EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of the 19th day
of December 2016, by and between Imprimis Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and each individual or entity named on the Schedule
of Buyers attached hereto (each such individual or entity, individually, a
“Buyer” and all of such individuals or entities, collectively, the “Buyers”).

 

RECITALS

 

A.        Subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506(b) promulgated thereunder, the Company desires
to issue and sell to each Buyer, and each Buyer, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully
described in this Agreement.

 

B.       In connection with the offering, the Company, together with National
Securities Corporation (the “Placement Agent”), have entered into an escrow
agreement, in the form attached hereto as Exhibit C (the “Escrow Agreement”),
with Delaware Trust Company (the “Escrow Agent”), to hold the Purchase Price (as
hereinafter defined), to be released at the Closing to the Company, upon the
written consent of the Company and the Placement Agent.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the
parties hereinafter expressed and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
each intending to be legally bound, agree as follows:

 

ARTICLE I

RECITALS, EXHIBITS, SCHEDULES

 

The foregoing recitals are true and correct and, together with the Schedules and
Exhibits referred to hereafter, are hereby incorporated into this Agreement by
this reference.

 

ARTICLE II

DEFINITIONS

 

For purposes of this Agreement, except as otherwise expressly provided or
otherwise defined elsewhere in this Agreement, or unless the context otherwise
requires, the capitalized terms in this Agreement shall have the meanings
assigned to them in this Article as follows:

 

2.1       “Affiliate” means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the
Securities Act.

 

   

   

 

2.2       “Assets” means all of the properties and assets of the Company and its
Operating Subs, whether real, personal or mixed, tangible or intangible,
wherever located, whether now owned or hereafter acquired.

 

2.3       “Buyer’s Purchase Price” shall mean, with respect to any Buyer, the
“Purchase Price” opposite such Buyer’s name on the Schedule of Buyers.

 

2.4       “Claims” means any Proceedings, Judgments, Obligations, known threats,
losses, damages, deficiencies, settlements, assessments, charges, costs and
expenses of any nature or kind.

 

2.5       “Common Stock” means the Company’s common stock, $0.001 par value per
share.

 

2.6       “Consent” means any consent, approval, order or authorization of, or
any declaration, filing or registration with, or any application or report to,
or any waiver by, or any other action (whether similar or dissimilar to any of
the foregoing) of, by or with, any Person, which is necessary in order to take a
specified action or actions, in a specified manner and/or to achieve a specific
result.

 

2.7       “Contract” means any written or oral contract, agreement, order or
commitment of any nature whatsoever, including, any sales order, purchase order,
lease, sublease, license agreement, services agreement, loan agreement,
mortgage, security agreement, guarantee, management contract, employment
agreement, consulting agreement, partnership agreement, shareholders agreement,
buy-sell agreement, option, warrant, debenture, subscription, call or put.

 

2.8       “Encumbrance” means any lien, security interest, pledge, mortgage,
easement, leasehold, assessment, tax, covenant, restriction, reservation,
conditional sale, prior assignment, or any other encumbrance, claim, burden or
charge of any nature whatsoever.

 

2.9       “Environmental Requirements” means all Laws and requirements relating
to human, health, safety or protection of the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants, or
Hazardous Materials in the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), or
otherwise relating to the treatment, storage, disposal, transport or handling of
any Hazardous Materials.

 

2.10       “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

 

2.11       “GAAP” means generally accepted accounting principles, methods and
practices set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants, and
statements and pronouncements of the Financial Accounting Standards Board, the
SEC or of such other Person as may be approved by a significant segment of the
U.S. accounting profession, in each case as of the date or period at issue, and
as applied in the U.S. to U.S. companies.

 

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2.12       “Governmental Authority” means any foreign, federal, state or local
government, or any political subdivision thereof, or any court, agency or other
body, organization, group, stock market or exchange exercising any executive,
legislative, judicial, quasi-judicial, regulatory or administrative function of
government.

 

2.13       “Hazardous Materials” means: (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls (PCB’s);
(ii) any chemicals, materials, substances or wastes which are now or hereafter
become defined as or included in the definition of “hazardous substances,”
“hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,”
“restricted hazardous wastes,” “toxic substances,” “toxic pollutants” or words
of similar import, under any Law; and (iii) any other chemical, material,
substance, or waste, exposure to which is now or hereafter prohibited, limited
or regulated by any Governmental Authority.

 

2.14       “Judgment” means any order, writ, injunction, fine, citation, award,
decree, or any other judgment of any nature whatsoever of any Governmental
Authority.

 

2.15       “Law” means any provision of any law, statute, ordinance, code,
constitution, charter, treaty, rule or regulation of any Governmental Authority
applicable to the Company.

 

2.16       “Leases” means all leases for real or personal property.

 

2.17       “Material Adverse Effect” means with respect to the event, item or
question at issue, that such event, item or question would not have or
reasonably be expected to result in: (i) a material adverse effect on the
legality, validity or enforceability of this Agreement or any of the Transaction
Documents; (ii) a material adverse effect on the results of operations, Assets,
business or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole; or (iii) a material adverse effect on the
Company’s or its subsidiaries’ ability to perform, on a timely basis, its or
their respective Obligations under this Agreement or any Transaction Documents.

 

2.18       “Material Contract” means any Contract to which the Company is a
party or by which it is bound which has been filed or is required to have been
filed as an exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item
601(b)(10) of Regulation S-K promulgated by the SEC.

 

2.19       “Obligation” means any debt, liability or obligation of any nature
whatsoever, whether secured, unsecured, recourse, nonrecourse, liquidated,
unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained,
known, unknown or obligations under executory Contracts.

 

2.20       “Operating Sub” shall have the meaning given in Section 6.1.

 

2.21       “Ordinary Course of Business” means the ordinary course of business
consistent with past custom and practice (including with respect to quantity,
quality and frequency).

 

2.22       “Outside Closing Date” shall have the meaning given in Section 12.1.

 

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2.23       “Permit” means any license, permit, approval, waiver, order,
authorization, right or privilege of any nature whatsoever, granted, issued,
approved or allowed by any Governmental Authority.

 

2.24       “Person” means any individual, sole proprietorship, joint venture,
partnership, company, corporation, association, cooperation, trust, estate,
Governmental Authority, or any other entity of any nature whatsoever.

 

2.25       “Principal Trading Market” shall mean the Nasdaq Global Select
Market, the Nasdaq Global Market, the Nasdaq Capital Market, the OTC Markets,
including the Bulletin Board and Pink Sheets, the NYSE Euronext or the New York
Stock Exchange, whichever is at the time the principal trading exchange or
market for the Common Stock.

 

2.26       “Proceeding” means any demand, claim, suit, action, litigation,
investigation, audit, study, arbitration, administrative hearing, or any other
proceeding of any nature whatsoever.

 

2.27       “Real Property” means any real estate, land, building, structure,
improvement, fixture or other real property of any nature whatsoever, including,
but not limited to, fee and leasehold interests.

 

2.28       “Registration Rights Agreement” means the Registration Rights
Agreement, dated the date hereof, among the Company and the Buyers, in the form
of Exhibit A attached hereto.

 

2.29       “SEC” means the United States Securities and Exchange Commission.

 

2.30       “SEC Documents” shall have the meaning given in Section 6.7.

 

2.31       “Securities” means collectively, the Shares, the Warrants and the
Warrant Shares.

 

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

 

2.33       “Shares” shall have the meaning given in Section 4.1.

 

2.34       “Tax” means (i) any foreign, federal, state or local income, profits,
gross receipts, franchise, sales, use, occupancy, general property, real
property, personal property, intangible property, transfer, fuel, excise,
accumulated earnings, personal holding company, unemployment compensation,
social security, withholding taxes, payroll taxes, or any other tax of any
nature whatsoever, (ii) any foreign, federal, state or local organization fee,
qualification fee, annual report fee, filing fee, occupation fee, assessment,
rent, or any other fee or charge of any nature whatsoever, or (iii) any
deficiency, interest or penalty imposed with respect to any of the foregoing.

 

2.35       “Tax Return” means any tax return, filing, declaration, information
statement or other form or document required to be filed in connection with or
with respect to any Tax.

 

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2.36       “Transaction Documents” means this Agreement, the Registration Rights
Agreement and the Warrant executed in connection with the transactions
contemplated hereunder.

 

2.37       “Units” shall have the meaning given in Section 4.1.

