Document:

Exhibit 10.25

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by and between COLLEGIUM PHARMACEUTICAL, INC. (the “Company”) and Douglas Carlson (the “Executive”).

 

WHEREAS, the Company desires to continue to employ Executive on at at-will basis, and the Executives wishes to continue to be employed by the Company on at-will basis, on the terms and conditions set forth herein.

 

WHEREAS, the Company and the Executive are parties to an Employment Agreement dated March 13, 2013 (the “Existing Agreement”); and

 

WHEREAS, the parties wish to enter into this Agreement to memorialize the terms of Executive’s continued employment by the Company.

 

NOW, THEREFORE, in consideration of the foregoing and intending to be bound hereby, the parties agree as follows:

 

1.                                     Duration of Agreement.  This Agreement is effective on the date it is fully executed (the “Effective Date”) and has no specific expiration date.  Unless terminated by agreement of the parties, this Agreement will govern Executive’s continued employment by the Company until that employment ceases.

 

2.                                      Title; Duties.  Executive will be employed as the Company’s Vice President, Corporate Development.  Executive will devote his best efforts and substantially all of his business time and services to the Company and its affiliates to perform such duties as may be customarily incident to his position and as may reasonably be assigned to him from time to time.  Executive shall report to such individual as designated by the Company.  Executive will not, in any capacity, engage in other business activities or perform services for any other individual, firm or corporation without the prior written consent of the Company; provided, however, that without such consent, Executive may engage in charitable, non-profit and public service activities, so long as such activities do not in any respect interfere or conflict with Executive’s performance of his duties and obligations to the Company.

 

3.                                     Place of Performance.  Executive will perform his services hereunder at the principal executive offices of the Company in Canton, Massachusetts; provided, however, that Executive may be required to travel from time to time for business purposes.

 

4.                                     Compensation and Indemnification.

 

4.1.                            Base Salary.  Executive’s annual salary will be $241,000 (the “Base Salary”), paid in accordance with the Company’s payroll practices as in effect from time to time.  The Base Salary will be reviewed annually by the Compensation Committee of the Company’s Board of Directors (the “Committee”).

 

4.2.                            Annual Bonuses.

 

4.2.1.                  For each fiscal year ending during his employment, Executive will be eligible to earn an annual bonus.  The target amount of that bonus will be 30% percent of Executive’s Base Salary for the applicable fiscal year.  The actual bonus payable with respect to a particular year will be determined by the Committee, based on the achievement of corporate and /or individual performance objectives established by the Committee.  Any bonus payable under this paragraph will be paid during the calendar year immediately following the fiscal year in respect of which the bonus is payable and, except

 

 

as otherwise provided in Section 5.1.1, will only be paid if Executive remains continuously employed by the Company through the actual bonus payment date.

 

4.2.2.                  For purposes of determining any bonus payable to Executive, the measurement of corporate and individual performance will be performed by the Committee in good faith.  From time to time, the Committee may, in its sole discretion, make adjustments to corporate or individual performance goals, so that required departures from the Company’s operating budget, changes in accounting principles, acquisitions, dispositions, mergers, consolidations and other corporate transactions, and other factors influencing the achievement or calculation of such goals do not affect the operation of this provision in a manner inconsistent with its intended purposes.

 

4.3.                            Employee Benefits.  During Executive’s employment, Executive will be eligible to participate in all employee benefit plans and programs made available by the Company from time to time to employees generally, subject to applicable plan terms and policies.  The Company periodically reviews its benefits, policies, benefits providers and practices and may terminate, alter or change them at its discretion from time to time.

 

4.4.                            Reimbursement of Expenses.  The Executive will be reimbursed by the Company for all reasonable business expenses incurred by Executive in accordance with the Company’s customary expense reimbursement policies as in effect from time to time.  Notwithstanding anything herein to the contrary, to the extent any expense, reimbursement or in-kind benefit provided to the Executive constitutes a “deferral of compensation” within the meaning of Section 409A of the Internal Revenue Code (the “Code”) (i) the amount of expenses eligible for reimbursement or in-kind benefits provided to the Executive must be incurred during the Executive’s term of employment; (ii) the amount of expenses eligible for reimbursement or in-kind benefits provided to the Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to the Executive in any other calendar year, (iii) the reimbursements for expenses for which the Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred and (iv) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

 

5.                                      Termination.  Executive’s employment with the Company may be terminated by the Company or Executive at any time and for any reason.  Upon any cessation of his employment with the Company, Executive will be entitled only to such compensation and benefits as described in this Section 5.  Upon any cessation of his employment for any reason, unless otherwise requested by the Company, Executive agrees to resign immediately from all officer and director positions he then holds with the Company and its affiliates.

 

5.1.                            Termination without Cause or for Good Reason.  If Executive’s employment by the Company ceases due to a termination by the Company without Cause (as defined below) or a resignation by Executive for Good Reason (as defined below), Executive will be entitled to:

 

5.1.1.                  payment of any annual bonus otherwise payable (but for the cessation of Executive’s employment) with respect to a year ended prior to the cessation of Executive’s employment;

 

5.1.2.                  continuation of Executive’s Base Salary for a period equal to 6 months, payable in accordance with the Company’s standard payroll practices; and

 

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5.1.3.                  waiver of the applicable premium otherwise payable for COBRA continuation coverage for Executive (and, to the extent covered immediately prior to the date of such cessation, his eligible dependents) for a period equal to 6 months.

