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THIS NOTE AND ANY SHARES ACQUIRED UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO MOUNT TAM BIOTECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

 

CONVERTIBLE PROMISSORY NOTE

 

Aggregate Amount: $100,000.00

Effective Date: September 18, 2018

FOR VALUE RECEIVED, Mount Tam Biotechnologies, Inc., a Nevada corporation (the “ Maker ”), promises to pay to Climate Change Investigation, Innovation and Investment Company, LLC, a California limited liability company or its permitted assigns (the “ Holder ”) the principal sum of One Hundred Thousand Dollars ($100,000.00), as scheduled pursuant to Schedule I , which is attached hereto and incorporated herein by this reference, together with interest on the unpaid principal balance(s) under this Note from time to time outstanding at the rate of 8.0% per year, minus any amounts prepaid by the Maker or converted by the Holder pursuant to the terms of this Convertible Promissory Note (this “ Note ”), until paid in full. Subject to the conversion provisions set forth herein or permitted prepayments pursuant to the terms of this Note, all outstanding principal and accrued interest shall be due and payable on May 18, 2019 (the “ Maturity Date ”). Interest on the outstanding amounts due under this Note shall be computed for each payment from each funding date (as set forth on Schedule 1 hereto) on the basis of a year of 365 days for the actual number of days elapsed. All cash payments made by the Maker under this Note shall be in immediately available funds.

The payment of all amounts due under this Note, and the performance of all obligations of Maker under this Note, are fully secured by the Security Agreement between the Maker and Holder effective as of September 18, 2018.

Effective upon a complete funding of the entire principal amount of $100,000, in accordance with Schedule I , the Maker shall issue to the Holder 200,000 shares of its common stock (or if less than $100,000 is lent, then the pro-rata amount of such 200,000 shares based on the amount that is lent).  In addition, the Maker shall issue to the Holder an additional 200,000 shares of its common stock in the event that the Maker has not either (i) closed a Financing resulting in funding of at least $1,000,000 to the Maker after the date of this Note, but on or before January 1, 2019, or (ii) received a binding term sheet or other similar binding agreement pertaining to a licensing transaction with a company that operates in the pharmaceutical and/or biotech industries that will provide for at least $500,000 in upfront payments to the Maker on or before January 1, 2019, as well as milestones and royalties for TAM-01, TAM-3, or for any follow-on compounds of the Maker (a “ Licensing Transaction ”) on or before January 1, 2019.  Lastly, and in addition to the foregoing, the Maker shall issue to the Holder an additional 600,000 shares of its common stock in the event that the Maker has not either (i) closed a Financing resulting in funding of at least $1,000,000 to the Maker after the date of this Note, but on or before April 30, 2019, or (ii) received a binding term sheet or other similar binding agreement for a Licensing Transaction on or before April 30, 2019.

 

From and after the Maturity Date, the Holder may, at the sole and exclusive option of the Holder, convert some or all of the outstanding principal and interest under this Note (the “ Outstanding Amount ”)

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into shares of the same class and series of capital stock of the Maker issued to investors in the most recent Financing (the “ Financing Securities ”) at a conversion price equal to the lesser of (i) 80% of the price per share of Financing Securities paid by the other investors in the Financing and (ii) a price per share equal to $10,000,000 divided by the number of outstanding shares of capital stock of the Maker on a fully-diluted basis (and treating as outstanding all shares issuable upon exercise of all outstanding options, warrants and other rights to acquire equity securities of the Maker, and treating all outstanding preferred stock on an as-converted to common stock basis). “ Financing ” means the issuance of stock by the Maker or any security convertible into, exchangeable for, or exercisable for stock of the Maker, after the date hereof; provided that the primary purpose of such issuance must be to raise capital (and as such excludes, for the avoidance of doubt, issuances of stock of the Maker or securities convertible into, exchangeable for or exercisable for stock of the Maker to employees, directors, consultants or other service providers in connection with the provision of goods or services to the Maker).