 

2.38       “Warrants” means the Warrants, dated the date hereof, issued by the
Company to each Buyer, in the form of Exhibit B attached hereto.

 

2.39       “Warrant Shares” shall have the meaning given in Section 4.1.

 

ARTICLE III

INTERPRETATION

 

In this Agreement, unless the express context otherwise requires: (i) the words
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement; (ii)
references to the words “Article” or “Section” refer to the respective Articles
and Sections of this Agreement, and references to “Exhibit” or “Schedule” refer
to the respective Exhibits and Schedules annexed hereto; (iii) references to a
“party” mean a party to this Agreement and include references to such party’s
permitted successors and permitted assigns; (iv) references to a “third party”
mean a Person not a party to this Agreement; (v) the terms “dollars” and “$”
means U.S. dollars; (vi) wherever the word “include,” “includes” or “including”
is used in this Agreement, it will be deemed to be followed by the words
“without limitation.”

 

ARTICLE IV

PURCHASE AND SALE

 

4.1       Sale and Issuance of Units. Subject to the terms and conditions of
this Agreement, each Buyer agrees, severally and not jointly, to purchase, and
the Company agrees to sell and issue to each Buyer, the number of units set
forth in the column designated “Number of Units” opposite such Buyer’s name on
the Schedule of Buyers (the “Units”), with each Unit consisting of one (1) share
of Common Stock (each a “Share” and collectedly, the “Shares”) and a Warrant to
purchase one (1) share (each a “Warrant Share” and collectedly, the “Warrant
Shares”) of Common Stock. The aggregate of all Units purchased and sold shall be
no less than Five Million Dollars ($5,000,000), and no more than Ten Million
Dollars ($10,000,000) at a cash purchase price of $1.915 per Unit (the “Purchase
Price”). The Warrants will be exercisable for a period commencing six months
after the Closing Date (as defined herein) and ending on the three year
anniversary of the Closing Date, at an exercise price equal to the closing
consolidated bid price of a share of the Common Stock on the day preceding the
date of this Agreement. The Company’s agreement with each Buyer is a separate
agreement, and the sale and issuance of the Units to each Buyer is a separate
sale and issuance.

 

4.2       Closing.

 

(a)       The purchase, sale and issuance of the Units shall take place at one
or more closings (each of which is referred to in this Agreement as a “Closing”
and the date of each is referred to in this Agreement as a “Closing Date”). The
initial Closing (the “Initial Closing”) shall have a minimum total Purchase
Price of not less than Five Million Dollars ($5,000,000) (the “Minimum Purchase
Proceeds”). The Initial Closing shall take place at the offices of Golenbock
Eiseman Assor Bell & Peskoe LLP, 711 Third Avenue, New York, New York 10017, or
such other location as the parties shall mutually agree, no later than the
second business day following the satisfaction or waiver of the conditions
provided in Articles VIII and IX of this Agreement (other than conditions that,
by their terms, are intended to be satisfied at the Closing, but subject to the
satisfaction or waiver of those conditions) (the “Initial Closing Date”), but in
no event later than the Outside Closing Date.

 

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(b)       If less than all of the Units are sold and issued at the Initial
Closing, then, subject to the terms and conditions of this Agreement, the
Company may sell and issue at one or more subsequent closings (each, a
“Subsequent Closing”), up through but no later than the Outside Closing Date, to
each Buyer who did not purchase Units at the Initial Closing or a Subsequent
Closing, the number of Units set forth in the column designated “Number of
Units” opposite such Buyer’s name on the Schedule of Buyers. Any such sale and
issuance in a Subsequent Closing shall be on the same terms and conditions as
those contained herein. Each Subsequent Closing shall take place at such date,
time and place as shall be approved by the Company in its sole discretion.

 

4.3       Form of Payment; Delivery. At each Closing, each Buyer shall deliver
to the Company the Buyer’s Purchase Price by the release of the Buyer’s Purchase
Price from escrow in accordance with the Escrow Agreement.

 

ARTICLE V

BUYERS’ REPRESENTATIONS AND WARRANTIES

 

Each Buyer severally represents and warrants to the Company, that:

 

5.1       Investment Purpose. The Buyer is acquiring the Securities for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the Securities Act; provided, however, that
by making the representations herein, the Buyer reserves the right to dispose of
the Securities at any time in accordance with or pursuant to an effective
registration statement covering such Securities or an available exemption under
the Securities Act. The Buyer acknowledges that a legend will be placed on the
certificates representing the Securities in the following form:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE “RESTRICTED SECURITIES”
AS THAT TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT. SUCH SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND THE APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER,
THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTION OF
COUNSEL TO THE ISSUER.

 

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5.2       Accredited Investor Status. The Buyer is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D, as promulgated under the
Securities Act.

 

5.3       Reliance on Exemptions. The Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities Laws and
that the Company is relying in part upon the truth and accuracy of, and the
Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.

 

5.4       Information. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and other information the Buyer deemed material to making an informed
investment decision regarding its purchase of the Units, which have been
requested by such Buyer. The Buyer acknowledges that it has received and
reviewed a copy of the SEC Documents. The Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and its
management. The Buyer understands that its investment in the Securities involves
a high degree of risk. Neither such inquiries, nor any other due diligence
investigations conducted by any Buyer or its advisors, if any, or its
representatives, shall modify, amend or affect each Buyer’s right to rely on the
Company’s and Operating Subs’ representations and warranties contained in
Article VI below. The Buyer is in a position regarding the Company, which, based
upon employment, family relationship or economic bargaining power, enabled and
enables such Buyer to obtain information from the Company in order to evaluate
the merits and risks of this investment. The Buyer has sought such accounting,
legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Securities. Without
limiting the foregoing, the Buyer has carefully considered the potential risks
relating to the Company and a purchase of the Securities, and fully understands
that the Securities are a speculative investment that involves a high degree of
risk of loss of the Buyer’s entire investment. Among other things, the Buyer has
carefully considered each of the risks described under the heading “Risk
Factors” in the Company’s Form 10-K filed March 23, 2016, which is attached
hereto as Appendix I, as updated in the Company’s Form 10-Q filed November 14,
2016, which is attached hereto as Appendix II.

 

5.5       Minimum Offering. The Buyer understands that the Company may accept
such Buyer’s purchase of Units hereunder, at any time once the Company shall
have received an aggregate Purchase Price in the amount of $5 million. Any
officer or director of the Company or the Placement Agent, or any of such
parties affiliates, may participate in this offering and their investment, if
any, will count towards the foregoing minimum amount. As such, the Buyer
understands that the Company may not receive proceeds hereunder in any amount
greater than $5 million, which may limit the Company’s ability to execute upon
its intended business plan.

 

5.6       No Governmental Review. The Buyer understands that no United States
federal or state Governmental Authority has passed on or made any recommendation
or endorsement of the Securities, or the fairness or suitability of the
investment in the Securities, nor have such Governmental Authorities passed upon
or endorsed the merits of the offering of the Securities.

 

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5.7       Authorization, Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer, enforceable in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

 

5.8       General Solicitation. The Buyer is not purchasing the Units as a
result of any advertisement, article, notice or other communication regarding
the Units published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement. The Buyer represents that it has a
relationship with the Placement Agent or the Company preceding its decision to
purchase the Units from the Company.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth and disclosed in the Company’s disclosure schedules
(“Disclosure Schedules”) attached to this Agreement and made a part hereof, the
Company and Operating Sub each hereby makes the following representations and
warranties to the Buyer. The Disclosure Schedules shall be arranged in sections
corresponding to the numbered and lettered sections and subsections contained in
this Article VI and certain other sections of this Agreement, and the
disclosures in any section or subsection of the Disclosure Schedules shall
qualify other sections and subsections in this Article VI 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.

 

6.1       Subsidiaries. Except for those subsidiaries set forth in Schedule 6.1
(each an “Operating Sub”), the Company has no subsidiaries and the Company does
not own, directly or indirectly, any outstanding voting securities of or other
interests in, or have any control over, any other Person. Except as set forth in
Schedule 6.1, the Company wholly-owns each Operating Sub. With respect to each
Operating Sub, all representations and warranties in this Article VI and
elsewhere in this Agreement shall be deemed repeated and re-made from and by
each Operating Sub, as if such representations and warranties were independently
made by each Operating Sub, in this Agreement (but modified as necessary in
order to give effect to the intent of the parties that such representation and
warranty is being made by the Operating Sub, rather than the Company, as
applicable). In addition, each representation and warranty contained in this
Article VI or otherwise set forth in this Agreement shall be deemed to mean and
be construed to include the Company and each of its subsidiaries, as applicable,
regardless of whether each of such representations and warranties in Article VI
specifically refers to the Company’s subsidiaries or not.

