Exhibit 10.1

 

XPRESSPA GROUP, INC.

 

SERIES E PREFERRED

 

STOCK PURCHASE AGREEMENT

 

 

 

 

TABLE OF CONTENTS

 

      Page         1. Purchase and Sale of Preferred Stock 1   1.1 Sale and
Issuance of Preferred Stock 1   1.2 Closing; Delivery 1   1.3 Use of Proceeds 1
  1.4 Defined Terms Used in this Agreement 2         2. Representations and
Warranties of the Company 5   2.1 Subsidiaries 5   2.2 Organization and
Qualification 5   2.3 Capitalization 6   2.4 Authorization 7   2.5 Valid
Issuance of Shares 7   2.6 Governmental Consents and Filings 7   2.7 No
Conflicts 8   2.8 SEC Reports; Financial Statements 8   2.9 Material Changes;
Undisclosed Events, Liabilities or Developments 9   2.10 Litigation 9   2.11
Labor Relations 9   2.12 Compliance 10   2.13 Regulatory Permits 10   2.14 Title
to Assets 10   2.15 Intellectual Property 10   2.16 Insurance 12   2.17
Transactions With Affiliates and Employees 12   2.18 Sarbanes-Oxley; Internal
Accounting Controls 13   2.19 Certain Fees 13   2.20 Investment Company 13  
2.21 Registration Rights 13   2.22 Reporting Company/Shell Company 13   2.23
Application of Takeover Protections 14   2.24 Disclosure 14   2.25 No Integrated
Offering 14   2.26 Solvency 15   2.27 Tax Status 15   2.28 Foreign Corrupt
Practices 15   2.29 Accountants and Lawyers 15   2.30 Acknowledgment Regarding
Purchaser’s Purchase of Shares 16   2.31 [Reserved.] 16   2.32 Regulation M
Compliance 16   2.33 Money Laundering 16   2.34 Stock Option Plans 16   2.35
Office of Foreign Assets Control 16   2.36 Private Placement 16   2.37 No
General Solicitation 16   2.38 Indebtedness and Seniority of Equity 17   2.39
Listing and Maintenance Requirements 17

 

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TABLE OF CONTENTS
(continued)

 

      Page           2.40 FDA 17   2.41 No Disqualification Events 17   2.42
Regulatory Matters 17   2.43 Other Covered Persons 17   2.44 No Outstanding
Variable Priced Equity Linked Instruments 17   2.45 Survival 17         3.
Representations and Warranties of the Purchaser 18   3.1 Authorization 18   3.2
Purchase Entirely for Own Account 18   3.3 Disclosure of Information 18   3.4
Restricted Securities 18   3.5 No Public Market 18   3.6 Legends 18   3.7
Accredited Investor 19   3.8 No General Solicitation 19   3.9 Exculpation Among
Purchaser 19   3.10 Residence 19         4. Covenants of the Company 19   4.1
Lock-Up Agreements 19   4.2 Exclusivity 20   4.3 Board Observer 20         5.
Covenants of the Purchaser 21   5.1 Restriction on Sale of Shares 21         6.
Conditions to the Purchaser’ Obligations at Closing 21   6.1 Representations and
Warranties 21   6.2 Performance 21   6.3 Collaboration Agreement 21   6.4
Qualifications 22   6.5 Opinion of Company Counsel 22   6.6 Certificate of
Designation 22   6.7 Secretary’s Certificate 22   6.8 Proceedings and Documents
22   6.9 Material Adverse Effect 22         7. Conditions of the Company’s
Obligations at Closing 22   7.1 Representations and Warranties 22   7.2
Performance 22   7.3 Qualifications 22   7.4 Collaboration Agreement 23        
8. Miscellaneous 23   8.1 Survival of Warranties 23   8.2 Successors and Assigns
23   8.3 Governing Law 23   8.4 Counterparts 23

 

 ii  

 

 

TABLE OF CONTENTS
(continued)

 

      Page           8.5 Titles and Subtitles 23   8.6 Notices 23   8.7 No
Finder’s Fees 24   8.8 Fees and Expenses 24   8.9 Amendments and Waivers 24  
8.10 Severability 24   8.11 Delays or Omissions 24   8.12 Entire Agreement 24  
8.13 Termination of Closing Obligations 24   8.14 WAIVER OF JURY TRIAL 25

 

  Exhibit A - FORM OF CERTIFICATE OF DESIGNATION         Exhibit B - DISCLOSURE
SCHEDULE         Exhibit C - FORM OF LOCK-UP AGREEMENT         Exhibit D - FORM
OF LEGAL OPINION OF COMPANY COUNSEL         Annex I - CURRENT OR POTENTIAL JOINT
VENTURES OR PARTNERSHIPS BETWEEN THE COMPANY AND ENTITIES

 

 iii  

 

 

SERIES E PREFERRED STOCK PURCHASE AGREEMENT

 

THIS SERIES E PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”), is made as
of the 12th day of November, 2018 by and between XpresSpa Group, Inc., a
Delaware corporation (the “Company”), and Calm.com, Inc., a Delaware Company
(the “Purchaser”).

 

The parties hereby agree as follows:

 

1.            Purchase and Sale of Preferred Stock.

 

1.1           Sale and Issuance of Preferred Stock.

 

(a)          The Company shall adopt and file with the Secretary of State of the
State of Delaware on or before the Initial Closing (as defined below) the
Certificate of Designation of Preferences, Rights and Limitations of Series E
Convertible Preferred Stock, dated November 12, 2018 in the form of Exhibit A
attached to this Agreement (the “Certificate of Designation”).

 

(b)          Subject to the terms and conditions of this Agreement and
concurrent with the execution of the agreement between the Company and the
Purchaser to be entered into on November 12th, 2018 (the “Collaboration
Agreement”), the Purchaser agrees to purchase at the Initial Closing (as defined
below) and the Company agrees to sell and issue to the Purchaser at the Initial
Closing 645,161 shares of Series E Convertible Preferred Stock, $0.01 par value
per share (the “Series E Preferred Stock”), at a purchase price of $3.10 per
share. The shares of Series E Preferred Stock issued to the Purchaser pursuant
to this Agreement (including any shares issued at the Initial Closing or the
Second Closing, as defined below) shall be referred to in this Agreement as the
“Shares.”

 

1.2          Closing; Delivery.

 

(a)          The initial purchase and sale of the Shares shall take place
remotely via the exchange of documents and signatures, at 10:00 a.m., on
November 13, 2018, or at such other time and place as the Company and the
Purchaser mutually agree upon, orally or in writing (which time and place are
designated as the “Initial Closing”). In the event there is more than one
closing, the term “Closing” shall apply to each such closing unless otherwise
specified.

 

(b)          On or before December 31, 2018, or at such other time and place as
the Company and the Purchaser mutually agree upon, orally or in writing, the
Company shall sell, and the Purchaser shall purchase, on the same terms and
conditions as those contained in this Agreement and subject to the conditions
set forth in Sections 6 and 7 of this Agreement, 322,581 additional shares of
Series E Preferred Stock (the “Second Closing Shares”) at a purchase price of
$3.10 per share. The date of the purchase and sale of the Second Closing Shares
are referred to in this Agreement as the “Second Closing.”

 

(c)          At each Closing, the Company shall deliver to the Purchaser a
certificate representing the Shares being purchased by such Purchaser at such
Closing against payment of the purchase price therefor by wire transfer to a
bank account designated by the Company.

 

1.3          Use of Proceeds. The Company will use the proceeds from the sale of
the Shares for working capital, capital expenditures and other ordinary course
business purposes.

 

 

 

 

1.4          Defined Terms Used in this Agreement. In addition to the terms
defined above, the following terms used in this Agreement shall be construed to
have the meanings set forth or referenced below.

 

(a)          Affiliate” means, with respect to any specified Person, any other
Person who, directly or indirectly, controls, is controlled by, or is under
common control with such Person, including, without limitation, any general
partner, managing member, officer, director or trustee of such Person, or any
venture capital fund or registered investment company now or hereafter existing
that is controlled by one or more general partners, managing members or
investment advisers of, or shares the same management company or investment
adviser with, such Person.

 

(b)          “Code” means the Internal Revenue Code of 1986, as amended.

