Document:

cbbt_ex1034.htm

EXHIBIT 10.34

 

CEREBAIN BIOTECH CORP.

____________________________

 

SECURITIES PURCHASE AGREEMENT

COMMON STOCK AT $0.50 PER SHARE

__________________________

 

	 
	1
	

 
	 

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is made and entered into effective as of the 1st day of February 2018 (the “Effective Date”) by and between Cerebain Biotech Corp., a Nevada corporation (the “Company”), and Charles Laba-Chedrawi, (the “Purchaser”). The Company and Purchaser shall each be referred to as a “Party” and collectively as the “Parties.”

 

AGREEMENT

 

1. PURCHASE OF SECURITIES: Upon the Closing Date (as hereinafter defined), subject to the terms and conditions set forth in this Agreement, the Purchaser hereby agrees to purchase, and the Company hereby agrees to sell, One Hundred Twenty Thousand (120,000) shares of the Company’s common stock (the “Shares”) at a per-share purchase price of Fifty Cents ($0.50) per share, for a total purchase price of Sixty Thousand Dollars ($60,000) (the “Purchase Price”). In addition to the Shares the Purchaser will be issued a warrant to purchase shares of common stock of the Company at an exercise price of $1.00 per share in the form attached hereto as Exhibit A (the “Warrant”). The number of shares underlying the Warrant will be equal to one share per $0.50 of the Purchase Price. 

 

2. CLOSING AND DELIVERY: 

 

a) Upon the terms and subject to the conditions set forth herein, the consummation of the Initial Purchase (the “Closing”) shall be held simultaneous with the execution of this Agreement, or at such other time mutually agreed upon between the constituent Parties (the “Closing Date”). The Closing shall take place at the offices of counsel for the Company set forth in Section 6 hereof, or by the exchange of documents and instruments by mail, courier, facsimile and wire transfer to the extent mutually acceptable to the Parties hereto.

 

b) At the Closing:

 

(i) The Company and the Purchaser shall execute this Agreement, which shall serve as evidence of ownership of the Shares for the Initial Purchase and the corresponding Warrant, free from restrictions on transfer except as set forth in this Agreement. Subsequent to the Closing, at a time chosen by the Company in its sole discretion, the Company will issue a stock certificate to the Purchaser to evidence the Shares for the Initial Purchase. The Company will issue the Purchaser a warrant agreement to evidence the Warrant.

 

(ii) The Purchaser shall deliver to the Company the Purchase Price for the Initial Purchase.

 

3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY PURCHASER: The Purchaser hereby represents, warrants and agrees as follows:

 

a) Purchase for Own Account. Purchaser represents that he is acquiring the Securities solely for his own account and beneficial interest for investment and not for sale or with a view to distribution of the Securities or any part thereof, has no present intention of selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the same, and does not presently have reason to anticipate a change in such intention.

 

b) Ability to Bear Economic Risk. Purchaser acknowledges that an investment in the Securities involves a high degree of risk, and represents that he is able, without materially impairing his financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of his investment.

 

	 
	2
	

 
	 

 

c) Access to Information. The Purchaser acknowledges that the Purchaser has been furnished with such financial and other information concerning the Company, the directors and officers of the Company, and the business and proposed business of the Company as the Purchaser considers necessary in connection with the Purchaser’s investment in the Securities. The Purchase is aware the Company currently has approximately 4,447,448 shares of common stock outstanding. As a result, the Purchaser is thoroughly familiar with the proposed business, operations, properties and financial condition of the Company and has discussed with officers of the Company any questions the Purchaser may have had with respect thereto. The Purchaser understands:

 

(i) The risks involved in this investment, including the speculative nature of the investment;

 

(ii) The financial hazards involved in this investment, including the risk of losing the Purchaser’s entire investment;

 

(iii) The lack of liquidity and restrictions on transfers of the Securities; and

 

(iv) The tax consequences of this investment.

 

The Purchaser has consulted with the Purchaser’s own legal, accounting, tax, investment and other advisers with respect to the tax treatment of an investment by the Purchaser in the Securities and the merits and risks of an investment in the Securities.

