Document:

curx_ex41.htm

EXHIBIT 4.1

CURAXIS PHARMACEUTICAL CORPORATION 

2011 INCENTIVE STOCK PLAN

 

This Curaxis Pharmaceutical Corporation 2011 Incentive Stock Plan (the “Plan”) is designed to retain directors, executives and selected employees and consultants and reward them for making major contributions to the success of the Company.  These objectives are accomplished by making long-term incentive awards under the Plan thereby providing Participants with a proprietary interest in the growth and performance of the Company.

	
1.

	
Definitions.

	
  

	
(a)

	
“Board” - The Board of Directors of the Company.

	
  

	
(b)

	
“Code” - The Internal Revenue Code of 1986, as amended from time to time.

	
  

	
(c)

	
“Committee” - The Compensation Committee of the Company's Board, or such other committee of the Board that is designated by the Board to administer the Plan, composed of not less than two members of the Board all of whom are disinterested persons, as contemplated by Rule 16b-3 (“Rule 16b-3”) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

	
  

	
(d)

	
“Company” – Curaxis Pharmaceutical Corporation and its subsidiaries including subsidiaries of subsidiaries.

	
  

	
(e)

	
“Exchange Act” - The Securities Exchange Act of 1934, as amended from time to time.

	
  

	
(f)

	
“Fair Market Value” - The fair market value of the Company's issued and outstanding Stock as determined in good faith by the Board or Committee.

	
  

	
(g)

	
“Grant” - The grant of any form of  stock award, or stock purchase offer, whether granted singly, in combination or in tandem, to a Participant pursuant to such terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of the Plan.

	
  

	
(h)

	
“Grant Agreement” - An agreement between the Company and a Participant that sets forth the terms, conditions and limitations applicable to a Grant.

	
  

	
(i)

	
“Participant” - A director, officer, employee or consultant (including, but not limited to outside legal counsel) of the Company to whom an Award has been made under the Plan.

 

  

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(j)

	
“Restricted Stock Purchase Offer” - A Grant of the right to purchase a specified number of shares of Stock pursuant to a written agreement issued under the Plan.

	
  

	
(k)

	
“Securities Act” - The Securities Act of 1933, as amended from time to time.

	
  

	
(l)

	
“Stock” - Authorized and issued or unissued shares of common stock of the Company.

 

	
  

	
(m)

	
“Stock Award” - A Grant made under the Plan in stock or denominated in units of stock for which the Participant is not obligated to pay additional consideration.

 

	
2.

	
Administration. The Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the Committee. Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a) grant, in its discretion, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the Stock covered by any Grant; (c) determine which eligible persons shall receive Grants and the number of shares, restrictions, terms and conditions to be included in such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and rescind rules and regulations relating to its administration, and correct defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan and with the consent of the Participant, as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g) determine the duration and purpose of leaves of absence which may be granted to Participants without constituting termination of their employment for the purpose of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan's administration. The interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and final. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant made thereunder.

	
3.

	
Eligibility.

	
  

	
(a)

	
General:  The persons who shall be eligible to receive Grants shall be directors, officers, employees or consultants to the Company. The term consultant shall mean any person, other than an employee, who is engaged by the Company to render services and is compensated for such services, including, but not limited to, outside legal counsel. Any issuance of a Grant to an officer or director of the Company subsequent to the first registration of any of the securities of the Company under the Exchange Act shall comply with the requirements of Rule 16b-3.

 

  

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4.

	
Stock.

	
  

	
(a)

	
Authorized Stock: Stock subject to Grants may be either unissued or reacquired Stock.

	
  

	
(b)

	
Number of Shares:  Subject to adjustment as provided in Section 5(i) of the Plan, the total number of shares of Stock which may be granted directly by Stock Awards or Restricted Stock Purchase Offers, shall not exceed 2,500,000 shares.  If any Grant shall for any reason terminate or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be available for Grants with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares. Any shares of Stock issued pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants as though not previously covered by a Grant.

	
  

	
(c)

	
Reservation of Shares:  The Company shall reserve and keep available at all times during the term of the Plan such number of shares as shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which efforts shall not include the registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from any applicable regulatory body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares hereunder, the Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite authority was so deemed necessary unless and until such authority is obtained.

	
  

	
(d)

	
Application of Funds:  The proceeds received by the Company under Stock Purchase Agreements will be used for general corporate purposes.

	
  

	
(e)

	
No Obligation to Exercise:  The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under such Grant.

 

	
5.

	
Stock Awards and Restricted Stock Purchase Offers.

	
  

	
(a)

	
Types of Grants.

	
  

	
(i)

	
Stock Award.  All or part of any Stock Award under the Plan may be subject to conditions established by the Board or the Committee, and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company performance. Such Awards may be based on Fair Market Value or other specified valuation. All Stock Awards will be made pursuant to the execution of a Stock Award Agreement substantially in the form attached hereto as Exhibit A.

	
  

	
(ii)

	
Restricted Stock Purchase Offer.  A Grant of a Restricted Stock Purchase Offer under the Plan shall be subject to such (i) vesting contingencies related to the Participant's continued association with the Company for a specified time and (ii) other specified conditions as the Board or Committee shall determine, in their sole discretion, consistent with the provisions of the Plan. All Restricted Stock Purchase Offers shall be made pursuant to a Restricted Stock Purchase Offer substantially in the form attached hereto as Exhibit B.

 

  

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(b)

	
Conditions and Restrictions.  Shares of Stock which Participants may receive as a Stock Award under a Stock Award Agreement or Restricted Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the Board or Committee, as applicable, shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and forfeiture provisions. When transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as “Restricted Stock”. Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in the form of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer distributions of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee to assure that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability to make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited in accordance with the provisions of Section 6(c). Dividends or dividend equivalent rights may be extended to and made part of any Stock Award or Restricted Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions and restrictions as the Board or Committee may establish.

	
  

	
(c)

	
Cancellation and Rescission of Grants.  Unless the Stock Award Agreement or Restricted Stock Purchase Offer specifies otherwise, the Board or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants at any time if the Participant is not in compliance with all other applicable provisions of the Stock Award Agreement or Restricted Stock Purchase Offer, or the Plan.

 

	
  

	
(d)

	
Nonassignability.