 

(c)          “Commission” means the United States Securities and Exchange
Commission.

 

(d)          “Common Stock” means the Company’s shares of Common Stock, par
value $0.01 per share.

 

(e)          “Common Stock Equivalents” means any securities of the Company or
its Subsidiaries (as defined below) which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt,
preferred stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock.

 

(f)          “Equity Line of Credit” means any transaction involving a written
agreement between the Company and an investor or underwriter whereby the Company
has the right to “put” its securities to the investor or underwriter over an
agreed period of time and at an agreed price and formula.

 

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

 

(h)          “GAAP” means generally accepted accounting principles in the United
States.

 

(i)          “Indebtedness” shall have the meaning ascribed to such term in
Section 2.26.

 

(j)          “Intellectual Property Rights” shall have the meaning ascribed to
such term in Section 2.15.

 

(k)          “Liens” means a lien, charge, pledge, security interest,
encumbrance, right of first refusal, preemptive right or other restriction.

 

(l)          “Material Adverse Effect” shall have the meaning assigned to such
term in Section 2.2.

 

(m)          “Material Permits” shall have the meaning assigned to such term in
Section 2.13.

 

  2 

 

 

(n)          “Permitted Indebtedness” means (a) any unsecured liabilities for
borrowed money or amounts owed not in excess of $1,000,000 in the aggregate
(other than trade accounts payable incurred in the ordinary course of business),
(b) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s consolidated balance sheet (or the notes thereto) not affecting
more than $1,000,000 in the aggregate, except guaranties, endorsements and other
contingent obligations in respect of letters of credit, bank guarantees or
similar instruments in the ordinary course of business relating to leases which
shall not be subject to the $1,000,000 threshold set forth in this clause (b)
above; (c) the present value of any lease payments due under leases entered into
in the ordinary course of business required to be capitalized in accordance with
GAAP; (d) purchase money indebtedness incurred after the date of this Agreement
in connection with the acquisition of capital assets up to the purchase price of
such assets; (e) any liabilities for borrowed money which in the aggregate with
all Indebtedness under this clause (e) and clause (f) does not exceed
$11,000,000 in aggregate principal amount, and which, for the avoidance of
doubt, shall include all Indebtedness outstanding pursuant to that certain
Credit Agreement dated as of April 22, 2015, as subsequently amended by and
between XpresSpa Holdings, LLC and Rockmore Investment Master Fund Ltd.; (f) any
liabilities for borrowed money secured by the credit card receipts of the
location or locations to which American Express or any other nationally
recognized credit company extends credit, which shall not in the aggregate with
all Indebtedness under clause (e) and this clause (f) exceed $11,000,000 in
aggregate principal amount; and (g) Indebtedness incurred in connection with the
construction and development of new XpresSpa locations, provided that (i) such
Indebtedness is secured only by the assets of the Subsidiary which owns and/or
operates such location and only in the assets of such location, and (ii) the
Indebtedness is not guaranteed by the Company or any other Subsidiary of the
Company.

 

(o)          “Permitted Lien” means the individual and collective reference to
the following: (a) Liens for taxes, assessments and other governmental charges
or levies not yet due or Liens for taxes, assessments and other governmental
charges or levies being contested in good faith and by appropriate proceedings
for which adequate reserves (in the good faith judgment of the management of the
Company) have been established in accordance with GAAP, (b) Liens imposed by law
which were incurred in the ordinary course of the Company’s business, such as
carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and
other similar Liens arising in the ordinary course of the Company’s business,
and which (x) do not individually or in the aggregate materially detract from
the value of such property or assets or materially impair the use thereof in the
operation of the business of the Company and its consolidated Subsidiaries or
(y) are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing for the foreseeable future the
forfeiture or sale of the property or asset subject to such Liens, (c) Liens in
connection with Permitted Indebtedness under clause (b) and clause (e)
thereunder, (d) Liens incurred in connection with Permitted Indebtedness under
clause (c) thereunder provided that such Liens are not secured by assets of the
Company or its Subsidiaries other than the assets so acquired or leased, (e)
Liens incurred in connection with Permitted Indebtedness under clause (f) of the
definition of “Permitted Indebtedness,” provided that such Liens are not secured
by assets of the Company or its Subsidiaries other than the credit card receipts
of the location or locations to which a credit card company extends credit, (f)
Liens incurred in connection with the construction, development and/or
remodeling of existing XpresSpa locations, provided that such Liens only relate
to the assets of the Subsidiary which owns and/or operates such location and
only in the assets of such location with respect to such construction,
development and/or remodeling, (g) Liens to the extent arising solely from the
filing of protective Uniform Commercial Code financing statements in respect of
equipment leased to the Company or any Subsidiary in the ordinary course of its
business under true, as opposed to finance, leases, only up to the value of such
leased equipment, (h) Liens securing the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds, and
other obligations of like nature, in each case in the ordinary course of
business, (i) any interest or title of a lessor of real property secured by a
lessor’s interest in such real property under any lease, (j) easements, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed by
law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business, and (k)
Liens incurred in connection with Permitted Indebtedness under clause (g) of the
definition of “Permitted Indebtedness,” provided that such Liens are not secured
by assets of the Company or its Subsidiaries other than the assets of the
Subsidiary which owns such location and only in the assets of such location.

 

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(p)          “Person” means any individual, corporation, partnership, trust,
limited liability company, association or other entity.

 

(q)          “Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

(r)          “Representatives” means a party’s stockholders, affiliates,
directors, officers, employees, agents, investment bankers, attorneys,
accountants, consultants, advisors and other representatives.

 

(s)          “SEC Reports” shall have the meaning ascribed to such term in
Section 2.8.

 

(t)          “Securities Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

 

(u)          “Shares” means the shares of Series E Preferred Stock issued at the
Initial Closing and the Second Closing.

 

(v)         “Short Sales” means “short sales” as defined in Rule 200 of
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, swaps and similar
arrangements (including on a total return basis) whether such transactions are
made through U.S. or non-U.S. broker dealers or foreign regulated brokers.

 

(w)          “Trading Day” means a day on which the principal Trading Market is
open for trading for at least 4.5 hours; provided, that in the event that the
Common Stock is not listed or quoted for trading on a Trading Market on the date
in question, then Trading Day shall mean a Business Day.

 

(x)          “Trading Market” means the first listed of any of the following
markets or exchanges on which the Common Stock is listed or quoted for trading
on the date in question: the NYSE American, the Nasdaq Capital Market, the
Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, the OTC Bulletin Board, the OTCQB, or the OTCQX (or any successors to
any of the foregoing). As of the Closing Date, the NASDAQ Capital Market is the
Trading Market.

 

(y)          “Transaction Agreements” means this Agreement and the Collaboration
Agreement.

 

(z)          “Variable Rate Transaction” means an Equity Line of Credit or
similar agreement, issue or agree to issue floating or Variable Priced Equity
Linked Instruments or issuance or agreement to issue any of the foregoing.

 

  4 

 

 

(aa)         “Variable Priced Equity Linked Instruments” shall include: (A) any
debt or equity securities which are convertible into, exercisable or
exchangeable for, or carry the right to receive additional shares of Common
Stock or Common Stock Equivalents or any of the foregoing at a price that can be
reduced either (1) at any conversion, exercise or exchange rate or other price
that is based upon and/or varies with the trading prices of or quotations for
Common Stock at any time after the initial issuance of such debt or equity
security, or (2) with a fixed conversion, exercise or exchange price that is
subject to being reset at some future date at any time after the initial
issuance of such debt or equity security due to a change in the market price of
the Company’s Common Stock since date of initial issuance, or upon the issuance
of any debt, equity or Common Stock Equivalent, and (B) any amortizing
convertible security which amortizes prior to its maturity date, where the
Company is required or has the option to (or any investor in such transaction
has the option to require the Company to) make such amortization payments in
shares of Common Stock which are valued at a price that is based upon and/or
varies with the trading prices of or quotations for Common Stock at any time
after the initial issuance of such debt or equity security (whether or not such
payments in stock are subject to certain equity conditions).