 

In addition, effective upon the closing of any Financing resulting in gross proceeds to the Maker, in one or a series of related transactions, of at least $2,000,000 (including the aggregate amount of any indebtedness converted into equity securities in such Financing) in which either (i) the investor leading the negotiation with the Maker is a bona fide institutional investor or (ii) if the investor leading the negotiation is not a bona fide institutional investor, such Financing includes commercially reasonable customary terms and conditions for an equity financing of an early stage biopharmaceutical company, which may (but shall not be required to) include one or more of the following terms: liquidation preferences, dividend rights, protective provisions, voting rights, anti-dilution provisions, conversion rights, board representation for the investors, redemption rights, preemptive rights, information rights, registration rights, drag-along rights, rights of first refusal and co-sale rights (in the case a Financing satisfies either clause (i) or (ii) above, a “ Qualified Financing ”) then the aggregate Outstanding Amount shall automatically without any further action of the parties be converted into shares of the same class and series of capital stock of the Maker issued to investors in the Qualified Financing (the “ Qualified Financing Securities ”) at a conversion price equal to the lesser of (i) 80% of the price per share of Qualified Financing Securities paid by the other investors in the Qualified Financing and (ii) a price per share equal to $10,000,000 divided by the number of outstanding shares of capital stock of the Maker on a fully-diluted basis (and treating as outstanding all shares issuable upon exercise of all outstanding options, warrants and other rights to acquire equity securities of the Maker, and treating all outstanding  preferred stock on an as-converted to common stock basis). The parties acknowledge and agree that a Financing which contains commercially reasonable customary terms and conditions for an equity financing of an early stage biopharmaceutical company does not have to contain all of the examples of terms listed in sub-clause (ii) of the preceding sentence.

 

The Maker shall notify the Holder in writing of the anticipated occurrence of a Financing or Qualified Financing at least 20 days prior to the closing date of the Financing or the Qualified Financing.

 

In lieu of the Maker issuing any fractional shares to the Holder upon the conversion of this Note, the Maker shall pay to the Holder an amount equal to the product obtained by multiplying the applicable conversion price by the fraction of a share not issued pursuant to the conversion of this Note.

 

Upon the conversion of this Note pursuant to the terms set forth herein, the Holder agrees to (i) execute and deliver to the Maker a customary 180-day lock-up agreement in connection with an initial public offering, and (ii) execute and deliver to the Maker all transaction documents entered into in connection with such conversion, which may include a purchase agreement, investor rights agreement,

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voting agreement, right of first refusal and co-sale agreement and/or other ancillary agreements, with customary representations and warranties and transfer restrictions. The Holder agrees in connection with any conversion of this Note to deliver the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Maker whereby the Holder agrees to indemnify the Maker from any loss incurred by it in connection with this Note) prior to conversion.

 

If (a) within two years after the date hereof the Company completes an additional round of debt financing with new investors (“ New Debt ”) and (b) the New Debt contains Economic Terms (as defined below) that are more favorable to New Debt holders than the Economic Terms of this Note, then the Holder shall have the option to exchange this Note for an equal principal amount of new notes (“ New Notes ”) with the same Economic Terms as the New Debt. “ Economic Terms ” shall mean and refer to interest rate, payment frequency, note attributes and amortization.  

 

This Note shall become immediately due and payable without notice or demand (but subject to the conversion rights set forth herein) upon the occurrence at any time of any of the following events of default (individually, an “ Event of Default ” and collectively, “ Events of Default ”):

 

(1) the Maker fails to pay any of the principal, interest or any other amounts payable under this Note when due and payable;  

 

(2) the Maker files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or seeks the appointment of a custodian, receiver, trustee (or other similar official) of the Maker or all or any substantial portion of the Maker’s assets, or makes any assignment for the benefit of creditors or takes any action in furtherance of any of the foregoing, or fails to generally pay its debts as they become due;  

 

(3) an involuntary petition is filed, or any proceeding or case is commenced, against the Maker (unless such proceeding or case is dismissed or discharged within 60 days of the filing or commencement thereof) under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, liquidation or moratorium statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is applied or appointed for the Maker or to take possession, custody or control of any property of the Maker, or an order for relief is entered against the Maker in any of the foregoing;  

 

(4) the occurrence of a breach or default under any agreement, instrument or document to which the Maker is a party or by which it is bound, involving any obligation for borrowed money of more than $100,000 in the aggregate;  

 

(5) the Maker materially breaches any other agreement with the Holder (including without limitation any security agreement), or with 0851229 BC, Ltd. or with Fromar Investments, LP; or  

 

(6) the Maker borrows any funds from a third party without repaying this Note in full (excluding for this purpose account and trade payables incurred by the Maker in the ordinary course of business), or the Maker is party to a merger, or there is a sale of a controlling interest in the outstanding stock of the Maker, or a sale of all or substantially all of the Maker’s assets, or enters into an agreement  

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for any of the foregoing.