	
  

	
(i)

	
Except pursuant to Section 6(e)(iii) and except as set forth in Section 6(d)(ii), no Grant or any other benefit under the Plan shall be assignable or transferable, or payable to or exercisable by, anyone other than the Participant to whom it was granted.

	
  

	
(ii)

	
Where a Participant terminates employment and retains a Grant pursuant to Section 6(e)(ii) in order to assume a position with a governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent permitted by law, may authorize a third party (including but not limited to the trustee of a “blind” trust), acceptable to the applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant with regard to such Awards.

 

  

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(e)

	
Termination of Employment.  If the employment or service to the Company of a Participant terminates, other than pursuant to any of the following provisions under this Section 5(e), all unexercised, deferred and unpaid Stock Awards or Restricted Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted Stock Purchase Offer provides otherwise:

	
  

	
(i)

	
Retirement Under a Company Retirement Plan.  When a Participant's employment terminates as a result of retirement in accordance with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards or Restricted Stock Purchase Offers to continue in effect beyond the date of retirement in accordance with the applicable Grant Agreement and the exercisability and vesting of any such Grants may be accelerated.

	
  

	
(ii)

	
Rights in the Best Interests of the Company.  When a Participant resigns from the Company and, in the judgment of the Board or Committee, the acceleration and/or continuation of outstanding Stock Awards or Restricted Stock Purchase Offers would be in the best interests of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or continuation of all or any part of Grants issued prior to such termination and (ii) permit the exercise, vesting and payment of such Grants for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 9 or at such time as the Board or Committee shall deem the continuation of all or any part of the Participant's Grants are not in the Company's best interest.

	
  

	
(iii)

	
Death or Disability of a Participant.

	
  

	
(1)

	
In the event of a Participant's death, the Participant's estate or beneficiaries shall have a period up to the expiration date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the Participant under such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall pass by will or the laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant; if none, then (b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of competent jurisdiction. Grants so passing shall be made at such times and in such manner as if the Participant were living.

	
  

	
(2)

	
In the event a Participant is deemed by the Board or Committee to be unable to perform his or her usual duties by reason of mental disorder or medical condition which does not result from facts which would be grounds for termination for cause, Grants and rights to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee or other legally designated guardian or representative if the Participant is legally incompetent by virtue of such disability.

 

  

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(3)

	
After the death or disability of a Participant, the Board or Committee may in its sole discretion at any time (1) terminate restrictions in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct the Company to pay the total of any accelerated payments in a lump sum to the Participant, the Participant's estate, beneficiaries or representative; notwithstanding that, in the absence of such termination of restrictions or acceleration of payments, any or all of the payments due under the Grant might ultimately have become payable to other beneficiaries.

	
  

	
(4)

	
In the event of uncertainty as to interpretation of or controversies concerning this Section 6, the determinations of the Board or Committee, as applicable, shall be binding and conclusive.

	
6.

	
Investment Intent.  All Grants under the Plan are intended to be exempt from registration under the Securities Act provided by Rule 701 thereunder. Unless and until sale and issuance of Stock subject to the Plan are registered under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder, each Grant under the Plan shall provide that the purchases or other acquisitions of Stock thereunder shall be for investment purposes and not with a view to, or for resale in connection with, any distribution thereof. Further, unless the issuance and sale of the Stock have been registered under the Securities Act, each Grant shall provide that no shares shall be purchased upon the exercise of the rights under such Grant unless and until (i) all then applicable requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company and its counsel, and (ii) if requested to do so by the Company, the person exercising the rights under the Grant shall (i) give written assurances as to knowledge and experience of such person (or a representative employed by such person) in financial and business matters, and (ii) execute and deliver to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the Securities Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations made upon the exercise of such rights.

	
7.

	
Amendment, Modification, Suspension or Discontinuance of the Plan.  The Board may, insofar as permitted by law, from time to time, with respect to any shares at the time not subject to outstanding Grants, suspend or terminate the Plan or revise or amend it in any respect whatsoever, except that without the approval of the shareholders of the Company, no such revision or amendment shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted, (iii) materially increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan; provided, however, no such action shall alter or impair the rights and obligations under any Stock Award, or Restricted Stock Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued while the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is in effect shall not be impaired by suspension or termination of the Plan.

 

  

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In the event of any change in the outstanding Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Board or the Committee may adjust proportionally (a) the number of shares of Stock (i) reserved under the Plan, and (ii) covered by outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding Grants; and (c) the appropriate Fair Market Value and other price determinations for such Grants. In the event of any other change affecting the Stock or any distribution (other than normal cash dividends) to holders of Stock, such adjustments as may be deemed equitable by the Board or the Committee, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board or the Committee shall be authorized to issue or assume stock options, whether or not in a transaction to which Section 424(a) of the Code applies, and other Grants by means of substitution of new Grant Agreements for previously issued Grants or an assumption of previously issued Grants.

	
8.

	
Tax Withholding. The Company shall have the right to deduct applicable taxes from any Grant payment and withhold, at the time of delivery or exercise of Stock Awards or Restricted Stock Purchase Offers or vesting of shares under such Grants, an appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.

	
9.

	
Availability of Information. During the term of the Plan and any additional period during which a Grant granted pursuant to the Plan shall be exercisable, the Company shall make available, not later than one hundred and twenty (120) days following the close of each of its fiscal years, such financial and other information regarding the Company as is required by the bylaws of the Company and applicable law to be furnished in an annual report to the shareholders of the Company.

	
10.

	
Notice. Any written notice to the Company required by any of the provisions of the Plan shall be addressed to  the chief executive officer of the Company, and shall become effective when it is received by the chief executive officer.

	
11.

	
Indemnification of Board. In addition to such other rights or indemnifications as they may have as directors or otherwise, and to the extent allowed by applicable law, the members of the Board and the Committee may be indemnified by the Company against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any claim, action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action taken, or failure to act, under or in connection with the Plan or any Grant granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such claim, action, suit or proceeding, except in any case in relation to matters as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for negligence or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action, suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle and defend the same.

 

	
12.

	
Governing Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the Code or the securities laws of the United States, shall be governed by the law of the State of Nevada and construed accordingly.

	
13.

