s employment.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.

						
	EMPLOYEE:
	COMPASS PATHWAYS, INC.:

	/s/ Michael Falvey	 By: /s/ Anne Benedict

	Michael Falvey
	Anne Benedict
Chief People Officer

		

 

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SCHEDULE A

INTELLECTUAL PROPERTY EMPLOYEE MADE PRIOR TO THE COMMENCEMENT OF HIS EMPLOYMENT WITH THE COMPANY, IN WHICH HE HAS AN OWNERSHIP INTEREST, WHICH ARE NOT THE SUBJECT MATTER OF ISSUED PATENTS OR PRINTED PUBLICATIONS:
    (If there are none, please enter the word “NONE”)

NOTE:  Please describe each such Intellectual Property without disclosing trade secrets, proprietary or confidential information.
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
[Attach additional sheets if more space is needed.]

 Page 14lmfa-ex101_49.htm

 

Exhibit 10.1

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, OR ASSIGNED: (1) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS OR (2) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.

 

SECURED PROMISSORY NOTE AND LOAN AGREEMENT

	
$3,000,000.00
	
             December 1, 2021

FOR VALUE RECEIVED, SYMBIONT.IO, INC., a Delaware corporation with an address at 632 Broadway, 5th Floor, New York, New York 10012 (the “Borrower”), promises to pay to the order of LM FUNDING AMERICA, INC., a Delaware corporation, or its successors, transferees or assignees (“Lender”), in lawful money of the United States of America the principal sum of Three Million and No/Dollars ($3,000,000.00), or such lesser principal amount as may be outstanding hereunder in accordance with the terms hereof on the earlier of (i) the Maturity Date (as hereinafter defined), or (ii) upon the occurrence and during the continuance of an Event of Default, together with all accrued and unpaid amounts due and payable to Lender pursuant to the provisions of this Secured Promissory Note and Loan Agreement (this “Note”).  This Note amends and restates that certain Secured Promissory Note and Loan Agreement of even date herewith in the aggregate principal amount of $3,000,000 issued by Borrower to Lender, $2,000,000 of which amount is the principal outstanding as of the date hereof.  

All payments under this Note shall be made in lawful money of the United States, in immediately available funds and without set-off, deduction or counterclaim.  

The Borrower hereby waives presentment, notice of dishonor, protest and any other notice or formality with respect to this Note except for such notice as provided herein.

The following is a statement of the rights of Lender and the conditions to which this Note is subject, and to which Lender, by the acceptance of this Note, agrees:

1.Advances; Commitment; Interest

(a)Advances and Commitment.  Subject to the terms and conditions set forth herein, Lender agrees to make loans (“Loans”) in dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount up to $3,000,000.00 in the following manner: (i) on the date of this Note, Lender shall fund a loan to Borrower in the amount of Two Million and No/Dollars ($2,000,000.00); and 

4883-9350-4517.4

(ii) upon the occurrence of a Triggering Event (as hereinafter defined) and upon the written request of Borrower in the manner set forth in Section 1(b) below (and so long as no Event of Default then exists), Lender will loan an additional One Million and No/Dollars ($1,000,000.00).  For purposes of this Note, the “Availability Period” means the period commencing on the date of this Note and ending on the earlier of (i) the Maturity Date and (ii) the date when, upon the occurrence and during the continuance of an Event of Default, all Obligations are declared due and payable by Lender or made automatically due and payable, in each case, in accordance with the terms hereof. For purposes hereof, a “Triggering Event” means Borrower becoming obligated to fund the payment described in Section 4.4 of the First Refusal and Purchase Option Agreement of even date herewith between Borrower and Lender (the “First Refusal Agreement”).   

(b)Borrowing Procedures; Requests for Loans.  Upon the occurrence of a Triggering Event, Borrower may request an additional Loan (the “Additional Loan”) by notifying Lender of such request in writing (delivered by hand, overnight mail, or email) in a form approved by Lender and signed by the Borrower not later than 12:00 p.m., Eastern time, not less than three (3) business days before the date of the proposed Loan (each, a “Loan Request”).  The proceeds from the Additional Loan will be used solely to fund the payment specified in Section 4.4 of the First Refusal Agreement. 

(c)   Repayment Terms.  