 

2.           Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser that, except as set forth in the SEC
Reports or on the Disclosure Schedule attached as Exhibit B to this Agreement,
which exceptions shall be deemed to be part of the representations and
warranties made hereunder, the following representations are true and complete
as of the date of the Initial Closing, except as otherwise indicated. The
Disclosure Schedule shall be arranged in sections corresponding to the numbered
and lettered sections and subsections contained in this Section 2, and the
disclosures in any section or subsection of the Disclosure Schedule shall
qualify other sections and subsections in this Section 2 only to the extent it
is readily apparent from a reading of the disclosure that such disclosure is
applicable to such other sections and subsections.

 

2.1          Subsidiaries. All of the direct and indirect Subsidiaries of the
Company and the Company’s ownership interests therein are set forth in
Subsection 2.1 of the Disclosure Schedule. The Company owns, directly or
indirectly, all or a majority of the capital stock or other equity interests of
each Subsidiary free and clear of any Liens other than Permitted Liens, and all
of the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, nonassessable and free of preemptive and
similar rights to subscribe for or purchase securities.

 

2.2          Organization and Qualification. The Company and each Subsidiary is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation nor default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and each
Subsidiary is duly qualified to conduct business and is in good standing as a
foreign Person or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, would not reasonably be expected to result in: (i) a material adverse effect
on the legality, validity or enforceability of any Transaction Agreement, a
material adverse effect on the results of operations, assets, business, or
condition (financial or otherwise) of the Company and each Subsidiary, taken as
a whole, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction
Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”) and, no
Proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

 

  5 

 

 

2.3          Capitalization.

 

(a)          The authorized capital of the Company consists, immediately prior
to the Initial Closing, of:

 

(i)          150,000,000 shares of common stock, $0.01 par value per share,
34,546,518 shares of which are issued and outstanding immediately prior to the
Initial Closing. The Company holds no Common Stock in its treasury.

 

(ii)         5,000,000 shares of Preferred Stock, par value $0.01 per share (the
“Preferred Stock”), (i) 500,000 of which have been designated Series D
Convertible Preferred Stock (the “Series D Preferred Stock”), of which 420,541
are outstanding and (ii) 1,473,300 of which have been designated Series E
Preferred Stock, none of which are issued and outstanding and all of which may
be sold pursuant to this Agreement. The rights, privileges and preferences of
the Series E Preferred Stock are as stated in the Certificate of Designation.

 

(iii)        The outstanding shares of Common Stock and Series D Preferred Stock
are all duly and validly authorized and issued, fully paid and non-assessable,
and were issued in accordance with the registration or qualification provisions
of the Securities Act, and any relevant state securities laws, or pursuant to
valid exemptions therefrom.

 

(iv)        The Company has reserved 7,573,568 shares of Common Stock for
issuance to officers, directors, employees and consultants of the Company
pursuant to its 2012 Employee, Director and Consultant Equity Incentive Plan
Stock duly adopted by the Board of Directors and approved by the Company
stockholders (the “2012 Plan”).Of such reserved shares of Common Stock pursuant
to the 2012 Plan, 455,000 restricted stock units have been issued pursuant to
the 2012 Plan, options to purchase 2,285,000 shares have been granted and are
currently outstanding, and 3,485,970 shares of Common Stock remain available for
issuance to officers, directors, employees and consultants pursuant to the 2012
Plan. The Company has furnished to the Purchaser complete and accurate copies of
the 2012 Plan and forms of agreements used thereunder.

 

(b)          Except for (A) the conversion privileges of the Series D Preferred
Stock and the Shares to be issued under this Agreement and (B) the securities
and rights described in Subsection 2.3(a)(iii) of this Agreement and Subsection
2.3(b) of the Disclosure Schedule, there are no outstanding options, warrants,
rights (including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, to purchase or acquire from
the Company any shares of Common Stock or Series E Preferred Stock, or any
securities convertible into or exchangeable for shares of Common Stock or Series
E Preferred Stock.

 

  6 

 

 

(c)          Except as set forth in Subsection 2.3(c)(1) of the Disclosure
Schedule, no Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Agreements. Except as disclosed in the SEC
Reports or in Subsection 2.3(c)(2) of the Disclosure Schedule, there are no
outstanding options, employee or incentive stock option plans, warrants, scrip
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire any shares of Common Stock, or material contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common Stock
Equivalents. Except as set forth in Subsection 2.3(c)(3) of the Disclosure
Schedule, the issuance and sale of the Shares will not obligate the Company to
issue shares of Common Stock or other securities to any Person (other than the
Purchaser) and will not result in a right of any holder of Company securities to
adjust the exercise, conversion, exchange or reset price under any of such
securities. Except as contemplated by Section 2.6, no further approval or
authorization of any stockholder, the Board of Directors or others is required
for the issuance and sale of the Shares. There are no stockholders agreements,
voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders. Except as set forth
in Subsection 2.3(c)(4) of the Disclosure Schedule, the Company is not a party
to any Variable Rate Transaction and as of Closing, there will not be
outstanding any Equity Line of Credit nor Variable Priced Equity Linked
Instruments as of the Closing.

 

2.4           Authorization. All corporate action required to be taken by the
Company’s Board of Directors and stockholders in order to authorize the Company
to enter into the Transaction Agreements, and to issue the Shares at the Closing
and the Common Stock issuable upon conversion of the Shares, has been taken or
will be taken prior to the Closing. All action on the part of the officers of
the Company necessary for the execution and delivery of the Transaction
Agreements, the performance of all obligations of the Company under the
Transaction Agreements to be performed as of the Closing, and the issuance and
delivery of the Shares has been taken or will be taken prior to the Closing. The
Transaction Agreements, when executed and delivered by the Company, shall
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their respective terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies or (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

2.5           Valid Issuance of Shares. The Shares, when issued, sold and
delivered in accordance with the terms and for the consideration set forth in
this Agreement, will be validly issued, fully paid and nonassessable and free of
restrictions on transfer other than restrictions on transfer under the
Transaction Agreements, applicable state and federal securities laws and liens
or encumbrances created by or imposed by the Purchaser. Assuming the accuracy of
the representations of the Purchaser in Section 3 of this Agreement, the Shares
will be issued in compliance with all applicable federal and state securities
laws. The Common Stock issuable upon conversion of the Shares has been duly
reserved for issuance, and upon issuance in accordance with the terms of the
Certificate of Designation, will be validly issued, fully paid and nonassessable
and free of restrictions on transfer other than restrictions on transfer under
the Transaction Agreements, applicable federal and state securities laws and
liens or encumbrances created by or imposed by a Purchaser. Based in part upon
the representations of the Purchaser in Section 3 of this Agreement, the Common
Stock issuable upon conversion of the Shares will be issued in compliance with
all applicable federal and state securities laws.

 

2.6           Governmental Consents and Filings. Assuming the accuracy of the
representations made by the Purchaser in Section 3 of this Agreement, the
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other provincial or foreign or domestic federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Agreements, except
for (i) the filing of the Certificate of Designation, which will have been filed
as of the Initial Closing, (ii) the notice and/or application(s) to each
applicable Trading Market for the issuance and sale of the Shares and the
listing of the shares of Common Stock underlying the Shares for trading thereon
in the time and manner required thereby, and (iii) filings pursuant to
Regulation D of the Securities Act, and applicable state securities laws, which
have been made or will be made in a timely manner (collectively, the “Required
Approvals”).

 

  7 

 

 

2.7           No Conflicts. Except as set forth in Subsection 2.7 of the
Disclosure Schedule, the execution, delivery and performance by the Company of
this Agreement and the other Transaction Agreements to which it is a party, the
issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not: (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment,
acceleration, exercise, cancellation adjustment, exchange or reset of (with or
without notice, lapse of time or both) any agreement, credit facility, debt,
equity or other instrument (evidencing Company or Subsidiary equity, debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.

 

2.8           SEC Reports; Financial Statements. The Company is subject to the
reporting requirements under Sections 12(b), and 13(a) or 15(d) under the
Exchange Act. Other than as set forth in Subsection 2.8 of the Disclosure
Schedule, the Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the Securities Act and
the Exchange Act, including pursuant to Sections 12(b), 12(g), 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as
the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated
by reference therein filed not later than ten (10) days prior to the date
hereof, being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable, and none
of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved except as may be otherwise
specified in such financial statements or the notes thereto and except that
unaudited financial statements included in the SEC Reports may not contain all
footnotes required by GAAP and are subject to normal, immaterial year-end audit
adjustments, and fairly present in all material respects the financial position
of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments. The Company is, and has no reason to believe that it will not
in the foreseeable future continue to be in compliance with all its reporting
requirements under the Securities Act and Exchange Act.

