UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

____________________

 

FORM 8-K

 

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of Earliest Event Reported): April 22, 2021

 

____________________

 

Rapid Therapeutic Science Laboratories, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

(State or other jurisdiction

of incorporation)

001-55018

(Commission File

Number)

46-2111820

(IRS Employer

Identification No.)

 

15800 Dooley Road, Suite 200

Addison, Texas

(Address of principal executive offices)

75001

(Zip code)

 

5580 Peterson Lane, Suite 200, Dallas, Texas 75240

(Former name or former address, if changed since last report)

 

Registrant’s telephone number, including area code: (800) 497-6059

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [  ]

 

 

 

Item 1.01

Entry into a Material Definitive Agreement.

 

Powell Independent Contractor Agreement

 

On April 22, 2021, Rapid Therapeutic Science Laboratories, Inc. (the “Company”, “we” and “us”) entered into an Independent Contractor Agreement with We the 23, LLC, a Texas limited liability company, whose managing member is Charles L. Powell, M.D. (“Powell” and the “Powell Agreement”).  Pursuant to the Powell Agreement, we engaged Powell, as an independent contractor, to provide oversight services and interpretation of clinical research for the Company. The Powell Agreement has a term of one year, automatically extendable thereafter on a month-to-month basis, unless terminated by either party with 30 days prior written notice, subject to certain termination rights described in greater detail in the agreement. The agreement contains customary confidentiality, proprietary information, work for hire, indemnification and arbitration provisions, and representations of Powell.

 

In consideration for Powell agreeing to provide services under the agreement, the Company agreed to pay Powell $10, and to issue Powell up to 8,000,000 shares of newly designated Series C Convertible Preferred Stock (“Series C Preferred Stock”), which have the terms described below under “Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.” Specifically, the Company agreed to issue (a) 1,000,000 shares of Series C Preferred Stock to Powell upon the completion of a study, showing favorable therapeutic benefits accompanied with underlying supporting medical or pharmaceutical data which is of value to the Company, as determined in the reasonable determination of the Company, relating to each of (1) anxiety; (2) depression; (3) attention deficit hyperactivity disorder (ADHD); (4) insomnia; and (5) arthritis or chronical pain (5,000,000 in aggregate)(each a “Study”, collectively, the “Studies”, and each successful study, a “Successful Study”); and (b) such number of Series C Preferred Stock as equals 3,000,000 multiplied by a fraction, the numerator of which is the number of Successful Studies and denominator of which is five, which shares are issuable upon completion of the last of the Studies. The right of Powell to earn any of the Series C Preferred Stock shares ends upon termination of the Powell Agreement.

 

Powell entered into a Trading Agreement in connection with the entry into the Powell Agreement, which restricts Powell’s ability to transfer or sell any of the Series C Preferred Stock (and any shares of common stock issuable upon conversion thereof), until April 22, 2025, provided that between April 22, 2023, and April 22, 2025, Powell may sell, on any trading day, not more than 5% of the average daily aggregate trading volume of the Company’s common stock over the preceding 30 day rolling period, subject to certain other requirements.

 

Epic Independent Contractor Agreement

 

On May 18, 2021, the Company entered into an Independent Contractor Agreement with Epic Medical Research (“Epic” and the “Epic Agreement”).  Pursuant to the Epic Agreement we engaged Epic, as an independent contractor, to act as the principal investigator of the Company’s products related to the Powell Agreement, while performing clinical research, including obtaining informed consent of patients, implementation of study procedures, product dispensing, evaluations of patient compliance with study requirements, and preparations of required study documents. The Epic Agreement has a term of one year, subject to certain termination rights described in greater detail in the agreement. The Epic Agreement contains customary confidentiality, indemnification and arbitration provisions, and representations of Epic. In consideration for Epic agreeing to provide services under the agreement, the Company agreed to issue Epic up to 500,000 shares of Series C Preferred Stock, which have the terms described below under “Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year”, of which 250,000 shares are earned and due upon completion of the five Studies, and with 250,000 shares of Series C Preferred Stock earned upon the start of the first Study.

 

* * * * *

 

The foregoing descriptions of the Powell Agreement, Trading Agreement, and Epic Agreement, are not complete and are qualified in their entirety by the Powell Agreement, Trading Agreement, Lease, and Epic Agreement, attached as Exhibits 10.1, 10.2, and 10.3, hereto, respectively, and incorporated in this Item 1.01 by reference in their entirety.

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Item 3.02

Unregistered Sales of Equity Securities.

 

The information disclosed in Item 1.01 of this Current Report on Form 8-K under the headings “Powell Independent Contractor Agreement” and “Epic Independent Contractor Agreement”, relating to the Powell Agreement and the Epic Agreement, including the obligation of the Company under certain circumstances to issue shares of Series C Preferred Stock to Powell and Epic thereunder, is incorporated by reference into this Item 3.02. We claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), for the offer of the Series C Preferred Stock shares and plan to claim a similar exemption for the issuance of such Series C Preferred Stock shares, since the foregoing issuances did not/will not involve a public offering, the recipients are “accredited investors”, and the recipients acquired/will acquire the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities will be subject to transfer restrictions, and the certificates evidencing the securities will contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom.

 

In the event the maximum number of shares of Series C Preferred Stock are issued to Powell and Epic, an aggregate of 8.5 million shares of Series C Preferred Stock would be issued, and the maximum number of shares of common stock convertible upon conversion thereof (which currently convert into common stock on a one-for-one basis), would be 8.5 million shares of common stock.

 

In the event the maximum number of shares of Series B Preferred Stock were issued pursuant to the terms of the Employment Agreement, discussed in Item 5.03, below, a maximum of 2,000,000 shares of Series B Preferred Stock would be issued, and the maximum number of shares of common stock convertible upon conversion thereof (which currently convert into common stock on a one-for-one basis), would be 2 million shares of common stock.

 

Item 3.03

Material Modification to Rights of Security Holders.

 

The descriptions of the Series B Convertible Preferred Stock and Series B Designation and Series C Convertible Preferred Stock and Series C Designation set forth in Item 5.03 of this Current Report on Form 8-K are incorporated by reference in this Item 3.03 in their entirety by reference.

 

Item 5.03.

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On May 28, 2021, the Company designated two new series of preferred stock, Series B Convertible Preferred Stock (the “Series B Preferred Stock” and the certificate of designation setting forth the rights thereof, the “Series B Designation”) of the Company and Series C Convertible Preferred Stock (the certificate of designation setting forth the rights thereof, the “Series C Designation”) of the Company. The Series B Preferred Stock and Series C Preferred Stock and Series B Designation and Series C Designation are described in greater detail below.

 

As previously disclosed in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on January 26, 2021, on January 11, 2021, the Company entered into an Employment Agreement with Duane Drinkwine, Ph.D., effective February 1, 2021 (the “Employment Agreement”). As additional consideration under the agreement, we agreed that Dr. Drinkwine could earn up to 2,000,000 shares of a to-be designated series of preferred stock of the Company. A total of 500,000 shares of the new preferred stock would be due on the six-month anniversary of the effective date, and 500,000 shares of new preferred stock will be due thereafter on each anniversary date of the effective date (until a total of 2 million shares are issued), subject to Dr. Drinkwine’s continued service to the Company. However, if Dr. Drinkwine’s employment is terminated for cause prior to the second anniversary of the agreement, all shares previously earned are forfeited. Any shares of common stock issuable upon conversion of the new preferred stock shares are subject to a trading restriction, which prohibits Dr. Drinkwine from trading such shares until January 1, 2023, and from not trading more than 5% of the average daily trading volume of the Company’s common stock from January 2, 2023 to October 31, 2025, subject to certain exceptions. The Series B Preferred Stock was designated as the ‘to-be designated’ preferred stock discussed under the Employment Agreement.

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Series B Convertible Preferred Stock

 

The Series B Designation, which was approved by the Board of Directors of the Company on May 28, 2021, and filed by the Company with the Secretary of State of Nevada on May 28, 2021 (and effective the same date), designated 2,000,000 shares of Series B Preferred Stock, $0.001 par value per share. The Series B Preferred Stock has the following rights:

 

Dividend Rights. The Series B Preferred Stock does not accrue any dividends, provided that the holders of Series B Preferred Stock are entitled to such dividends paid and distributions made to the holders of common stock in cash, to the same extent as if such holders had converted the Series B Preferred Stock into common stock at the Conversion Rate (described below under “Conversion Rights”)(without regard to any limitations on conversion herein or elsewhere) and had held such shares of common stock on the record date for such dividends and distributions.

 

Liquidation Preference. The Series B Designation provides that the Series B Preferred Stock has a liquidation preference which is (a) pari passu with respect to the Company’s common stock, Series A Preferred Stock and Series C Preferred Stock; and (b) junior to all current and future senior indebtedness of the Company. If the Company determines to liquidate, dissolve or wind-up its business and affairs, the Company will prior to or concurrently with the closing, effectuation or occurrence of any such action, pay the holders of the Series B Preferred Stock, pari passu with the holders of the common stock, Series A Preferred Stock and Series C Preferred Stock, an amount equal to the Liquidation Preference per share of Series B Preferred Stock. The “Liquidation Preference” per share of the Series B Preferred Stock is equal to $0.80 per share.

 

Conversion Rights. Each share of Series B Preferred Stock is automatically converted into common stock of the Company on a one-for-one basis (subject to customary adjustments for stock splits, stock dividends and recapitalizations affecting the Company’s common stock and Series B Preferred Stock)(the “Conversion Rate”), on January 11, 2023, the second anniversary of the effective date of the Employment Agreement.

 

Voting Rights. The Series B Preferred Stock have no voting rights on general matters to come before the shareholders of the Company; however, the Company is prohibited from undertaking any of the following actions without the approval of holders holding a majority of the then aggregate shares of Series B Preferred Stock:

 

(a)  Increasing or decreasing (other than by redemption or conversion) the total number of authorized shares of Series B Preferred Stock;

 

(b)  Re-issuing any shares of Series B Preferred Stock converted pursuant to the terms of the Series B Designation;

 

(c)  Issuing any shares of Series B Preferred Stock other than pursuant to the Purchase Agreement;

 

(d)  Altering or changing the rights, preferences or privileges of the shares of Series B Preferred Stock so as to affect adversely the shares of such series; or

 

(e)  Amending or waiving any provision of the Company’s Articles of Incorporation or Bylaws relative to the Series B Preferred Stock so as to affect adversely the shares of Series B Preferred Stock in any material respect as compared to holders of other series of shares.

 

Redemption Rights. The Series B Preferred Stock does not have any redemption rights.

 

Series C Convertible Preferred Stock

 

The Series C Designation, which was approved by the Board of Directors of the Company on May 28, 2021, and filed by the Company with the Secretary of State of Nevada on May 28, 2021 (and effective the same date), designated 8,500,000 shares of Series C Preferred Stock, $0.001 par value per share. The Series C Preferred Stock has the following rights:

 

4

 

 

Dividend Rights. The Series C Preferred Stock does not accrue any dividends, provided that the holders of Series C Preferred Stock are entitled to such dividends paid and distributions made to the holders of common stock in cash, to the same extent as if such holders had converted the Series C Preferred Stock into common stock at the Conversion Rate (described below under “Conversion Rights”)(without regard to any limitations on conversion herein or elsewhere) and had held such shares of common stock on the record date for such dividends and distributions.

 

Liquidation Preference. The Series C Designation provides that the Series C Preferred Stock has a liquidation preference which is (a) pari passu with respect to the Company’s common stock, Series A Preferred Stock and Series B Preferred Stock; and (b) junior to all current and future senior indebtedness of the Company. If the Company determines to liquidate, dissolve or wind-up its business and affairs, the Company will prior to or concurrently with the closing, effectuation or occurrence of any such action, pay the holders of the Series C Preferred Stock, pari passu with the holders of the common stock, Series A Preferred Stock and Series B Preferred Stock, an amount equal to the Liquidation Preference per share of Series C Preferred Stock. The “Liquidation Preference” per share of the Series C Preferred Stock is equal to $0.80 per share.

 

Conversion Rights. Each share of Series C Preferred Stock is automatically converted into common stock of the Company on a one-for-one basis (subject to customary adjustments for stock splits, stock dividends and recapitalizations affecting the Company’s common stock and Series C Preferred Stock)(the “Conversion Rate”), on April 22, 2023, the second anniversary of the Powell Agreement.

 

Voting Rights. The Series C Preferred Stock have no voting rights on general matters to come before the shareholders of the Company; however, the Company is prohibited from undertaking any of the following actions without the approval of holders holding a majority of the then aggregate shares of Series C Preferred Stock:

 

(a)  Increasing or decreasing (other than by redemption or conversion) the total number of authorized shares of Series C Preferred Stock;

 

(b)  Re-issuing any shares of Series C Preferred Stock converted pursuant to the terms of the Series C Designation;

 

(c)  Issuing any shares of Series C Preferred Stock other than pursuant to the Purchase Agreement;

 

(d)  Altering or changing the rights, preferences or privileges of the shares of Series C Preferred Stock so as to affect adversely the shares of such series; or

 

(e)  Amending or waiving any provision of the Company’s Articles of Incorporation or Bylaws relative to the Series C Preferred Stock so as to affect adversely the shares of Series C Preferred Stock in any material respect as compared to holders of other series of shares.

 

Redemption Rights. The Series C Preferred Stock does not have any redemption rights.

 

* * * * *

 

The foregoing descriptions of the Series B Preferred Stock and Series B Designation and Series C Preferred Stock and Series C Designation, do not purport to be complete and are qualified in their entirety by reference to the Series B Designation and the Series C Designation, copies of which are incorporated by reference as Exhibits 3.1 and 3.2 to this Current Report on Form 8-K and incorporated in this Item 5.03 in their entirety by reference.

 

Item 7.01

Regulation FD Disclosure.

 

On June 2, 2021, the Company issued a press release announcing the planned filing of an Investigational New Drug Application. A copy of the press releases is attached hereto as Exhibit 99.1. The press release attached to this Form 8-K as Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The press release attached as Exhibit 99.1 shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing or document.

5

 

Forward- Looking Statements

 

This Current Report on Form 8-K contains forward-looking statements that are made pursuant to the safe harbor provisions within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act, as amended. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties, many of which are beyond our control, that may cause actual results or events to differ materially from those projected. These risks and uncertainties, many of which are beyond our control, include the ability of the Company to satisfy certain conditions to closing the Offering on a timely basis or at all, as well as other risks described in the section entitled “Risk Factors” and elsewhere in our Transition Report on Form 10-K filed with the SEC on March 16, 2021 and in our other filings with the Securities and Exchange Commission (SEC), including, without limitation, our reports on Forms 8-K and 10-Q, all of which can be obtained on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.

 

Item 8.01

Other Events.

 

Effective on May 1, 2021, the Company relocated its principal executive office to the following address:

 

Rapid Therapeutic Science Laboratories, Inc.

15800 Dooley Road, Suite 200

Addison, Texas 75001

 

The Company’s phone number will remain (800) 497-6059.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)  Exhibits.

 

The following Exhibits are filed herewith:

 

Exhibit

Number

 

Description of Exhibit

3.1*

 

Certificate of Designation of Rapid Therapeutic Science Laboratories, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series B Convertible Preferred Stock as filed with the Secretary of State of Nevada on May 28, 2021

3.2*

 

Certificate of Designation of Rapid Therapeutic Science Laboratories, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series C Convertible Preferred Stock as filed with the Secretary of State of Nevada on May 28, 2021

10.1*

 

Independent Contractor Agreement dated April 22, 2021, by and between We the 23, LLC, and Rapid Therapeutic Science Laboratories, Inc.

10.2*

 

Trading Agreement dated April 22, 2021, between We the 23, LLC and Rapid Therapeutic Science Laboratories, Inc.

10.3*

 

Independent Contractor Agreement dated May 18, 2021, by and between Epic Medical Research, and Rapid Therapeutic Science Laboratories, Inc.

10.4**

 

Press Release dated June 2, 2021

 

*Filed herewith.

** Furnished herewith.

+Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that Rapid Therapeutic Science Laboratories, Inc. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.

6

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

RAPID THERAPEUTIC SCIENCE

LABORATORIES, INC.

 

Date: June 2, 2021

/s/ Donal R. Schmidt, Jr.

Name: Donal R. Schmidt, Jr.

