Document:

Exhibit 10.8

 

 

 

FUTURELAND HOLDINGS, INC.

EMPLOYMENT AGREEMENT WITH SAM TALARI

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into effective as of May 28th, 2015 (the "Effective Date"), by and between FutureLand Holdings, Inc., a Nevada Corporation (the "Company"), and Sam Talari (the "Executive").

RECITALS

A.   Executive possesses knowledge and skills which the Company believes will be of substantial benefit to its operations and success, and the Company desires to employ the Executive on the terms and conditions set forth below.

B.   Executive is willing to make his services available to the Company on the terms and conditions set forth below.

C.   Company and Executive wish to enter into this Agreement providing for, among other things, the full-time employment of the Executive by the Company in accordance with the terms set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual premises set forth above and the respective representations, warranties, covenants, agreements, and conditions contained herein, the adequacy and sufficiency of which is hereby acknowledged by the Company and the Executive, the parties hereto, intending to be legally bound, do hereby agree as follows:

EMPLOYMENT AGREEMENT WITH SAM TALARI - 2 -

1.        Employment.  The Company hereby agrees to employ Executive and Executive hereby accepts and agrees to be employed by the Company in the capacity of the PRESIDENT upon the terms and conditions hereinafter set forth in the management of the Company.  The Executive shall diligently perform all services as may be assigned to his by the Board of Directors of the Company having management responsibility for the FutureLand Holdings for which the Executive will be primarily responsible managing the day to day operations of the Company, and shall exercise such power and authority as may from time-to-time be delegated to him by the Board and shall have all of the powers, authority, duties, and responsibilities usually incident to the position and role of PRESIDENT in private companies that are comparable in size, character, and performance to the Company. The Board may also direct Executive to perform such duties for any entities which are now or may in the future be direct or indirect subsidiaries of the Company (the "Affiliates"), subject to the limitation that Executive's overall time commitment is comparable to similarly situated executives.  Executive shall serve the Company and the Affiliates faithfully, diligently, and to the best of his ability.  Executive agrees during the Term (as hereinafter defined) of this Agreement to devote all of his full-time business efforts, attention, energy, and skill to the performance of his employment to furthering the interests of the Company and the Affiliates.  In connection with his employment by the Company, the Executive shall be based in Saint Petersburg, FL area or at any Company location as he may determine to be appropriate for the performance of his duties, and he agrees to travel, subject to the reimbursement of expenses set forth in Section 4(e) below and to the extent reasonably necessary to perform his duties and obligations under this Agreement, to Company facilities and other destinations.  During the Term and any Renewal Term, Executive shall not engage in any other employment or occupation for any direct or indirect remuneration without the prior written consent of the Board; provided that the Executive may engage in community service and other charitable activities without prior written consent of the Board.

 

2.   Conditions of Employment.  The Executive agrees that so long as he is employed under this Agreement he will (i) at all times perform his responsibilities in a manner reasonably satisfactory to and subject to the direction and control of the Board with respect to his activities on behalf of the Company; (ii) comply with all material rules, orders, and regulations of the Company; (iii) truthfully and accurately maintain and preserve such records and make all reports as the Company may reasonably require; (iv) fully account for all monies and other property of the Company that he may from time to time have custody of and deliver the same to the Company whenever and however directed to do so by the Board of Directors of the Company as long as such requests are in compliance with all applicable laws; (v) act at all times in a professional manner in keeping with the Company's philosophy, avoiding any action that would materially reflect poorly on the Company's reputation or be damaging to its image;  and (vi) obey all laws now in force or hereafter enacted affecting the work place.

3.   Term of Employment.  The Term of employment hereunder will commence on the Effective Date and terminate five (5) years from the Effective Date (the "Term"), unless terminated earlier pursuant to Section 5 of this Agreement.  The Term shall automatically renew ("Renewal Term") for successive one year terms, unless written notification of non-renewal is provided by either party no less than 30 days prior to the expiration of the Term or the then current Renewal Term.

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4.   Compensation and Benefits.

a.   Compensation.

i.   The Company shall pay Executive the sum of one hundred thirty thousand dollars ($130,000) per year, commencing on the Commencement Date.

ii.   For purposes of this Agreement, the foregoing amounts which are payable during any calendar year shall be defined as the Executive's "Base Salary".  The Base Salary will be paid in installments at regular intervals as is in keeping with the Company's established payroll schedule.  Executive further acknowledges that he has not been promised or guaranteed that his salary will remain the same or increase by any particular amount during the term of this Agreement. The Executive will be given annual periodic performance evaluations in which the Base Salary will be evaluated and negotiated to determine when and if there will be an increase.

b.   Performance Bonus.  Executive shall be eligible to receive an annual bonus ("Bonus") to be determined by the Board within ninety (90) days following the end of the Company's fiscal year end.

Stock Grant. Executive shall receive stock grant of 95,000 shares of common stock of the Company, par value $0.000001, at the time of the signing of this agreement.

c.   Benefits.  Executive shall be entitled to participate in such employee benefit plans and insurance offered by the Company to similarly situated employees of the Company subject to the eligibility requirements, restrictions, and limitations of any such plans or programs.

d.   Business Expense Reimbursement; Telephone Expenses.  Upon the submission of proper substantiation by Executive, and subject to such rules and guidelines as the Company may from time to time adopt, the Company shall reimburse Executive for all reasonable expenses actually paid or incurred by the Executive during the Term in the course of and pursuant to the business of the Company including, without limitation, travel and telephone expenses incurred by the Executive while traveling to and from the Company's facilities as may be required pursuant to Section 1 hereof. The Executive shall account to the Company in writing for all expenses for which reimbursement is sought and shall supply to the Company copies of all relevant invoices, receipts, or other evidence reasonably requested by the Company.

e.   Vacation.  Executive shall be entitled to three (3) weeks of vacation each calendar year during the Term and any Renewal Term, to be taken at such times as the Executive and the Company shall mutually determine and provided that no vacation time shall interfere with the duties required to be rendered by the Executive hereunder.  Any vacation time not taken by Executive during any calendar year may be carried forward into any succeeding calendar year pursuant to the Company's vacation policy.