 

  8 

 

 

2.9           Material Changes; Undisclosed Events, Liabilities or Developments.
Since the date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC Report or in
Subsection 2.9 of the Disclosure Schedule there has been no event, occurrence or
development that has had or that would reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any material
liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has not
issued any equity securities to any officer, director or Affiliate except
pursuant to the 2012 Plan or the 2006 Plan. The Company does not have pending
before the Commission any request for confidential treatment of information.
Except for the issuance of the Shares contemplated by this Agreement, or as set
forth in Subsection 2.9 of the Disclosure Schedule, no event, liability, fact,
circumstance, occurrence or development has occurred or exists, or is reasonably
expected to occur or exist, with respect to the Company or its Subsidiaries or
their respective businesses, properties, operations, assets or financial
condition, that would be required to be disclosed by the Company under
Applicable Law at the time this representation is made or deemed made that has
not been publicly disclosed at least two Trading Days prior to the date that
this representation is made.

 

2.10         Litigation. Except as set forth in the SEC Reports, there is no
action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Agreements or the Shares or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Except as set forth in the SEC Reports, neither the Company nor
any Subsidiary, nor, to the Company’s knowledge, any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. Except as set forth in the SEC Reports, there has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or, to the Company’s
knowledge, any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

 

2.11         Labor Relations. No labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company or
any Subsidiary, which would reasonably be expected to result in a Material
Adverse Effect. Except as disclosed in Subsection 2.11 of the Disclosure
Schedule, none of the Company’s or its Subsidiaries’ employees is a member of a
union that relates to such employee’s relationship with the Company or such
Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the
Company, no executive officer of the Company or any Subsidiary, is in violation
of any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any third party,
and the continued employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters. The Company and its Subsidiaries are in compliance with all
U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

  9 

 

 

2.12         Compliance. To the Company’s knowledge, neither the Company nor any
Subsidiary, is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary under), nor has the Company
or any Subsidiary received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any
statute, rule, ordinance or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as would not
reasonably be expected to result in a Material Adverse Effect.

 

2.13         Regulatory Permits. The Company and each Subsidiary possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports and as actually conducted,
except where the failure to possess such permits would not reasonably be
expected to result in a Material Adverse Effect (“Material Permits”), and
neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.

 

2.14         Title to Assets. Except as disclosed in the SEC Reports, the
Company and each Subsidiary have good and marketable title in fee simple to all
real property (if any) owned by them and good and marketable title in all
personal property owned by them that is material to the business of the Company
and each Subsidiary, in each case free and clear of all Liens, except for
Permitted Liens and (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and each Subsidiary and (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have
been made in accordance with GAAP and, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities held under
lease by the Company and each Subsidiary are held by them under valid,
subsisting and enforceable leases with which the Company and each Subsidiary are
in compliance.

 

2.15         Intellectual Property. (a)           The term “Intellectual
Property Rights” means:

 

(i)          the name of the Company and each Subsidiary, all fictional business
names, trading names, registered and unregistered trademarks, service marks, and
applications of the Company and each Subsidiary (collectively “Marks”),

 

(ii)         all patents and patent applications of the Company and each
Subsidiary (collectively, “Patents”);

 

(iii)        all copyrights in both published works and unpublished works of the
Company and each Subsidiary (collectively, “Copyrights”);

 

  10 

 

 

(iv)        all rights in mask works of the Company and each Subsidiary
(collectively, “Rights in Mask Works”); and

 

(v)         all know-how, trade secrets, confidential information, customer
lists, software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, “Trade Secrets”); owned, used, or
licensed by the Company and each Subsidiary as licensee or licensor

 

insofar as (i)-(v) above relate solely to the Company’s and Subsidiaries’
XpresSpa business and the name of the Company and XpresSpa Subsidiaries and in
no event to any of the Company’s other Subsidiaries.

 

(b)          Agreements. Except as set forth in the SEC Reports, there are no
outstanding and, to Company’s knowledge, no threatened disputes (in writing) or
disagreements with respect to any agreements relating to any Intellectual
Property Rights to which the Company is a party or by which the Company is
bound.

 

(c)          Know-How Necessary for the Business. Except as set forth in the SEC
Reports, the Intellectual Property Rights are all those necessary for the
operation of the Company’s and Subsidiaries’ XpresSpa business as currently
conducted. Each of the Company and each Subsidiary is the owner of all right,
title, and interest in and to each of their respective Intellectual Property
Rights, free and clear of all Liens (other than Permitted Liens) and adverse
claims, and has the right to use all of the Intellectual Property Rights. To the
Company’s knowledge, no employee of the Company or any Subsidiary has entered
into any contract that requires the employee to transfer, assign, or disclose
information concerning his work to anyone other than the Company or a
Subsidiary.

 

(d)          Patents. Except as set forth in the SEC Reports, the Company and
each Subsidiary is the owner of all right, title and interest in and to each of
the Patents related to the Company’s XpresSpa business, free and clear of all
Liens (other than Permitted Liens) and adverse claims. To the Company’s
knowledge, all of the issued Patents related to the Company’s XpresSpa business
are currently in compliance with formal legal requirements (including payment of
filing, examination, and maintenance fees and proofs of working or use), are
valid and enforceable, and are not subject to any maintenance fees or taxes or
actions falling due within ninety days after the Closing Date. No Patent related
to the Company’s XpresSpa business has been or is now involved in any
interference, reissue, reexamination, or opposition proceeding. To the Company’s
knowledge, none of the products manufactured and sold, nor any process or
know-how used, by the Company or any Subsidiary related to the Company’s
XpresSpa business infringes or is alleged to infringe any patent or other
proprietary right of any other Person for which the Company does not have a
license.

 

(e)          Trademarks. The Company and each Subsidiary is the owner of all
right, title, and interest in and to each of the Marks related to the Company’s
XpresSpa business, free and clear of all Liens (other than Permitted Liens) and
adverse claims. All Marks related to the Company’s XpresSpa business that have
been registered with the United States Patent and Trademark Office are currently
in compliance with all formal legal requirements (including the timely post
registration filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the Closing Date.
No Mark related to the Company’s XpresSpa business has been or is now involved
in any opposition, invalidation, or cancellation and, to the Company’s
knowledge, no such action is threatened with respect to any of the Marks related
to the Company’s XpresSpa business. To the Company’s knowledge, none of the
Marks related to the Company’s XpresSpa business used by the Company and each
Subsidiary infringes or is alleged to infringe any trade name, trademark, or
service mark of any third party.

 

  11 

 

 

(f)          Copyrights. The Company and each Subsidiary is the owner of all
right, title, and interest in and to each of the Copyrights related to the
Company’s XpresSpa business, free and clear of all Liens (other than Permitted
Liens) and adverse claims. All the Copyrights related to the Company’s XpresSpa
business have been registered and are currently in compliance with formal
requirements, are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the Closing Date.
To the Company’s knowledge, no Copyright related to the Company’s XpresSpa
business is infringed or has been challenged or threatened in any way. To the
Company’s knowledge, none of the subject matter of any of the Copyrights related
to the Company’s XpresSpa business infringes or is alleged to infringe any
copyright of any third party or is a derivative work based on the work of a
third party. All works encompassed by the Copyrights related to the Company’s
XpresSpa business have been marked with the proper copyright notice.

 

(g)          Trade Secrets. With respect to each Trade Secret related to the
Company’s XpresSpa business, the documentation relating to such Trade Secret
related to the Company’s XpresSpa business is current, accurate, and sufficient
in detail and content to identify and explain it and to allow its full and
proper use without reliance on the knowledge or memory of any individual. The
Company has taken all reasonable precautions to protect the secrecy,
confidentiality, and value of its Trade Secrets related to the Company’s
XpresSpa business. The Company and each Subsidiary has good title and an
absolute (but not necessarily exclusive) right to use the Trade Secrets related
to the Company’s XpresSpa business. The Trade Secrets related to the Company’s
XpresSpa business are not part of the public knowledge or literature, and, to
the Company’s knowledge, have not been used, divulged, or appropriated either
for the benefit of any Person (other the Company and each Subsidiary) or to the
detriment of the Company and each Subsidiary. No Trade Secret related to the
Company’s XpresSpa business is subject to any adverse claim or has been
challenged or threatened in writing in any way.