 

d) Securities Part of Private Placement. The Purchaser has been advised that the Securities have not been registered under the Securities Act of 1933, as amended (the “Act”), or qualified under the securities law of any state, on the ground, among others, that no distribution or public offering of the Securities is to be effected and the Securities will be issued by the Company in connection with a transaction that does not involve any public offering within the meaning of section 4(a)(2) of the Act and/or Regulation D as promulgated by the Securities and Exchange Commission under the Act, and under any applicable state blue sky authority. The Purchaser understands that the Company is relying in part on the Purchaser’s representations as set forth herein for purposes of claiming such exemptions and that the basis for such exemptions may not be present if, notwithstanding the Purchaser’s representations, the Purchaser has in mind merely acquiring the Securities for resale on the occurrence or nonoccurrence of some predetermined event. The Purchaser has no such intention.

 

e) Purchaser Not Affiliated with Company. The Purchaser, either alone or with the Purchaser’s professional advisers (i) are unaffiliated with, have no equity interest in, and are not compensated by, the Company or any affiliate or selling agent of the Company, directly or indirectly; (ii) has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of an investment in the Securities; and (iii) has the capacity to protect the Purchaser’s own interests in connection with the Purchaser’s proposed investment in the Securities.

 

f) Further Limitations on Disposition. Purchaser further acknowledges that the Securities are restricted securities under Rule 144 of the Act, and, therefore, if the Company, in its sole discretion, chooses to issue any certificates reflecting the ownership interest in the Securities, those certificates will contain a restrictive legend substantially similar to the following:

 

	 
	3
	

 
	 

 

	
 
	
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
	
 

 

Without in any way limiting the representations set forth above, Purchaser further agrees not to make any disposition of all or any portion of the Securities unless and until:

 

(i) There is then in effect a Registration Statement under the Act covering such proposed disposition and such disposition is made in accordance with such Registration Statement; or

 

(ii) Purchaser shall have obtained the consent of the Company and notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, Purchaser shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration under the Act or any applicable state securities laws.

 

Notwithstanding the provisions of subparagraphs (i) and (ii) above, no such registration statement or opinion of counsel shall be necessary for a transfer by such Purchaser to a partner (or retired partner) of Purchaser, or transfers by gift, will or intestate succession to any spouse or lineal descendants or ancestors, if all transferees agree in writing to be subject to the terms hereof to the same extent as if they were Purchasers hereunder as long as the consent of the Company is obtained.

 

g) Accredited Investor Status (Please check one). Purchaser 

 

_____ is 

 

_____ is not 

 

an “accredited investor” as such term is defined in Rule 501 under the Act because Purchaser either:

 

(i) has a net worth of at least $1,000,000 (for purposes of this question, Purchaser may include spouse's net worth and may include the fair market value of home furnishings and automobiles, but must exclude from the calculation the value of Purchaser’s primary residence and the related amount of any indebtedness on primary residence up to the fair market value of the primary residence (any indebtedness that exceeds the fair market value of the primary residence must be deducted from net worth calculation)), or 

 

(ii) had an individual income of more than $200,000 in each of the two most recent calendar years, and reasonably expects to have an individual income in excess of $200,000 in the current calendar year; or along with Purchaser’s spouse had joint income in excess of $300,000 in each of the two most recent calendar years, and reasonably expects to have a joint income in excess of $300,000 in the current calendar year.

 

	 
	4
	

 
	 

 

For purposes of this Agreement, “individual income” means “adjusted gross income” as reported for Federal income tax purposes, exclusive of any income attributable to a spouse or to property owned by a spouse: (i) the amount of any interest income received which is tax‐exempt under Section 103 of the Internal Revenue Code of 1986, as amended, (the “Code”), (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of form 1040), (iii) any deduction claimed for depletion under Section 611 et seq. of the Code and (iv) any amount by which income from long‐term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Sections 1202 of the Internal Revenue Code as it was in effect prior to enactment of the Tax Reform Act of 1986.

 

For purposes of this Agreement, “joint income” means, “adjusted gross income,” as reported for Federal income tax purposes, including any income attributable to a spouse or to property owned by a spouse, and increased by the following amounts: (i) the amount of any interest income received which is tax‐exempt under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form 1040), (iii) any deduction claimed for depletion under Section 611 et seq. of the Code and (iv) any amount by which income from long‐term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code as it was in effect prior to enactment of the Tax Reform Act of 1986.

