AGREEMENT

 

THIS AGREEMENT (this “Agreement”) is entered into on May 5, 2015, by and between VistaGen Therapeutics, Inc., a Nevada corporation (the “Company”), and Platinum Long Term Growth VII, LLC, a Delaware limited liability corporation (“Platinum”).

 

WHEREAS, Platinum is the holder of certain Senior Secured Convertible Promissory Notes of the Company, issued on the dates and in the principal amounts and with accrued interest as set forth on Schedule A hereto (the “Platinum Notes”);

WHEREAS, in order to secure the Company’s obligations to Platinum under the terms of the Platinum Notes, the Company and Platinum entered into (i) the Amended and Restated Security Agreement (the “Security Agreement”), pursuant to which Platinum was granted a security interest in substantially all of the Company’s assets; and (ii) a Negative Covenant (the “Negative Covenant”), prohibiting VistaGen Therapeutics, Inc., a California corporation and wholly owned subsidiary of the Company (“VistaGen California”), and Artemis Neuroscience, Inc., a Maryland corporation and wholly owned subsidiary of VistaGen California (“Artemis) (together, the “Subsidiaries”), from incurring, among other things, certain kinds of liens or indebtedness, and from agreeing to any merger or other organizational change;

WHEREAS, in addition, the Company, the Subsidiaries and Platinum entered into the Intellectual Property and Stock Pledge Agreement (the “IP Security Agreement”), pursuant to which Platinum was granted a security interest in (i) all intellectual property of VistaGen California, and (ii) all of the capital stock and other equity interests of VistaGen California in Artemis;

WHEREAS, the Company has also issued to Platinum certain Exchange Warrants, Investment Warrants and Additional Warrants, as each is defined in that certain Note Exchange and Purchase Agreement, dated October 11, 2012, as amended (together, the “Warrants”), and issued on the dates and in the share amounts set forth on Schedule B;

WHEREAS, to provide for its working capital needs, the Company issued to certain investors, including Platinum (“Note Investors”) convertible promissory notes in the aggregate amount of $4,614,756.56, including aggregate accrued interest through May 8, 2015 of $317,873.23 (“Investor Notes”), which Investor Notes are due and payable between March 31, 2015 and May 15, 2015, and convertible into the Private Financing under the terms and conditions set forth in the Investor Notes; and

WHEREAS, the Company proposes to sell in a private financing contemplating aggregate gross proceeds, including cancellation of indebtedness, of up to $18.0 million (the “Private Financing”), units consisting of Series B Preferred Stock (“Series B Preferred”) and warrants to purchase shares of the Company’s common stock, par value $0.001 per share (“Common Stock Warrants” and together with the Series B Preferred, “Private Financing Securities”) in connection with Platinum’s agreement as set forth herein to (i) convert the principal balance and all accrued but unpaid interest due and owing Platinum under the terms of the Platinum Notes (the “Outstanding Balance”) into Series B Preferred;  (ii) terminate the Security Agreement, Negative Covenant and IP Security Agreement (together, the “Security Agreements”); (iii) purchase the Investor Notes from the Investors electing to sell, transfer and assign such Investor Notes to Platinum, for an aggregate amount, including principal and all accrued interest due thereunder, not to exceed $1.5 million; (v) purchase $1.0 million of the Private Financing Securities, (v) amend the Warrants to (y) fix the exercise price thereof and the number of shares exercisable and issuable thereunder, and (z) eliminate the cashless exercise option; (vi) exchange up to  30,000 shares of Common Stock currently beneficially owned or controlled by Platinum (the “Platinum Common Shares”) for an equal number of shares of Series B Preferred; and (vii) lock-up the sale of any Platinum Common Shares.

  

NOW, THEREFORE, for and in consideration of the mutual agreements set forth herein, the parties hereto agree as follows:

 

1.          Platinum Note Conversion. Upon receipt of confirmation from the Nevada Secretary of State of the filing of the Company’s Certificate of Determination or Rights and Preferences of the Series B Preferred (the “Closing Date”), the Outstanding Balance due Platinum under the terms of the Notes shall convert into 641,335 shares of Series B Preferred of the Company issued in connection with the Private Financing, in an amount equal to the Outstanding Balance on the Closing Date (the “Conversion Securities”).

 

 

(a)           Platinum is a limited liability company validly existing and in good standing under the laws of the jurisdiction of its organization.

 

 

 

11.           Conditions Precedent to the Obligation of Platinum. The obligation hereunder of Platinum to surrender the Platinum Notes, purchase the Investor Notes and accept the New Securities is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below.  These conditions are for Platinum’s sole benefit and may be waived by Platinum at any time in its sole discretion.

 

12.           Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without giving effect conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  Each of the Parties consents to the exclusive jurisdiction of the Federal courts whose districts encompass any part of the State of New York in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions.  Each Party waives its right to a trial by jury.  Each Party to this Agreement irrevocably consents to the service of process in any such proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Party at its address set forth herein.  Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law.

13.           Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, express overnight courier, registered first class mail, or telecopier (provided that any notice sent by telecopier shall be confirmed by other means pursuant to this Section 8), initially to the address set forth below, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section.

 

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IN WITNESS WHEREOF the parties have signed this instrument as of the date first set forth above.