 

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6.2       Organization. The Company and its subsidiaries are corporations, duly
organized, validly existing and in good standing under the Laws of the
jurisdiction in which they are incorporated. The Company has the full corporate
power and authority and all necessary certificates, licenses, approvals and
Permits to: (i) enter into and execute this Agreement and the Transaction
Documents and to perform all of its Obligations hereunder and thereunder; and
(ii) own and operate its Assets and properties and to conduct and carry on its
business as and to the extent now conducted. The Company is duly qualified to
transact business and is in good standing as a foreign corporation in each
jurisdiction where the character of its business or the ownership or use and
operation of its Assets or properties requires such qualification, except to the
extent that failure to so qualify will not result in a Material Adverse Effect.

 

6.3       Authority and Approval of Agreement; Binding Effect. The execution and
delivery by the Company of this Agreement and the Transaction Documents, and the
performance by the Company of all of its Obligations hereunder and thereunder,
including the issuance of the Securities, have been duly and validly authorized
and approved by the Company and its board of directors pursuant to all
applicable Laws and no other corporate action or Consent on the part of the
Company, its board of directors, stockholders or any other Person is necessary
or required by the Company to execute this Agreement and the Transaction
Documents, consummate the transactions contemplated herein and therein, perform
all of Company’s Obligations hereunder and thereunder, or to issue the
Securities. This Agreement and each of the Transaction Documents have been duly
and validly executed by the Company (and the officer executing this Agreement
and all such other Transaction Documents is duly authorized to act and execute
same on behalf of the Company) and constitute the valid and legally binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies.

 

6.4       Capitalization. Immediately prior to the Initial Closing, the
authorized capital stock of the Company will consist of 90,000,000 shares of
Common Stock, of which 13,253,796 shares of Common Stock are issued and
outstanding. All of such outstanding shares have been validly issued and are
fully paid and nonassessable. The Common Stock is currently quoted on the Nasdaq
Capital Market under the trading symbol “IMMY.” The Company has received no
notice, either oral or written, with respect to the continued eligibility of the
Common Stock for quotation on the Principal Trading Market, and the Company has
maintained all requirements on its part for the continuation of such quotation.
Except as set forth on Schedule 6.4, no shares of Common Stock are subject to
preemptive rights or any other similar rights or any Encumbrances suffered or
permitted by the Company. Except as set forth on Schedule 6.4, as of the date
hereof: (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, or Contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
subsidiaries, or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries; (collectively, “Derivative Securities”); (ii) there are no
outstanding debt securities, notes, credit agreements, credit facilities or
other Contracts or instruments evidencing indebtedness of the Company or any of
its subsidiaries, or by which the Company or any of its subsidiaries is or may
become bound; (iii) there are no outstanding registration statements with
respect to the Company or any of its securities (other than registration
statements on Form S-8); (iv) there are no agreements or arrangements under
which the Company or any of its subsidiaries is obligated to register the sale
of any of their securities under the Securities Act (except pursuant to this
Agreement); (v) there are no financing statements securing obligations filed in
connection with the Company or any of its Assets; (vi) there are no securities
or instruments containing anti-dilution or similar provisions that will be
triggered by this Agreement or any related agreement or the consummation of the
transactions described herein or therein; and (vii) there are no outstanding
securities or instruments of the Company which contain any redemption or similar
provisions, and there are no Contracts by which the Company is or may become
bound to redeem a security of the Company. Except as set forth on Schedule 6.4,
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. Schedule 6.4 sets forth a detailed calculation of the total number
of shares of Common Stock outstanding as of the date hereof assuming (i) the
issuance of 5.1 million Units pursuant to this Agreement; (ii) the exercise in
full of all outstanding Derivative Securities taking into account all applicable
anti-dilution or similar adjustments or rights, including without limitation
those resulting from the issuance of Units and the exercise of the Warrants made
part thereof pursuant to this Agreement; and (iii) the exercise of all
Derivative Securities authorized for issuance, but not yet issued, under any
plan of the Company.

 

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6.5       No Conflicts; Consents and Approvals. The execution, delivery and
performance of this Agreement and the Transaction Documents, and the
consummation of the transactions contemplated hereby and thereby, will not: (i)
constitute a violation of or conflict with any provision of the Company’s or any
Operating Sub’s certificate or articles of incorporation, bylaws or other
organizational or charter documents; (ii) constitute a violation of, or a
default or breach under (either immediately, upon notice, upon lapse of time, or
both), or conflict with, or give to any other Person any rights of termination,
amendment, acceleration or cancellation of, any provision of any Material
Contract; (iii) constitute a violation of, or a default or breach under (either
immediately, upon notice, upon lapse of time, or both), or conflict with, any
Judgment; (iv) assuming the accuracy of the representations and warranties of
the Buyers set forth in Article V above, constitute a violation of, or conflict
with, any Law (including United States federal and state securities Laws and the
rules and regulations of any market or exchange on which the Common Stock is
quoted); or (v) result in the loss or adverse modification of, or the imposition
of any fine, penalty or other Encumbrance with respect to, any Permit granted or
issued to, or otherwise held by or for the use of, Company or any of Company’s
Assets. The Company is not in violation of its articles of incorporation, bylaws
or other organizational or governing documents and the Company is not in default
or breach (and no event has occurred which with notice or lapse of time or both
could put the Company in default or breach) under, and the Company has not taken
any action or failed to take any action that would give to any other Person any
rights of termination, amendment, acceleration or cancellation of, any Material
Contract. Except as specifically contemplated by this Agreement, the Company is
not required to obtain any Consent of, from, or with any Governmental Authority,
or any other Person, in order for it to execute, deliver or perform any of its
Obligations under this Agreement or the Transaction Documents in accordance with
the terms hereof or thereof, or to issue and sell the Securities in accordance
with the terms hereof. All Consents which the Company is required to obtain
pursuant to the immediately preceding sentence have been obtained or effected on
or prior to the date hereof.

 

6.6       Issuance of Securities. The Shares and the Warrant Shares are duly
authorized and, upon issuance in accordance with the terms hereof or the
Warrant, as the case may be, shall be duly issued, fully paid and
non-assessable, and free from all Encumbrances with respect to the issue
thereof, and, assuming the accuracy of the representations and warranties of the
Buyers set forth in Article V above, will be issued in compliance with all
applicable United States federal and state securities Laws. Assuming the
accuracy of the representations and warranties of the Buyers set forth in
Article V above, the offer and sale by the Company of the Securities is exempt
from: (i) the registration and prospectus delivery requirements of the
Securities Act; and (ii) the registration and/or qualification provisions of all
applicable state and provincial securities and “blue sky” laws.

 

6.7       SEC Documents; Financial Statements. The Common Stock is registered
pursuant to Section 12 of the Exchange Act and the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC under the Exchange Act (all of the foregoing filed within the
two (2) years preceding the date hereof or amended after the date hereof and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to as
the “SEC Documents”). The Company is current with its filing obligations under
the Exchange Act and all SEC Documents have been filed on a timely basis or the
Company has received a valid extension of such time of filing and has filed any
such SEC Document prior to the expiration of any such extension. The Company
represents and warrants that true and complete copies of the SEC Documents are
available on the SEC’s website (www.sec.gov) at no charge to Buyers, and Buyers
acknowledge that each of them may retrieve all SEC Documents from such website
and each Buyer’s access to such SEC Documents through such website shall
constitute delivery of the SEC Documents to Buyers. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Exchange Act, and none of the SEC Documents, at the time they were filed
with the SEC, 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 light of the circumstances under which they were
made, not misleading. None of the statements made in any such SEC Documents is,
or has been, required to be amended or updated under applicable Law (except as
such statements have been amended or updated in subsequent filings prior to the
date hereof, which amendments or updates are also part of the SEC Documents). As
of their respective dates, the financial statements of the Company included in
the SEC Documents (“Financial Statements”) complied in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto (except as such Financial Statements have been
amended or updated in subsequent filings prior to the date hereof, which
amendments or updates are also part of the SEC Documents). All of the Financial
Statements have been prepared in accordance with GAAP, consistently applied,
during the periods involved (except: (i) as may be otherwise indicated in such
Financial Statements or the notes thereto; or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements), and fairly present in all material respects the
consolidated financial position of the Company as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). To the knowledge of the Company and its officers, no other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstance under which they are or were made, not
misleading.