 

For the purposes of this Agreement, “net worth” means (except as otherwise specifically defined) the excess of total assets at fair market value, including home and personal property, over total liabilities, including mortgages and income taxes on unrealized appreciation of assets.

 

h) Purchaser Qualifications. 

 

(i) If the Purchaser is an individual, the Purchaser is over 21 years of age; and if the Purchaser is an unincorporated association, all of its members are of such age.

 

(ii) If the Purchaser is a corporation, partnership, employee benefit plan or IRA, the Purchaser was either:

 

(a) not formed for the purpose of investing in the Securities, has or will have other substantial business or investments, and is (please check one):

 

	
 
		an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, provided that the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, and the plan fiduciary is a bank, savings and loan association, insurance company or registered investment adviser; or
	
 
	
 
	
 

	
 
		an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 that has total assets in excess of $5,000,000; or
	
 
	
 
	
 

	
 
		each of its shareholders, partners, or beneficiaries is an Accredited Investor; or
	
 
	
 
	
 

	
 
		the plan is a self-directed employee benefit plan and the investment decision is made solely by a person that is an Accredited Investor; or
	
 
	
 
	
 

	
 
		a corporation, a partnership, or a Massachusetts or similar business trust with total assets in excess of $5,000,000.

 

 

	 
	5
	

 
	 

 

(b) formed for the specific purpose of investing in the Securities and is an Accredited Investor because each of its shareholders or beneficiaries is an Accredited Investor.

 

(iii) If the Purchaser is a Trust, the Purchaser was either:

 

(a) not formed for the specific purpose of investing in the Securities, and is an Accredited Investor because (please check one):

 

	
 
		the trust has total assets in excess of $5,000,000 and the investment decision has been made by a “sophisticated person”; or
	
 
	
 
	
 

	
 
		the trustee making the investment decision on its behalf is a bank (as defined in Section 3(a)(2) of the Act), a saving and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, acting in its fiduciary capacity; or
	
 
	
 
	
 

	
 
		the undersigned trustee certifies that the trust is an Accredited Investor because the grantor(s) of the trust may revoke the trust at any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and the (each) grantor(s) is an Accredited Investor; or
	
 
	
 
	
 

	
 
		the undersigned trustee certifies that the trust is an Accredited Investor because all of the beneficial owners of the trust are Accredited Investors

 

 

(b) formed for the specific purpose of investing in the Securities, and the undersigned trustee certifies that the trust is an Accredited Investor because the grantor(s) of the trust may revoke the trust at any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and the (each) grantor(s) is an Accredited Investor.

 

i) Purchaser Authorization. The Purchaser, if not an individual, is empowered and duly authorized to enter into this Agreement under any governing document, partnership agreement, trust instrument, pension plan, charter, certificate of incorporation, bylaw provision or the like; this Agreement constitutes a valid and binding agreement of the Purchaser enforceable against the Purchaser in accordance with its terms; and the person signing this Agreement on behalf of the Purchaser is empowered and duly authorized to do so by the governing document or trust instrument, pension plan, charter, certificate of incorporation, bylaw provision, board of directors or stockholder resolution, or the like.

 

j) No Backup Withholding. The Social Security Number or taxpayer identification shown in this Agreement is correct, and the Purchaser is not subject to backup withholding because (i) the Purchaser has not been notified that he or she is subject to backup withholding as a result of a failure to report all interest and dividends or (ii) the Internal Revenue Service has notified the Purchaser that he or she is no longer subject to backup withholding.

 

	 
	6
	

 
	 

 

4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY COMPANY: The Company hereby represents, warrants and agrees as follows:

 

a) Authority of Company. The Company has all requisite authority to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this Agreement.