Title: Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.,

ESTABLISHING THE DESIGNATION, PREFERENCES,

LIMITATIONS AND RELATIVE RIGHTS OF ITS

SERIES B CONVERTIBLE PREFERRED STOCK

 

Pursuant to Section 78.1955 of the Nevada Revised Statutes (the “NRS”), Rapid Therapeutic Science Laboratories, Inc., a company organized and existing under the State of Nevada (the “Company”),

 

DOES HEREBY CERTIFY that pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of the Company, as amended, and pursuant to Section 78.1955 of the NRS, the Board of Directors, by unanimous written consent of all members of the Board of Directors on May 28, 2021, duly adopted a resolution providing for the issuance of a series of Two Million shares of Series B Convertible Preferred Stock, which resolution is and reads as follows:

 

RESOLVED, that pursuant to the authority expressly granted to and invested in the Board of Directors by the provisions of the Articles of Incorporation of the Company, as amended and Section 78.1955 of the NRS, a series of the preferred stock, par value $0.001 per share, of the Company be, and it hereby is, established; and

 

FURTHER RESOLVED, that the series of preferred stock of the Company be, and it hereby is, given the distinctive designation of “Series B Convertible Preferred Stock”; and

 

FURTHER RESOLVED, that the Series B Convertible Preferred Stock shall consist of Two Million (2,000,000) shares; and

 

FURTHER RESOLVED, that the Series B Convertible Preferred Stock shall have the powers and preferences, and the relative, participating, optional and other rights, and the qualifications, limitations, and restrictions thereon set forth in this Certificate of Designation (the “Designation” or the “Certificate of Designation”) below:

 

1.  Dividends.

1.1  Dividends in General. The Series B Convertible Preferred Stock shall not accrue any dividends, provided that, the Holders shall, as holders of Series B Convertible Preferred Stock, be entitled to such dividends paid and Distributions made to the holders of Common Stock to the same extent as if such Holders had converted the Series B Convertible Preferred Stock into Common Stock (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends and Distributions. Payments under the preceding sentence shall be made concurrently with the dividend or Distribution to the holders of Common Stock. Following the occurrence of a Liquidation Event (as hereinafter defined) and the payment in full to a Holder of its applicable Liquidation Preference, such Holder shall cease to have any rights hereunder to participate in any future dividends or distributions made to the holders of Common Stock. No Distributions

Rapid Therapeutic: Series B Convertible Preferred Stock

Page 1

shall be made with respect to the Common Stock until all past due, if any, and/or declared dividends on the Series B Convertible Preferred Stock have been paid or set aside for payment to the Holders. Notwithstanding the foregoing, the Holders shall have no right of participation in connection with dividends or Distributions made to the Common Stock shareholders consisting solely of shares of Common Stock.

1.2  Non-Cash Distributions. Whenever a Distribution provided for in this Section 1 shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors.

1.3  Other Distributions. Subject to the terms of this Certificate of Designation, and to the fullest extent permitted by the NRS, the Company shall be expressly permitted to redeem, repurchase or make distributions on the shares of its capital stock.

2.  Liquidation Rights.

2.1  Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary (each a “Liquidation Event”), the holders of Series B Convertible Preferred Stock shall be entitled to receive pari passu with any Distribution of any of the assets of the Company to the holders of the Company’s Common Stock and Parity Securities and prior to any holders of any Junior Securities, by reason of their ownership of such stock, but not prior to any holders of the Company’s Senior Securities, which holders of the Senior Securities shall have priority to the Distribution of any assets of the Company, an amount per share for each share of Series B Convertible Preferred Stock held by them equal to the Liquidation Preference. If upon the liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the holders of the Series B Convertible Preferred Stock, Parity Securities and Common Stock (i.e., after payment of the Company’s liabilities and payment to any holders of the Company’s Senior Securities) are insufficient to permit the payment to such holders of the full amounts specified in this Section then the entire assets of the Company legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series B Convertible Preferred Stock (on an as-converted basis), Parity Securities and Common Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section and applicable law. For the sake of clarity, the rights of the Series B Convertible Preferred Stock upon the occurrence of a Liquidation Event shall be pari passu with the rights of the Parity Securities and Common Stock for all purposes.

2.2  Valuation of Non-Cash Consideration. If any assets of the Company distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Company are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors.

Rapid Therapeutic: Series B Convertible Preferred Stock

Page 2

 

 

3.  Conversion.

3.1  Automatic Conversion.

(a)  Each share of Series B Convertible Preferred Stock shall automatically convert, without any required action by any Holder, into that number of fully-paid, nonassessable shares of Common Stock determined by dividing (i) the Original Issue Price for the Series B Convertible Preferred Stock by (ii) the Conversion Price (such shares of Common Stock issuable upon a Conversion, the “Shares” and a “Conversion”), on the second anniversary of the Effective Date, to the extent vested, if subject to vesting.

(b)  Following the Conversion, the Company shall promptly issue to each Holder all Shares of Common Stock which such Holder is due in connection with the Conversion (and promptly deliver such Shares to the address of Holder which the Company then has on record (a “Delivery”)). The Shares issuable in connection with a Conversion shall be fully-paid, non-assessable shares of Common Stock. Unless the Shares are covered by a valid and effective registration under the Securities Act or the Holder provides a valid opinion from an attorney stating that such Shares can be issued free of restrictive legend, which shall be determined by the Company in its sole discretion, prior to the issuance date of such Shares, such Shares shall be issued as Restricted Shares.

(c)  The issuance and Delivery by the Company of the Shares shall fully discharge the Company from any and all further obligations under or in connection with the Series B Preferred Stock and shall automatically, and without any required action by the Company or the Holder, result in the cancellation, termination and invalidation of any outstanding Series B Preferred Stock and Preferred Stock Certificates held by a Holder or his, her or its assigns.

(d)  Without limiting the obligation of each Holder set forth herein (including in the subsequent clause (e)), the Company and/or the Company’s Transfer Agent shall be authorized to take whatever action necessary, if any, following the issuance and Delivery of the Shares to reflect the cancellation of the Series B Preferred Stock subject to the Conversion, which shall not require the approval and/or consent of any Holder (a “Cancellation”).

(e)  Notwithstanding the above, each Holder, by accepting such Preferred Stock Certificates (or such Series B Preferred Stock shares in book-entry form) hereby covenants that it will, whenever and as reasonably requested by the Company and the Transfer Agent, at the Company’s sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Company or the Transfer Agent may reasonably require in order to complete, insure and perfect the Cancellation, if such may be reasonably required by the Company and/or the Company’s Transfer Agent, including, but not

Rapid Therapeutic: Series B Convertible Preferred Stock

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limited to the delivery to the Company of all Preferred Stock Certificates and stock powers with medallion signature guaranty in connection with the Cancellation.

(f)  In the event that the Delivery of any Shares is unsuccessful and/or any Holder fails to accept such Shares, such Shares shall be held by the Company and/or the Transfer Agent in trust (without accruing interest) and shall be released to such Holder upon reasonable evidence to the Company or the Transfer Agent that such Holder is the legal owner of such Shares, provided that the Holder’s failure to accept such Shares and/or the Company’s inability to Deliver such shares shall in no event effect the validity of the Cancellation.

3.2  Fractional Shares. If any Conversion of Series B Convertible Preferred Stock would result in the issuance of a fractional share of Common Stock (aggregating all shares of Series B Convertible Preferred Stock being converted), such fractional share shall be payable in cash based upon the market value of the Common Stock on the trading day immediately prior to the date of conversion (as determined in good faith by the Board of Directors) and the number of shares of Common Stock issuable upon conversion of the Series B Convertible Preferred Stock shall be the next lower whole number of shares. If the Company elects not to, or is unable to, make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

3.3  Taxes. The Company shall not be required to pay any tax which may be payable in respect to any transfer involved in the issue and delivery of shares of Common Stock upon Conversion in a name other than that in which the shares of the Series B Convertible Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid. The Company shall withhold from any payment due whatsoever in connection with the Series B Convertible Preferred Stock any and all required withholdings and/or taxes the Company, in its sole discretion deems reasonable or necessary, absent an opinion from Holder’s accountant or legal counsel, acceptable to the Company in its sole determination, that such withholdings and/or taxes are not required to be withheld by the Company.

3.4  No Impairment. The Company will not through any reorganization, transfer of assets, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 3. Notwithstanding the foregoing, nothing in this Section shall prohibit the Company from amending its Articles of Incorporation with the requisite consent of its stockholders and the Board of Directors, provided that such amendment will not prohibit the Company from having sufficient authorized shares of Common Stock to permit conversion hereunder.

3.5  Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of

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Common Stock solely for the purpose of effecting the conversion of the shares of the Series B Convertible Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of the Series B Convertible Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series B Convertible Preferred Stock, the Company will use its commercially reasonable efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

4.  Adjustments for Recapitalizations.

4.1  Equitable Adjustments for Recapitalizations. (a) The Liquidation Preference and the Original Issue Price (each, as and if applicable) (the “Preferred Stock Adjustable Provisions”); (b) the Conversion Price (as and if applicable) (the “Common Stock Adjustable Provisions”), and (c) any and all other terms, conditions, amounts and provisions of this Designation which (i) pursuant to the terms of this Designation provide for equitable adjustment in the event of a Recapitalization (the “Other Equitable Adjustable Provisions”); or (ii) the Board of Directors of the Company determines in their reasonable good faith judgment is required to be equitably adjusted in connection with any Recapitalizations, shall each be subject to equitable adjustment as provided in Sections 4.2 through 4.3, below, as determined by the Board of Directors in their sole and reasonable discretion.

4.2  Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, without a corresponding subdivision of the Series B Convertible Preferred Stock, the applicable Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, without a corresponding combination of the Series B Convertible Preferred Stock, the Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted.

4.3  Adjustments for Subdivisions or Combinations of Series B Convertible Preferred Stock. In the event the outstanding shares of Series B Convertible Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Series B Convertible Preferred Stock, the applicable Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Series B Convertible Preferred Stock shall be combined (by reclassification or otherwise) into a

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lesser number of shares of Series B Convertible Preferred Stock, the applicable Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted. Provided however that the result of any concurrent adjustment in the Common Stock (as provided under Section 4.2) and Series B Convertible Preferred Stock (as provided under Section 4.3) shall only be to affect the equitable adjustable provisions hereof once.

4.4  Other Adjustments. The Board of Directors of the Company shall also adjust equitably, and shall have the right to adjust equitably, any or all of the Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions or Other Equitable Adjustable Provisions from time to time, if the Board of Directors of the Company determine in their reasonable good faith judgment that such values and/or provisions are required to be equitably adjusted in connection with any Company action.

4.5  Adjustments for Reclassification, Exchange and Substitution.

(a)  Except to the extent such Recapitalization Event is subject to Sections 4.1 through 4.3, above (the “Recapitalization and Adjustment Rights”), and/or Section 2 (“Liquidation Rights”), if at any time or from time to time after the Effective Date there shall occur any capital reorganization, recapitalization, reclassification, share exchange, restructuring, consolidation, combination or merger involving the Company in which the Common Stock (but not the Series B Convertible Preferred Stock) is converted into or exchanged for shares of stock or other securities or property (including cash) of the Company or otherwise (other than a transaction covered by the Recapitalization and Adjustment Rights or Liquidation Rights) (each a “Recapitalization Event”), provision shall be made so that each Series B Convertible Preferred Holder shall thereafter be entitled to receive upon conversion of the shares of Series B Convertible Preferred Stock held by such Series B Convertible Preferred Holder the kind and number of shares of stock or other securities or property (including cash or any combination thereof) of the Company or otherwise, to which a Common Stock shareholder holding the number of shares of Common Stock into which the shares of Series B Convertible Preferred Stock held by such Series B Convertible Preferred Holder are convertible immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger (without regard for the Maximum Percentage) would have been entitled upon such event.

(b)  In the event that the holders of Common Stock have the opportunity to elect the form of consideration to be received in the business combination, then the Company shall make adequate provision whereby the Holders of Series B Convertible Preferred Stock shall have the opportunity to determine the form of consideration into which all of the Series B Convertible Preferred Stock, treated as a single class, shall be convertible from and after the effective date of such business combination. If such opportunity is granted, such determination shall be based on the determination at a meeting duly called or via a written consent to action of a Majority In Interest, shall be subject to any limitations to which all holders of Common Stock are subject, such as pro rata reductions applicable to any portion of the consideration payable in such business

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combination, and shall be conducted in such a manner as to be completed by the date which is the earliest of (1) the deadline for elections to be made by holders of Common Stock and (2) two Business Days prior to the anticipated effective date of the business combination. Further, the Company shall not affect any such consolidation, merger or sale, unless prior to the consummation thereof, the successor entity (if other than the Company) resulting from consolidation or merger or the entity purchasing such assets assumes by written instrument, the obligation to deliver to each such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire.

(c)  If a conversion of Series B Convertible Preferred Stock is to be made in connection with a transaction contemplated by this Section 4.5 or a similar transaction affecting the Company (other than a tender or exchange offer), the conversion of any shares of Series B Convertible Preferred Stock may, at the election of the Holder thereof, be conditioned upon the consummation of such transaction, in which case such conversion shall not be deemed to be effective until such transaction has been consummated. In connection with any tender or exchange offer for shares of Common Stock, Holders of Series B Convertible Preferred Stock shall have the right to tender (or submit for exchange) shares of Series B Convertible Preferred Stock in such a manner so as to preserve the status of such shares as Series B Convertible Preferred Stock until immediately prior to such time as shares of Common Stock are to be purchased (or exchanged) pursuant to such offer, at which time that portion of the shares of Series B Convertible Preferred Stock so tendered which is convertible into the number of shares of Common Stock to be purchased (or exchanged) pursuant to such offer shall be deemed converted into the appropriate number of shares of Common Stock. Any shares of Series B Convertible Preferred Stock not so converted shall be returned to the Holder as Series B Convertible Preferred Stock.

(d)  None of the foregoing provisions shall affect the right of a Holder of shares of Series B Convertible Preferred Stock to convert such Holder’s shares of Series B Convertible Preferred Stock into shares of Common Stock prior to the effective date of such business combination, subject to the terms of this Designation.

(e)  In the event of any Recapitalization Event falling under this Section 4.5, in such case, appropriate adjustment shall be made in the application of the provisions of this Section 4.5 with respect to the rights and interests of the Series B Convertible Preferred Holders after such events to the end that the provisions of this Section 4.5 (including, but not limited to, adjustment of the Conversion Price in respect of any shares of Series B Convertible Preferred Stock then in effect and the number of shares issuable upon conversion of all such shares of Series B Convertible Preferred Stock) shall be applicable after that event as nearly reasonably as may be. The Company may not become a party to any such transaction unless its terms are consistent with the preceding requirements and such transaction is otherwise affected in accordance with this Designation.

4.6  Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 4, the Company at its expense shall

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promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series B Convertible Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the reasonable written request at any time of any holder of Series B Convertible Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of the Series B Convertible Preferred Stock.

5.  Voting. The Series B Convertible Preferred Stock shall not have any voting rights, except as expressly set forth below under Section 6, “Protective Provisions”. Other than as provided herein or required by law, there shall be no series voting.

6.  Protective Provisions.

6.1  Subject to the rights of series of preferred stock which may from time to time come into existence, so long as any shares of Series B Convertible Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of the holders of a Majority In Interest:

(a)  Increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series B Convertible Preferred Stock;

(b)  Re-issue any shares of Series B Convertible Preferred Stock converted pursuant to the terms of this Designation;

(c)  Issue any shares of Series B Convertible Preferred Stock other than pursuant to the Agreement;

(d)  Alter or change the rights, preferences or privileges of the shares of Series B Convertible Preferred Stock so as to affect adversely the shares of such series; or

(e)  Amend or waive any provision of the Company’s Articles of Incorporation or Bylaws relative to the Series B Convertible Preferred Stock so as to affect adversely the shares of Series B Convertible Preferred Stock in any material respect as compared to holders of other series of shares, except as otherwise allowed hereunder.

For the sake of clarity, no approval of the holders of the Series C Preferred Stock shall be required for the Company to issue any Junior Securities, Parity Securities or Senior Securities.

7.  Redemption Rights. The Series B Convertible Preferred Stock shall not have any redemption rights.

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8.  Notices.

8.1  In General. Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile or email transmission, and shall be effective, unless otherwise provided herein, three days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by nationally recognized overnight carrier or confirmed facsimile transmission, in each case addressed to a party.

9.  No Preemptive Rights. No Holder shall have the right to repurchase shares of capital stock of the Company sold or issued by the Company except to the extent that such right may from time to time be set forth in a written agreement between the Company and such stockholder.

10.  Replacement Preferred Stock Certificates. In the event that any Holder notifies the Company that a Preferred Stock Certificate evidencing shares of Series B Convertible Preferred Stock has been lost, stolen, destroyed or mutilated, the Company shall issue a replacement stock certificate evidencing the Series B Convertible Preferred Stock identical in tenor and date (or if such certificate is being issued for shares not covered in a redemption or conversion, in the applicable tenor and date) to the original Preferred Stock Certificate evidencing the Series B Convertible Preferred Stock, provided that the Holder executes and delivers to the Company and/or its Transfer Agent, as applicable, an affidavit of lost stock certificate and an agreement reasonably satisfactory to the Company and its Transfer Agent to indemnify the Company from any loss incurred by it in connection with such Series B Convertible Preferred Stock certificate, and provides the Company and/or its Transfer Agent such other information, documents and if applicable, bonds and indemnities as the Company or its Transfer Agent customarily requires for reissuances of stock certificates (collectively the “Lost Certificate Materials”); provided, however, the Company shall not be obligated to re-issue replacement stock certificates if the Holder contemporaneously requests the Company to convert or redeem the full number of shares evidenced by such lost, stolen, destroyed or mutilated certificate.

11.  No Other Rights or Privileges. Except as specifically set forth herein, the Holders of the Series B Convertible Preferred Stock shall have no other rights, privileges or preferences with respect to the Series B Convertible Preferred Stock.