 

Except as otherwise provided in this Section 5.1, and except for payment of all (i) accrued and unpaid Base Salary through the date of such cessation, (ii) any expense reimbursements to be paid in accordance with Company policy and (iii) payments for any accrued but unused paid time off in accordance with the Company’s policies and applicable law, all compensation and benefits will cease at the time of such cessation and the Company will have no further liability or obligation by reason of such cessation.  The payments and benefits described in this Section 5.1 are in lieu of, and not in addition to, any other severance arrangement maintained by the Company.  Notwithstanding any provision of this Agreement, the payments and benefits described in Section 5.1 are conditioned on: (a) the Executive’s execution and delivery to the Company and the expiration of all applicable statutory revocation periods, by the 45th day following the effective date of his cessation of employment, of a general release of claims against the Company and its affiliates in a form reasonably prescribed by the Company (the “Release”); and (b) the Executive’s continued compliance with the Restrictive Covenants (as defined below).  Subject to Section 5.4, below, the benefits described in Section 5.1 will be paid or provided (or begin to be paid or provided) as soon as administratively practicable (or determinable in the case of the benefits described in Section 5.1.1) after the Release becomes irrevocable, provided that if the 45 day period described above begins in one taxable year and ends in a second taxable year such payments or benefits shall not commence until the second taxable year.

 

5.2.                            Termination Following a Change in Control.  For cessations of employment described in Section 5.1 that occur during the twelve (12) month period immediately following the occurrence of a Change in Control (as defined below), the Executive will receive the payments and benefits described in Section 5.1 above, subject to the following modifications:

 

5.2.1.                  the references in Sections 5.1.2 and 5.1.3 to “6 months” will each be replaced with a reference to “9 months”; and

 

5.2.2.                  all unvested restricted stock, stock options and other equity incentives awarded to Executive by the Company will become immediately and automatically fully vested and exercisable (as applicable).

 

5.3.                            Other Terminations.  If Executive’s employment with the Company ceases for any reason other than as described in Section 5.1, above (including but not limited to termination (i) by the Company for Cause, (ii) as a result of Executive’s death, (iii) as a result of Executive’s Disability or (d) by Executive without Good Reason, then the Company’s obligation to Executive will be limited solely to (a) accrued and unpaid Base Salary through the date of such cessation, (b) any expense reimbursements to be paid in accordance with Company policy and (c) payments for any accrued but unused paid time off in accordance with the Company’s policies and applicable law.  All compensation and benefits will cease at the time of such cessation and, except as otherwise provided by COBRA or this Section 5.3, the Company will have no further liability or obligation by reason of such termination.  The foregoing will not be construed to limit Executive’s right to payment or reimbursement for claims incurred prior to the date of such termination under any insurance contract funding an employee benefit plan, policy or arrangement of the Company in accordance with the terms of such insurance contract.

 

5.4.                            Compliance with Section 409A.  If the termination giving rise to the payments described in Section 5.1 is not a “Separation from Service” within the meaning of Treas. Reg. § 1.409A-1(h)(1) (or any successor provision), then the amounts otherwise payable pursuant to that section will instead be deferred without interest and will not be paid until Executive experiences a Separation from

 

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Service.  To the maximum extent permitted under Section 409A of the Code and its corresponding regulations, the cash severance benefits payable under this Agreement are intended to meet the requirements of the short-term deferral exemption under Section 409A of the Code and the “separation pay exception” under Treas. Reg. §1.409A-1(b)(9)(iii).  To the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Internal Revenue Code to payments due to Executive upon or following his Separation from Service, then notwithstanding any other provision of this Agreement (or any otherwise applicable plan, policy, agreement or arrangement), any such payments that are otherwise due within six months following Executive’s Separation from Service (taking into account the preceding sentence of this paragraph) will be deferred without interest and paid to Executive in a lump sum immediately following that six month period.  For purposes of the application of Treas. Reg. § 1.409A-1(b)(4)(or any successor provision), each payment in a series of payments will be deemed a separate payment.

 

5.5.                            PPACA.  Notwithstanding anything in this Agreement to the contrary, the waiver in respect of COBRA premiums pursuant to this Sections 5.1 and 5.2 shall cease to the extent required to avoid adverse consequences to the Company under the Patient Protection and Affordable Care Act of 2010 and regulations thereunder.

 

5.6.                            Section 280G.  If any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement or the lapse or termination of any restriction on or the vesting or exercisability of any payment or benefit (each a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law (such tax or taxes are hereafter collectively referred to as the “Excise Tax”), then the aggregate amount of Payments payable to Executive shall be reduced to the aggregate amount of Payments that may be made to the Executive without incurring an excise tax (the “Safe-Harbor Amount”) in accordance with the immediately following sentence; provided that such reduction shall only be imposed if the aggregate after-tax value of the Payments retained by Executive (after giving effect to such reduction) is equal to or greater than the aggregate after-tax value (after giving effect to the Excise Tax) of the Payments to Executive without any such reduction.  Any such reduction shall be made in the following order: (i) first, any future cash payments (if any) shall be reduced (if necessary, to zero); (ii) second, any current cash payments shall be reduced (if necessary, to zero); (iii) third, all non-cash payments (other than equity or equity derivative related payments) shall be reduced (if necessary, to zero); and (iv) fourth, all equity or equity derivative payments shall be reduced.