 

b) Authorization. All actions on the part of the Company necessary for the authorization, execution, delivery and performance of this Agreement by the Company and the performance of the Company’s obligations hereunder has been taken or will be taken prior to the issuance of the Securities. This Agreement, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws. The issuance of the Securities will be validly issued, fully paid and nonassessable, will not violate any preemptive rights, rights of first refusal, or any other rights granted by the Company, and will be issued in compliance with all applicable federal and state securities laws, and will be free of any liens or encumbrances, other than any liens or encumbrances created by or imposed upon the Purchaser through no action of the Company; provided, however, that the Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time the transfer is proposed.

 

c) Governmental Consents. All consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with, any governmental authority required on the part of the Company in connection with the valid execution and delivery of this Agreement, the offer, sale or issuance of the Securities, or the consummation of any other transaction contemplated hereby shall have been obtained, except for notices required or permitted to be filed with certain state and federal securities commissions, which notices will be filed on a timely basis.

 

5. INDEMNIFICATION: The Purchaser hereby agrees to indemnify and defend the Company and its officers and directors and hold them harmless from and against any and all liability, damage, cost or expense incurred on account of or arising out of:

 

(a) Any breach of or inaccuracy in the Purchaser’s representations, warranties or agreements herein;

 

(b) Any disposition of any Securities contrary to any of the Purchaser’s representations, warranties or agreements herein;

 

(c) Any action, suit or proceeding based on (i) a claim that any of said representations, warranties or agreements were inaccurate or misleading or otherwise cause for obtaining damages or redress from the Company or any director or officer of the Company under the Act, or (ii) any disposition of any Securities.

 

	 
	7
	

 
	 

 

6. MISCELLANEOUS:

 

a) Binding Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

b) Governing Law; Venue. This Agreement shall be governed by and construed under the laws of the State of California as applied to agreements among California residents, made and to be performed entirely within the State of California. The Parties agree that any action brought to enforce the terms of this Agreement will be brought in the appropriate federal or state court having jurisdiction over Orange County, California, United States of America.

 

c) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

d) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

e) Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day, or (c) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent as follows:

 

 

	
 
	
If to the Company: 
	
Cerebain Biotech Corp.

600 Anton Blvd., Suite 1100

Costa Mesa, CA Attn: Eric Clemons, President

Facsimile No.: 

	
 
	
 
	
 

	
 
	
with a copy to:
	
Law Offices of Craig V. Butler

300 Spectrum Center Dr., Suite 300

Irvine, CA 92618

Attn: Craig V. Butler, Esq.

Facsimile No.: (949) 209-2545

 

	
 
	
If to Purchaser: 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Facsimile No.:____
	
 

 

or at such other address as the Company or Purchaser may designate by ten (10) days advance written notice to the other Party hereto.

 

f) Modification; Waiver. No modification or waiver of any provision of this Agreement or consent to departure therefrom shall be effective unless in writing and approved by the Company and the Purchaser.

 

	 
	8
	

 
	 

 

g) Entire Agreement; Successors. This Agreement and the Exhibits hereto constitute the full and entire understanding and agreement between the Parties with regard to the subjects hereof and no Party shall be liable or bound to the other Party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein. The representations, warranties and agreements contained in this Agreement shall be binding on the Purchaser’s successors, assigns, heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the Company and its directors and officers.

 

h) Expenses. Each Party shall pay their own expenses in connection with this Agreement. In addition, should either Party commence any action, suit or proceeding to enforce this Agreement or any term or provision hereof, then in addition to any other damages or awards that may be granted to the prevailing Party, the prevailing Party shall be entitled to have and recover from the other Party such prevailing Party’s reasonable attorneys’ fees and costs incurred in connection therewith.

 

i) Currency. All currency is expressed in U.S. dollars.

 

IN WITNESS WHEREOF, the Parties have executed this Securities Purchase Agreement as of the date first written above.

 

	
“Company”
	
 
	
“Purchaser”
	
 

	
 
		
 
	
 
	
 
	
 

	
Cerebain Biotech Corp.,
	
 
	
Charles Laba-Chedrawi
	
 

	
a Nevada corporation
	
 
	
 
		
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
/s/ Eric Clemons
	
 
	
 
	
/s/ Charles Laba-Chedrawi
	
 

	
By: 
	
Eric Clemons
	
 
	
By: 
	
Charles Laba-Chedrawi
	
 

	
Its: 
	
President
	
 
	
 
		
 

 

 

	
 9cbbt_ex1035.htm

EXHIBIT 10.35

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is made, entered into, and effective as of February 1, 2018 (“Effective Date”), by and between Cerebain Biotech Corp., a Nevada corporation (the “Company”), and Eric Clemons.