 

Upon the occurrence of an Event of Default, the Holder shall have then, or at any time thereafter, all of the rights and remedies afforded creditors generally by the applicable federal laws or the laws of the State of California.

 

Notwithstanding anything to the contrary, this Note may be prepaid, in whole or in part, without the prior written consent of the Holder. The Maker shall disclose in writing to the Holder if and when it is in material discussions with respect to a Qualified Financing or a Financing.

 

All payments by the Maker under this Note shall be made without set-off or counterclaim and be free and clear and without any deduction or withholding for any taxes or fees of any nature whatever, unless the obligation to make such deduction or withholding is imposed by law.

 

The Maker shall pay the reasonable costs and expenses (including reasonable attorney’s fees and disbursements) that it incurs and, upon presentation of appropriate receipts, that the Holder incurs with respect to the preparation, negotiation, execution and delivery of this Note, any security agreement and any other agreement or instrument contemplated hereby or thereby. After the occurrence of an Event of Default, the Maker shall pay all costs and expenses, including, without limitation, reasonable attorneys’ fees and court costs, incurred in connection with any act or actions taken to collect or otherwise satisfy the obligations due under this Note, any security agreement and any other agreement or instrument contemplated hereby or thereby.

 

No delay or omission on the part of the Holder in exercising any right under this Note shall operate as a waiver of such right or of any other right of the Holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion. This Note may not be amended or modified without the prior written consent of the Maker and the Holder.

 

All payments by the Maker under this Note shall be applied first to any fees and expenses due and payable hereunder, then to the accrued interest due and payable hereunder and the remainder, if any, to the outstanding principal.

 

The Maker hereby waives presentment, demand, protest and notices of every kind and assents to any permitted extension of the time of payment and to the addition or release of any other party primarily or secondarily liable hereunder.

 

Until the conversion of this Note, the Holder shall not have or exercise any rights by virtue of this Note as a stockholder of the Maker.

 

All rights and obligations hereunder shall be governed by the laws of the State of California (without giving effect to principles of conflicts or choices of law) and this Note is executed as an instrument under seal.

 

Neither the Maker nor the Holder may assign, sell or otherwise transfer this Note or any of their respective rights and duties hereunder without the prior written consent of the other party hereto.

 

The Maker acknowledges that neither this Note nor any securities issuable upon the conversion

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of this this Note (collectively, the “ Note Securities ”) will be registered under the Securities Act of 1933, as amended (the “ Securities Act ”), or any state securities laws. The Holder represents that (i) it is acquiring the Note Securities for its own account, for investment purposes only and not with a view to, or for sale in connection with, any distribution and (ii) it is an “accredited investor” under Regulation D promulgated under the Securities Act.

 

 

[Signature page follows.]

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IN WITNESS WHEREOF, the parties have executed this Note effective as of the effective date set forth above.

 

 

 

MAKER:

 

MOUNT TAM BIOTECHNOLOGIES, INC.

 

 

 

By: /s/ Richard Marshak        

Print Name: Richard Marshak

Title: Chief Executive Officer

 

HOLDER:

 

CLIMATE CHANGE INVESTIGATION,

INNOVATION AND INVESTMENT COMPANY, LLC

 

 

By: /s/ James J. Farrell          

Name: James J. Farrell  

Title: Manager  

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Schedule 1

Schedule of Drawdowns

 

Amount	Date

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SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “ Agreement ”) by and between Mount Tam Biotechnologies, Inc., a Nevada corporation (the “ Debtor ”) on the one hand, and Climate Change Investigation, Innovation and Investment Company, LLC, a California limited liability company, on the other hand (“ Secured Party ”) is effective as of September 18, 2018.  In consideration of the financial accommodations extended to the Debtor by the Secured Party, the Debtor hereby agrees that the Secured Party shall have all of the rights given herein against the Debtor in addition to those given by law or by the Convertible Promissory Note issued by the Debtor to the Secured Party on or about September 18, 2018, as amended (the “ Note ”) or any other agreement or document underlying the Liabilities:

1. The term “ Liabilities ” as herein used shall include all indebtedness, obligations and liabilities of any kind of Debtor to the Secured Party, whether now existing or hereafter incurred, including without limitation those pursuant to or arising under the Note and any other promissory notes or any other future advances (the Note, such other promissory notes and any other agreement evidencing future advances, together with this Agreement, the “ Loan Documents ”) executed between the Debtor and the Secured Party (as the same may be amended, modified or restated from time to time and any Loan Documents exchanged or substituted for the Loan Documents).    