EMPLOYMENT AGREEMENT WITH SAM TALARI - 4 -

f.   Taxation.  Executive acknowledges that his compensation set forth above will be treated by the Company as wages paid to him and will be subject to withholding for all applicable taxes.  Accordingly, the Company shall deduct from all compensation payable to Executive hereunder (including, without limitation, Base Salary and Executive Bonuses, as such term is defined below) any and all sums required as Executive's portion of Social Security taxes and shall withhold federal and state income taxes as required by law, and shall further deduct from such compensation any other federal, state, or local tax or charge which is now or hereafter enacted or required as a charge or deduction from the compensation payable to Executive.

g.   Employment Commitment.  Executive shall devote such time, attention, knowledge, and skills to the business and interests of the Company as Company may reasonably require, and the Company shall be entitled to all of the benefits and profits arising from or incident to the work, services, advice, inventions, or innovations of Executive in connection with the Company's business.

h.   Leave of Absence.  Executive may take a leave of absence, without compensation, upon his written request to the Board and the Board's written consent for the leave. The length of the leave will be subject to the mutual agreement between the Board and the Executive.

5.   Termination.

a.   Termination.  This Agreement shall be terminated (i) upon the expiration of the Term, (ii) upon the death of the Executive, (iii) if the Executive shall have been substantially unable to perform Executive's duties hereunder for a period of three (3) consecutive months, (iv) by the Company for "Cause" (as defined below) and upon written notice, or (v) for Good Reason or voluntarily by the Executive.

b.   Cause.  As used in this Agreement, "Cause" shall mean any of the following: (i) Executive's willful failure or refusal, after notice thereof, to perform specific directives of the President when such directives are lawful and consistent with the Executives duties and responsibilities described in this Agreement; (ii) dishonesty of the Executive affecting the Company; (iii) habitual abuse of drugs or alcohol; (iv) conviction of Executive of, or a plea by Executive of guilty or no contest to, any felony or any crime involving moral turpitude, fraud, gross neglect, embezzlement, or misrepresentation; (v) any gross or willful conduct of the Executive resulting in loss to the Company or damage to the reputation of the Company; (vi) theft from the Company; (vii) commission or participation by Executive in any other injurious act or omission wantonly, willfully, recklessly, or in a manner which was grossly negligent against the Company; or (viii) violation by the Executive, after notice thereof, of the business policies and guidelines of the Company as may be in effect from time to time. Notwithstanding anything herein to the contrary, the Company shall notify the Executive of any purported grounds constituting Cause, and the Executive shall have no less than ten (10) business days within which to cure such purported grounds.

EMPLOYMENT AGREEMENT WITH SAM TALARI - 5 -

c.   Good Reason.  For purposes of this Agreement, the Executive shall have "Good Reason" to terminate his employment during the Term of this Agreement only if:

i.   the Company fails to pay or provide any amount or benefit that the Company is obligated to pay or provide under this Agreement and the failure is not remedied within 30 days after the Company receives written notice from the Executive of such failure; or

ii.   the Company limits the Executive's duties or responsibilities or power or authority contemplated by Section 1 above in any material respect, and the situation is not remedied within thirty (30) days after the Company receives written notice from the Executive of the situation; or

iii.   if the Executive is removed from the office of PRESIDENT and the Company does not have Cause for doing so; or

iv.   the Company forces Executive to relocate his office outside of the saint Petersburg, FL metropolitan area, and the situation is not remedied within thirty (30) days after the Company receives written notice from the Executive of the situation; or

v.   Change in Control occurs.

d.  Severance Payment.  In the even the Company terminates the Executive's employment without cause, it will be obligated to pay the Executive severance pay equal to two month's compensation for years one and two, three months for year three, four months for year four, and five months for year five of employment served by the Executive.

6.   Covenant Not To Compete/Non-Solicitation.  Executive acknowledges and recognizes the highly competitive nature of the Company's business and the goodwill and business strategy of the Company constitute a substantial asset of the Company.  Executive further acknowledges and recognizes that during the course of the Executive's employment, Executive will receive specific knowledge of the Company's business, have access to trade secrets and Confidential Information (as hereinafter defined), and participate in business acquisitions and decisions, and that it would be impossible for Executive to work for a competitor without using and divulging this valuable Confidential Information.  Executive further acknowledges that this covenant not to compete is an independent covenant within this Agreement.  This covenant shall survive this Agreement and shall be treated as an independent covenant for the purposes of enforcement.  Executive agrees to the following:

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a.   that all times during the Term and any Renewal Term and for a period of two (2) years after termination of the Executive's employment under this Agreement or any renewal or extension thereof (the "Restricted Period'), for whatever reason and in any geographic areas in which the Company operated or was actively planning on operating as of the date of termination of the Executive's employment (the "Restricted Area"), Executive will not individually or in conjunction with others, directly engage in Competition (as hereinafter defined) with the business of the Company, whether as an officer, director, proprietor, employer, employee, partner independent contractor, investor, consultant, advisor, agent, or otherwise; provided that this provision shall not apply to the Executive's ownership of the capital stock, solely as an investment, of securities of any issuer that is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the National Association of Securities Dealers Automated Quotations System, or any similar system or automated dissemination of quotations of securities prices in common use, so long as the Executive does not control, acquire a controlling interest in or become a member of a group which exercises direct or indirect control or, more than three percent of any class of capital stock of such corporation;

b.   that during the Restricted Period and within the Restricted Area, Executive will not, indirectly or directly, compete with the Company by soliciting, inducing or influencing any of the Company's customers that have a business relationship with the Company at any time during the Restricted Period to discontinue or reduce the extent of such relationship with the Company;

c.   that during the Restricted Period and within the Restricted Area, Executive will not (i) directly or indirectly recruit any employee of the Company to discontinue such employment relationship with the Company, or (ii) employ or seek to employ, or cause to permit any business which competes directly or indirectly with the business of the Company to employ or seek to employ for any such business any person who is then (or was at any time within six months prior to the date Executive or the competitive business employs or seeks to employ such person) employed by the Company; and

d.   that during the Restricted Period, Executive will not interfere with, disrupt, or attempt to disrupt any past or present relationship contractual or otherwise, between the Company and any Company's employees.