 

RECITALS

 

WHEREAS, COMPANY desires to benefit from Eric Clemons’s (the “Executive”) expertise and employ him as President and Chief Executive Officer and he is willing to accept such employment.

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties hereto hereby agree as follows:

 

AGREEMENT

 

1. Term and Duties.

 

The parties agree that this Agreement shall be for a term of thirty-six (36) months (“Termination Date”), subject to any severance payment as set forth in Section 7, hereunder. After the Termination Date, either party may terminate this Agreement by providing the other with thirty (30) days written notice of such termination. The Company hereby employs the Executive as President and Chief Executive Officer as of the Effective Date and he agrees to enter into and remain in the employ of the Company until this Agreement is terminated. The Executive shall faithfully and diligently perform all professional duties and acts as President and Chief Executive Officer as may be reasonably requested of him by the Company or its officers with the function of a President and Chief Executive Officer of a similar biomedical company.

 

2. Duties & Covenants.

 

2.1 The Executive agrees to perform the services to the best of his ability. The Executive agrees throughout the term of this Agreement to devote sufficient time, energy and skill to the business of the Company and to the promotion of the best interests of the Company. 

 

2.2 The Executive represents and covenants to the Company as follows:

 

(a) During and at any time after the employment with the Company and/or any of its divisions, subsidiaries and affiliates, the Executive shall not use, or disclose to any person, corporation, partnership or other entity whatsoever any confidential information, trade secrets, and proprietary information of the Company, its vendors, licensors, marketing partners or any of its clients learned by me at any time during my employment with the Company.

 

(b) Upon ceasing to be an employee of the Company, The Executive shall immediately return all documents and notes including all copies thereof of any and all information and materials belonging or relating to the Company (whether or not such materials were prepared by the Company, The Executive or another person) and which are in my possession or over which I exercise any control.

 

	 
	1
	

 
	 

 

(c) The Executive agrees that a violation of any provision of Paragraph 2.2(a) or 2.3(b) above will cause irreparable injury the Company. Accordingly, the Company shall be entitled, in addition to any other rights and remedies it may have at law or in equity, to an injunction enjoining and restraining The Executive from violating, or continuing to violate, any such provision.

 

2.3 The Executive understands and agrees that the Company shall have exclusive rights to anything relating to the Company’s actual or prospective business which The Executive conceives or works on while employed by the Company. Accordingly, The Executive:

 

(a) shall promptly and fully disclose all such items to the Company and will not disclose such items to any other person or entity (other than employees of the Company authorized to review such information), without the Company’s prior consent;

 

(b) shall maintain on the Company’s behalf and surrender to the Company upon ceasing to be a Company all written records regarding all such items.

 

(c) shall, but without personal expense, fully cooperate with the Company and execute all papers and perform all acts requested by the Company to establish, confirm or protect its exclusive rights in such items or to enable it to transfer to such items together with any patents, copyrights, trademarks, service marks and /or trade names that may be accepted for and/or issued;

 

(d) shall, but without personal expense, provide such information and true testimony as the Company may request regarding such items including, without limitation, items which The Executive neither conceived nor worked on but regarding which have knowledge because of his employment by the Company; and

 

(e) hereby assigns to the Company, its successors and assigns, exclusive right, title and interest in and to all such items including, without limitation, any patents, copyrights, trademarks, service marks and/or trade names which have been of may be issued.

 

	 
	2
	

 
	 

 

3. Compensation. 

 

3.1 Subject to the termination of this Agreement as provided herein, the Company shall compensate The Executive for his services hereunder at an annual salary (“Salary”) of Two Hundred Fourteen Thousand Five Hundred Dollars ($214,500.00), payable in semi-monthly installments in accordance with the Company’s practices, less normal payroll deductions. 