2. In order to secure the performance of the Debtor’s payment and other obligations under the Loan Documents, the Debtor hereby grants to the Secured Party a security interest (the “ Security Interest ”), subject only to Permitted Security Interests, in all of the present and future assets of the Debtor and all products and proceeds of those assets, including but not limited to the following, to secure the Debtor’s due and punctual payment of the Loan Documents (hereinafter referred to collectively as the “ Collateral ”):  

(a)  All equipment, including machinery, motor vehicles, office equipment, furniture, fixtures, along with all other parts, tools, trade-ins, repairs, accessories, accessions, modifications, and replacements, whether now owned or subsequently acquired, constructed, or attached or added to, or placed in, the foregoing;

 

(b)  All inventory, wherever located, including goods, merchandise and other personal property, held for sale or lease or furnished or to be furnished under a contract of service, or constituting raw materials, work in process or materials used or consumed in the Debtor’s business, or consigned to others or held by others for return to the Debtor, whether now owned or subsequently acquired or manufactured and wherever located;

 

(c)  All accounts, including, without limitation, accounts receivable, contracts, contract rights, chattel paper, instruments, rents, deposits, general intangibles, and any other obligations of any kind whether now existing or hereafter arising out of or in connection with the sale or lease of goods or the rendering of services, and all rights now or hereafter existing in and to all security agreements, notes, leases, licenses, franchises, supply agreements, and other contracts securing or otherwise relating to any such accounts, contracts, contract rights, chattel paper, instruments, rents, deposits, general intangibles, or obligations;

 

(d)  All general intangibles, including, but not limited to, corporate names, trade names, trademarks, service marks, trade secrets, inventions, copyrights (including without limitation copyrights for computer programs) and all tangible property embodying copyrights, patents and patent applications, license agreements relating to any of the foregoing and income therefrom, books and records, blue prints and plans, computer programs, tapes and related electronic data processing software, and all corporate ledgers;

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(e)  Any and all additions, accessions, substitutions or replacements to or for any of the foregoing;

 

(f)  Any and all products and proceeds of any or all of the foregoing, including, without limitation, cash, cash equivalents, tax refunds and the proceeds of insurance policies providing coverage against the loss or destruction of or damage to any of the Collateral, or any indemnity, warranty, or guarantee payable by reason of loss or damage to or otherwise with respect to any of the Collateral (whether or not the Debtor is the loss payee thereof);

 

(g)  All of the Debtor’s after-acquired property of the kinds and types described in paragraphs (a) - (f) herein; and

 

(h)  All records and data relating to any of the property described above, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of the Debtor’s right, title, and interest in and to all computer software required to utilize, create, maintain and process any of such records or data or electronic media.

“ Permitted Security Interests ” means (i) liens for taxes, fees, assessments, or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; (ii) liens arising from judgments, decrees, or attachments; (iii) liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (iv) purchase money security liens on equipment or vehicles that are hereafter acquired by the Debtor; and (v) the security interests previously granted to (1) 0851229 BC, Ltd. and (2) Fromar Investments, LP.

 

3. The Debtor shall preserve the Collateral, keep the Collateral in good repair, subject to ordinary wear and tear, and abstain from and not permit the commission of waste with regard thereto.  The Debtor shall maintain insurance coverage in accordance with good business practice against loss or damage to the Collateral by fire and other hazards, with such insurance carriers as are reasonably satisfactory to the Secured Party.  In the event of loss or damage to the Collateral, the Debtor shall give immediate written notice thereof to the Secured Party.  In such event, if the Debtor fails promptly to adjust or compromise any loss claims under the insurance, the Secured Party shall have the right, at their election, to adjust or compromise any such loss claims under such insurance.    

4. The Secured Party is hereby authorized to from time to time to file one or more financing statements (and extensions thereof) under the Uniform Commercial Code (the “ Code ”), as in effect from time to time in the State of Nevada and/or any such other jurisdiction as Secured Party may decide, naming the Debtor as Debtor and the Secured Party as Secured Party and indicating therein the items of Collateral herein specified. The Debtor will from time to time execute such statements and such other notices, affidavits or other documents as the Secured Party may reasonably deem necessary to protect its Collateral interest hereunder.  At this time, the Secured Party is not requesting that the Debtor enter into any agreements other than this Agreement with respect to the Security Interest or the perfection of the Security Interest (such as landlord waivers, deposit account control agreements and intellectual property security agreements) but it reserves the right to do so in its sole discretion to protect its rights hereunder.  