 

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6.8       Absence of Certain Changes. Since the date the last of the SEC
Documents was filed with the SEC, none of the following have occurred:

 

(a)       There has been no event or circumstance of any nature whatsoever that
has resulted in, or could reasonably be expected to result in, a Material
Adverse Effect; or

 

(b)       Except for this Agreement and the other Transaction Documents, there
has been no transaction, event, action, development, payment, or other matter of
any nature whatsoever entered into by the Company that requires disclosure in an
SEC Document which has not been so disclosed.

 

6.9       Absence of Litigation or Adverse Matters. Except as disclosed in the
SEC Documents: (i) there is no Proceeding before or by any Governmental
Authority or any other Person, pending, or the best of Company’s knowledge,
threatened or contemplated by, against or affecting the Company, its business or
Assets; (ii) there is no outstanding Judgments against or affecting the Company,
its business or Assets; and (iii) the Company is not in breach or violation of
any Material Contract.

 

6.10       Liabilities of the Company. The Company does not have any Obligations
of a nature required by GAAP to be disclosed on a consolidated balance sheet of
the Company, except: (i) as disclosed in the Financial Statements; or (ii)
incurred in the Ordinary Course of Business since the date of the last Financial
Statements filed by the Company with the SEC that have not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

6.11       Title to Assets. The Company has good and marketable title to, or a
valid license or leasehold interest in, all of its Assets which are material to
the business and operations of the Company as presently conducted, free and
clear of all Encumbrances or restrictions on the transfer or use of same, other
than restrictions on transfer or use arising under a license or Lease with
respect to such Assets that, individually or in the aggregate, would not have,
or be reasonably expected to, materially interfere with the purposes for which
they are currently used and for the purposes for which they are proposed to be
used. Except as would not have a Material Adverse Effect, the Company’s Assets
are in good operating condition and repair, ordinary wear and tear excepted, and
are free of any latent or patent defects which might impair their usefulness,
and are suitable for the purposes for which they are currently used and for the
purposes for which they are proposed to be used.

 

6.12       Real Estate.

 

(a)       Real Property Ownership. The Company does not own any Real Property.

 

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(b)       Real Property Leases. Except pursuant to the Leases described in the
SEC Documents (the “Company Leases”), the Company does not lease any Real
Property. With respect to each of the Company Leases, except as set forth on
Schedule 6.12, (i) the Company has been in peaceful possession of the property
leased thereunder and neither the Company nor, to the Company’s knowledge, the
landlord is in default thereunder; (ii) no waiver, indulgence or postponement of
any of the Obligations thereunder has been granted by the Company or landlord
thereunder; and (iii) there exists no event, occurrence, condition or act known
to the Company which, upon notice or lapse of time or both, would be or could
become a default thereunder or which could result in the termination of the
Company Leases, or any of them, or have a Material Adverse Effect on the
business of the Company, its Assets or its operations or financial results. The
Company has not violated nor breached any provision of any such Company Leases,
and all Obligations required to be performed by the Company under any of such
Company Leases have been fully, timely and properly performed. If requested by
any of the Buyers, the Company has delivered to such Buyers true, correct and
complete copies of all Company Leases, including all modifications and
amendments thereto, whether in writing or otherwise. The Company has not
received any written or oral notice to the effect that any of the Company Leases
will not be renewed at the termination of the term of such Company Leases, or
that any of such Company Leases will be renewed only at higher rents.

 

6.13       Material Contracts. An accurate, current and complete copy of each of
the Material Contracts has been furnished to Buyers and/or is readily available
as part of the SEC Documents, and each of the Material Contracts constitutes the
entire agreement of the respective parties thereto relating to the subject
matter thereof. Each of the Material Contracts is in full force and effect and
is a valid and binding Obligation of the parties thereto in accordance with the
terms and conditions thereof. To the knowledge of the Company and its officers,
all Obligations required to be performed under the terms of each of the Material
Contracts by any party thereto have been fully performed by all parties thereto,
and no party to any Material Contracts is in default with respect to any term or
condition thereof, nor has any event occurred which, through the passage of time
or the giving of notice, or both, would constitute a default thereunder or would
cause the acceleration or modification of any Obligation of any party thereto or
the creation of any Encumbrance upon any of the Assets of the Company. Further,
the Company has received no notice, nor does the Company have any knowledge, of
any pending or contemplated termination of any of the Material Contracts and, no
such termination is proposed or has been threatened, whether in writing or
orally.

 

6.14       Compliance with Laws. Except as would not have a Material Adverse
Effect, the Company is and at all times has been in material compliance with all
Laws. The Company has not received any notice that it is in violation of, has
violated, or is under investigation with respect to, or has been threatened to
be charged with, any violation of any Law.

 

6.15       Intellectual Property. The Company owns or possesses adequate and
legally enforceable rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and all other intellectual property rights
necessary to conduct its business as now conducted. The Company does not have
any knowledge of any infringement by the Company of trademark, trade name
rights, patents, patent rights, copyrights, inventions, licenses, service names,
service marks, service mark registrations, trade secret or other intellectual
property rights of others, and, to the knowledge of the Company, there is no
Claim being made or brought against, or to the Company’s knowledge, being
threatened against, the Company regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
mark registrations, trade secret or other intellectual property infringement;
and the Company is unaware of any facts or circumstances which might give rise
to any of the foregoing.

 

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6.16       Labor and Employment Matters. The Company is not involved in any
labor dispute or, to the knowledge of the Company, is any such dispute
threatened. To the knowledge of the Company and its officers, none of the
Company’s employees is a member of a union and the Company believes that its
relations with its employees are good. To the knowledge of the Company and its
officers, the Company has complied in all material respects with all Laws
relating to employment matters, civil rights and equal employment opportunities.

 

6.17       Employee Benefit Plans. The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”); no “reportable event” (as defined in
ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”); and each “pension plan”
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification. To the Company’s knowledge, the Company has
promptly paid and discharged all Obligations arising under ERISA of a character
which if unpaid or unperformed might result in the imposition of an Encumbrance
against any of its Assets or otherwise have a Material Adverse Effect.

 

6.18       Tax Matters. The Company has made and timely filed all Tax Returns
required by any jurisdiction to which it is subject, and each such Tax Return
has been prepared in compliance with all applicable Laws, and all such Tax
Returns are true and accurate in all respects. Except and only to the extent
that the Company has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported Taxes, the Company has timely paid all
Taxes shown or determined to be due on such Tax Returns, except those being
contested in good faith, and the Company has set aside on its books provision
reasonably adequate for the payment of all Taxes for periods subsequent to the
periods to which such Tax Returns 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 know of no basis for any such claim. The Company
has withheld and paid all Taxes to the appropriate Governmental Authority
required to have been withheld and paid in connection with amounts paid or owing
to any Person. There is no Proceeding or Claim for refund now in progress,
pending or, to the Company’s knowledge, threatened against or with respect to
the Company regarding Taxes.

 

6.19       Insurance. The Company is covered by valid, outstanding and
enforceable policies of insurance which were issued to it by reputable insurers
of recognized financial responsibility, covering its properties, Assets and
businesses against losses and risks normally insured against by other
corporations or entities in the same or similar lines of businesses as the
Company is engaged and in coverage amounts which are prudent and typically and
reasonably carried by such other corporations or entities (the “Insurance
Policies”). Such Insurance Policies are in full force and effect, and all
premiums due thereon have been paid. None of the Insurance Policies will lapse
or terminate as a result of the transactions contemplated by this Agreement. The
Company has complied with the provisions of such Insurance Policies. The Company
has not been refused any insurance coverage sought or applied for and the
Company does not have any reason to believe that it will not be able to renew
its existing Insurance Policies as and when such Insurance Policies expire or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or operations of
the Company.

 

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6.20       Permits. The Company possesses all Permits necessary to conduct its
business, and the Company has not received any notice of, or is otherwise
involved in any Proceedings relating to, the revocation or modification of any
such Permits. All such Permits are valid and in full force and effect and the
Company is in material compliance with the respective requirements of all such
Permits.