12.  Miscellaneous.

12.1  Cancellation of Series B Convertible Preferred Stock. If any shares of Series B Convertible Preferred Stock are converted pursuant to Section 3, the shares so converted or redeemed shall be canceled and shall return to the status of designated, but unissued Series B Convertible Preferred Stock.

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12.2  Further Assurances. Each Holder hereby covenants that, in consideration for receiving shares of Series B Convertible Preferred Stock, that he, she or it will, whenever and as reasonably requested by the Company, do, execute, acknowledge and deliver any and all such other and further acts, deeds, confirmations, agreements and documents as the Company or its Transfer Agent may reasonably require in order to complete, insure and perfect any of the terms, conditions or provisions of this Designation.

12.3  Technical, Corrective, Administrative or Similar Changes. The Company may, by any means authorized by law and without any vote of the Holders of shares of the Series B Convertible Preferred Stock, make technical, corrective, administrative or similar changes in this Designation that do not, individually or in the aggregate, adversely affect the rights or preferences of the Holders of shares of the Series B Convertible Preferred Stock.

12.4  Waiver/Amendment. Notwithstanding any provision in this Designation to the contrary, any provision contained herein and any right of the holders of Series B Convertible Preferred Stock granted hereunder may be waived and/or amended as to all shares of Series B Convertible Preferred Stock (and the Holders thereof) upon the written consent of a Majority In Interest, unless a higher percentage is required by applicable law, in which case the written consent of the Holders of not less than such higher percentage of shares of Series B Convertible Preferred Stock shall be required, and no separate approval of the holders of the Common Stock of the Company shall be required.

12.5  Interpretation. Whenever possible, each provision of this Designation shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.

13.  Definitions. In addition to other terms defined throughout this Designation, the following terms have the following meanings when used herein:

13.1  “Agreement” means that certain Employment Agreement dated February 1, 2021, by and between the Company and Duane Drinkwine, Ph.D., as such may be amended or modified from time to time.

13.2  “Business Day” means any day except Saturday, Sunday or any day on which banks are authorized by law to be closed in the City of Dallas, Texas.

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13.3  “Common Stock” shall mean the common stock, $0.001 par value per share of the Company.

13.4  “Conversion Price” shall equal $0.80 per share, subject to adjustment in connection with any Recapitalization.

13.5  “Distribution” shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise (other than dividends on Common Stock payable in Common Stock), other than: (i) repurchases of Common Stock (or securities convertible into Common Stock) in individually negotiated transactions, (ii) other repurchases allowed pursuant to the terms of this Designation, or (iii) any other repurchases or redemptions of capital stock of the Company approved by the Board of Directors of the Company.

13.6  “Effective Date” means the ‘Effective Date’ as defined in the Agreement.

13.7  “Exchange Act” means the Securities Exchange Act of 1934, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

13.8  “Holder” shall mean the person or entity in which the Series B Convertible Preferred Stock is registered on the books of the Company, which shall initially be the person or entity which such Series B Convertible Preferred Stock is issued to, and shall thereafter be permitted and legal assigns which the Company is notified of by the Holder and which the Holder has provided a valid legal opinion in connection therewith to the Company and to whom such Preferred Stock Shares are legally transferred.

13.9  “Junior Securities” shall mean each other class of capital stock or series of preferred stock of the Company other than the Common Stock established after the Effective Date, the terms of which do not expressly provide that such class or series ranks senior to or on parity with the Series B Convertible Preferred upon the liquidation, winding-up or dissolution of the Company.

13.10  “Liquidation Preference” shall equal the Original Issue Price per share.

13.11  “Majority In Interest” means Holders holding a majority of the then aggregate shares of Series B Convertible Preferred Stock.

13.12  “Original Issue Date” means the date that such applicable shares of Series B Convertible Preferred Stock are actually earned and issued.

13.13  “Original Issue Price” shall mean $0.80 per share (as appropriately adjusted for any Recapitalizations).

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13.14  “Parity Securities” means any class or series of stock of the Company, including, but not limited to preferred stock (whether designated as of the date hereof, or which may be designated in the future) the terms of which do not expressly provide that such class or series will rank senior or junior to Series B Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Company (in each case without regard to whether dividends accrue cumulatively or non-cumulatively), or which provides that such class or series of stock of the Company (which provision need not be express, but may be implied) are in parity with the Common Stock of the Company in regards to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Company. For the sake of clarity, the issuance or grant of any Party Stock shall not require notice to, or the approval and/or consent of any of the Holders. Further for the sake of clarity, the Company’s Series A Convertible Preferred Stock as designated as of the date of this Designation, and the Company’s Series C Convertible Preferred Stock designated on or around the date of this Designation, shall be considered Parity Securities.

13.15  “Preferred Stock Certificates” means the stock certificate(s) issued by the Company representing the applicable Series B Convertible Preferred Stock shares.

13.16  “Recapitalization” shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event described in Sections 4.2 through 4.3.

13.17  “Restricted Shares” means shares of the Company’s Common Stock which are restricted from being transferred by the Holder thereof unless the transfer is affected in compliance with the Securities Act and applicable state securities laws (including investment suitability standards, which shares shall bear the following restrictive legend (or one substantially similar)):

The securities represented by this certificate have not been registered under the Securities Act of 1933 or any state securities act. The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated unless (i) they shall have been registered under the Securities Act of 1933 and any applicable state securities act, or (ii) the corporation shall have been furnished with an opinion of counsel, satisfactory to counsel for the corporation, that registration is not required under any such acts.

 

13.18  “SEC” means the Securities and Exchange Commission.

13.19  “Securities Act” means the Securities Act of 1933, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

13.20  “Senior Securities” means the Company’s capital leases as may be in place from time to time; and any other senior debt, equity (including, but not limited to preferred stock) or other security of the Company, including, but not limited to securities

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held by certain banks and/or institutions, which hold security interests over the Company’s assets as of the Issuance Date, or which the Company may agree in the future to provide priority security interests to in the future, which provide for priority rights in liquidation, priority voting rights or any other priority rights or preferences when compared to the Series B Preferred Stock. For the sake of clarity, the issuance or grant of any Senior Securities shall not require notice to, or the approval and/or consent of any of the Holders.

13.21  “Transfer Agent” means initially, the Company, which will be serving as its own transfer agent for the Series B Convertible Preferred Stock, but at the option of the Company from time to time, may also mean Vail Stock Transfer, or any successor transfer agent which the Company may use for its Series B Convertible Preferred Stock.

_________________________________________________

 

NOW THEREFORE BE IT RESOLVED, that the Designation is hereby approved, affirmed, confirmed, and ratified; and it is further

 

RESOLVED, that each officer of the Company be and hereby is authorized, empowered and directed to execute and deliver, in the name of and on behalf of the Company, any and all documents, and to perform any and all acts necessary to reflect the Board of Directors approval and ratification of the resolutions set forth above; and it is further

 

RESOLVED, that in addition to and without limiting the foregoing, each officer of the Company and the Company’s attorney be and hereby is authorized to take, or cause to be taken, such further action, and to execute and deliver, or cause to be delivered, for and in the name and on behalf of the Company, all such instruments and documents as he may deem appropriate in order to effect the purpose or intent of the foregoing resolutions (as conclusively evidenced by the taking of such action or the execution and delivery of such instruments, as the case may be) and all action heretofore taken by such officer in connection with the subject of the foregoing recitals and resolutions be, and it hereby is approved, ratified and confirmed in all respects as the act and deed of the Company; and it is further

 

RESOLVED, that this Designation may be executed in several counterparts, each of which is an original; that it shall not be necessary in making proof of this Designation or any counterpart hereof to produce or account for any of the other.

 

[Remainder of page left intentionally blank. Signature page follows.]

 

 

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IN WITNESS WHEREOF, the Board of Directors of the Company has unanimously approved and caused this “Certificate of Designation of Rapid Therapeutic Science Laboratories, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series B Convertible Preferred Stock” to be duly executed and approved this 28th day of May 2021.

 

DIRECTORS:

 

/s/ Donal R. Schmidt, Jr.

DONAL R. SCHMIDT, JR.

DIRECTOR

 

 

/s/ D. Hughes Watler, Jr.

D. HUGHES WATLER, JR.

DIRECTOR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.,

ESTABLISHING THE DESIGNATION, PREFERENCES,

LIMITATIONS AND RELATIVE RIGHTS OF ITS

SERIES C CONVERTIBLE PREFERRED STOCK

 

Pursuant to Section 78.1955 of the Nevada Revised Statutes (the “NRS”), Rapid Therapeutic Science Laboratories, Inc., a company organized and existing under the State of Nevada (the “Company”),

 

DOES HEREBY CERTIFY that pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of the Company, as amended, and pursuant to Section 78.1955 of the NRS, the Board of Directors, by unanimous written consent of all members of the Board of Directors on May 28, 2021, duly adopted a resolution providing for the issuance of a series of Eight Million Five Hundred Thousand shares of Series C Convertible Preferred Stock, which resolution is and reads as follows:

 

RESOLVED, that pursuant to the authority expressly granted to and invested in the Board of Directors by the provisions of the Articles of Incorporation of the Company, as amended and Section 78.1955 of the NRS, a series of the preferred stock, par value $0.001 per share, of the Company be, and it hereby is, established; and

 

FURTHER RESOLVED, that the series of preferred stock of the Company be, and it hereby is, given the distinctive designation of “Series C Convertible Preferred Stock”; and

 

FURTHER RESOLVED, that the Series C Convertible Preferred Stock shall consist of Eight Million (8,500,000) shares; and

 

FURTHER RESOLVED, that the Series C Convertible Preferred Stock shall have the powers and preferences, and the relative, participating, optional and other rights, and the qualifications, limitations, and restrictions thereon set forth in this Certificate of Designation (the “Designation” or the “Certificate of Designation”) below:

 

1.  Dividends.

1.1  Dividends in General. The Series C Convertible Preferred Stock shall not accrue any dividends, provided that, the Holders shall, as holders of Series C Convertible Preferred Stock, be entitled to such dividends paid and Distributions made to the holders of Common Stock to the same extent as if such Holders had converted the Series C Convertible Preferred Stock into Common Stock (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends and Distributions. Payments under the preceding sentence shall be made concurrently with the dividend or Distribution to the holders of Common Stock. Following the occurrence of a Liquidation Event (as hereinafter defined) and the payment in full to a Holder of its applicable Liquidation Preference, such Holder shall cease to have any rights hereunder to participate in any future dividends or distributions made to the holders of Common Stock. No Distributions

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shall be made with respect to the Common Stock until all past due, if any, and/or declared dividends on the Series C Convertible Preferred Stock have been paid or set aside for payment to the Holders. Notwithstanding the foregoing, the Holders shall have no right of participation in connection with dividends or Distributions made to the Common Stock shareholders consisting solely of shares of Common Stock.

1.2  Non-Cash Distributions. Whenever a Distribution provided for in this Section 1 shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors.

1.3  Other Distributions. Subject to the terms of this Certificate of Designation, and to the fullest extent permitted by the NRS, the Company shall be expressly permitted to redeem, repurchase or make distributions on the shares of its capital stock.

2.  Liquidation Rights.

2.1  Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary (each a “Liquidation Event”), the holders of Series C Convertible Preferred Stock shall be entitled to receive pari passu with any Distribution of any of the assets of the Company to the holders of the Company’s Common Stock and Parity Securities and prior to any holders of any Junior Securities, by reason of their ownership of such stock, but not prior to any holders of the Company’s Senior Securities, which holders of the Senior Securities shall have priority to the Distribution of any assets of the Company, an amount per share for each share of Series C Convertible Preferred Stock held by them equal to the Liquidation Preference. If upon the liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the holders of the Series C Convertible Preferred Stock, Parity Securities and Common Stock (i.e., after payment of the Company’s liabilities and payment to any holders of the Company’s Senior Securities) are insufficient to permit the payment to such holders of the full amounts specified in this Section then the entire assets of the Company legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series C Convertible Preferred Stock (on an as-converted basis), Parity Securities and Common Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section and applicable law. For the sake of clarity, the rights of the Series C Convertible Preferred Stock upon the occurrence of a Liquidation Event shall be pari passu with the rights of the Parity Securities and Common Stock for all purposes.

2.2  Valuation of Non-Cash Consideration. If any assets of the Company distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Company are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors.

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3.  Conversion.

3.1  Automatic Conversion.

(a)  Each share of Series B Convertible Preferred Stock shall automatically convert, without any required action by any Holder, into that number of fully-paid, nonassessable shares of Common Stock determined by dividing (i) the Original Issue Price for the Series B Convertible Preferred Stock by (ii) the Conversion Price (such shares of Common Stock issuable upon a Conversion, the “Shares” and a “Conversion”), on the second anniversary of the Effective Date, to the extent vested, if subject to vesting.

(b)  Following the Conversion, the Company shall promptly issue to each Holder all Shares of Common Stock which such Holder is due in connection with the Conversion (and promptly deliver such Shares to the address of Holder which the Company then has on record (a “Delivery”)). The Shares issuable in connection with a Conversion shall be fully-paid, non-assessable shares of Common Stock. Unless the Shares are covered by a valid and effective registration under the Securities Act or the Holder provides a valid opinion from an attorney stating that such Shares can be issued free of restrictive legend, which shall be determined by the Company in its sole discretion, prior to the issuance date of such Shares, such Shares shall be issued as Restricted Shares.

(c)  The issuance and Delivery by the Company of the Shares shall fully discharge the Company from any and all further obligations under or in connection with the Series B Preferred Stock and shall automatically, and without any required action by the Company or the Holder, result in the cancellation, termination and invalidation of any outstanding Series B Preferred Stock and Preferred Stock Certificates held by a Holder or his, her or its assigns.

(d)  Without limiting the obligation of each Holder set forth herein (including in the subsequent clause (e)), the Company and/or the Company’s Transfer Agent shall be authorized to take whatever action necessary, if any, following the issuance and Delivery of the Shares to reflect the cancellation of the Series B Preferred Stock subject to the Conversion, which shall not require the approval and/or consent of any Holder (a “Cancellation”).

(e)  Notwithstanding the above, each Holder, by accepting such Preferred Stock Certificates (or such Series B Preferred Stock shares in book-entry form) hereby covenants that it will, whenever and as reasonably requested by the Company and the Transfer Agent, at the Company’s sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Company or the Transfer Agent may reasonably require in order to complete, insure and perfect the Cancellation, if such may be reasonably required by the Company and/or the Company’s Transfer Agent, including, but not

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limited to the delivery to the Company of all Preferred Stock Certificates and stock powers with medallion signature guaranty in connection with the Cancellation.

(f)  In the event that the Delivery of any Shares is unsuccessful and/or any Holder fails to accept such Shares, such Shares shall be held by the Company and/or the Transfer Agent in trust (without accruing interest) and shall be released to such Holder upon reasonable evidence to the Company or the Transfer Agent that such Holder is the legal owner of such Shares, provided that the Holder’s failure to accept such Shares and/or the Company’s inability to Deliver such shares shall in no event effect the validity of the Cancellation.

3.2  Fractional Shares. If any Conversion of Series B Convertible Preferred Stock would result in the issuance of a fractional share of Common Stock (aggregating all shares of Series B Convertible Preferred Stock being converted), such fractional share shall be payable in cash based upon the market value of the Common Stock on the trading day immediately prior to the date of conversion (as determined in good faith by the Board of Directors) and the number of shares of Common Stock issuable upon conversion of the Series B Convertible Preferred Stock shall be the next lower whole number of shares. If the Company elects not to, or is unable to, make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

3.3  Taxes. The Company shall not be required to pay any tax which may be payable in respect to any transfer involved in the issue and delivery of shares of Common Stock upon Conversion in a name other than that in which the shares of the Series B Convertible Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid. The Company shall withhold from any payment due whatsoever in connection with the Series B Convertible Preferred Stock any and all required withholdings and/or taxes the Company, in its sole discretion deems reasonable or necessary, absent an opinion from Holder’s accountant or legal counsel, acceptable to the Company in its sole determination, that such withholdings and/or taxes are not required to be withheld by the Company.

3.4  No Impairment. The Company will not through any reorganization, transfer of assets, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 3. Notwithstanding the foregoing, nothing in this Section shall prohibit the Company from amending its Articles of Incorporation with the requisite consent of its stockholders and the Board of Directors, provided that such amendment will not prohibit the Company from having sufficient authorized shares of Common Stock to permit conversion hereunder.

3.5  Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of

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Common Stock solely for the purpose of effecting the conversion of the shares of the Series B Convertible Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of the Series B Convertible Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series B Convertible Preferred Stock, the Company will use its commercially reasonable efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

4.  Adjustments for Recapitalizations.

4.1  Equitable Adjustments for Recapitalizations. (a) The Liquidation Preference and the Original Issue Price (each, as and if applicable) (the “Preferred Stock Adjustable Provisions”); (b) the Conversion Price (as and if applicable) (the “Common Stock Adjustable Provisions”), and (c) any and all other terms, conditions, amounts and provisions of this Designation which (i) pursuant to the terms of this Designation provide for equitable adjustment in the event of a Recapitalization (the “Other Equitable Adjustable Provisions”); or (ii) the Board of Directors of the Company determines in their reasonable good faith judgment is required to be equitably adjusted in connection with any Recapitalizations, shall each be subject to equitable adjustment as provided in Sections 4.2 through 4.3, below, as determined by the Board of Directors in their sole and reasonable discretion.