5. The Debtor shall not, without at least thirty days prior written notice to the Secured Party, change its principal place of business, change the location of the Collateral (excluding sales of inventory in the ordinary course of business), or change its name or any trade name, in any such case which would require the filing of an additional financing statement or statements then or at any time in the future to preserve the Secured Party’s Security Interest in the Collateral.  

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6. Upon the occurrence of any Events of Default (as determined under the Loan Documents) as a result of which the Secured Party require the payment of amounts due under the Loan Documents whether or not prior to the stated maturity date thereof, the Debtor shall, at the request of the Secured Party, forthwith assemble the Collateral at such reasonable place or places as the Secured Party designate in their request.  In addition to any other rights granted by law or under this Agreement, the Secured Party shall have the rights and remedies with respect to the Collateral of a secured party under the Code (whether or not the Code is in effect in the jurisdiction where the rights and remedies are asserted).  In addition, with respect to the Collateral or any part thereof which shall then be or shall thereafter come into the possession or custody of the Debtor, the Secured Party may sell or cause to be sold in Nevada or elsewhere, in one or more sales or parcels, at such price as the Secured Party may deem best, and for cash or on credit or for future delivery, without assumption of any credit risk, all or any of the Collateral, at public or private sale, without demand of performance or notice of intention to sell or of time or place of sale (provided that any such transactions shall be in accordance with the Code and all other applicable laws), and to the extent permitted by law, the purchaser of any or all of the Collateral so sold shall thereafter hold the same absolutely free from any claim or right of whatsoever kind, any such demand, notice, claim or right being hereby expressly waived and released. Notwithstanding the foregoing, unless the Collateral threatens to decline speedily in value or is of a type sold on a recognized market, the Secured Party will give the Debtor reasonable notice of the time and place of any public sale thereof, or of the time after which any private sale or any intended disposition is to be made. Any requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to Debtor at the address given below, at least five days before the time of the sale or disposition. Secured Party may, in its own name, or in the name of any designee, buy at any public sale and if the Collateral is of a type sold in a recognized market, or is of a type which is the subject of widely distributed standard price quotations, buy at private sale. The Secured Party shall apply the net cash receipts from any such sale of the Collateral to the payment of principal of and/or interest of all of the remaining Liabilities, whether or not then due. Notwithstanding that the Secured Party, whether on its own behalf and/or on behalf of another or others, may continue to hold any of the Collateral and regardless of the value thereof, the Debtor shall be and remain liable for the payment in full, of principal and interest, of any balance of the unsatisfied Liabilities at any time unpaid.  

7. Subsequent to the occurrence of an Event of Default under the Loan Documents, if, in its sole discretion, the Secured Party deems it desirable, it may remove any Collateral held by it or its agents from the state, city, county or other governmental subdivision or jurisdiction in which it may now or hereafter be held or deposited to any place which it designates and there deal with it as herein provided and in accordance with applicable law.  

8. In the event that the Debtor fails to do so after 30 days written notice from the Secured Party, the Secured Party may, but shall not be obligated to, contest, pay and/or discharge all liens, encumbrances, taxes or assessments on, or claims or demands against (other than Permitted Security Interests), any of the Collateral without the consent of the Debtor and take all actions and proceedings in its name or in the name of the Debtor or of any other appropriate person to remove or contest such liens, encumbrances, taxes or assessments, claims or demands; and all sums advanced or paid by the Secured Party, and all reasonable costs, attorneys’ fees and expenses relating thereto, shall be Liabilities within the terms of this Agreement.  

9. The Secured Party shall not be deemed to have modified, discharged, terminated or waived any of its rights hereunder or any terms, provisions or conditions hereof unless such modification, discharge, termination or waiver is in writing and signed by its duly authorized officers or agents. No such modification, discharge, termination or waiver, unless so expressly stated therein, shall be effective as to any transaction which occurs subsequent to the date thereof nor to any continuance thereof.  This  

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Agreement may not be amended or modified without the prior written consent of the Debtor and the Secured Party.