	
Effective and Termination Dates. The Plan shall become effective on the date it is approved by the Board. The Plan shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 8.

The foregoing Curaxis PharmaCeutical Corporation  2011 Incentive Stock Plan  was duly adopted and approved by the Board of Directors on December 1, 2011.

  

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EXHIBIT A

CURAXIS PHARMACEUTICAL COPORATION

STOCK AWARD AGREEMENT

 

This Stock Award Agreement (“Agreement”) is made and entered into as of the date set forth below, by and between Curaxis Pharmaceutical Corporation, a Nevada corporation (the “Company”), and the employee, director or consultant of the Company named in Section 1(b). (“Grantee”):

In consideration of the covenants herein set forth, the parties hereto agree as follows:

1.  Stock Award Information.

	
  

	
(a)

	
Date of Award:

	 ____________________	 

	
  

	
(b)

	
Grantee:

	 ____________________	 

	
  

	
(c)

	
Number of Shares:

	 ____________________	 

	
  

	
(d)

	
Original Value:

	 ____________________	 

2.  Acknowledgements.

 

	
  

	
(a) Grantee is a [employee/director/consultant] of the Company.

 

	
  

	
(b)  The Company has adopted the Curaxis Pharmaceutical Corporation 2011 Incentive Stock Plan (the “Plan”) under which the Company's common stock (“Stock”) may be offered to directors, officers, employees and consultants pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) provided by Rule 701 thereunder.

3.  Shares; Value.  The Company hereby grants to Grantee, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) (the “Shares”), which Shares have a fair value per share (“Original Value”) equal to the amount set forth in Section 1(d). For the purpose of this Agreement, the terms “Share” or “Shares” shall include the original Shares plus any shares derived therefrom, regardless of the fact that the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation, stock dividend or amendment of the corporate charter of the Company. The number of Shares covered by this Agreement and the Original Value thereof shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.

4.  Investment Intent.  Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities Act, Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.

 

  

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5.  Restriction Upon Transfer.  The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Grantee except as hereinafter provided.

 

	
  

	
(a)  Repurchase Right on Termination Other Than for Cause.  For the purposes of this Section, a “Repurchase Event” shall mean an occurrence of one of (i) termination of Grantee's employment [or service as a director/consultant] by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the sole and separate property of Grantee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to purchase all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of the Repurchase Event.

 

	
  

	
(b)  Repurchase Right on Termination for Cause. In the event Grantee's employment [or service as a director/consultant] is terminated by the Company “for cause” (as defined below), then the Company shall have the right (but not an obligation) to purchase Shares of Grantee at a price equal to the Original Value. Such right of the Company to purchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. Termination of employment [or service as a director/consultant] “for cause” means (i) as to employees or consultants, termination for cause, or as defined in the Plan, this Agreement or in any employment [or consulting] agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to the Nevada Revised Statutes. In the event the Company elects to purchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.

	
  

	
(c)  Exercise of Repurchase Right.  Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination or cessation of services as director, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada Revised Statutes, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.

	
  

	
(d)  Right of First Refusal.  In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.

 

  

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(e)  Acceptance of Restrictions.  Acceptance of the Shares shall constitute the Grantee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.

	
  

	
(f)  Permitted Transfers.  Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Grantee and the Company.

	
  

	
(g)  Release of Restrictions on Shares.  All rights and restrictions under this Section 5 shall terminate five (5) years following the date of this Agreement, or when the Company's securities are publicly traded, whichever occurs earlier.

6.  Representations and Warranties of the Grantee.  This Agreement and the issuance and grant of the Shares hereunder is made by the Company in reliance upon the express representations and warranties of the Grantee, which by acceptance hereof the Grantee confirms that:

	
  

	
(a)  The Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other things, upon the bona fide nature of his representations as expressed herein;

	
  

	
(b)  The Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption; and

	
  

	
(c)  Grantee further represents that Grantee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information reasonably necessary to verify the accuracy of such information,

	
  

	
(d)  Unless and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:

 

  

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THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.

	
  

	
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN STOCK AWARD AGREEMENT DATED ____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.

	
  

	
and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.

	
  

	
(e)  Grantee understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the date of grant, exceeds the price paid by Grantee, if any. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such liability.

7.  Stand-off Agreement.  Grantee agrees that, in connection with any registration of the Company's securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering. This Section 8 shall survive any termination of this Agreement.

8.  Termination of Agreement.  This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company; (c) the closing of any public offering of common stock of the Company pursuant to an effective registration statement under the Securities Act; or (d) dissolution, bankruptcy, or insolvency of the Company.

9.  Agreement Subject to Plan; Applicable Law.  This Grant is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Grantee, at no charge, at the principal office of the Company. Any provision of this Agreement inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Grant shall be governed by the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in the State of New York.

 

  

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10.  Miscellaneous.

	
  

	
(a)  Notices.  Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company's records.

	
  

	
(b)  Entire Agreement.  This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.

	
  

	
(c)  Enforcement.  This Agreement shall be construed in accordance with, and governed by, the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in the State of New York.  If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.

	
  

	
(d)  Validity of Agreement.  The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be in full force and effect.

 

  

12

  

 

In Witness Whereof, the parties have executed this Agreement as of the date first above written.

 

	COMPANY:	Curaxis Pharmaceutical Corporation 

a Nevada corporation

	 
	 	 	 
	 	By: 	 
	
 

	

Name:  Timothy R. Wright

Title:  Chief Executive Officer

	 
	  	  	 
	 	 	 
	
GRANTEE:

	
By:

	 
	 	(signature)	 
	 	Name: 	 

 

  

13

  

 

EXHIBIT B

CURAXIS PHARMACEUTICAL CORPORATION

RESTRICTED STOCK PURCHASE AGREEMENT

 

 

This Restricted Stock Purchase Agreement (“Agreement”) is made and entered into as of the date set forth below, by and between Curaxis Pharmaceutical Corporation, a Nevada corporation (the “Company”), and the employee, director or consultant of the Company named in Section 1(b). (“Grantee”):

In consideration of the covenants herein set forth, the parties hereto agree as follows:

1.  Stock Purchase Information.

 

	
  

	
(a)

	
Date of Agreement:

	 _____________________________	 

	
  

	
(b)

	
Grantee:

	_____________________________	 

	
  

	
(c)

	
Number of Shares:

	 _____________________________	 

	
  

	
(d)

	
Purchase Price:

	_____________________________	 

2.  Acknowledgements.

 

	
  

	
(a)  Grantee is a [employee/director/consultant] of the Company.