 

6.21       Business Location. The Company has no office or place of business
other than as identified in the SEC Documents and the Company’s principal
executive offices are located in San Diego, California. All books and records of
the Company and other material Assets of the Company are held or located at the
offices and places of business identified in the SEC Documents.

 

6.22       Environmental Laws. The Company is and has at all times been in
compliance in all material respects with any and all applicable Environmental
Requirements, and there are no pending Claims against the Company relating to
any Environmental Requirements, nor to the best knowledge of the Company, is
there any basis for any such Claims.

 

6.23       Illegal Payments. Neither the Company, nor any director, officer,
agent, employee or other Person acting on behalf of the Company has, in the
course of his actions for, or on behalf of, the Company: (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.

 

6.24       Related Party Transactions. Except as disclosed in the SEC Documents,
and except for arm’s length transactions pursuant to which the Company makes
payments in the Ordinary Course of Business upon terms no less favorable than
the Company could obtain from third parties, none of the officers, directors or
employees of the Company, nor any stockholders who own, legally or beneficially,
five percent (5%) or more of the issued and outstanding shares of any class of
the Company’s capital stock (each a “Material Shareholder”), is presently a
party to any transaction with the Company (other than for services as employees,
officers and directors), including any Contract providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from, any officer, director or such
employee or Material Shareholder or, to the best knowledge of the Company, any
other Person in which any officer, director, or any such employee or Material
Shareholder has a substantial or material interest in or of which any officer,
director or employee of the Company or Material Shareholder is an officer,
director, trustee or partner. There are no Claims or disputes of any nature or
kind between the Company and any officer, director or employee of the Company or
any Material Shareholder, or, to the Company’s knowledge, between any of them,
relating to the Company and its business.

 

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6.25       Internal Accounting Controls. Except as set forth in the SEC
Documents, the Company and each of its subsidiaries 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.

 

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

 

6.27       Listing and Maintenance Requirements. The Company’s Common Stock is
registered pursuant to Section 12 of the Exchange Act, and the Company has taken
no action designed to, or which to the best of its knowledge is likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act, nor has the Company received any notification that the SEC is
contemplating terminating such registration.

 

6.28       Bad Actor. No “bad actor” disqualifying event described in Rule
506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is
applicable to the Company or, to the Company’s knowledge, any Company Covered
Person. As used in this Section 6.28, the term “Company Covered Person” means,
with respect to the Company as an “issuer” for purposes of Rule 506 promulgated
under the Securities Act, any Person listed in the first paragraph of Rule
506(d)(1).

 

6.29       Brokerage Fees. Except for the Placement Agent, there is no Person
acting on behalf of the Company who is entitled to or has any claim for any
financial advisory, brokerage or finder’s fee or commission in connection with
the execution of this Agreement or the consummation of the transactions
contemplated hereby. The Company has agreed to pay the Placement Agent a cash
amount equal to 7.5% of the gross proceeds from the sale of the Units. The
Company has agreed to issue to the Placement Agent, or its designees, a
three-year warrant to purchase up to the number of shares of Common Stock equal
to 4% of the shares of Common Stock included in the Units (excluding the shares
of Common Stock underlying the Warrants). The exercise price per share will be
equal to the exercise price of the Warrants made part of the Units, and the
warrant will be exercisable commencing six months after the Closing Date. The
warrant to be issued to the Placement Agent will have a cashless exercise
provision, and the shares issuable upon exercise of the warrant will have
registration rights. The Company has also agreed to reimburse the Placement
Agent up to $40,000 for its legal fees and other expenses in connection with the
sale of the Units.

 

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ARTICLE VII

COVENANTS

 

7.1       Best Efforts. Each party shall use its best efforts to timely satisfy
each of the conditions to be satisfied by it as provided in Articles VIII and IX
of this Agreement.

 

7.2       Form D. If required by applicable Law, the Company agrees to file a
Form D with respect to the Units as required under Regulation D of the
Securities Act and to provide a copy thereof to the Placement Agent. The Company
shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary to qualify the Units, or obtain an exemption
for the Units for sale to each of the Buyers at Closing pursuant to this
Agreement under applicable securities or “Blue Sky” Laws of the states of the
United States, and shall provide evidence of any such action so taken to the
Placement Agent on or prior to the Closing Date.

 

7.3       Affirmative Covenants.

 

(a)       Reporting Status; Listing. Until the earlier of three (3) years from
the date hereof or when the Shares, Warrants and Warrant Shares are no longer
registered in the names of the Buyers on the books and records of the Company,
the Company shall: (i) file in a timely manner all reports required to be filed
under the Securities Act, the Exchange Act or any securities Laws and
regulations thereof applicable to the Company of any state of the United States,
or by the rules and regulations of the Principal Trading Market, and, if not
otherwise publicly available, to provide a copy thereof to a Buyer upon request;
(ii) not terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations thereunder
would otherwise permit such termination; (iii) if required by the rules and
regulations of the Principal Trading Market, promptly secure the listing of any
of the Shares or Warrant Shares upon the Principal Trading Market (subject to
official notice of issuance) and, take all reasonable action under its control
to maintain the continued listing, quotation and trading of its Common Stock on
the Principal Trading Market, and the Company shall comply in all respects with
the Company’s reporting, filing and other Obligations under the bylaws or rules
of the Principal Trading Market, the Financial Industry Regulatory Authority,
Inc. and such other Governmental Authorities, as applicable.

 

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(b)       Rule 144. With a view to making available to each Buyer the benefits
of Rule 144 under the Securities Act (“Rule 144”), or any similar rule or
regulation of the SEC that may at any time permit Buyers to sell any of the
Shares or Warrant Shares to the public without registration, the Company
represents and warrants that: (i) the Company is, and has been for a period of
at least ninety (90) days immediately preceding the date hereof, subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act; (ii) the
Company has filed all required reports under Section 13 or 15(d) of the Exchange
Act, as applicable, during the twelve (12) months preceding the Closing Date (or
for such shorter period that the Company was required to file such reports);
(iii) the Company is not an issuer defined as a “Shell Company” (as hereinafter
defined); and (iv) if the Company has, at any time, been an issuer defined as a
Shell Company, the Company has: (A) not been an issuer defined as a Shell
Company for at least six (6) months prior to the Closing Date; and (B) has
satisfied the requirements of Rule 144(i) (including, without limitation, the
proper filing of “Form 10 information” at least six (6) months prior to the
Closing Date). For the purposes hereof, the term “Shell Company” shall mean an
issuer that meets the description set forth under Rule 144(i)(1)(i). In
addition, until the earlier of five (5) years from the date hereof or when the
Shares and Warrant Shares no longer bear a restrictive legend, the Company
shall, at its sole expense:

 

(i)       make, keep and ensure that adequate current public information with
respect to the Company, as required in accordance with Rule 144, is publicly
available;

 

(ii)       furnish to each Buyer, promptly upon reasonable request: (A) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act; and (B) such
other information as may be reasonably requested by each Buyer to permit each
Buyer to sell any of the Shares or Warrant Shares pursuant to Rule 144 without
limitation or restriction; and

 

(iii)       promptly at the request of each Buyer, give the Company’s transfer
agent instructions to the effect that, upon the transfer agent’s receipt from
any Buyer of a certificate (a “Rule 144 Certificate”) certifying that such
Buyer’s holding period (as determined in accordance with the provisions of Rule
144) for any portion of the Shares or Warrant Shares which such Buyer proposes
to sell (the “Securities Being Sold”) is not less than six (6) months, and
receipt by the transfer agent of the “Rule 144 Opinion” (as hereinafter defined)
from the Company or its counsel (or from such Buyer and its counsel as permitted
below), the transfer agent is to effect the transfer of the Securities Being
Sold and issue to such Buyer or transferee(s) thereof one or more stock
certificates representing the transferred Securities Being Sold without any
restrictive legend and without recording any restrictions on the transferability
of such Securities Being Sold on the transfer agent’s books and records or, at
the Buyer’s option, the Securities Being Sold shall be transmitted by the
transfer agent to the Buyer by crediting the account of the Buyer’s or its
designee’s balance account with The Depository Trust Company through its Deposit
or Withdrawal at Custodian system if the transfer agent is then a participant in
such system. In this regard, upon each Buyer’s request, the Company shall have
an affirmative obligation at its expense to cause its counsel to promptly issue
to the transfer agent a legal opinion providing that, based on the Rule 144
Certificate, the Securities Being Sold were or may be sold, as applicable,
pursuant to the provisions of Rule 144, even in the absence of an effective
registration statement (the “Rule 144 Opinion”). If the transfer agent requires
any additional documentation in connection with any proposed transfer by any
Buyer of any Securities Being Sold, the Company shall promptly deliver or cause
to be delivered to the transfer agent or to any other Person, all such
additional documentation as may be necessary to effectuate the transfer of the
Securities Being Sold and the issuance of an unlegended certificate to any
transferee thereof, all at the Company’s expense.