10. Upon reasonable notice during normal business hours, the Debtor agrees to allow any representative of the Secured Party (or any agent or nominee of the Secured Party) to visit and inspect any of the Debtor’s properties relating to the Collateral, to examine the books and records and accounts of the Debtor, all at such reasonable times and as often as the Secured Party may reasonably request; provided that the Debtor shall not be obligated to provide information (i) that the Debtor reasonably determines in good faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form reasonably acceptable to the Debtor) or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Debtor and its counsel; provided further that in each such case, the Debtor shall inform the Secured Party in writing of its reliance on sub-clause (i) or (ii).  The Secured Party agrees, and shall cause each of its agents or nominees, to hold in confidence and trust and not to use (except in connection with monitoring its investment and prospects of repayment) or disclose any information provided to or learned by it in connection with its rights under the Loan Documents, unless required by applicable law, a court order or any other governmental authority or to exercise or enforce any of its rights under the Loan Documents.  

11. This Agreement shall inure to the benefit of the parties hereto, and their respective successors and assigns; provided that no party shall assign its rights hereunder or delegate its obligations hereunder without the prior written consent of the other party.  No delay on the part of a party in exercising any power or right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right hereunder preclude other or further exercise thereof or the exercise of any other power or right.  All rights and remedies of the Secured Party with respect to the Liabilities or the Collateral, whether evidenced hereby or by any other instrument of paper, shall be cumulative and may be exercised singularly or concurrently.  

12. All notices, requests, instructions and documents, hereunder shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, as follows:  

if to the Debtor:

Mount Tam Biotechnologies, Inc.

7250 Redwood Blvd. Suite 300

Novato, CA 94945

Attn: Chief Executive Officer

 

if to the Secured Party:

 

CC3IC  

12 San Rafael Avenue

Belvedere, CA 94920

Attn: James J. Farrell  

 

or at such other address as either party may by written notice to the other designate for this purpose. If delivered personally, the date on which a notice, request, instruction or document is delivered shall be the date on which such delivery is made, and if delivered by mail, the date on which such notice, request, instruction or document is deposited in the mail shall be the date of delivery.

13. If any term, condition or provision of this Agreement or of any other agreement or document executed and/or delivered pursuant hereto is determined to be invalid or unenforceable, such  

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determination shall not affect the validity or enforceability of any other term, condition or provision of this Agreement.

14. This Agreement and the Loan Documents contain the entire agreement between the Party hereto with respect to the transactions contemplated.  

(b) This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable in the case of contracts made and to be performed entirely within that state.  

(c) Each party hereto shall cooperate with and shall take such further action and shall execute and deliver such further documents as may be reasonably requested by the other party in order to carry out the provisions and purposes of this Agreement (including but not limited to any actions necessary to release the Security Interest upon the conversion, repayment or termination of the Note).  

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

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IN WITNESS WHEREOF, this Security Agreement has been duly executed by the parties hereto as of the date first above written.

SECURED PARTY:

CLIMATE CHANGE INVESTIGATION, INNOVATION AND INVESTMENT COMPANY, LLC   By: /s/ James J. Farrell

Name: James J. Farrell Title: Manager

DEBTOR:   MOUNT TAM BIOTECHNOLOGIES, INC.   By   /s/ Richard Marshak       Name: Richard Marshak Title: Chief Executive Officer

 

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INTERCREDITOR AGREEMENT

 

This Intercreditor Agreement (“ Agreement ”) is entered into as of the 18th day of September 2018, by and among Mount Tam Biotechnologies, Inc., a Nevada corporation (“ Borrower ”), 0851229 BC Ltd. (“ BC ”), Fromar Investments, LP, a Delaware limited partnership (“ Fromar ”), and Climate Change Investigation, Innovation and Investment Company, LLC, a California limited liability company (“ CC3IC ”). BC, Fromar and CC3IC are jointly referred to herein as the “ Creditors ”.  

 

R E C I T A L S :

 

WHEREAS, on or about November 9, 2015, Borrower and BC entered into that certain Secured Convertible Promissory Note, which has been amended, restated and otherwise modified on several different occasions (such Secured Convertible Promissory Note, together with all such modifications, amendments and restatements shall hereinafter be collectively referred to as the “ BC Note ”);

 

WHEREAS, the BC Note is secured by that certain Security Agreement between Borrower and BC dated on or about November 9, 2015 (the “ BC Security Agreement ”);

 

WHEREAS , on or about March 5, 2018, Borrower and Fromar entered into that certain Convertible Promissory Note in the principal amount of $500,000.00 (such Convertible Promissory Note, together with any and all modifications, amendments and restatements shall hereinafter be collectively referred to as the “ Fromar Note ”);