 

5.7.                            Definitions.  For purposes of this Agreement:

 

5.7.1.                  “Cause” means (a) commission or conviction of any felony or any crime involving dishonesty; (b) commission of any fraud against the Company; (c) intentional and material damage to any material property of the Company; (d) Executive’s material breach of any agreement with or duty owed to the Company or any of its affiliates (including, without limitation, Executive’s material breach of any of the Restrictive Covenants, as defined below); or (e) refusal to perform the lawful, reasonable and material directives of the Company’s Board of Directors (the “Board”) or the Company’s Chief Executive Officer.

 

5.7.2.                  “Change in Control” means the first to occur of any of the events described in Section 1(g) of the Company’s Amended and Restated 2014 Stock Incentive Plan (or any successor provision).

 

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5.7.3.                  “Disability” means a condition entitling the Executive to benefits under the Company’s long term disability plan, policy or arrangement; provided, however, that if no such plan, policy or arrangement is then maintained by the Company and applicable to the Executive, “Disability” will mean the Executive’s inability to perform his duties under this Agreement due to a mental or physical condition that can be expected to result in death or that can be expected to last (or has already lasted) for a continuous period of 90 days or more, or for 120 days in any 180 consecutive day period.  Termination as a result of a Disability will not be construed as a termination by the Company “without Cause.”

 

5.7.4.                  “Good Reason” means any of the following, without the Executive’s prior consent: (a) a diminution of the Executive’s title below the rank of Vice President; (b) a reduction in Base Salary; or (c) the relocation of the Executive’s primary place of employment to a location that is (i) more than 50 miles from the location of the Executive’s permanent primary place of employment prior to such relocation and (ii) more than 50 miles from the location of the Executive’s residence. However, none of the foregoing events or conditions will constitute Good Reason unless the Executive provides the Company with written objection to the event or condition within 30 days following the occurrence thereof, the Company does not reverse or otherwise cure the event or condition within 30 days of receiving that written objection, and the Executive resigns Executive’s employment within 30 days following the expiration of that cure period. Notwithstanding the foregoing and for the avoidance of doubt, a diminution of the Executive’s title as a result of Change in Control shall not constitute Good Reason.

 

6.                                     Restrictive Covenants.  To induce the Company to enter into this Agreement and in recognition of the compensation to be paid to the Executive pursuant to Sections 4 and 5 of this Agreement, the Executive agrees to be bound by the provisions of this Section 6 (the “Restrictive Covenants”). These Restrictive Covenants will apply without regard to whether any termination or cessation of the Executive’s employment is initiated by the Company or the Executive, and without regard to the reason for that termination or cessation.

 

6.1.                            Covenant Not To Compete.  The Executive covenants that, during his employment by the Company and for a period of 6 months following immediately thereafter (the “Restricted Period”), the Executive will not (except in his capacity as an employee or director of the Company) do any of the following, directly or indirectly:

 

6.1.1.                  engage or participate in any Competing Business (as defined below) wherever the Company or its affiliates do business, do or plan to do business or sell or market their products or services;

 

6.1.2.                  become interested in (as owner, stockholder, lender, partner, co-venturer, director, officer, employee, agent or consultant) any person, firm, corporation, association or other entity engaged in a Competing Business.  Notwithstanding the foregoing, the Executive may hold up to 1% of the outstanding securities of any class of any publicly-traded securities of any company;

 

6.1.3.                  influence or attempt to influence any employee, consultant, supplier, licensor, licensee, contractor, agent, strategic partner, distributor, customer or other person to terminate or modify any written or oral agreement, arrangement or course of dealing with the Company or any of its affiliates; or

 

6.1.4.                  solicit for employment or retention as an independent contractor (or arrange to have any other person or entity solicit for employment or retention) any person employed or retained by the Company or any of its affiliates.

 

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6.2.                            Confidentiality.  The Executive recognizes and acknowledges that the Proprietary Information (as defined in below) is a valuable, special and unique asset of the business of the Company and its affiliates.  As a result, both during the Term and thereafter, the Executive will not, without the prior written consent of the Company, for any reason divulge to any third-party or use for his own benefit, or for any purpose other than the exclusive benefit of the Company and its affiliates, any Proprietary Information.  Notwithstanding the foregoing, if the Executive is compelled to disclose Proprietary Information by court order or other legal or regulatory process, to the extent permitted by applicable law, he shall promptly so notify the Company so that it may seek a protective order or other assurance that confidential treatment of such Proprietary Information shall be afforded, and the Executive shall reasonably cooperate with the Company and its affiliates in connection therewith.  If the Executive is so obligated by court order or other legal process to disclose Proprietary Information it will disclose only the minimum amount of such Proprietary Information as is necessary for the Executive to comply with such court order or other legal process.