 

3.2 In addition to the compensation set forth above, the Company shall periodically review The Executive’s performance and services rendered with a view to paying discretionary bonuses based upon above-average or outstanding performance for a prior period. Any such bonuses approved by the Company shall be paid to The Executive within 30 days of the grant thereof.

 

3.3 The Executive shall be entitled to a stock grant of 800,000 common restricted shares of the Company’s common stock, subject to the following vesting schedule:

 

	
 
	
% Vesting
	
 
	
Date of Vesting
	
 

	
 
	
20%
	
 
	
February 1, 2018
	
 

	
 
	
20%
	
 
	
January 1, 2019
	
 

	
 
	
20%
	
 
	
January 1, 2020
	
 

	
 
	
20%
	
 
	
January 1, 2021
	
 

	
 
	
20%
	
 
	
January 1, 2022
	
 

 

4. Incentive Bonus.

 

During the Employment Term, Executive shall be eligible to participate in the Company's bonus and other incentive compensation plans and programs for the Company's senior executives at a level commensurate with his position. Executive shall have the opportunity to earn an annual target bonus (the “Annual Bonus”) to be determined by and measured against objective financial and operational criteria to be determined by the Board (or a committee thereof) of up to 50% percent of Base Salary upon the Company’s achievement of financial and operating metrics to be annually determined by the Board (or a committee thereof), Such annual incentive bonuses are payable to the Executive no later than 60 days following the close of the fiscal year.

 

5. Equity Incentives.

 

5.1 Option Award. The Board or any committee of the Board (the "Committee") appointed to administer the Company's Equity Incentive Plan, as may be amended from time to time (the "Stock Plan") shall award Executive as of the Effective Date, options to purchase shares of the Company’s common stock, $0.01 par value per share, having an exercise price equal to the common stock’s fair market value as determined by the Board or Committee as of the Effective Date, which options shall be subject to certain restrictions (the "Options Award"). The Options Award shall be granted pursuant to and shall be subject to all of the terms and conditions imposed upon such awards granted under the Stock Plan and shall be evidenced by an Incentive Stock Option Agreement in the form approved by the Board or Committee. As a condition to receiving the Options Award, Executive shall become party to the Stockholders Agreement as amended from time to time, by and among the Company and certain holders of the Company's securities, and, if requested, Executive shall also execute and deliver a letter in a form approved by the Company’s underwriters agreeing not to sell any shares of Company common stock during a customary period following the completion of an initial public offering of the Company’s common stock.

 

	 
	3
	

 
	 

 

5.2 Discretionary Grants. In addition to the Options Award contemplated under this Section 5, at the sole discretion of the Board or the Committee, Executive shall be eligible for grants of stock options and other equity awards.

 

5.3 Notwithstanding any other provision, in the event of a change in control, all equity awards (including, but not limited to, any options or stock grants made subsequent to the date of this Agreement) shall fully vest and be immediately exercisable. A change in control means the consummation after the date hereof of a transaction or series of related transactions that results in any person or group ("group" as defined in the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended) acquiring (i) directly or indirectly by merger or otherwise more than 50% of the Company's securities entitled to vote in the election of directors, (ii) all or substantially all of the assets of the Company or (iii) the right to elect a majority of the members of the Company's Board of Directors.

 

5.4 Option to Have Company Repurchase Stock and Options. If Executive dies while employed, the Company shall, subject to any restrictions contained in any credit or similar agreements or that exist under the California Law, offer to purchase all of Executive’s stock and any outstanding options which are vested at the time of death. If the representative of the Executive's estate wishes to accept such offer, he or she shall request, within six (6) months of death, that the Board determine the fair market value of Executive’s interest in the Company. This value shall be communicated in writing to the representative, and the representative shall have thirty (30) days to accept or reject the valuation. If the valuation is rejected, the representative shall have no further rights to have the interest repurchased by the Company.

 

6. Employee Benefits.

 

6.1 Benefit Plans. Executive shall be entitled to participate in all employee benefit plans of the Company including, but not limited to, equity, pension, thrift, profit sharing, medical coverage, education, or other retirement or welfare benefits that the Company has adopted or may adopt, maintain or contribute to for the benefit of its senior executives at a level commensurate with his position, subject to satisfying any applicable eligibility requirements.