	
  

	
(b)  The Company has adopted the Curaxis Pharmaceutical Corporation 2011 Incentive Stock Plan (the “Plan”) under which the Company's common stock (“Stock”) may be offered to officers, employees, directors and consultants pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) provided by Rule 701 thereunder.

	
  

	
(c)  The Grantee desires to purchase shares of the Company's common stock on the terms and conditions set forth herein.

3.  Purchase of Shares. The Company hereby agrees to sell and Grantee hereby agrees to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) (the “Shares”), at the price per Share set forth in Section 1(d) (the “Price”). For the purpose of this Agreement, the terms “Share” or “Shares” shall include the original Shares plus any shares derived therefrom, regardless of the fact that the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation, stock dividend or amendment of the corporate charter of the Company.  The number of Shares covered by this Agreement shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.  The manner and form of payment of consideration shall be mutually agreed to by the parties at the time of purchase.

 

  

14

  

 

4.  Investment Intent. Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities Act, Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.

5.  Restriction Upon Transfer.  The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Grantee except as hereinafter provided.

 

	
  

	
(a)  Repurchase Right on Termination Other Than for Cause. For the purposes of this Section, a “Repurchase Event” shall mean an occurrence of one of (i) termination of Grantee's employment [or service as a director/consultant] by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the sole and separate property of Grantee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Grantee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.

	
  

	
(b) Repurchase Right on Termination for Cause. In the event Grantee's employment [or service as a director/consultant] is terminated by the Company “for cause” (as defined below), then the Company shall have the right (but not an obligation) to repurchase Shares of Grantee at a price equal to the Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. Termination of employment [or service as a director/consultant] “for cause” means (i) as to employees and consultants, termination for cause, or as defined in the Plan, this Agreement or in any employment [or consulting] agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to the Nevada Revised Statutes.  In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.

 

  

15

  

 

	
  

	
(c) Exercise of Repurchase Right.  Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada Revised Statutes, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.

	
  

	
(d)  Right of First Refusal. In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.

	
  

	
(e)  Acceptance of Restrictions. Acceptance of the Shares shall constitute the Grantee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.

	
  

	
(f)  Permitted Transfers. Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Grantee and the Company.

	
  

	
(g)  Release of Restrictions on Shares. All rights and restrictions under this Section 5 shall terminate five (5) years following the date upon which the Company receives the full Price as set forth in Section 3, or when the Company's securities are publicly traded, whichever occurs earlier.

 

  

16

  

 

5.  Representations and Warranties of the Grantee. This Agreement and the issuance and grant of the Shares hereunder is made by the Company in reliance upon the express representations and warranties of the Grantee, which by acceptance hereof the Grantee confirms that:

	
  

	
(a)  The Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other things, upon the bona fide nature of his representations as expressed herein;

	
  

	
(b)  The Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption; and

	
  

	
(c)  Grantee further represents that Grantee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information reasonably necessary to verify the accuracy of such information;

	
  

	
(d)  Unless and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:

	
  

	
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.

	
  

	
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT DATED ____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.

	
  

	
and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.

	
  

	
(e)  Grantee understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the date of Grant, exceeds the price paid by Grantee. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such liability.

 

  

17

  

 

7.  Stand-off Agreement. Grantee agrees that, in connection with any registration of the Company's securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering. This Section 8 shall survive any termination of this Agreement.

8.  Termination of Agreement. This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company; (c) the closing of any public offering of common stock of the Company pursuant to an effective registration statement under the Act; or (d) dissolution, bankruptcy, or insolvency of the Company.

9.  Agreement Subject to Plan; Applicable Law. This Grant is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Grantee, at no charge, at the principal office of the Company. Any provision of this Agreement inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan.  This Grant shall be governed by the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in the State of New York.

10.  Miscellaneous.

	
  

	
(a)  Notices.  Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company's records.

	
  

	
(b)  Entire Agreement.  This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.

	
  

	
(c)  Enforcement.  This Agreement shall be construed in accordance with, and governed by, the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in the State of New York. If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.

	
  

	
(d)  Validity of Agreement. The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be in full force and effect.

 

  

18

  

 

In Witness Whereof, the parties have executed this Agreement as of the date first above written.

 

	COMPANY:	Curaxis Pharmaceutical Corporation 

a Nevada corporation

	 
	 	 	 
	 	By: 	 
	
  

	

Name: Timothy R. Wright

Title: Chief Executive Officer

	 
	 	 	 
	 	 	 
	
GRANTEE:

	
By:

	 
	 	(signature)	 
	 	Name: 	 

 

 

19ex-10_10.htm

TherapeuticsMD, Inc, 8K/A

Exhibit 10.10

 

Financing Agreement

This Financing Agreement (the “Agreement”) is between (i) Lang Naturals, Inc., a Rhode Island corporation, having its principal place of business at 20 Silva Lane, Middletown, RI  02842-7201 (“Lang”) and (ii) VitaMedMD, LLC, a Delaware limited liability company with offices located at 951 Broken Sound Parkway NW, Suite 320 Boca Raton, FL  33487 (“VitaMedMD”) is made and entered into effective as of September 20, 2011 (the “Effective Date”).