7.   For purposes hereof, "Competition" shall mean any company, partnership, limited liability company, or other entity any portion of whose business directly or indirectly competes with the business of the Company.  In the event that a court of competent jurisdiction shall determine that any provision of this Section is invalid or more restrictive than permitted under the governing law of such jurisdiction, then only as to enforcement of this Section within the jurisdiction of such court, such provision shall be interpreted and enforced as if it provided for the maximum restriction permitted under such governing law.  If the Executive shall be in violation of any provision of this Section, then each time limitation set forth in this Section shall be extended for a period of time equal to the period of time during which such violation or violations occur.  If the Company seeks injunctive relief from such violation in any court, then the covenants set forth in this Section shall be extended for a period of time equal to the pendency of such proceeding including all appeals by the Executive.

EMPLOYMENT AGREEMENT WITH SAM TALARI - 7 -

8.   Non-Disclosure of Confidential Information.

a.   Executive acknowledges that the Company's trade secrets, private or secret processes, methods, and ideas, as they exist from time to time, and information concerning the Company's services, business records and plans, inventions, acquisition strategy, price structure and pricing, discounts, costs, computer programs and listings, source code and/or subject code, copyrights, trademarks, proprietary information, formulae, protocols, forms, procedures, training methods, development technical information, know-how, show-how, new product and service development, advertising budgets, past, present or planned marketing, activities and procedures, method for operating the Company's business, credit and financial data concerning the Company's customers, and marketing, advertising, promotional, and sales strategies, sales presentations, research information, revenues, acquisitions, practices and plans and information which is embodied in written or otherwise recorded form, and other information of a confidential nature not known publicly or by other companies selling to the same markets and specifically including information which is mental, not physical (collectively, the "Confidential Information") are valuable, special, and unique assets of the Company, access to and knowledge of which have been provided to Executive by virtue of Executive's association with the Company. In light of the highly competitive nature of the industry in which the Company's business is conducted, Executive agrees that all Confidential Information, heretofore or in the future obtained by Executive as a result of Executive's association with the Company shall be considered confidential.

b.   The Executive agrees that the Executive shall (i) hold in confidence and not disclose or make available to any third party any such Confidential Information obtained directly or constructively from the Company, unless so authorized in writing by the Company or compelled to by a court of law; (ii) exercise all reasonable efforts to prevent third parties from gaining access to the Confidential Information; (iii) restrict the disclosure or availability of the Confidential Information to those employees or agents of the Company who have a need to know the information in order to further the business purposes of the Company; (iv) not copy or modify any Confidential Information without prior written consent of the Company, provided, however, that such copying or modification of any Confidential Information does not include any modifications or copying which would otherwise prevent the Executive from performing his duties and responsibilities to the Company; (v) take such other protective measures as may be reasonably necessary to preserve the confidentiality of the Confidential Information; and (vii) relinquish all rights he may have in any matter, such as drawings, documents, models, samples, photographs, patterns, templates, molds, tools, or prototypes which may contain, embody, or make use of the Confidential Information; promptly deliver to the Company any such matter as the Company may direct at any time, and not retain any copies or other reproductions thereof.

EMPLOYMENT AGREEMENT WITH SAM TALARI - 8 -

c.   Executive further agrees (i) that Executive shall promptly disclose in writing to the Company all ideas, inventions, improvements, and discoveries which may be conceived, made, or acquired by Executive as the direct or indirect result of the disclosure by the Company of the Confidential Information to Executive; (ii) that all such ideas, inventions, improvements, and discoveries conceived, made, or acquired by Executive, alone or with the assistance of others, relating to the Confidential Information in accordance with the provisions hereof are the property of the Company and that Executive shall not acquire any intellectual property rights under this Agreement except the limited right to use set forth in this Agreement; (iii) that Executive shall assist in the preparation and execution of all applications, assignments, and other documents which the Company may deem necessary to obtain patents, copyrights, and the like in the United States and in jurisdictions foreign thereto, and to otherwise protect the Company.

d.   Upon written request of the Company, Executive shall immediately return to the Company all written materials containing the Confidential Information as well as any other books, records, and accounts relating in any manner to the Company or its business.  Executive shall also deliver to the Company written statements signed by Executive certifying all materials have been returned within five days of receipt of the request.

9.   Acknowledgment by Executive.  The Executive acknowledges and confirms that (a) the restrictive covenants contained in this Agreement are reasonably necessary to protect the legitimate business interests of the Company, and (b) the restrictions contained herein (including without limitation the length of the term of the provisions of the covenant not to compete) are not overbroad, overlong, or unfair and are not the result of overreaching, duress, or coercion of any kind.  The Executive further acknowledges and confirms that his full, uninhibited, and faithful observance of each of the covenants contained herein will not cause him any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained herein will not impair his ability to obtain employment commensurate with his abilities and on terms fully acceptable to his or otherwise to obtain income required for the comfortable support of his and his family and the satisfaction of the needs of his creditors. The Executive acknowledges and confirms that his special knowledge of the business of the Company is such as would cause the Company serious injury or loss if he were to use such ability and knowledge to the benefit of a competitor or were to compete with the Company in violation of the terms hereof.  The Executive further acknowledges that the restrictions contained herein are intended to be, and shall be, for the benefit of and shall be enforceable by, the Company's successors and assigns.

10.   Injunction.  It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Sections 6 and 7 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain.  As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in Sections 6 and 7 of this Agreement by the Executive or any of his affiliates, associates, partners, or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess. In addition, upon any violation of the covenants contained in Sections 6 and 7, all severance payments and benefits to which the Executive may be entitled to hereunder shall immediately cease and be without further force and effect.