(i)Borrower and Lender each acknowledge that the purpose of this lending relationship is to enable Borrower to provide working capital to be used in the ordinary course of Borrower’s business, and, with respect to the Additional Loan, to fund the Borrower’s obligations under Section 4.4 of the First Refusal Agreement (the “Purpose”).  

(ii)The aggregate unpaid principal amount of the Loans, all accrued and unpaid interest and all other amounts payable under this Note shall be due and payable on December 1, 2022 (the “Maturity Date”).

(d)Prepayment.  The Borrower may prepay this Note in whole or in part without penalty at any time.

(e)Interest Rate. Except as otherwise provided herein, the outstanding principal amount of the Loans made hereunder shall bear interest at the Applicable Rate from the date the Loans were made until the Loans are paid in full, whether at maturity, upon acceleration, by prepayment, or otherwise.

(f)Interest Payment Dates. Interest shall be payable in arrears to Lender on the Maturity Date.

(g)Computation of Interest. All computations of interest shall be made on the basis of a year of 365 days and the actual number of days elapsed. Interest shall accrue on each Loan on the day on which such Loan is made, and shall not accrue on the Loans for the day on which they are paid. Interest shall be calculated on a simple-interest basis.

2.Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

(a)Failure to Pay. The Borrower shall fail (i) to pay when due any payment on the due date hereunder to the extent such payment is due before the Maturity Date, or (ii) to pay on the Maturity Date the entire remaining unpaid amounts due hereunder; or

	

	
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4883-9350-4517.4

(b)Breaches of Certain Covenants. The Borrower shall fail to observe or perform any obligation under Sections 5(a) or (b) or Section 6 or Borrower materially breaches the First Refusal Agreement; or

(c)Breaches of Other Covenants. The Borrower shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note (other than those specified in Section 2(b)) and such failure shall continue for thirty (30) days after the earlier to occur of (i) Borrower’s receipt of written notice of such failure and (ii) the date on which the Borrower has knowledge of such failure; or

(d)Representations and Warranties. Any representation, warranty, certificate, or other statement (financial or otherwise) made or furnished by or on behalf of the Borrower to Lender in writing in connection with this Note, or as an inducement to Lender to enter into this Note, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or

(e)Default on Other Indebtedness. Defaults shall exist under any other agreements of the Borrower with Lender or under any other agreement with any third party or parties which consists of the failure to pay any Indebtedness when due or which results in a right by Lender or any such third party or parties, whether or not exercised, to accelerate the maturity of such Indebtedness of the Borrower, in each case, in an aggregate amount in excess of One Hundred Thousand Dollars ($100,000); or

(f)Voluntary Bankruptcy or Insolvency Proceedings. The Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) admit in writing its inability to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of effecting any of the foregoing; or

(g)Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Borrower, or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Borrower, if any, or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) days of commencement; or

(h)Judgments. A final judgment or order for the payment of money in excess of One Hundred Thousand Dollars ($100,000), exclusive of any amounts fully covered by insurance (less any applicable deductible) and as to which the insurer has acknowledged its responsibility to cover such judgment or order, shall be rendered against the Borrower and the same shall remain undischarged for a period of forty-five (45) days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against a substantial part of the property of the Borrower, if any and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within forty-five (45) days after issue or levy; or

(i)Material Adverse Effect.  Any circumstance occurs that would reasonably be expected to have a Material Adverse Effect.

3.Rights of Lender upon Default. 

	

	
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4883-9350-4517.4

(a) Notice of Default. Upon the occurrence of any Event of Default and at any time thereafter during the continuance of such Event of Default, Lender may, by written notice to the Borrower, declare all outstanding Obligations payable by the Borrower hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. 