4.2  Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, without a corresponding subdivision of the Series C Convertible Preferred Stock, the applicable Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, without a corresponding combination of the Series C Convertible Preferred Stock, the Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted.

4.3  Adjustments for Subdivisions or Combinations of Series C Convertible Preferred Stock. In the event the outstanding shares of Series C Convertible Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Series C Convertible Preferred Stock, the applicable Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Series C Convertible Preferred Stock shall be combined (by reclassification or otherwise) into a

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lesser number of shares of Series C Convertible Preferred Stock, the applicable Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted. Provided however that the result of any concurrent adjustment in the Common Stock (as provided under Section 4.2) and Series C Convertible Preferred Stock (as provided under Section 4.3) shall only be to affect the equitable adjustable provisions hereof once.

4.4  Other Adjustments. The Board of Directors of the Company shall also adjust equitably, and shall have the right to adjust equitably, any or all of the Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions or Other Equitable Adjustable Provisions from time to time, if the Board of Directors of the Company determine in their reasonable good faith judgment that such values and/or provisions are required to be equitably adjusted in connection with any Company action.

4.5  Adjustments for Reclassification, Exchange and Substitution.

(a)  Except to the extent such Recapitalization Event is subject to Sections 4.1 through 4.3, above (the “Recapitalization and Adjustment Rights”), and/or Section 2 (“Liquidation Rights”), if at any time or from time to time after the Effective Date there shall occur any capital reorganization, recapitalization, reclassification, share exchange, restructuring, consolidation, combination or merger involving the Company in which the Common Stock (but not the Series C Convertible Preferred Stock) is converted into or exchanged for shares of stock or other securities or property (including cash) of the Company or otherwise (other than a transaction covered by the Recapitalization and Adjustment Rights or Liquidation Rights) (each a “Recapitalization Event”), provision shall be made so that each Series C Convertible Preferred Holder shall thereafter be entitled to receive upon conversion of the shares of Series C Convertible Preferred Stock held by such Series C Convertible Preferred Holder the kind and number of shares of stock or other securities or property (including cash or any combination thereof) of the Company or otherwise, to which a Common Stock shareholder holding the number of shares of Common Stock into which the shares of Series C Convertible Preferred Stock held by such Series C Convertible Preferred Holder are convertible immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger (without regard for the Maximum Percentage) would have been entitled upon such event.

(b)  In the event that the holders of Common Stock have the opportunity to elect the form of consideration to be received in the business combination, then the Company shall make adequate provision whereby the Holders of Series C Convertible Preferred Stock shall have the opportunity to determine the form of consideration into which all of the Series C Convertible Preferred Stock, treated as a single class, shall be convertible from and after the effective date of such business combination. If such opportunity is granted, such determination shall be based on the determination at a meeting duly called or via a written consent to action of a Majority In Interest, shall be subject to any limitations to which all holders of Common Stock are subject, such as pro rata reductions applicable to any portion of the consideration payable in such business

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combination, and shall be conducted in such a manner as to be completed by the date which is the earliest of (1) the deadline for elections to be made by holders of Common Stock and (2) two Business Days prior to the anticipated effective date of the business combination. Further, the Company shall not affect any such consolidation, merger or sale, unless prior to the consummation thereof, the successor entity (if other than the Company) resulting from consolidation or merger or the entity purchasing such assets assumes by written instrument, the obligation to deliver to each such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire.

(c)  If a conversion of Series C Convertible Preferred Stock is to be made in connection with a transaction contemplated by this Section 4.5 or a similar transaction affecting the Company (other than a tender or exchange offer), the conversion of any shares of Series C Convertible Preferred Stock may, at the election of the Holder thereof, be conditioned upon the consummation of such transaction, in which case such conversion shall not be deemed to be effective until such transaction has been consummated. In connection with any tender or exchange offer for shares of Common Stock, Holders of Series C Convertible Preferred Stock shall have the right to tender (or submit for exchange) shares of Series C Convertible Preferred Stock in such a manner so as to preserve the status of such shares as Series C Convertible Preferred Stock until immediately prior to such time as shares of Common Stock are to be purchased (or exchanged) pursuant to such offer, at which time that portion of the shares of Series C Convertible Preferred Stock so tendered which is convertible into the number of shares of Common Stock to be purchased (or exchanged) pursuant to such offer shall be deemed converted into the appropriate number of shares of Common Stock. Any shares of Series C Convertible Preferred Stock not so converted shall be returned to the Holder as Series C Convertible Preferred Stock.

(d)  None of the foregoing provisions shall affect the right of a Holder of shares of Series C Convertible Preferred Stock to convert such Holder’s shares of Series C Convertible Preferred Stock into shares of Common Stock prior to the effective date of such business combination, subject to the terms of this Designation.

(e)  In the event of any Recapitalization Event falling under this Section 4.5, in such case, appropriate adjustment shall be made in the application of the provisions of this Section 4.5 with respect to the rights and interests of the Series C Convertible Preferred Holders after such events to the end that the provisions of this Section 4.5 (including, but not limited to, adjustment of the Conversion Price in respect of any shares of Series C Convertible Preferred Stock then in effect and the number of shares issuable upon conversion of all such shares of Series C Convertible Preferred Stock) shall be applicable after that event as nearly reasonably as may be. The Company may not become a party to any such transaction unless its terms are consistent with the preceding requirements and such transaction is otherwise affected in accordance with this Designation.

4.6  Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 4, the Company at its expense shall

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promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series C Convertible Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the reasonable written request at any time of any holder of Series C Convertible Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of the Series C Convertible Preferred Stock.

5.  Voting. The Series C Convertible Preferred Stock shall not have any voting rights, except as expressly set forth below under Section 6, “Protective Provisions”. Other than as provided herein or required by law, there shall be no series voting.

6.  Protective Provisions.

6.1  Subject to the rights of series of preferred stock which may from time to time come into existence, so long as any shares of Series C Convertible Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of the holders of a Majority In Interest:

(a)  Increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series C Convertible Preferred Stock;

(b)  Re-issue any shares of Series C Convertible Preferred Stock converted pursuant to the terms of this Designation;

(c)  Issue any shares of Series C Convertible Preferred Stock other than pursuant to the Agreement;

(d)  Alter or change the rights, preferences or privileges of the shares of Series C Convertible Preferred Stock so as to affect adversely the shares of such series; or

(e)  Amend or waive any provision of the Company’s Articles of Incorporation or Bylaws relative to the Series C Convertible Preferred Stock so as to affect adversely the shares of Series C Convertible Preferred Stock in any material respect as compared to holders of other series of shares, except as otherwise allowed hereunder.

For the sake of clarity, no approval of the holders of the Series C Preferred Stock shall be required for the Company to issue any Junior Securities, Parity Securities or Senior Securities.

7.  Redemption Rights. The Series C Convertible Preferred Stock shall not have any redemption rights.

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8.  Notices.

8.1  In General. Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile or email transmission, and shall be effective, unless otherwise provided herein, three days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by nationally recognized overnight carrier or confirmed facsimile transmission, in each case addressed to a party.

9.  No Preemptive Rights. No Holder shall have the right to repurchase shares of capital stock of the Company sold or issued by the Company except to the extent that such right may from time to time be set forth in a written agreement between the Company and such stockholder.

10.  Replacement Preferred Stock Certificates. In the event that any Holder notifies the Company that a Preferred Stock Certificate evidencing shares of Series C Convertible Preferred Stock has been lost, stolen, destroyed or mutilated, the Company shall issue a replacement stock certificate evidencing the Series C Convertible Preferred Stock identical in tenor and date (or if such certificate is being issued for shares not covered in a redemption or conversion, in the applicable tenor and date) to the original Preferred Stock Certificate evidencing the Series C Convertible Preferred Stock, provided that the Holder executes and delivers to the Company and/or its Transfer Agent, as applicable, an affidavit of lost stock certificate and an agreement reasonably satisfactory to the Company and its Transfer Agent to indemnify the Company from any loss incurred by it in connection with such Series C Convertible Preferred Stock certificate, and provides the Company and/or its Transfer Agent such other information, documents and if applicable, bonds and indemnities as the Company or its Transfer Agent customarily requires for reissuances of stock certificates (collectively the “Lost Certificate Materials”); provided, however, the Company shall not be obligated to re-issue replacement stock certificates if the Holder contemporaneously requests the Company to convert or redeem the full number of shares evidenced by such lost, stolen, destroyed or mutilated certificate.

11.  No Other Rights or Privileges. Except as specifically set forth herein, the Holders of the Series C Convertible Preferred Stock shall have no other rights, privileges or preferences with respect to the Series C Convertible Preferred Stock.

12.  Miscellaneous.

12.1  Cancellation of Series C Convertible Preferred Stock. If any shares of Series C Convertible Preferred Stock are converted pursuant to Section 3, the shares so converted or redeemed shall be canceled and shall return to the status of designated, but unissued Series C Convertible Preferred Stock.

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12.2  Further Assurances. Each Holder hereby covenants that, in consideration for receiving shares of Series C Convertible Preferred Stock, that he, she or it will, whenever and as reasonably requested by the Company, do, execute, acknowledge and deliver any and all such other and further acts, deeds, confirmations, agreements and documents as the Company or its Transfer Agent may reasonably require in order to complete, insure and perfect any of the terms, conditions or provisions of this Designation.

12.3  Technical, Corrective, Administrative or Similar Changes. The Company may, by any means authorized by law and without any vote of the Holders of shares of the Series C Convertible Preferred Stock, make technical, corrective, administrative or similar changes in this Designation that do not, individually or in the aggregate, adversely affect the rights or preferences of the Holders of shares of the Series C Convertible Preferred Stock.

12.4  Waiver/Amendment. Notwithstanding any provision in this Designation to the contrary, any provision contained herein and any right of the holders of Series C Convertible Preferred Stock granted hereunder may be waived and/or amended as to all shares of Series C Convertible Preferred Stock (and the Holders thereof) upon the written consent of a Majority In Interest, unless a higher percentage is required by applicable law, in which case the written consent of the Holders of not less than such higher percentage of shares of Series C Convertible Preferred Stock shall be required, and no separate approval of the holders of the Common Stock of the Company shall be required.

12.5  Interpretation. Whenever possible, each provision of this Designation shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.

13.  Definitions. In addition to other terms defined throughout this Designation, the following terms have the following meanings when used herein:

13.1  “Agreement” means that certain Independent Contractor Agreement dated April 22, 2021, by and between the Company and Charles L. Powell, M.D., as such may be amended or modified from time to time.

13.2  “Business Day” means any day except Saturday, Sunday or any day on which banks are authorized by law to be closed in the City of Dallas, Texas.

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13.3  “Common Stock” shall mean the common stock, $0.001 par value per share of the Company.

13.4  “Conversion Price” shall equal $0.80 per share, subject to adjustment in connection with any Recapitalization.

13.5  “Distribution” shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise (other than dividends on Common Stock payable in Common Stock), other than: (i) repurchases of Common Stock (or securities convertible into Common Stock) in individually negotiated transactions, (ii) other repurchases allowed pursuant to the terms of this Designation, or (iii) any other repurchases or redemptions of capital stock of the Company approved by the Board of Directors of the Company.

13.6  “Effective Date” means the ‘Effective Date’ as defined in the Agreement.

13.7  “Exchange Act” means the Securities Exchange Act of 1934, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

13.8  “Holder” shall mean the person or entity in which the Series C Convertible Preferred Stock is registered on the books of the Company, which shall initially be the person or entity which such Series C Convertible Preferred Stock is issued to, and shall thereafter be permitted and legal assigns which the Company is notified of by the Holder and which the Holder has provided a valid legal opinion in connection therewith to the Company and to whom such Preferred Stock Shares are legally transferred.

13.9  “Junior Securities” shall mean each other class of capital stock or series of preferred stock of the Company other than the Common Stock established after the Effective Date, the terms of which do not expressly provide that such class or series ranks senior to or on parity with the Series C Convertible Preferred upon the liquidation, winding-up or dissolution of the Company.

13.10  “Liquidation Preference” shall equal the Original Issue Price per share.

13.11  “Majority In Interest” means Holders holding a majority of the then aggregate shares of Series C Convertible Preferred Stock.

13.12  “Original Issue Date” means the date that such applicable shares of Series C Convertible Preferred Stock are actually earned and issued.

13.13  “Original Issue Price” shall mean $0.80 per share (as appropriately adjusted for any Recapitalizations).

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13.14  “Parity Securities” means any class or series of stock of the Company, including, but not limited to preferred stock (whether designated as of the date hereof, or which may be designated in the future) the terms of which do not expressly provide that such class or series will rank senior or junior to Series C Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Company (in each case without regard to whether dividends accrue cumulatively or non-cumulatively), or which provides that such class or series of stock of the Company (which provision need not be express, but may be implied) are in parity with the Common Stock of the Company in regards to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Company. For the sake of clarity, the issuance or grant of any Party Stock shall not require notice to, or the approval and/or consent of any of the Holders. Further for the sake of clarity, the Company’s Series A Convertible Preferred Stock as designated as of the date of this Designation, and the Company’s Series B Convertible Preferred Stock designated on or around the date of this Designation, shall be considered Parity Securities.

13.15  “Preferred Stock Certificates” means the stock certificate(s) issued by the Company representing the applicable Series C Convertible Preferred Stock shares.

13.16  “Recapitalization” shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event described in Sections 4.2 through 4.3.

13.17  “Restricted Shares” means shares of the Company’s Common Stock which are restricted from being transferred by the Holder thereof unless the transfer is affected in compliance with the Securities Act and applicable state securities laws (including investment suitability standards, which shares shall bear the following restrictive legend (or one substantially similar)):

The securities represented by this certificate have not been registered under the Securities Act of 1933 or any state securities act. The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated unless (i) they shall have been registered under the Securities Act of 1933 and any applicable state securities act, or (ii) the corporation shall have been furnished with an opinion of counsel, satisfactory to counsel for the corporation, that registration is not required under any such acts.

 

13.18  “SEC” means the Securities and Exchange Commission.

13.19  “Securities Act” means the Securities Act of 1933, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

13.20  “Senior Securities” means the Company’s capital leases as may be in place from time to time; and any other senior debt, equity (including, but not limited to preferred stock) or other security of the Company, including, but not limited to securities

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held by certain banks and/or institutions, which hold security interests over the Company’s assets as of the Issuance Date, or which the Company may agree in the future to provide priority security interests to in the future, which provide for priority rights in liquidation, priority voting rights or any other priority rights or preferences when compared to the Series C Preferred Stock. For the sake of clarity, the issuance or grant of any Senior Securities shall not require notice to, or the approval and/or consent of any of the Holders.

13.21  “Transfer Agent” means initially, the Company, which will be serving as its own transfer agent for the Series C Convertible Preferred Stock, but at the option of the Company from time to time, may also mean Vail Stock Transfer, or any successor transfer agent which the Company may use for its Series C Convertible Preferred Stock.

____________________________________________________________

 

NOW THEREFORE BE IT RESOLVED, that the Designation is hereby approved, affirmed, confirmed, and ratified; and it is further

 

RESOLVED, that each officer of the Company be and hereby is authorized, empowered and directed to execute and deliver, in the name of and on behalf of the Company, any and all documents, and to perform any and all acts necessary to reflect the Board of Directors approval and ratification of the resolutions set forth above; and it is further

 

RESOLVED, that in addition to and without limiting the foregoing, each officer of the Company and the Company’s attorney be and hereby is authorized to take, or cause to be taken, such further action, and to execute and deliver, or cause to be delivered, for and in the name and on behalf of the Company, all such instruments and documents as he may deem appropriate in order to effect the purpose or intent of the foregoing resolutions (as conclusively evidenced by the taking of such action or the execution and delivery of such instruments, as the case may be) and all action heretofore taken by such officer in connection with the subject of the foregoing recitals and resolutions be, and it hereby is approved, ratified and confirmed in all respects as the act and deed of the Company; and it is further

 

RESOLVED, that this Designation may be executed in several counterparts, each of which is an original; that it shall not be necessary in making proof of this Designation or any counterpart hereof to produce or account for any of the other.

 

[Remainder of page left intentionally blank. Signature page follows.]

 

 

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IN WITNESS WHEREOF, the Board of Directors of the Company has unanimously approved and caused this “Certificate of Designation of Rapid Therapeutic Science Laboratories, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series C Convertible Preferred Stock” to be duly executed and approved this 28th day of May 2021.

 

DIRECTORS:

 

/s/ Donal R. Schmidt, Jr.

DONAL R. SCHMIDT, JR.

DIRECTOR

 

 

/s/ D. Hughes Watler, Jr.