 

6.3.                            Property of the Company.

 

6.3.1.                  Proprietary Information. All right, title and interest in and to Proprietary Information will be and remain the sole and exclusive property of the Company and its affiliates.  The Executive will not remove from the Company’s or its affiliates’ offices or premises any documents, records, notebooks, files, correspondence, reports, memoranda or similar materials of or containing Proprietary Information, or other materials or property of any kind belonging to the Company or its affiliates unless necessary or appropriate in the performance of his duties to the Company and its affiliates.  If the Executive removes such materials or property in the performance of his duties, he will return such materials or property promptly after the removal has served its purpose.  The Executive will not make, retain, remove and/or distribute any copies of any such materials or property, or divulge to any third person the nature of and/or contents of such materials or property, except to the extent necessary to satisfy contractual obligations of the Company or its affiliates or to perform his duties on behalf of the Company and its affiliates.  Upon termination of the Executive’s employment with the Company, he will leave with the Company and its affiliates or promptly return to the Company and its affiliates all originals and copies of such materials or property then in his possession.

 

6.3.2.                  Intellectual Property.  The Executive agrees that all the Intellectual Property (as defined below) will be considered “works made for hire” as that term is defined in Section 101 of the Copyright Act (17 U.S.C. § 101) and that all right, title and interest in such Intellectual Property will be the sole and exclusive property of the Company and its affiliates.  To the extent that any of the Intellectual Property may not by law be considered a work made for hire, or to the extent that, notwithstanding the foregoing, the Executive retains any interest in the Intellectual Property, the Executive hereby irrevocably assigns and transfers to the Company and its affiliates any and all right, title, or interest that the Executive may now or in the future have in the Intellectual Property under patent, copyright, trade secret, trademark  or other law, in perpetuity or for the longest period otherwise permitted by law, without the necessity of further consideration.  The Company and its affiliates will be entitled to obtain and hold in its own name all copyrights, patents, trade secrets, trademarks and other similar registrations with respect to such Intellectual Property.  The Executive further agrees to execute any and all documents and provide any further cooperation or assistance reasonably required by the Company, at the Company’s expense,  to perfect, maintain or otherwise protect its rights in the Intellectual Property.  If the Company or its affiliates, as applicable, are unable after reasonable efforts to secure the Executive’s signature, cooperation or assistance in accordance with the preceding sentence, whether because of the Executive’s incapacity or any other reason whatsoever, the Executive hereby designates and appoints the Company, the appropriate affiliate, or their respective designee as the Executive’s agent and attorney-in-fact, to act on his behalf, to execute and file documents and to do all other lawfully permitted acts necessary or desirable to perfect, maintain or otherwise protect the Company’s or its affiliates’ rights

 

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in the Intellectual Property.  The Executive acknowledges and agrees that such appointment is coupled with an interest and is therefore irrevocable.

 

6.4.                            Definitions.  For purposes of this Agreement:

 

6.4.1.                  “Competing Business” means any person, firm, corporation, partnership, association or other entity engaged in developing, manufacturing, marketing, distributing or selling, directly or indirectly, pharmaceutical abuse-deterrent products or any other product for pain indications that directly competes with a product developed, manufactured, marketed, distributed or sold by the Company.  A division, subsidiary or similar business unit of an entity that does not engage in the business activities described in this definition will not be considered a Competing Business even if another separate division, subsidiary or similar business unit does engage in such activities.

 

6.4.2.                  “Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents and patent applications claiming such inventions, (b) all trademarks, service marks, trade dress, logos, trade names, fictitious names, brand names, brand marks and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets (including research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, methodologies, technical data, designs, drawings and specifications), (f) all computer software (including data, source and object codes and related documentation), (g) all other proprietary rights, (h) all copies and tangible embodiments thereof (in whatever form or medium), or (i) similar intangible personal property which have been or are developed or created in whole or in part by the Executive (1) at any time and at any place while the Executive is employed by Company and which, in the case of any or all of the foregoing, are related to and used in connection with the business of the Company or its affiliates, or (2) as a result of tasks assigned to the Executive by the Company or its affiliates.

 

6.4.3.                  “Proprietary Information” means any and all proprietary information developed or acquired by the Company or any of its subsidiaries or affiliates that has not been specifically authorized to be disclosed.  Such Proprietary Information shall include, but shall not be limited to, the following items and information relating to the following items: (a) all intellectual property and proprietary rights of the Company (including, without limitation, the Intellectual Property), (b) computer codes and instructions, processing systems and techniques, inputs and outputs (regardless of the media on which stored or located) and hardware and software configurations, designs, architecture and interfaces, (c) business research, studies, procedures and costs, (d) financial data, (e) distribution methods, (f) marketing data, methods, plans and efforts, (g) the identities of actual and prospective suppliers, (h) the terms of contracts and agreements with, the needs and requirements of, and the Company’s or its affiliates’ course of dealing with, actual or prospective suppliers, (i) personnel information, (j) customer and vendor credit information, and (k) information received from third parties subject to obligations of non-disclosure or non-use.  Failure by the Company or its affiliates to mark any of the Proprietary Information as confidential or proprietary shall not affect its status as Proprietary Information.