 

2.16          Insurance. The Company and the Subsidiaries are currently insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged. A description of the principal terms
of the Company’s directors and officers insurance policy and the name and
contact information for the issuer of such policy are set forth in Subsection
2.16 of the Disclosure Schedule. Neither the Company nor any Subsidiary believes
that it will not be able to acquire insurance coverage at reasonable cost as may
be necessary to continue its business.

 

2.17         Transactions With Affiliates and Employees. Except as set forth in
the SEC Reports, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or lending of
money to or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, stockholder, member or partner, in each case in
excess of $100,000 other than for: (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company or any Subsidiary, (iii) other employee benefits, including stock option
agreements under the 2012 Plan or the 2006 Plan or any other plan of the Company
except as disclosed in Subsection 2.17 to the Disclosure Schedule and (iv) as
described in the Company’s Annual Report on Form 10-K/A filed with the
Commission on April 30, 2018, with respect to a loan facility provided to the
Company by Rockmore Investment Master Fund Ltd.

 

  12 

 

 

2.18         Sarbanes-Oxley; Internal Accounting Controls. The Company and each
Subsidiary are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and
any and all applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of the Closing Date.
The Company and each Subsidiary maintain a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company and each Subsidiary have
established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and each Subsidiary and designed such
disclosure controls and procedures to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of
the Company and each Subsidiary as of the end of the period covered by the most
recently filed periodic report under the Exchange Act (such date, the
“Evaluation Date”). The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no changes in the internal control over financial reporting (as such term
is defined in the Exchange Act) of the Company and its Subsidiaries that have
materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting of the Company and its Subsidiaries.

 

2.19         Certain Fees. Except as set forth in Subsection 2.19 of the
Disclosure Schedule, no brokerage, finder’s fees, commissions or due diligence
fees are or will be payable by the Company or any Subsidiary to any broker,
financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the
Transaction Agreements. The Purchaser shall have no obligation with respect to
any such fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section 2.19 that may be due in
connection with the transactions contemplated by the Transaction Agreements.

 

2.20         Investment Company. The Company is not, and is not an Affiliate of,
and immediately after receipt of payment for the Shares, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in a
manner so that it will not become an “investment company” subject to
registration under the Investment Company Act of 1940, as amended.

 

2.21         Registration Rights. No Person has any right to cause the Company
or any Subsidiary to effect the registration under the Securities Act of any
securities of the Company or any Subsidiary, except for the Purchaser and as set
forth in the SEC Reports.

 

2.22         Reporting Company/Shell Company. The Company is a publicly-held
company subject to reporting obligations pursuant to Sections 12(g), 13 and
15(d) of the Exchange Act. Pursuant to the provisions of the Exchange Act, the
Company has timely filed all reports and other materials required to be filed by
the Company thereunder with the SEC during the twelve months preceding the date
of this Agreement. The Company has no reason to believe that it will not in the
year following the Closing continue to be in compliance with all listing and
reporting requirements applicable to the Company as of the Closing Date and
thereafter. As of the date of this Agreement and the Closing Date, the Company
is not a “shell company” nor a former “shell company” (as defined in Rule 405 of
the Securities Act) and has never been a “shell company”.

 

  13 

 

 

2.23         Application of Takeover Protections. The Company and the Board of
Directors has taken all necessary action in order to render inapplicable any
control share acquisition, business combination (as defined in the DGCL), poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or
similar charter documents) or the laws of Delaware, including under
Section 203(a)(l) of the DGCL that are or could become applicable to the
Purchaser as a result of the Purchaser and the Company fulfilling their
obligations or exercising their rights under the Transaction Agreements,
including without limitation as a result of the Company’s issuance of the Shares
and the Purchaser’s ownership of the Shares.

 

2.24         Disclosure. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Agreements, the
Company confirms that neither it nor any other Person acting on its behalf has
provided the Purchaser or their agents or counsel with any information that it
believes constitutes or might constitute material, non-public information. The
Company understands and confirms that the Purchaser will rely on the foregoing
representation in effecting transactions in securities of the Company. All of
the disclosure furnished by or on behalf of the Company to the Purchaser
regarding the Company and its Subsidiaries, their respective businesses and the
transactions contemplated hereby, including the Disclosure Schedule to this
Agreement, when taken together as a whole, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The press releases
disseminated by the Company during the twelve months preceding the date of this
Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made and when made, not misleading. The Company acknowledges and
agrees that no Purchaser makes or has made any representations or warranties
with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3 hereof.

 

2.25         No Integrated Offering. Assuming the accuracy of the Purchaser’s
representations and warranties set forth in Section 3, neither the Company, nor,
to the Company’s knowledge, any of its Affiliates, nor any Person acting on its
or, to the Company’s knowledge, their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause the offering of the Shares to be integrated
with prior offerings by the Company for purposes of: (i) the Securities Act
which would require the registration of any such securities under the Securities
Act, or (ii) any applicable shareholder approval provisions of any Trading
Market on which any of the securities of the Company are listed or designated.

 

  14 

 

 

2.26         Solvency. Based on the consolidated financial condition of the
Company and Subsidiaries as of the Closing Date, and the Company’s good faith
estimate of the fair market value of its assets, after giving effect to the
receipt by the Company of the proceeds from the sale of the Shares hereunder:
(i) the fair saleable value of the Company’s assets exceeds the amount that will
be required to be paid on or in respect of the Company’s existing debts and
other liabilities (including known contingent liabilities) as they mature, (ii)
the Company’s assets do not constitute unreasonably small capital to carry on
its business as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, consolidated and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its
liabilities when such amounts are required to be paid. The Company does not
intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year
from the Closing Date. Subsection 2.26 of the Disclosure Schedule sets forth as
of the date hereof all outstanding secured and unsecured Indebtedness of the
Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement, “Indebtedness” means (x) any
liabilities for borrowed money or amounts owed in excess of $400,000 in the
aggregate (other than trade accounts payable incurred in the ordinary course of
business), (y) all guaranties, endorsements and other contingent obligations in
respect of indebtedness of others, whether or not the same are or should be
reflected in the Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and (z)
the present value of any lease payments in excess of $400,000 due under leases
required to be capitalized in accordance with GAAP. Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

 

2.27         Tax Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all required
United States federal, state and local income and all foreign income and
franchise tax returns, reports and declarations required by any jurisdiction to
which it is subject, (ii) has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no reasonable basis for any such claim.

 

2.28         Foreign Corrupt Practices. Neither the Company nor any Subsidiary,
nor to the knowledge of the Company or any Subsidiary, any agent or other person
acting on behalf of the Company or any Subsidiary, has: (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law or (iv) violated in any
material respect any provision of FCPA.

 

2.29         Accountants and Lawyers. The Company’s accounting firm is set forth
on Subsection 2.29 of the Disclosure Schedule. To the knowledge and belief of
the Company, such accounting firm: (i) is a registered public accounting firm as
required by the Exchange Act and (ii) shall express its opinion with respect to
the financial statements to be included in the Company’s Annual Report for the
fiscal year ending December 31, 2018. There are no disagreements of any kind
presently existing between the Company and the accountants and lawyers formerly
or presently employed by the Company and the Company is current with respect to
any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction
Agreements.

 

  15 

 

 

2.30         Acknowledgment Regarding Purchaser’s Purchase of Shares. The
Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Agreements
and the transactions contemplated thereby. The Company further acknowledges that
no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Agreements and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Agreements and the transactions contemplated thereby is merely incidental to the
Purchaser’s purchase of the Shares. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Agreements has been based solely on the independent evaluation of
the transactions contemplated hereby by the Company and its representatives.

 

2.31         [Reserved.]

 

2.32         Regulation M Compliance. The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any of the
Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting
purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person
any compensation for soliciting another to purchase any other securities of the
Company.

 

2.33         Money Laundering. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering Laws” ), and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiary with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.