 

WHEREAS, VitaMedMD and Lang have entered into and may in the future enter into various Product Sales Agreements (as heretofore and hereafter entered into or amended, each a “Product Sales Agreement”), including without limitation, (i) that certain Product Sales Agreement for Prenatal Multivitamin and VitaMedMD DHA 300 mg Vegetarian Softgel, dated December 2, 2008, as amended, (ii) that certain Product Sales Agreement for Prenatal 1 Single Softgel Prenatlal Multivitamin with DHA, dated October 20, 2009, as amended, (iii) that certain Product Sales Agreement, dated as of January 14, 2010, relating to purchases and sales of VitaMedMD Perimenopause/Bone Supplement (alternatively referred to as Menopause Relief plus Bone Support), as amended, and (iv) that certain Product Sales Agreement for VitaMedMD Iron 150, dated March 24, 2011, as amended; and

 

WHEREAS, VitaMedMD has requested that Lang commit to a temporary increase in the credit limit available to VitaMedMD for products purchased under the Product Sales Agreements, and Lang is willing to do so provided that VitaMedMD grants Lang a security interest in certain of VitaMedMD’s personal property as contemplated by a Security Agreement between the parties in the form attached hereto as Exhibit A and dated as of even date herewith (the “Security Agreement”),

 

NOW THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 

1.           Definitions.  Certain terms used in this Agreement are defined where first used herein.  As used in this Agreement, the following terms shall have the meanings indicated below:

 

(a)           “Special Products” means each of the following [REDACTED]

 

[REDACTED]:

 

o [REDACTED]

o [REDACTED]

o [REDACTED]

 

  

1

  

 

(b)           “Normal Credit Limit” means (x) at any time during the period commencing on the Effective Date and ending on December 31, 2011, the sum of Two Hundred Fifty Thousand Dollars ($250,000), and (y) at any time after December 31, 2011, the sum of Three Hundred Twenty-Five Thousand Dollars ($325,000); provided, however, that if VitaMedMD shall default in the performance of its obligations under this Agreement or any Product Sales Agreement, Lang may establish the Normal Credit Limit from time to time thereafter at such level as Lang shall determine in its sole discretion.  The Normal Credit Limit applies to purchase orders and accounts receivable attributable to products purchased by VitaMedMD from Lang other than Special Products.

 

(c)           “Normal Products” means any products ordered by VitaMedMD from Lang under any Product Sales Agreement, other than Special Products.

 

(d)           “Special Credit Limit” means the sum of Seven Hundred Thousand Dollars ($700,000); provided, however, that if VitaMedMD shall default in the performance of its obligations under this Agreement or any Product Sales Agreement, Lang may establish the Special Credit Limit from time to time thereafter at such level as Lang shall determine in its sole discretion.  The Special Credit Limit applies only to purchase orders and accounts receivable attributable to Special Products.

 

2.           Payment for Product Purchases.  Notwithstanding the terms and conditions of the Product Sales Agreements, after the Effective Date, payment for all Product ordered by VitaMedMD under any Product Sales Agreement shall be governed by the terms of this Agreement.  VitaMedMD acknowledges that the credit limits established by this Agreement apply not only to accounts receivable but also to purchase orders as all products under the Product Sales Agreements are custom manufactured.  The purchase terms for for all Product ordered by VitaMedMD under any Product Sales Agreement shall be as follows:

 

(a)           Normal Product.  For purchases of Normal Product within the Normal Credit Limit, invoices for such product shall be paid by VitaMedMD within thirty (30) days of the issuance thereof.

 

(b)           Special Product.  For purchases of Special Product within the Special Credit Limit, (a) twenty-five percent (25%) of the total purchase order sales price (excluding shipping) shall be paid by VitaMedMD upon order – no confirmation for any purchase order will be made until receipt of the foregoing payment is acknowledged by Lang’s bank; (b) twenty-five percent (25%) of the total purchase order sales price (excluding shipping) shall be paid by VitaMedMD upon notice from Lang that such product is ready for shipment – no shipment will be released until receipt of the foregoing payment is acknowledged by Lang’s bank; and (c) the balance of the total purchase order sales price (including shipping) shall be paid by VitaMedMD and received by Lang’s bank within forty-five (45) days of the invoice date.

 

  

2

  

 

3.           Normal Credit Limit; Certain Remedies.  Subject to the terms of this Agreement, Lang agrees to make available to VitaMedMD credit for Normal Products in an aggregate amount equal to the Normal Credit Limit in effect under this Agreement from time to time.  If the sum of (a) the aggregate unpaid invoices and purchase orders received from VitaMedMD for Normal Products less (b) any advance payments made by VitaMedMD with respect to such invoices and purchase orders, which advance payments may be applied by Lang to such invoices and purchase orders for Normal Product as Lang determines in its sole discretion (such sum being referred to herein as the “Net Normal Purchase Balance”), exceeds the Normal Credit Limit then in effect, then (i) Lang shall have the right to suspend its performance under the Product Sales Agreements and this Agreement, and (ii) VitaMedMD shall, upon written demand of Lang, (x) for periods from the Effective Date through December 31, 2011, pay Lang such amount as may be required to reduce the Net Normal Purchase Balance to not more than the Normal Credit Limit then in effect, and (y) pay Lang an amount equal to fifty percent (50%) of the amount by which the Net Normal Purchase Balance exceeds the Normal Credit Limit then in effect; provided, however, that Lang shall not be obligated to accept any further purchase orders from VitaMedMD unless the Net Normal Purchase Balance is reduced to or below the Normal Credit Limit then in effect.  If at any time Lang suspends its performance under this Section, VitaMedMD may relieve such suspension as to any proposed purchase order by providing adequate assurances of future performance reasonably acceptable to Lang in the form of payment in advance or a standby letter of credit with terms reasonably acceptable to Lang, in each case in amounts sufficient to meet the foregoing requirements.  In the event of a payment default by VitaMedMD under any invoice for Normal Product, including any default in the schedule for payments for such Product set forth in Section 2 above, or in the event of a default by VitaMedMD under any Product Sales Agreement or the Security Agreement, without limiting any other remedies available to Lang hereunder, Lang may from time to time and without notice to VitaMedMD, suspend performance under the Products Sales Agreements and/or set off all advance payments, deposits or other sums at any time or times credited by or received by Lang for the benefit of VitaMedMD, whether in a special account or other account or represented by a letter of credit or otherwise, which advance payments, deposits and other sums shall at all times constitute additional security for VitaMedMD’s obligations under this Agreement.  Lang shall endeavor to give VitaMedMD notice promptly following any exercise by Lang of its setoff rights hereunder.