 

6.5.                            Acknowledgements.  The Executive acknowledges that the Restrictive Covenants are reasonable and necessary to protect the legitimate interests of the Company and its affiliates, that the duration and geographic scope of the Restrictive Covenants are reasonable given the nature of this Agreement and the position the Executive holds within the Company, and that the Company would not

 

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enter into this Agreement or otherwise employ or continue to employ the Executive unless the Executive agrees to be bound by the Restrictive Covenants set forth in this Section 6.

 

6.6.                            Remedies and Enforcement Upon Breach.

 

6.6.1.                  Specific Enforcement. The Executive acknowledges that any breach by him, willfully or otherwise, of the Restrictive Covenants will cause continuing and irreparable injury to the Company or its affiliates for which monetary damages would not be an adequate remedy.  The Executive shall not, in any action or proceeding to enforce any of the provisions of this Agreement, assert the claim or defense that such an adequate remedy at law exists.  In the event of any such breach or threatened breach by the Executive of any of the Restrictive Covenants, the Company or its affiliates, as applicable, shall be entitled to injunctive or other similar equitable relief in any court, without any requirement that a bond or other security be posted, and this Agreement shall not in any way limit remedies of law or in equity otherwise available to the Company and its affiliates.

 

6.6.2.                  Judicial Modification.  If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, such court shall have the power to modify such provision and, in its modified form, such provision shall then be enforceable.

 

6.6.3.                  Enforceability.  If any court holds the Restrictive Covenants unenforceable by reason of their breadth or scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Company and its affiliates to the relief provided above in the courts of any other jurisdiction within the geographic scope of such Restrictive Covenants.

 

6.6.4.                  Disclosure of Restrictive Covenants.  The Executive agrees to disclose the existence and terms of the Restrictive Covenants to any employer that the Executive may work for during the Restricted Period.

 

6.6.5.                  Extension of Restricted Period.  If the Executive breaches Section 6.1 in any respect, the restrictions contained in that section will be extended for a period equal to the period that the Executive was in breach.

 

7.                                     Miscellaneous.

 

7.1.                            Other Agreements.  Executive represents and warrants to the Company that there are no restrictions, agreements or understandings whatsoever to which he is a party that would prevent or make unlawful his execution of this Agreement, that would be inconsistent or in conflict with this Agreement or Executive’s obligations hereunder, or that would otherwise prevent, limit or impair the performance by Executive of his duties under this Agreement.

 

7.2.                            Successors and Assigns.  The Company may assign this Agreement to any successor to its assets and business by means of liquidation, dissolution, sale of assets or otherwise.  The duties of Executive hereunder are personal to Executive and may not be assigned by him.

 

7.3.                            Governing Law and Enforcement.  This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of laws.  Any legal proceeding arising out of or relating to this Agreement will be instituted in a state or federal court in the Commonwealth of Massachusetts, and Executive and the Company hereby consent to the personal and exclusive jurisdiction of such court(s) and hereby waive any

 

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objection(s) that they may have to personal jurisdiction, the laying of venue of any such proceeding and any claim or defense of inconvenient forum.

 

7.4.                            Waivers.  The waiver by either party of any right hereunder or of any breach by the other party will not be deemed a waiver of any other right hereunder or of any other breach by the other party.  No waiver will be deemed to have occurred unless set forth in a writing.  No waiver will constitute a continuing waiver unless specifically stated, and any waiver will operate only as to the specific term or condition waived.

 

7.5.                            Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law.  However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.

 

7.6.                            Survival.  This Agreement will survive the cessation of Executive’s employment to the extent necessary to fulfill the purposes and intent the Agreement.

 

7.7.                            Notices.  Any notice or communication required or permitted under this Agreement will be made in writing and (a) sent by overnight courier, (b) mailed by overnight U.S. express mail, return receipt requested or (c) sent by telecopier.  Any notice or communication to Executive will be sent to the address contained in his personnel file.  Any notice or communication to the Company will be sent to the Company’s principal executive offices, to the attention of its Chief Executive Officer.  Notwithstanding the foregoing, either party may change the address for notices or communications hereunder by providing written notice to the other in the manner specified in this paragraph.

 

7.8.                            Entire Agreement; Amendments.  This Agreement contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to that subject matter (including, without limitation, the Existing Agreement).  This Agreement may not be changed or modified, except by an agreement in writing signed by each of the parties hereto.

 

7.9.                            Withholding.  All payments (or transfers of property) to Executive will be subject to tax withholding to the extent required by applicable law.

 

7.10.                     Section Headings.  The headings of sections and paragraphs of this Agreement are inserted for convenience only and will not in any way affect the meaning or construction of any provision of this Agreement.

 

7.11.                     Counterparts; Facsimile.  This Agreement may be executed in multiple counterparts (including by facsimile signature), each of which will be deemed to be an original, but all of which together will constitute but one and the same instrument.  Counterparts may be delivered via facsimile, electronic mail (including pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

<remainder of page intentionally left blank; signature page follows>

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Executive has executed this Agreement, on the date(s) indicated below.