(b)Conversion. Upon the occurrence of any Event of Default, Lender may, under its sole and absolute discretion, elect to convert the total outstanding principal and accrued but unpaid interest into shares of common stock of Borrower at a conversion price per share (the “Conversion Price”) equal to three and 642/10,000 dollars ($3.0642) (subject to adjustment for any stock splits, reverse stock splits and similar changes in the capital stock of Borrower after the date hereof) by delivery of written notice to Borrower within thirty (30) calendar days of the delivery of the notice of the Event of Default by Lender to Borrower. In the event the Borrower issues additional shares of its common stock, or shares of another class of equity securities which are convertible into its shares of common stock, in exchange for consideration per share in an amount less than the Conversion Price (as adjusted for stock splits, reverse stock splits and similar changes in the capital stock of Borrower after the date hereof), then Borrower shall either (i) issue Lender, concurrently with such issue, the number of shares of common stock necessary to ensure that Lender has the number of shares of common stock that it would have had if it purchased the common stock in such subsequent offering at such lower purchase price, or (ii) adjust the conversion price per share as it relates to Lender to the lowest price at which additional common stock of Borrower is purchased or is convertible.

(c)Effect of Bankruptcy. Upon the occurrence of any Event of Default described in Sections 2(f) and 2(g), immediately and without notice, all outstanding Obligations payable by the Borrower hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.  

(d) No Further Obligations. In addition to the foregoing remedies, upon the occurrence and during the continuance of any Event of Default, (i) Lender shall have no obligation to fund any further Loans under this Note and (ii) Lender may exercise any other right, power or remedy granted to it by this Note or otherwise permitted to it by law, either by suit in equity or by action at law, or both. 

4.The Borrower’s Representations and Warranties.  The Borrower represents and warrants to Lender that:

(a)Due Incorporation, Qualification, etc. The Borrower (i) is a duly organized, validly existing and in good standing under the laws of the State of Delaware; and (ii) has the power and authority to own, lease and operate its properties and carry on its business as now conducted. Borrower further represents and warrants that it has no subsidiaries and does not control, directly or indirectly, or have any direct or indirect equity participation in any corporation, partnership, limited liability company, trust, or other business association.

(b)Authority. The execution, delivery and performance by the Borrower of this Note and the consummation of the transactions contemplated thereby (i) are within the Borrower’s powers and (ii) have been duly authorized by all necessary actions on the part of the Borrower.

(c)Enforceability. This Note constitutes, or will constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as limited by 

	

	
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4883-9350-4517.4

bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.

(d)Non-Contravention. The execution and delivery by the Borrower of this Note and the performance and consummation of the transactions contemplated thereby do not and will not (i) violate the Borrower’s Organic Documents or any judgment, order, writ, decree, statute, rule or regulation applicable to the Borrower; (ii) contravene any applicable laws, (iii) violate any provision of, or result in the breach or the acceleration of, or entitle any other Person to accelerate (whether after the giving of notice or lapse of time or both), any material mortgage, indenture, agreement, instrument or contract to which the Borrower is a party or by which it is bound; or (iv) result in the creation or imposition of any Lien upon any property, asset or revenue of the Borrower or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization or approval applicable to the Borrower, its business or operations, or any of its assets or properties (other than the Lien in favor of Lender pursuant hereto). 

(e)Approvals. No consent, approval, order or authorization of, or registration, declaration or filing with, any governmental authority or other Person (including, without limitation, the shareholders of any Person) is required in connection with (i) the execution and delivery of this Note by the Borrower, or (ii) the performance and consummation of the transactions contemplated thereby.

(f)Litigation. No actions (including, without limitation, derivative actions), suits, proceedings or investigations are pending or threatened in writing against the Borrower at law or in equity in any court or before any other governmental authority that seeks to enjoin, either directly or indirectly, the execution, delivery or performance by the Borrower of this Note or the transactions contemplated thereby.

(g)Solvency.  The Borrower is Solvent, both before and after giving effect to this Note.

(h)Financial Statements. Complete copies of Borrower’s unaudited interim financial statements consisting of the balance sheet of Borrower at October 31, 2021 (the “Balance Sheet Date”) and the related statements of income and retained earnings, stockholders’ equity and cash flow for the period then ended (the “Financial Statements”) have been delivered to Lender. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved, subject to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes. The Financial Statements are based on the books and records of Borrower, and fairly present in all material respects the financial condition of Borrower as of the respective dates they were prepared and the results of the operations of Borrower for the periods indicated.

(i)Undisclosed Liabilities. Borrower has no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise, except (a) those which are adequately reflected or reserved against in the Financial Statements as of the Balance Sheet Date, and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount.