 

4.           Special Credit Limit; Certain Remedies.  Subject to the terms of this Agreement, Lang agrees to make available to VitaMedMD credit for Special Products in an aggregate amount equal to the Special Credit Limit in effect under this Agreement from time to time.  If the sum of (a) the aggregate unpaid invoices and purchase orders received from VitaMedMD for Special Products less (b) any advance payments made by VitaMedMD with respect to such invoices and purchase orders, which advance payments may be applied by Lang to such invoices and purchase orders for Special Product as Lang determines in its sole discretion 

 

  

3

  

 

(such sum being referred to herein as the “Net Special Purchase Balance”), exceeds the Special Credit Limit, then (i) Lang shall have the right to suspend its performance under the Product Sales Agreements and this Agreement, and (ii) VitaMedMD shall, upon written demand of Lang, pay Lang such amount as may be required to reduce the Net Special Purchase Balance to not more than the Special Credit Limit then in effect.   If at any time Lang suspends its performance under this Section, VitaMedMD may relieve such suspension as to any proposed purchase order by providing adequate assurances of future performance reasonably acceptable to Lang in the form of payment in advance or a standby letter of credit with terms reasonably acceptable to Lang, in each case in amounts sufficient to reduce the Net Special Purchase Balance following acceptance of such proposed purchase order to not more than the Special Credit Limit then in effect.  In the event of a payment default by VitaMedMD under any invoice for Special Product, including any default in the schedule for payments for such Product set forth in Section 2 above, or in the event of a default by VitaMedMD under any Product Sales Agreement or the Security Agreement, without limiting any other remedies available to Lang hereunder, Lang may from time to time and without notice to VitaMedMD, suspend performance under the Products Sales Agreements and/or set off all advance payments, deposits or other sums at any time or times credited by or received by Lang for the benefit of VitaMedMD, whether in a special account or other account or represented by a letter of credit or otherwise, which advance payments, deposits and other sums shall at all times constitute additional security for VitaMedMD’s obligations under this Agreement.  Lang shall endeavor to give VitaMedMD notice promptly following any exercise by Lang of its setoff rights hereunder.

 

5.           Security Agreement.  To secure the timely payment and performance of VitaMedMD’s obligations under the Product Sales Agreements and this Agreement, VitaMedMD agrees to grant Lang contemporaneously with the execution and delivery hereof a perfected security interest in VitaMedMD’s assets as provided in the Security Agreement.

 

6.           Product Sales Agreements Superseded.  This Agreement supersedes any inconsistent provisions of the Product Sales Agreements, except with respect to any Product Sales Agreement entered into after the Effective Date that specifically mentions this Agreement and provides that a particular provision thereof is intended to amend or superseded a specific provision of this Agreement.  This Agreement may be assigned only in compliance with and subject to the terms and limitations on assignment of the Product Sales Agreements and only to a person or entity that is assigned and assumes the obligations of VitaMedMD under all of the Product Sales Agreements in accordance with their terms.

 

7.           Counterparts; Signatures.  This Agreement may be signed in one or more counterparts, each of which shall be one and the same agreement.  If a counterpart of this Agreement is signed and transmitted via facsimile, or via PDF transmitted by e-mail, such signatures shall bind the signing party to this Agreement in full.  Original documents may also be signed by the parties and will have the same binding power.

 

  

4

  

 

8.           Notices.  All notices required or permitted hereunder shall be given in the manner and to the addressee entitled thereto in accordance with the Product Sales Agreements.  In the event of a conflict in the various notice provisions set forth in the Product Sales Agreements, the Product Sales Agreement with the most recent execution date (or with the amendment having the most recent execution date) shall control.

 

9.           Waiver of Jury Trial.  Each party acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve complicated and difficult issues, and therefore, each party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of or relating to this Agreement or the transactions hereby.  Each party acknowledges and represents that (a) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce such waiver; (b) it understands and has considered the implications of such waiver; (c) it makes such waiver voluntarily; and (d) it has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 9.

 

10.           Consent to Jurisdiction.

 

(a)           Each of the parties consents to the exclusive jurisdiction of all state and federal courts located in Providence, Rhode Island, as well as to the jurisdiction of all courts to which an appeal may be taken from such courts, for the purpose of any suit, action, or other proceeding arising out of, or in connection with, this Agreement or any of the transactions contemplated hereby.  Each party expressly waives any and all rights to bring any suit, action, or other proceeding in or before any court or tribunal other than the courts described above and covenants that it shall not seek in any manner to resolve any dispute other than as set for in this Section 10 or to challenge or set aside any decision, award, or judgment obtained in accordance with the provisions hereof.

 

(b)           Each of the parties expressly waives any and all objections it may have to venue, including, without limitations, the inconvenience of such forum, in any of such courts.  In addition, each of the parties consents to the service of process by personal service or any manner in which notices may be delivered hereunder in accordance with Section 8 above.

 

11.           Attorneys’ Fees.  The prevailing party in any suit, action, or other proceeding arising out of, or in connection with, this Agreement or any of the transactions contemplated hereby shall, as part of any remedy granted in such suit, action, or proceeding, be entitled to recovery of such party’s reasonable attorney’s fees and expenses incurred in connection with such suit, action, or other proceeding.

 

12.           Governing Law.  This Agreement is and shall be deemed to be a contract entered into and made pursuant to the laws of the State of Rhode Island, and shall in all respects be governed, construed, applied, and enforced in accordance with the laws of the State of Rhode Island, without reference to conflict of laws principles.

 

  

5

  

 

13.           Interpretation.  The captions of this Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Agreement nor affect it in any way.  Should any provision of this Agreement require judicial or arbitral interpretation, it is agreed that the court or arbitrator interpreting or construing the same shall not imply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent prepared the same, it being agreed that the agents of all parties have participated in the preparation of this Agreement.  Words of the masculine gender mean and include correlative words of the feminine and neuter genders, and words importing the singular number mean and include the plural number and vice versa.

 

14.           Amendment; Waiver.   Any modifications or amendments to this Agreement must be in writing and signed by both parties.  Any waiver by either party of a breach of any provision of this Agreement will not operate as or be construed to be a waiver of any other breach of that or any other provision of this Agreement.  Any waiver must be in writing.  Failure by either party to insist upon strict adherence to any provision of this Agreement on one or more occasions will not deprive such party of the right to insist upon strict adherence to that or any other provision of this Agreement.

 

15.           Independent Parties.  This Agreement shall not be construed as constituting a joint venture or partnership between Lang and VitaMedMD.  Neither party shall have any right to obligate the other party in any manner whatsoever, and nothing herein is intended to confer any right of any kind to any third person.

 

[Signatures appear on the immediately succeeding page.]