EMPLOYMENT AGREEMENT WITH SAM TALARI - 9 -

11.   Indemnification by The Company.  To the fullest extent permitted by applicable law, the Company shall indemnify, defend, and hold harmless the Executive from and against any and all claims, demands, actions, causes of action, liabilities, losses, judgments, fines, costs, and expenses (including reasonable attorneys' fees and settlement expenses) arising from or relating to his service or status as an officer, director, executive, agent, or representative of the Company or any subsidiary of the Company or in any other capacity in which the Executive serves or has served at the request of, or for the benefit of, the Company or its subsidiaries, including but not limited to claims alleged by Executive's former employer regarding solicitation of employees; provided, however, that the Company shall not be responsible to indemnify the Executive for any actions of gross negligence or willful misconduct. The Company's obligations under this Section 10 shall be in addition to, and not in derogation of, any other rights the Executive may have against the Company to indemnification or advancement of expenses, whether by statute, contract or otherwise.

12.   Survival. The obligations of Executive and the rights of the Company, its successors, and assigns under these Sections 6 and 7shall survive the expiration or termination of this Agreement indefinitely with respect to Executive's non-competition, non-solicitation, and confidentiality obligations.

13.   Representations and Warranties of Executive.  The Executive represents and warrants to the Company as follows:

 

a.   Executive has the full right to enter into this Agreement and perform all duties hereunder, and has made no contract or other commitment in contravention of the terms hereof (including, without limitation, contracts or obligations respecting trade secrets or proprietary information or otherwise restricting competition), or which would prevent Executive from using his best efforts in the performance of his duties hereunder.  Executive has fulfilled all of his obligations under all prior employment or consulting agreements (or similar arrangements), and there is not, under any of the foregoing, any existing default or breach by Executive with respect thereto.

b.   Executive's performance hereunder shall not constitute a default under any contract or other commitment to which the Executive is bound.

c.   All information furnished by Executive to the Company is to the best of Executive's knowledge, true and complete (including, without limitation, documentary evidence of Executive's identity and eligibility for employment in the United States), and Executive will promptly advise the Company with respect to any change in the information of record.

d.   Executive is not subject to any order, decree, or decision precluding his from performing his duties as described herein.

e.   Executive declares that he has read and understands all the terms of this Agreement; that he has had ample opportunity to review it with his attorney before signing it; that no promise, inducement, or agreement has been made except as expressly provided in this Agreement; that it contains the entire Agreement between the parties; and that he enters into this Agreement fully, voluntarily, knowingly, and without coercion.

EMPLOYMENT AGREEMENT WITH SAM TALARI - 10 -

14.   Severability.  If any provision, section, or subsection of this Agreement is adjudged by any court to be void or unenforceable in whole or in part, such adjudication shall not affect the validity of the remainder of the Agreement, including any other provision, section, or subsection, and the Company and Executive shall negotiate in good faith to modify the unenforceable provision so as to effect the original intent of the parties as closely as possible.

15.   Binding Effect.  This Agreement shall be binding upon and shall inure to the benefit of the Company and Executive, and their respective successors, heirs, executors, legal representatives, and administrators.

16.   Waiver of Breach – Payment of Fees and Expenses.  Failure of the Company to demand strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of the term, covenant, or condition, nor shall any waiver or relinquishment by the Company of any right or power hereunder at any one time or more times be deemed a waiver or relinquishment of the right or power at any other time or times.  In the event either party breaches this Agreement, the breaching party shall pay all of the non-breaching party's costs and expenses, including attorneys' fees and expenses, incurred in enforcing the terms of this Agreement.

17.   Modification in Writing Only.  No waiver or modification of this Agreement or of any covenant, condition, or limitation herein, shall be valid unless in writing and duly executed by the party to be charged therewith.

18.   Choice of Law and Venue.  This Agreement shall be subject to and governed by the laws of the State of Nevada, irrespective of the fact that any party is or may become a resident of a different state, and without regard to principles of conflict of laws.  In addition, venue for any action instituted to enforce the provisions of this Agreement shall be in the Circuit Court of Pinellas County, Florida.

19.   Notice.  All notices, requests, claims, demands, and other communications hereunder (collectively, "Notice") shall be in writing and shall be deemed to have been duly given if (i) delivered in person against signed and dated receipt, (ii) sent by recognized commercial overnight delivery service, (iii) sent by registered or certified mail, first class postage prepaid, return receipt requested, or (iv) sent by facsimile or electronic mail (with receipt orally confirmed on the same date) and simultaneously mailed, first class, postage prepaid, as follows:

If to the Company:

FutureLand Holding, Inc.

3637 4th Street North, #330

Saint Petersburg, FL 33704

Attn:  Cameron Cox, CEO

If to Executive:

Sam Talari

7504th Ave. South

Saint Petersburg, FL 33701

i.   Notice shall be deemed effective on the day of delivery if given pursuant to clause (i) or (iv) above, or on the third (3rd) business day following mailing if given pursuant to clause (ii) or (iii) above.  Any party may change its address for purposes hereof by written Notice in accordance herewith, except that Notices regarding change of address shall only be effective upon receipt.  Failure to accept a Notice shall not invalidate such Notice.

20.   Assignment. This Agreement is personal and not assignable by Executive directly or indirectly.

21.   Entire Agreement.  The parties acknowledge that they have read this Agreement, understand it, and agree to be bound by its terms, conditions, and covenants, and also agree that it constitutes the entire agreement between the parties and supersedes all proposals, oral or written, and all prior negotiations, conversations, or discussions between the parties relating to the subject matter of this Agreement.

22.   Counterparts.  This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.  Facsimile signatures are intended by the parties to serve as originals.

23.   Construction.  The parties hereto acknowledge and agree that this Agreement is the result of negotiations between the parties, and that this Agreement will not be construed against any party hereto by virtue of such party's role or its counsel's role in the authorship hereof.

(Signature page follows)

EMPLOYMENT AGREEMENT WITH SAM TALARI - 11 -

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the Company and Executive as of the date first above written.

Company:

FUTURELAND HOLDINGS, INC.