 

	
 
    	
COLLEGIUM   PHARMACEUTICAL, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Paul Brannelly
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Paul Brannelly
    
	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
Date: 
    	
August 4, 2015
    
	
 
    	
 
    	
 
    
	
 
    	
DOUGLAS   CARLSON
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Douglas Carlson
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date: 
    	
August 3, 2015
    

 

Signature Page to Employment AgreementExhibit 10.1

 

NEITHER THIS NOTE NOR THE SECURITIES
THAT ARE ISSUABLE UPON CONVERSION HEREOF OR UPON EXCHANGE HEREUNDER (COLLECTIVELY, THE “SECURITIES”) HAVE 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: (I) IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS;
OR (II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OR; (III) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.

 

4% CONVERTIBLE PROMISSORY NOTE

 

	Issuance Date:  December 28, 2015	  US $8,500,000

 

FOR VALUE RECEIVED, Wins Finance
Holdings Inc., a Cayman Island corporation (the “Company”), with principal executive offices located
at No. 58 Jianguo Road, Chaoyang District Beijing 100024, People’s Republic of China, hereby promises to pay to the order
of Bluesky LLC, located at C/O Lian Fang, Withers Bergman LLP, 430 Park Avenue, 10th Floor, New York, New York 10022,
or their successors or assigns (the “Holder,”) the principal amount of Eight Million Five Hundred Thousand
United States Dollars (US$8,500,000) on or prior to one (1) year after the issuance of this note (the “Maturity Date”),
in accordance with the terms hereof. This 4% Senior Convertible Promissory Note (this note, and all notifications, extensions,
future advances, supplements, and renewals thereof, and any substitutions therefor, hereinafter referred to as the “Note”
together with other notes that are issued pursuant to the Company’s offering of convertible promissory notes (the “Note
Offering,” the “Notes”) was issued pursuant to a Subscription Agreement, dated December
28, 2015, (the “Subscription Agreement”), entered into by and between the Company and the Holder. Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in the Subscription Agreement.

 

1.                 
Payments of Principal and Interest.

 

(a)                Payment of Principal. The principal amount of this Note shall be paid to the Holder on or prior to the Maturity
Date.

 

(b)                Payment of Interest. Interest under this Note shall be 4% per annum and shall be computed daily on the basis of
a 365-day year. Interest shall be payable in cash at the Maturity Date.

 

(c)                General Payment Provisions. So long as a Holder or any of its nominees shall be the holder of any Note, and notwithstanding
anything contained elsewhere in this Note to the contrary, all sums of principal, interest or otherwise becoming due on this Note
shall be made in lawful money of the United States of America by certified bank check or wire transfer to such account as the
Holder may designate by written notice to the Company no later than 5:00 p.m. EST, on the date such payment is due, without the
presentation or surrender of such Note or the making of any notation thereon. Any payment made after 5:00 p.m. EST on a Business
Day will be deemed made on the next following Business Day. Whenever any amount expressed to be due by the terms of this Note
is due on any day which is not a Business Day, the same shall instead be due on the next succeeding Business Day, and interest
shall be payable on any principal so extended for the period of such extension. All amounts payable under this Note shall be paid
free and clear of, and without reduction by reason of, any deduction, set-off or counterclaim. The Company will afford the benefits
of this Section to the Holder and to each other Person holding this Note. For purposes of this Note, “Business Day”
shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the United States are authorized or required
by law or executive order to remain closed.

 

 

     

     

    

 

(d)                Optional Prepayment. At any time prior to the Maturity Date, the Company shall have the right, exercisable on not
less than twenty (20) days prior written notice to the Holder, to prepay the outstanding amount under this Note (including principal
and accrued interest thereunder), in full. On the date fixed for prepayment (the “Optional Prepayment Date”),
the Company shall make payment of the Optional Prepayment Amount (as defined below) to the Holder. If the Company exercises its
right to prepay this Note, the Company shall make payment to the Holder of an amount in cash (the “Optional Prepayment
Amount”) equal to 105% of the amount then outstanding under this Note including the principal and any accrued and unpaid
interest through the Optional Prepayment Date. Upon such prepayment in full, the Holder shall have no further rights under this
Note, including no rights of conversion.

 

2.                 
Conversion of Note. 

 

(a)                Optional Conversion.The Holder shall have the right, at its option, to convert all or any portion of the then outstanding
principal and accrued and unpaid interest of this Note, into ordinary shares, par value US$0.0001 of the Company (the “Conversion
Securities”), at a price of $12 per ordinary share (the “Conversion Price.”)