 

6.2 Paid Time Off. Executive shall be entitled to paid time off in accordance with the Company's policies applicable to its senior executives, but in no event less than twenty days (as prorated for partial years), which paid time off may be taken at such times as Executive elects with due regard to the needs of the Company.

 

6.3 Perquisites. The Company shall provide the Executive all perquisites which other senior executives of the Company are generally entitled to receive.

 

6.4 Business and Entertainment Expenses. Upon presentation of appropriate documentation, Executive shall be reimbursed in accordance with the Company's expense reimbursement policy for all reasonable and necessary business and entertainment expenses incurred in connection with the performance of his duties hereunder.

 

	 
	4
	

 
	 

 

7. Severance.

 

7.1 If, and only if, this Agreement is terminated by The Executive pursuant to Section 7.3 or is terminated by the Company for a reason NOT set forth in Sections 7.2 herein, then the Company shall pay to The Executive severance in the amount equal to the number of months remaining to termination Date under Section 1 herein then payable pursuant to Section 3.1 herein, at the date of The Executive’s termination (the “Termination Salary”). The Company shall pay the Termination Salary to The Executive immediately subject to all state, federal, and local tax withholdings, as though The Executive were still employed by the Company.

 

7.1.1 Notwithstanding the above, however, in the case of any reorganization of the Company, whereby the Company shall consolidate with or merge into another corporation or convey all or substantially all of its assets to another corporation, and at such time The Executive is no longer employed by the Company and is owed a Termination Salary, then the Termination Salary shall become immediately due and payable to The Executive upon closing of such reorganization.

 

7.2 Upon the occurrence of any of the following events, the Company shall be entitled to terminate The Executive’s employment hereunder and the Company shall NOT be obligated to pay The Executive the Termination Salary:

 

7.2.1 The Executive voluntarily resigns or is voluntarily terminated.

 

7.2.2 The Executive is terminated by the Company for Cause. The following shall constitute “Cause” for purposes of this Agreement:

 

a. A willful act of dishonesty by The Executive involving theft of funds or assets;

 

b. The conviction of The Executive of a felony; or

 

c. Willful failure or refusal of The Executive to properly perform The Executive 's duties under this Agreement, other than any such failure resulting from The Executive’s exercise of business judgment or incapacity due to physical or mental illness;

 

7.2.3 For purposes of this paragraph 7.2.2, no act, or failure to act, on The Executive’s part shall be considered “willful” or “intentional” unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omissions was in the best interest of the Company.

 

7.3 In the event that the Company modifies The Executive’s position as President and Chief Executive Officer without The Executive’s consent, and such modification of The Executive’s position involves a material reduction in The Executive’s duties and responsibilities, then The Executive may terminate this Agreement and the Company shall be required to pay The Executive the Termination Salary as set forth in Section 7.1.

 

	 
	5
	

 
	 

 

8. Arbitration. 

 

If a dispute or claim shall arise between the parties with respect to any of the terms or provisions of this Agreement, or with respect to the performance by any of the parties under this Agreement, then the parties agree that the dispute shall be arbitrated in Costa Mesa, California, before a single arbitrator, in accordance with the rules of either the American Arbitration Association (“AAA”) or Judicial Arbitration and Mediation Services, Inc./Endispute (“AJAMS/Endispute”). The selection between AAA and JAMS/Endispute rules shall be made by the claimant first demanding arbitration. The arbitrator shall have no power to alter or modify any express provisions of this Agreement or to render any award which by its terms affects any such alteration or modification. The parties to the arbitration may agree in writing to use different rules and/or arbitrator(s). In all other respects, the arbitration shall be conducted in accordance with the California Code of Civil Procedure, or equivalent. The parties agree that the judgment award rendered by the arbitrator shall be considered binding and may be entered in any court having jurisdiction as stated in Paragraph 12 of this Agreement. The provisions of this Paragraph shall survive the termination of this Agreement.

 

9. Notices. 

 

Any notice, request, demand, or other communication given pursuant to the terms of this Agreement shall be deemed given upon delivery, if hand delivered or delivered via facsimile, or Forty‐Eight (48) hours after deposit in the United States mail, postage prepaid, and sent certified or registered mail, return receipt requested, correctly addressed to the addresses of the parties indicated below or at such other address as such party shall in writing have advised the other party.