By:  /s/ Cameron Cox                                                        

       Cameron Cox, CEO

Dated: 5-28-2015                                                         

 

Executive:

 

By: /s/ Sam Talari                                                             

      Sam Talari

Dated: 5-28-2015Exhibit 4.1

 

NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.  THIS NOTE AND SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THIS NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS.

 

BIOPHARMX CORPORATION

 

FORM OF CONVERTIBLE PROMISSORY NOTE

 

	
Note   No.: [·]
    	
 
    
	
$ 500,000
    	
Made as of June [·], 2015
    

 

Subject to the terms and conditions of this Note, for value received, BioPharmX Corporation, a Delaware corporation (the “Company”), with chief executive offices at 1098 Hamilton Court, Menlo Park, CA 94025, hereby promises to pay to the order of [name] or registered assigns (“Holder”), the principal sum of five hundred thousand Dollars ($500,000.00), or such lesser amount as shall then equal the outstanding principal amount hereunder, together with interest accrued on the unpaid principal amount at the Applicable Rate (as defined below).  Interest shall begin to accrue on the date of this Note and shall continue to accrue on the outstanding principal until the entire Balance is converted and shall be computed based on the actual number of days elapsed and on a year of 365 days.

 

This Note will be subordinated to any future secured indebtedness with banks, lessors or other financial or lending institutions. The following is a statement of the rights of Holder and the terms and conditions to which this Note is subject, and to which Holder, by the acceptance of this Note, agrees.

 

1.                                      DEFINITION.  The following definitions shall apply for purposes of this Note.

 

“Actual Conversion Amount” means all (or if permitted by the terms of this Note, that lesser portion) of the Balance actually converted into Conversion Stock pursuant to Section 2.1 or Section 6.1, as applicable, on an Actual Conversion Date, including, if accrued interest and expenses convert pursuant to the terms of this Note,

 

 

interest and expenses accrued through such Actual Conversion Date and actually converted into Conversion Stock.

 

“Actual Conversion Date” means a date on which all (or if permitted by this Note, a lesser portion) of the Balance of this Note is converted pursuant to Section 2.1 or Section 6.1, as applicable.

 

“Affiliate” has the meaning ascribed to it in Rule 144 promulgated under the Securities Act.

 

“Applicable Rate” means a rate equal to the lower of: (a) the Highest Lawful Rate; and (b) six percent (6.00%) per annum.

 

“Balance” means, at the applicable time, the sum of all then outstanding principal of this Note, all then accrued but unpaid interest and all other amounts then accrued but unpaid under this Note.

 

“Business Day” means a weekday on which banks are open for general banking business in San Francisco, California.

 

“Change of Control” means “Liquidation Event” as defined in the Company’s Amended and Restated Designations, Preferences and Rights of Series A Preferred Stock.

 

“Company” shall include, in addition to the Company identified in the opening paragraph of this Note, any corporation or other entity which succeeds to the Company’s obligations under this Note, whether by permitted assignment, by merger or consolidation, operation of law or otherwise.

 

“Conversion Price” means: (1) if the Public Offering Closing occurs before the Maturity Date, an amount equal to the public offering price at which shares of Common Stock of the Company (“Common Stock”), $0.001 par value per share are sold in the Public Offering; or (2) if the Public Offering Closing does not occur before the Maturity Date, the 30-day average of the closing price of the Company’s Common Stock as of close of business on the Maturity Date as quoted on the OTCQB or another automated quotation system on which the Company’s Common Stock trades; provided, however, in each case, in no event shall the Conversion Price be lower than $1.85 per share (with such per share price to be adjusted for stock splits, stock combinations, recapitalizations and like events affecting the Common Stock).  The Conversion Price is subject to adjustment as provided herein.

 

“Conversion Stock” means Common Stock.  The number and character of shares of Conversion Stock are subject to adjustment as provided in this Note and the term “Conversion Stock” shall include the stock and other securities and property that are, on an Actual Conversion Date, receivable or issuable upon such conversion of this Note in accordance with its terms.

 

“Event of Default” has the meaning set forth in Section 5.

 

“Financing Document” means this Note and any document entered into, executed or delivered under or in connection with, or for the purpose of amending, this Note.

 

2

 

“Highest Lawful Rate” means the maximum non-usurious rate of interest, as in effect from time to time, which may be charged, contracted for, reserved, received or collected by Holder in connection with this Note under applicable law.

 

“Lost Note Documentation” means documentation satisfactory to the Company with regard to a lost or stolen Note, including, if required by the Company, an affidavit of lost note and an indemnification agreement by Holder in favor of the Company with respect to such lost or stolen Note.

 

“Maturity Date” means the earlier of (a) June [·], 2016 or (b) the time at which the Balance of this Note is due and payable upon an Event of Default; provided, however that if the Event of Default is cured as permitted in this Note, then the Maturity Date shall not thereafter be deemed to have occurred with regard to such Event of Default under this clause (b).

 

“Note” means this Convertible Promissory Note.

 

“Person” means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other entity or any governmental authority.

 

“Principal Balance” means, at the applicable time, all the then outstanding principal of this Note.

 

“Public Offering” means the Company’s public offering of common stock pursuant to an effective registration statement on Form S-1 filed under the Securities Act, where in connection with such public offering, the Company receives the approval to list shares of its Common Stock on the NYSE MKT or other exchange which is registered under the Securities Exchange Act of 1934, as amended, as a “national securities exchange,” including their successors.

 

“Public Offering Closing” means the closing of the Public Offering.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Senior Indebtedness” means the principal of, accrued but unpaid interest on and other amounts with respect to, any and all future indebtedness of the Company, hereafter created or incurred in connection with secured indebtedness with banks, lessors or other financial or lending institutions.

 

2.                                      PAYMENT AT MATURITY DATE; INTEREST.

 

2.1                               Conversion at Maturity Date.  If this Note has not been previously converted (as provided in Section 6), then on the Maturity Date, all of the Balance then outstanding shall convert into Conversion Stock at the Conversion Price then in effect. Conversion shall be deemed to have occurred under this Section 2.1 at the close of business on the Maturity Date.