 

WHEREAS, the Fromar Note is secured by that certain Security Agreement between Borrower and Fromar dated on or about March 5, 2018 (the “ Fromar Security Agreement ”);

 

WHEREAS , on or about September 18th, 2018, Borrower and CC3IC entered into that certain Convertible Promissory Note in the principal amount of $100,000.00 (such Convertible Promissory Note, together with any and all modifications, amendments and restatements shall hereinafter be collectively referred to as the “ CC3IC Note ”);

 

WHEREAS, the CC3IC Note is secured by that certain Security Agreement between Borrower and CC3IC dated on or about September 18th, 2018 (the “ CC3IC Security Agreement ,” and together with the BC Security Agreement and the Fromar Security Agreement, the “ Security Agreements ”);

 

WHEREAS, each of the Security Agreements provides each of the Creditors with a security interest in and to the same Collateral (as that term is defined in each of the Security Agreements, which definition is incorporated herein by this reference). Such security interests of the Creditors are referred to herein individually as a “Security Interest” and collectively as the “Security Interests”;

 

WHEREAS , the parties hereto desire to enter into an agreement providing other matters for the coordination of the loans being provided by the Creditors and the security thereunder.

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NOW THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. The Security Interests of the Creditors shall rank pari passu . In the event of a default with respect to the obligations secured by any Security Interest, the Creditors agree to jointly share in the amount realized from the Collateral in proportion to the amount of their respective debt with respect to which a default has occurred to the total debt of each of the Creditors with respect to which defaults have occurred.  Accordingly, each Creditor shall jointly exercise their respective rights under the Security Interests including selling and otherwise disposing of the Collateral thereunder.  In connection therewith, before taking any action to enforce any of its rights or remedies under such Collateral, such Creditor shall give the other Creditors notice of such action, together with information regarding the facts and circumstances on which such action is grounded.  

 

2. The priorities specified herein are applicable without regard to the time, manner or order of attachment or perfection of any security interest or the time or order of filing of financing statements or the giving or failure to give notice of acquisition or expected acquisition of purchase money or other security interest.  

 

3. This Agreement shall remain in effect until one Creditor gives written notice to the other Creditors of its intention to terminate.  No notice of termination shall impair the Security Interest acquired by any Creditor prior to the notice or affect the priorities thereof hereunder.  

 

4. This Agreement is solely for the benefit of the undersigned Creditors and no other persons shall have any rights, benefits, priority, or interest under or because of the existence of this Agreement .  

 

5. The Creditors shall endeavor to notify each other of any amendment or modification in their respective notes, loan agreements and documents, but the failure to do so shall not create a cause of action against the Creditor failing to give notice or create a claim or right on behalf of any third party.  Each Creditor, upon request to another Creditor, is authorized to provide copies of all modifications or amendments and copies of all other documentation relevant to the Collateral.  The Creditors agree not to increase the amount of their respective loan facilities unless they have obtained the written consent of the other Creditors.  

 

6. The Creditors shall provide the other Creditors with a copy of any notice of the occurrence of an event of default simultaneously with the delivery of such notice to Borrower, but the failure to do so shall not affect the validity of such notice or create a cause of action against such Creditor for failing to give such notice. Borrower hereby consents to the Creditors sharing information with respect to the Collateral or Borrower’s business between each other.  

 

7. Miscellaneous.  

 

A. Counterparts .   This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such  

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counterparts shall together constitute but one and the same instrument. This Agreement shall become effective when executed by all parties hereto.

 

B. Amendment .  Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing which purports to terminate, amend, supplement, waive or modify this Agreement or any of the terms hereof and is signed by all parties hereto.  

 

C. Successors and Assigns .  The terms of this Agreement shall be binding on, and inure to the benefit of, the parties hereto and their respective successors and assigns.  

 

D. Governing Law . This Agreement, including all matters of construction, validity and performance, shall in all respects be governed by, and construed in accordance with, the laws of the State of California.  

 

E. Notices .  Except as otherwise provided in this Agreement, all notices hereunder shall be in writing and shall be given by mail, personal delivery, overnight courier, telecopy or any other customary means of written communication at the addresses set forth on the signature pages hereof, or at such other addresses as may be specified by written notice to the parties hereto, and shall become effective when received by the addressees.  

 

F. Severability of Provisions .  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceable of such provision in any other jurisdiction.  The provisions of this Agreement shall prevail over any inconsistent provisions in any agreement between any of the parties hereto.  