D. HUGHES WATLER, JR.

DIRECTOR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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INDEPENDENT CONTRACTOR AGREEMENT

THIS INDEPENDENT CONTRACTOR AGREEMENT (the “Agreement”) is made and entered into as of the 22th day of April 2021 (the “Effective Date”), by and between Rapid Therapeutic Science Laboratories, Inc., a Nevada for profit company (the “Company”) and We the 23, LLC, a Texas Limited Liability Company, whose managing member is Charles L. Powell, M.D., an individual, a Texas resident and a license physician in the state of Texas (collectively the “Contractor”), each of which may be collectively referred to herein as the “Parties,” and individually as a “Party.”

 

W I T N E S E T H:

 

WHEREAS, Company is a manufacturer of certain aerosol products;

WHEREAS, Company desires to hire Contractor to provide the Services (as defined below); and

WHEREAS, Contractor desires to accept independent contractor Services under the terms and conditions set forth in this Agreement.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

1.  DEFINITIONS

In addition to the other terms defined throughout this Agreement, the following terms shall have the meanings provided below:

1.1.  “Confidential Information” means information of a Party, to the extent not considered a Trade Secret under applicable law, that (i) relates to the business of the Parties, (ii) possesses an element of value to the Parties, (iii) is not generally known to the public, and (iv) would damage a Party if disclosed. Confidential Information shall not include any information that (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure, (ii) has been independently developed and disclosed by others without violating this Agreement or the legal rights of any party or person, or (iii) otherwise enters the public domain through lawful means. Confidential Information includes Trade Secrets as defined under the Texas Trade Secrets Act at Tex. Civ. Prac. & Rem Code §134A.002. Any breach of this clause will result in damages for Misappropriation under the Act.

1.2.  “Restricted Period” means the time period during the Term of this Agreement and for two (2) year after the effective date of termination of this Agreement for any reason.  

1.3.  “Services” means performing oversight and interpretation of clinical research including, but not limited to, obtaining informed consent of patients, implementation of study procedures, product dispensing, evaluations of patient compliance with study requirements, preparations of required study documents by principal investigator, Neal C. Lawrence, M.D. (or any substitute approved by the Company in writing), on the Company’s products under the direction of Charles L. Powell, M.D. (or any substitute approved by the Company in writing), with respect to Company products provided to Contractor, and shall also include the Contractor Responsibilities defined in Section 4.1.

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2.  INDEPENDENT CONTRACTOR RELATIONSHIP

2.1.  Contractor. Subject to the terms and conditions herein, Company engages Contractor to oversee its clinical research as a clinical research center. Contractor accepts such engagement.

2.2.  Relationship of Parties. It is mutually understood and agreed that in performing the services, duties and obligations under this Agreement, Contractor is acting as an independent contractor and the Contractor shall at all times perform services as an independent contractor on behalf of Company pursuant to the terms of this Agreement. None of the provisions of this Agreement is intended to create, nor shall be deemed or construed to create any relationship between the Parties hereto other than that of independent contractors.

2.3.  Disclosure of Relationship. The identification of the Contractor is expected to be disclosed to the public as a medical “Consultant” to the Company at the direction of the Company’s Chief Executive Officer (“CEO”). At all times the Contractor and the CEO will mutually agree on any terminology or disclosure thereof before publication to the media or the public, provided that the Company will have the final say on such disclosure, consistent with its reporting requirements under the rules and regulations of the Securities and Exchange Commission.

2.4.  Tax Matters. All fees payable to Contractor hereunder shall be paid in full, without any withholding, deduction, or offset of any Federal, state, or local income taxes, employment taxes, or other withholdings, except to the extent Company reasonably determines that any such withholdings, deductions, or offsets are required by applicable law. Contractor hereby covenants and agrees that Contractor shall be solely responsible for all income taxes, payroll taxes, and other withholdings (both employer and employee portions) with respect to all fees paid by Company hereunder, and agrees to indemnify and hold Company harmless from and against any and all loss, liability, claim, cause of action, suit, fine, damage, judgment, cost or expense (including reasonable attorneys’ fees) arising out of or in connection with any tax liability or other tax obligations relating to payments made to Contractor pursuant to this Agreement, including, without limitation, any such taxes and withholdings imposed as a result of any claim or determination by any taxing authority or otherwise that Contractor is not an independent contractor with respect to the services performed hereunder.

3.  COMPENSATION

3.1.  Compensation. Company shall compensate Contractor for all Services that Contractor renders to Company during the Term of this Agreement as set forth in Exhibit A, attached hereto and incorporated herein by reference, as well as any Addendums (mutually signed by the Parties). The Parties agree that Exhibit A may be revised and updated by the Company to reflect new or additional services; however, such revision or update may neither diminish the compensation provided herein nor materially change the earn-out provisions unless such change is to the benefit of Contractor, and no such revisions or updates shall be effective unless set forth in writing and mutually executed by both Parties.

4.  DUTIES OF CONTRACTOR/CONSULTANT

4.1.  Role of Contractor. During the Term of this Agreement, Contractor shall use its best efforts to oversee pharmaceutical and device studies on Company’s provided products in a manner consistent with standard industry practices for medical formula and devices at the direction of Dr. Lawrence (or any substitute approved by the Company in writing) or as may be agreed between Dr. Lawrence (or any substitute approved by the Company in writing) and Contractor. Contractor shall be responsible for design of protocol, coordination with Accent Clinical Research Professionals, LLC (“Accent”) under their contract, oversight of any published works, preparation of full report on status of studies and results of studies, procurement of all data related to studies, at a minimum or as otherwise agreed between the

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parties. Collectively the responsibilities of the Contractor set forth in this Section 4.1 shall be defined as the “Contractor Responsibilities”).

4.2.  Representations. Contractor and or its employees, contractors and/or agents shall not make any false or misleading representations to medical providers, retailers, wholesalers, pharmacies, or others regarding Company or the products that Company provides for testing; nor, shall Contractor make any representations, warranties or guarantees with respect to products the Company provides that are not consistent with Company’s documentation or literature describing its products or that found on its websites at www.nhaler.com, www.rxoid.com, or www.rtslco.com or other brands to be released in the future.

4.3.  No Authority to Bind Company. Contractor is not authorized to act as agent for Company and may not bind Company in any manner. Furthermore, Contractor warrants that neither he, nor any of his agents, employees, or members, will represent or appear to represent to any person, authority to bind Company to any arrangement or agreement.

4.4.  Use of Agents or Employees or Contractors by Contractor. Contractor acknowledges that he may use employees, agents, subcontractors or other parties to perform some or all of its services under this Agreement. Contractor also acknowledges he is legally and financially responsible for the actions or omissions of its agents, employees, or members that fall outside the direction provided by Contractor or Dr. Lawrence (or any replacement agreed to in writing by the Company).

4.5.  Plans and Reports. The Company may request that project plans, progress reports and a final results report be provided by Contractor on a monthly or other periodic basis. A final results report may be due, at Company’s request, at the conclusion of the Agreement and shall be submitted to the Company in a confidential written report at such time. The results report shall be in such form and setting forth such information and data as is reasonably requested by the Company.

5.  TERM AND TERMINATION OF AGREEMENT

5.1.  Term of Agreement. The term of this Agreement shall be for one (1) year from the Effective Date (the “Initial Term”), provided that this Agreement shall extend thereafter on a month-to-month basis, until either Party provides the other at least 30 days written notice of their intent to terminate this Agreement as discussed below in Section 5.2 (each month-to-month extension after the end of the Initial Term, a “Renewal Term”). The “Term” of this Agreement shall be from the Effective Date until the date this Agreement is terminated as provided in Section 5.2.

 

5.2.  Termination. This Agreement may be terminated as follows:

5.2.1.  Without Cause by Contractor. Contractor may terminate this Agreement by giving Company prior written notice pursuant to the notice provisions of Section 9.3.  Such termination shall be effective on the 30th day following the date of such notice. In addition, this Agreement is automatically terminated upon disability or death of Contractor.

5.2.2.  Without Cause by Company. Company may terminate this Agreement, with or without cause. Such termination shall be effective on the 30th day following the date of such notice (such date notice of termination is provided by the Company, the “Company Termination Date”). Notwithstanding such termination, the Contractor shall be paid the compensation due to Contractor hereunder after termination until the earlier of (a) one hundred eighty (180) days’ after the Company Termination Date; (b) the end of the Initial Term (if such notice to terminate is received by the Contractor prior to 30 days before the end of the Initial Term); and (c) the 30th day after such Company Termination

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Date (if such Company Termination Date falls within 30 days of the end of the Initial Term or during any Renewal Term).

5.2.3. With Cause by the Company. The Company shall have the right to terminate this Agreement immediately in the event the Contractor breaches any term or condition of this Agreement, or is found to have breached any representation and warranty set forth herein, and such breach (if capable of being cured), is not cured within 10 days written notice thereof by the Company.

5.2.4.  Mutual Termination. This Agreement may be terminated at any time by mutual agreement in writing between Company and Contractor. Such termination under this Section 5.2.3 shall be effective on the date mutually agreed by Contractor and Company.

6.  COVENANTS

6.1.  Non-Disparagement. During the Term of this Agreement and upon the termination of the Agreement for any reason, neither Party will make any disparaging or defamatory statements, whether written or verbal, regarding the other Party, or any of said Party’s officers, members, employees, or owners,

6.2.  Proprietary Information. Contractor agrees to retain in confidence all information relating to Company, including, but not limited to, the Confidential Information and any of Company’ proprietary information, technical data, trade secrets, know-how, research, product plans, products, services, works of original authorship, photographs, negatives, digital images, software, computer programs, ideas, research, developments, inventions (whether or not patentable), processes, formulas, technology, designs, drawings, engineering, hardware configuration information, forecasts, strategies, marketing, finances or other business information (collectively, the “Proprietary Information”). Except as is reasonably necessary in the performance of Contractor’s obligations to Company, Contractor agrees not to use the Proprietary Information. All right, title and interest in and to the Proprietary Information will remain the exclusive property of Company. Nothing in this Agreement will be construed to grant Contractor any rights to or license under the Proprietary Information or under any related patent, patent application, trademark, copyright, know-how, or other intellectual property of Company.

6.3.  Nature of Proprietary Information. Contractor acknowledges and agrees that the Proprietary Information protected by this Agreement is of a special, unique, unusual, extraordinary and intellectual character that money damages would not be sufficient to avoid or compensate for the unauthorized use or disclosure of the Proprietary Information or the breach of the covenants herein; and that specific performance, injunctive relief, and other equitable relief would be appropriate to prevent any actual or threatened use or disclosure of the Proprietary Information or breach of the covenants herein. Contractor also acknowledges that the interests of Company in and to its Proprietary Information may be irreparably injured by disclosure of such Proprietary Information. The remedies stated above may be pursued in addition to any other remedies available at law or in equity for breach of this Agreement, and the Contractor agrees to waive any requirement for the securing or posting of any bond or other security in connection with such remedy. Should litigation be instituted to enforce any provision hereof, the prevailing Party will be entitled to recover all costs, including, without limitation, reasonable legal fees, cost of investigation and cost of settlement.

 

6.4.  Restrictive Covenants.

6.2.1. Acknowledgements.

6.2.1.1.  The Parties acknowledge that the restrictions contained in this Article 6 are reasonable and necessary to protect the legitimate business interests of the Parties.

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6.2.1.2.  The Parties further acknowledge that: (i) each Party is in a position of trust and responsibility with access to Confidential Information and information concerning employees and business partners; and (ii) the Confidential Information, and the relationship between each Party and each of its employees and clients are valuable assets of the Parties and may not be used for any purpose other than furthering the services under this Agreement. This information is expressly protected under the CA.NDA and the Texas Trade Secrets Act.

7.  REPRESENTATIONS AND WARRANTIES

7.1.  Representations and Warranties of Contractor.

7.1.1.  Contractor represents and warrants to Company that (i) Contractor has the legal capacity to execute, deliver and perform this Agreement, (ii) this Agreement is a valid and binding agreement and is fully enforceable against Contractor, (iii) Contractor is not a party to any agreement that would prevent his entering into this Agreement or performing his obligations hereunder, (iv) any work product prepared or provided by Contractor shall not infringe the intellectual property or other rights of any third party, (v) Contractor’s performance of this Agreement will not breach any confidentiality or other agreement, with any former employer or other third party, to which Contractor is bound, (vi) in performing the Services, Contractor shall not make any unauthorized use of any confidential or proprietary information of any other person or entity, and (vii) Contractor has not previously granted, pledged, or made any other disposition to any person or entity, or any right, title or interest in or to any rights provided to the Company hereunder, and shall not make sure any disposition to any person or entity other than Company.

7.1.2.  In the accomplishment of the performance of such duties and responsibilities as are assigned to contractor under the terms of this Agreement, Contractor shall at all times conduct himself in a professional manner and shall conform to those standards of ethical conduct as are generally expected from those performing such services in the relevant business community. At all times during the Term of this Agreement as defined below, the Contractor shall use personal best efforts to fulfill his duties.

7.1.3.  Contractor will notify the Company immediately if, during the Term, he engages, or proposes to engage, in the performance of services for any competitor of Company, or any vendor to or customer of the Company. If Contractor performs services, whether as an employee or an independent contractor, for a competitor of Company during the Term of this Agreement, Company may terminate this Agreement immediately and without further obligation. Additionally, to avoid the appearance or existence of a conflict of interest, during the Term, Contractor must fully disclose in advance to Company the terms of any proposed or actual services for a vendor or customer of Company, and Company shall have the right in its sole discretion to disapprove the transaction on conflict-of-interest grounds, or alternatively to terminate this Agreement immediately and without further obligation to Contractor.

7.1.4.  Contractor agrees during the Term of this Agreement and thereafter to hold in confidence and not to directly or indirectly reveal, report, publish, disclose or transfer any of the Proprietary Information to any other person or entity, or utilize any of the Proprietary Information for any purpose, except in the course of services performed under this Agreement.

7.1.5.  Any information obtained as a result of the Services, may not be published, in whole or in part by Contractor without the prior written consent of Company.

7.1.6.  Contractor has, and is, acquiring the securities of the Company as described on Exhibit A (and issuable upon conversion thereof)(collectively, the “Stock”), for his or his own account, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that

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term is used in Section 2(11) of the Securities Act of 1933, as amended (the “Securities Act”), in a manner which would require registration under the Securities Act or any state securities laws. Contractor can bear the economic risk of investment in the Stock, has knowledge and experience in financial business matters, is capable of bearing and managing the risk of investment in the Stock and is an “accredited investor” as defined in Regulation D under the Securities Act. Contractor recognizes that the Stock has not been registered under the Securities Act, nor under the securities laws of any state and, therefore, cannot be resold unless the resale of the Stock is registered under the Securities Act or unless an exemption from registration is available. Contractor has carefully considered and has, to the extent he believes such discussion necessary, discussed with his respective professional, legal, tax and financial advisors, the suitability of an investment in the Stock for his particular tax and financial situation and his respective advisers, if such advisors were deemed necessary, have determined that the Stock is a suitable investment for it. Contractor has not been offered the Stock by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to Contractor’s knowledge, those individuals that have attended have been invited by any such or similar means of general solicitation or advertising. Contractor has had an opportunity to ask questions of and receive satisfactory answers from the Company, or persons acting on behalf of the Company, concerning the terms and conditions of the Stock and the Company, and all such questions have been answered to the full satisfaction of Contractor. Contractor is relying on its own investigation and evaluation of the Company and the Stock and not on any other information.

7.2.  Contractor shall at all times comply with all of the Company’s written policies and procedures, as enacted and updated from time to time with notice to Contractor, and all applicable rules and regulations of the Securities and Exchange Commission.

7.3.  Representations and Warranties of Company. Company represents and warrants to Contractor that (i) Company has the legal capacity to execute, deliver and perform this Agreement, (ii) this Agreement is a valid and binding agreement and is fully enforceable against Company, and (iii) Company is not a party to any agreement that would prevent it from entering into this Agreement or performing its obligations hereunder.

8. INDEMNIFICATION

8.1.  Indemnification. During the term of this Agreement, the Company agrees to fully and completely defend, indemnify and hold harmless Contractor from any and all claims other than those for Contractor’s own negligence or gross negligence and other than as resulting from Contractor’s breach of any term or condition of this Agreement or any breach of any representation of Contractor contained herein. At all times, Company shall maintain commercial insurance on the Services to be performed by Contractor.

9.  MISCELLANEOUS PROVISIONS

9.1.  Ownership of Work Product. During Contractor’s engagement with the Company, Contractor may develop or conceive, in whole or in part, alone or with others, plans, manuals, handbooks, inventions, discoveries, improvements, trade secrets, secret processes and any technology, know-how or intellectual property, which results from any work Contractor may do for or at the request of the Company (collectively, “Work Product”).  All such Work Product will be deemed “work for hire” in accordance with the U.S. Copyright Act and shall be the Company’s exclusive property, whether or not developed or made during business hours or with the use of the Company’s facilities, equipment, materials, or personnel. Contractor will promptly report all Work Product to the Company. Contractor will assist the Company as necessary in obtaining patents or other protections for such Work Product. Confidential Information Belongs to Company. All notes, data reference materials, memoranda,

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documentation and records in any way incorporating or reflecting any of the Confidential Information shall belong exclusively to Company, and Contractor agrees to return the originals and all copies of such materials in his possession, custody or control to the Company upon request or upon termination or expiration of the Term of this Agreement.