 

2.34         Stock Option Plans. Each stock option and similar security granted
by the Company was granted (i) in accordance with the terms of such any
applicable stock option plans and (ii) with an exercise price at least equal to
the fair market value of the Common Stock on the date such stock option would be
considered granted under GAAP and applicable law. No stock option granted under
any stock option plan has been backdated. The Company has not knowingly granted,
and there is no and has been no Company policy or practice to knowingly grant,
stock options prior to, or otherwise knowingly coordinate the grant of stock
options with, the release or other public announcement of material information
regarding the Company or its Subsidiaries or their financial results or
prospects.

 

2.35         Office of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).

 

2.36         Private Placement. Assuming the accuracy of the Purchaser’s
representations and warranties set forth in Section 3, no registration under the
Securities Act is required for the offer and sale of the Shares by the Company
to the Purchaser as contemplated hereby. The issuance and sale of the Shares
hereunder does not contravene the rules and regulations of the Trading Market.

 

2.37         No General Solicitation. Neither the Company nor any person acting
on behalf of the Company has offered or sold any of the Shares by any form of
general solicitation or general advertising. The Company has offered the Shares
for sale only to the Purchaser and certain other accredited investors as defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act..

 

  16 

 

 

2.38         Indebtedness and Seniority of Equity. As of the date hereof, all
Indebtedness of the Company and the principal terms thereof are set forth in the
SEC Reports. Except as set forth on Subsection 2.38 of the Disclosure Schedule,
as of the Closing Date, no equity securities of the Company are or will be pari
passu or senior to the Shares in right of payment, whether with respect to the
payment of dividends or upon liquidation or dissolution, or otherwise.

 

2.39         Listing and Maintenance Requirements. The Common Stock is listed on
the Nasdaq Capital Market under the symbol “XSPA.” Except as set forth in
Subsection 2.39 of the Disclosure Schedule or disclosed in the SEC Reports, the
Company has not, in the twelve (12) months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is or has been listed
or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market.

 

2.40         FDA. The Company has no products subject to the jurisdiction of the
U.S. Food and Drug Administration.

 

2.41         No Disqualification Events. With respect to the Shares to be
offered and sold hereunder in reliance on Rule 506 under the Securities Act,
none of the Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company participating in the
offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power,
nor any promoter (as that term is defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a
Disqualification Event. The Company has complied, to the extent applicable, with
its disclosure obligations under Rule 506(e), and has furnished to the Purchaser
a copy of any disclosures provided thereunder.

 

2.42         Regulatory Matters. The Company and its Subsidiaries have complied
in all material respects with all statutes and regulations related to the
research, manufacture and sale of its products to the extent applicable to the
Company’s and its Subsidiaries’ activities.

 

2.43         Other Covered Persons. Except as set forth in Subsection 2.43 of
the Disclosure Schedule or to attorneys for legal services, the Company is not
aware of any person that has been or will be paid (directly or indirectly)
remuneration in connection with the sale of any Regulation D Securities pursuant
to this Agreement.

 

2.44         No Outstanding Variable Priced Equity Linked Instruments. As of the
Closing Date and except as set forth in Subsection 2.38 of the Disclosure
Schedule, the Company does not have outstanding nor issuable any Variable Priced
Equity Linked Instruments, nor any debt or equity with antidilution (other than
adjustments for stock splits, distributions, dividends, recapitalizations,
fundamental transactions and the like), ratchet or reset rights.

 

2.45         Survival. The foregoing representations and warranties shall
survive the Closing.

 

  17 

 

 

3.           Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company that:

 

3.1           Authorization. The Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. The Purchaser has full power and authority to enter into the
Transaction Agreements. The Transaction Agreements to which the Purchaser is a
party, when executed and delivered by the Purchaser, will constitute valid and
legally binding obligations of the Purchaser, enforceable in accordance with
their terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and any other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

3.2           Purchase Entirely for Own Account. This Agreement is made with the
Purchaser in reliance upon the Purchaser’s representation to the Company, which
by the Purchaser’s execution of this Agreement, the Purchaser hereby confirms,
that the Shares to be acquired by the Purchaser will be acquired for investment
for the Purchaser’s own account, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and that the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, the Purchaser further
represents that the Purchaser does not presently have any contract, undertaking,
agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to any of the
Shares. The Purchaser has not been formed for the specific purpose of acquiring
the Shares.

 

3.3           Disclosure of Information. The Purchaser has had an opportunity to
discuss the Company’s business, management, financial affairs and the terms and
conditions of the offering of the Shares with the Company’s management and has
had an opportunity to review the Company’s facilities. The foregoing, however,
does not limit or modify the representations and warranties of the Company in
Section 2 of this Agreement or the right of the Purchaser to rely thereon.

 

3.4           Restricted Securities. The Purchaser understands that the Shares
have not been, and will not be, registered under the Securities Act, by reason
of a specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Purchaser’s representations as expressed herein.
The Purchaser understands that the Shares are “restricted securities” under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, the Purchaser must hold the Shares indefinitely unless they are registered
with the Securities and Exchange Commission and qualified by state authorities,
or an exemption from such registration and qualification requirements is
available. The Purchaser acknowledges that the Company has no obligation to
register or qualify the Shares, or the Common Stock into which it may be
converted, for resale. The Purchaser further acknowledges that if an exemption
from registration or qualification is available, it may be conditioned on
various requirements including, the time and manner of sale, the holding period
for the Shares, and on requirements relating to the Company which are outside of
the Purchaser’s control, and which the Company is under no obligation and may
not be able to satisfy.

 

3.5           No Public Market. The Purchaser understands that no public market
now exists for the Shares, and that the Company has made no assurances that a
public market will ever exist for the Shares.

 

3.6           Legends. The Purchaser understands that the Shares and any
securities issued in respect of or exchange for the Shares, may be notated with
one or all of the following legends:

 

  18 

 

 

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

(a)          Any legend set forth in, or required by, the other Transaction
Agreements.

 

(b)          Any legend required by the securities laws of any state to the
extent such laws are applicable to the Shares represented by the certificate,
instrument, or book entry so legended.

 

3.7           Accredited Investor. The Purchaser is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

 

3.8           No General Solicitation. Neither the Purchaser, nor any of its
officers, directors, employees, agents, stockholders or partners has either
directly or indirectly, including, through a broker or finder (a) engaged in any
general solicitation, or (b) published any advertisement in connection with the
offer and sale of the Shares.

 

3.9           Exculpation Among Purchaser. The Purchaser acknowledges that it is
not relying upon any Person, other than the Company and its officers and
directors, in making its investment or decision to invest in the Company.

 

3.10         Residence. The office of the Purchaser in which its principal place
of business is identified in the address of the Purchaser set forth on the
signature page.

 

4.           Covenants of the Company.

 

4.1           Lock-Up Agreements. The Company shall have received and delivered
to Purchaser on or before the Initial Closing “lock-up” agreements, each
substantially in the form of Exhibit C hereto, executed by officers and
directors of the Company and shareholders of the Company affiliated with the
Company’s officers and directors (including, Rockmore Investment Master Fund
Ltd. and Mistral Spa Holdings, LLC) relating to sales and certain other
dispositions of shares of Common Stock or certain other securities, and such
“lock-up” agreements shall be in full force and effect on the Initial Closing.