 

  

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IN WITNESS WHEREOF, the parties have each caused this Agreement to be signed and delivered by their duly authorized representatives as of the Effective Date.

 

	  	  	

Lang Naturals, Inc.

	  	  	  
	  	  	
By:

	
/s/ David Lang

	  	  	 	David Lang
	  	  	 	President

 

	  	  	

VitaMedMD, LLC

	  	  	  
	  	  	
By:

	
/s/ Robert Finizio

	  	  	 	
Robert Finizio

	  	  	 	President

  

7

  

EXHIBIT A

 

Form of Security Agreement

 

 

  

8

  

SECURITY AGREEMENT

 

 

This Security Agreement (“Agreement”) between (i) Lang Naturals, Inc., a Rhode Island corporation, having its principal place of business at 20 Silva Lane, Middletown, RI  02842-7201 (“Secured Party”) and (ii) VitaMedMD, LLC, a Delaware limited liability company with offices located at 951 Broken Sound Parkway NW, Suite 320 Boca Raton, FL  33487 (“Debtor”) is made and entered into effective as of September 20, 2011.

 

Section 1: Definitions; Security Interest; Obligations.

 

1.1 Definitions.  Certain terms used in this Agreement are defined where first used.  The following terms as used in this Agreement shall have the meanings indicated respectively below:

 

“Collateral” means all accounts, inventory, equipment, trademarks and trade names, general intangibles, deposit accounts, investment property, instruments, letter-of-credit rights, chattel paper, documents, commercial tort claims, goodwill, supporting obligations, insurance policies, insurance proceeds, insurance claims, and all ledger sheets, files, records, documents and instruments (including, without limitation, computer programs, tapes and related electronic data processing software) evidencing an interest therein or relating thereto, now owned or hereafter acquired by Debtor.  Each of the forgoing terms shall be interpreted in accordance with the meanings given to the same, if any, by the Uniform Commercial Code.

 

 “Uniform Commercial Code” means the Uniform Commercial Code as adopted and in effect from time to time in the State of Rhode Island, currently identified as Title 6A of the Rhode Island General Laws of 1956, as amended.

 

1.2 Security Interest; Obligations.  Debtor hereby grants to Secured Party a security interest in all Collateral.  The security interest herein granted is to secure the payment and performance of (i) the unpaid portion of the purchase price of all goods purchased from time to time by Debtor from Secured Party; (ii) Debtor’s obligations to Secured Party under that certain Financing Agreement between Debtor and Secured Party dated as of even date herewith; (iii)  Debtor’s obligations to Secured Party under each product sales agreement entered into from time to time by Debtor and Secured Party with respect to the purchase by Debtor from Secured Party of nutritional supplements and other products more particularly described therein, including without limitation those certain Product Sales Agreements between Debtor and Secured Party more particularly described on Exhibit A attached hereto and made a part hereof (as the same may be amended from time to time, collectively, the “Product Sales Agreements”); and (iv) any and all obligations and liabilities of Debtor to Secured Party under this Agreement (the obligations designated in clauses (i), (ii), (iii) and (iv) above are herein collectively called the “Obligations”).

 

  

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Section 2:  Representations, Warranties and Covenants.

 

2.1 Debtor represents, warrants and covenants that:

 

2.1.1 Except for the security interest granted hereby, Debtor has good and marketable title to the Collateral, free from any adverse lien, security interest or encumbrance; Debtor will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein; and Debtor intends to use the Collateral for business purposes only.  Notwithstanding the foregoing, Secured Party agrees to subordinate its lien in the Collateral to a lien in favor of the senior lender providing working capital financing to Debtor, such subordination to be with respect to senior working capital indebtedness not exceeding the sum of $350,000 in the aggregate and otherwise on terms and conditions reasonably agreed by such lender and Secured Party.

 

2.1.2 The Collateral is or will be kept and located at 951 Broken Sound Parkway NW, Suite 320 Boca Raton, FL  33487.  Debtor will give Secured Party ten (10) days’ prior notice in writing of any change in, addition to or discontinuance of the location where the Collateral is kept, and Debtor will not remove any Collateral from the above location without the prior written consent of Secured Party.

 

2.1.3 No financing statement covering any Collateral or any proceeds thereof is on file in any public office and, at the request of Secured Party, Debtor authorizes Secured Party to file  one or more financing statements pursuant to the Uniform Commercial Code and applicable law in form satisfactory to Secured Party evidencing Secured party’s lien in the Collateral, and Debtor will pay the cost of filing the same in all public offices wherever filing is deemed by Secured Party to be necessary or desirable.

 

2.1.4 Without the prior written consent of Secured Party, Debtor will not sell or offer to sell or otherwise transfer the Collateral or any interest therein except in the ordinary course of Debtor’s business.

 

2.1.5 Debtor shall have and maintain insurance at all times with respect to all Collateral against risks of fire and such other risks customarily insured against by companies engaged in similar businesses to that of Debtor.  Upon request, Debtor shall furnish to Secured Party certificates or other evidence satisfactory to Secured Party of compliance with these insurance requirements.  All proceeds paid under any such insurance policies with respect to the Collateral shall be applied to reduce the outstanding balance of the Obligations, and any such proceeds paid to Debtor shall be held by Debtor as trustee for Secured Party and paid to Secured Party immediately upon receipt.  Secured Party may act as attorney for Debtor in obtaining, adjusting, collecting and cancelling such insurance, and Debtor hereby appoints Secured Party, irrevocably, as attorney for Debtor for such purposes.

 

2.1.6 Except as permitted hereby, Debtor will keep the Collateral free from any adverse lien, security interest or encumbrance and in good order and repair and will not waste or destroy the Collateral.  Secured Party may examine and inspect the Collateral at any time, wherever located.

 

  

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2.1.7 Debtor will pay promptly when due all taxes and assessments upon the Collateral or for the use or operation of the Collateral.

 

2.1.8 Debtor (a) is a duly formed and validly existing limited liability company organized and in good standing under the laws of the State of Delaware and (b) has all requisite power and authority to own all of its properties and assets and to carry on its business as it is now being conducted and has full power and authority to place mortgages and liens upon its assets and to borrow funds secured thereby.