 

 17 

   

 

(c)       Matters With Respect to Shares and Transfer Agent.

 

(i)       Removal of Restrictive Legends. In the event that any Buyer has any
shares of the Company’s Common Stock bearing any restrictive legends, and such
Buyer, through its counsel or other representatives, submits to the Company’s
transfer agent (“Transfer Agent”) any such shares for the removal of the
restrictive legends thereon, whether in connection with a sale of such shares
pursuant to any exemption to the registration requirements under the Securities
Act, or otherwise, and the Company and or its counsel refuses or fails for any
reason (except to the extent that such refusal or failure is based solely on
applicable Law that would prevent the removal of such restrictive legends) to
render an opinion of counsel or any other documents or certificates required for
the removal of the restrictive legends, then the Company hereby agrees and
acknowledges that such Buyer is hereby irrevocably and expressly authorized to
have counsel to such Buyer render any and all opinions and other certificates or
instruments which may be required for purposes of removing such restrictive
legends, and the Company hereby irrevocably authorizes and directs the Transfer
Agent to, without any further confirmation or instructions from the Company,
issue any such shares without restrictive legends as instructed by such Buyer,
and surrender to a common carrier for overnight delivery to the address as
specified by such Buyer, certificates, registered in the name of such Buyer or
its designees, representing the shares of Common Stock to which such Buyer is
entitled, without any restrictive legends and otherwise freely transferable on
the books and records of the Company.

 

(ii)       Authorized Agent of the Company. The Company hereby irrevocably
appoints each Buyer and each Buyer’s counsel and its representatives, each as
the Company’s duly authorized agent and attorney-in-fact for the Company solely
for the purposes of authorizing and instructing the Transfer Agent to process
issuances, transfers and legend removals upon instructions from each Buyer, or
any counsel or representatives of each Buyer, in strict compliance with this
Section 7.3(c). The authorization and power of attorney granted hereby is
coupled with an interest and is irrevocable so long as any Buyer owns or has the
right to receive, any shares of the Company’s Common Stock hereunder. In this
regard, the Company hereby confirms to the Transfer Agent and each Buyer that it
can NOT and will NOT give instructions, including stop orders or otherwise,
inconsistent with the terms of this Section 7.3(c) with regard to the matters
contemplated herein, and that each Buyer shall have the absolute right to
provide a copy of this Agreement to the Transfer Agent as evidence of the
Company’s irrevocable authority for each Buyer and Transfer Agent to process
issuances, transfers and legend removals upon instructions from each Buyer, or
any counsel or representatives of each Buyer, in each case as specifically
contemplated in this Section 7.3(c), without any further instructions, orders or
confirmations from the Company.

 

(iii)       Injunction and Specific Performance. The Company specifically
acknowledges and agrees that in the event of a breach or threatened breach by
the Company of any provision of this Section 7.3(c), each Buyer will be
irreparably damaged and that damages at law would be an inadequate remedy if
this Agreement were not specifically enforced. Therefore, in the event of a
breach or threatened breach of any provision of this Section 7.3(c) by the
Company, each Buyer shall be entitled to seek, in addition to all other rights
or remedies such Buyer may have, at law or in equity, an injunction restraining
such breach, without being required to show any actual damage or to post any
bond or other security, and/or to a decree for specific performance of the
provisions of this Section 7.3(c).

 

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7.4       Use of Proceeds. The Company shall use the net proceeds from the sale
of the Units for working capital and general corporate purposes, including
marketing and product promotion, capital expenditures and payment of the fees
and expenses of this offering.

 

7.5       Fees and Expenses. The Company agrees to pay to each Buyer (or any
designee or agent of the Buyers), upon demand, or to otherwise be responsible
for the payment of, any and all costs, fees, charges and expenses, including the
reasonable fees, costs, expenses and disbursements of counsel for any Buyer, and
of any experts and agents, which any Buyer may incur or which may otherwise be
due and payable in connection with: (i) any documentary stamp taxes, intangibles
taxes, recording fees, filing fees, or other similar taxes, fees or charges
imposed by or due to any Governmental Authority in connection with this
Agreement or any other Transaction Documents; (ii) the exercise or enforcement
of any of the rights of any Buyer under this Agreement or the Transaction
Documents; or (iii) the failure by the Company to perform or observe any of the
provisions of this Agreement or any of the Transaction Documents. The provisions
of this Subsection shall survive the termination of this Agreement.

 

7.6       Public Disclosure of Buyers. The Company shall not publicly disclose
the name of any Buyer, or include the name of any Buyer in any filing with the
SEC or any regulatory agency or Principal Trading Market, without the prior
written consent of such Buyer except: (a) as required by federal securities law
in connection with any registration statement contemplated by the Registration
Rights Agreement or (b) to the extent such disclosure is required by Law or
Principal Trading Market regulations, in which case the Company shall provide
Buyers with prior written notice of such disclosure permitted under this clause
(b).

 

ARTICLE VIII

CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL

 

The obligation of the Company hereunder to issue and sell the Units to a Buyer
at the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion:

 

8.1       The Buyer shall have executed the Transaction Documents that require
the Buyer’s execution, and delivered them to the Company.

 

8.2       The Buyer shall have paid the Buyer’s Purchase Price to the Company,
which payment may be made by the release of the Buyer’s Purchase Price from
escrow in accordance with the Escrow Agreement.

 

8.3       The Buyer’s representations and warranties shall be true and correct
in all material respects as of the date when made and as of the applicable
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Buyer at or prior to the applicable Closing Date.

 

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8.4       The Company shall have obtained all governmental, regulatory or third
party consents and approvals necessary for the sale of the Units.

 

8.5       No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents.

 

8.6       Since the date of execution of this Agreement, no event or series of
events shall have occurred that resulted, or could reasonably be expected to
result, in a Material Adverse Effect.

 

8.7       Trading in the Common Stock shall not have been suspended by the SEC
or any Principal Trading Market (except for any suspensions of trading of not
more than one trading day solely to permit dissemination of material information
regarding the Company) at any time since the date of execution of this
Agreement.

 

8.8       In connection with the Initial Closing, the Company shall have
received an aggregate Purchase Price in the amount of, at least, the Minimum
Purchase Proceeds. Any officer or director of the Company or the Placement
Agent, or any of such parties affiliates, may participate in this offering and
their investment, if any, will count towards the foregoing amount.

 

ARTICLE IX

CONDITIONS PRECEDENT TO A BUYER’S OBLIGATIONS TO PURCHASE

 

The obligation of a Buyer hereunder to purchase the Units at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions (in addition to any other conditions precedent elsewhere in
this Agreement), provided that these conditions are for the Buyer’s sole benefit
and may be waived by the Buyer at any time in its sole discretion:

 

9.1       The Company shall have executed and delivered the Transaction
Documents and delivered the same to the Placement Agent.

 

9.2       The Company shall have delivered to the transfer agent for the
Company’s Common Stock instructions and all such other documents required by the
transfer agent to issue, in certificate form and in such Buyer’s name, the
number of Shares underlying the Units that such Buyer is purchasing.

 

9.3       The Company shall have delivered to the Placement Agent the Warrants
made part of the Units purchased at the Closing, with each Warrant in the
appropriate Buyer’s name and executed by a duly authorized officer of the
Company.

 

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9.4       The representations and warranties of the Company and each of the
Operating Subs shall be true and correct in all material respects (except to the
extent that any of such representations and warranties are already qualified as
to materiality in Article VI above, in which case, such representations and
warranties shall be true and correct in all respects without further
qualification) as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date) and the Company and each of the Operating Subs shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company and the Operating Subs at or prior to the
Closing Date. The Placement Agent shall have received a certificate, executed by
the Chief Executive Officer or Chief Financial Officer of the Company, dated as
of the Closing Date, to the foregoing effect.

 

9.5       The Company shall have delivered to the Placement Agent a certificate
evidencing the formation and good standing of the Company and each Operating Sub
in its jurisdiction of formation issued by the Secretary of State (or comparable
office) of such jurisdiction of formation as of a date within ten (10) days of
the Closing Date.