9.2.  Contractor’s Use of Work. Contractor shall not at any time without Company’s prior written consent, except as required in the performance of Contractor’s responsibilities on behalf of Company, (i) reproduce, display, publish, perform, record, broadcast, transmit, distribute, modify, translate, combine with other information or materials, create derivative works based on, exploit commercially, disclose, or otherwise use the work product or results of the Services (collectively, the “Work”), in any manner or medium whatsoever; or (ii) disclose or publicize the terms of this Agreement.

9.3.  Notices. Any and all notices required hereunder shall be in writing, signed by the Party giving such notice, and shall be deemed to have been duly given or delivered if delivered personally or sent by recognized overnight delivery service, to the applicable address of the Party as set forth on the signature page hereof, or at such other address as the Party may have last designated by written notice to the other Party. The effective date of a notice shall be the date of personal delivery of such notice or, in the case of sending by overnight delivery service as provided above, shall be deemed to be on the date evidenced on the return receipt. Failure to accept a notice or designate a new address by a Party will not frustrate the effectiveness of such notice.

9.4.  Amendments. No provision of this Agreement may be altered, waived, modified or changed unless in writing, signed by the Parties hereto, and no alleged verbal agreements, modifications or understandings shall be enforceable.

9.5.  No Waiver. The failure of any Party hereto in any one or more instances to insist upon the performance of any of the terms and conditions of this Agreement, or to exercise any right or privilege conferred in this Agreement, or the waiver of any breach of any of the terms, covenants or conditions of this Agreement, shall not be construed as thereafter waiving any such terms, covenants, conditions, rights, or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

9.6.  Entire Agreement. This Agreement, including all Addenda, which are hereby incorporated by reference, constitutes the entire agreement between the Parties concerning the subject matter of this Agreement. This Agreement supersedes any prior communications, agreements or understandings, whether oral or written, between the Parties relating to the subject matter of this Agreement. Other than terms of this Agreement, no other representation, promise or agreement has been made with Contractor to cause Contractor to sign this Agreement.

9.7.  Governing Law. This Agreement shall be governed and construed according to the laws of the State of Texas.

9.8.  Choice of Venue. Except as otherwise expressly provided in this Agreement (including, but not limited to Section 9.15, any action seeking to enforce any provision of, or based on any matter arising out of or in connection with this Agreement or to enforce any arbitration award rendered as provided herein, shall be brought in any state court located in the Counties of Dallas or Collin, State of Texas. Each Party hereto consents to the jurisdiction and venue of such court and hereby waives any objection that it may now or hereafter have to the personal jurisdiction and venue of such court and to any claim of inconvenient forum.

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9.9.  Binding Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, but it may not be assigned by either Party without the consent of the other.

9.10.  Headings. The section headings herein contained are for convenience of reference only and shall not be deemed to impart substantive meaning to any provision or condition of this Agreement.

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

9.12.  Independent Enforcement. The covenants set forth in Article 6 of this Agreement shall be construed as agreements independent of any other agreements or any other provision in this Agreement, and the existence of any claim or cause of action by Contractor against Company, whether predicated on this Agreement or otherwise, regardless of who was at fault and regardless of any claims that Contractor or Company may have against the other, shall not constitute a defense to the enforcement by Company of the covenants set forth in Article 6. The Company shall not be barred from enforcing the restrictive covenants set forth in Article 6 by reason of any breach of any other part of this Amendment or any other agreement with Contractor.

9.13.  Compliance with Applicable Laws; Change of Applicable Law. The parties hereto shall comply with all applicable local, state and federal laws, rules, regulations and restrictions governing their obligations and responsibilities under this Agreement (collectively, the “Applicable Laws”). If any provision of this Agreement shall reasonably be determined by either Party to violate any Applicable Law or if a change in Applicable Laws occurs which, in the opinion of counsel to the applicable Party, clearly or materially affects the legality of this Agreement for any Party or for all parties, the Parties agree that, upon written notice, they will negotiate in good faith to amend this Agreement appropriately. If the Parties are unable to agree, following good faith diligently pursued negotiations on an amendment or revision to this Agreement that satisfactorily resolves the issues raised by such Party’s notice, then such Party shall have the right to terminate the Term upon three (3) months’ prior written notice to each other Party. If a non-material provision of this Agreement shall be determined to be invalid or unenforceable by any court of law for any reason, such provision shall be deemed modified to the extent necessary to make it enforceable and the remainder of this Agreement shall be unaffected thereby and shall remain in full force and effect.

9.14.  Savings Provision. If any term or provision of this Agreement, or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

9.15.  ARBITRATION AGREEMENT: ANY AND ALL DISPUTES, CONTROVERSIES OR CLAIMS FOR DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY MATTER COVERED IN THIS AGREEMENT, OR ANY SUBSEQUENT AGREEMENT WITH THE CONTRACTOR RELATING TO ANY OF THE TERMS OF THIS AGREEMENT SHALL BE SUBMITTED TO BINDING ARBITRATION. THIS ALSO EXPRESSLY INCLUDES ANY ACTION BROUGHT BY ANY CONTRACTOR’S PATIENTS OR CLIENTS FOR ANY DAMAGE OF ANY KIND. THE PARTIES AGREE EITHER PARTY MAY INVOKE BINDING ARBITRATION AND SUCH INVOCATION IS IRREVOCABLE.  

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SUCH BINDING ARBITRATION SHALL ONLY BE INITIATED THROUGH STATE COURT IN DALLAS OR COLLIN COUNTY, TEXAS, AND/OR THE AMERICAN HEALTH LAWYERS ASSOCIATION (“AHLA”).

SUCH SELECTION OF FORUM, VENUE AND/OR RULES IN ANY COURT OF COMPETENT JURISDICTION IS AT THE SOLE DISCRETION OF THE COMPANY. THE ARBITRATION SHALL BE CONDUCTED BEFORE A SOLE ARBITRATOR AGREED UPON BY THE PARTIES. THE ARBITRATOR’S AUTHORITY SHALL BE LIMITED TO WHETHER OR NOT A PARTY BREACHED THE AGREEMENT, THE AMOUNT OF AN AWARD OF DAMAGES AS A RESULT OF THE BREACH AND/OR THE ISSUANCE OF AN INJUNCTION.

AT ALL TIMES THE ARBITRATOR SHALL HAVE THE RIGHT TO ISSUE TEMPORARY INJUNCTIONS THAT CAN BE ENFORCED BY A COURT OF COMPETENT JURISDICTION TO HALT ANY BREACH BEFORE ISSUANCE OF A FINAL AWARD. THE INTENT OF THIS IS TO PROTECT TRADE SECRETS FROM BEING USED WITHOUT COMPENSATION TO THE COMPANY.

IN ADDITION, IF THE CONTRACTOR HAS ACQUIRED ANY ASSETS, OF ANY NATURE, AS A RESULT OF ANY BREACH, THOSE ASSETS MAY BE FORFEITED TO THE COMPANY AS AN OFFSET OF DAMAGES. THIS AWARD SHALL BE CONSIDERED LIQUIDATED DAMAGES BY THE ARBITRATOR AND SHALL BE AN OFFSET AGAINST REASONABLE DAMAGES SO AS NOT TO CREATE A PENALTY.

THE ARBITRATOR SHALL NOT ALLOW ANY DISCOVERY OTHER THAN: 1) PRODUCTION OF BUSINESS AND FINANCIAL RECORDS WHICH EITHER SUPPORTS OR CONTRADICTS THE ALLEGED BREACH AND DAMAGES. SUCH PRODUCTION SHALL OCCUR AT LEAST 30 DAYS PRIOR TO THE FINAL ARBITRATION HEARING; AND 2) EACH PARTY MAY TAKE ONE DEPOSITION OF A PARTY AND ONE DEPOSITION OF A NON-PARTY.

FURTHER, THE ARBITRATION FINAL HEARING SHALL TAKE PLACE WITHIN 120 DAYS OF ANY DEMAND AND ANY AWARD SHALL ISSUE WITHIN 30 DAYS AFTER THE FINAL ARBITRATION HEARING. DEPARTURE FROM THIS PARAGRAPH BY AN ARBITRATOR SHALL CONSTITUTE AN ACT OUTSIDE THE POWER OF THE ARBITRATOR AND SHALL BE REVERSED OR RESUBMITTED FOR CORRECTION BY A COURT OF COMPETENT JURISDICTION.

[NOTE: VACATING AN AWARD IS DISCUSSED IN SECTION 171.088 OF THE CODE. THE ITEMS DESCRIBED IN THIS SECTION ARE NOT SUBJECT TO THE COURT’S JURISDICTION. I SUGGEST DELETION.

THE ARBITRATOR SHALL HAVE SOLE AUTHORITY TO DETERMINE THEIR OWN JURISDICTION.

 

ANY PREVAILING PARTY MAY SEEK ENFORCEMENT IN ANY COURT OF COMPETENT JURISDICTION. FAILURE TO SEEK ARBITRATION IS NOT A WAIVER OF ANY RIGHT BY THE COMPANY.

[Remainder of page left intentionally blank. Signature page follows.]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

 

COMPANY:

CONTRACTOR:

Rapid Therapeutic Science Laboratories, Inc.

We the 23, LLC

/s/ Donal R. Schmidt, Jr.

/s/ Charles L. Powell, M.D.

Donal R. Schmidt, Jr.

Charles L. Powell, M.D.

Chief Executive Officer

Managing Member

 

 

CONTACT INFORMATION:

 

 

 

Accounting and Billing:

 

5580 Peterson Lane

Charles L. Powell, M.D.

Suite 200

127 Jellico Cir

Dallas, Texas 75220

South Lake, TX 76092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

In full and complete consideration for the acquisition from the Contractor for all the Work Product, Work, and all other information associated with the Services and Studies (as defined below), the Company agrees to pay the Contractor $10.

In full and complete consideration for all Services to be provided by Contractor under the Agreement, and for all representations, warranties and restrictions set forth therein, the Company and Contractor agree to the following compensation

·The issuance of 1,000,000 shares of series of a newly designated form of Series C Convertible Preferred Stock of the Company, in the form attached hereto as Exhibit A.1 (the “Series C Preferred Stock”), which provides the right to convert into shares of common stock of Company on a one-for one basis (subject to equitable adjustments for stock splits and stock dividends) after two years from the date earned, upon Successful (defined below) completion, as determined in the reasonable discretion of the Company (a Successful study), of each of the five studies (the “Studies”) which Contractor shall provide Services in connection with (up to 5,000,000 New Preferred Shares in total), which are being conducted by Accent, as follows: 

 

(1)  anxiety;

 

(2)  depression;

 

(3)  ADHD;

 

(4)  insomnia; and

 

(5)  Arthritis or chronic pain.

 

·The Studies may be modified or substituted by mutual consent of the Parties in writing.   

 

·“Successful” means that the study shows favorable therapeutic benefits accompanied with underlying supporting medical or pharmaceutical data which is of value to the Company.   

 

·Upon the completion of the last of the Studies, the Contractor shall be issued an additional number of Series C Preferred Stock equal to 3,000,000 multiplied by a fraction, the numerator of which is the number of Successful Studies and the denominator of which is five (the “Bonus Shares”). 

 

·In the event this Agreement is terminated prior to the end of the last of the Studies, the Contractor shall only be due shares of Series C Preferred Stock for each Successfully completed Study, as discussed above, shall not be eligible to earn any other Series C Preferred Stock for any uncompleted Studies and shall not be eligible for any Bonus Shares. 

 

·Contractor’s ability to earn Series C Preferred Stock shall end upon the termination of this Agreement, and any unearned Series C Preferred Stock on the date of such termination shall be deemed forfeited and unearned. 

 

·The sale of the shares of common stock issuable upon conversion of the Series C Preferred Stock shall be subject to the terms of a separate Trading Agreement entered into between the parties in connection with the entry into this Agreement. 

TRADING AGREEMENT

 

THIS TRADING AGREEMENT (this “Agreement”), made as of this 22nd day of April 2021 (the “Effective Date”), by and among We the 23, LLC, at Texas limited liability company and its managing member, Charles L. Powell, M.D., an individual (collectively “Shareholder”) and Rapid Therapeutic Science Laboratories, Inc., a Nevada corporation (RTSL) (the “Company”).

 

W I T N E S S E TH:

 

WHEREAS, the Shareholder is eligible to earn certain shares of convertible preferred stock of the Company pursuant to the terms of that certain Independent Contractor Agreement with the Company dated on or around the date hereof (the “Preferred Stock”, and together with any and all other shares of common stock or other securities of the Company which a Shareholder may obtain beneficial or record ownership of until the end of the Trading Period (defined below), the “Shares”, including, but not limited to the shares of common stock issuable upon conversion of such convertible preferred stock and any shares obtained by exercising warrants, or converting convertible securities and/or preferred stock, which Shares shall be subject to the terms of this Agreement as provided below); and

 

WHEREAS, the parties hereto desire to enter into this Agreement upon the terms and conditions contained hereinafter to set forth conditions pursuant to which the Shareholder may transfer and sell the Shares.

 

NOW, THEREFORE, in consideration of the mutual premises set forth herein, $10 and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by Shareholder, the parties hereto hereby agree as follows.

 

1.  Trading Period. Shareholder hereby agrees that:

 

1.1.  Until April 22, 2025, Shareholder will not, directly or indirectly Transfer any of the Shares; provided that after April 22, 2023, and until April 22, 2025 (such period, the Trading Period”), Shareholder shall be authorized to sell a limited number of Shares in connection with an open market sale of the Shares, which number of Shares sold in the open market shall not exceed, on a daily basis, more than:

 

(1)  5.0% of the average aggregate daily number of shares of the Company’s common stock which have traded publicly on the OTC Pink Market, OTCQB, or such other market or exchange on which the Company’s common stock primarily trades, relative to the volume of shares trading during the open market (daily trading volume) (as adjusted for any stock split, recapitalization or combination), as determined by the daily trading volume of the open market for the preceding rolling thirty days.

Trading Agreement (a/k/a Lock-up and Leak-out Agreement)

Powell and Rapid

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1.2.  Additionally, during the Trading Period:

 

(1)  Shareholder will not engage in collectively selling of individual, isolated trades of Shares that total in aggregate more than 5% of the daily trading volume of the Company’s common stock.  

 

(2)  Shareholder will not sell any Shares in the first or last 30 minutes of any trading day.  

 

(3)  Shareholder will trade the Shares in multiple trades and not have the allocated daily volume be placed as a single order placed on a trading desk as block trade in the last hour and 30 minutes of the trading day. The individual trading will be done on a “dripped procedure” relative to the daily trading volume.  An exemption to this requirement will be if a trade is placed early in the day and the volume “vanishes” at the end of the trading day.

 

(4)  Shareholder may have a standard deviation relative to daily trading volume if the afternoon trading session volume lightens significantly relative to the trading market morning session.  That standard deviation is not to exceed 2% of the daily trading volume.

 

The obligations and restrictions of the Shareholder as set forth in Section 1.1 and Section 1.2 are defined as the “Trading Restrictions”.

 

1.3.  “Transfer” means the direct or indirect, offer for sale, sale, pledge, hypothecation, transfer, assignment or other disposition of (or to enter into any transaction or device that is designed to, or could be expected to, result in the sale, pledge, hypothecation, transfer, assignment or other disposition at any time) (including, without limitation, by operation of law), or the entry into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Shares, whether any such transaction is to be settled by delivery of Shares or other securities, in cash or otherwise. This includes private transfers to any beneficial owner. For the sake of clarity, and without limiting any other provision of this Agreement, the Shareholder agrees and confirms that a distribution of any Shares to such Shareholder’s security holders, shareholders, members, or other owners, directly or indirectly, and by the operation of law or otherwise, shall be deemed a Transfer hereunder, and shall be prohibited by the terms of this Agreement.

 

1.4.  Any attempted Transfer of Shares by Shareholder which is not in compliance with this Agreement or which is in violation of the terms of this Agreement shall be void ab initio.

 

2.  Representations and Warranties of  Shareholder. Shareholder represents, warrants and agrees that:

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2.1.  The Shareholder is the sole record and beneficial owner of the Shares (or rights thereto) and has/will have good and marketable title to all of the Shares. Shareholder has sole managerial and dispositive authority with respect to the Shares (or rights thereto) and has not granted any person a proxy or option to buy the Shares that has not expired or been validly withdrawn.

 

2.2.  The Shares and any certificate evidencing such Shares and/or any book-entry notation representing the Shares, may, at the request of the Company, be stamped or otherwise imprinted or noted with a conspicuous legend in substantially the following form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THAT CERTAIN TRADING AGREEMENT (A/K/A A LOCK-UP AND LEAK OUT AGREEMENT) BETWEEN THE HOLDER, AND THE COMPANY, DATED AS OF APRIL 22, 2021. A COPY OF THE LOCK-UP AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY.”