(j)Capitalization. As of the date hereof, Borrower’s authorized capital stock consists 55,000,000 shares of common stock, of which 54,020,952 shares are designated as “Voting Common Stock” and 979,048 shares are designated as “Nonvoting Common Stock, and 25,940,066 shares of preferred stock, of which 937,500 shares are designated as “Series Seed Preferred Stock”, 4,673,884 shares are designated as “Series A Preferred Stock,” 3,723,372 shares are designated as “Series A1 Preferred Stock”, 15,626,262 shares are designated as “Voting Series B Preferred Stock”, and 979,048 shares are designated as “Nonvoting Series B Preferred Stock.”  Of the Voting Common Stock, (i) 15,413,456 shares are issued and outstanding, (ii) 

	

	
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9,827,584 shares are reserved for the future issuance of awards under the Company’s 2014 Equity Incentive Plan (the “Plan”) or are subject to outstanding stock options under the Plan, and (iv) 195,810 shares are issuable upon the exercise of outstanding warrants.  None of the authorized shares of Nonvoting Common Stock are issued and outstanding.  All of the authorized shares of the Series Seed Preferred Stock are issued and outstanding.  All of the authorized shares of the Series A Preferred Stock are issued and outstanding. All of the authorized shares of the Series A1 Preferred Stock are issued and outstanding. 14,226,907 of the authorized shares of the Voting Series B Preferred Stock are issued and outstanding.  636,246 of the authorized shares of the Non-Voting Series B Preferred Stock are issued and outstanding. All of the outstanding shares of capital stock of Borrower have been duly authorized, are validly issued, fully paid and non-assessable. Other than the foregoing, there are no outstanding or authorized shares, options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of Borrower or obligating Borrower to issue or sell any shares of capital stock of, or any other interest in, Borrower.

(k)Conversion of Note and Issuance of Securities. The issuance of shares of common stock of Borrower pursuant to the terms of this Note has been duly authorized and, upon the conversion of this Note and issuance of shares of common stock hereunder, the shares of common stock will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, Liens, charges and other encumbrances with respect to the issue thereof. Subject to the accuracy of the representations and warranties of Lender, the offer and issuance by Borrower of the shares of common stock is exempt from registration under the Securities Act. Upon receipt of the shares of common stock of Borrower, Lender shall have good and marketable title to such shares.

(l)No Material Adverse Effect. As of the date hereof, there have been no events, occurrences, or developments that have had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(m)Intellectual Property Rights. Borrower owns or possesses adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations therefor (the “Intellectual Property Rights”) necessary to conduct its business as now conducted and as presently proposed to be conducted, and Borrower is not in violation of the Intellectual Property Rights of any third party. None of Borrower’s Intellectual Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within two (2) years from the date hereof, except where such expiration, termination or abandonment would not have a Material Adverse Effect. Borrower has no knowledge of any infringement by Borrower of Intellectual Property Rights of others. Borrower has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its Intellectual Property Rights, except where failure to take such measures would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(n)Conduct of Business. Borrower is not in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to Borrower, and Borrower will not conduct its business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Borrower possesses all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct its business, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and Borrower has not received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.

	

	
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(o)Title. Borrower has title to all real property, and has good and marketable title to all personal property, owned by it which is material to the business of Borrower, in each case, free and clear of all Liens, encumbrances and defects except those that do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by Borrower. Any real property and facilities held under lease by Borrower are in full force and effect, with such exceptions as would not reasonably be expected to have a Material Adverse Effect.

(p)Sufficiency of Assets. The buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property of Borrower are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles, intellectual property rights, software and other items of tangible and intangible personal property currently owned or leased by Borrower, together with all other properties and assets of Borrower, are sufficient for the continued conduct of the Borrower's business after the date hereof in substantially the same manner as conducted prior to the date hereof and constitute all of the rights, property and assets necessary to conduct the business of Borrower as currently conducted.

(q)Tax Status. Except for occurrences that would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, Borrower (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of Borrower know of no basis for any such claim.

(r)Illegal or Unauthorized Payments; Political Contributions. Neither Borrower nor, to Borrower’s knowledge (after reasonable inquiry of its executive officers and directors), any of the officers, directors, employees, agents or other representatives of Borrower or any other business entity or enterprise with which Borrower is or has been affiliated or associated has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of Borrower.