 

9.6       The Company shall have delivered to the Placement Agent a certificate
or other reasonably acceptable evidence evidencing the Company’s qualification
as a foreign corporation and good standing issued by the Secretary of State (or
comparable office) of each jurisdiction in which the Company conducts business
and is required to so qualify, as of a date within twenty (20) days of the
Closing Date.

 

9.7       The Company shall have delivered to the Placement Agent a certificate,
in the form acceptable to the Placement Agent, executed by the Secretary of the
Company dated as of the Closing Date, as to (i) the resolutions consistent with
Section 6.3 as adopted by the Company’s board of directors, and (ii) the
Certificate of Incorporation and the Bylaws of the Company, each in effect at
the Closing.

 

9.8       The Company shall have delivered to the Placement Agent an opinion of
counsel to the Company, as of the Closing Date, in a form satisfactory to the
Placement Agent and its counsel.

 

9.9       No event shall have occurred which could reasonably be expected to
have a Material Adverse Effect.

 

9.10       In connection with the Initial Closing, the Company shall have
received an aggregate Purchase Price in the amount of, at least, the Minimum
Purchase Proceeds. Any officer or director of the Company or the Placement
Agent, or any of such parties affiliates, may participate in this offering and
their investment, if any, will count towards the foregoing amount.

 

 21 

   

 

ARTICLE X

INDEMNIFICATION

 

10.1       Company’s Obligation to Indemnify. In consideration of the Buyers’
execution and delivery of this Agreement, and in addition to all of the
Company’s other obligations under this Agreement, the Company hereby agrees to
defend and indemnify each Buyer and each Buyer’s Affiliates and subsidiaries,
and their respective directors, officers, employees, agents and representatives,
and the successors and assigns of each of them (collectively, the “Buyer
Indemnified Parties”) and the Company hereby agrees to hold the Buyer
Indemnified Parties harmless, from and against any and all Claims made, brought
or asserted against the Buyer Indemnified Parties, or any one of them, and the
Company hereby agrees to pay or reimburse the Buyer Indemnified Parties for any
and all Claims payable by any of the Buyer Indemnified Parties to any Person,
including reasonable attorneys’ and paralegals’ fees and expenses, court costs,
settlement amounts, costs of investigation and interest thereon from the time
such amounts are due at the highest non-usurious rate of interest permitted by
applicable Law, through all negotiations, mediations, arbitrations, trial and
appellate levels, as a result of, or arising out of, or relating to: (i) any
misrepresentation or breach of any representation or warranty made by the
Company or any Operating Subs in this Agreement, the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby;
(ii) any breach of any covenant, agreement or Obligation of the Company or any
Operating Sub contained in this Agreement, the Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby; or
(iii) any Claims brought or made against the Buyer Indemnified Parties, or any
one of them, by any Person and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement, the Transaction
Documents or any other instrument, document or agreement executed pursuant
hereto or thereto. To the extent that the foregoing undertaking by the Company
may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Claims covered
hereby, which is permissible under applicable Law. The Company will not be
liable to any Buyer under this indemnity: (i) for any settlement by a Buyer in
connection with any Claim effected without the Company’s prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed; or
(ii) to the extent, but only to the extent, that a Claim is attributable to any
Buyer’s breach of any of the representations, warranties, covenants or
agreements made by such Buyer in this Agreement or in the other Transaction
Documents.

 

ARTICLE XI

MATTERS RELATING TO THE BUYERS

 

11.1       Independent Nature of Buyers’ Obligations and Rights. The obligations
of each Buyer under this Agreement and the Transaction Documents are several and
not joint with the obligations of any other Buyer, and no Buyer shall be
responsible in any way for the performance of the obligations of any other Buyer
under any one or more of the Transaction Documents. The decision of each Buyer
to purchase the Units pursuant to the Transaction Documents has been made by
each such Buyer independently of any other Buyer and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or of its subsidiaries, if
any, which may have been made or given by any other Buyer or any of their
respective officers, directors, principals, employees, agents, counsel or
representatives (collectively, including the Buyer in question, the “Buyer
Representatives”). No Buyer Representative shall have any liability to any other
Buyer or the Company relating to or arising from any such information,
materials, statements or opinions, if any. Each Buyer acknowledges that no other
Buyer has acted as agent for such Buyer in connection with making its investment
hereunder and that no Buyer will be acting as agent of such other Buyer in
connection with monitoring its investment in the Securities or enforcing its
rights under the Transaction Documents. Each Buyer shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional
party in any Proceeding for such purpose. The Company and each of the Buyers
acknowledge that, for reasons of administrative convenience the Company has
elected to provide each of the Buyers with the same Transaction Documents for
the purpose of closing a transaction with multiple Buyers and not because it was
required or requested to do so by any Buyer. In furtherance of the foregoing,
and not in limitation thereof, the Company and the Buyers acknowledge that
nothing contained in this Agreement or in any Transaction Document, and no
action taken by any Buyer pursuant thereto, shall be deemed to constitute any
two or more Buyers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.

 

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11.2       Equal Treatment of Buyers. No consideration shall be offered or paid
to any Buyer to amend or consent to a waiver or modification of any provision of
any of the Transaction Documents, unless the same consideration is also offered
to all of the other Buyers parties to the Transaction Documents.

 

ARTICLE XII

TERMINATION

 

12.1       Termination. This Agreement may be terminated prior to Closing (i) by
written agreement of the Buyers and the Company or (ii) by either the Company or
a Buyer (as to itself but no other Buyer) upon written notice to the other, if
the Closing shall not have taken place by December 23, 2016, or such later date
approved by the Company’s Board of Directors, but in no event later than
December 31, 2016 (“Outside Closing Date”); provided, that the right to
terminate this Agreement under this Section 12.1 shall not be available to any
party whose failure to comply with its obligations under this Agreement has been
the cause of or resulted in the failure of the Closing to occur on or before
such time.

 

12.2       Consequences of Termination. No termination of this Agreement shall
release any party from any liability for breach by such party of the terms and
provisions of this Agreement or the other Transaction Documents.

 

ARTICLE XIII

MISCELLANEOUS

 

13.1       Notices. All notices of request, demand and other communications
hereunder shall be addressed to the parties as follows:

 

  If to the Company: Imprimis Pharmaceuticals, Inc.     12264 El Camino Real,
Suite 350     San Diego, California 92130     Attention: Mark L. Baum     Email:
mark@imprimispharma.com     Facsimile: (858) 345-1743         With a copy to:
Golenbock Eiseman Assor Bell & Peskoe LLP     711 Third Avenue     New York, New
York 10017     Attention: Andrew D. Hudders     Email: ahudders@golenbock.com  
  Facsimile: (212) 818-8881         If to the Buyers: To each Buyer based on the
information set forth in the Schedule of Buyers attached hereto

 

unless the address is changed by the party by like notice given to the other
parties. Notice shall be in writing and shall be deemed delivered: (i) if mailed
by certified mail, return receipt requested, postage prepaid and properly
addressed to the address below, then three (3) business days after deposit of
same in a regularly maintained U.S. Mail receptacle; or (ii) if mailed by
Federal Express, UPS or other nationally recognized overnight courier service,
next business morning delivery, then one (1) business day after deposit of same
in a regularly maintained receptacle of such overnight courier; or (iii) if hand
delivered, then upon hand delivery thereof to the address indicated on or prior
to 5:00 p.m., New York time, on a business day. Any notice hand delivered after
5:00 p.m., New York time, shall be deemed delivered on the following business
day. Notwithstanding the foregoing, notice, consents, waivers or other
communications referred to in this Agreement may be sent by facsimile, e-mail,
or other method of delivery, but shall be deemed to have been delivered only
when the sending party has confirmed (by reply e-mail or some other form of
written confirmation from the receiving party) that the notice has been received
by the other party.