 

3.  Right to Reject Dispositions. In furtherance of the foregoing, the Company and its Transfer Agent are hereby authorized (i) to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Agreement and (ii) to imprint on any certificate representing Shares beneficially owned by Shareholder (or any book-entry relating to such Shares) with a legend describing the restrictions contained herein.

 

4.  Power and Authority. Each party hereto respectively represents and warrants that such party has full power and authority to enter into this Agreement and that, upon request of the Company, Shareholder will execute any additional documents necessary in connection with the enforcement hereof.

 

5.  No Assignment; Binding Nature. No party may assign this Agreement in whole or in part, without the written consent of the other parties. This Agreement shall be binding upon the parties and their respective successors and permitted assigns.

 

6.  Inspection of Records. On the first day of each calendar month during the Trading Period, Shareholder shall produce his prior month’s trading records for inspection by the Company, for all brokerage accounts. Failure to timely produce such trading records shall be a violation of this Agreement and the Company may thereafter, in its sole discretion, cause the transfer agent to suspend further transfers and/or may seek injunctive relief to stop sales of any shares held in a trading account by the Shareholder who has not complied with the terms of this Section 6.

 

7.  Miscellaneous.

 

7.1.  Severability of Invalid Provision. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held

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invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

7.2.  Entire Agreement of the Parties. The Agreement constitutes the entire agreement of the parties regarding the matters contemplated herein, or related thereto, and supersedes all prior and contemporaneous agreements, and understandings of the parties in connection therewith. No covenant, representations, or conditions, which are not expressed in the Agreement shall affect, or be effective to interpret, change, or restrict, the express provisions of this Agreement.

 

7.3.  Further Assurances. All parties agree that, from time to time, each of them will take such other action and to execute, acknowledge and deliver such contracts or other documents as may be reasonably requested and necessary or appropriate to carry out the purposes and intent of this Agreement.

 

7.4.  Specific Performance. The parties agree that the covenants and obligations contained in this Agreement relate to special, unique and extraordinary matters and that a violation of any of the terms hereof or thereof would cause irreparable injury in an amount which would be impossible to estimate or determine and for which any remedy at law would be inadequate.  As such, the parties agree that if either party fails or refuses to fulfill any of its obligations under this Agreement, then the other party shall have the remedy of specific performance, which remedy shall be cumulative and nonexclusive and shall be in addition to any other rights and remedies otherwise available under any other contract or at law or in equity and to which such party might be entitled. The Shareholder therefore agrees that, in the event of any such breach or threatened breach of this Agreement or the terms and conditions hereof by the Shareholder, the Company shall be entitled, in addition to all other available remedies, to an injunction restraining any breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required.

 

7.5.  Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED ACCORDING TO, THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS PROVISIONS THEREOF AND SHALL BE BINDING UPON THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. Any judicial proceeding brought by or any party regarding any dispute arising out of this Agreement or any matter related hereto may be brought in the courts of the State of Texas, or in the United States District Court for the State of Texas and, by execution and delivery of this Agreement, each party hereby submits to the jurisdiction of such courts.

 

7.6.  Construction. When used in this Agreement, unless a contrary intention appears: (i) a term has the meaning assigned to it; (ii) “or” is not exclusive; (iii) “including” means including without limitation; (iv) words in the singular include the plural and words in the plural include the singular, and words importing the masculine gender include the feminine and neuter genders; (v) any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection

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herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; (vi) the words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision hereof; (vii) references contained herein to Article, Section, Schedule and Exhibit, as applicable, are references to Articles, Sections, Schedules and Exhibits in this Agreement unless otherwise specified; (viii) references to “writing” include printing, typing, lithography and other means of reproducing words in a visible form, including, but not limited to email; (ix) references to “dollars”, “Dollars” or “$” in this Agreement shall mean United States dollars; (x) reference to a particular statute, regulation or law means such statute, regulation or law as amended or otherwise modified from time to time; (xi) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein); (xii) unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”; (xiii) references to “days” shall mean calendar days; and (xiv) the paragraph headings contained in this Agreement are for convenience only, and shall in no manner be construed as part of this Agreement.

 

7.7.  Counterparts, Effect of Facsimile, Emailed and Photocopied Signatures. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic mail (email) or downloaded from a website or data room (any such delivery, an “Electronic Delivery”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party, each other party shall re execute the original form of this Agreement and deliver such form to all other parties. No party shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.

 

 

 

[Remainder of page left intentionally blank. Signature pages follow.]

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

 

 

THE COMPANY:

 

Rapid Therapeutic Science Laboratories, Inc.

 

 

By: /s/ Donal R. Schmidt, Jr.

 

Its:  CEO

 

 

 

Printed Name: Donal R. Schmidt, Jr.  

 

 

 

SHAREHOLDER:

 

WE THE 23, LLC

Charles L. Powell, M.D., Managing Member

 

By:/s/ Charles L. Powell, M.D.
 

Printed Name: Charles L. Powell, M.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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INDEPENDENT CONTRACTOR AGREEMENT

THIS INDEPENDENT CONTRACTOR AGREEMENT (the “Agreement”) is made and entered into as of the 18th day of May, 2021 (the “Effective Date”), by and between Rapid Therapeutic Science Laboratory, Inc., a Nevada for profit company (the “Company”) and Epic Medical Research, a Texas for profit company (the “Contractor”) may be collectively referred to herein as the “Parties,” and individually as a “Party.”

 

W I T N E S E T H:

WHEREAS, Company is a manufacture of certain aerosol products;

WHEREAS, Company desires to hire Contractor for the Services (as defined below);

WHEREAS, Contractor desires to accept independent contractor Services under the terms and conditions set forth in this Agreement;

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

1.  DEFINITIONS

1.1.  “Confidential Information” means information of a Party, to the extent not considered a Trade Secret under applicable law, that (i) relates to the business of the Parties, (ii) possesses an element of value to the Parties, (iii) is not generally known to the public, and (iv) would damage a Party if disclosed. Confidential Information shall not include any information that (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure, (ii) has been independently developed and disclosed by others without violating this Agreement or the legal rights of any party, or (iii) otherwise enters the public domain through lawful means.  This Confidential Information is more fully defined and set out in the Confidentiality Agreement, Non-Disclosure and Non-Circumvent Agreement (“CA.NDA”) signed by Contractor wherein the term PCI includes Confidential Information. Confidential Information is considered Trade Secrets as defined under the Texas Trade Secrets Act at Tex. Civ. Prac. & Rem Code §134A.002. Any breach of this clause will result in damages for Misappropriation under the Act.

1.2.  “Restricted Period” means the time period during the Term of this Agreement and for two (2) year after the effective date of termination of this Agreement.  The term of the CA.NDA is not modified by this Agreement.

1.3.  “Services” means acting as the principal investigator of Company’s products related to that certain agreement between Company and Dr. Powell d/b/a We the 23, LLC while performing clinical research including, but not limited to, obtaining informed consent of patients, implementation of study procedures, product dispensing, evaluations of patient compliance with study requirements, preparations of required study documents by principal investigator, Haresh Boghara, M.D. on the Company’s products under the direction of Charles L. Powell, M.D. with respect to Company products provided to Contractor.

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2.  INDEPENDENT CONTRACTOR RELATIONSHIP

2.1.  Contractor. Subject to the terms and conditions herein, Company engages Contractor as a clinical research center and Dr. Boghara as its principal investigator. Contractor and Dr. Boghara accepts such engagement.

2.2.  Relationship of Parties. It is mutually understood and agreed that in performing the services, duties and obligations under this Agreement, Contractor is acting as an independent contractor and the Contractor shall at all times perform services as an independent contractor on behalf of Company pursuant to the terms of this Agreement. None of the provisions of this Agreement is intended to create, nor shall be deemed or construed to create, any relationship between the Parties hereto other than that of independent contractors.

3.  COMPENSATION

3.1.  Compensation. The Company is a manufacturer of certain aerosol products. Company shall compensate Contractor for all services that Contractor renders to Company during the Term of this Agreement as set forth in Exhibit A, attached hereto and incorporated herein by reference, as well as any Addendums. The Parties agree that Exhibit A may be revised and updated by the Company to reflect new or additional services.

4.  DUTIES OF CONTRACTOR

4.1.  Role of Contractor. During the Term of this Agreement, Contractor shall use its best efforts to perform pharmaceutical and device studies on Company’s provided products in a manner consistent with standard industry practices for medical formula and devices at the direction of Dr. Powell.

4.2.  Representations. Contractor and or its employees, contractors and/or agents shall not make any false or misleading representations to medical providers, retailers, wholesalers, pharmacies, or others regarding Company or the products that Company provides for testing, nor shall Contractor make any representations, warranties or guarantees with respect to products the Company provides that are not consistent with Company’s documentation or literature describing its products or that found on its website at www.nhaler.com, www.rxoid.com, or www.rtslco.com.

4.3.  No Authority to Bind Company. Contractor is not authorized to act as agent for Company and may not bind Company in any manner. Furthermore, Contractor warrants that he, or any of his agents, employees, or members, will not represent or appear to represent to any person the authority to bind Company to any arrangement or agreement.

4.4.Use of Agents or Employees or Contractors by Contractor. Contractor acknowledges that he may use employees, agents, subcontractors or other parties to perform some or all of its services under this Agreement. Contractor also acknowledges it is legally and financially responsible for the actions or omissions of its agents, employees, or members that fall outside and direction provide by Dr Powell or Dr. Boghara. 

5.  TERM AND TERMINATION OF AGREEMENT

5.1.  Term of Agreement. The term of this Agreement shall be for one (1) year.

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5.2.  Termination. This Agreement may be terminated as follows:

5.2.1.  Without Cause by Contractor. Contractor may terminate this Agreement by giving Company prior written notice pursuant to the notice provisions of Section 8.1.  Such termination shall be effective on the 30th day following the date of such notice.

5.2.2.  Without Cause by Company. Company may terminate this Agreement, with or without cause, upon one hundred eighty (180) days’ notice.

5.2.3.  Mutual Termination. This Agreement may be terminated at any time by mutual agreement in writing between Company and Contractor. Such termination under this Section 5.2.3 shall be effective on the date mutually agreed by Contractor and Company.

6.  REPRESENTATIONS, WARRANTIES AND COVENANTS

6.1.  Non-Disparagement. During the Term of this Agreement and upon the termination of the Agreement for any reason, neither Party will make any disparaging or defamatory statements, whether written or verbal, regarding the other Party, or any of said Party’s officers, members, employees, or owners.

6.2.  Restrictive Covenants.

6.2.1. Acknowledgements.

6.2.1.1.  The Parties acknowledge that the restrictions contained in this Article 6 are reasonable and necessary to protect the legitimate business interests of the Parties.

6.2.1.2.  The Parties further acknowledge that: (i) each Party may be in a position of trust and responsibility with access to Confidential Information and information concerning employees and business partners; and (ii) the Confidential Information, and the relationship between each Party and each of its employees and clients are valuable assets of the Parties and may not be used for any purpose other than furthering the services under this Agreement. This information is expressly protected under the CA.NDA and the Texas Trade Secrets Act.

7.  INDEMNIFICATION

7.1Indemnification. During the term of this Agreement, the Company agrees to fully and completely indemnify and hold harmless Contractor from any and all claims other than those for Contractor’s own negligence or gross negligence. At all times, Company shall maintain commercial insurance on the Services to be performed by Contractor. 

8.  MISCELLANEOUS PROVISIONS

8.1.  Notices. Any and all notices required hereunder shall be in writing, signed by the party giving such notice, and shall be deemed to have been duly given or delivered if delivered personally or sent by recognized overnight delivery service, in the case of Company, to its principal office, and in the case of Contractor, to the address appearing on the books of Company, or at such other address as either party may have last designated by notice to the other party. The effective date of a notice shall be the date of personal delivery of such notice or, in the case of sending by overnight delivery service as provided

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above, shall be deemed to be on the date evidenced on the return receipt. Failure to accept a notice or designate a new address by a party will not frustrate the effectiveness of such notice.

8.2.  Amendments. No provision of this Agreement may be altered, waived, modified or changed unless in writing, signed by the parties hereto, and no alleged verbal agreements, modifications or understandings shall be enforceable.

8.3.  No Waiver. The failure of any party hereto in any one (1) or more instances to insist upon the performance of any of the terms and conditions of this Agreement, or to exercise any right or privilege conferred in this Agreement, or the waiver of any breach of any of the terms, covenants or conditions of this Agreement, shall not be construed as thereafter waiving any such terms, covenants, conditions, rights, or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

8.4.  Entire Agreement. This Amendment, including all Addenda, which are hereby incorporated by reference, constitutes the entire agreement between the Parties concerning the subject matter of this Agreement. This Agreement supersedes any prior communications, agreements or understandings, whether oral or written, between the Parties relating to the subject matter of this Agreement. Other than terms of this Agreement, no other representation, promise or agreement has been made with Contractor to cause Contractor to sign this Agreement.

8.5.  Governing Law. This Agreement shall be governed and construed according to the laws of the State of Texas.

8.6.  Choice of Venue. Except as otherwise expressly provided in this Agreement, any action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or to enforce any arbitration award rendered pursuant to the attached and incorporated arbitration agreement and shall be brought in any state court located in the Counties of Dallas or Collin, State of Texas, and each Party hereto consents to the jurisdiction and venue of such court and hereby waives any objection that it may now or hereafter have to the personal jurisdiction and venue of such court and to any claim of inconvenient forum.

8.7.  Binding Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, but it may not be assigned by either party without the consent of the other.

8.8.  Headings. The section headings herein contained are for convenience of reference only and shall not be deemed to impart substantive meaning to any provision or condition of this Agreement.

 

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

8.10.  Independent Enforcement. The covenants set forth in Article 6 of this Agreement shall be construed as agreements independent of any other agreements or any other provision in this Agreement, and the existence of any claim or cause of action by Contractor against Company, whether predicated on this Agreement or otherwise, regardless of who was at fault and regardless of any claims that Contractor or Company may have against the other, shall not constitute a defense to the enforcement by Company of the covenants set forth in Article 6. The Company shall not be barred from enforcing the restrictive

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covenants set forth in Article 6 by reason of any breach of any other part of this Amendment or any other agreement with Contractor.

8.11.  Compliance with Applicable Laws; Change of Applicable Law. The parties hereto shall comply with all applicable local, state and federal laws, rules, regulations and restrictions governing their obligations and responsibilities under this Agreement (the “Applicable Laws”). If any provision of this Agreement shall reasonably be determined by either Party to violate any Applicable Law or if a change in Applicable Laws occurs which, in the opinion of counsel to the applicable Party, clearly or materially affects the legality of this Agreement for any Party or for all parties, the Parties agree that, upon written notice, they will negotiate in good faith to amend this Agreement appropriately. If the Parties are unable to agree, following good faith diligently pursued negotiations on an amendment or revision to this Agreement that satisfactorily resolves the issues raised by such Party’s notice, then such Party shall have the right to terminate the Term upon three (3) months’ prior written notice to each other Party. If a non-material provision of this Agreement shall be determined to be invalid or unenforceable by any court of law for any reason, such provision shall be deemed modified to the extent necessary to make it enforceable and the remainder of this Agreement shall be unaffected thereby and shall remain in full force and effect.

8.12  ARBITRATION AGREEMENT: THE PRIOR CONFIDENTIALITY, NON-CIRCUMVENTION & NON-DISCLOSURE AGREEMENT (CA.NDA), IF ANY, SIGNED BY REPRESENTIVE IN ANY CAPACITY IS EXPRESSLY INCORPORATED HEREIN BY REFERENCE. A BREACH OF THAT AGREEMENT IS A BREACH OF THIS AGREEMENT. AND A BREACH OF THIS AGREEMENT IS A BREACH OF THAT AGREEMENT.

AS SUCH, ANY AND ALL DISPUTES, CONTROVERSIES OR CLAIMS FOR DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OR ANY MATTER COVERED IN THIS AGREEMENT, OR ANY SUBSEQUENT AGREEMENT WITH THE CONTRACTOR RELATING TO ANY OF THE TERMS OF THIS AGREEMENT AND/OR THE CA.NDA SHALL BE SUBMITTED TO BINDING ARBITRATION. THIS ALSO EXPRESSLY INCLUDES ANY ACTION BROUGHT BY ANY CONTRACTOR’S CUSTOMERS OR CLIENTS FOR ANY DAMAGE OF ANY KIND. THE PARTIES AGREE EITHER PARTY MAY INVOKE BINDING ARBITRATION AND SUCH INVOCATION IS IRREVOCABLE.  

SUCH BINDING ARBITRATION SHALL ONLY BE INITIATED THROUGH STATE COURT IN DALLAS OR COLLIN COUNTY, TEXAS, AND/OR EITHER UNDER THE AMERICAN ARBITRATION ASSOCIATION (“AAA”), AND/OR THE DALLAS OFFICE OF JAMS.