 

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2.2                               Payment of Interest.  Anything herein to the contrary notwithstanding, if during any period for which interest is computed hereunder, the amount of interest computed on the basis provided for in this Note, together with all fees, charges and other payments which are treated as interest under applicable law, as provided for herein or in any other document executed in connection herewith, would exceed the amount of such interest computed on the basis of the Highest Lawful Rate, then the Company shall not be obligated to pay, and Holder shall not be entitled to charge, collect, receive, reserve or take, interest in excess of the Highest Lawful Rate, and during any such period the interest payable hereunder shall be computed on the basis of the Highest Lawful Rate.

 

3.                                      NO PREPAYMENT. Except with regard to the conversion of this Note under Section 6, the Company may not pay any unpaid Balance of this Note before it becomes due.

 

4.                                      [INTENTIONALLY LEFT BLANK].

 

5.                                      EVENTS OF DEFAULT.  Each of the following events shall constitute an “Event of Default” hereunder:

 

(a)                                 The Company fails to make any payment when due under this Note on the applicable due date;

 

(b)                                 A receiver is appointed for any material part of the Company’s property, the Company makes a general assignment for the benefit of creditors, or the Company becomes a debtor or alleged debtor in a case under the U.S. Bankruptcy Code or becomes the subject of any other bankruptcy or similar proceeding for the general adjustment of its debts or for its liquidation;

 

(c)                                          The Company breaches any material obligation to Holder under this Note or under any other Financing Document and does not cure such breach within 20 days after written notice thereof has been given by or on behalf of Holder to the Company;

 

(d)                                         The Company is in default under any Senior Indebtedness and such default is not waived by the holder of such Senior Indebtedness or cured by the Company within the applicable grace period, if any, provided in the agreements evidencing such Senior Indebtedness; or

 

(e)                                          The Company’s Board of Directors or stockholders adopt a resolution for the liquidation, dissolution or winding up of the Company.

 

Upon the occurrence of any Event of Default, all accrued but unpaid expenses, accrued but unpaid interest, all principal and any other amounts outstanding under this Note shall (i) in the case of any Event of Default under Section 5(b), become immediately due and payable in full without further notice or demand by Holder and (ii) in the case of any Event of Default other than under Section 5(b), become immediately due and payable upon written notice by or on behalf of the Holder to the Company.

 

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6.                                      CONVERSION.

 

6.1                               Conversion at Public Offering.  At the Public Offering Closing, the entire Balance then outstanding shall automatically be cancelled and converted into that number of shares of Conversion Stock obtained by dividing (a) the entire Balance by (b) the Conversion Price then in effect.  Such conversion shall be deemed to occur under this Section 6.1 as of immediately prior to the Public Offering Closing, without regard to whether Holder has then delivered to the Company this Note (or the Lost Note Documentation where applicable).

 

6.2                               Termination of Rights.  Except for the right to obtain certificates representing the Conversion Stock under Section 7, all rights with respect to this Note shall terminate upon the effective conversion of the entire Balance of the Note as provided in Section 2.1 or 6.1, whichever is applicable.  Notwithstanding the foregoing, Holder agrees to surrender this Note to the Company (or Lost Note Documentation where applicable) as soon as practicable after conversion.  In any event, Holder shall not be entitled to receive any stock certificates representing the shares of Conversion Stock issuable upon conversion of this Note unless and until Holder has surrendered the original of this Note (or Lost Note Documentation where applicable).

 

7.                                      CERTIFICATES; NO FRACTIONAL SHARES.  Subject to Section 6.2, as soon as practicable after conversion of this Note pursuant to Section 2.1 or 6.1, as applicable, the Company at its expense will cause to be issued in the name of Holder and to be delivered to Holder, a certificate or certificates for the number of shares of Conversion Stock to which Holder shall be entitled upon such conversion (bearing such legends as may be required by applicable state and federal securities laws in the opinion of legal counsel of the Company, by any lockup agreement, by the Company’s Certificate of Incorporation and Bylaws and by any agreement between the Company and Holder), together with any other securities and property to which Holder is entitled upon such conversion under the terms of this Note.  No fractional shares shall be issued upon conversion of this Note.  If upon any conversion of this Note a fraction of a share would otherwise be issued, then in lieu of such fractional share, the Company shall pay to Holder an amount in cash equal to such fraction of a share multiplied by the applicable Conversion Price.

 

8.                                      ADJUSTMENT PROVISIONS.  So long as any of the Balance of this Note remains outstanding and conversion under Sections 2.1 or 6.1 has not occurred, the number and character of shares of Conversion Stock issuable upon conversion of this Note upon an Actual Conversion Date and, to the extent set forth in this Section 8, the Conversion Price therefor, are each subject to adjustment upon each occurrence of an adjustment event described in Sections 8.1 through 8.4 occurring between the date this Note is issued and such Actual Conversion Date.

 

8.1                               Adjustment for Stock Splits and Stock Dividends.  The Conversion Price and the number of shares of Conversion Stock shall each be proportionally adjusted to reflect any stock dividend, stock split, reverse stock split or other similar event affecting the number of outstanding shares of Conversion Stock without the payment of consideration to the Company therefor at any time before an Actual Conversion Date.

 

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8.2                               Adjustment for Other Dividends and Distributions.  If the Company shall make or issue, or shall fix a record date for the determination of eligible holders of its capital stock entitled to receive, a dividend or other distribution payable with respect to the Conversion Stock that is payable in securities of the Company (other than issuances with respect to which adjustment is made under Sections 8.1 or 8.3), or in assets (other than cash dividends) (each, a “Dividend Event”), and such dividend or other distribution is actually made, then, and in each such case, Holder, upon conversion of an Actual Conversion Amount at any time after such Dividend Event, shall receive, in addition to the Conversion Stock issuable upon such conversion of the Note, the securities or other assets that would have been issuable to Holder had Holder, immediately prior to such Dividend Event, converted such Actual Conversion Amount into Conversion Stock.