 

If to the Company:

 

Cerebain Biotech Corp.

600 Anton Blvd., Suite 1100

Costa Mesa, CA 92626

 

With a copy to:

 

The Law Offices of Craig V. Butler

300 Spectrum Center Drive

Suite 300

Irvine, CA 92618

Attn: Mr. Craig V. Butler

 

If to Eric Clemons

 

Eric Clemons 

____________________

____________________

 

10. Assignment. 

 

Subject to all other provisions of this Agreement, any attempt to assign or transfer this Agreement or any of the rights conferred hereby, by judicial process or otherwise, to any person, firm, company, or corporation without the prior written consent of the other party, shall be invalid, and may, at the option of such other party, result in an incurable event of default resulting in termination of this Agreement and all rights hereby conferred.

 

	 
	6
	

 
	 

 

11. Choice of Law. 

 

This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws. 

 

12. Jurisdiction. 

 

The parties submit to the jurisdiction of the Court of the State of California in and for the County of Orange, for the resolution of all legal disputes arising under the terms of this Agreement, including, but not limited to, enforcement of any arbitration award.

 

13. Entire Agreement. 

 

Except as provided herein, this Agreement, including exhibits, contains the entire agreement of the parties, and supersedes all existing negotiations, representations, or agreements and all other oral, written, or other communications between them concerning the subject matter of this Agreement. There are no representations, agreements, arrangements, or understandings, oral or written, between and among the parties hereto relating to the subject matter of this Agreement that are not fully expressed herein.

 

14. Severability. 

 

If any provision of this Agreement is unenforceable, invalid, or violates applicable law, such provision, or unenforceable portion of such provision, shall be deemed stricken and shall not affect the enforceability of any other provisions of this Agreement.

 

15. Captions. 

 

The captions in this Agreement are inserted only as a matter of convenience and for reference and shall not be deemed to define, limit, enlarge, or describe the scope of this Agreement or the relationship of the parties, and shall not affect this Agreement or the construction of any provisions herein.

 

16. Counterparts. 

 

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument. 

 

17. Modification. 

 

No change, modification, addition, or amendment to this Agreement shall be valid unless in writing and signed by all parties hereto.

 

	 
	7
	

 
	 

 

18. Waiver.

 

No waiver of any breach, covenant, representation, warranty or default of this Agreement by any party shall be considered to be a waiver of any other breach, covenant, representation, warranty or default of this Agreement.

 

19. Interpretation

 

The terms and conditions of this Agreement shall be deemed to have been prepared jointly by all of the Parties hereto. Any ambiguity or uncertainty existing hereunder shall not be construed against any one of the drafting parties, but shall be resolved by reference to the other rules of interpretation of contracts as they apply in the State of California.

 

20. Taxes. 

 

Any income taxes required to be paid in connection with the payments due hereunder, shall be borne by the party required to make such payment. Any withholding taxes in the nature of a tax on income shall be deducted from payments due, and the party required to withhold such tax shall furnish to the party receiving such payment all documentation necessary to prove the proper amount to withhold of such taxes and to prove payment to the tax authority of such required withholding.

 

21. Not for the Benefit of Creditors or Third Parties. 

 

The provisions of this Agreement are intended only for the regulation of relations among the parties. This Agreement is not intended for the benefit of creditors of the parties or other third parties and no rights are granted to creditors of the parties or other third parties under this Agreement. Under no circumstances shall any third party, who is a minor, be deemed to have accepted, adopted, or acted in reliance upon this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the Effective Date. 

 

	
"Company" 
	
 
	“Eric Clemons"	
	
 
	 	
 
	 	 
	
Cerebain Biotech Corp. 
	
 
	
Eric Clemons
	
	
 
	
 
	
 
	
 
	 
	
 
	/s/ Wesley Tate	
 
	
/s/ Eric Clemons
	 
	
By: 
	Wesley Tate	
 
	 	 

 

 

	
 8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00278-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00278-of-00352.parquet"}]]