 

G. Headings . The headings used herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.  

 

H. Entire Agreement .  This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings between the parties hereto relating to the subject matter hereof.  

 

I. Recitals .  The Recitals to this Agreement are incorporated into and shall constitute a part of this Agreement.  

 

 

[signature page follows]

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IN WITNESS WHEREOF duly authorized officers of the undersigned have executed the foregoing Intercreditor Agreement.  

 

BORROWER:
MOUNT TAM BIOTECHNOLOGIES, INC
/s/ Richard Marshak
Name: Richard Marshak
Title:  Chief Executive Officer
CREDITORS:
0851229 BC Ltd.	ADDRESS:
/s/ Doug Froese
Name:  Doug Froese
Title:  Director
FROMAR INVESTMENTS, LP	ADDRESS:
/s/ Doug Froese
Name:  Doug Froese
Title:  Partner
CLIMATE CHANGE INVESTIGATION, INNOVATION AND INVESTMENT COMPANY, LLC	ADDRESS:
/s/ James J. Farrell
Name:  James J. Farrell
Title:  Managing Member

 

AMENDMENT TO CONVERTIBLE PROMISSORY NOTE

 

THIS AMENDMENT TO CONVERTIBLE PROMISSORY NOTE (this “ Amendment ”) is entered into as of September 24, 2018, by and between MOUNT TAM BIOTECHNOLOGIES, INC., a Nevada corporation (“ Maker ”), and Fromar Investments, LP (“ Holder ”).

 

RECITALS

 

A. Maker and Holder entered into that certain Convertible Promissory Note on effective as of March 5, 2018 (the “ March Note ”).  

 

B. Maker and Holder have agreed to amend the March Note pursuant to the terms set forth herein.  

 

NOW THEREFORE, in consideration of the above recitals and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:

 

1. The March Note is hereby amended by extending the Maturity Date to November 15, 2018.  

 

2. This Amendment supersedes any and all other provisions of the March Note which are in conflict with this instrument.  

 

3. This Amendment constitutes the full and complete agreement between the parties hereto.  All other provisions of the March Note not modified herein shall remain in full force and effect and are incorporated herein.  

 

 

 

[Signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Amendment to Convertible Promissory Note effective as of the effective date set forth above.

 

 

 

	MAKER:   MOUNT TAM BIOTECHNOLOGIES, INC.     By: /s/ Richard Marshak   Name: Richard Marshak   Title: Chief Executive Officer
	HOLDER:   Fromar Investments, LP     By: /s/ Doug Froese   Name: Doug Froese   Title: Chief Financial Officer

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SECOND AMENDMENT TO AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE

 

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE (this “ Amendment ”) is entered into as of September 24, 2018, by and between MOUNT TAM BIOTECHNOLOGIES, INC., a Nevada corporation (“ Maker ”), and 0851229 BC Ltd. (“ Holder ”).

 

RECITALS

 

A. Maker and Holder entered into that certain Amended Convertible Promissory Note on March 23, 2016 (the “ 2016 Note ”).  

 

B. The 2016 Note was amended and restated by Maker and Holder pursuant to that certain Second Amended and Restated Secured Convertible Promissory Note entered into as of June 13, 2016, and again amended on March 5, 2018 pursuant to that certain Amendment to Secured Convertible Promissory Note (the “ March Note ”).  

 

C. Maker and Holder have agreed to further amend the March Note pursuant to the terms set forth herein.  

 

NOW THEREFORE, in consideration of the above recitals and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:

 

1. The March Note is hereby amended by extending the Maturity Date to November 15, 2018.  

 

2. This Amendment supersedes any and all other provisions of the March Note which are in conflict with this instrument.  

 

3. This Amendment constitutes the full and complete agreement between the parties hereto.  All other provisions of the March Note not modified herein shall remain in full force and effect and are incorporated herein.  

 

 

 

[Signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Second Amendment to Amended and Restated Convertible Promissory Note effective as of the effective date set forth above.

 

 

 

	MAKER:   MOUNT TAM BIOTECHNOLOGIES, INC.     By: /s/ Richard Marshak   Name: Richard Marshak   Title: Chief Executive Officer
	HOLDER:   0851229 BC Ltd.     By: /s/ Doug Froese   Name: Doug Froese   Title: Director

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Signature Page to Second Amendment to Secured Convertible Promissory Note