  

(b)                Mechanics
of Holder’s Conversion. The conversion of this Note shall be conducted in the following manner: 

 

(i)                
Subject to Section 2(a) hereof, this Note may be converted by the Holder in whole and not in part at any time by (A) submitting
to the Company a Notice of Conversion in the form of Exhibit A (by e-mail or other reasonable means of communication
dispatched on the Conversion Date prior to 5:00 p.m., New York time) and (B) surrendering this Note at the principal office of
the Company. Notwithstanding the foregoing, upon conversion of this Note in accordance with the terms hereof, the Holder shall
not be required to physically surrender this Note to the Company unless the entire unpaid principal amount of this Note is so
converted.  The Holder and the Company shall maintain records showing the principal amount so converted and the dates of
such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical
surrender of this Note upon each such conversion.  In the event of any dispute or discrepancy, such records of the Company
shall, prima facie, be controlling and determinative in the absence of manifest error.  Notwithstanding the
foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first
physically surrenders this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder
a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request,
representing in the aggregate the remaining unpaid principal amount of this Note.  The Holder and any assignee, by acceptance
of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of
this Note, the unpaid and unconverted principal and interest of this Note represented by this Note may be less than the amount
stated on the face hereof. At such time as such conversion has been effected, the rights of the Holder of this Note as the Holder
of such Note shall cease (with respect to the amount so converted), and the Person or Persons in whose name or names any certificate
or certificates for the Conversion Securities are to be issued upon such conversion shall be deemed to have become the holder
or holders of record of the Conversion Securities represented thereby.

 

    	 	2	 

     

    

(ii)              As soon as possible but no later than 5 trading days thereafter the conversion has been effected, the Company or acquirer shall
deliver to the converting holder a certificate or certificates representing the Conversion Securities issuable by reason of such
conversion in such name or names and such denomination or denominations as the converting holder has specified.

 

(iii)            
No fraction of shares or scrip representing fractions of shares will be issued on conversion. Upon any conversion of the entire
outstanding principal of and interest on this Note, the number of shares or other securities issuable shall be rounded up to the
nearest whole number.

 

(iv)            
The issuance of certificates for Conversion Securities upon conversion of this Note shall be made without charge to the holder
hereof in respect thereof or other cost incurred by the Company or acquirer in connection with such conversion and the related
issuance of the Conversion Securities.

 

(v)              The Company shall not close its books against the transfer of this Note in any manner which interferes with the timely conversion
of this Note. The Company shall assist and cooperate with any holder of this Note required to make any governmental filings or
obtain any governmental approval prior to or in connection with the conversion of this Note (including, without limitation, making
any filings required to be made by the Company).

 

(vi)            
The Company shall at all times reserve and keep available out of its authorized but unissued ordinary shares, solely for the purpose
of issuance upon conversion hereunder, such number of ordinary shares of the Company as are issuable upon conversion. All Conversion
Securities which are so issuable shall, when issued, be duly authorized and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges. The Company or its acquirer shall take all such actions as may be necessary to assure that all
such Conversion Securities may be so issued without violation of any applicable law or governmental regulation or any requirements
of any domestic securities exchange upon which such equity share capital is quoted.

 

3.                Adjustment to the Conversion Price. 

 

(a)              If, at any time when this Note is issued and outstanding, there is any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which the ordinary shares of the Company are changed into the same or a
different number of shares of another class or classes of equity capital or other securities of the Company or another entity,
or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a plan
of complete liquidation of the Company, then the Holder of this Note shall thereafter have the right to receive upon conversion
of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the Conversion Securities issuable
immediately prior to such event upon conversion, such securities or other assets which the Holder would have been entitled to receive
in such transaction had this Note been converted in full immediately prior to such transaction, and in any such case appropriate
provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion Price and of the number of Conversion Securities issuable
upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets
thereafter deliverable upon the conversion hereof.

 

4.                Transfer, Exchange and Replacement.

 

    	 	3	 

     

    

(a)              Transfer. This Note has not been and is not being registered under the provisions of the Securities Act or any state securities
laws and this Note may not be transferred unless the Holder has delivered to the Company an opinion of counsel, reasonably satisfactory
in form, scope and substance to the Company, to the effect that this Note may be sold or transferred without registration under
the Securities Act. Prior to any such transfer, the transferee must represent in writing to the Company that such transferee has
requested and received from the Company all information relating to the business, properties, operations, condition (financial
or other), results of operations or prospects of the Company deemed relevant by such transferee, and that such transferee has been
afforded the opportunity to ask questions of the Company concerning the foregoing. Upon surrender of any Note for registration
of transfer or for exchange to the Company at its principal office, the Company at its sole expense will execute and deliver in
exchange for such Note a new Note or Notes, as the case may be, as requested by the holder or transferee, which aggregate principal
amount is equal the unpaid principal amount of such Note, registered as such holder or transferee may request, dated so that there
will be no loss of interest on the Note and otherwise of like tenor; provided that this Note may not be transferred by Holder to
any Person other than Holder’s affiliates without the prior written consent of the Company (which consent shall not be unreasonably
withheld or delayed). The issuance of new Notes shall be made without charge to the holder(s) of the surrendered Note for any issuance
tax in respect thereof or other cost incurred by the Company in connection with such issuance, provided that each holder of the
Note shall pay any transfer taxes associated therewith. The Company shall be entitled to regard the registered holder of this Note
as the holder of the Note so registered for all purposes until the Company or its agent, as applicable, is required to record a
transfer of this Note on its register.

  

(b)              Replacement.
Upon notice to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or
destruction, of an indemnification undertaking by the Holder to the Company in a form reasonably acceptable to the Company
and, in the case of mutilation, upon surrender and cancellation of the Note, the Company shall execute and deliver a new Note
of like tenor and date and in substantially the same form as this Note; provided, however, the Company shall not
be obligated to re-issue a Note if the Holder contemporaneously requests the Company to convert such remaining principal
amount and interest into the Conversion Securities.