SUCH SELECTION OF FORUM, VENUE AND/OR RULES IN ANY COURT OF COMPETENT JURISDICTION OR TRIBUNAL HEREUNDER IS AT THE SOLE DISCRETION OF THE COMPANY. IF THE RECEIPENT PARTY, OR ANY CUSTOMER OR CLIENT OF RECEIPEENT PARTY SEEKS ADJUDICATION FOR ANY DAMAGES IN ANY OTHER FORUM OR VENUE, UPON TRANSFER TO THE ALLOWED VENUES HEREIN, THE ARBITRATOR SHALL IMMEDIATELY AWARD COSTS AND ATTORNEY FEES TO THE COMPANY ON AN INTERMIN BASIS FOR CORRECTING SUCH IMPROPER USE OF FORUM AND/OR VENUE. THIS IS A MANDATORY AWARD AND SHALL BE AWARED AND ENFORCED WITHIN 30 DAYS OF CHANGE OF VENUE TO DALLAS OR COLLIN COUNTY, TEXAS. THIS AWARD SHALL BE IN THE FORM OF A SANCTION AND NOT A FINAL AJUDICATION.

THE ARBITRATION SHALL BE CONDUCTED BEFORE A SOLE ARBITRATOR AGREED UPON BY THE PARTIES; OTHERWISE, SELECTED BY A COURT OF COMPETENT JURISDICTION, AAA, OR JAMS. THE ARBITRATOR’S AUTHORITY SHALL BE LIMITED TO WHETHER OR NOT A PARTY BREACHED THE AGREEMENT, THE AMOUNT OF AN AWARD OF DAMAGES AS A RESULT OF THE BREACH AND/OR THE ISSUANCE OF AN INJUNCTION.

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IN THE EVENT THE ARBITRATOR FINDS THE CONTRACTOR BREACHED THE AGREEMENT, IN ANY MANNER WHATSOVER WHETHER THE CONTRACTOR HAS CURED OR ATTEMPTED TO CURE ITS BREACH, THE ARBITRATOR MUST AND SHALL AWARD ACTUAL ATTORNEY FEES AND MONEY DAMAGES, EVEN IF NOMINAL IN AMOUNT.  IN ADDITION, IF A BREACH OF ANY NATURE HAS OCCURRED RELATED TO NON-PERMISSBLE CONTACT WITH TPIP AS LISTED UNDER THE EXISTING CA.NDA BETWEEN THE PARTIES, WHETHER CURED OR NOT, THE ARBITRATOR IN ADDITION TO DAMAGES MUST ALSO AWARD A PERMENANT INJUNCTION CONCURRENT WITH ACTUAL DAMAGES PROHIBITING THE CONTRACTOR FROM EVER CONTACTING ANY PARTY (TPIP) LISTED ON EXHIBIT “A” OF THE CONFIDENTIALITY AGREEMENT INCLUDING, BUT NOT LIMITED TO, THEIR EMPLOYEES, OFFICERS, AGENTS, CONTRACTORS, AFFILATES AND/OR SUBSIDIARIES, DURING THE REMAINING DURATION OF THE TEN (10) YEAR PERIOD SET FORTH IN IN THE CONFIDENTIALITY AGREEMENT. A BREACH RELATED TO NON-PERMISSIBLE CONTACT WITH A TPIP SHALL BE AWARDED SOME DAMAGES, EVEN IF NOMINAL.

AT ALL TIMES THE ARBITRATOR SHALL HAVE THE RIGHT TO ISSUE TEMPORARY INJUNCTIONS THAT CAN BE ENFORECED BY A COURT OF COMPETENT JURISDICTION TO HALT ANY BREACH BEFORE ISSUANCE OF A FINAL AWARD. THE INTENT OF THIS IS TO PROTECT TRADE SECRETS FROM BEING USED WITHOUT COMPENSATION TO THE COMPANY.

THE COMPANY SHALL HAVE THE RIGHT TO ELECT THE TYPE OF MONEY DAMAGES (BOTH GENERAL AND SPECIAL) THEY SEEK. AS SUCH, THEY MAY ELECT TO RECOVER: 1) EXPECTANCY DAMAGES (BENEFIT OF THE BARGAIN); 2) RELIANCE DAMAGES; 3) RESTITUTION DAMAGES (QUATUM MERIUT); 4) LOST PROFITS; 5) OUT OF POCKET DAMAGES; 6) LOSS OF GOODWILL; 7) LOSS OF CREDIT; AND/OR 7) EXEMPLARY DAMAGES. ANY DAMAGES SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND NO OTHER.

IN ADDITION, IF THE CONTRACTOR HAS ACQUIRED ANY ASSETS, OF ANY NATURE, AS A RESULT OF ANY BREACH, THOSE ASSETS MAY BE FORFIETED TO THE COMPANY AS AN OFFSET OF DAMAGES. THIS AWARD SHALL BE CONSIDERED LIQUIDATED DAMAGES BY THE ARBITRATOR AND SHALL BE AN OFFSET AGAINST REASONABLE DAMAGES SO AS NOT TO CREAT A PENALTY.

IN ADDITION, ANY BREACH SHALL RESULT IN IMMEDIATE FOREFEITURE OF ANY MONEY CONTRACTOR HAS ON DEPOSIT WITH THE COMPANY AS LIQUIDATED DAMAGES. SUCH FOREFEITURE SHALL BE AN OFFSET AGAINST FUTURE ACTUAL DAMAGES, ATTORNEY FEES AND COSTS.

FURTHER, THE COMPANY MAY ELECT TO HAVE A COMBINATION AWARD OF ANY AND ALL TYPES OF DAMAGES ALLOWED HEREIN OR UNDER TEXAS LAW TO FULLY AND COMPLETELY COMPENSATE THEM FOR ANY BREACH.

MONEY DAMAGES FOR ANY BREACH BY THE COMPMANY IS LIMITED TO: 1) SPECIFIC PERFORMANCE OF ANY CONTRACT FOR GOODS, SERVICES OR FEES (PERSONAL SERVICE CONTRACTS ARE NOT ENFORCEABLE IN TEXAS AND MAY NOT BE ENFORECED BY THE ARBITRATOR) BETWEEN CONTRACTOR AND THE COM[PANY (IF SPECIFIC PERFORMANCE IS NOT AVAILABLE, THEN A REFUND OF THE PRICE OF GOODS OR PAYMENT OF FEES); 2) DAMAGES ONLY IN THE AMOUNT OF ANY EARNED MONEY ON DEPOSIT WITH COMPANY AT THE TIME THE ARBITRATION IS ENVOKED; AND 3) AN AWARD OF REASONABLE ATTORNEY FEES AND COSTS ONLY. THE ARBITRATOR MAY NOT AWARD THE CONTRACTOR ANY DAMAGES FOR FUTURE LOST PROFITS, BENEFIT OF THE BARGAIN, LOSS OF BUSINESS REPUTATION, OR LOSS OF GOODWILL. ANY SUCH AWARD IS OUTSIDE THE ARBITRATIOR’S EXPRESS POWERS.

ANY OTHER AWARDS, (INCLUDING FAILURE TO FIND DAMAGES, EVEN IF NOMINAL, OR TO ISSUE AN INJUNCTION IF A BREACH WAS FOUND BY THE RECEIPENT PARTY) THAN

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THOSE LISTED HEREIN, SHALL BE OUTSIDE THE ARBITRATOR’S EXPRESS POWERS AND MAY BE IMMEDIATELY REVOKED AND/OR MODIFIED BY A COURT OF COMPETENT JURSIDICTION.

THE ARBITRATOR SHALL NOT ALLOW ANY DISCOVERY OTHER THAN: 1) PRODUCTION OF BUSINESS AND FINANCIAL RECORDS WHICH EITHER SUPPORTS OR CONTRADICTS THE ALLEGED BREACH AND DAMAGES. SUCH PRODUCTION SHALL OCCUR AT LEAST 30 DAYS PRIOR TO THE FINAL ARBITRATION HEARING; AND 2) EACH PARTY MAY TAKE ONE DEPOSITION OF A PARTY AND ONE DEPOSITION OF A NON-PARTY. HEARSAY IS ONLY ALLOWED RELATING TO A TPIP, OR THEIR EMPLOYEES, OFFICERS AND/OR DIRECTORTES, AS EVIDENCE AND AFFIDAVITS OR SWORN STATEMENTS OF NON-PARTY EMPLOYEES WHO ARE LISTED AS TPIP ARE ALLOWED AS EVIDENCE. ALL OTHER TESTIMONY SHALL BE LIVE.

FURTHER, THE ARBITRATION FINAL HEARING SHALL TAKE PLACE WITHIN 120 DAYS OF ANY DEMAND AND ANY AWARD SHALL ISSUE WITHIN 30 DAYS AFTER THE FINAL ARBITRATION HEARING. DEPARTURE FROM THIS PARAGRAPH BY AN ARBITRATOR SHALL CONSITUTE AN ACT OUTSIDE THE POWER OF THE ARBITRATOR AND SHALL BE REVERSED OR RESUBMITTED FOR CORRECTION BY A COURT OF COMPETENT JURISDICTION.

IN THE EVENT THE ARBITRATOR FAILS TO ACT WITHIN THE PRESCRIBED TIME, OR WITHIN THE PRESCIBED LIMITS ON AWARDS SET FORTH HEREIN, INCLUDING A FAILURE TO AWARD NOMINAL DAMAGES AND A PERMENANT INJUNCTION IF A BREACH OF ANY NATURE HAS BEEN FOUND, A COURT OF COMPETENT JURISDICTION SHALL VACATE THE AWARD PURSUANT TO TEX. CIV. PRAC. REM CODE § 171.07 (A)(3)(A). THE MATTER SHALL THEN BE RESUBMITTED TO ARBITRATION WITH A NEW ARBITRATOR.

IF AN AWARD IS APPEALED BY THE NON-PREVAILING PARTY ANY INJUNCTIVE RELIEF SHALL REMAIN IN PLACE DURING THE APPEAL. FAILURE TO FOLLOW THIS SHALL BE CONSIDERED A VIOLATION OF AN ARBITRATOR’S EXPRESS POWERS.

 

THE PARTIES AGREE THAT THE DAMAGES IN THESE ARBITRATION PARAGRAPHS AS WELL AS THE ENFORCEMENT OF AN INJUNTION RELATED TO TPIP MAY BE CONTRARY TO PUBLIC POLICY AND THAT THIS PARAGRAPH IS A WAIVER OF PUBLIC POLICY UNLESS EXPRESSLY PROHIBITED AS A MATTER OF LAW. IN ADDITION, THE ARBITRATOR SHALL HAVE SOLE AUTHORITY TO DETERMINE THEIR OWN JURISDICTION.

OTHER THAN THOSE REASONS SET FORTH HEREIN, ANY APPEAL, WHETHER IN FEDERAL OR STATE COURT, MUST EXPRESLLY COMPLY WITH THE PROVISIONS OF THE TEXAS ARBITRATION ACT.

ANY PREVAILING PARTY MAY SEEK ENFORCEMENT IN ANY COURT OF COMPETENT JURISDICTION UNDER ONE OR MORE INTERNATIONAL TREATIES OR AGREEMENTS, IF NECESSARY. FAILURE TO SEEK ARBITRATION IS NOT A WAIVER OF ANY RIGHT BY THE COMPANY.

SERVICE OF NOTICE OF ARBITRATION MAY BE MADE BY EMAIL AS WELL AS CERTIFIED MAIL.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

COMPANY:

CONTRACTOR:

RTSL

 

/s/ Donal R. Schmidt, Jr.

/s/ Dr. Haresh Boghara

By: Donal R. Schmidt, Jr.

By: Dr. Haresh Boghara

CEO

Title: HARESH BOGHARA

 

 

CONTACT INFORMATION:

 

 

Accounting and Billing:

15800 Dooley Rd Suite 200

Addison, TX 75001

 

If to Contractor:

Haresh Boghara, MD, MBA

106 Plaza Dr.

Red Oak, Texas 75154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Clinical Contractor Agreement Page 8 of 8

 

EXHIBIT A

 

Company will pay to Contractor 500,000 convertible preferred shares of its restricted stock upon completion of a five (5) arm study of Company’s CBD and/or CBG blended products with up to 50 individual patients per arm. The study protocols are to be prepared by Dr. Haresh Boghara and/or Dr. Powell and shall be approved by Company prior to initiation of each study. These shares will be subject to the same exact terms and trading agreement as those of Dr. Powell’s, unless provided otherwise in writing by RTSL. 250,000 preferred convertible shares shall be fully earned upon commencement of the start of the first arm of the study.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rapid Therapeutic Prepares to file Investigational New Drug Application for its CBD Metered Dose Inhaler with FDA

DALLAS, June 2, 2021 (GLOBE NEWSWIRE) -- Rapid Therapeutic Science Laboratories, Inc. (OTC Pink: RTSL) an SEC fully-reporting, growth-oriented aerosol manufacturing company focused on delivery of non-psychoactive cannabinoid compounds, announced today it has executed two (2) contracts to conduct Phase 1 human clinical trials of its flagship metered dose inhaler (MDI) containing Cannabidiol (CBD).  RTSL entered into these two contracts in preparation for filing an Investigational New Drug Application (IND) with the U.S. Food and Drug Administration (FDA). Filing is anticipated in the next 30 days. An IND is a request for the FDA's authorization to administer an investigational drug to humans and is the first step towards designing and conducting clinical trials in the U.S.

RTSL engaged Dr. Charles Powell, MD who is the Chief Medical Officer (CMO) and founder of a primary care group in North Texas with over 90,000 patients from which volunteers will be solicited for the planned studies. Dr. Powell is responsible for oversight of the studies on behalf of RTSL. Dr. Powell in conjunction with Dr. Haresh Boghara, MD of Epic Medical Research, who has been engaged as RTSL’s primary medical investigator, will launch five clinical studies to assess RTSL’s MDI containing CBD for dosage, efficacy and safety. The planned studies will initially focus on therapeutic benefits of CBD relating to depression, anxiety, insomnia, ADHD and arthritis/chronic pain. Of importance, the studies will measure blood serum levels (pharmacokinetics) to support clinical observations. RTSL will need to file and obtain approval of the IND by the FDA to begin the planned studies.

Dr. Powell stated, “Based upon my observation from our clinical experience with this product, we think these studies will translate into concrete data that will ultimately result in Phase 2 and 3 studies which will hopefully lead to a fully approved FDA product.”

RTSL previously announced it was in discussions with Dr. Powell and Accent Clinical Research Professionals, LLC for eight clinical studies. These discussions fell through when the previously proposed lead investigator could not participate due to undisclosed personal reasons not having to do with the proposed testing.

RTSL’s CEO, Donal R. Schmidt, Jr. stated, “We made the decision to file an IND based upon a number of things. Most importantly, we believe we are the first company to develop and manufacture an MDI containing pure pharmaceutical grade

CBD isolate that has a good chance of ultimately being approved by the FDA for use in humans.”

Mr. Schmidt continued “We believe our product is non-toxic, stable, unadulterated, and does not cause airway reactivity. We reached this conclusion after two years of work culminating this past month with Dr. Duane Drinkwine’s breakthrough discovery of a new proprietary method of manufacturing pharmaceutical grade CDB isolate that we believe can be safely delivered to the pulmonary tract without irritation. We will be releasing specific details of this discovery in the next month or two.”

While the application process is pending with the FDA, RTSL plans to utilize its existing lab equipment to continue to develop and manufacture non-MDI aerosol products for sale to the growing hemp product market.

About Rapid Therapeutic Science Laboratories, Inc. (OTC Pink: RTSL)

RTSL has developed a new method of formulating and manufacturing pressurized metered dose inhalers (pMDI) that contain and properly aerosolize proprietary formula of one or more cannabinoid compounds. The Company’s nhāler product line is manufactured in compliance with Good Manufacturing Practice (GMP).

CBD is not approved by the FDA.

We encourage all individuals to do their own research regarding cannabinoids, the use of MDI and our other products. Always consult a physician prior to using any cannabinoid product. RTSL makes no therapeutic claims regarding its products, the use of its products, or any results which can be obtained from using its products. None of our products are intended to diagnose, treat, cure, or prevent any disease. If you experience any adverse reaction of any non-psychotropic cannabinoid stop use immediately and seek appropriate medical attention. RTSL’s products are not approved by the FDA or under the Food Drug & Cosmetics Act (FD&C Act). Our products contain zero THC.

Visit our corporate website at www.rtslco.com.

Forward-Looking Statements

This press release may contain forward-looking statements. In particular, when used in the preceding discussion, the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of RTSL, its divisions and concepts to be materially different than those expressed or implied in such statements. These risk

factors and others are included from time to time in filings made by RTSL with the Securities and Exchange Commission, including, but not limited to, in the “Risk Factors” sections in its Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which we have filed, and file from time to time, with the U.S. Securities and Exchange Commission. These reports are available at www.sec.gov.

Other unknown or unpredictable factors also could have material adverse effects on RTSL’s future results and/or could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements which include, among others, the following: a delay in, or the failure of, RTSL’s filing of the IND, a delay in, or the failure of, the FDA’s approval of the IND, and the outcome of planned studies.

The forward-looking statements included in this press release are made only as of the date hereof. RTSL cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 

Contact:
Donal (Don) R. Schmidt, Jr.
Chairman and CEO
info@rtslco.com

Phone: 800-497-6059

Fax: 888-274-9120