(s)Money Laundering. Borrower is in compliance with, and has not previously violated, the USA Patriot Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations.

(t)Accuracy of Information Furnished. This Note and none of the other certificates, statements or information furnished to Lender by or on behalf of the Borrower in connection with this Note or the transactions contemplated thereby contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

	

	
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5.Affirmative Covenants.  The Borrower covenants and agrees with Lender that until the Obligations (other than inchoate indemnity obligations) are paid in full, the Borrower will perform or cause to be performed the covenants set forth below.

(a)Notice Requirements.  The Borrower shall deliver to Lender, (i) prompt written notice of the occurrence of any Event of Default, including a statement of a Responsible Officer setting forth details of such Event of Default and the action which the Borrower has taken or proposes to take with respect thereto; and (ii) prompt written notice of any litigation or governmental proceedings pending or threatened in writing against the Borrower that if adversely determined (A) would (alone or in the aggregate) reasonably be expected to result in liabilities in excess of $100,000 or (B) seeks to enjoin, either directly or indirectly, the execution, delivery or performance by the Borrower of this Note or the transactions contemplated thereby.

(b)Maintenance of Properties.  The Borrower will maintain, preserve, protect and keep its properties in good repair, working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements so that the business carried on by the Borrower may be properly conducted at all times, unless the Borrower determines in good faith that the continued maintenance of such property is no longer economically desirable, necessary or useful to the business of the Borrower.

(c)Insurance.  The Borrower shall (i) carry and maintain insurance at its expense of the types and in the amounts customarily carried by others engaged in substantially the same business as the Borrower and operating in the same geographic area as the Borrower, including, but not limited to, fire, public liability, property damage and worker’s compensation, such insurance to be in such form as is carried with companies reasonably satisfactory to Lender, and (ii) deliver to Lender from time to time, as Lender may request, schedules or insurance certificates setting forth all insurance then in effect. 

(d)Governmental Charges.  The Borrower shall promptly pay and discharge when due all Taxes, levies, assessments, fees, claims or other charges imposed by any governmental authority upon or relating to (i) the Borrower, (ii) this Note, (iii) employees, payroll, income or gross receipts of the Borrower, (iv) the ownership or use of any assets by the Borrower or (v) any other aspect of the business of the Borrower to the date upon which penalties accrue thereon, except as may be contested in good faith by the appropriate procedures and for which adequate reserves in accordance with GAAP have been set aside.

(e)Use of Proceeds.  The Borrower shall use the proceeds of this Note solely in connection with the Purpose.  

(f)General Business Operations.  The Borrower shall (i) preserve and maintain its corporate existence and all of its rights, privileges and franchises reasonably necessary to the conduct of its business, (ii) conduct its business activities in compliance with all applicable laws, (iii) perform in all material respects its obligations under Material Agreements to which the Borrower is a party, (iv) take all actions to ensure that all Material Agreements remain in full force and effect unless the Borrower determines in good faith that the continuance of such Material Agreement is no longer economically desirable, necessary or useful to the business of the Borrower.

(g)Books and Records.  The Borrower will keep books and records in accordance with GAAP which accurately reflect in all material respects all of its business affairs and transactions and permit Lender or any of its representatives, at reasonable times and intervals upon reasonable notice to the Borrower, to visit the Borrower’s offices, to discuss the Borrower’s financial or other matters. In addition, Borrower shall on a monthly basis make available to Lender a report of (i) all cash in-flows and cash out-flows from Borrower’s deposit accounts, (2) a reconciliation of all expenses incurred to the operating budget of Borrower, (3) an accounts payable ageing, (4) a list of the outstanding principal of all debts and other liabilities, and (5) such 

	

	
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other information regarding Borrower’s financial condition as Lender may reasonably request.  Borrower shall make its chief financial officer (or equivalent officer) available to Lender by telephone or videoconference during normal business hours on reasonable advance notice.

6.Negative Covenants.  The Borrower covenants and agrees with Lender that until the Obligations (other than inchoate indemnity obligations) are paid in full, the Borrower will perform or cause to be performed the covenants set forth below.