 

  19 

 

 

4.2           Exclusivity. During the period beginning on the date hereof and
ending on the date that is sixty (60) days after the date hereof (the
“Exclusivity Period”), the Company shall not, and shall not authorize or permit
any of its Representatives to, without Purchaser’s consent, directly or
indirectly, solicit, initiate or take any action to facilitate or encourage any
inquiries or the making of any proposal from a person or group of persons other
than Purchaser and its affiliates that may constitute, or could reasonably be
expected to lead to, a Competing Transaction (as defined below); (ii) enter into
or participate in any discussions or negotiations with any person or group of
persons other than Purchaser and its affiliates regarding a Competing
Transaction; (iii) furnish any information relating to the Company or any of its
subsidiaries, assets or businesses, or afford access to the assets, business,
properties, books or records of the Company or any of its subsidiaries to any
person or group of persons other than Purchaser and its Representatives, in all
cases for the purpose of assisting with or facilitating a Competing Transaction,
or enter into any agreement, agreement in principle or other commitment (whether
or not legally binding) with respect to a loan or credit facility, co-marketing
agreement (other than with respect to co-marketing of retail products),
licensing agreement, joint venture or partnership (other than current or
potential joint ventures or partnerships between the Company and the entities
listed in Annex I), merger, sale of substantially all of its assets or capital
stock, business combination, or equity raise (a “Competing Transaction”), or
knowingly solicit, initiate or encourage the submission of any proposal or offer
from any person or entity (including any of their officers, directors,
employees, representatives or agents) relating to any Competing Transaction.
Further, the Company shall not participate in or cooperate with any due
diligence efforts of any other party interested in a Competing Transaction.
However, nothing herein shall limit the Company from pursuing leases, franchise
and other operational agreements or, negotiating and/or consummating any draw
down or refinancing of all, or any portion, of or under its current debt
financing arrangements (the convertible notes held by Alpha Capital Anstalt and
the other investors party to that certain Securities Purchase Agreement, dated
as of May 15, 2018, by and among XpresSpa Group, Inc. and each purchaser party
thereto, loans expected to be made by American Express and all Indebtedness
outstanding pursuant to the Credit Agreement and Waiver dated as of April 22,
2015, as subsequently amended, by and between XpresSpa Holdings, LLC and
Rockmore Investment Master Fund Ltd., collectively, the “Existing Lenders”),
provided that the Company shall promptly deliver any such financing proposals,
term sheets, loan agreements, or related documents to the Purchaser prior to
entering into any refinancing with any party other than an Existing Lender and
such refinancing shall not conflict with the consummation of the transactions
contemplated by Transaction Agreements, paying such debt as it becomes due
(principal and interest) in equity or honoring outstanding obligations under
convertible or exercisable securities.

 

4.3           Board Observer. The Purchaser shall be entitled to appoint one
nonvoting observer (the “Observer”) to attend each meeting of the Company’s
board of directors (the “Board”) or committee of the Board and to receive copies
of all communications received by the Board members, including, without
limitation, notices regarding the call of meetings, provided, however, that the
Company reserves the right to exclude the Observer from access to any portion of
materials or any portion of a meeting to the extent such portion of the
materials or meeting contains information (i) the disclosure of which would, in
the opinion of the Company or its counsel, adversely affect the attorney-client
privilege between the Company and its counsel, (ii) the Board determines that
the Observer has a conflict of interest that is specific to the Observer or
(iii) the Board otherwise determines that Observers receipt of such materials or
attendance at such meeting would materially and adversely affect the Company.
Upon reasonable notice and at a scheduled meeting of the Board or such other
time, if any, as the Board may determine in its sole discretion, Observer may
address the Board with respect to the Purchaser’s concerns regarding significant
business issues facing the Company. Prior to attendance at any meeting of the
Company’s Board or the receipt of copies of any communications received by the
Board members, the Observer shall enter into a standard Regulation FD
Confidentiality Agreement reasonably acceptable to the Company. The Purchaser
agrees and Observer or any other representative of the Purchaser shall agree, to
keep confidential and not disclose, divulge, or use for any purpose (other than
to monitor its investment in the Company), including trading, any confidential
information obtained from the Company pursuant to the terms of this Section 4.3
other than to the Purchaser’s attorneys, accountants, consultants, and other
professionals, to the extent necessary to obtain their services in connection
with monitoring the Purchaser’s investment in the Company; provided, however,
that prior to the disclosure of any confidential information obtained from the
Company pursuant to the terms of this Section 4.3 to any of the Purchaser’s
representatives, any such representative shall have entered into a standard
Regulation FD Confidentiality Agreement reasonably acceptable to the Company.

 

  20 

 

 

5.            Covenants of the Purchaser.

 

5.1           Restriction on Sale of Shares. The Purchaser covenants with the
Company that, without the prior written consent of the Company, the Purchaser
will not, during the period ending 180 days after the date of the execution of
this Agreement (the “Restricted Period”), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock
beneficially owned (as such term is used in Rule 13d-3 of the Securities
Exchange Act), by the Purchaser or any other securities so owned convertible
into or exercisable or exchangeable for Common Stock (including Series D
Preferred Stock, Series E Preferred Stock or any warrants or options convertible
into or exercisable or exchangeable for Common Stock) or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (a) transactions relating to shares of Common Stock
or other securities acquired in open market transactions after the execution of
this Agreement, provided that no filing under Section 16(a) of the Exchange Act
shall be required or shall be voluntarily made in connection with subsequent
sales of Common Stock or other securities acquired in such open market
transactions, (b) transfers of shares of Common Stock or any security
convertible into Common Stock as a bona fide gift, or (c) distributions of
shares of Common Stock or any security convertible into Common Stock (including
shares of the Series D Preferred Stock and Series E Preferred Stock) to limited
partners or stockholders of the Purchaser; provided that in the case of any
transfer or distribution pursuant to clause (b) or (c), (i) each donee or
distributee shall sign and deliver a lock-up letter substantially to the effect
of this Section 5.1 and (ii) no filing under Section 16(a) of the Exchange Act,
reporting a reduction in beneficial ownership of shares of Common Stock, shall
be required or shall be voluntarily made during the Restricted Period, or (d)
the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange
Act for the transfer of shares of Common Stock, provided that (i) such plan does
not provide for the transfer of Common Stock during the Restricted Period and
(ii) to the extent a public announcement or filing under the Exchange Act, if
any, is required of or voluntarily made by or on behalf of the Purchaser
regarding the establishment of such plan, such announcement or filing shall
include a statement to the effect that no transfer of Common Stock may be made
under such plan during the Restricted Period. The Purchaser also agrees and
consents to the entry of stop transfer instructions with the Purchaser’s
transfer agent and registrar against the transfer of the Purchaser’s shares
except in compliance with the foregoing restrictions.

 

6.           Conditions to the Purchaser’ Obligations at Closing. The
obligations of the Purchaser to purchase Shares at the Initial Closing or the
Second Closing are subject to the fulfillment, on or before such Closing, of
each of the following conditions, unless otherwise waived:

 

6.1           Representations and Warranties. The representations and warranties
of the Company contained in Section 2 shall be true and correct in all material
respects (determined without regard to any materiality, Material Adverse Effect
or other similar qualifiers therein) as of the Initial Closing.

 

6.2           Performance. The Company shall have performed and complied in all
material respects with all covenants, agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by the Company on or before such Closing.

 

6.3           Collaboration Agreement. The Company shall have executed the
Collaboration Agreement and performed all of its obligations thereunder in all
material respects and complied in all material respects with all covenants,
agreements, and conditions contained therein through, with respect to the
Initial Closing, the date of the Initial Closing and, with respect to the Second
Closing, December 31, 2018, including placing all Products (as defined in the
Collaboration Agreement) identified as of the Closing on the designated shelves
within ten (10) days of receipt of such Products by each Store (as defined in
the Collaboration Agreement).

 

  21 

 

 

6.4           Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be obtained and effective as of such
Closing.

 

6.5           Opinion of Company Counsel. The Purchaser shall have received from
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the Company, an
opinion, dated as of the Initial Closing, in substantially the form of Exhibit D
attached to this Agreement.

 

6.6           Certificate of Designation. The Company shall have filed the
Certificate of Designation with the Secretary of State of Delaware on or prior
to the Closing, which shall continue to be in full force and effect as of the
Closing.

 

6.7           Secretary’s Certificate. The Secretary of the Company shall have
delivered to the Purchaser at the Closing a certificate certifying (i) the
Bylaws of the Company and (ii) resolutions of the Board of Directors of the
Company approving the Transaction Agreements and the transactions contemplated
under the Transaction Agreements.

 

6.8           Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Purchaser, and the Purchaser (or its counsel) shall have received all such
counterpart original and certified or other copies of such documents as
reasonably requested. Such documents may include good standing certificates.

 

6.9           Material Adverse Effect. From the date of this Agreement, there
shall not have occurred any Material Adverse Effect, nor shall any event or
events have occurred that, individually or in the aggregate, with or without the
lapse of time, could reasonably be expected to result in a Material Adverse
Effect.