  

5.                Defaults and Remedies.

 

(a)              Events of Default. An “Event of Default” means any of the following events which is not cured within
10 business days (the “Cure Period”):

 

(i)              
failure by the Company to pay any principal amount or interest due hereunder within five (5) business days of the date
such payment is due;

(ii)             the Company:

(1)     makes a general assignment for the benefit of its creditors;

(2)     applies for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or
similar official for itself or any of its assets and properties;

(3)     commences a voluntary case for relief as a debtor under the United States Bankruptcy Code;

(4)     files with or otherwise submits to any governmental authority any petition, answer or other document seeking: (A) reorganization,
(B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting
bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation;

(5)     files or otherwise submits any answer or other document admitting or failing to contest the material allegations of
a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law, or

(6)     is adjudicated as bankrupt or insolvent by a court of competent jurisdiction;

 

    	 	4	 

     

    

 

(iii)           any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official is appointed with respect to
the Company, or is appointed to take or otherwise acquires possession or control of all or a substantial part of the assets and
properties of the Company, and any of the foregoing continues unstayed and in effect for any period of sixty (60) days;

(iv)            any material breach by the Company of any of its representations or warranties under the Subscription Agreement; or

(v)             any default, whether in whole or in part, occurs in the due observance or performance of any obligations or other covenants,
terms or provisions to be performed under this Note or the Subscription Agreement which is not cured by the Company within the
Cure Period after receipt of written notice thereof.

 

(b)             Remedies.
Upon the occurrence of an Event of Default, the interest under this Note shall be increased to 10% retroactive from the date
of issuance of this Note. Notwithstanding the foregoing, in no event shall any interest to be paid under the Note exceed the
maximum rate permitted by law. In any such event, the Note shall automatically be deemed amended to permit interest charges
at an amount equal to, but no greater than, the maximum rate permitted by law.

  

6.               Amendment and Waiver. The provisions of this Note may not be modified, amended or waived, without a written amendment executed
by the Company and holders of the Notes consisting of a majority of the outstanding principal amount.

 

7.               Voting Rights. Upon Conversion into the Conversion Securities the Holder shall have the voting rights applicable to the
Conversion Securities consistent with the Company’s Memorandum and Articles. 

 

8.               Investment Representations. This Note has been issued subject to certain investment representations of the original Holder
set forth in the Subscription Agreement and may be transferred or exchanged only in compliance with the Subscription Agreement
and applicable federal and state securities laws and regulations.

 

9.               Cancellation. After all principal owed on this Note has been paid in full, this Note shall automatically be deemed cancelled,
shall be surrendered to the Company for cancellation and shall not be re-issued.

 

10.             Waiver of Notice. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands
and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.

 

11.             Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the laws of the State of New York, without giving effect
to provisions thereof regarding conflict of laws. Each party hereto hereby irrevocably submits to the jurisdiction of the state
and federal courts sitting in New York County in the State of New York for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by sending by certified mail or overnight courier a copy thereof to such party at the address indicated in
the preamble hereto and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    	 	5	 

     

    

 

12.             Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note, at law or in equity.

 

13.             Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more
general provision contained herein. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not
be construed against any person as the drafter hereof.

 

14.             Failure or Indulgence Not Waiver. No failure or delay on the part of this Note in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.

 

15.             Notice. Notice shall be given to each party at the address indicated in the preamble hereto or at such other address as
provided to the other party in writing.

 

[Signature Page Follows]

 

    	 	6	 

     

    

 

 

IN WITNESS WHEREOF, the Company has caused this Note
to be executed on and as of the Issuance Date.

 

 

	 	Wins Finance Holdings Inc.
	 	 	 
	 	By:	
	 	Name:	 
	 	Title:	 

  

 

[Signature Page to Convertible Promissory
Note]

 

 

 

 

 

    	 	7	 

     

    

 

 

EXHIBIT A

NOTICE OF CONVERSION

 

The undersigned holder (the “Holder”)
hereby elects to convert $_____________ principal amount of the Note (defined below) into that number of Conversion Securities
to be issued pursuant to the conversion of the Note as set forth below, of Wins Finance Holdings Inc., a Cayman Islands exempted
company (the “Company”) according to the conditions of the convertible promissory note of the Company dated as of __________
(the “Note”), as of the date written below.  No fee will be charged to the Holder for any conversion, except for
transfer taxes, if any.  

 

The undersigned hereby requests that the
Company issue a certificate or certificates for the number of shares of Conversion Securities set forth below (which numbers are
based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is
necessary, on an attachment hereto:

___________________________

___________________________

___________________________

 

	 	 	 
	Date of Conversion:  	 	 ______________________
	Applicable Conversion Price: 	 	 $12.00________________
	Number of Shares of Conversion Securities to be issued pursuant to Conversion of the Note:   	 	 _____________________
	Amount of Principal due remaining under the Note after this conversion:	 	 ______________________
	 	 	 

 

HOLDER

 

By:_____________________________

Name:

Title:

Date:  __________________________

 

    	 	8

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