(a)Mergers, Acquisitions, Etc.  Except in the event of the contemplated internal corporate reorganization of Borrower to create a holding company (the “Corporate Reorg”), Borrower shall not consolidate with or merge into any other Person or permit any other Person to merge into it, or acquire all or substantially all of the assets or capital stock of any other Person without the consent of Lender, which consent shall not be unreasonably withheld, conditioned, or delayed.

(b)Affiliate Transactions. Except in the event of the Corporate Reorg, the Borrower shall not enter into or consummate any transaction of any kind with any of its Affiliates other than transactions on overall terms, whether consummated as one transaction or a series of related transactions, at least as favorable to the Borrower as an arms-length transaction with Persons that are not Affiliates.

(c)Change in Business.  The Borrower will not without the consent of Lender engage in any business other than its present business or a business reasonably related or incidental thereto, or a business that is in support of the present business or a business reasonably related or incidental thereto, which consent shall not be unreasonably withheld, conditioned, or delayed.

(d)Modification of Charter Documents.  Except in the event of the Corporate Reorg, the Borrower will not consent to any amendment, supplement, waiver or other modification of, or enter into any forbearance from exercising any rights with respect to, the terms or provisions contained in any Organic Documents of the Borrower, if the result would have an adverse effect on the rights or remedies of Lender.

7.Granting of Security Interest. Borrower hereby pledges, assigns and grants to Lender, to secure the payment and the performance of this Note, the Loans, and the Obligations, a first priority security interest in and Lien on, and a right of set-off against, the following property and assets (collectively, the “Collateral”), but not including the Excluded Collateral (as hereinafter defined), wherever located, whether now or hereafter existing, owned or acquired by Borrower, and all proceeds and products thereof:

All goods, accounts, equipment, inventory, contract rights or rights to payment of money, leases, intellectual property, license agreements, franchise agreements, general intangibles, commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and all books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

Borrower hereby represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a valid, first priority perfected security interest in the Collateral.  Lender’s security interest in the Collateral shall continue until the Obligations (other than contingent obligations of Borrower hereunder that will survive payment in full of the Obligations and termination of this Note by express terms) are repaid in full. Upon payment in full of all amounts due under this Note or upon conversion of this Note, this Note and all obligations of Borrower hereunder (other than contingent obligations of Borrower hereunder that will survive payment in full of the Obligations and termination of this Note by express 

	

	
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terms) shall automatically terminate, and all rights to the Collateral shall revert to the granting party and Lender shall, at Borrower’s sole cost and expense, release its security interest in the Collateral.

8.Authorization to File Financing Statements. Borrower hereby authorizes Lender to file financing statements or take any other action required to memorialize or perfect Lender’s security interest in the Collateral at Borrower’s expense, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Lender’s interest or rights under this Note, including a notice that any disposition of the Collateral, except to the extent permitted by the terms of this Note, by Borrower, or any other Person, shall be deemed to violate the rights of Lender under the UCC, and including entering into one or more deposit account control agreements in customary form.

9.Definitions. As used in this Note, the following capitalized terms have the following meanings:

“Affiliate” of any Person shall mean any other Person which, directly or indirectly, Controls, is Controlled by or is under common Control with such Person. “Control” (and its correlatives) by any Person means the power of such Person, directly or indirectly, (i) to vote 10% or more of the Voting Securities (determined on a fully diluted basis) of another Person, or (ii) to direct or cause the direction of the management and policies of such other Person (whether by contract or otherwise).

“Applicable Rate” shall mean the rate equal to sixteen percent (16%) per annum.

“Availability Period” shall have the meaning given in Section 1(a) hereof.

“Balance Sheet Date” shall have the meaning given in Section 4(h) hereof.

“Borrower” shall have the meaning given in the introductory paragraph of this Note.

“Conversion Price” has the meaning given in Section 3 hereof.

“Event of Default” has the meaning given in Section 2 hereof.

“Excluded Collateral” shall mean proceeds of the Lawsuit.

“Financial Statements” shall have the meaning given in Section 4(h) hereof. 

“GAAP” shall mean generally accepted accounting principles in the United States.

“Governmental Authority” shall mean any national, supranational, federal, state, county, provincial, local, municipal or other government or political subdivision thereof (including any regulatory agency), whether domestic or foreign, and any agency, authority, commission, ministry, instrumentality, regulatory body, court, tribunal, arbitrator, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to any such government.