 

7.           Conditions of the Company’s Obligations at Closing. The obligations
of the Company to sell Shares to the Purchaser at the Initial Closing or the
Second Closing are subject to the fulfillment, on or before the Closing, of each
of the following conditions, unless otherwise waived:

 

7.1           Representations and Warranties. The representations and warranties
of the Purchaser contained in Section 3 shall be true and correct in all
material respects (determined without regard to any materiality, Material
Adverse Effect or other similar qualifiers therein) as of such Closing.

 

7.2           Performance. The Purchaser shall have performed in all material
respects and complied in all material respects with all covenants, agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by them on or before such Closing.

 

7.3           Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be obtained and effective as of the
Closing.

 

  22 

 

 

7.4           Collaboration Agreement. The Purchaser shall have executed the
Collaboration Agreement and performed all of its obligations thereunder in all
material respects and complied in all material respects with all covenants,
agreements, and conditions contained therein through, with respect to the
Initial Closing, the date of the Initial Closing and, with respect to the Second
Closing, December 31, 2018.

 

8.            Miscellaneous.

 

8.1           Survival of Warranties. Unless otherwise set forth in this
Agreement, the representations and warranties of the Company and the Purchaser
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing and shall in no way be affected by
any investigation or knowledge of the subject matter thereof made by or on
behalf of the Purchaser or the Company.

 

8.2           Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.

 

8.3           Governing Law. This Agreement shall be governed by the internal
law of the State of New York, without regard to conflict of law principles that
would result in the application of any law other than the law of the State of
New York.

 

8.4           Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Counterparts may be
delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g.,
www.docusign.com) or other transmission method and any counterpart so delivered
shall be deemed to have been duly and validly delivered and be valid and
effective for all purposes.

 

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

 

8.6           Notices. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed effectively
given upon the earlier of actual receipt, or (a) personal delivery to the party
to be notified, (b) when sent, if sent by electronic mail or facsimile during
normal business hours of the recipient, and if not sent during normal business
hours, then on the recipient’s next business day, (c) five (5) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one (1) business day after deposit with a nationally recognized
overnight courier, freight prepaid, specifying next business day delivery, with
written verification of receipt. All communications shall be sent to the
respective parties at their address as set forth on the signature page, or to
such e-mail address, facsimile number or address as subsequently modified by
written notice given in accordance with this Section 8.6. If notice is given to
the Company, a copy shall also be sent to Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C., Chrysler Center, 666 3rd Avenue, New York, NY 10017, Attn:
Kenneth R. Koch, Esq., email: krkoch@mintz.com and if notice is given to the
Purchaser, a copy shall also be given to Davis Polk & Wardwell LLP, 1600 El
Camino Real, Menlo Park, CA 94025, Attn: Alan Denenberg and Don Lang, email:
alan.denenberg@davispolk.com and donald.lang@davispolk.com.

 

  23 

 

 

8.7           No Finder’s Fees. Except as set forth in Subsection 2.19 of the
Disclosure Schedule, each party represents that it neither is nor will be
obligated for any finder’s fee or commission in connection with this
transaction. The Purchaser agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder’s or broker’s fee arising out of this transaction (and the costs and
expenses of defending against such liability or asserted liability) for which
the Purchaser or any of its officers, employees or representatives is
responsible. The Company agrees to indemnify and hold harmless the Purchaser
from any liability for any commission or compensation in the nature of a
finder’s or broker’s fee arising out of this transaction (and the costs and
expenses of defending against such liability or asserted liability) for which
the Company or any of its officers, employees or representatives is responsible.

 

8.8           Fees and Expenses. Irrespective of whether any Closing is
effected, each of the Company and the Purchaser shall pay all costs and expenses
that it respectively incurs with respect to the negotiation, execution, delivery
and performance of this Agreement. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the Transaction
Agreements or the Certificate of Designation, the prevailing party shall be
entitled to reasonable attorney’s fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

 

8.9           Amendments and Waivers. Except as set forth in Section 1.2 of this
Agreement, any term of this Agreement may be amended, terminated or waived only
with the written consent of the Company and the holders of a majority of the
then-outstanding Shares. Any amendment or waiver effected in accordance with
this Section 8.9 shall be binding upon the Purchaser and each transferee of the
Shares (or the Common Stock issuable upon conversion thereof), each future
holder of all such securities, and the Company.

 

8.10         Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.

 

8.11         Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.

 

8.12         Entire Agreement. This Agreement (including the Exhibits hereto),
the Certificate of Designation and the other Transaction Agreements constitute
the full and entire understanding and agreement between the parties with respect
to the subject matter hereof, and any other written or oral agreement relating
to the subject matter hereof existing between the parties are expressly
canceled.

 

8.13         Termination of Closing Obligations. The Purchaser shall have the
right to terminate its obligations to complete the Initial Closing or the Second
Closing, as the case may be, if prior to the occurrence thereof, any of the
following occurs:

 

  24 

 

 

(a)          the Company consummates a Deemed Liquidation Event (as defined in
the Certificate of Designation); or

 

(b)          the Company (i) applies for or consents to the appointment of a
receiver, trustee, custodian or liquidator of itself or substantially all of its
property, (ii) becomes subject to the appointment of a receiver, trustee,
custodian or liquidator of itself or substantially all of its property, (iii)
makes an assignment for the benefit of creditors, (iv) institutes any
proceedings under the United States Bankruptcy Code or any other federal or
state bankruptcy, reorganization, receivership, insolvency or other similar law
affecting the rights of creditors generally, or files a petition or answer
seeking reorganization or an arrangement with creditors to take advantage of any
insolvency law, or files an answer admitting the material allegations of a
bankruptcy, reorganization or insolvency petition filed against it, or (v)
becomes subject to any involuntary proceedings under the United States
Bankruptcy Code or any other federal or state bankruptcy, reorganization,
receivership, insolvency or other similar law affecting the rights of creditors
generally, when proceeding is not dismissed within thirty (30) days of filing,
or have an order for relief entered against it in any proceedings under the
United States Bankruptcy Code.

 

8.14         WAIVER OF JURY TRIAL. Waiver of Jury Trial: EACH PARTY HEREBY
WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES
OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO
BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN
FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE
SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.

 

[Remainder of page intentionally left blank]

  25 

 

 

IN WITNESS WHEREOF, the parties have executed this Series E Preferred Stock
Purchase Agreement as of the date first written above.

 

  COMPANY:  XPRESSPA GROUP, INC.         By: /s/ Edward Jankowski         Name:
Edward Jankowski     (print)       Title: Chief Executive Officer        
Address: 780 Third Avenue, 12th Floor                                   New
York, New York 10017

 

Signature Page to Stock Purchase Agreement

 

 

 

  PURCHASER:  CALM.COM, INC.       Michael Acton Smith       (Print Name of
Purchaser)         By: /s/ Michael Acton Smith         Name: Michael Acton Smith
    (print)         Title:           Address:   140 Second Street,       San
Francisco, California 94105       PURCHASER:  CALM.COM, INC.       Alex Tew    
  (Print Name of Purchaser)         By: /s/ Alex Tew         Name: Alex Tew    
(print)         Title:                                               Address:  
140 Second Street,       San Francisco, California 94105

 

Signature Page to Stock Purchase Agreement

 

 

 

 

EXHIBITS

 

Exhibit A -   FORM OF CERTIFICATE OF DESIGNATION       Exhibit B -   DISCLOSURE
SCHEDULE       Exhibit C -   FORM OF LOCK-UP AGREEMENT       Exhibit D -   FORM
OF LEGAL OPINION OF COMPANY COUNSEL       Annex I -   CURRENT OR POTENTIAL JOINT
VENTURES OR PARTNERSHIPS BETWEEN THE COMPANY AND ENTITIES

 

 

 

 

EXHIBIT A

 

FORM OF CERTIFICATE OF DESIGNATION

 

 

 

 

EXHIBIT B

 

DISCLOSURE SCHEDULE

 

 

 

 

EXHIBIT C

 

FORM OF LOCK-UP AGREEMENT

 

 

 

 

EXHIBIT D

 

FORM OF LEGAL OPINION OF COMPANY COUNSEL

 

 

 

 

ANNEX I

 

CURRENT OR POTENTIAL JOINT VENTURES OR PARTNERSHIPS BETWEEN THE
COMPANY AND ENTITIES