 

8.3                               Adjustment for Consolidation or Merger.  If the Company shall consolidate with or merge into one or more other corporations or other entities, and pursuant to such consolidation or merger, stock, other securities or other property is issued or paid to holders of Conversion Stock (each, a “Reorganization Event”), then, and in each such case, Holder, upon conversion of an Actual Conversion Amount after the consummation of such Reorganization Event, shall be entitled to receive (in lieu of the stock or other securities and property that Holder would have been entitled to receive under the terms of this Note upon such conversion but for such Reorganization Event), the stock or other securities or property that Holder would have been entitled to receive upon the consummation of such Reorganization Event if, immediately prior to such Reorganization Event, Holder had converted such Actual Conversion Amount into Conversion Stock, all subject to further adjustment as provided in this Note, and the successor corporation or other successor entity in such Reorganization Event shall duly execute and deliver to Holder a supplement to this Note acknowledging such corporation’s or other entity’s obligations under this Note; and in each such case, the terms of the Note shall be applicable to the shares of stock or other securities or property receivable upon the conversion of this Note after the consummation of such Reorganization Event.

 

8.4                               Conversion of Stock.  In each case not otherwise covered in Section 8.3 where (a) all the outstanding Conversion Stock is converted, pursuant to the terms of the Company’s Certificate of Incorporation, into Common Stock or other securities or property, or (b) the Conversion Stock otherwise ceases to exist or to be authorized under the Company’s Certificate of Incorporation (each a “Stock Event”), then Holder, upon conversion of this Note at any time after such Stock Event, shall receive, in lieu of the number of shares of Conversion Stock that would have been issuable upon conversion of this Note immediately prior to such Stock Event, the stock and other securities and property that Holder would have been entitled to receive upon the Stock Event, if immediately prior to such Stock Event, Holder had converted the Actual Conversion Amount into Conversion Stock.

 

8.5                               Notice of Adjustments.  The Company shall promptly give written notice of each adjustment of the Conversion Price or the number or type of shares of Conversion Stock or other securities or property issuable upon conversion of this Note that is required under this Section 8.  The notice shall describe the adjustment or readjustment and show in reasonable detail the facts on which the adjustment or readjustment is based.

 

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8.6                               No Change Necessary.  The form of this Note may, but need not, be changed because of any adjustment in the Conversion Price or in the number or type of shares of Conversion Stock issuable upon its conversion.

 

8.7                               Reservation of Stock.  If the number of shares of Conversion Stock or other securities authorized and reserved for issuance upon conversion of this Note shall not be sufficient to effect the conversion of the Balance of this Note, then the Company shall take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Conversion Stock or other securities issuable upon conversion of this Note as shall be sufficient for such purpose.

 

9.                                      PROVISIONS RELATING TO STOCKHOLDERS RIGHTS.

 

9.1                               Rights as Investor.  Upon conversion of the Balance in connection with the Public Offering, Holder shall be entitled to the rights and be subject to all other obligations of the investors in the Conversion Stock issued in the Public Offering.

 

“Market Stand-Off” Agreement.  Holder hereby agrees that Holder shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any shares of stock or other securities of the Company then or thereafter owned by Holder (other than to donees or partners of Holder who agree to be similarly bound) for up to one hundred eighty (180) days, plus up to an additional 18 days to the extent necessary to comply with applicable regulatory requirements, following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such agreement shall be applicable only to the first such registration statement of the Company which covers securities to be sold on its behalf to the public in an underwritten offering, but shall not apply to any securities sold pursuant to such registration statement.

 

For purposes of this Section 9.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates.  In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the securities of the Company subject to this Section and to impose stop transfer instructions with respect to the securities of the Company held by Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.  Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

9.2                               No Voting or Other Rights.  This Note does not entitle Holder to any voting rights or other rights as a stockholder of the Company, unless and until (and only to the extent that) this Note is actually converted into shares of the Company’s capital stock in accordance with its terms.  In the absence of conversion of this Note into Conversion Stock, no provisions of this Note and no enumeration herein of the rights or privileges of Holder, shall cause Holder to be a stockholder of the Company for any purpose.

 

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9.3          Inspection Rights.  Holder shall also be entitled to standard inspection and visitation rights pursuant to Delaware law.

 

10.          REPRESENTATIONS AND WARRANTIES OF HOLDER.

 

In order to induce the Company to issue this Note to the original Holder, the original Holder has made representations and warranties to the Company as set forth below.

 

10.1        Authorization.  This Note constitutes Holder’s valid and legally binding obligations, enforceable against Holder in accordance with its terms, except as may be limited by  (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and (ii) the effect of rules of law governing the availability of equitable remedies.  Holder represents and warrants to the Company that Holder has full power and authority to enter into this Note.

 

10.2        Purchase for Own Account.  The Note and the Conversion Stock issuable upon the conversion of the Note, (collectively, the “Securities”) will be acquired for investment for Holder’s own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof within the meaning of the Securities Act, and Holder has no present intention of selling, granting any participation in, or otherwise distributing the same.

 

10.3        No Solicitation.  At no time was Holder presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and purchase of the Securities.

 

10.4        Disclosure of Information.  Holder has received or has had full access to all the information Holder considers necessary or appropriate to make an informed investment decision with respect to the Securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder had access.

 

10.5        Investment Experience.  Holder understands that the purchase of the Securities involves substantial risk.  Holder (i) has experience as an investor in securities of companies in the development stage and acknowledges that such Investor is able to fend for itself, can bear the economic risk of Holder’s investment in the Securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of this investment in the Securities and protecting Holder’s own interests in connection with this investment in the Securities or (ii) has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

10.6        Accredited Investor Status.  Holder is familiar with the definition of, and qualifies as, an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act.