 “Indebtedness” shall mean (i) all obligations of such Person for borrowed money or advances and all obligations of such Person evidenced by bonds, debentures, notes or similar instruments; (ii) all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, 

	

	
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and banker’s acceptances issued for the account of such Person; (iii) capital lease and purchase money obligations; and (iv) contingent Obligations.

“Intellectual Property Rights” shall have the meaning given in Section 4(m) hereof.

“Lawsuit” means the action captioned Symbiont.io, Inc. v. Ipreo Holdings LLC, et al., Del. Ch., C.A. No. 2019-0407-JTL and all related appeals.

“Lender” shall mean the Person specified in the introductory paragraph of this Note or any Person who shall at the time be the holder of this Note. 

 “Lien” shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or other encumbrance.

“Loans” shall have the meaning given in Section 1(a) hereof.

.

“Material Adverse Effect” shall mean a material adverse effect on (i) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower, (ii) the rights and remedies of Lender under the Note or (iii) the ability of the Borrower to perform its Obligations under the Note.

“Material Agreements” shall mean (i) each contract or agreement to which the Borrower is a party involving aggregate payments of more than $50,000, whether such payments are being made by the Borrower to a non-Affiliated Person, or by a non-Affiliated Person to the Borrower; and (ii) any other contract or agreement material to the business, operations, assets, prospects, conditions (financial or otherwise), performance or liabilities of the Borrower.

 “Maturity Date” shall have the meaning set forth in Section 1(c).

“Note” shall have the meaning set forth in the introductory paragraph.

“Obligations” shall mean and include all loans, advances, debts, liabilities and obligations, howsoever arising, owed by the Borrower to Lender of every kind and description, now existing or hereafter arising under or pursuant to the terms of this Note, including, all interest, fees, charges, expenses, reasonable attorneys’ fees and costs and reasonable accountants’ fees and costs chargeable to and payable by the Borrower hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U. S. C. Section 101 et seq.), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding.

“Organic Documents” shall mean, relative to the Borrower, its certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation, limited liability agreement, operating agreement and all shareholder agreements, voting trusts and similar arrangements applicable to the Borrower’s equity interests.

“Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental authority.

	

	
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“Purpose” shall have the meaning set forth in Section 1(c).

 “Responsible Officer” means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president, vice president (or the equivalent thereof), chief financial officer or treasurer.

“Solvent” shall mean, with respect to any Person on a particular date, that on such date (i) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (ii) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature, (iv) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which the property of such Person would constitute an unreasonably small capital and (v) such Person has not executed this Note, or made any transfer or incurred any obligations hereunder or thereunder, with actual intent to hinder, delay or defraud either present or future creditors.

“Taxes” shall mean all income, documentary, stamp or other taxes, duties, levies, imposts, charges, assessments, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all interest, penalties or similar liabilities with respect thereto.

“Triggering Event” shall have the meaning set forth in Section 1(a).

10.Miscellaneous. 

(a)Successors and Assigns; Transfer of this Note.

(i)Subject to the restrictions on transfer described in this Section 10(a), the rights and obligations of the Borrower and Lender shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

(ii)Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Borrower without the prior written consent of Lender.  Lender may assign this Note upon written notice to Borrower.

(b)Waiver and Amendment. This Note may not be modified except by written instrument signed by the Borrower and Lender.

(c)Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and emailed, mailed or delivered to each party at the respective addresses of the parties as set forth on the signature page hereto, or at such other address or email address as the Borrower shall have furnished to Lender in writing.  All such notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being deposited with an overnight courier service of recognized standing or (iv) four days after being deposited in the U.S. mail, first class with postage prepaid.

(d)Payment. Payments shall be made in lawful tender of the United States.

(e)Tax Withholding.  Any and all payments by or on account of any obligation of the Borrower under this Note shall be made without deduction or withholding for any taxes, except as required by 

	

	
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applicable law.  If any applicable law requires the deduction or withholding of any tax from any such payment, then the Borrower shall be entitled to deduct and withhold such tax from any amounts payable or otherwise deliverable pursuant to this Note and shall timely pay the full amount deducted or withheld to the applicable Governmental Authority.  The amount payable by the Borrower to Lender shall be increased as necessary so that after such deduction or withholding has been made (including such deduction and withholding applicable to additional sums payable under this Section 10(e), Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made. Borrower shall be responsible for and shall satisfy all Florida documentary stamp taxes that may be due with respect to this Note.