 

2.1.9 Debtor is duly qualified and/or registered to do business and in good standing in all jurisdictions where such qualification or registration is required.

 

2.1.10 The execution and delivery of this Agreement and the consummation of the transactions contemplated thereby have been duly authorized, do not violate any provisions of any Debtor’s formation or governance documents, or any provision thereof, or result in the acceleration of any obligation of any Debtor under, any deed of trust or mortgage, lien, lease, agreement, instrument, arbitration award, judgment or decree to which such Debtor is a party or by which such Debtor is bound, and with respect to which Debtor has not obtained a written waiver, and do not violate or conflict with any other restriction of any kind or character to which Debtor is subject;

 

2.1.11 After giving effect to this Agreement, the security interest granted to Secured Party in Collateral will continue to be valid and perfected security interest in the Collateral securing the obligations of Debtor to Secured Party.

 

2.1.12 This Agreement constitutes the valid and binding obligation of Debtor, enforceable against Debtor in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

2.1.13 Debtor shall, from and after the execution of this Agreement, execute and deliver to the Secured Party whatever additional documents, instruments, and agreements that the Secured Party may reasonably require in order to vest or perfect the security interest in the Collateral more securely in the Secured Party and to otherwise give effect to the terms and conditions of this Agreement.

 

Section 3:  Taxes, Insurance and Adverse Liens.  At its option, Secured Party may discharge taxes, liens or security interest or other encumbrances at any time levied or placed upon the Collateral, may pay for insurance on the Collateral and may pay for the maintenance and preservation of the Collateral.  Any payment made or expense incurred by Secured Party pursuant to this provision shall be payable on demand, shall be secured by this Agreement and shall bear interest until paid at the rate of interest established by the Note.

 

Section 4:  Events of Default.  Debtor shall be in default under this Agreement upon the happening of any one or more of the following events (each of which shall be an “Event of Default”):

 

  

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4.1 The occurrence of a default by Debtor under any Product Sales Agreement beyond any applicable notice and cure period applicable to such default;

 

4.2 Default shall be made in the payment or performance of any other Obligation or any covenant or agreement contained or referred to herein or in any guaranty of Debtor’s obligations under this Agreement, which default shall have continued for more than ten (10) days (no prior demand therefor being necessary);

 

4.3 Substantial loss, theft, damage, destruction or encumbrance of any of the Collateral shall occur; or

 

4.4 Debtor shall become insolvent, merge or consolidate with any corporation, dissolve, discontinue business operations or terminate Debtor’s existence; or Debtor shall become unable to pay Debtor’s debts as they mature or shall make an assignment for the benefit of creditors; or any Debtor shall file a petition for relief under any bankruptcy, receivership, insolvency or debtor relief law (or an order for relief shall be entered against Debtor under any such law).

 

Section 5:  Remedies.  If any Event of Default shall occur, then in such event and at any time thereafter, Secured Party may declare all Obligations secured hereby to be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived.  Secured Party, in addition to such other rights and remedies as are or may be set forth in this Agreement, may exercise and shall have the rights and remedies of a secured party under the Uniform Commercial Code.  Secured Party may exercise its rights hereunder without giving Debtor any opportunity for hearing to be held before the Secured Party, through judicial process or otherwise, takes possession of the Collateral upon the occurrence of any Event of Default, and Debtor expressly waives the right, if any, to such prior hearing.  Secured Party may require Debtor to assemble the collateral and make it available to Secured Party at a place to be designated by Secured Party which is reasonably convenient to both parties.  Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of time and place of any public sale thereof or the time after which any private sale or any other intended disposition thereof is to be made.  The requirement of reasonable notice shall be met if notice is mailed, postage prepaid to Debtor at Debtor’s Mailing Address noted above, at least ten (10) days before the time of sale or disposition of the Collateral.  Debtor shall pay to Secured Party, on demand, any and all expenses, including all reasonable attorneys’ fees and expenses, incurred or paid by Secured Party in protecting, preserving or enforcing its rights, powers and remedies hereunder, or under the Note or under any other agreement between the parties secured hereby or in any way connected with any proceeding or action by whomsoever initiated concerning the protection or enforcement thereof.  No delay in taking any action with respect to any Event of Default shall affect the rights of Secured Party later to take such action with respect thereto, and no waiver by Secured Party of any default shall operate as a waiver of any other default or the same default on a future occasion.

 

Section 6:  Miscellaneous Provisions.  The provisions of this Agreement may be amended or compliance with this Agreement waived at any time only by the written agreement of Secured Party and Debtor.  All rights of Secured Party hereunder shall inure to the benefit of

 

  

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its successors and assigns, and all obligations of Debtor hereunder shall bind its successors and assigns.  This Agreement and all of the rights, remedies and duties of Secured Party and Debtor hereunder shall be governed by the laws of the State of Rhode Island without reference to its conflict of laws principles.

 

IN WITNESS WHEREOF, the parties have each caused this Agreement to be signed and delivered by their duly authorized representatives as of the date first above written.

 

	  	  	

Lang Naturals, Inc., Secured Party

	  	  	  
	  	  	
By:

	
/s/ David Lang

	  	  	 	David Lang
	  	  	 	President

 

	  	  	

VitaMedMD, LLC, Debtor

	  	  	  
	  	  	
By:

	
/s/ Robert Finizio

	  	  	 	
Robert Finizio

	  	  	 	President

  

13

  

Exhibit A

 

Product Sales Agreements

 

1.           Product Sales Agreement, dated as of December 2, 2008, relating to purchases and sales of VitaMedMD Prenatal Multivitamin and VitaMedMD DHA 300 mg Vegetarian Softgel, as heretofore and hereafter amended.

 

2.           Product Sales Agreement, dated as of October 20, 2009, relating to purchases and sales of VitaMedMD  Prenatal 1 Single Softgel Prenatal Multivitamin with DHA, as heretofore and hereafter amended.

 

3.           Product Sales Agreement, dated as of January 14, 2010, relating to purchases and sales of VitaMedMD Perimenopause/Bone Supplement (alternatively referred to as Menopause Relief plus Bone Support), as heretofore and hereafter amended.

 

4.           Product Sales Agreement, dated as of March 24, 2010, relating to purchases and sales of VitaMedMD  Iron 150, as heretofore and hereafter amended.

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