 

13.2       Entire Agreement. This Agreement, including the Exhibits and
Schedules attached hereto and the documents delivered pursuant hereto, including
the Transaction Documents, set forth all the promises, covenants, agreements,
conditions and understandings between the parties hereto with respect to the
subject matter hereof and thereof, and supersede all prior and contemporaneous
agreements, understandings, inducements or conditions, expressed or implied,
oral or written, except as contained herein and in the Transaction Documents;
provided, however, except as explicitly stated herein, nothing contained in this
Agreement or any other Transaction Document shall (or shall be deemed to) (i)
have any effect on any agreements any Buyer has entered into with, or any
instruments any Buyer has received from, the Company prior to the date hereof
with respect to any prior investment made by such Buyer in the Company or (ii)
waive, alter, modify or amend in any respect any obligations of the Company, or
any rights of or benefits to any Buyer or any other Person, in any agreement
entered into prior to the date hereof between or among the Company and any
Buyer, or any instruments any Buyer received from the Company prior to the date
hereof, and all such agreements and instruments shall continue in full force and
effect..

 

 23 

   

 

13.3       Successors and Assigns. This Agreement, and any and all rights,
duties and obligations hereunder, shall not be assigned, transferred, delegated
or sublicensed by the Company without the prior written consent of each Buyer.
Subject to the foregoing and except as otherwise provided herein, the provisions
of this Agreement shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.

 

13.4       Binding Effect. This Agreement shall be binding upon the parties
hereto, their respective successors and permitted assigns.

 

13.5       Amendment. Except as specifically set forth herein, neither the
Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. For clarification purposes, the
Recitals are part of this Agreement. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
Required Buyers. Any amendment to any provision of this Agreement made in
conformity with the provisions of this Section 13.5 shall be binding on all
Buyers and holders of Securities, as applicable, provided that no such amendment
shall be effective to the extent that it (1) applies to less than all of the
holders of the Securities then outstanding or (2) imposes any obligation or
liability on any Buyer without such Buyer’s prior written consent (which may be
granted or withheld in such Buyer’s sole discretion). No waiver shall be
effective unless it is in writing and signed by an authorized representative of
the waiving party, provided that the Required Buyers may waive any provision of
this Agreement, and any waiver of any provision of this Agreement made in
conformity with the provisions of this Section 13.5 shall be binding on all
Buyers and holders of Securities, as applicable, provided that no such waiver
shall be effective to the extent that it (1) applies to less than all of the
holders of the Securities then outstanding (unless a party gives a waiver as to
itself only) or (2) imposes any obligation or liability on any Buyer without
such Buyer’s prior written consent (which may be granted or withheld in such
Buyer’s sole discretion). No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration also is offered to
all of the parties to the Transaction Documents who are holders of Securities.
The Company has not, directly or indirectly, made any agreements with any Buyers
relating to the terms or conditions of the transactions contemplated by the
Transaction Documents except as set forth in the Transaction Documents. Without
limiting the foregoing, the Company confirms that, except as set forth in this
Agreement, no Buyer has made any commitment or promise or has any other
obligation to provide any financing to the Company or otherwise. As a material
inducement for each Buyer to enter into this Agreement, the Company expressly
acknowledges and agrees that no due diligence or other investigation or inquiry
conducted by a Buyer, any of its advisors or any of its representatives shall
affect such Buyer’s right to rely on, or shall modify or qualify in any manner
or be an exception to any of, the Company’s representations and warranties
contained in this Agreement or any other Transaction Document. “Required Buyers”
means Buyers holding a majority of the Units sold pursuant to this Agreement.

 

 24 

   

 

13.6       Gender and Use of Singular and Plural. All pronouns shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the identity
of the party or parties or their personal representatives, successors and
assigns may require.

 

13.7       Execution. This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed and considered one and
the same Agreement, and same shall become effective when counterparts have been
signed by each party and each party has delivered its signed counterpart to the
other party. A digital reproduction, portable document format (“.pdf”) or other
reproduction of this Agreement may be executed by one or more parties hereto and
delivered by such party by electronic signature (including signature via
DocuSign or similar services), electronic mail or any similar electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen. Such execution and delivery shall be considered valid,
binding and effective for all purposes.

 

13.8       Headings. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.

 

13.9       Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the State of New York,
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereby irrevocably waives any right it may have,
and agrees not to request, a jury trial for the adjudication of any dispute
hereunder or in connection with or arising out of this Agreement or any
transaction contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.

 

13.10       Further Assurances. The parties hereto will execute and deliver such
further instruments and do such further acts and things as may be reasonably
required to carry out the intent and purposes of this Agreement.

 

 25 

   

 

13.11       Survival. The representations and warranties contained herein shall
survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties and covenants hereunder.

 

13.12       Joint Preparation. The preparation of this Agreement has been a
joint effort of the parties and the resulting documents shall not, solely as a
matter of judicial construction, be construed more severely against one of the
parties than the other.

 

13.13       Severability. If any one of the provisions contained in this
Agreement, for any reason, shall be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, and this Agreement shall remain in full
force and effect and be construed as if the invalid, illegal or unenforceable
provision had never been contained herein.

 

13.14       No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

 

13.15       WAIVER OF JURY TRIAL. THE BUYERS AND THE COMPANY, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES, IRREVOCABLY, THE RIGHT TO TRIAL BY JURY
WITH RESPECT TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY OTHER
AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS
AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE BUYERS AND
THE COMPANY ARE ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
BUYERS TO PURCHASE THE UNITS.

 

13.16        Compliance with Federal Law. The Company shall: (i) ensure that no
Person who owns a controlling interest in or otherwise controls the Company is
or shall at any time be listed on the Specially Designated Nationals and Blocked
Person List or other similar lists maintained by the Office of Foreign Assets
Control (“OFAC”), the Department of the Treasury, included in any Executive
Orders or in any other similar lists of any Governmental Authority; (ii) not use
or permit the use of the proceeds of the purchase of the Shares to violate any
of the foreign asset control regulations of OFAC or any enabling statute,
Executive Order relating thereto or any other requirements or restrictions
imposed by any Governmental Authority; and (iii) comply with all applicable
Lender Secrecy Act (“BSA”) laws and regulations, as amended.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

 26 

   

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year set forth above.

 

  “COMPANY”         IMPRIMIS PHARMACEUTICALS, INC.,   a Delaware corporation    
    By: /s/ Mark L. Baum     Mark L. Baum,     Chief Executive Officer        
BUYERS:         See Signature pages for each Buyer attached

 

Company Signature Page to Securities Purchase Agreement

   

 

BUYER SIGNATURE PAGE FOR SECURITIES PURCHASE AGREEMENT

 

WITH IMPRIMIS PHARMACEUTICALS, INC.

 

By its execution below, the undersigned Buyer hereby acknowledges and agrees to
the terms set forth in the Securities Purchase Agreement to which this signature
page is attached.

 

FOR ENTITY INVESTORS:   FOR INDIVIDUAL INVESTORS:                 Signature:  
[Name of Entity]   Name:             By:     Signature:   Name:     Name:  
Title:                   WORK ADDRESS:   HOME ADDRESS:                          
Attention:     Phone:   Phone:     SSN:   Fax:         E-mail:         Taxpayer
ID#:        

 

Number of Units to be Purchased: _________________

 

Buyer Signature Page to Securities Purchase Agreement

   

 

BUYER ADDENDUM RE ESCROW

(this information is required)

 

    (Print Name of Buyer)  

 

By signing the Securities Purchase Agreement, the above named Buyer hereby
certifies and confirms that: In the event that the Escrow Agent makes a
disbursement to the Buyer, which may or may not occur, the Buyer hereby confirms
that such disbursement is to be made by wire transfer using the following wire
transfer instructions. The Escrow Agent, the Company and the Placement Agent can
rely on this confirmation and the Buyer will not revoke this confirmation unless
the Buyer confirms to the Company on this form, replacement wire transfer
instructions at least two (2) Business Days before revoking this confirmation.
The Company may instruct the Escrow Agent to, or the Escrow Agent may on its
own, withhold any such disbursement until the Company is reasonably satisfied
and the Escrow Agent is satisfied in its sole discretion with the instructions
and procedures for making such disbursement.

 

Bank Name: ____________________

 

Bank Address: ____________________

 

ABA Number: ____________________

 

Account Number: ____________________

 

Account Name: ____________________

 

Reference: ____________________

 

 

 

Escrow Addendum

   

 

SCHEDULE OF BUYERS

 

 

 

 

Schedule of Buyers

   

 

EXHIBIT A

 

Registration Rights Agreement

 

 

Exhibit A

   

 

EXHIBIT B

 

Warrant

  

 

Exhibit B

   

 

EXHIBIT C

 

ESCROW AGREEMENT

 

 

Exhibit C

   

 

Appendix I

  

 

Appendix I

   

 

Appendix II

  

 

Appendix II