(f)Usury.  In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

(g)Expenses; Waivers.  If action is instituted to collect this Note, the Borrower promises to pay all costs and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred in connection with such action.  The Borrower hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument.

(h)Governing Law; Entire Agreement. THIS NOTE, AND ALL ACTIONS ARISING OUT OF OR IN CONNECTION WITH THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.  This Note constitutes the entire understanding among the parties hereto with respect to the subject matter thereof and supersedes any prior agreements, written or oral, with respect thereto.

(i)Jurisdiction and Venue. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS NOTE SHALL BE TRIED AND LITIGATED ONLY IN THE STATE OF FLORIDA AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE STATE OF FLORIDA; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH OF LENDER AND THE BORROWER WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 10(I).

(j)Waiver of Jury Trial; Judicial Reference. BY ACCEPTANCE OF THIS NOTE, LENDER HEREBY AGREES AND THE BORROWER HEREBY AGREES TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE.

(k)Severability.  Any provision of this Note which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Note or affecting the validity or enforceability of such provision in any other jurisdiction.

(l)Counterparts. This Note may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Note.

	

	
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11.Lender’s Investment Representations.

(a)Experience.  Lender is experienced in investing in securities of development stage companies and acknowledges that the investment represented by this Note involves significant risks. Lender is able to bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of this lending relationship.

(b)Purchase Entirely for Its Own Account. Lender is acquiring this debt security for investment for its own account and not with the view to, or for resale in connection with, any distribution thereof. Lender understands that the debt securities represented by this Note have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Act that depends upon, among other things, Lender’s bona fide nature of the investment intent as expressed herein.

(c)Rule 144. Lender acknowledges that the Borrower’s debt securities are “restricted securities” under Rule 144 promulgated under the Securities Act inasmuch as they are being acquired from Borrower in a transaction not involving a public offering and that under such laws and applicable regulations such securities may not be transferred or resold except as permitted under the Securities Act and the applicable state securities laws, pursuant to registration or an exemption therefrom.  Lender represents that it is aware of the provisions of Rule 144 promulgated under the Securities Act and understands the resale limitations imposed thereby and by the Securities Act. Lender also understands that Borrower is issuing this Note in reliance upon Lender’s representations and warranties contained herein and that any federal or state exemption is contingent upon the accuracy of Lender’s representations and warranties in this Note.

(d)No Public Market. Lender understands that no public market now exists for any of the debt securities issued by Borrower and that there can be no assurance that a public market will ever exist for the debt securities.

(e)Access to Data. Lender has had an opportunity to discuss Borrower’s business, management, and financial affairs with its management and the opportunity to review Borrower’s business plans. Lender understands that such discussions, as well as any written information issued by Borrower, were intended to describe the aspects of Borrower’s business and prospects which it believes to be material but were not necessarily a thorough or exhaustive description.

(f)Accredited Investor. Unless otherwise disclosed to Borrower in writing by Lender, Lender represents that it is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act.

(g)No “Bad Actor” Disqualification Events.  Lender is not subject to any disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualifying Event”), except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) under the Securities Act, and disclosed in writing in reasonable detail to Borrower.

(Signature Page Follows)

 

	

	
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The Borrower and Lender have caused this Note to be issued as of the date first written above.

BORROWER:

SYMBIONT.IO, INC.
a Delaware corporation

 

 

By: /s/ Mark Smith

Name: Mark Smith

Title: CEO

 

Address:

632 Broadway, 5th Floor 

New York, New York 10004

Email: mark.smith@symbiont.io

 

LENDER:

 

LM FUNDING AMERICA, INC., 
a Delaware corporation

 

 

By: /s/ Bruce Rodgers

Name: Bruce Rodgers

Title: CEO

 

Address:

1200 West Platt Street, Suite 100

Tampa, Florida 33606

Email:  bruce@lmfunding.com

[Signature page to Secured Promissory Note and Loan Agreement]

4883-9350-4517.4

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