 

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10.7        Restricted Securities.  Holder understands that the Securities are characterized as “restricted securities” under the Securities Act and Rule 144 promulgated thereunder (“Rule 144”) since they are being acquired from the Company in a transaction not involving a public offering, and that under the Securities Act and applicable regulations thereunder the Securities may be resold without registration under the Securities Act only in certain limited circumstances.  Holder further understands that the Company is under no obligation to register the Securities, and the Company has no present plans to do so.  Furthermore, Holder is familiar with Rule 144, as presently in effect, and understands the limitations imposed thereby and by the Securities Act on resale of the Securities without such registration.  Holder understands that, whether or not the Securities may be resold in the future without registration under the Securities Act, no public market now exists for any of the Securities and that it is uncertain whether a public market will ever exist for the Securities.

 

10.8        Further Limitations on Disposition.  Without in any way limiting the representations set forth above, Holder further agrees not to make any disposition of all or any portion of the Securities unless and until:

 

(a)           there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such effective registration statement; or

 

(b)           Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition and, at the expense of Holder or its transferee, with an opinion of counsel reasonably satisfactory in form and substance to the Company that such disposition will not require registration of such Securities under the Securities Act.

 

Notwithstanding the provisions of paragraphs (a) and (b) of this Section 10.8, no such registration statement or opinion of counsel shall be required for any transfer:  (i) of any Securities in compliance with Rule 144 or Rule 144A promulgated under the Securities Act when the Company is promptly provided evidence of such compliance; (ii) of any Securities by a Holder that is a partnership or a corporation to (A) a partner of such partnership or stockholder of such corporation, (B) an affiliate of such partnership or corporation, (C) a retired partner of such partnership who retires after the date hereof, (D) the estate of any deceased partner of such partnership or deceased stockholder of such corporation; or (iii) by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in each of the foregoing cases the transferee agrees in writing to be subject to the terms of this Section 10.8 to the same extent as if the transferee had been an original Holder hereunder.

 

10.9        Legends.  Holder understands and agrees that the certificates evidencing the Securities will bear legends substantially similar to those set forth below in addition to any other legend that may be required by applicable law, the Company’s Certificate of Incorporation or Bylaws, Section 9.2 above or any other agreement between the Company and Holder:

 

(a)           THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE

 

9

 

“ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE  AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS.

 

(b)           Any legend pursuant to a lock up agreement, required by the laws of the State of California, including any legend required by the California Department of Corporations or any other state securities laws.

 

The legend set forth in (a) above shall be removed by the Company from any certificate evidencing the Securities upon delivery to the Company of an opinion of counsel, reasonably satisfactory in form and substance to the Company, that either (i) a registration statement under the Securities Act is at that time in effect with respect to the legended security or (ii) such security can be freely transferred in a public sale (other than pursuant to Rule 144, Rule 144A or Rule 145 promulgated under the Securities Act) without such a registration statement being in effect and that such transfer will not jeopardize the exemption or exemptions from registration pursuant to which the Company issued the Securities.

 

10.10      Disqualification.  Holder represents that neither Holder, nor any person or entity with whom Holder shares beneficial ownership of the Company securities, is subject to any Disqualification Event (as defined in Rule 506(d)(1)(i) through (viii) under the Securities Act), except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed reasonably in advance of the date hereof in writing in reasonable detail to the Company.

 

11.          GENERAL PROVISIONS.

 

11.1        Waivers.  The Company and all endorsers of this Note hereby waive notice, presentment, protest and notice of dishonor.

 

11.2        Attorneys’ Fees.  In the event any party is required to engage the services of an attorney for the purpose of enforcing this Note, or any provision thereof, the prevailing party shall be entitled to recover its reasonable expenses and costs in enforcing this Note, including attorneys’ fees.

 

11.3        Transfer.  Neither this Note nor any rights hereunder may be assigned, conveyed or transferred, in whole or in part, without the Company’s prior written consent, which the Company may withhold in its sole discretion.  Subject to the foregoing, the rights and obligations of the Company and Holder under this Note shall be binding upon and benefit their respective permitted successors, assigns, heirs, administrators and transferees.

 

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11.4        Governing Law.  This Note shall be governed by and construed under the internal laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within the State of California, without reference to principles of conflict of laws or choice of laws.

 

11.5        Headings.  The headings and captions used in this Note are used only for convenience and are not to be considered in construing or interpreting this Note.  All references in this Note to sections and exhibits shall, unless otherwise provided, refer to sections hereof and exhibits attached hereto, all of which exhibits are incorporated herein by this reference.

 

11.6        Notices.  Unless otherwise provided herein, any notice required or permitted under this Note shall be given in writing and shall be deemed effectively given (a) at the time of personal delivery, if delivery is in person; (b) one (1) Business Day after deposit with an express overnight courier for United States deliveries, or three (3) Business Days after deposit with an international express overnight air courier for deliveries outside of the United States, in each case with proof of delivery from the courier requested; or (c) four (4) Business Days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries, when addressed to the party to be notified at the address indicated below, or at such other address as any party hereto may designate for itself to receive notices by giving ten (10) days’ advance written notice to all other parties in accordance with the provisions of this Section.  For purposes of this Section 11.6, a “business day” means a weekday on which banks are open for general banking business in San Francisco, California.

 

COMPANY ADDRESS

BioPharmX Corporation

1098 Hamilton Court

Menlo Park, California 94025

 

HOLDER ADDRESS

[Holder’s name and address]

 

11.7        Amendments and Waivers.  Any term of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Holder.  Any amendment or waiver effected in accordance with this Section 11.7 shall be binding upon Holder, each future holder of the Note, and the Company.

 

11.8        Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, then such provision(s) shall be excluded from this Note to the extent they are held to be unenforceable and the remainder of the Note shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be signed in its name as of the date first written above.

 

	
 
    	
THE COMPANY
    
	
 
    	
 
    
	
 
    	
BioPharmX Corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
James Pekarsky
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
CEO and Chairman of the Board
    
	
 
    	
 
    
	
AGREED   AND ACKNOWLEDGED:
    	
 
    
	
 
    	
 
    
	
HOLDER
    	
 
    
	
 
    	
 
    
	
[NAME OF HOLDER]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
[name of holder]
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
[title of holder]
    	
 
    

 

[SIGNATURE PAGE TO CONVERTIBLE PROMISSORY NOTE OF BIOPHARMX CORPORATION]

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